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The Office of the Comptroller of the Currency; the Board of Governors of the Federal Reserve System; and the Federal Deposit Insurance Corporation.
Final rule.
The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation are issuing a final rule to implement section 402 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Section 402 directs these agencies to amend the regulatory capital rule to exclude from the supplementary leverage ratio certain funds of banking organizations deposited with central banks if the banking organization is predominantly engaged in custody, safekeeping, and asset servicing activities.
The rule is effective April 1, 2020.
D. Regulatory Reporting Requirements
In April 2019, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), and Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) published a notice of proposed rulemaking (proposal)
Section 402 requires the agencies to amend the supplementary leverage ratio, a measure of capital adequacy that applies to large banking organizations. Under section 402, the supplementary leverage ratio must not take into account funds of a custodial bank that are deposited with certain central banks, provided that any amount that exceeds the value of deposits of the custodial bank that are linked to fiduciary or custodial and safekeeping accounts must be taken into account when calculating the supplementary leverage ratio as applied to the custodial bank.
The proposal would have implemented section 402 by defining the scope of banking organizations considered to be predominantly engaged in custody, safekeeping, and asset servicing activities and by providing the standard by which such banking organizations would determine the amount of central bank deposits that could be excluded from total leverage exposure, which is the denominator of the supplementary leverage ratio in the capital rule.
Under the proposal, a depository institution holding company with a ratio of assets under custody (AUC)-to-total assets of at least 30:1 would have been considered predominantly engaged in custody, safekeeping, and asset servicing activities. Such a banking organization would have been termed a “custodial banking organization.” A custodial banking organization would have excluded from the supplementary leverage ratio deposits placed at a “qualifying central bank,” which would have included a Federal Reserve Bank, the European Central Bank, or any central bank of a member country of the OECD if the member country meets certain criteria. The amount of central bank deposits that could have been excluded from total leverage exposure would have been limited by the amount of deposit liabilities of the custodial banking organization that are linked to fiduciary or custody and safekeeping accounts.
The agencies collectively received six comment letters on the proposal (from banking organizations and other interested parties). Some commenters were supportive of the agencies' proposal to implement section 402. Other commenters acknowledged that the agencies are required to implement section 402 but raised various concerns regarding the potential effect that implementation of section 402 would have on other aspects of the banking sector.
The agencies have considered all the comments received on the proposal. As described in more detail below, the agencies are adopting the proposal as a final rule without modification. The agencies are required under section 402 to amend the capital rule to exclude from the supplementary leverage ratio certain central bank deposits of banking organizations predominantly engaged in custody, safekeeping, and asset servicing activities. The agencies' adoption of the proposal fulfills this statutory requirement. The final rule becomes effective on April 1, 2020.
The supplementary leverage ratio measures tier 1 capital relative to total leverage exposure, which includes on-balance sheet assets (including deposits at central banks) and certain off-balance sheet exposures.
Certain banking organizations engage in fiduciary, custody, safekeeping, and asset servicing activities. Custody, safekeeping, and asset servicing activities generally involve holding securities or other assets on behalf of clients, as well as activities such as transaction settlement, income processing, and related record keeping and operational services. A banking organization may also act as a fiduciary by, for example, acting as trustee or executor, or by having investment discretion over the management of client assets. Banking organizations typically provide custody, safekeeping, and asset servicing to their fiduciary accounts. While many banking organizations offer some or all of these services, certain banking organizations specialize in these activities and often do not provide the same range or scale of traditional commercial or retail banking products as are provided by other banking organizations.
Fiduciary and custody clients often maintain cash deposits at the banking organization in connection with these services. Clients typically maintain cash positions consisting of funds awaiting investment or distribution that are often in the form of deposits placed in banking organizations. These cash deposits help facilitate the administration of the custody account. Under U.S. generally accepted accounting principles (U.S. GAAP), cash deposits at a banking organization are a deposit liability and thus appear on the banking organization's balance sheet.
Cash deposits that are linked to custody and fiduciary accounts at banking organizations fluctuate depending on the activities of the banking organization's custodial clients. For example, cash deposit balances of such banking organizations generally increase during periods when clients liquidate securities, such as during times of stress. To assist in managing these cash fluctuations, banking organizations may maintain significant cash deposits at central banks. Central bank deposits can be used as an asset-liability management strategy to facilitate these banking organizations' ability to support custodial clients' cash-related needs. Under U.S. GAAP,
The proposal would have defined a depository institution holding company predominantly engaged in custody, safekeeping, and asset servicing activities, together with any subsidiary depository institution, as a “custodial banking organization.”
For the proposal, the agencies considered various measures that they could use to identify and define a custodial banking organization. As noted in the proposal, the agencies believe that the phrase “predominantly engaged in custodial, safekeeping, and asset servicing activities” suggests that the banking organization's business model is primarily focused on custody, safekeeping, and asset servicing activities, as compared to its commercial lending, investment banking, or other banking activities.
The agencies received several comments on the proposed definition of a custodial banking organization. One commenter supported adoption of the AUC-to-total assets measure under the proposal as a simple assessment that is consistent with legislative intent, and did not support the use of an income-based measure because it would increase reporting burden. Another commenter, however, supported an income-based measure to determine a custodial banking organization, arguing that an income-based measure would be more accurate than an asset-based measure in a stress environment.
While an income-based measure would show the percentage of a banking organization's income that it derives from custodial, safekeeping, and asset servicing activities, the agencies are concerned that such an approach would increase reporting burden for banking organizations subject to the supplementary leverage ratio, as banking organizations do not currently report income from custodial, safekeeping, and asset servicing activities separately from income derived from fiduciary activities. In addition and as noted above, an income-based measure likely would not result in a different outcome than an asset-based measure, as the agencies' analysis revealed a significant positive correlation between the AUC-to-total assets measure and the income-based measure.
As noted in the proposal, an AUC-to-total assets measure provides a metric for sizing a banking organization's custodial, safekeeping, and asset servicing business as compared with its other activities. Such a measure would compare assets held in custody—a major activity of banking organizations primarily focused on custody, safekeeping, and asset servicing activities—relative to on-balance sheet assets. The measure is objective because AUC often comprises marketable securities or other assets with widely quoted market values, and banking organizations typically exercise little or no valuation discretion when measuring AUC. In addition, the AUC-to-total assets measure is derived from items that are publicly reported and is subject to review by regulators, banking organizations, and the public.
For these reasons, the agencies are adopting as final the proposed use of an AUC-to-total assets measure as the basis for defining a custodial banking organization.
A commenter pointed out that the agencies omitted “asset servicing activities” from the definitions of “fiduciary or custodial and safekeeping account” and “custodial banking organization” in several parts of the proposal. Section 402 defines “custodial bank” as a “depository institution holding company predominantly engaged in custody, safekeeping, and asset servicing activities.” In contrast with the term “custodial banking organization” in section 402, the statute uses the term “fiduciary or custodial and safekeeping account” to describe the limit on the exclusion of deposits at qualifying central banks and does not include “asset servicing activities” in this context. Accordingly, the final rule does not use the phrase “asset servicing activities” in the context of the exclusion.
In defining a custodial banking organization, the proposal would have set a threshold for the AUC-to-total assets ratio at 30:1. This threshold represents the midpoint between the lowest AUC-to-total assets measure of
The proposal also incorporated use of a four-quarter average for the AUC-to-total assets measure. This approach would further minimize the effect of significant fluctuations in a banking organization's AUC-to-total assets ratio, which is a particular concern under stress conditions. The 30:1 AUC-to-total assets measure also would limit the potential for a banking organization subject to the supplementary leverage ratio that does not predominantly engage in custody, safekeeping, and asset servicing activities, as compared to its other activities, to qualify as a custodial banking organization. The agencies did not receive comments on the proposed threshold. In addition, expanding the analysis to include the first and second quarters of 2019 produces the same range of AUC-to-total assets ratios. For the reasons provided above, the agencies are adopting as final the proposed threshold of 30:1 for the AUC-to-total assets measure.
Under the proposal, any subsidiary depository institution of a U.S. top-tier depository institution holding company that qualifies as a custodial banking organization also would be a custodial banking organization and therefore could exclude from total leverage exposure all deposits with a qualifying central bank that are recognized on its consolidated balance sheet in the same manner as its parent depository institution holding company.
The agencies also sought comment on whether to expand the scope of application and definition of custodial banking organization to include a depository institution that is not controlled by a holding company and that has a ratio of AUC-to-total assets of at least 30:1.
Under the proposal, the amount of central bank deposits eligible for exclusion from total leverage exposure would have equaled the average daily balance over the reporting quarter of all deposits placed with a “qualifying central bank.” Under the proposal, and consistent with section 402, a qualifying central bank would have meant a Federal Reserve Bank, the European Central Bank, or a central bank of a member country of the OECD if an exposure to the member country receives a zero percent risk weight under section 32 of the capital rule and the sovereign debt of such member country is not in default or has not been in default during the previous five years.
The agencies did not receive any comments addressing the mechanics of the central bank deposit exclusion. One commenter stated that custodial banking organizations should be permitted to distribute profits received from interest earned on excess reserves. The agencies note that this rulemaking does not affect the types of deposits that a bank may have with a Federal Reserve Bank, or the interest paid on those deposits.
In addition, as discussed in the Supplementary Information to the proposal, all deposits placed with a Federal Reserve Bank qualify for the rule's central bank deposit exclusion, including deposits in a master account, deposits in a term deposit account that offers an early withdrawal feature, and deposits in an excess balance account.
The agencies are adopting as final the proposed mechanics of the central bank deposit exclusion.
Consistent with section 402, the proposal would have limited the amount of a custodial banking organization's deposits with a qualifying central bank that could have been excluded from total leverage exposure. In particular, the amount of such deposits that could have been excluded could not have exceeded an amount equal to the on-balance-sheet deposit liabilities of the custodial banking organization that were linked to fiduciary or custody and safekeeping accounts. After considering the comments discussed below, the agencies are adopting this aspect of the proposal without change.
The proposal would have defined a fiduciary or custodial and safekeeping account as an account administered by a custodial banking organization for which the custodial banking organization provides fiduciary or custodial and safekeeping services, as authorized by applicable federal and state law. Under the proposal, a deposit account would have been considered linked to a fiduciary or custodial and safekeeping account if the deposit account is used to facilitate the administration of the fiduciary or custody and safekeeping account.
The agencies sought comment on the advantages and disadvantages of using the FDIC exclusion limit or the reporting instructions to Schedule RC-O of the Call Report for purposes of determining linkage between a deposit account and a fiduciary or custody and safekeeping account to calculate the limit on the amount of deposits that could be excluded from total leverage exposure. In particular, the proposal noted that the asset exclusion limit for “custodial banks” provided under the FDIC's regulations for purposes of determining risk-based deposit insurance assessments (FDIC exclusion limit) includes the concept of a “linked” deposit and that the Call Report collects information related to such linked deposits on Schedule RC-O.
One commenter supported defining the scope of fiduciary or custodial and safekeeping accounts in a manner that does not deviate materially from the current scope of fiduciary and custody and safekeeping accounts reported under schedule RC-T of the Call Report. To mitigate additional compliance obligations for the purpose of section 402, the commenter supported using the FDIC exclusion limit and reporting instructions in Schedule RC-O to determine whether a deposit account is linked to a fiduciary or custodial and safekeeping account.
The agencies are adopting as final the proposed definition of fiduciary or custodial and safekeeping accounts. As noted in the proposal, the agencies anticipate that the scope of the fiduciary or custodial and safekeeping accounts under the rule should not deviate materially from the current scope of the fiduciary and custody and safekeeping accounts reported under Schedule RC-T of the Call Report. However, the agencies are clarifying that because this final rule applies to both custodial banking organization holding companies and custodial banking organization subsidiary depository institutions, and because holding companies do not report Schedule RC-T of the Call Report, the agencies are not referring directly to schedule RC-T for the scope of fiduciary or custodial and safekeeping accounts.
The agencies are clarifying that the existing FDIC exclusion limit and the reporting instructions to Schedule RC-O are factors that a banking organization may take into account to determine linkage between a deposit account and a fiduciary or custody and safekeeping account. However, the agencies are not directly defining the linkage standard in the final rule by reference to the FDIC exclusion limit or Schedule RC-O.
The FDIC exclusion limit and the reporting instructions to Schedule RC-O were designed for the purpose of determining risk-based deposit insurance assessments for insured depository institutions. In addition, the FDIC exclusion limit and reporting instructions in Schedule RC-O were designed to limit the custodial bank deduction to transaction account deposit liabilities and therefore Schedule RC-O would not capture non-transaction account deposit liabilities.
The fact that a client has both a deposit account and a fiduciary or custody and safekeeping account at the same custodial banking organization, or an affiliate or subsidiary of such custodial banking organization, would not by itself be sufficient for those accounts to be considered “linked” for purposes of the final rule. On the other hand, cash deposits may be used to facilitate the administration of a custody or fiduciary account, such as holding interest and dividend payments related to securities held in the custody or
Consistent with section 402, under the final rule, a custodial banking organization may exclude from total leverage exposure the lesser of (1) the amount of central bank deposits placed at qualifying central banks by the custodial banking organization (including deposits placed by consolidated subsidiaries), and (2) the amount of on-balance sheet deposit liabilities of the custodial banking organization (including consolidated subsidiaries) that are linked to fiduciary or custodial and safekeeping accounts.
One commenter asked the agencies to clarify that the calculation of the central bank exclusion limit must be done on a quarterly basis, consistent with the calculations required under Schedule RC-T and RC-O.
Banking organizations report their supplementary leverage ratios on FFIEC Form 101, Schedule A and Form Y-9C, Schedule HC-R, and Call Reports, Schedule RC-R. The agencies recently proposed modifications to the regulatory reporting requirements for the supplementary leverage ratio in a separate publication in the
As discussed in section III, the agencies sought comment on whether to expand the scope of application and definition of “custodial banking organization” to include a depository institution that is not controlled by a holding company and that has a ratio of AUC-to-total assets of at least 30:1. For the reasons stated in the proposal,
Under the Board's total loss-absorbing capacity (TLAC) rule, a covered company is subject to requirements that, in part, rely on the covered company's total leverage exposure.
Some commenters stated that the definition of total leverage exposure should be consistent across the supplementary leverage ratio and TLAC requirements. The commenters asserted that inconsistent treatment across the supplementary leverage ratio and TLAC requirements would be in tension with the legislative intent of section 402. Commenters stated that including central bank deposits in TLAC for custodial banking organizations could undermine the ability for such deposits to serve as a safe store of value for client cash during a stress event. In addition, commenters asserted that there is no compelling policy rationale for requiring a banking organization to include in TLAC an asset for which there is no corresponding capital requirement under the supplementary leverage ratio. Commenters also stated that the use of different measures for the supplementary leverage ratio and TLAC rule would increase complexity for bank capital allocation without improving risk assessment, because the differences between the measures would only reflect the amount of central bank placements.
The agencies are adopting as final the proposed treatment of total leverage exposure. This treatment will align the TLAC rule with the supplementary leverage ratio and reduce burden by not requiring separate calculations for total leverage exposure under each of the TLAC rule and the supplementary leverage ratio.
Several commenters acknowledged that the agencies are required to implement section 402 but raised various concerns regarding the potential effect that implementation of section 402 could have on other aspects of the banking sector. Two commenters raised concerns that implementation of section 402 would lead to a market concentration in custody services and provide custodial banking organizations with a competitive advantage relative to banking organizations that are subject to the supplementary leverage ratio but are not eligible to exclude central bank deposits. To help mitigate these concerns, these commenters urged for finalization of the proposal to recalibrate the eSLR standards issued by the Board and OCC.
The agencies did not propose recalibrating the eSLR standards as part of this rulemaking. Therefore, the agencies view comments on the eSLR standards as outside the scope of this rulemaking. Another commenter noted that while the agencies are required to implement section 402, the agencies are not prevented from using other authorities to counteract the potential effects of section 402 through making changes to other parts of the capital rule. As noted above, the proposal was designed to implement section 402, and the agencies did not seek comment on other changes. Changes to the capital rule that do not address the supplementary leverage ratio are outside of the scope of this rulemaking, but may be considered by the agencies in subsequent rulemakings.
Under the final rule, a top-tier U.S. depository institution holding company that qualifies as a custodial banking organization, and any of its depository institution subsidiaries, will be able to exclude certain central bank deposits
Thus, the final rule would reduce the amount of tier 1 capital that must be maintained by a custodial banking organization holding company only if the supplementary leverage ratio currently serves as the binding capital requirement for the banking organization.
The supplementary leverage ratio as of the third quarter 2018 serves as the binding constraint for two depository institution subsidiaries of custodial banking organization holding companies. Accordingly, under the final rule, the amount of tier 1 capital required of those institutions to the supplementary leverage ratio will decrease by approximately $7 billion, which represents approximately 23 percent of the total amount of tier 1 capital that must be maintained by those institutions as of the third quarter 2018. As described above, given the applicable capital requirements for parent holding companies of these depository institutions, the final rule is not expected to decrease the amount of tier 1 capital maintained by such holding companies.
One commenter expressed concern that the rule might allow custodial banking organizations to reduce the amount of tier 1 capital and urged the agencies to use other authorities to offset the potential capital impact. As described above, the capital standards and other constraints applicable at the custodial banking organization holding company level are expected to limit the amount of capital that such a holding company could distribute outside of the consolidated organization, thus limiting any safety and soundness or financial stability concerns for the holding company as a whole due to reduced requirements at the depository institution level. In addition, the agencies have regulatory and supervisory tools to ensure that depository institutions and holding companies maintain appropriate amounts of capital for their operations and risk profile.
The agencies' capital rule contains “collections of information” within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521). In accordance with the requirements of the PRA, the agencies may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number for the OCC is 1557-0318, Board is 7100-0313, and FDIC is 3064-0153. The information collections that are part of the agencies' capital rule will not be affected by this final rule and therefore no final submissions will be made by the FDIC or OCC to OMB under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and § 1320.11 of the OMB's implementing regulations (5 CFR part 1320) in connection with this rulemaking.
Related to the final rule, there are required changes to the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051), the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101), and the Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128 (Board)), which will be addressed through one or more separate
Under regulations issued by the Small Business Administration, a small entity includes a bank, bank holding company, or savings and loan holding company with assets of $600 million or less and trust companies with total assets of $41.5 million or less (small banking organization).
As discussed in the Supplementary Information section, the final rule revises the capital rule to implement section 402 of EGRRCPA. Specifically, the final rule allows custodial banking organization to exclude from the denominator of the supplementary leverage ratio certain funds of the banking organization that are deposited with central banks. The supplementary leverage ratio applies only to advanced approaches banking organizations, which are very large banking organizations and their depository institution subsidiaries regardless of size.
As of June 30, 2019, there were 3,424 FDIC-supervised institutions, of which 2,665 are considered small entities for the purposes of RFA. These small entities hold $514 billion in assets, accounting for 16.6 percent of total assets held by FDIC-supervised institutions.
The final rule applies to only three advanced approaches banking organizations, one of which has an IDI subsidiary that is FDIC-supervised and has less than $600 million in total assets.
Section 722 of the Gramm-Leach-Bliley Act
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
The agencies considered the administrative burdens and benefits of the rule in determining its effective date
The OCC has analyzed the final rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA).
The OCC's estimated UMRA cost is near zero. Therefore, the OCC finds that the final rule does not trigger the UMRA cost threshold. Accordingly, the OCC has not prepared the written statement described in section 202 of the UMRA.
For purposes of Congressional Review Act, the Office of Management and Budget (OMB) makes a determination as to whether a final rule constitutes a “major” rule.
The Congressional Review Act defines a “major rule” as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.
Administrative practice and procedure, Capital, National banks, Risk.
Administrative practice and procedure, Banks, Banking, Capital, Federal Reserve System, Holding companies.
Administrative practice and procedure, Banks, Banking, Capital adequacy, Savings associations, State non-member banks.
For the reasons set out in the joint preamble, the OCC amends 12 CFR part 3 as follows:
12 U.S.C. 93a, 161, 1462, 1462a, 1463, 1464, 1818, 1828(n), 1828 note, 1831n note, 1835, 3907, 3909, and 5412(b)(2)(B).
(1) A Federal Reserve Bank;
(2) The European Central Bank; and
(3) The central bank of any member country of the OECD, if:
(i) Sovereign exposures to the member country would receive a zero percent risk-weight under § 3.32; and
(ii) The sovereign debt of the member country is not in default or has not been in default during the previous 5 years.
(c) * * *
(4) * * *
(ii) For purposes of this part,
(J) A custodial bank shall exclude from its total leverage exposure the lesser of:
(
(
For the reasons set forth in the preamble, chapter II of title 12 of the Code of Federal Regulations is amended as set forth below:
12 U.S.C. 248(a), 321-338a, 481-486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p-l, 1831w, 1835, 1844(b), 1851, 3904, 3906-3909, 4808, 5365, 5368, 5371, and 5371 note.
(1) A Board-regulated institution that is:
(i) A top-tier depository institution holding company domiciled in the United States that has assets under custody that are at least 30 times the amount of the depository institution holding company's total assets; or
(ii) A state member bank that is a subsidiary of a depository institution holding company described in paragraph (1)(i) of this definition.
(2) For purposes of this definition, total assets are equal to the average of the banking organization's total consolidated assets for the four most recent calendar quarters. Assets under custody are equal to the average of the Board-regulated institution's assets under custody for the four most recent calendar quarters.
(1) A Federal Reserve Bank;
(2) The European Central Bank; and
(3) The central bank of any member country of the Organisation for Economic Co-operation and Development, if:
(i) Sovereign exposures to the member country would receive a zero percent risk-weight under § 217.32; and
(ii) The sovereign debt of the member country is not in default or has not been in default during the previous 5 years.
(c) * * *
(4) * * *
(ii) For purposes of this part,
(J) A custodial banking organization shall exclude from its total leverage exposure the lesser of:
(
(
For the reasons set forth in the preamble, chapter III of title 12 of the Code of Federal Regulations is amended as set forth below.
12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n), 1828(o), 1831o, 1835, 3907, 3909, 4808; 5371; 5412; Pub. L. 102-233, 105 Stat. 1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236, 2355, as amended by Pub. L. 103-325, 108 Stat. 2160, 2233 (12 U.S.C. 1828 note); Pub. L. 102-242, 105 Stat. 2236, 2386, as amended by Pub. L. 102-550, 106 Stat. 3672, 4089 (12 U.S.C. 1828 note); Pub. L. 111-203, 124 Stat. 1376, 1887 (15 U.S.C. 78o-7 note).
(1) A Federal Reserve Bank;
(2) The European Central Bank; and
(3) The central bank of any member country of the Organisation for Economic Co-operation and Development, if:
(i) Sovereign exposures to the member country would receive a zero percent risk-weight under § 324.32; and
(ii) The sovereign debt of the member country is not in default or has not been in default during the previous 5 years.
(c) * * *
(4) * * *
(ii) For purposes of this part,
(J) A custody bank shall exclude from its total leverage exposure the lesser of:
(
(
By order of the Board of Governors of the Federal Reserve System, November 19, 2019.
By order of the Board of Directors.
Bureau of Consumer Financial Protection.
Policy statement.
The Bureau of Consumer Financial Protection (Bureau) is publishing this policy statement in order to announce a new designation for certain Bureau guidance, known as “Compliance Aids,” and to explain the legal status and role of guidance with that designation.
This policy statement becomes applicable on February 1, 2020.
Christopher Shelton, Counsel, or Lea Mosena, Senior Counsel, Legal Division, 202-435-7700. Regulatory inquiries can be submitted at
The Bureau's “primary functions” under the Dodd-Frank Wall Street Reform and Consumer Protection Act
Since its inception, the Bureau has provided guidance through a variety of means, and its guidance functions have evolved and are continuing to evolve in response to feedback from industry and other stakeholders. Some examples of compliance resources that the Bureau has released include small entity compliance guides, instructional guides for disclosure forms, executive summaries, summaries of regulation changes, factsheets, flow charts, compliance checklists, frequently asked questions, and summary tables.
Going forward, the Bureau intends to establish a new category of materials that are similar to previous compliance resources but will now be designated as “Compliance Aids.” This designation will provide the public with greater clarity regarding the legal status and role of these materials, as discussed below.
The Bureau does not intend to use Compliance Aids to make decisions that bind regulated entities. Unlike the Bureau's regulations and official interpretations, Compliance Aids are not “rules” under the Administrative Procedure Act.
Compliance Aids are designed to accurately summarize and illustrate the underlying rules and statutes. Accordingly, when exercising its enforcement and supervisory discretion, the Bureau does not intend to sanction, or ask a court to sanction, entities that reasonably rely on Compliance Aids.
This policy statement constitutes a general statement of policy that is exempt from the notice and comment rulemaking requirements of the Administrative Procedure Act.
Pursuant to the Congressional Review Act,
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule establishes, amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures (ODPs) for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective January 27, 2020. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of January 27, 2020.
Availability of matters incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001.
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center at
Thomas J. Nichols, Flight Procedures and Airspace Group, Flight Technologies and Procedures Division, Flight Standards Service, Federal Aviation Administration. Mailing Address: FAA Mike Monroney Aeronautical Center, Flight Procedures and Airspace Group, 6500 South MacArthur Blvd., Registry Bldg. 29 Room 104, Oklahoma City, OK 73169. Telephone: (405) 954-4164.
This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.
The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPS as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as Amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts.
The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.
Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this
Air traffic control, Airports, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide for the safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective January 27, 2020. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of January 27, 2020.
Availability of matter incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001;
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Navigation Products, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center online at
Thomas J. Nichols, Flight Procedures and Airspace Group, Flight Technologies and Procedures Division, Flight Standards Service, Federal Aviation Administration. Mailing Address: FAA Mike Monroney Aeronautical Center, Flight Procedures and Airspace Group, 6500 South MacArthur Blvd., Registry Bldg 29 Room 104, Oklahoma City, OK 73169. Telephone: (405) 954-4164.
This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the
This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.
The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.
The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.
Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air Traffic Control, Airports, Incorporation by reference, Navigation (Air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97, (14 CFR part 97), is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:
Drug Enforcement Administration, Department of Justice.
Direct final rule.
Under this direct final rule, the Drug Enforcement Administration (DEA) is updating the Table of Exempt Chemical Mixtures to include the listing of 15 additional preparations. This action is in response to DEA's review of new applications for exemption. Having reviewed applications and relevant information, DEA finds that these preparations meet the applicable exemption criteria. Therefore, these products are exempted from the application of certain provisions of the Controlled Substances Act.
This direct final rule is effective March 27, 2020 without further action, unless adverse comment is received by DEA no later than February 26, 2020. If any comments or objections raise significant issues regarding any findings of fact or conclusions of law upon which the order is based, the DEA will publish a timely withdrawal of the rule in the
Written comments must be postmarked and electronic comments must be submitted on or before February 26, 2020. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period.
To ensure proper handling of comments, please reference “Docket No. DEA-505F/RIN 1117-ZA05” on all correspondence, including any attachments.
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Scott A. Brinks, Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152. Telephone: (571) 362-3261.
Any interested person may file comments or objections to this order, on or before March 27, 2020. If any such comments or objections raise significant issues regarding any findings of fact or conclusions of law upon which the order is based, the DEA will publish a timely withdrawal of the rule in the
Please note that all comments received are considered part of the public record and made available for public inspection online at
If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be posted online or made available in the public docket, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also place all the personal identifying information you do not want posted online or made available in the public docket in the first paragraph of your comment and identify what information you want redacted.
If you want to submit confidential business information as part of your comment, but do not want it to be posted online or made available in the public docket, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify confidential
The manufacturers of 15 chemical mixtures listed below have applied for an exemption pursuant to 21 CFR 1310.13. The Drug Enforcement Administration (DEA) has reviewed the applications, as well as any additional information submitted by the respective manufacturers. DEA has found that: (1) Each of these chemical mixtures is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance; and (2) the listed chemical(s) contained in these chemical mixtures cannot be readily recovered. Therefore, DEA has determined that each of the applications should be granted, and previously issued a letter to this effect. This regulatory action conforms DEA regulations to the exemptions previously issued.
Under 21 CFR 1310.13(a), the Acting Administrator may, by publication of a Final Rule in the
• The mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance; and
• The listed chemical or chemicals contained in the chemical mixture cannot be readily recovered.
Any manufacturer seeking an exemption for a chemical mixture, not automatically exempt under 21 CFR 1310.12, may apply to the Acting Administrator by submitting an application for exemption which contains the information required by 21 CFR 1310.13(c):
• The name, address, and registration number, if any, of the applicant;
• The date of the application;
• The exact trade name(s) of the applicant's chemical mixture;
• The complete qualitative and quantitative composition of the chemical mixture (including all listed and all non-listed chemicals); or if a group of mixtures, the concentration range for the listed chemical and a listing of all non-listed chemicals with respective concentration ranges;
• The chemical and physical properties of the mixture and how they differ from the properties of the listed chemical or chemicals; and if a group of mixtures, how the group's properties differ from the properties of the listed chemical;
• A statement that the applicant believes justifies an exemption for the chemical mixture or group of mixtures. The statement must explain how the chemical mixture(s) meets the exemption criteria;
• A statement that the applicant accepts the right of the Acting Administrator to terminate exemption from regulation for the chemical mixture(s) granted exemption under 21 CFR 1310.13; and
• The identification of any information on the application that is considered by the applicant to be a trade secret or confidential and entitled to protection under U.S. laws restricting the public disclosure of such information.
The Acting Administrator may require the applicant to submit such additional documents or written statements of fact relevant to the application that he deems necessary for determining if the application should be granted.
Title 21 CFR 1310.13 further specifies that within a reasonable period of time after the receipt of an application for an exemption, the Acting Administrator will notify the applicant of acceptance or rejection of the application for filing. If the application is not accepted for filing, an explanation will be provided. The Acting Administrator is not required to accept an application if any information required pursuant to 21 CFR 1310.13 is lacking or not readily understood. The applicant may, however, amend the application to meet the requirements of this section.
If the exemption is granted, the applicant shall be notified in writing and the Acting Administrator shall issue, and publish in the
A formulation granted exemption by publication in the
Having considered the information provided in each of the below listed applications, I find that each of the referenced chemical mixtures meets the requirements for exemption under 21 CFR 1310.13(a). Therefore, each of these mixtures is exempt from the application of sections 302, 303, 310, 1007, and 1008 of the Controlled Substances Act (21 U.S.C. 822, 823, 830, 957 and 958).
DEA is updating the table in 21 CFR 1310.13(i) to include each of these exempt chemical mixtures.
An agency may find good cause to exempt a rule from prior public notice provisions of the Administrative Procedure Act (5 U.S.C. 553(b)(B)), if it is determined to be unnecessary, impracticable, or contrary to the public interest. DEA finds that it is unnecessary to engage in notice and comment procedures because this rulemaking grants exemptions for the below listed products in accordance with standards set by existing DEA regulations. Each of these manufacturers has previously received a letter from DEA granting exempted status for the specific products. This regulatory action hereby conforms DEA regulations to the exemptions previously considered and issued.
This direct final rule was developed in accordance with the principles of
This direct final rule is not an Executive Order 13771 regulatory action pursuant to Executive Order 12866 and the Office of Management and Budget (OMB) guidance.
The Acting Administrator further certifies that this rulemaking meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.
This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government.
This rule does not have tribal implications warranting the application of Executive Order 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Acting Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), and by approving it certifies that this regulation will not have a significant economic impact upon a substantial number of small entities. This regulation will not have a significant impact upon firms who distribute these products. In fact, the approval of Exempt Chemical Mixture status for these products reduces the regulatory requirements for distribution of these materials.
In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501
This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501-3521. This action does not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. 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.
This rule is not a major rule as defined by the Congressional Review Act (CRA), 5 U.S.C. 804. This rule does not result in: An annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based companies to compete with foreign based companies in domestic and export markets. However, pursuant to the CRA, the DEA has submitted a copy of this direct final rule to both Houses of Congress and to the Comptroller General.
Drug traffic control, Exports, Imports, Reporting and recordkeeping requirements.
Under the authority vested in the Attorney General by section 102(39)(A)(vi) of the Act (21 U.S.C. 802(39)(A)(vi)) and delegated to the Administrator of the Drug Enforcement Administration by regulations of the Department of Justice (28 CFR 0.100), the Acting Administrator hereby amends 21 CFR part 1310 as set forth below.
21 U.S.C. 802, 827(h), 830, 871(b) 890.
The additions read as follows:
(i) * * *
Coast Guard, DHS.
Notice of temporary deviation from regulations; request for comments.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the CSX Transportation Railroad vertical lift bridge across Mobile River, mile 13.3 near Hurricane, Alabama. This deviation is needed to collect and analyze information on vessel traffic when the bridge tender is moved to a geographically remote centralized control point located in Mobile, AL. The Coast Guard is seeking comments from the public about the impact to vessel traffic generated by this change.
This deviation is effective from 6 a.m. January 27, 2020 through 6 p.m. March 27, 2020.
Comments and related material must be received by the Coast Guard on or before March 27, 2020.
You may submit comments identified by docket number USCG-2019-0911 using Federal eRulemaking Portal at
See the “Public Participation and Request for Comments” portion of the
If you have questions about this test deviation, call or email Mr. Doug Blakemore, Eighth Coast Guard District Bridge Administrator; telephone (504) 671-2128, email
CSX Railroad has established a central location to operate CSX drawbridges. They have requested to relocate the Mobile River bridge tender to their centralized location in Mobile, AL. This CSX vertical lift bridge is located at Mobile River, mile 13.3, Mobile County, near Hurricane, AL. It has a vertical clearance of 5.5' in the closed to vessel position. The bridge operates according to 33 CFR 117.5. Mobile River is used primarily by commercial tow and recreational vessels. The bridge opens for vessels about 6 times per day and vessels that do not need the bridge to open may pass.
This deviation will last for 60 days. CSX will collect data on all bridge openings to ensure that the remote operations will not impact navigation. CSX will immediately return the tender to the bridge location if there are any system failures or weather conditions that will not allow the bridge tender to operate the bridge from Mobile.
The Coast Guard will publish information about this temporary deviation in our Local and Broadcast Notice to Mariners so that mariners are informed of this operating change and our request for comments on the change.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this deviation from drawbridge regulations as being available in this docket and all public comments, will be in our online docket at
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS implements management measures described in Vision Blueprint Commercial Regulatory Amendment 27 (Regulatory Amendment 27) to the Fishery Management Plan (FMP) for the Snapper-Grouper Fishery of the South Atlantic Region (Snapper-Grouper FMP), as prepared and submitted by the South Atlantic Fishery Management Council (Council). This final rule modifies commercial fishing seasons, trip limits, and minimum size limits for selected snapper-grouper species in the South Atlantic exclusive economic zone (EEZ). The purpose of this final rule is to improve equitable access for commercial fishermen in the snapper-grouper fishery, minimize discards to the extent practicable, and improve marketability within the snapper-grouper fishery.
This final rule is effective on February 26, 2020.
Electronic copies of Regulatory Amendment 27 may be obtained from
Mary Vara, NMFS Southeast Regional Office, telephone: 727-824-5305, or email:
The snapper-grouper fishery in the South Atlantic region is managed under the Snapper-Grouper FMP and includes blueline tilefish, snowy grouper, greater amberjack, red porgy, vermilion snapper, almaco jack, other jacks complex (lesser amberjack, almaco jack, and banded rudderfish), queen snapper, silk snapper, blackfin snapper, and gray triggerfish, along with other snapper-grouper species. The Snapper-Grouper FMP was prepared by the Council and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
On October 17, 2019, NMFS published a proposed rule for Regulatory Amendment 27 in the
This final rule modifies the commercial trip limits for blueline tilefish, greater amberjack, red porgy, and vermilion snapper; establishes commercial split seasons for snowy grouper, greater amberjack, and red porgy; and establishes a commercial trip limit for the other jacks complex. For the commercial sector, this final rule establishes a minimum size limit for almaco jack, removes the minimum size limits for silk snapper, queen snapper, and blackfin snapper, and reduces the minimum size limit for gray triggerfish in the EEZ off the east coast of Florida. The management measures in this final rule apply on board a vessel for which a Federal commercial permit for South Atlantic snapper-grouper has been issued. Unless otherwise noted, all weights in this final rule are described in gutted weight.
This final rule modifies the commercial trip limit for blueline tilefish throughout the South Atlantic EEZ. During the period from January 1 through April 30 each year, the commercial trip limit is 100 lb (45 kg), and from May 1 through December 31 each year, the commercial trip limit is 300 lb (136 kg). The Council determined that a lower 100-lb (45-kg) commercial trip limit of blueline tilefish each year from January through April would help reduce snowy grouper discards by commercial fishermen operating south of Cape Hatteras, North Carolina, because the commercial trip limit for blueline tilefish would be met more quickly on a trip. This final rule maintains the current 300-lb (136-kg) trip limit for blueline tilefish from May through December when good weather conditions are more likely to allow commercial fishermen in the northern portion of the Council's area of jurisdiction to have greater access to the resource and optimize their harvest through an extended fishing season.
This final rule establishes two commercial fishing seasons for snowy grouper of January 1 through June 30 (Season 1) and July 1 through December 31 (Season 2) within the current fishing year. This final rule allocates the commercial quotas as 70 percent to Season 1, 107,754 lb (48,876 kg), and 30 percent to Season 2, 46,181 lb (20,947 kg). Any remaining commercial quota from Season 1 will be transferred to
This final rule establishes two commercial fishing seasons for greater amberjack. The two seasons are March 1 through August 31 (Season 1) and September 1 through the end of February (Season 2). The commercial quotas are allocated as 60 percent to Season 1, 461,633 lb (209,393 kg), and 40 percent to Season 2, 307,755 lb (139,595 kg). Any remaining commercial quota from Season 1 will be added to the commercial quota in Season 2. Any remaining quota from Season 2 will not be carried forward into the next fishing year. Additionally, this final rule modifies the commercial trip limit for greater amberjack. During Season 1, the commercial trip limit is 1,200 lb (544 kg) in round or gutted weight, and during Season 2, the commercial trip limit is 1,000 lb (454 kg) in round or gutted weight. However, during April each year, the commercial sale and purchase of greater amberjack will continue to be prohibited, and the commercial harvest and possession limit will continue to be one fish per person per day or one fish per person per trip, whichever is more restrictive.
The Council expects that dividing the commercial quota for South Atlantic greater amberjack between two seasons and reducing the commercial trip limit for the latter half of the fishing year would lengthen the greater amberjack commercial season and allow for a more equitable distribution and price stability of the greater amberjack resource throughout the South Atlantic.
This final rule establishes two commercial fishing seasons for red porgy. Season 1 is January 1 through April 30, and Season 2 is May 1 through December 31. The commercial quotas are allocated as 30 percent to Season 1, which is 47,308 lb (21,459 kg), gutted weight, or 49,200 lb (22,317 kg), round weight; and 70 percent to Season 2, which is 110,384 lb (50,069 kg), gutted weight, or 114,800 lb (52,072 kg), round weight. Any remaining commercial quota from Season 1 will be added to the commercial quota in Season 2. Any remaining quota from Season 2 will not be carried forward into the next fishing year.
Additionally, Regulatory Amendment 27 and this final rule modify the commercial trip limit for red porgy during Season 1 to be 60 fish. During Season 2, the commercial trip limit for red porgy will continue to be 120 fish.
The final rule removes the current commercial sale and purchase prohibition and the possession limit of three fish per person per day or three fish per person per trip, whichever is more restrictive, from January 1 through April 30. The Council determined that these new measures will continue to constrain commercial harvest to protect spawning red porgy during Season 1, while allowing commercial fishermen to retain some red porgy when targeting other co-occurring species, thereby reducing discards of red porgy.
This final rule removes the commercial trip limit reduction for vermilion snapper when 75 percent of the seasonal quota is met during both Season 1 and 2 but retains the 1,000 lb (454 kg) commercial trip limit. The Council determined that there is no longer a need to have a trip limit reduction for vermilion snapper. Also, as described in Regulatory Amendment 27, maintaining the current commercial trip limit would ensure economic profitability and efficient use of the vermilion snapper resource.
This final rule establishes a commercial minimum size limit of 20 inches (50.8 cm), fork length (FL), for almaco jack in the South Atlantic EEZ. The Council determined that a commercial minimum size limit of 20 inches (50.8 cm) FL will allow more individual almaco jack to reach reproductive activity before being susceptible to harvest, and is projected to increase the average size and the corresponding average weight of fish harvested.
This final rule establishes a commercial trip limit for the other jacks complex of 500 lb (227 kg). The Council determined a 500-lb (227-kg) commercial trip limit for the other jacks complex would still allow fishermen to make a profitable trip, and enables them to have the added benefit of an extended commercial season, and it is better for the long-term sustainability of the other jacks complex resource.
Queen snapper, silk snapper, and blackfin snapper are part of the deep-water complex. Prior to this final rule, the commercial minimum size limit for queen snapper, silk snapper, and blackfin snapper was 12 inches (30.5 cm) total length (TL), but the remaining species in the deep-water complex do not have a specified minimum size limit requirement. The Council determined that removing the commercial minimum size limit for queen snapper, silk snapper, and blackfin snapper would reduce discards and discard mortality for these species. Therefore, this final rule removes the commercial minimum size limit for queen snapper, silk snapper, and blackfin snapper.
This final rule reduces the commercial minimum size limit to 12 inches (30.5 cm) FL for gray triggerfish in the EEZ off the east coast of Florida. In 2015, the 12-inch (30.5-cm) FL commercial minimum size limit was implemented for gray triggerfish in the EEZ off North Carolina, South Carolina, and Georgia, and a commercial minimum size limit of 14 inches (35.6 cm) FL was implemented in the EEZ off the east coast of Florida (80 FR 30947, June 1, 2015). However, after the commercial minimum size limit went into effect on July 1, 2015, stakeholders in Florida expressed concern to the Florida Fish and Wildlife Conservation Commission (FWC) regarding increasing discards of gray triggerfish in south Florida where the average size of gray triggerfish is less than that off northeast Florida. In response to that concern, the FWC subsequently reduced the recreational minimum size limit of gray triggerfish in state waters to 12 inches (30.5 cm) FL in 2015 (incorrectly stated in the preamble of the proposed rule as 2017), and requested that the Council develop consistent size limit regulations in Federal waters for gray triggerfish. Therefore, reducing the commercial minimum size limit to 12 inches (30.5 cm) FL in the EEZ off the east coast of Florida will make these state and Federal commercial regulations for gray triggerfish consistent throughout the Council's jurisdiction.
NMFS received six comments from individuals, a state agency, and a fisheries consulting company during the public comment period on the proposed rule for Regulatory Amendment 27. Five of the comments offered were in general support of most or all the actions in the proposed rule. NMFS acknowledges the comments in favor of all or part of the actions in the proposed rule and agrees with them. Comments that were beyond the scope of the proposed rule are not responded to in this final rule. The public comment that opposed an action contained in Regulatory Amendment 27 and the proposed rule is summarized below, along with NMFS' response.
Although minimum size limits, in general, have the potential to increase discards, NMFS believes that almaco jack would presumably exhibit similar release mortality to that of greater amberjack (20 percent, Southeast Data, Assessment, and Review 15, 2008), and thus, most discarded fish would likely survive. Some fishermen also believe that almaco jack are a “hardy” fish and have high release survival. Therefore, a 20-inch (50.8-cm) FL minimum size limit is expected to reduce discards to the extent practicable.
Additionally, and as stated in Regulatory Amendment 27, 88.5 percent of almaco jack landed commercially (by weight) in the South Atlantic are above 20 inches (50.8 cm) FL and 66 percent of the catch is above 26 inches (66 cm) FL; therefore, the change in regulatory discards is expected to be minimal. In regard to biological benefits, the larger the minimum size limit, the greater the resulting benefits to the population in terms of increased reproductive potential. Therefore, implementing a commercial minimum size limit of 20 inches (50.8 cm) FL is expected to result in positive biological impacts to the almaco jack stock. Overall, the Council determined that action to implement the 20-inch (50.8-cm) FL minimum size limit best meets their purpose to minimize discards in the snapper-grouper commercial fishery to the extent practicable while improving marketability.
The Regional Administrator for the NMFS Southeast Region determined that this final rule is necessary for the conservation and management of the South Atlantic snapper-grouper fishery and that it is consistent with Regulatory Amendment 27, the Snapper-Grouper FMP, the Magnuson-Stevens Act, and other applicable laws.
This final rule has been determined to be not significant for purposes of Executive Order 12866. This final rule is considered to be an Executive Order 13771 deregulatory action. The potential cost savings from this final rule are estimated to be $.02 million in 2016 dollars, discounted at 7 percent in perpetuity.
A final regulatory flexibility analysis (FRFA) was prepared. NMFS did not receive any comments from the U.S. Small Business Administration's Office of Advocacy or the public on the IRFA in the proposed rule, and therefore, NMFS did not make any associated changes to this final rule. A copy of this analysis is available from NMFS (see
The objective of this rule is to improve management of the commercial sector of the snapper-grouper fishery to better achieve optimum yield, while minimizing to the extent practicable, the adverse socio-economic effects of regulations on commercial fishing entities in the South Atlantic.
This final rule makes the following changes to the regulations for the commercial snapper-grouper fishing industry in the South Atlantic region. This rule reduces the commercial trip limit for blueline tilefish from 300 lb (136 kg) to 100 lb (45 kg) from January 1 through April 30 each fishing year. For snowy grouper, this rule establishes two commercial fishing seasons of January 1 through June 30 (Season 1) and July 1 through December 31 (Season 2), rather than a single season within the fishing year; allocates 70 percent of the commercial quota to Season 1 and 30 percent to Season 2; and adds any remaining commercial quota from Season 1 to Season 2 only. For greater amberjack, this rule establishes two commercial fishing seasons of March 1 through August 31 (Season 1) and September 1 through the end of February (Season 2), rather than a single season within the March through February fishing year; allocates 60 percent of the commercial quota to Season 1 and 40 percent to Season 2; and adds any remaining commercial quota from Season 1 to Season 2 only; and reduces the commercial trip limit from 1,200 lb (545 kg) in round or gutted weight to 1,000 lb (454 kg) in round or gutted weight for Season 2. For red porgy, this rule removes the sale and purchase prohibition, and the possession limit of three fish per person per day or three fish per person per trip during January 1 to April 30 each year; specifies two commercial fishing seasons for red porgy of January 1 through April 30 (Season 1) and May 1 through December 31 (Season 2) within the fishing year; allocates 30 percent of the commercial quota to Season 1 and 70 percent to Season 2; and establishes a commercial trip limit of 60 fish in Season 1. In addition, this rule also removes the in-season reduction of the commercial trip limit in Season 1 and Season 2 for vermilion snapper; establishes a commercial minimum size limit of 20 inches (50.8 cm) FL for almaco jack; establishes a commercial trip limit of 500 lb (227 kg) for the other jacks complex; removes the 12-inch (30.5-cm) TL commercial minimum size limit for queen snapper, silk snapper, and blackfin snapper; and reduces the commercial minimum size limit for gray triggerfish from 14 inches (35.6 cm) to 12 inches (30.5 cm) FL in the EEZ off the east coast of Florida. Therefore, this final rule is expected to directly regulate businesses that are active in the commercial snapper-grouper fishing industry.
As of August 17, 2018, the number of vessels with a valid or renewable Federal commercial permit for South Atlantic snapper-grouper was 644, composed of 536 transferable, unlimited snapper-grouper permits and 108 non-transferable, 225-lb (102 kg) trip-limited permits. With the exception of species-specific trip limits, there is no aggregate snapper-grouper harvest limit per trip for vessels with unlimited snapper-grouper permits, while vessels with trip-limited permits cannot harvest more
Although NMFS started to collect ownership data for businesses that possess commercial snapper-grouper permits in 2017, this data is currently incomplete and historical data is not available. Therefore, it is not currently feasible to accurately determine affiliations between these particular businesses. As a result of the incomplete ownership data, for purposes of this analysis, it is assumed each of these vessels is independently owned by a single business, which is expected to result in an overestimate of the actual number of businesses directly regulated by this rule. Therefore, this rule is estimated to directly regulate 584 businesses in the commercial snapper-grouper fishing industry.
All monetary estimates in the following analysis are in 2016 dollars. For vessels that were active in the snapper-grouper fishing industry from 2012 through 2016, average annual gross revenue was approximately $44,000 per vessel. Average annual net cash flow per vessel was approximately $8,300 while net revenue from operations was approximately $2,000 per vessel. Net revenue from operations is the best available estimate of economic profit.
The Small Business Administration has established size standards for all major industry sectors in the U.S. including commercial fishing businesses. On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts (revenue) for all businesses primarily engaged in the commercial fishing industry (NAICS code 11411) for RFA compliance purposes only (80 FR 81194, December 29, 2015). In addition to this gross revenue standard, a business primarily involved in commercial fishing is classified as a small business if it is independently owned and operated, and is not dominant in it field of operations (including its affiliates). The maximum average annual gross revenue from 2012 through 2016 for a single vessel in the commercial snapper-grouper fishing industry was about $1.6 million. Based on the information above, all businesses directly regulated by this rule are determined to be small businesses for the purpose of this analysis.
This final rule, if implemented, would be expected to directly regulate the 584 active vessels with Federal commercial permits in the South Atlantic snapper-grouper fishery of the 644 vessels that currently possess those permits. All directly regulated businesses have been determined, for the purpose of this analysis, to be small entities. Based on this information, the rule is expected to affect a substantial number of small businesses.
The action to reduce the commercial trip limit for blueline tilefish from 300 lb (136 kg) to 100 lb (45 kg) each year from January 1 through April 30 is expected to directly regulate approximately 134 vessels. These vessels' average annual gross revenues were $82,411 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Thus, annual net revenue from operations (economic profit) for these vessels is estimated to be about $3,300 per vessel. Average annual gross revenue per vessel is expected to increase by about $13 per year, which would result in an increase in economic profit of about 0.4 percent for these vessels.
For snowy grouper, the action to establish two commercial fishing seasons of January 1 through June 30 (Season 1) and July 1 through December 31 (Season 2) rather than a single season within the fishing year, allocate 70 percent of the commercial quota to Season 1 and 30 percent to Season 2, and to add any remaining commercial quota from Season 1 to Season 2 only, is expected to directly regulate approximately 149 vessels. These vessels' average annual gross revenues were $85,475 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Therefore, annual net revenue from operations for these vessels is estimated to be about $3,400 per vessel. This action is not expected to affect landings, annual gross revenue, or harvesting costs, and thus economic profit for these vessels is not expected to change.
For greater amberjack, the action to establish two commercial fishing seasons of March 1 through August 31 (Season 1) and September 1 through the end of February (Season 2) within the fishing year, allocate 60 percent of the commercial quota to Season 1 and 40 percent to Season 2, add any remaining commercial quota from Season 1 to Season 2 only, and reduce the commercial trip limit from 1,200 lb (545 kg) in round or gutted weight to 1,000 lb (454 kg) in round or gutted weight for Season 2 is expected to directly regulate approximately 263 vessels. These vessels' average annual gross revenues were $62,578 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Thus, average annual net revenue from operations for these vessels is estimated to be about $2,500 per vessel. This action is expected to reduce average annual gross revenues to these vessels by about $34, which represents less than 0.1 percent of their average annual gross revenues, and about 11.4 percent of their average annual economic profit. Although a quantitative estimate cannot be provided due to lack of data, this action is also expected to cause a minor increase in these vessels' operating costs. In general, trip limits are expected to increase costs because commercial fishing vessels must take more trips to harvest and land the same amount of fish. The more restrictive the trip limit, the greater the expected increase in costs. The reduction in the commercial trip limit for Season 2 is 200 lb (91 kg) in round or gutted weight per trip, or about 17 percent of the current trip limit. A 17 percent reduction is not a large reduction in general and the reduction only applies in Season 2. Thus, this action would be expected to only slightly reduce these vessels' economic profits.
For red porgy, the actions to remove the sale and purchase prohibition, and the possession limit of three fish per person per day or three fish per person per trip from January 1 to April 30 each year, establish two commercial fishing seasons of January 1 through April 30 (Season 1) and May 1 through December 31 (Season 2) within the fishing year, allocate 30 percent of the commercial quota to Season 1 and 70 percent to Season 2, and establish a commercial trip limit of 60 fish in Season 1 is expected to directly regulate approximately 160 vessels. These vessels' average annual gross revenues were $73,366 per vessel from 2012 through 2016. Average annual net revenue from operations for commercial vessels in the snapper-grouper fishery was approximately 4.5 percent of their average annual gross revenue from 2014
The action to remove the in-season commercial trip limit reduction for vermilion snapper in both seasons is expected to directly regulate approximately 206 vessels. These vessels' average annual gross revenues were $66,330 per vessel from 2011 through 2016. Average annual net revenue from operations for these vessels was approximately negative 1 percent of their average annual gross revenue from 2014 through 2016 (
The action to establish a commercial minimum size limit of 20 inches (50.8 cm) FL for almaco jack is expected to directly regulate approximately 165 vessels. These vessels' average annual gross revenues were $77,267 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Thus, average annual net revenue from operations for these vessels is estimated to be about $3,100 per vessel. Average annual gross revenue per vessel is expected to decrease by about $4 per vessel under the action, which is minimal (
The action to establish a commercial trip limit of 500 lb (227 kg) for the other jacks complex is expected to directly regulate approximately 210 vessels. These vessels' average annual gross revenues were $69,363 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Therefore, annual net revenue from operations for these vessels is estimated to be about $2,800 per vessel. Given the commercial minimum size limit for almaco jack discussed in the previous action, establishing a commercial trip limit for the other jacks complex is expected to result in a reduction of $28 in average annual gross revenue per vessel, or about 1 percent of the average annual economic profit. However, establishing a minimum size limit is also expected to increase costs, which would decrease economic profit even further. The magnitude of the increase in costs depends on how much additional effort commercial vessels must exert to maintain their landings and revenues. Therefore, economic profit for these vessels is expected to be reduced.
The action to remove the 12-inch (30.5-cm) TL commercial minimum size limit for queen snapper, silk snapper, and blackfin snapper is expected to directly regulate approximately 94 vessels. These vessels' average annual gross revenues were $93,154 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 4 percent of their average annual gross revenue from 2014 through 2016. Thus, annual net revenue from operations for these vessels is estimated to be about $3,700 per vessel. This action is expected to result in a minimal increase in landings of queen snapper, silk snapper, and blackfin snapper. However, commercial fishing vessels have only harvested about 43 percent of the commercial ACL for the deep-water complex since blueline tilefish was removed from that complex. Therefore, landings of queen snapper, silk snapper, and blackfin snapper could increase significantly without any concern of exceeding the commercial ACL for the deep-water complex. Further, with the
The action to reduce the commercial minimum size limit for gray triggerfish in the EEZ off the east coast of Florida from 14 inches (35.6 cm) to 12 inches (30.5 cm) FL is expected to directly regulate approximately 213 vessels. These vessels' average annual gross revenues were $65,661 per vessel from 2012 through 2016. Average annual net revenue from operations for these vessels was approximately 2 percent of their average annual gross revenue from 2014 through 2016. Thus, annual net revenue from operations for these vessels is estimated to be about $1,300 per vessel. This action is expected to result in an increase in annual gross revenue per vessel of approximately $10, which would represent an increase the average vessel's economic profit of about 0.8 percent per year. Reducing the minimum size limit for gray triggerfish will also allow commercial fishing vessels to harvest these species with less effort. As such, this action would also be expected to decrease the cost per pound of harvest, though by how much is unknown due to the lack of appropriate models. Thus, this action is expected to result in a modest increase in these vessels' economic profit.
Based on the information above, average annual gross revenues for the 584 active commercial snapper-grouper vessels is expected to increase by about $33,400, or approximately $57 per vessel, as a result of all the actions in this rule. This increase represents only about 0.1 percent of these vessels' average annual gross revenues, but about 3 percent of their average annual economic profit. Harvesting costs are expected to significantly decrease for vessels harvesting vermilion snapper and slightly decrease for vessels harvesting gray triggerfish, while they are expected to increase for vessels harvesting greater amberjack, almaco jack, and species in the other jacks complex. Because of these countervailing effects on harvesting costs, harvesting costs for many commercial snapper-grouper vessels will likely change little if at all. Thus, economic profit for the average commercial snapper-grouper vessel is expected to increase slightly or remain relatively the same, though some vessels could experience a reduction in economic profit.
Five alternatives, including the
Two alternatives, including the
Nine alternatives, including the
For red porgy, seven alternatives, including the
Five alternatives, including the
Four alternatives, including the
Three alternatives, including the
One alternative, the
One alternative, the
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a fishery bulletin that also serves as a small entity compliance guide was prepared. Copies of this final rule are available from the Southeast Regional Office, see
Fisheries, Fishing, Grouper, Snapper, South Atlantic.
This document was received for publication by the Office of the Federal Register on January 15, 2020.
For the reasons set out in the preamble, 50 CFR part 622 is amended as follows:
16 U.S.C. 1801
(a) * * *
(3)
(c) * * *
(2)
(ii) For a fish taken by a person that is subject to the bag limit specified in § 622.187(b)(8)—
(A) In the South Atlantic EEZ off Florida—14 inches (35.6 cm), FL.
(B) In the South Atlantic EEZ off North Carolina, South Carolina, and Georgia—12 inches (30.5 cm), FL.
(6)
(a) * * *
(1)
(ii) For the period July 1 through December 31 each year—46,181 lb (20,947 kg).
(iii) Any unused portion of the quota specified in paragraph (a)(1)(i) of this section will be added to the quota specified in paragraph (a)(1)(ii) of this section. Any unused portion of the quota specified in paragraph (a)(1)(ii) of this section, including any addition of quota specified in paragraph (a)(1)(i) of this section that was unused, will become void and will not be added to any subsequent quota.
(3)
(ii) For the period September 1 through the end of February each year—307,755 lb (139,595 kg).
(iii) Any unused portion of the quota specified in paragraph (a)(3)(i) of this section will be added to the quota specified in paragraph (a)(3)(ii) of this section. Any unused portion of the quota specified in paragraph (a)(3)(ii) of this section, including any addition of quota specified in paragraph (a)(3)(i) of this section that was unused, will become void and will not be added to any subsequent quota.
(6)
(ii) For the period May 1 through December 31 each year—110,384 lb (50,069 kg), gutted weight; 114,800 lb (52,072 kg), round weight.
(iii) Any unused portion of the quota specified in paragraph (a)(6)(i) of this section will be added to the quota specified in paragraph (a)(6)(ii) of this section. Any unused portion of the quota specified in paragraph (a)(6)(ii) of this section, including any addition of quota specified in paragraph (a)(6)(i) of this section that was unused, will become void and will not be added to any subsequent quota.
(a) * * *
(4)
(i) From January 1 through April 30—60 fish.
(ii) From May 1 through December 31—120 fish.
(5)
(i) From March 1 through August 31—1,200 lb (544 kg).
(ii) From September 1 through the end of February—1,000 lb (454 kg).
(6)
(10)
(i) From January 1 through April 30—100 lb (45 kg), gutted weight; 106 lb (48 kg), round weight.
(ii) From May 1 through December 31—300 lb (136 kg), gutted weight; 318 lb (144 kg), round weight.
(14)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule; adjustment to specifications; correction.
This final rule corrects minor errors published in our rule approving and implementing Framework Adjustment 58 to the Northeast Multispecies Fishery Management Plan and distributes sector allocation carried over from fishing year 2018 into fishing year 2019 as authorized by the sector regulations. This action is necessary to correct errors published in the final rule and to allocate carryover quota to sectors. The carryover adjustments are routine and formulaic, and industry expects them each year.
Effective January 24, 2020, through April 30, 2020.
Claire Fitz-Gerald, Fishery Management Specialist, (978) 281-9255.
We recently published a final rule approving Framework Adjustment 58 to the Northeast Multispecies Fishery Management Plan (FMP), which set 2019-2020 annual catch limits (ACL) for four groundfish stocks, and 2019 ACLs for three shared U.S./Canada stocks. That action became effective on July 18, 2019 (84 FR 34799; July 19, 2019). This rule corrects minor errors published in the Framework Adjustment 58 final rule and distributes unused sector quota carried over from fishing year 2018.
Table 2 published fishing year 2019 and 2020 overfishing limits and acceptable biological catch (ABC) for 20 groundfish stocks. The fishing year 2020 ABC published in the table for Georges Bank (GB) yellowtail flounder was incorrect. The ABC published in Framework Adjustment 58 was 168 mt, but the ABC approved by the Scientific and Statistical Committee was 162 mt. This error was the result of a typographical error in the Environmental Assessment that was repeated in the rulemaking. It did not affect the ACL or sub-ACL. The corrected information appears in the table below.
In fishing year 2017, Gulf of Maine (GOM) cod catch exceeded the total ACL and ABC due to excess catch by the recreational fishery, state waters sub-component, and the other sub-component. Accountability measures described in the regulations require sectors and the common pool to pay back their share of the overage for the unallocated fishery components (state waters and other sub-components) pound-for-pound. The application of this accountability measure resulted in reductions of 28.8 mt to the sector sub-ACL and 0.4 mt to the common pool sub-ACL for fishing year 2019.
Framework Adjustment 58 announced this reduction and published revised 2019 allocations that accounted for the overage. According to regulation, the overage should be applied to the sector and common pool sub-ACLs only; the total ACL and commercial groundfish sub-ACL should not be reduced. The GOM cod total ACL and commercial groundfish sub-ACL published in Framework Adjustment 58 were incorrectly reduced to reflect the overage. The table below displays the incorrect GOM cod ACL and commercial groundfish sub-ACL originally published in Table 3 in Framework Adjustment 58, as well as the corrected values. This correction is administrative only, does not change the amount of quota available to sectors or the common pool, and ensures the published catch limits are consistent with the Framework 58 Environmental Assessment.
The final rule for Framework Adjustment 58 included Table 8, which provided the incidental catch total allowable catches (TACs) for each special management program for fishing years 2019 and 2020. The published rule included a formatting error that made Table 8 difficult to interpret. This rule republishes Table 8 in the correct format.
Framework Adjustment 58 included new or revised rebuilding plans for several stocks, including witch flounder. The New England Fishery Management Council approved, and Framework Adjustment 58 implemented, a 23-year rebuilding plan for witch flounder. The final rule stated that the plan's official start date would be January 1, 2020, with a target to rebuild by calendar year (CY) 2043. A stock on a 23-year rebuilding plan that begins in CY 2020 would be expected to rebuild by the end of CY 2042, not CY 2043. This rule corrects the terminal year for the witch flounder rebuilding plan to CY 2042.
Sector regulations at 50 CFR 648.87(c) authorize us to adjust annual catch entitlement (ACE) carryover to ensure that the total unused ACE combined with the overall sub-ACL does not exceed the ABC for the fishing year in which the carryover may be harvested. We have completed 2018 fishing year data reconciliation with sectors and determined final 2018 fishing year sector catch and the amount of allocation that sectors may carry over from the 2018 to the 2019 fishing year. A sector may carry over up to 10 percent of unused ACE for each stock, except in instances where the amount of unused ACE was reduced so as not to exceed the ABC. Accordingly, unused ACE from fishing year 2018 available to carry over to 2019 was reduced for the following stocks: GB cod, GB haddock; GOM haddock; Southern New England/Mid-Atlantic (SNE/MA) yellowtail flounder; Cape Cod/GOM yellowtail flounder; American plaice; GB winter flounder; GOM winter flounder; SNE/MA winter flounder; redfish; white hake; and pollock. Complete details on carryover reduction percentages can be found at:
Table 5 includes the
The NMFS Assistant Administrator has determined that this rule is consistent with the Northeast Multispecies FMP, other provisions of the Magnuson-Stevens Fishery Conservation and Management Act, and other applicable laws.
This rule has been determined to be not significant for the purposes of Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(3)(B), we find good cause to waive prior public notice and opportunity for public comment on the minor corrections and allocation adjustments because allowing time for notice and comment is impracticable, unnecessary, and contrary to the public interest. We also find good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(1) and (3), so that this final rule may become effective in a timely manner and maximize the economic benefits of the adjusted allocations to the fishery.
Notice and comment and a 30-day delay in effectiveness would be impracticable, unnecessary, and contrary to the public interest. The adjustments in this rule are necessary to correct minor errors made in the Framework Adjustment 58 final rule. Correcting these errors is not subject to our discretion, so there would be no benefit to allowing time for notice and comment. Immediate implementation corrects information published in Framework Adjustment 58 and provides industry with the most accurate information. Delaying these adjustments could cause confusion to industry. The distribution of unused quota carried over from the previous fishing year is an annual adjustment action that is expected by industry and causes no economic harm. Some of these adjustments increase available catch. They are routine, formulaic, and authorized by regulation. Delaying these adjustments would result in a delay in the distribution of unused carryover to sectors, and could negate or reduce the intended economic benefits of the rule.
Also, because advanced notice and the opportunity for public comment are not required for this action under the Administrative Procedure Act, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601,
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; reallocation.
NMFS is reallocating the projected unused amount of Pacific cod from vessels using jig gear to catcher vessels less than 60 feet (18.3 meters) length overall using hook-and-line or pot gear in the Bering Sea and Aleutian Islands management area. This action is necessary to allow the A season apportionment of the 2020 total allowable catch of Pacific cod to be harvested.
Effective January 24, 2020, through 2400 hours, Alaska local time (A.l.t.), December 31, 2020.
Josh Keaton, 907-586-7228.
NMFS manages the groundfish fishery in the Bering Sea and Aleutian Islands (BSAI) according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The A season apportionment of the 2020 Pacific cod total allowable catch (TAC) specified for vessels using jig gear in the BSAI is 1,167 metric tons (mt) as established by the final 2019 and 2020 harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019) and inseason adjustment (85 FR 19, January 2, 2020).
The 2020 Pacific cod TAC allocated to catcher vessels less than 60 feet (18.3 meters(m)) length overall (LOA) using hook-and-line or pot gear in the BSAI is 2,766 mt as established by final 2019 and 2020 harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019) and inseason adjustment (85 FR 19, January 2, 2020).
The Administrator, Alaska Region, NMFS, (Regional Administrator) has determined that jig vessels will not be able to harvest 667 mt of the A season apportionment of the 2020 Pacific cod TAC allocated to those vessels under § 679.20(a)(7)(ii)(A)(
The harvest specifications for 2020 Pacific cod included in final 2019 and 2020 harvest specifications for groundfish in the BSAI (84 FR 9000, March 13, 2019) and inseason adjustment (85 FR 19, January 2, 2020) are revised as follows: 500 mt to the A season apportionment and 1,278 mt to the annual amount for vessels using jig gear, and 3,433 mt to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the reallocation of Pacific cod specified from jig vessels to catcher vessels less than 60 feet (18.3 m) LOA using hook-and-line or pot gear. Since the fishery is currently open, it is important to immediately inform the industry as to the revised allocations. Immediate notification is necessary to allow for the orderly conduct and efficient operation of this fishery, to allow the industry to plan for the fishing season, and to avoid potential disruption to the fishing fleet as well as processors. NMFS was unable to publish a notice providing time for public comment because the most
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for pollock in Statistical Area 610 in the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2020 total allowable catch of pollock for Statistical Area 610 in the GOA.
Effective 1200 hrs, Alaska local time (A.l.t.), January 22, 2020, through 1200 hrs, A.l.t., March 10, 2020.
Josh Keaton, 907-586-7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The A season allowance of the 2020 total allowable catch (TAC) of pollock in Statistical Area 610 of the GOA is 517 metric tons (mt) as established by the final 2019 and 2020 harvest specifications for groundfish in the GOA (84 FR 9416, March 14, 2019) and inseason adjustment (84 FR 70436, December 23, 2019).
In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the A season allowance of the 2020 TAC of pollock in Statistical Area 610 of the GOA is necessary to account for the incidental catch in other anticipated fisheries. Therefore, the Regional Administrator is establishing a directed fishing allowance of 0 mt and is setting aside the remaining 517 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 610 of the GOA.
While this closure is effective the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing for pollock in Statistical Area 610 of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of January 13, 2020.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Agricultural Marketing Service, USDA.
Proposed rule.
The Agricultural Marketing Service (AMS) invites comments on proposed revisions to regulations that implement the Federal Seed Act (FSA). The proposals include revisions to seed labeling, testing, and certification requirements. The proposed revisions would add certain seed species to the lists of covered kinds of seed and update the lists to reflect current scientific nomenclature; update regulations related to seed quality, germination and purity standards, and acceptable seed testing methods; and update seed certification and recertification requirements, including new eligibility standards and the recognition of current breeding techniques. AMS intends to align FSA regulations with current industry practices, harmonize FSA testing methods with industry standards, and clarify confusing or contradictory language in the existing regulations. AMS expects the proposed revisions to reduce trade burden associated with interstate seed commerce and encourage compliance with State and Federal laws.
Comments must be received by March 27, 2020.
Interested persons are invited to submit comments on this proposed rulemaking. All comments must be submitted electronically through the e-rulemaking portal at
Ernest Allen, Director, Seed Regulatory and Testing Division, Science and Technology Program, AMS, USDA; 801 Summit Crossing Place, Suite C, Gastonia, NC 28054, USA; telephone: 704-810-8884; email
The FSA (7 U.S.C. 1551-1611) regulates interstate and foreign commerce of planting seeds for agricultural and gardening purposes. The FSA requires seeds to meet certain germination rate, purity, and certification standards. Under the FSA, seeds must be truthfully labeled with specific quality information. As well, the FSA requires all persons shipping agricultural seed in interstate commerce to maintain records of seed variety, origin, treatment, germination, and purity. Regulations established under the FSA (7 CFR part 201) (regulations) implement the requirements of the FSA and are administered by AMS.
From time to time, AMS finds it necessary to update the regulations to reflect current industry standards and practices and to remove obsolete references. AMS last updated the regulations in 2011 (76 FR 31790). AMS met with representatives of major seed industry stakeholder organizations in February 2019 to discuss possible revisions to make the regulations more reflective of current industry practices and updated testing methods. Based on stakeholder input, the Seed Regulatory and Testing Division of AMS's Science and Technology Program initiated this proposed action to update the regulations.
AMS proposes to update the lists of which seed kinds are covered by the regulations and revise the names of several agricultural and vegetable seeds to provide updated scientific nomenclature. AMS proposes further to revise the definitions of other terms used in the regulations to provide greater clarity for regulated entities. Other revisions in this proposed rule would update the seed labeling, testing, and certification requirements to reflect revised terminology, as well as the evolution of industry practices. Finally, AMS is proposing several revisions of an administrative nature to correct misspellings and other errors in the regulations. Specific proposals are addressed below.
The regulations specify the kinds of agricultural and vegetable seed that are subject to regulation. AMS proposes to revise the list of agricultural seed covered by the regulation in § 201.2(h) by adding
To assure clear market communication about seeds, the regulations use the Latin scientific names assigned to plants in the
Other sections of the regulations reference scientific names, as well. AMS proposes to update those references by revising the scientific names for
Section 201.2 defines other terms used in the regulations. The proposed rule would update some terms to reflect changes in industry and AMS needs and processes. AMS proposes to revise the term for “person” in § 201.2(b) to include
The FSA regulations require seed shippers to maintain records and samples for each lot of agricultural and vegetable seed shipped in interstate commerce. Sections 201.4 through 201.7a specify the recordkeeping requirements related to seed origin, germination testing, purity testing, and treatment. AMS proposes to revise §§ 201.6 and 201.7 to clarify that complete records about germination and purity, respectively, would include all the records of laboratory tests considered acceptable under proposed new § 201.2 (nn) described above.
The FSA requires each container of agricultural and vegetable seed shipped in interstate commerce to be labeled with specific information. For agricultural seed, the label must include, among other things, the name of each kind of seed comprising more than 5 percent of the contents, and for certain kinds of seed, the labels must show the variety(ies). Currently, § 201.12a of the regulations requires mixtures of lawn and turf seed to be labeled as mixtures and requires the name and percentage of each seed component to be listed on the label in the order of predominance. AMS proposes to revise § 201.12a by removing the reference to turf and lawn seed mixtures, requiring all mixtures of agricultural seed for seeding or planting purposes to be designated mixtures on the label, and requiring the label to list each seed component on the label in order of predominance. AMS proposes to add a similar requirement for labeling vegetable seed mixtures by adding a new § 201.26a—Vegetable Seed Mixtures, which would require labels for mixtures of vegetable seeds to list each seed component in order of predominance. This change would reflect the current market practice of packaging vegetable seed mixtures, which has not previously been addressed in the regulations.
The regulations prohibit the interstate shipment of agricultural or vegetable seeds containing seeds or bulblets of certain noxious weeds identified in § 201.16(b). AMS proposes to revise the list of prohibited noxious weed seed in § 201.16(b) by updating the scientific names of several species to reflect the current names recognized in the market. Where the shipment of noxious-weed seed is not prohibited under § 201.16(b), the rate of occurrence in agricultural seed cannot exceed the rate permitted by each State into which the seed is shipped or reshipped, and the label must include the rate of occurrence according to each State's requirements. (
Currently, § 201.18 specifies that when agricultural seeds other than the predominant kind, variety, or type named on the label are included, they may be collectively identified as “crop seeds” or “other crop seeds” by percentage. A proposed change to § 201.18 would remove the reference to “crop seeds” to reduce confusion about what is in the seed. Another proposed labeling change would clarify in § 201.19 that the percentage by weight of inert matter in the seed includes coating material, if any is present. This would allow seed shippers to identify coating material separately from other inert material, if desired.
Under §§ 201.21 and 201.30, seed labels are required to show the percentage of hard seed—seed with an impermeable seed coat that doesn't absorb water and germinate—apart from the agricultural or vegetable seed germination percentage. A proposed change to §§ 201.21 and 201.30 would require labels to also show the percentage of dormant seed—seed other than hard seed that fails to germinate under specified conditions—apart from the germination percentage. The proposed rule would make similar changes to the labeling requirements for percentages of hard seed and dormant
Currently, the regulations require seed labels to include the full name and address of the shipper or consignee, or to show a code that identifies the shipper. Proposed revisions to §§ 201.23, 201.24, 201.27, and 201.28 would require the labels of both agricultural and vegetable seed to show the full name and address of the interstate shipper or show both a code identifying the interstate shipper and the full name and address of the consignee. AMS intends these proposed changes to reduce industry confusion about the labeling requirements.
Currently, § 201.31a requires seed labels to include the name or description of any treatment applied to the seed. Paragraph (b) of that section specifies the names that can be used to identify substances used in seed treatments. AMS proposes to revise § 201.31a(b) to clarify that active ingredient substances used in seed treatments must be included in the label, and that biological active ingredients should be identified by their brand names or genus and species names.
The regulations specify testing requirements for seed shipped in interstate commerce. Seed testing methodology continues to evolve as new equipment and processes are developed. In addition to the revisions described earlier in this document, AMS proposes the following revisions to the testing regulations in 7 CFR part 201 to ensure the requirements reflect methods and procedures that have been adopted in the industry and by AMS.
The proposal would revise the introductory text of § 201.48 to clarify that pure seed includes all seeds of each kind that are present in excess of 5 percent by weight of the whole. Revisions to § 201.48(g)(3) would remove references to
Currently, for seed label claims related to germination rates to be truthful, they must incorporate the percentage of hard seed present. AMS proposes to revise the introductory text of § 201.63 to clarify that when 400 or more seeds are tested, the amount of dormant seed in the mix must also be considered when calculating total germination. AMS proposes a similar revision for the introductory text and formula in § 201.64, which provide the tolerance calculation for pure live seed.
The regulations require seed certifying agencies to meet specified qualification standards and comply with procedures outlined in the regulations. One such procedure provided in § 201.68 requires certifying agencies to obtain specific information from certification applicants. AMS proposes to revise the introductory text of § 201.68 to clarify that point, as the regulations as currently written have been confusing, making it unclear that certifying agencies must request the specified information. A further revision to § 201.68(b) would require entities applying for certification to supply information about the breeding technique(s) or reproductive stabilization procedures used to develop the variety. This change is necessary to recognize that different techniques are used to develop new plant varieties.
A proposed revision to § 201.70(a) would permit recertification of seed beyond the standard two generations past the Foundation seed generation only when neither Foundation nor Registered class seed is being maintained. Currently, the regulations allow recertification of Certified class seed when no Foundation seed is being maintained, even if Registered seed is being maintained. This revision would prohibit recertification of Certified class seeds when Registered class seed is being maintained. Adding this restriction would preclude recertification of Certified class seed when seed of a higher certification class is available. AMS intends such a restriction to prevent recertification of the class of seed most likely to have changed over time when more stable alternatives are available. Proposed revisions to §§ 201.74 and 201.75 would remove the caveat that certified seed labeling would require the variety name only if the seed has been certified as to variety. This change would remove contradictory or confusing language from the regulations, since all certification is varietal.
Section 201.76 of the regulations establishes production standards for Foundation, Registered, and Certified classes of various crop seeds. As well as adding the five new crop kinds mentioned earlier in the
Section 201.78 provides additional certification requirements related to
AMS is proposing to make several revisions of an administrative nature to the regulations to correct typographical errors and update addresses and other references to reflect current business practices or provide clarity. A proposed revision to § 201.2(a) would replace the reference to “the FSA” with the words “the Federal Seed Act” to clarify the meaning of the term “Act” used throughout the regulations. References to the “Act” would replace references to the “act” throughout the regulations and minor misspellings would be corrected in several sections. A proposed revision to § 201.51a(a)(3) would update the address for obtaining calibration samples and instructions from the Seed Regulatory and Testing Division to its current address in Gastonia, North Carolina. A proposed revision to the entries for “
AMS is issuing this proposed rule in conformance with Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulations are necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
In the development of this proposed rule, AMS considered alternatives, including updating only the list of regulated seed varieties or making no changes at all. Ultimately, AMS rejected those alternatives because many references and processes in the current regulations are obsolete and do not reflect modern business and industry practices. AMS believes making the proposed revisions would best serve the industry by aligning seed species references with internationally recognized scientific names, clarifying processes to simplify regulatory compliance, and improving AMS's customer service. AMS does not expect the proposed rule to provide any environmental, public health, or safety benefits.
This rule does not meet the criteria of a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Therefore, the Office of Management and Budget (OMB) has not reviewed this rule under those Orders. Because this rule does not meet the criteria of a significant regulatory action, it does not trigger the requirements in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs'” (February 2, 2017).
AMS does not expect the proposed revisions to impact compliance costs for the private sector because the industry has already adopted the practices reflected by the proposed regulatory changes in order to comply with State laws. AMS expects seed industry stakeholders to benefit from the references to updated scientific nomenclature, which provides a common language for marketing seed. Likewise, AMS expects updating the labeling, testing, and certification requirements to simplify compliance and facilitate the interstate marketing of seed. AMS also expects stakeholders to benefit from streamlined AMS business practices.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
Table 1 shows the most recent descriptive data for the industry, obtained from the County Business Pattern 2016 survey. This data set provides information on the number of establishments, number of employees and total annual payroll.
The
Table 2 shows the most recent data available on the breakdown between
The 2002 Economic Census reported that fewer than one percent of firms were considered large (79 of 10,279 firms, or 0.54 percent). The 10,279 firms at that time owned a total of 13,133 establishments, with 1,380 (nearly 11 percent) of these facilities owned by
The tables show the extent of growth in the industry over time. The number of establishments has grown from 13,133 in 2002 to 17,292 in 2016 (32 percent, or 2.3 percent per year). Total employment increased from 557,417 workers to 695,810 (25 percent, or 1.8 percent per year), and total annual payroll from $52,557,389 to $82,865,611 (58 percent or 4 percent per year). These figures indicate that the industry has seen small to moderate growth, with a more highly paid work force over time. There do not appear to be significant changes in the structure of the industry between 2002 and 2016. AMS expects that the size distribution of the firms affected by these revisions is consistent with data reported in the 2002 Economic Census. Therefore, affected firms would mostly be considered small business entities under the criteria established by SBA (13 CFR 121.201).
As a result of meeting with representatives of major seed industry stakeholder organizations in February 2019, AMS is updating regulations to reflect current industry standards and practices and to remove obsolete references. With these revisions to the existing FSA regulation, AMS proposes the following:
1. Update the lists of which seed kinds are covered by the regulations and revise the names of several agricultural and vegetable seeds to provide updated scientific nomenclature;
2. Revise the definitions of other terms used in the regulations to provide greater clarity for regulated entities;
3. Update the seed labeling, testing, and certification requirements to reflect revised terminology and industry practices; and
4. Correct misspellings and other errors in the regulations.
Most of the proposed revisions listed above (1, 2, and 4) are changes in the regulations that would not impact costs to the private sector. The third proposal listed above is expected to lower the costs of seed testing for three grass species. The proposed revisions would eliminate the requirement to segregate certain components of seed in purity testing for those three species. This would reduce the number of component separations for those species from five to four. Cost savings are difficult to estimate. Information on the exact costs of the tests was difficult to obtain because of the variability in seed testing fees by third-party labs. Costs for these tests are generally based on hourly laboratory charges and can range between $10 and $50 per test. Without data on the breakdown of cost for each of the separations performed in the test, it is assumed testing costs for the three affected crops could fall by 20 percent as a result of the proposed revisions.
The proposed revisions would ease the existing requirement to follow test procedures according to the Federal Seed Act before engaging in interstate commerce by allowing the use of seed testing methods from Association of Official Seed Analysts Rules used by most seed testing laboratories in the U.S. These revisions also expand the time requirement of the current regulation by allowing testing to be completed only on laboratory work days, which effectively acknowledges the existence of weekends and holidays, eliminating the need for staff to work or reschedule completion dates.
The burden of labeling radishes is also expected to fall, as currently it is not considered agricultural seed under the Federal Seed Act. Radishes are now considered only as a vegetable crop and must be labeled by variety. Inclusion of radishes as agricultural seed under the Act will allow the industry to exclude varieties in labeling agricultural radish seed.
The proposed rule reduces the trade burden associated with interstate seed commerce and encourages compliance with State and Federal laws. AMS has determined that this action would not have a significant negative economic impact on a substantial number of these small business entities.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information requirements under the regulations have been approved previously by OMB and assigned OMB No. 0581-0026. No changes are necessary in those requirements as a result of this proposed action. Reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. Should any changes become necessary, they would be submitted to OMB for approval.
Pursuant to the Congressional Review Act (5 U.S.C. 801
USDA is committed to complying with the E-Government Act (44 U.S.C. 3601,
This proposed action has been reviewed in accordance with the requirements of Executive Order 13175—Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct impacts on Tribal governments or significant Tribal implications.
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. There are no administrative procedures that must be exhausted prior to judicial challenge to the provisions of this proposed rule.
Certified seed, Definitions, Inspections, Labeling, Purity analysis, Sampling.
Administrative practice and procedure, Agricultural commodities, Imports, Labeling, Seeds, Vegetables.
For the reasons set forth in the preamble, it is proposed that 7 CFR parts 201 and 202 be amended as follows:
7 U.S.C. 1592.
The additions read as follows:
(nn)
(oo)
The Administrator of the Agricultural Marketing Service may perform such duties as the Secretary requires in enforcing the provisions of the Act and of the regulations in this part.
Seed mixtures intended for seeding/planting purposes shall be designated as a mixture on the label and each seed component shall be listed on the label in the order of predominance.
Agricultural seeds other than those included in the percentage or percentages of kind, variety, or type may be expressed as “other crop seeds,” but the percentage shall include collectively all kinds, varieties, or types not named upon the label.
The label shall show the percentage by weight of inert matter, including coating material as defined in § 201.2(q), if any is present.
The label shall show the percentage of germination for each kind, kind and variety, kind and type, or kind and hybrid of agricultural seed comprising more than 5 percent of the whole. The label shall show the percentage of germination for each kind, kind and variety, kind and type, or kind and hybrid of agricultural seed comprising 5 percent of the whole or less if the seed is identified individually on the label.
The label shall show the percentage of hard seed or dormant seed, as defined in § 201.57 or § 201.57a, if any is present. The percentages of hard seed and dormant seed shall not be included as part of the germination percentage.
The full name and address of the interstate shipper shall appear upon the label. If the name and address of the shipper are not shown upon the label, a code designation identifying the interstate shipper shall be shown, along with the full name and address of the consignee.
* * * When used, the AMS code designation shall appear on the label in a clear and legible manner, along with the full name and address of the consignee.
Vegetable seed mixtures for seeding/planting purposes shall be designated as a mixture on the label, and each seed component shall be listed on the label in the order of predominance.
The full name and address of the interstate shipper shall appear upon the label. If the name and address of the interstate shipper are not shown upon the label, a code designation identifying the interstate shipper shall be shown, along with the full name and address of the consignee.
* * * When used, the AMS code designation shall appear on the label in a clear and legible manner, along with the full name and address of the consignee.
Vegetable seeds in containers of 1 pound or less which have a germination percentage equal to or better than the standard set forth in § 201.31 need not be labeled to show the percentage of germination and date of test. Each variety of vegetable seed which has a germination percentage less than the standard set forth in § 201.31 shall have the words “Below Standard” clearly shown in a conspicuous place on the label or on the face of the container in type no smaller than 8 points. Each variety which germinates less than the standard shall also be labeled to show the percentage of germination and the percentage of hard seed or dormant seed (if any).
Each variety of vegetable seeds in containers of more than 1 pound shall be labeled to show the percentage of germination and the percentages of hard seed or dormant seed (if any).
If hard seed or dormant seed as defined in §§ 201.57 or 201.57a, respectively, is present in the seed kinds indicated in those sections, the label shall show the percentage of hard seed or dormant seed present. The percentages of hard seed and dormant seed shall not be included as part of the germination percentage.
Except for those kinds of noxious-weed seeds shown in § 201.16(b), the names of kinds of noxious-weed seeds and the rate of occurrence of each shall be expressed in the label in accordance with, and the rate shall not exceed the rate permitted by, the law and regulations of the State into which the seed is offered for transportation or is transported. If in the course of such transportation, or thereafter, the seed is diverted to another State of destination, the person or persons responsible for such diversion shall cause the seed to be relabeled with respect to noxious-weed seed content, if necessary, to conform to the laws and regulations of the State into which the seed is diverted.
The following minimum germination standards for vegetable seeds in interstate commerce, which shall be construed to include hard seed and dormant seed, are determined and established under section 403(c) of the Act:
(b)
The revisions and additions read as follows:
(b) Mixtures consisting of one predominant kind of seed or groups of kinds of similar size. The weights of the purity and noxious-weed seed working samples in this category shall be determined by the kind or group of kinds which comprise more than 50 percent of the sample.
(d) * * *
(2) * * *
(iii) * * *
The pure seed shall include all seeds of each kind or each kind and variety under consideration present in excess of 5 percent by weight of the whole. * * *
(a) Immature or shriveled seeds and seeds that are cracked or injured. For seeds of legumes (Fabaceae) and crucifers (Brassicaceae) with the seed coats entirely removed refer to § 201.51(a)(1);
(f) Intact fruits, whether or not they contain seed, of species belonging to the following families: Sunflower (Asteraceae), buckwheat (Polygonaceae), carrot (Apiaceae), valerian (Valerianaceae), mint (Laminaceae) and other families in which the seed unit may be a dry, indehiscent one-seeded fruit. For visibly empty fruits, refer to inert matter, § 201.51(a)(6);
(g) * * *
(1) Intact burs of buffalograss (
(3) Special purity procedures for smooth brome, fairway crested wheatgrass, standard crested wheatgrass, intermediate wheatgrass, pubescent wheatgrass, tall wheatgrass, and western wheatgrass are listed in § 201.51a(b).
(a) The laboratory analyst shall use the Uniform Blowing Procedure described in this paragraph to separate pure seed and inert matter in the following: Kentucky bluegrass, Canada bluegrass, rough bluegrass, Pensacola variety of bahiagrass, orchardgrass, blue grama, and side-oats grama.
(1)
(2)
(3)
(i) Refer to the specifications on the calibration samples for Kentucky bluegrass, orchardgrass, and Pensacola variety of bahiagrass to determine their appropriate blowing points for the Uniform Blowing Procedure.
(ii) Use the calibration sample for Kentucky bluegrass to determine the blowing points for Canada bluegrass, rough bluegrass, blue grama, and side-oats grama.
(A) The blowing point for Canada bluegrass shall be the same as the blowing point determined for Kentucky bluegrass.
(B) The blowing point for rough bluegrass shall be a factor of 0.82 (82 percent) of the blowing point determined for Kentucky bluegrass. The 0.82 factor is restricted to the General-type seed blower.
(C) The blowing point for blue grama shall be a factor of 1.157 of the blowing point determined for Kentucky bluegrass. Before blowing, extraneous material that will interfere with the blowing process shall be removed. The sample to be blown shall be divided into four approximately equal parts and each blown separately. The 1.157 factor is restricted to the General-type seed blower.
(D) The blowing point for side-oats grama shall be a factor of 1.480 of the blowing point determined for Kentucky bluegrass. Before blowing, extraneous material that will interfere with the blowing process shall be removed. The sample to be blown shall be divided into four approximately equal parts and each part blown separately. The 1.480 factor is restricted to the General-type seed blower.
(4)
(i) Determine the blowing point using a calibrated anemometer.
(ii) Position the anemometer fan precisely over the blower opening, set it at
(iii) Use this anemometer reading to determine the blower gate setting whenever the Uniform Blowing Procedure is required.
(5)
(b) * * *
(2) * * *
(ii) * * *
The revisions and additions read as follows:
(a)
(b) * * *
(13)
(c) * * *
(3) * * *
* * *
FLUORESCENCE TOLERANCE, BASED ON TEST FLUORESCENCE (TFL)
The following tolerances are applicable to the percentage of germination and also to the sum of the germination plus the hard seed and dormant seed when 400 or more seeds are tested.
The tolerance for pure live seed shall be determined by applying the respective tolerances to the germination plus the hard seed and dormant seed, and the pure seed.
When a seed originator, developer, owner of the variety, or agent thereof requests eligibility for certification, the certification agency shall require the person to provide the following information upon request:
(b) A statement concerning the variety's origin and the breeding technique(s) or the reproductive stabilization procedures used in its development.
(a) Recertification of the Certified class may be permitted when no Foundation or Registered seed is being maintained; or
(e)
302, 305, 402, 408, 409, 413, 414, 53 Stat. 1275, as amended; 7 U.S.C. 1582, 1585, 1592, 1598, 1599, 1603, and 1604.
Federal Deposit Insurance Corporation.
Notice of proposed rulemaking; extension of comment period.
On December 16, 2019, the Federal Deposit Insurance Corporation (FDIC) published in the
The comment period for the Notice published on December 16, 2019 (84 FR 68353), is extended from February 14, 2020, to March 16, 2020.
You may submit comments by any of the methods identified in the proposal.
Brian Zeller, Review Examiner, (319) 395-7394 x4125, or Larisa Collado, Section Chief, (202) 898-8509, in the Division of Risk Management Supervision; or Graham N. Rehrig, Senior Attorney, (202) 898-3829, John Dorsey, Acting Supervisory Counsel, (202) 898-3807, or Andrea Winkler, Acting Assistant General Counsel, (202) 898-3727 in the Legal Division.
On December 16, 2019, the FDIC published in the
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Bombardier, Inc., Model BD-100-1A10 airplanes. This proposed AD was prompted by reports of the loss of all air data system information provided to the flightcrew, which was caused by icing at high altitudes. This proposed AD would require revising the existing airplane flight manual (AFM) to provide the flightcrew with procedures to stabilize the airplane's airspeed and attitude. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by March 12, 2020.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this NPRM, contact Bombardier, Inc., 200 Côte-Vertu Road West, Dorval, Québec H4S 2A3, Canada; North America toll-free telephone 1-866-538-1247 or direct-dial telephone 1-514-855-2999; email
You may examine the AD docket on the internet at
Darren Gassetto, Aerospace Engineer,
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
The FAA will post all comments, without change, to
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2019-24, dated July 5, 2019 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model BD-100-1A10 airplanes. You may examine the MCAI in the AD docket on the internet at
This proposed AD was prompted by reports of the loss of all air data system information provided to the flightcrew, which was caused by icing at high altitudes. The FAA is proposing this AD to address the loss of all air data system information provided to the flightcrew. If not addressed, this condition may adversely affect continued safe flight and landing. See the MCAI for additional background information.
Bombardier has issued the following service information, which provides a procedure for “Unreliable Airspeed” in the Emergency Procedures section, and also provides a procedure for “Go-Around” in the Normal Procedures section of the applicable AFM. These documents are distinct since they apply to different airplane models.
• Bombardier Challenger 300 AFM, Publication No. CSP 100-1, Revision 56, dated July 8, 2019.
• Bombardier Challenger 350 AFM, Publication No. CH 350 AFM, Revision 22, dated July 8, 2019.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI and service information referenced above. The FAA is proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This proposed AD would require revising the existing AFM with procedures for “Unreliable Airspeed” in the Emergency Procedures section of the applicable AFM and with procedures for “Go-Around” in the Normal Procedures section of the applicable AFM, as described previously.
The FAA estimates that this proposed AD affects 560 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments by March 12, 2020.
None.
This AD applies to Bombardier, Inc., Model BD-100-1A10 airplanes, certificated in any category, serial numbers 20001 through 20688 inclusive.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by reports of the loss of all air data system information provided to the flightcrew, which was caused by icing at high altitudes. The FAA is issuing this AD to address the loss of all air data system information provided to the flightcrew. If not addressed, this condition may adversely affect continued safe flight and landing.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD: Revise the Emergency Procedures—Avionics (section 03-17) of the existing AFM to include the information in the “Unreliable Airspeed” procedure of the applicable AFM specified in figure 1 to paragraph (g) of this AD, and revise the Normal Procedures—After Take-off (section 04-04) of the existing AFM to include the information in the “Go-Around” procedure of the applicable AFM specified in figure 1 to paragraph (g) of this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian AD CF-2019-24, dated July 5, 2019, for related information. This MCAI may be found in the AD docket on the internet at
(2) For more information about this AD, contact Darren Gassetto, Aerospace Engineer, Mechanical Systems and Admin Services Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7323; fax 516-794-5531; email
(3) For service information identified in this AD, contact Bombardier, Inc., 200 Côte-Vertu Road West, Dorval, Québec H4S 2A3, Canada; North America toll-free telephone 1-866-538-1247 or direct-dial telephone 1-514-855-2999; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain ATR—GIE Avions de Transport Régional Model ATR72 airplanes. This proposed AD was prompted by occurrences of smoke in the flight deck and flap extension difficulties due to wire chafing on the electrical harness under a certain panel. This proposed AD would require modifying the clamp installation of the electrical routing on a certain rib of the left- and right-hand side of the wing rear spars, as specified in a European Union Aviation Safety
The FAA must receive comments on this proposed AD by March 12, 2020.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For the material identified in this proposed AD that will be incorporated by reference (IBR), contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 89990 1000; email
You may examine the AD docket on the internet at
Shahram Daneshmandi, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3220; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
The FAA will post all comments, without change, to
The EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2019-0290, dated November 29, 2019 (“EASA AD 2019-0290”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain ATR—GIE Avions de Transport Régional Model ATR72 airplanes.
This proposed AD was prompted by occurrences of smoke in the flight deck and flap extension difficulties due to wire chafing on the electrical harness under panel 295CL, on rib 4 of the left-hand side of the wing rear spar. The FAA is proposing this AD to address wire chafing, which may lead to wire failure (cut or shorted) and uncontrolled fire with potential loss of multiple systems, and could possibly result in reduced control of the airplane. See the MCAI for additional background information.
EASA AD 2019-0290 describes procedures for modifying the clamp installation of the electrical routing on rib 4 of the left- and right-hand side of the wing rear spars. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with the State of Design Authority, the FAA has been notified of the unsafe condition described in the MCAI referenced above. The FAA is proposing this AD because the FAA evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require accomplishing the actions specified in EASA AD 2019-0290 described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA initially worked with Airbus and EASA to develop a process to use certain EASA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has since coordinated with other manufacturers and civil aviation authorities (CAAs) to use this process. As a result, EASA AD 2019-0290 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2019-0290 in its entirety, through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in the EASA AD does not mean that operators need to comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in the EASA AD. Service information specified in EASA AD 2019-0290 that is required for compliance with EASA AD 2019-0290 will be available on the internet at
The FAA estimates that this proposed AD affects 23 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes and associated appliances to the Director of the System Oversight Division.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments by March 12, 2020.
None.
This AD applies to ATR—GIE Avions de Transport Régional Model ATR72-101, -102, -201, -202, -211, -212, and -212A airplanes, certificated in any category, as identified in European Union Aviation Safety Agency (EASA) AD 2019-0290, dated November 29, 2019 (“EASA AD 2019-0290”).
Air Transport Association (ATA) of America Code 92, Electrical routing.
This AD was prompted by occurrences of smoke in the flight deck and flap extension difficulties due to wire chafing on the electrical harness under panel 295CL, on rib 4 of the left-hand side of the wing rear spar. The FAA is issuing this AD to address wire chafing, which may lead to wire failure (cut or shorted) and uncontrolled fire with potential loss of multiple systems, and could possibly result in reduced control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2019-0290.
(1) Where EASA AD 2019-0290 refers to its effective date, this AD requires using the effective date of this AD.
(2) The “Remarks” section of EASA AD 2019-0290 does not apply to this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) For information about EASA AD 2019-0290, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone
(2) For more information about this AD, contact Shahram Daneshmandi, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3220; email
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard is proposing to modify the name and location of an existing security zone in St. Croix, U.S. Virgin Islands. This proposed rule would adjust the coordinates of the security zone and update the facility name from HOVENSA Refinery to Limetree Bay Terminals. The proposed rule would continue to prohibit persons and vessels from entering the security zone, unless authorized by the Captain of the Port San Juan or a designated representative. This action is necessary to better meet the safety and security needs of Limetree Bay Terminals in St. Croix, USVI. We invite your comments on this proposed rulemaking.
Comments and related material must be received by the Coast Guard on or before February 26, 2020.
You may submit comments identified by docket number USCG-2020-0011 using the Federal eRulemaking Portal at
If you have questions about this proposed rulemaking, call or email Lieutenant Commander Pedro Mendoza, Sector San Juan Prevention Department, Waterways Management Division, U.S. Coast Guard; telephone 787-729-2374, email
The existing regulation in 33 CFR 165.770, contains a fixed security zone around the HOVENSA Refinery on the south coast of St. Croix, USVI. On November 21, 2019, the Coast Guard received a request to extend the regulated area of the security zone and update the facility name to Limetree Bay Terminals. Limetree Bay Terminals recently installed a Single Point Mooring system to enable deep draft vessel traffic to transfer to and from the facility. The location of the Single Point Mooring systems falls outside of the existing security zone. The proposed rule would increase the security zone by approximately 880 yards (.5 mile) to encompass their new mooring system.
The purpose of this rulemaking is to ensure the safety of vessels and the navigable waters surrounding Limetree Bay Terminals. The Coast Guard is proposing this rulemaking under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231).]
The proposed rule would amend the existing fixed security zone in 33 CFR 165.770 to expand the regulated area and to update the facility name. We are proposing to increase the regulated area by approximately 880 yards (.5 mile) to encompass the new mooring system location installed by the facility. We are proposing to update the facility name to Limetree Bay Terminals to reflect its current ownership. Vessels may seek permission from the COTP to transit through the security zone.
We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.
This regulatory action determination is based on size and location of the security zone. Vessel traffic would be able to continue to safely transit around the security which would impact a small designated area of southern St. Croix, USVI. The rule will allow vessels to seek permission to transit through the security zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the security zone may be small entities, for the reasons stated in section IV.A above, this proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
This proposed rule would not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please call or email the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves expanding an existing security zone and updating the facility name. Normally such actions are categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A preliminary Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
Documents mentioned in this NPRM as being available in the docket, and all public comments, will be in our online docket at
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(2) Persons desiring to transit the area of the security zone may contact the COTP San Juan or designated representative at telephone number 787-289-2041 or on VHF-FM Channel 16. If permission is granted, all persons and vessels must comply with the instructions of the COTP or designated representative.
Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a meeting of the Massachusetts Advisory Committee to the Commission will convene at the law offices of Nutter McClennan and Fish, located at 155 Seaport Blvd. in Boston, MA 02210, at 12:00 p.m. (EST) on Tuesday, February 11, 2020. The purpose of the meeting is for project planning.
Tuesday, February 11, 2020, at 12:00 p.m. (EST).
Nutter McClennan and Fish, located at 155 Seaport Blvd., Boston, MA 02110.
Evelyn Bohor, at
If other persons who plan to attend the meeting require other accommodations, please contact Evelyn Bohor at
Time will be set aside at the end of the meeting so that members of the public may address the Committee after the planning meeting. Persons interested in the issue are also invited to submit written comments; the comments must be received in the regional office by Wednesday, March 11, 2018. Written comments may be mailed to the Eastern Regional Office, U.S. Commission on Civil Rights, 1331 Pennsylvania Avenue, Suite 1150, Washington, DC 20425, faxed to (202) 376-7548, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a meeting of the California Advisory Committee (Committee) to the Commission will be held at 2:00 p.m. (Pacific Time) Friday, February 7, 2020. The purpose of the meeting is to plan community forum in San Diego and to discuss report outline for report on the impact of immigration enforcement on California children.
The meeting will be held on Friday, February 7, 2020 at 2:00 p.m. PT.
Ana Victoria Fortes at
This meeting is available to the public through the following toll-free call-in number: 800-367-2403 conference ID number: 6547099. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the Western Regional Office, U.S. Commission on Civil Rights, 300 North Los Angeles Street, Suite 2010, Los Angeles, CA 90012. They may be faxed to the Commission at (213) 894-0508, or emailed Ana Victoria Fortes at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a meeting of the Alaska Advisory Committee (Committee) to the Commission will be held at 12:00 p.m. Alaska Time (AKT) on Wednesday, January 29, 2020. The purpose of the meeting is for the Committee to discuss next steps to address letter from USPS that provides feedback on AK SAC report on voting rights.
The meeting will be held on Wednesday, January 29, 2020 at 12:00 p.m. AKT.
Ana Victoria Fortes (DFO) at
This meeting is available to the public through the following toll-free call-in number: 800-367-2403, conference ID number: 7504778. Any interested member of the public may call this number and listen to the meeting. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-877-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are entitled to make comments during the open period at the end of the meeting. Members of the public may also submit written comments; the comments must be received in the Regional Programs Unit within 30 days following the meeting. Written comments may be mailed to the Western Regional Office, U.S. Commission on Civil Rights, 300 North Los Angeles Street, Suite 2010, Los Angeles, CA 90012. They may be faxed to the Commission at (213) 894-0508, or emailed Ana Victoria Fortes at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a proposed new collection called the Management and Organizational Practices Survey—Hospitals (MOPS-HP) as required by the Paperwork Reduction Act of 1995.
To ensure consideration, written comments must be submitted on or before March 27, 2020.
Direct all written comments to Thomas Smith, PRA Liaison, U.S. Census Bureau, 4600 Silver Hill Road, Room 7K250A, Washington, DC 20233 (or via the internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Edward Watkins at
The U.S. Census Bureau plans to conduct the Management and Organizational Practices Survey-Hospitals (MOPS-HP) for survey year 2019 as a joint project with Harvard Business School. The MOPS-HP will utilize a subset of the Service Annual Survey mail-out sample and will collect data on management practices from Chief Nursing Officers (CNOs) at general medical and surgical hospitals to assist in identifying determinants of clinical and financial performance.
Currently, no official statistics on management practices in hospitals exist. Past research shows these practices are related to health care providers' clinical and financial outcomes. This suggests that providing measures on management practices may potentially help the U.S.
The MOPS-HP content was proposed by external researchers with past experience in surveying hospitals on management practices. Some questions are adapted from the Management and Organizational Practices Survey (MOPS), conducted in the manufacturing sector, allowing for inter-sectoral comparisons. Content for the MOPS-HP includes performance monitoring, financial and clinical targets, and incentives. The 39 questions are grouped into the following sections: Tenure, Management Practices, Management Training, Management of Team Interactions, Staffing and Allocation of Human Resources, Standardized Clinical Protocols, Documentation of Patients' Medical Records, and Organizational Characteristics.
The MOPS-HP sample will consist of approximately 4,500 hospital locations for enterprises classified under General Medical and Surgical Hospitals (NAICS 6221) and sampled in the Service Annual Survey (SAS). The survey will be mailed separately from the 2019 SAS and collected electronically through the Census Bureau's Centurion online reporting system. Respondents will be sent an initial letter with instructions detailing how to log into the instrument and report their information. These letters will be addressed to the location's Chief Nursing Officer (CNO). Before mailing, the Census Bureau will attempt to identify the CNO at each location. In instances where the CNO is not identifiable, the letter will be addressed to the hospital's administrative office with attention to the CNO. Collection is scheduled to begin in September 2020 and end in April 2021.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of Ocean Freight Revenues and Foreign Expenses of U.S. Carriers (BE-30). The data collected on the BE-30 survey are needed to measure U.S. trade in transport services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-30 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 45 days after the end of each calendar quarter. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0011. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 4 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of Foreign Airline Operators' Revenues and Expenses in the United States (BE-9). The data collected on the BE-9 survey are needed to measure U.S. trade in transport services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-9 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 45 days after the end of each calendar quarter. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0068. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 6 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Annual Survey of Foreign Direct Investment in the United States (BE-15). The data collected on the BE-15 survey are needed to measure the size and economic significance of foreign direct investment in the United States and its impact on the U.S. economy. This survey is authorized by the International Investment and Trade in Services Survey Act.
Ricardo Limés, Chief, Multinational Operations Branch (BE-49), Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9659; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-15 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. A completed report covering the entity's fiscal year ending during the previous calendar year is due by May 31, 2020 (or by June 30 for reporting companies that use BEA's eFile system). This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0034. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 19.7 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of Foreign Direct Investment in the United States—Transactions of U.S. Affiliate with Foreign Parent (BE-605). The data collected on the BE-605 survey are needed to measure the size and economic significance of foreign direct investment in the United States and its impact on the U.S. economy. This survey is authorized by the International Investment and Trade in Services Survey Act.
Jessica Hanson, Chief, Direct Transactions and Positions Branch (BE-49), Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9595; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-605 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 30 days after the
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0009. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 1 hour per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Annual Survey of Foreign Ocean Carriers' Expenses in the United States (BE-29). The data collected on the BE-29 survey are needed to measure U.S. trade in transport services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-29 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 90 days after the end of each calendar year. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0012. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 3 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of U.S. Airline Operators' Foreign Revenues and Expenses (BE-37). The data collected on the BE-37 survey are needed to measure U.S. trade in transport services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-37 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 45 days after the end of each calendar quarter. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0011. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 4 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-185 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 45 days after the end of each fiscal quarter, except for the final quarter of the entity's fiscal year when reports must be filed within 90 days. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0065. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 10 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108 and 15 U.S.C. 4908(b).
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of U.S. Direct Investment Abroad—Transactions of U.S. Reporter with Foreign Affiliate (BE-577). The data collected on the BE-577 survey are needed to measure the size and economic significance of U.S. direct investment abroad and its impact on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Jessica Hanson, Chief, Direct Transactions and Positions Branch (BE-49), Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9595; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-577 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 30 days after the end of each calendar or fiscal quarter, or within 45 days if the report is for the final quarter of the financial reporting year. This Notice is being issued in conformance with the rule BEA issued
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0004. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 1 hour per response. Additional information regarding this burden estimate may be viewed at
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons (BE-45). The data collected on the BE-45 survey are needed to measure U.S. trade in insurance services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-45 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 60 days after the end of each calendar quarter, except for the final quarter of the calendar year when reports must be filed within 90 days. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0066. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 9 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
Bureau of Economic Analysis, Commerce.
Notice of reporting requirements.
By this Notice, the Bureau of Economic Analysis (BEA), Department of Commerce, is informing the public that it is conducting the mandatory survey titled Quarterly Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons (BE-125). The data collected on the BE-125 survey are needed to measure U.S. trade in services and to analyze the impact of U.S. trade on the U.S. and foreign economies. This survey is authorized by the International Investment and Trade in Services Survey Act.
Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Washington, DC 20233; phone (301) 278-9189; or via email at
Through this Notice, BEA publishes the reporting requirements for the BE-125 survey form. As noted below, all entities required to respond to this mandatory survey will be contacted by BEA. Entities must submit the completed survey forms within 45 days after the end of each fiscal quarter, except for the final quarter of the entity's fiscal year when reports must be filed within 90 days. This Notice is being issued in conformance with the rule BEA issued on April 24, 2012 (77 FR 24373), establishing guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. Additional information about BEA's collection of data on international trade in services and direct investment can be found in the 2012 rule, the International Investment and Trade in Services Survey Act (22 U.S.C. 3101
Notice of specific reporting requirements, including who is to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be mailed to those required to complete this survey.
(b) Entities required to report will be contacted individually by BEA. Entities not contacted by BEA have no reporting responsibilities.
This data collection has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act and assigned control number 0608-0067. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. Public reporting burden for this collection of information is estimated to average 21 hours per response. Additional information regarding this burden estimate may be viewed at
22 U.S.C. 3101-3108.
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by World Trade Center Savannah, LLC, grantee of Foreign-Trade Zone 104, requesting authority to reorganize the zone to expand its service area under the alternative site framework (ASF) adopted by the FTZ Board (15 CFR Sec. 400.2(c)). The ASF is an option for grantees for the establishment or reorganization of zones and can permit significantly greater flexibility in the designation of new subzones or “usage-driven” FTZ sites for operators/users located within a grantee's “service area” in the context of the FTZ Board's standard 2,000-acre activation limit for a zone. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on January 14, 2020.
FTZ 104 was approved by the FTZ Board on April 18, 1984 (Board Order 256, 49 FR 17789, April 25, 1984), reorganized under the ASF on January 12, 2011 (Board Order 1736, 76 FR 4865, January 27, 2011) and the ASF service area was expanded on June 10, 2013 (Board Order 1904, 78 FR 36165, June 17, 2013) and on March 12, 2015 (Board Order 1965, 80 FR 14940-14941, March 20, 2015). The zone currently has a service area that includes Bulloch, Bryan, Candler, Chatham, Columbia, Effingham, Emanuel, Evans, Jenkins, Liberty, Long, Richmond, Screven, Tattnal, Toombs and Treulten Counties, Georgia.
The applicant is now requesting authority to expand the service area of the zone to include Burke County, Georgia, as described in the application. If approved, the grantee would be able to serve sites throughout the expanded service area based on companies' needs for FTZ designation. The application indicates that the proposed expanded service area is adjacent to the Savannah, Georgia U.S. Customs and Border Protection Port of Entry
In accordance with the FTZ Board's regulations, Christopher Kemp of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the FTZ Board.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary and sent to:
A copy of the application will be available for public inspection in the “Reading Room” section of the FTZ Board's website, which is accessible via
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily determines that imports of unfinished blends of hydrofluorocarbon (HFC) components R-32 and R-125 from the People's Republic of China (China) are circumventing the antidumping duty (AD) order on HFC blends from China. As a result, imports of blends of HFC components R-32 and R-125 from China will be subject to suspension of liquidation effective June 18, 2019. We invite interested parties to comment on this preliminary determination.
Applicable January 27, 2020.
Andrew Medley or Jacob Garten, 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) 482-4987 or (202) 482-3342, respectively.
Commerce received information from U.S. Customs and Border Protection (CBP) relating to the
On August 14, 2018, the petitioner filed a request that, pursuant to section 781(a) of the Tariff Act of 1930, as amended (the Act), Commerce initiate an anti-circumvention inquiry regarding imports of unfinished blends of HFC components R-32 and R-125 from China that are further processed into finished HFC blends in the United States, which the petitioner alleged are circumventing the
On June 18, 2019, Commerce initiated the anti-circumvention inquiry with respect to unfinished blends of HFC components R-32 and R-125 from China that are further processed into finished HFC blends in the United States.
On October 31, 2019, we placed on the record CBP data for U.S. imports under Harmonized Tariff Schedule of the United States (HTSUS) numbers 3824.78.0020 and 3824.78.0050, and solicited comments on these data.
On November 7, 2019, we received comments on the CBP data from Shandong Huaan New Material Co. Ltd. (Shandong Huaan), Zhejiang Quhua Fluor-Chemistry Co., Ltd. (Zhejiang Quhua), Zhejiang Yonghe New Type Refrigerant Co., Ltd. (Zhejiang Yonghe), and Zibo Feiyuan Chemical Co., Ltd. (Zibo Feiyuan).
On December 13, 2020, we selected Weitron Inc. and Weitron Kunshan as the only mandatory respondents in this inquiry.
The products subject to the
Any blend that includes an HFC component other than R-32, R-125, R-143a, or R-134a is excluded from the scope of the
Excluded from the
Also excluded from the
HFC blends covered by the scope of the
This anti-circumvention inquiry covers imports of partially finished blends of HFC components R-32 (also known as Difluoromethane) and R-125 (also known as Pentafluoroethane) from China that must be further processed in the United States to create an HFC blend that would be subject to the
Section 781 of the Act addresses circumvention of antidumping or countervailing duty orders. With respect to merchandise assembled or completed in the United States, section 781(a)(1) of the Act provides that if: (A) The merchandise sold in the United States is of the same class or kind as any other
In determining whether the process of assembly or completion in the United States is minor or insignificant, section 781(a)(2) of the Act directs Commerce to consider: (A) the level of investment; (B) the level of research and development; (C) the nature of the production process; (D) the extent of production facilities; and (E) whether the value of processing performed in the United States represents a small proportion of the value of the merchandise sold in the United States.
Section 781(a)(3) of the Act sets forth the factors to consider in determining whether to include parts or components in an AD order. Commerce shall take into account: (A) The pattern of trade, including sourcing patterns; (B) whether the manufacturer or exporter of the parts or components is affiliated with the person who assembles or completes the merchandise sold in the United States; and (C) whether imports into the United States of the parts or components produced in the foreign country have increased after the initiation of the investigation which resulted in the issuance of the order.
For the reasons described below, we preliminarily determine, pursuant to section 781(a) of the Act, that imports of unfinished blends of HFC components R-32 and R-125 from China are circumventing the
As noted above, Weitron Inc. is the only importer of R-32/R-125 blends and Weitron Kunshan is the only exporter/producer of R-32/R-125 blends after the imposition of the
Without this information Commerce has no choice but to resort to the use of facts available in making its determination pursuant to section 776(a)(2) of the Act. In selecting from among the facts available, Commerce determines that an adverse inference is warranted, pursuant to section 776(b) of the Act, because Weitron failed to comply to the best of its ability with Commerce's request for information.
Section 776(a) of the Act requires Commerce to resort to facts otherwise available if necessary information is not available on the record or when an interested party or any other person withholds information that has been requested by Commerce.
Section 776(b) of the Act permits Commerce to use an inference that is adverse to the interests of an interested party if that party fails to cooperate by not acting to the best of its ability to comply with a request for information. Given that Weitron refused to comply with Commerce's request for information, we find that Weitron failed to cooperate by not acting to the best of its ability. The refusal by Weitron to respond to our questionnaire precludes Commerce from making a determination based on a complete record as to whether the importation of unfinished blends of R-32 and R-125 from China is circumventing the AD order. In addition, because Weitron failed to provide Commerce with any information, we are also unable to distinguish between their imports or purchases of unfinished blends of HFC components R-32 and R-125 from China for purposes other than U.S. assembly into merchandise covered by the
Section 776(c) of the Act provides that when Commerce relies on secondary information rather than on information obtained in the course of an investigation or review, Commerce shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The Statement of Administrative Action (SAA), which accompanied the Uruguay Round Agreements Act,
We reviewed all information on the record including the petitioner's August 14, 2018, request for this anti-circumvention inquiry,
In accordance with 19 CFR 351.225(l)(2), Commerce will instruct CBP to suspend liquidation of all unfinished blends of HFC components R-32 and R-125 (as defined in the Merchandise Subject to the Anti-Circumvention Inquiry section above) from China that are entered, or withdrawn from warehouse, for consumption on or after June 18, 2019, the date of initiation of this anti-circumvention inquiry.
Consistent with section 781(e) of the Act, Commerce is notifying the ITC of this affirmative preliminary determination to include the merchandise subject to this inquiry within the AD order on HFC blends from China. Pursuant to section 781(e) of the Act, the ITC may request consultations concerning Commerce's proposed inclusion of the subject merchandise. These consultations must be concluded within 15 days after the date of the request. If, after consultations, the ITC believes that a significant injury issue is presented by the proposed inclusion, it will have 60 days to provide written advice to Commerce.
Interested parties may submit case briefs to Commerce no later than 30 days after the date of publication of this notice.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance, filed electronically and received successfully in its entirety, via ACCESS by 5:00 p.m. Eastern Time within 30 days after the date of publication of this notice.
Commerce will publish the final determination with respect to this anti-circumvention inquiry, including the results of its analysis of any written comments. The deadline for the final determination is currently April 7, 2020.
This notice is published in accordance with section 781(a) of the Act and 19 CFR 351.225(g).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is rescinding the administrative review of the antidumping duty order on polyethylene retail carrier bags (PRCBs) from the People's Republic of China (China) for the period August 1, 2018, through July 31, 2019, based on the timely withdrawal of the request for review.
Applicable January 27, 2020.
Lochard Philozin, AD/CVD Operations, Office I Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4260.
On August 2, 2019, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order on PRCBs from China for the period of review (POR) August 1, 2018, through July 31, 2019.
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review. The petitioners withdrew their request for review within 90 days of the publication date of the
Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries of PRCBs from China during the POR at rates equal to the cash deposit rate of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after publication of this notice 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 this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.213(d)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 60 South Atlantic Red Porgy Assessment Webinar III.
The SEDAR 60 assessment of the South Atlantic stock of Red Porgy will consist of a data webinar, an in-person workshop, and a series assessment webinars.
The SEDAR 60 Red Porgy Assessment Webinar III has been scheduled for Friday, February 28, 2020, from 12 p.m. to 2:30 p.m., EST.
Kathleen Howington, SEDAR
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 three-step process including: (1) Data Workshop; (2) Assessment Process utilizing webinars; and (3) Review Workshop. The product of the Data Workshop is a data report which compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The product of the Assessment Process is a stock assessment report which describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The assessment is independently peer reviewed at the Review Workshop. The product of the Review Workshop is a Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, Highly Migratory Species 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 non-governmental organizations (NGOs); international experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion at the SEDAR 60 Red Porgy Assessment Webinar III are as follows:
• Finalize modelling discussion.
• Review projection results and address the terms of reference.
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.
This meeting is accessible to people with disabilities. Requests for auxiliary aids should be directed to the South Atlantic Fishery Management Council office (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice of a public meeting.
The South Atlantic Fishery Management Council (Council) will hold a meeting of its System Management Plan (SMP) Workgroup via webinar.
The SMP Workgroup will meet via webinar on February 20, 2020, from 1 p.m. until 3 p.m.
The meeting will be held via webinar. The meeting is open to the public and will be available via webinar as it occurs. Registration is required. Webinar registration information, a public comment form, meeting agenda, and other meeting materials will be posted to the Council's website at:
Kim Iverson, Public Information Officer, SAFMC; phone: (843) 571-4366 or toll free (866) SAFMC-10; fax: (843) 769-4520; email:
The SMP Workgroup is an advisory group for the Council that reviews actions items, evaluates managed areas, and reviews management of managed areas recommended by the Council. The Workgroup is responsible for development of a report to the Council with recommendations. Components of the report include background information on managed areas; biological and habitat monitoring; socio-economic factors; enforcement and compliance; research recommendations; and outreach.
The workgroup is holding a meeting via webinar to discuss a review of the Oculina Bank Experimental Closed Area Evaluation Plan created by the Council. The Workgroup will also review the Spawning Special Management Zone web page currently under development.
The meeting is physically accessible to people with disabilities. Requests for auxiliary aids should be directed to the council office (see
16 U.S.C. 1801
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. chapter 35).
Paperwork and information collection occurs largely outside of NOAA by: (1) State and Federal agencies engaged in licensing and permitting activities affecting coastal resources, (2) Federal agencies taking actions affecting State coastal zones, and (3) Federal agencies providing federal assistance to State and local governments in the coastal zone. In each of these cases, information is collected by the entity making the license, permit, assistance or action decision and NOAA's regulations provide for the use of that information already required by the State or Federal entity in the consistency process. Pursuant to 16 U.S.C. 1456, NOAA's regulations require the appropriate entity, Federal agency or applicant for license or permit, to prepare a consistency determination or certification. This information is provided to the relevant State CMP, not to NOAA. Information is provided to NOAA only when there is a State objection to a consistency certification, when informal mediation is sought by a Federal agency or State, or when an applicant for a federal license or permit appeals to the Secretary of Commerce for an override to a State CMPs objection to a consistency certification. Last, in 1990, Congress required State CMPs to provide for public participation in their permitting processes, consistency determinations and similar decisions, 16 U.S.C. 1455(d)(14), and NOAA regulations at part 930 implement that requirement.
A number of paperwork submissions are required by the Coastal Zone Management Act (CZMA) federal consistency provision, 16 U.S.C. 1456, and implementing regulations. These submissions are intended to provide a reasonable, efficient, and predictable means of complying with CZMA requirements. The paperwork submission requirements are detailed in 15 CFR part 930. The information will be used by coastal states with federally approved Coastal Zone Management Programs to determine if Federal agency activities, Federal license or permit activities, and Federal assistance activities that affect a state's coastal zone are consistent with the state's coastal management program. Information will also be used by NOAA and the Secretary of Commerce for appeals to the Secretary by non-federal applicants regarding state CZMA objections to federal license or permit activities or Federal assistance activities.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments.
The Assistant Regional Administrator for Sustainable Fisheries, Greater Atlantic Region, NMFS, has made a preliminary determination that an Exempted Fishing Permit application contains all of the required information and warrants further consideration. The Exempted Fishing Permit would allow commercial fishing vessels to use dredge fishing gear with a forward facing camera within the Great South Channel Habitat Management Area to characterize habitat substrate types where dredge fishing occurs, and conduct compensation fishing that would support research conducted by the Coonamessett Farm Foundation. Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed Exempted Fishing Permits.
Comments must be received on or before February 11, 2020.
You may submit written comments by any of the following methods:
•
•
Laura Hansen, Fishery Management Specialist, 978-281-9225.
On April 9, 2018, we approved the New England Fishery Management Council's Omnibus Essential Fish Habitat Amendment 2 that created the Great South Channel Habitat Management Area (GSC HMA). The Council also initiated a follow-up action in December of 2018 that approved limited exemption areas within the HMA for the surfclam fishery, and explicitly mentioned potential research in other parts of the HMA that could provide data necessary to support expanded exemptions in the future.
In an effort to address some of the Council's research priorities for the GSC HMA, Coonamessett Farm Foundation (CFF) has developed a multi-phase research project that would attempt to:
1. Characterize substrate types where surfclam and mussel fishing occurs within the GSC HMA;
2. Track spatiotemporal habitat change and benthic macrofauna distribution in an active fishing ground; and
3. Determine spatiotemporal occurrence of Atlantic cod and other species within the HMA that are subjected or adjacent to commercial clam and mussel dredging activities.
CFF submitted a complete application for an EFP on November 8, 2019, to enable research in support of the objective 1 (identified above). The exemptions would authorize participating vessels to fish with dredge gear in portions of the GSC HMA in order to characterize substrate types where surfclam and mussel fishing occurs, and to enable compensation fishing, which would fund research associated with objectives 2 and 3.
Under this EFP, five vessels targeting surfclams and mussels would fish with dredge-mounted, forward-facing cameras to characterize substrate types where surfclam and mussel fishing occurs within the GSC HMA. CFF contends that this information will support future consideration of HMA dredge emeption areas. A portion of the funds generated from these trips would be used to support future data collection using cameras to examine the habitat impacts of dredging, conduct habitat mapping and analysis, and research the presence of juvenile cod in the GSC HMA. If this EFP is approved, CFF has indicated their intention to broaden the scope of where they may fish with clam and mussel dredges once the initial phase of fishing is complete. Additional dredge fishing in the GSC HMA would entail a new EFP. We would evaluate future EFP applications on its own merits, which would include the utility of the information gathered from the first phase of dredge fishing before considering additional exemptions.
Figure 1 shows Rose and Crown and Davis Bank, the 24 km
If approved, the applicant may request minor modifications and extensions to the EFP throughout the study period. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of telephonic meeting.
The North Pacific Fishery Management Council's Pacific Northwest Crab Industry Advisory Committee (PNCIAC) will meet February 11, 2020.
The meeting will be held on Tuesday, February 11, 2020, from 1 p.m. to 5 p.m., PST.
The meeting will be held telephonically. Telephone number is 1-855-464-2233, or connect online through
Sarah Marrinan, Council staff; telephone: (907) 271-2809, or Lance Farr, Committee Chair, (206) 669-7163.
The Committee will discuss: (a) Selection of new officers; (b) Board of Fisheries proposals; and (c) other business. Agenda is subject to change, and the latest version will be posted at
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271-2809 at least 7 working days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public webinar.
The Caribbean Fishery Management Council's (Council) Ecosystem-Based Fishery Management Technical Advisory Panel (EBFM TAP) will hold a two-hours webinar meeting to address the items contained in the agenda included in the
The webinar meeting will be held on February 19, 2020, from 9 a.m. to 11 a.m.
The webinar meeting will be held through GoToMeeting. You can join the meeting from your computer, tablet or smartphone at
You can also dial in using your phone. United States: +1 (571) 317-3122 Access Code: 771-316-093. If joining from a video-conferencing room or system, depending on your device, dial in or type: 771316093@67.217.95.0 or 67.217.95.2##771316093.
Miguel Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918-1903, telephone: (787) 766-5926.
The order of business may be adjusted as necessary to accommodate the completion of agenda items. The meeting will begin on February 19, 2020, at 9 a.m.
For more information on this webinar, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918-1903, telephone: (787) 766-5926.
16 U.S.C. 1801
9:00 a.m., Thursday, January 30, 2020.
CFTC Headquarters, Lobby-Level Hearing Room, Three Lafayette Centre, 1155 21st Street NW, Washington, DC.
Open.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) will hold this meeting to consider the following matters:
•
•
This meeting will consist of a morning and an afternoon session. The morning session will convene at 9:00 a.m. and will include consideration of the Proposed Rule on Position Limits for Derivatives. The afternoon session will convene at 1:30 p.m. and will include consideration of the Proposed Rule on Amendments to Codify No-Action Relief in Swap Execution Facility and Real-Time Reporting Requirements.
The agenda for this meeting will be available to the public and posted on the Commission's website at
Christopher Kirkpatrick, Secretary of the Commission, 202-418-5964.
5 U.S.C. 552b.
Wednesday, January 29, 2020; 1:30 p.m.
Hearing Room 420, Bethesda Towers, 4330 East-West Highway, Bethesda, MD 20814.
Commission Meeting—Open to the Public.
Briefing Matter: Age Determination Guidelines.
Alberta E. Mills, Secretary, Division of the Secretariat, Office of the General Counsel, U.S. Consumer Product Safety Commission, 4330 East-West Highway, Bethesda, MD 20814, (301) 504-7479.
Office of Elementary and Secondary Education, Department of Education.
Notice.
The Department of Education is issuing a notice inviting applications for fiscal year (FY) 2020 for CSP Grants to State Entities, Catalog of Federal Domestic Assistance (CFDA) number 84.282A. This notice relates to the approved information collection under OMB control number 1894-0006.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Ashley Gardner, U.S. Department of Education, 400 Maryland Avenue SW, Room 3E113, Washington, DC 20202-5970. Telephone: (202) 453-6787. Email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Through the CSP Grants to State Entities (CSP State Entities) competition (CFDA number 84.282A), the Department awards grants to
The CSP State Entities program is authorized under Title IV, Part C of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (ESEA) (20 U.S.C. 7221-7221j). This notice contains information regarding eligibility, priorities, definitions, application requirements, and selection criteria under the CSP State Entities program.
All
• An additional four points to an application that meets Competitive Preference Priority 1;
• An additional two points to an application that meets Competitive Preference Priority 2; and
• Up to an additional 16 points to an application, depending on whether and how well the application addresses Competitive Preference Priorities 3-7.
An application may receive a total of up to 22 additional points under the competitive preference priorities.
These priorities are:
Under this priority, an applicant must demonstrate that the area in which the applicant proposes to provide services overlaps with a Qualified Opportunity Zone, as designated by the Secretary of the Treasury under section 1400z-1 of the Internal Revenue Code (IRC). An applicant must—
(a) Provide the census tract number of the Qualified Opportunity Zone(s) in which it proposes to provide services; and
(b) Describe how the applicant will provide services in the Qualified Opportunity Zone(s).
To meet this priority, an applicant must demonstrate that it is located in a
(a) Allows at least one entity that is not a local educational agency (LEA) to be an
(b) In the case of a
To be eligible to receive points under this priority, an applicant must demonstrate the extent to which the
To be eligible to receive points under this priority, an applicant must demonstrate the extent to which the
(a) Funding for facilities.
(b) Assistance with facilities acquisition.
(c) Access to public facilities.
(d) The ability to share in bonds or mill levies.
(e) The right of first refusal to purchase public school buildings.
(f) Low- or no-cost leasing privileges.
To be eligible to receive points under this priority, an applicant must demonstrate the extent to which the
To be eligible to receive points under this priority, an applicant must demonstrate the extent to which it supports
To be eligible to receive points under this priority, an applicant must demonstrate the extent to which it has taken steps to ensure that all
These application requirements are from section 4303(f) of the ESEA (20 U.S.C. 7221b(f)). The Department will reject an application that does not meet each application requirement.
In responding to the application requirements, applicants must clearly identify which application requirement they are addressing. An applicant must respond to requirements (I)(A)(1), (I)(A)(7), (I)(A)(9), (I)(B)(2), and (I)(B)(3) in its response to paragraph (a)(1) of the Quality of the Project Design selection criterion; requirements (I)(A)(2), (I)(A)(13),(I)(C), (I)(E), and (I)(G) in its response to the Quality of Eligible Subgrant Applicants selection criterion; requirements (I)(A)(6) and (I)(A)(10) in its response to paragraph (c)(1) of the State Plan selection criterion; requirements (I)(A)(3), (I)(A)(4), (I)(A)(8), and (I)(A)(11) in its response to paragraph (c)(3) of the State Plan selection criterion; and requirement (I)(D) in its response to paragraph (d)(1) of the Quality of the Management Plan selection criterion. An applicant must respond to the application requirements in paragraph (I) that are not listed above in the Project Narrative.
Applications for funding under the CSP State Entities program must contain the following:
(I) Description of Program—A description of the
(A) A description of how the
(1) Support the opening of
(2) Inform eligible
(3) Work with
(a) Participate in the Federal programs in which the schools and students are eligible to participate;
(b) Receive the commensurate share of Federal funds the schools and students are eligible to receive under such programs; and
(c) Meet the needs of students served under such programs, including students with disabilities
(4) Ensure that
(5) In the case of a
(a) Work with the
(b) Work with the
(6) Ensure that each
(a) Is using funds provided under this program for one of the activities described in section 4303(b)(1) of the ESEA; and
(b) Is prepared to continue to operate
(7) Support—
(a)
(b) The use of
(8) Work with
(a) Recruitment and enrollment practices to promote inclusion of all students, including by eliminating any barriers to enrollment for educationally disadvantaged students (who include foster youth and unaccompanied homeless youth); and
(b) Supporting all students once they are enrolled to promote retention, including by reducing the overuse of discipline practices that remove students from the classroom;
(9) Share best and promising practices between
(10) Ensure that
(11) Support efforts to increase charter school quality initiatives, including meeting the quality authorizing elements described in section 4303(f)(2)(E) of the ESEA;
(12)(a) In the case of a
(b) In the case of a
(13) Work with
(B) A description of the extent to which the
(1) Is able to meet and carry out Competitive Preference Priorities 2 through 7;
(2) Is working to develop or strengthen a cohesive statewide system to support the opening of new
(3) Is working to develop or strengthen a cohesive strategy to encourage collaboration between
(C) A description of how the
(1) A description of the application each
(a) A description of the roles and responsibilities of
(b) A description of the quality controls agreed to between the
(c) A description of how the autonomy and flexibility granted to a
(d) A description of how the
(e) A description of the
(f) A description of how the
(2) A description of how the
(D) In the case of a
(E) A description of how the
(F) A description of how the
(G) A description of how the
(II) Assurances—Assurances that—
(A) Each
(B) The
(C) The
(D) The
(E) The
(1) Assessing annual performance data of the schools, including, as appropriate, graduation rates, student academic growth, and rates of student attrition;
(2) Reviewing the schools' independent, annual audits of financial statements prepared in accordance with generally accepted accounting principles and ensuring that any such audits are publically reported; and
(3) Holding
(F)
(G) The
(1) Information on the educational program;
(2) Student support services;
(3) Parent contract requirements (as applicable), including any financial obligations or fees;
(4) Enrollment criteria (as applicable); and
(5) Annual performance and enrollment data for each of the subgroups of students, as defined in section 1111(c)(2) of the ESEA, except that such disaggregation of performance and enrollment data shall not be required in a case in which the number of students in a group is insufficient to yield statistically reliable information or the results would reveal personally identifiable information about an individual student.
(III) Waivers—Requests for information about waivers, including—
(A) A request and justification for waivers of any Federal statutory or regulatory provisions that the
(B) A description of any
Definitions:
The following definitions are from sections 4303(a), 4310, and 8101 of the ESEA (20 U.S.C. 7221b(a), 7221i, and 7801); and 34 CFR 77.1.
(a) In accordance with a specific
(b) Is created by a
(c) Operates in pursuit of a specific set of educational objectives determined by the school's
(d) Provides a program of elementary or secondary education, or both;
(e) Is nonsectarian in its programs, admissions policies, employment practices, and all other operations, and is not affiliated with a sectarian school or religious institution;
(f) Does not charge tuition;
(g) Complies with the Age Discrimination Act of 1975, title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990 (42 U.S.C. 12101
(h) Is a school to which
(1) Admits students on the basis of a lottery, consistent with section 4303(c)(3)(A) of the ESEA, if more students apply for admission than can be accommodated; or
(2) In the case of a school that has an affiliated
(i) Agrees to comply with the same Federal and
(j) Meets all applicable Federal,
(k) Operates in accordance with
(l) Has a written performance contract with the
(m) May serve students in
(a) Assistance to
(b) Technical assistance to operating
(a) A child (1) with intellectual disabilities, hearing impairments (including deafness), speech or language impairments, visual impairments (including blindness), serious emotional disturbance (referred to as “emotional disturbance”), orthopedic impairments, autism, traumatic brain injury, other health impairments, or specific learning disabilities; and (2) who, by reason thereof, needs special education and related services.
(b) For a child aged 3 through 9 (or any subset of that age range, including ages 3 through 5), may, at the discretion of the
(a) Applied to an
(b) Provided adequate and timely notice to that authority (ESEA section 4310(6)).
(a) Who is aged 3 through 21;
(b) Who is enrolled or preparing to enroll in an elementary school or secondary school;
(c)(1) Who was not born in the United States or whose native language is a language other than English;
(2)(i) Who is a Native American or Alaska Native, or a native resident of the outlying areas; and
(ii) Who comes from an environment where a language other than English has had a significant impact on the individual's level of English language proficiency; or
(3) Who is migratory, whose native language is a language other than English, and who comes from an environment where a language other than English is dominant; and
(d) Whose difficulties in speaking, reading, writing, or understanding the English language may be sufficient to deny the individual—
(1) The ability to meet the challenging State academic standards;
(2) The ability to successfully achieve in classrooms where the language of instruction is English; or
(3) The opportunity to participate fully in society (ESEA section 8101(20)).
(a) Shows evidence of strong academic results, which may include strong student academic growth, as determined by a
(b) Has no significant issues in the areas of student safety, financial and operational management, or statutory or regulatory compliance;
(c) Has demonstrated success in significantly increasing student academic achievement, including graduation rates where applicable, for all students served by the
(d) Has demonstrated success in increasing student academic achievement, including graduation rates where applicable, for each of the subgroups of students, as defined in section 1111(c)(2) of the ESEA, except that such demonstration is not required in a case in which the number of students in a group is insufficient to yield statistically reliable information or the results would reveal personally identifiable information about an individual student (ESEA section 4310(8)).
(a) A
(b) A
(c) A Governor of a
(d) A
Title IV, part C of the ESEA (20 U.S.C. 7221-7221j).
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
1.
Under section 4303(e)(1) of the ESEA, no
Consistent with section 4303(e)(1), if a
2.
3.
(b) Under section 4303(d)(2) of the ESEA, a
4.
For this competition, the maximum amount of subgrant funds a
(b)
(ii) A non-Federal entity that expends less than $750,000 during the non-Federal entity's fiscal year in Federal awards is exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503 (Relation to other audit requirements), but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and Government Accountability Office. (2 CFR 200.501(d)).
1.
2.
Because we plan to make successful applications available to the public, you may wish to request confidentiality of business information.
Consistent with Executive Order 12600, please designate in your application any information that you believe is exempt from disclosure under Exemption 4. In the appropriate Appendix section of your application, under “Other Attachments Form,” please list the page number or numbers on which we can find this information.
3.
4.
A subgrant awarded by a
Likewise, a
(a) Open and prepare for the operation of new
(b) Open and prepare for the operation of
(c)
Under section 4303(h) of the ESEA, an
(a) Preparing teachers, school leaders, and specialized instructional support personnel, including through paying costs associated with—
(i) Providing professional development; and
(ii) Hiring and compensating, during the
(A) Teachers.
(B) School leaders.
(C) Specialized instructional support personnel.
(b) Acquiring supplies, training, equipment (including technology), and educational materials (including developing and acquiring instructional materials).
(c) Carrying out necessary renovations to ensure that a new school building complies with applicable statutes and regulations, and minor facilities repairs (excluding construction).
(d) Providing one-time, startup costs associated with providing transportation to students to and from the
(e) Carrying out community engagement activities, which may include paying the cost of student and staff recruitment.
(f) Providing for other appropriate, non-sustained costs related to opening,
(a) Are distributed throughout different areas, including urban, suburban, and rural areas; and
(b) Will assist
We reference additional regulations outlining funding restrictions in the
5.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
Applications must be in English, and peer reviewers will only consider supporting documents submitted with the application that are in English.
The recommended page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; or the one-page abstract, the resumes, the bibliography, or the letters of support. However, the recommended page limit does apply to all of the application narrative.
6.
For further information about the pre-application meeting, contact Ashley Gardner, U.S. Department of Education, 400 Maryland Avenue SW, Room 3E113, Washington, DC 20202-5970. Telephone: (202) 453-6787. Email:
1.
(a)
(1) The extent to which the proposed project
(2) The extent to which the methods of evaluation include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quantitative and qualitative data to the extent possible (34 CFR 75.210(h)(2)(iv))(up to 15 points); and
(3) The
(b)
(c)
(1) Adequately monitor the
(2) Work with the
(3) Provide technical assistance and support for—
(i) The
(ii) Quality authorizing efforts in the
(4) The
(5) The degree of flexibility afforded by the
(d)
(1) The adequacy of the management plan to achieve the objectives of the proposed project on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks (34 CFR 75.210(g)(2)(i)) (up to 10 points);
(2) The adequacy of procedures for ensuring feedback and continuous improvement in the operation of the proposed project (34 CFR 75.210(g)(2)(ii)) (up to 3 points); and
(3) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project (34 CFR 75.210(g)(2)(iv)) (up to 2 points).
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit annual performance reports that provide the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) In accordance with section 4303(i) of the ESEA, each
(1) The number of students served by each subgrant awarded under this section and, if applicable, the number of new students served during each year of the period of the subgrant.
(2) A description of how the
(A) How the
(B) If known, the extent to which such practices were adopted and implemented by such other public schools.
(3) The number and amount of subgrants awarded under this program to carry out activities described in section 4303(b)(1)(A) through (C) of the ESEA.
(4) A description of—
(A) How the
(B) How the
(d) Under 34 CFR 75.250(b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
(a) The Secretary has established two performance indicators to measure annual progress towards achieving the purposes of the program, which are discussed elsewhere in this notice. The performance indicators are: (1) The number of
(b)
(1)
(2)
(3)
(4)
All grantees must submit an annual performance report with information that is responsive to these
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
7.
You may also access documents of the Department published in the
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before February 26, 2020.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before February 26, 2020.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before March 27, 2020.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Beth Grebeldinger, 202-377-4018.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
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), Northern New Mexico. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Wednesday, February 26, 2020; 1:00 p.m.-5:15 p.m.
Ohkay Conference Center, 68 New Mexico 291, San Juan, New Mexico 87566.
Menice Santistevan, Northern New Mexico Citizens' Advisory Board (NNMCAB), 94 Cities of Gold Road, Santa Fe, NM 87506. Phone (505) 995-0393; Fax (505) 989-1752 or Email:
Office of Fossil Energy, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Methane Hydrate Advisory Committee. The Federal Advisory Committee Act (FACA) requires that notice of these meetings be announced in the
Wednesday, February 26, 2020, 11:30 a.m. to 12:00 p.m. (CST)—Registration, 12:00 p.m. to 6:00 p.m. (CST)—Meeting.
Hotel Galvez, Navigation Room, 2024 Seawall Blvd., Galveston, Texas 77550.
Gabby Intihar, U.S. Department of Energy, Office of Oil and Natural Gas, 1000 Independence Avenue SW, Washington, DC 20585.
On November 5 and 6, 2019, Federal Energy Regulatory Commission (Commission) staff convened a workshop to discuss grid-enhancing technologies (GETs) that increase the capacity, efficiency, or reliability of transmission facilities.
All interested persons are invited to file post-workshop comments on any or all of the questions listed in the attachment to this Notice. Commenters are encouraged to organize responses using the numbering and order in the attached questions. Commenters are also invited to reference material previously filed in this docket, including workshop transcripts and submitted opening remarks, but are encouraged to avoid repetition or replication of previous material. To the extent your response addresses issues raised in other current proceedings before the Commission, such as the Inquiry Regarding the Commission's Electric Transmission Incentives (Docket No. PL19-3-000) or Managing Transmission Line Ratings (Docket No. AD19-15-000), please provide references to pertinent comments in those proceedings in your response. Comments must be submitted on or before 21 days from the date of this Notice.
For more information about this Notice, please contact:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), NSPS for Rubber Tire Manufacturing (EPA ICR Number 1158.13, OMB Control Number 2060-0156) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through March 31, 2020. Public comments were previously requested via the
Additional comments may be submitted on or before February 26, 2020.
Submit your comments, referencing Docket ID Number EPA-HQ-OECA-2013-0329, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Patrick Yellin, Monitoring, Assistance, and Media Programs Division, Office of Compliance, Mail Code 2227A, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (202) 564-2970; fax number: (202) 564-0050; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
In general, all NSPS standards require initial notifications, performance tests, and periodic reports by the owners/operators of the affected facilities. They are also required to maintain records of the occurrence and duration of any startup, shutdown, or malfunction in the operation of an affected facility, or any period during which the monitoring system is inoperative. These notifications, reports, and records are essential in determining compliance, and are required of all affected facilities subject to NSPS.
Environmental Protection Agency (EPA).
Notice of availability.
The Environmental Protection Agency (EPA) is announcing the availability of a final document titled, “Integrated Science Assessment for Particulate Matter” (EPA/600/R-19/188). The document was prepared by the Center for Public Health and Environmental Assessment (CPHEA) within EPA's Office of Research and Development (ORD) as part of the review of the primary (health-based) and secondary (welfare-based) National Ambient Air Quality Standards (NAAQS) for particulate matter (PM) and represents an update of the 2009 Integrated Science Assessment (ISA) for PM. The welfare-based effects evaluated consist of non-ecological effects, specifically visibility impairment, climate effects, and effects on materials. The ISA provides the scientific basis for EPA's decisions, in conjunction with additional technical and policy assessments, on the adequacy of the current NAAQS and the appropriateness of possible alternative standards. EPA is currently developing a separate ISA to support the secondary NAAQS review for ecological effects for oxides of nitrogen, oxides of sulfur, and particulate matter.
The document is available on or about January 6, 2020.
The “Integrated Science Assessment for Particulate Matter (Final)” will be available primarily via the internet on EPA's Integrated Science Assessment Particulate Matter page at
For technical information, contact Mr. Jason Sacks, CPHEA; phone: 919-541-9729; fax: 919-541-1818; or email:
Section 108(a) of the Clean Air Act directs the Administrator to identify certain pollutants which, among other things, “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare” and to issue air quality criteria for them. These air quality criteria are to “accurately reflect the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health or welfare which may be expected from the presence of [a] pollutant in the ambient air . . .” Under
Particulate matter is one of six criteria pollutants for which EPA has established NAAQS. Periodically, EPA reviews the scientific basis for these standards by preparing an ISA (formerly called an Air Quality Criteria Document). The ISA provides the scientific basis for EPA's decisions, in conjunction with additional technical and policy assessments, on the adequacy of the current NAAQS and the appropriateness of possible alternative standards. The Clean Air Scientific Advisory Committee (CASAC), an independent science advisory committee whose review and advisory functions are mandated by Section 109(d)(2) of the Clean Air Act, is charged (among other things) with independent scientific review of the EPA's air quality criteria.
On December 3, 2014 (79 FR 71764), EPA formally initiated its current review of the air quality criteria for the health and welfare effects of particulate matter and the primary (health-based) and secondary (welfare-based) NAAQS, requesting the submission of recent scientific information on specified topics. EPA conducted a workshop from February 9 to 11, 2015 to gather input from invited scientific experts, both internal and external to EPA, as well as from the public, regarding key science and policy issues relevant to the review of the primary and secondary NAAQS (79 FR 71764). These science and policy issues were incorporated into EPA's “Draft Integrated Review Plan for the National Ambient Air Quality Standards for Particulate Matter,” which was available for public comment (81 FR 22977) and discussion by the CASAC via publicly accessible teleconference consultation (81 FR 13362). The “Final Integrated Review Plan for the National Ambient Air Quality Standards for Particulate Matter” was released December 6, 2016 (81 FR 87933).
Subsequent webinar workshops were held on June 9, 13, 20, and 22, 2016, to discuss initial draft materials prepared in the development of the particulate matter ISA with invited EPA and external scientific experts (81 FR 29262). The input received during these webinar workshops aided in the development of the materials presented in the “Integrated Science Assessment for Particulate Matter (External Review Draft), which was released on October 23, 2018” (83 FR 53471), and is available at:
The Administrator responded to the CASAC's letter on the External Review Draft of the PM ISA on July 25, 2019, and is available at:
Environmental Protection Agency (EPA).
Notice.
The EPA Science Advisory Board (SAB) Staff Office announces a public meeting of the Chartered Clean Air Scientific Advisory Committee (CASAC) to discuss their Draft Report on EPA's
The public meeting will be held on Tuesday, February 11, 2020, from 12:00 p.m. to 4:00 p.m. (Eastern Time) and Wednesday, February 12, 2020, from 12:00 p.m. to 4:00 p.m. (Eastern Time).
The public meeting will be conducted by telephone only.
Any member of the public wishing to obtain information concerning these public meetings may contact Mr. Aaron Yeow, Designated Federal Officer (DFO), at (202) 564-2050 or at
The CASAC is a Federal Advisory Committee chartered under the Federal Advisory Committee Act (FACA), 5 U.S.C., App. 2. The Chartered CASAC will comply with the provisions of FACA and all appropriate SAB Staff Office procedural policies. Pursuant to FACA and EPA policy, notice is hereby given that the Chartered CASAC will hold a public meeting to discuss their Draft Report on EPA's
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), NESHAP for Beryllium (EPA ICR Number 0193.13, OMB Control Number 2060-0092), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through March 31, 2020. Public comments were previously requested via the
Additional comments may be submitted either on or before February 26, 2020.
Submit your comments, referencing Docket ID Number EPA- HQ-OECA-2013-0301, to: (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change, including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI), or other information whose disclosure is restricted by statute.
Patrick Yellin, Monitoring, Assistance, and Media Programs Division, Office of Compliance, Mail Code 2227A, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (202) 564-2970; fax number: (202) 564-0050; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Environmental Protection Agency (EPA).
Notice.
EPA is announcing the availability of and soliciting public comment on the draft Toxic Substances Control Act (TSCA) risk evaluation of carbon tetrachloride. EPA is also submitting the same document to the TSCA Science Advisory Committee on Chemicals (SACC) for peer review and is announcing that there will be an in-person public meeting of the TSCA SACC to consider and review the draft risk evaluation. Preceding the in-person meeting, there will be a preparatory virtual public meeting for the panel to consider the scope and clarity of the draft charge questions for the peer review. The purpose of conducting risk evaluations under TSCA is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment under the conditions of use, including an unreasonable risk to a relevant potentially exposed or susceptible subpopulation.
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
This action is directed to the public in general. This action may be of interest to persons who are or may be required to conduct testing and those interested in risk evaluations of chemical substances under TSCA, 15 U.S.C. 2601
TSCA section 6, 15 U.S.C. 2605, requires EPA to conduct risk evaluations to “determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, without consideration of costs or other nonrisk factors, including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant to the risk evaluation by the Administrator, under the conditions of use.” 15 U.S.C. 2605(b)(4)(A). TSCA sections 6(b)(4)(A) through (H) enumerate the deadlines and minimum requirements applicable to this process, including provisions that provide instruction on chemical substances that must undergo evaluation, the minimum components of a TSCA risk evaluation, and the timelines for public comment and completion of the risk evaluation. TSCA also requires that EPA operate in a manner that is consistent with the best available science, make decisions based on the weight of the scientific evidence and consider reasonably available information. 15 U.S.C. 2625(h), (i), and (k).
The statute identifies the minimum components for all chemical substance risk evaluations. For each risk evaluation, EPA must publish a document that outlines the scope of the risk evaluation to be conducted, which includes the hazards, exposures, conditions of use, and the potentially exposed or susceptible subpopulations that EPA expects to consider. 15 U.S.C. 2605(b)(4)(D). The statute further provides that each risk evaluation must also: (1) Integrate and assess available information on hazards and exposures for the conditions of use of the chemical substance, including information that is relevant to specific risks of injury to health or the environment and information on relevant potentially exposed or susceptible subpopulations; (2) describe whether aggregate or sentinel exposures were considered and the basis for that consideration; (3) take into account, where relevant, the likely duration, intensity, frequency, and number of exposures under the conditions of use; and (4) describe the weight of the scientific evidence for the identified hazards and exposures. 15 U.S.C. 2605(b)(4)(F)(i)-(ii) and (iv)-(v). Each risk evaluation must not consider costs or other nonrisk factors. 15 U.S.C. 2605(b)(4)(F)(iii).
The statute requires that the risk evaluation process last no longer than three years, with a possible additional six-month extension. 15 U.S.C. 2605(b)(4)(G). The statute also requires that the EPA allow for no less than a 30-day public comment period on the draft risk evaluation, prior to publishing a final risk evaluation. 15 U.S.C. 2605(b)(4)(H).
EPA is announcing the availability of and seeking public comment on the draft risk evaluation of the chemical substance identified in Unit II. EPA is seeking public comment on all aspects of the draft risk evaluation, including any preliminary conclusions, findings, and determinations, and the submission of any additional information that might be relevant to the draft risk evaluation, including the science underlying the risk evaluation and the outcome of the systematic review associated with the chemical substance. This 60-day comment period on the draft risk evaluation satisfies TSCA section 6(b)(4)(H), which requires EPA to “provide no less than 30 days public notice and an opportunity for comment on a draft risk evaluation prior to publishing a final risk evaluation” and 40 CFR 702.49(a), which states that “EPA will publish a draft risk evaluation in the
EPA is also submitting the draft risk evaluation and associated supported documents to the TSCA SACC for peer review and announcing the meeting for the peer review panel. All comments submitted to the docket on the draft risk evaluation by the deadline identified in the
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The risk evaluation process is the second step in EPA's existing chemical process under TSCA, following prioritization and before risk management. As this chemical is part of the first ten chemical substances undergoing risk evaluation, the chemical substance was not required to go through prioritization (81 FR 91927, December 19, 2016) (FRL-9956-47). The purpose of conducting risk evaluations is to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, under the conditions of use, including an unreasonable risk to a relevant potentially exposed or susceptible subpopulation. As part of this process, EPA must evaluate both hazard and exposure, not consider costs or other nonrisk factors, use reasonably available information and approaches in a manner that is consistent with the requirements in TSCA for the use of the best available science, and ensure decisions are based on the weight-of-scientific-evidence.
The specific risk evaluation process that EPA has established by rule to implement the statutory process is set out in 40 CFR part 702 and summarized on EPA's website at
Carbon tetrachloride is a solvent used primarily as a feedstock in the production of hydrochlorofluorocarbons, hydrofluorocarbons and hydrofluoroolefins and as a process agent in the manufacturing of other chlorinated compounds and petrochemicals-derived and agricultural products. The Montreal Protocol and Title VI of the Clean Air Act Amendments of 1990 led to a phase-out of carbon tetrachloride production in the United States for most non-feedstock domestic uses in 1996. The Consumer Product Safety Commission banned the use of carbon tetrachloride in consumer products (excluding unavoidable residues not exceeding 10 parts per million atmospheric concentration) in 1970. Information from the 2016 Chemical Data Reporting for carbon tetrachloride indicates the reported yearly production volume was 117 to 143 million pounds (manufacture and import) between 2012 and 2015.
Information about the problem formulation and scope phases of the TSCA risk evaluation for this chemical is available at
The TSCA SACC was established by EPA in 2016 and operates in accordance with the Federal Advisory Committee Act (FACA), 5 U.S.C. Appendix 2
The TSCA SACC is comprised of experts in: Toxicology; human health and environmental risk assessment; exposure assessment; and related sciences (
EPA's background documents, related supporting materials, and draft charge questions to the TSCA SACC are available on the TSCA SACC website and in the docket established for the specific chemical substance. In addition, EPA will provide additional background documents (
After the public meeting, the TSCA SACC will prepare meeting minutes summarizing its recommendations to the EPA. The meeting minutes will be posted on the TSCA SACC website and in the relevant docket.
The focus of the public meetings is to peer review EPA's draft risk evaluation. After the peer review process, EPA will consider peer reviewer comments and recommendations and public comments, in finalizing the risk evaluation. The draft risk evaluation contains: Discussion of chemistry and physical-chemical properties; characterization of conditions of use; environmental fate and transport assessment; human health exposures; environmental hazard assessment; risk characterization; risk determination; and a detailed description of the systematic review process developed by the Office of Pollution Prevention and Toxics to search, screen, and evaluate scientific literature for use in the risk evaluation process.
You may participate in the public meetings by following the instructions in this unit. To ensure proper receipt by EPA, it is imperative that you identify the corresponding docket ID number in the subject line on the first page of your request.
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15 U.S.C. 2601
Environmental Protection Agency (EPA).
Notice.
As required by EPA's Final Rule on Fees for the Administration of TSCA (the Fees Rule), in which EPA established fees to defray some of the costs of administering certain provisions of the Toxic Substances Control Act (TSCA), this Notice identifies the preliminary lists of manufacturers (including importers) of 20 chemical substances that have been designated as a High-Priority Substance for risk evaluation and for which fees will be charged. EPA is providing a 60-day comment period during which manufacturers (including importers) are required to self-identify as a manufacturer of a High-Priority Substance irrespective of whether they are included on the preliminary lists. Where appropriate, entities may also avoid or reduce fee obligations by making certain certifications consistent with the Fees Rule. During this 60-day comment period, the public will have the opportunity to correct errors or provide comments on the preliminary lists. EPA expects to publish final lists of manufacturers (including importers) subject to fees no later than concurrently with the publication of the final scope document for risk evaluations of these 20 High-Priority Substances. Manufacturers (including importers) identified on the final lists will be subject to applicable fees.
Comments must be received on or before March 27, 2020.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2019-0677, by one of the following methods:
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Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
This action applies to entities that manufacture a chemical substance (including import of the chemical substance or import of an article containing the chemical substance) undergoing a risk evaluation under TSCA section 6(b) (
EPA is publishing preliminary lists identifying manufacturers (including importers) that may be subject to fee
As amended in by the
TSCA provides EPA with authority to establish fees to defray a portion of the costs associated with administering EPA-initiated TSCA section 6 risk evaluations. On September 27, 2018, EPA finalized a rule imposing a fee for any person who manufactures (including imports) a chemical substance that is the subject of an EPA-initiated risk evaluation under TSCA section 6 (Ref. 1). The requirements for those fee payments are codified in 40 CFR 700.45.
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TSCA section 6(b)(1) requires EPA to prioritize 20 chemical substances as High-Priority Substances. In accordance with TSCA section 6(b) and 40 CFR 702.7, on March 21, 2019, EPA initiated the prioritization process for 20 chemical substances identified as candidates for High-Priority Substance designation (Ref. 2). On August 23, 2019, EPA proposed to designate the same 20 chemical substances as High-Priority Substances for risk evaluation (Ref. 3). After considering additional information collected during the comment periods following initiation of prioritization and the proposed designation, EPA finalized, in a separate action, the High-Priority Substance designations of the same 20 chemical substance proposed for High-Priority Substance designations (Ref. 4). EPA is now announcing the availability of the preliminary lists for the 20 High-Priority Substances designated (Refs. 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, and 24).
This Notice describes EPA's preliminary lists of manufacturers (including importers) who are potentially responsible for payment of fees, as required by 40 CFR 700.45, and associated with each TSCA section 6 risk evaluation that EPA will initiate for 20 High-Priority Substances (Ref. 1). The preliminary lists are available at docket number EPA-HQ-OPPT-2019-0677 at
This Notice initiates a 60-day comment period during which manufacturers (including importers) of the chemical substance must self-identify to EPA irrespective of whether they are included on a preliminary list. Where appropriate, entities may also certify as to no manufacture or cessation of manufacture in accordance with 40 CFR 700.45(b)(5). Manufacturers (including importers) are required to provide EPA with the contact information as described in 40 CFR 700.45(b)(5)(i). Other stakeholders also
Following the comment period and no later than the date EPA issues the final scope document as part of the risk evaluations for these 20 High-Chemical Substances, EPA expects to publish a final list of manufacturers subject to fees for each chemical substance. Manufacturers listed on the final lists will be subject to applicable fees under 40 CFR 700.45.
Fee obligations are set forth in 40 CFR 700.45 and include a total fee of $1,350,000 for EPA-initiated risk evaluations, with a reduced fee amount for small business concerns (Ref. 2). The total fee is shared amongst all identified manufacturers (including importers). The Fees Rule provides more detailed information on how EPA determined the fee amounts (Ref. 2). The fees established in 2018 are fees for the 2019, 2020, and 2021 fiscal years. Fees for the 2022 and later fiscal years may be adjusted on a three-year cycle as described in the final Fees Rule (Ref. 2).
As required by 40 CFR 700.45(g)(3)(iv)(A), payment of fees are due within 120 days following the publication of the final scope of a chemical risk evaluation. Manufacturers may also form a consortium to pay fees in accordance with 40 CFR 700.45(f)(3). The consortium must notify EPA that a consortium has formed within 60 days of the publication of the final scope of a risk evaluation. Once established, the consortium would determine how the fee would be split among the members, and ultimately paid to EPA. For additional information on the possible division of costs amongst consortia and individual manufacturers, please see the fees rule Unit III.J, Multiple Parties Subject to Fee Obligation (Ref. 1).
In accordance with 40 CFR 700.45(b)(5), all manufacturers who have manufactured or imported any of the 20 chemical substances designated as High-Priority Substances (Ref. 5) in the previous five years, must submit notice to EPA, irrespective of whether they are included in the preliminary lists. The notice must be submitted electronically via EPA's Central Data Exchange (CDX), the Agency's electronic reporting portal, and must contain the following information: Name and address of the submitting company, the name and address of the authorized official for the submitting company, and the name and telephone number of a person who will serve as technical contact for the submitting company and who will be able to answer questions about the information submitted by the company to EPA. EPA has also made the Chemical Information Submission System (CISS) reporting tool available for this electronic reporting.
All manufacturers (including importers) of these chemical substances, including those who import the chemical as part of an article, or manufacture (including import) chemical substances that are considered an impurity or byproduct, or in small amounts are subject to the Fees Rule requirements. TSCA requires EPA to evaluate chemicals under their conditions of use, and conditions of use evaluated may involve import of articles containing the chemical, the manufacture of the chemical as an impurity or byproduct, or in small amounts. As described in Unit III.E. of the Fees Rule, EPA does not exempt these manufacturers from fee obligations for TSCA section 6 activities.
Manufacturers (including importers) on the preliminary lists have an opportunity to certify through CDX that: (1) They have already ceased manufacturing prior to the defined cutoff dates and will not manufacture (including import) for five years; or (2) they have not manufactured the chemical substance in the five-year period preceding publication of the preliminary lists. For this group of 20 chemicals, the cutoff date for ceasing manufacture or import of a chemical substance is March 20, 2019, which is the day prior to initiation of the prioritization process for the applicable designated High-Priority Substance. If EPA receives such a certification statement from a manufacturer, then the manufacturer will not be obligated to pay the fee. Manufacturers who are not listed on the preliminary lists and otherwise believe they can “certify out” as described in this Unit and in 40 CFR 700.45(b)(5) may choose to attest to these facts to EPA. In addition, entities will have the opportunity to certify as to whether they meet the definition of a “small business concern” as defined in the Fees Rule and qualify for a reduced fee amount.
If information received during the public comment period would prompt the addition of manufacturers (including importers) to the final lists, then EPA plans to first notify those manufacturers (including importers). Manufacturers (including importers) who plan to cease manufacture (including import) in the future (but have not yet done so), or those who have already ceased but may re-enter the market within the next five years, would not be permitted to “certify out”, and would still be subject to the fee obligation.
Manufacturers (including importers) who fail to identify themselves as manufacturers subject to fee obligations, as required by the Fees Rule (Ref. 1), may be subject to a penalty under TSCA section 16. Each day of failed self-identification by a manufacturer (including importer) past the payment due date is a separate TSCA violation subject to penalty. Likewise, manufacturers (including importers) who falsely certify to having ceased manufacture (including import) or not re-initiating manufacture (including import) within five years will also be subject to penalty, as described in Unit III.C.7. of the Fees Rule.
With publication of the preliminary lists, EPA is providing a 60-day comment period for manufacturers and the public to correct errors, self-identify as a manufacturer, or certify that they have already exited the market and that they will not resume manufacture (including import) for a period of five years.
The preliminary lists of manufacturers (including importers) that may be subject to fee obligations under 40 CFR 700.45 associated with EPA-initiated risk evaluations of 20 High-Priority Substances are in this docket; there is a separate preliminary list for each substance (Refs. 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, and 24). Each list is provided in two formats: A searchable Excel file and in two PDF files—the first file presenting manufacturers in parent company name order and the second file presenting manufacturers in parent company Dun & Bradstreet Number order. Instructions for using the searchable Excel file are presented in the READ ME FIRST tab. Instructions for accessing the TSCA section 6 User Fees application through CDX are also provided in the READ ME FIRST tab and at the top of the PDF files.
EPA is soliciting public comments that would inform the final lists defining the universe of manufacturers (including importers) obligated to pay fees associated with each TSCA section 6 EPA-initiated risk evaluation for the 20 following chemicals, which separately have been designated as High Priority Substances for risk evaluation (Ref. 4):
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Instructions for self-identifying as a manufacturer (including importer) of any of the 20 High Priority Substances are in each preliminary list Excel and PDF files in the docket (Refs. 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, and 24).
Instructions for certifying an exit from the market (
Please see Unit I.E for more information on how to submit comments to EPA. After the comment period for the preliminary lists of entities subject to a fee obligation, EPA expects to make any necessary updates or corrections before publishing final lists of manufacturers for each of the 20 High-Priority Substances. EPA expects that these final lists will indicate if any manufacturers were identified in error, any additional manufacturers that were identified through the comment period or self-identification process, and if any manufacturers have certified that they have already ceased manufacture (including import) prior to the cutoff date of March 20, 2019 and will not manufacture the subject chemical substance for five years. Each final list will be published concurrently with the final scope document for each risk evaluation initiated by EPA under TSCA section 6 for these 20 High-Priority Substances.
The following is a listing of the documents that are specifically referenced in this Notice. The docket includes these documents and other information considered by EPA, including documents that are referenced within the documents that are included in the docket, even if the referenced document is not physically located in the docket. For assistance in locating these other documents, please consult the technical person listed under
1. EPA. Fees for Administration of Toxic Substances Control Act.
2. EPA. Initiation of Prioritization Under the Toxic Substances Control Act (TSCA). Notice.
3. EPA. Proposed High-Priority Substance Designations Under the Toxic Substances Control Act (TSCA).
4. EPA. High-Priority Substance Designations Under the Toxic Substances Control Act (TSCA).
5. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,3-Butadiene, CASRN 106-99-0. December 2019.
6. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Butyl benzyl phthalate (BBP) (1,2-Benzenedicarboxylic acid, 1-butyl 2-(phenylmethyl) ester), CASRN 85-68-7. December 2019.
7. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Dibutyl phthalate (DBP) (1,2-Benzenedicarboxylic acid, 1,2-dibutyl ester), CASRN 84-74-2. December 2019.
8. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of o-Dichlorobenzene (Benzene, 1,2-dichloro-), CASRN 95-50-1. December 2019.
9. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of p-Dichlorobenzene (Benzene, 1,4-dichloro-), CASRN 106-46-7. December 2019.
10. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,1-Dichloroethane, CASRN 75-34-3. December 2019.
11. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,2-Dichloroethane, CASRN 107-06-2. December 2019.
12. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of trans-1,2-Dichloroethylene (Ethene, 1,2-dichloro-, (1E)-), CASRN 156-60-5. December 2019.
13. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,2-Dichloropropane, CASRN 78-87-5. December 2019.
14. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Dicyclohexyl phthalate (1,2-Benzenedicarboxylic acid, 1,2-dicyclohexyl ester), CASRN 84-61-7. December 2019.
15. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Di-ethylhexyl phthalate (DEHP) (1,2-Benzenedicarboxylic acid, 1,2-bis(2-ethylhexyl) ester), CASRN 117-81-7. December 2019.
16. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Di-isobutyl phthalate (DIBP) (1,2-Benzenedicarboxylic acid, 1,2-bis(2-methylpropyl) ester), CASRN 84-69-5. December 2019.
17. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Ethylene dibromide (Ethane, 1,2-dibromo-), CASRN 106-93-4. December 2019.
18. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Formaldehyde, CASRN 50-00-0. December 2019.
19. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,3,4,6,7,8-Hexahydro-4,6,6,7,8,8-hexamethylcyclopenta [g]-2-benzopyran (HHCB), CASRN 1222-05-5. December 2019.
20. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 4,4′-(1-Methylethylidene)bis[2, 6-dibromophenol] (TBBPA), CASRN 79-94-7. December 2019.
21. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Phosphoric
22. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Phthalic anhydride (1,3-Isobenzofurandione), CASRN 85-44-9. December 2019.
23. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of 1,1,2-Trichloroethane, CASRN 79-00-5. December 2019.
24. EPA. Preliminary List Identifying Manufacturers Subject to Fee Obligations for EPA-Initiated Risk Evaluations of Tris(2-chloroethyl) phosphate (TCEP) (Ethanol, 2-chloro-, 1,1′,1″-phosphate), CASRN 115-96-8. December 2019.
15 U.S.C. 2625
Farm Credit System Insurance Corporation.
Notice, regular meeting.
Notice is hereby given of the regular meeting of the Farm Credit System Insurance Corporation Board (Board).
The meeting of the Board will be held at the offices of the Farm Credit Administration in McLean, Virginia, on January 30, 2020, from 10:00 a.m. until such time as the Board concludes its business.
Farm Credit System Insurance Corporation, 1501 Farm Credit Drive, McLean, Virginia 22102. Submit attendance requests via email to
Dale Aultman, Secretary to the Farm Credit System Insurance Corporation Board, (703) 883-4009, TTY (703) 883-4056,
Parts of this meeting of the Board will be open to the public (limited space available), and parts will be closed to the public. Please send an email to
Board of Governors of the Federal Reserve System.
9:30 a.m. on Thursday, January 30, 2020.
Marriner S. Eccles Federal Reserve Board Building, 20th Street entrance between Constitution Avenue and C Streets NW, Washington, DC 20551.
Open.
On the day of the meeting, you will be able to view the meeting via webcast from a link available on the Board's website.
1. Notice of Proposed Rulemaking on Section 13 of the Bank Holding Company Act (Volcker Rule).
2. Final Rule to Revise the Board's Control Framework.
2. This meeting will be recorded for the benefit of those unable to attend. The webcast recording and a transcript of the meeting will be available after the meeting on the Board's website
Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.
You may access the Board's website at
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project “Evaluation of Patient-Centered Outcomes Research Trust Fund—Training Program.”
This proposed information collection was previously published in the
Comments on this notice must be received by 30 days after date of publication.
Written comments should be submitted to: AHRQ's OMB Desk Officer by fax at (202) 395-6974 (attention: AHRQ's desk officer) or by email at
Section 6301(b) of the Patient Protection and Affordable Care Act, Public Law 111-148 (the “Affordable Care Act”), enacted section 937(e) of the Public Health Service Act (“PHS Act”), which authorizes AHRQ to build capacity for comparative effectiveness research (CER) by establishing grant programs that provide training for researchers in methods used to conduct research. It also notes that, “[at] a minimum, such training shall be in methods that meet the methodological standards adopted [by the Patient Centered Outcomes Research Institute (PCORI)] under section 1181(d)(9) of the Social Security Act.” In addition, section 937(a) of the PHS Act charges AHRQ with disseminating patient-centered outcomes research (PCOR) and CER findings into practice. AHRQ's PCOR Trust Fund Training Program (PCORTF-TP) invests in training grants that build researchers' skills and enhance research capacity in these practice areas.
PCOR is research that assesses the benefits and harms of preventive, diagnostic, therapeutic, palliative, or health delivery system interventions. This research helps clinicians, patients, and caregivers make decisions about health care choices by highlighting comparisons and outcomes that matter to people, such as survival, function, symptoms, and health-related quality of life. The AHRQ PCORTF-TP supports individuals and academic institutions to train researchers and clinicians in CER methods applied within the context of CER/PCOR via mentored career development award mechanisms for emerging independent investigators, as well as targeted skill development and applied experiences via research grant mechanisms for independent researchers. PCORTF-TP grants support training for recent graduates, mid-career professionals, and established professionals in research and clinical settings. The program prioritizes expanding capacity in underserved and predominantly minority communities.
AHRQ recognizes the importance of ensuring that its training activities are useful, well implemented, and effective in achieving their intended goals. Therefore, the PCORTF-TP evaluation reflects AHRQ's commitment to ensuring responsible stewardship. The PCORTF-TP evaluation comprises analysis of grantee progress reports, a bibliometric analysis of grantee publications, key informant interviews with AHRQ program staff responsible for managing PCORTF-TP grants, focused discussions with the PCORTF-TP evaluation Stakeholder Working Group, and surveys of grantees and mentors.
The purpose of this evaluation is to assess the outputs, outcomes, and impact of AHRQ's PCORTF-TP. The evaluation will address the following questions:
• What is the nature of PCORTF-TP activities for scholar/investigator development?
• Which activities for PCORTF-TP scholars/investigators have the greatest influence on intended outcomes (
• How have PCORTF-TP and partner institutions developed the capacity for PCOR training and mentoring, and in what ways is this sustainable?
• What do mentors and mentees perceive to be the most important ways that the program has contributed to the field of CER/PCOR?
This evaluation is being conducted by AHRQ through its contractor, AFYA, Inc., pursuant to AHRQ's authority to carry out the activities described in section 937 of the PHS Act. 42 U.S.C. 299b-37.
To achieve the goals of this project, the evaluator will survey PCORTF-TP awardees, scholars, and mentors. Online surveys: K Awardee Survey/K12 Scholar Survey and K Awardee/K12 Scholar Primary Mentor Survey will be used to: (1) Collect non-identifying demographic information; and (2) ask respondents about their training activities and outcomes. Key informant interviews: Key Informant Interview Guide will be used to collect qualitative data about program processes, outcomes, and lessons learned from K12 scholar program directors.
AHRQ will use the information collected through this Information Collection Request to assess progress toward achieving the PCORTF-TP aims. The information collected will facilitate program planning. Results will indicate whether grantees are conducting
Exhibit 1 shows the estimated annualized burden hours for the respondents' time to participate in this evaluation. The survey will be completed by approximately 288 awardees, scholars, principal investigators (PI), and mentors. The surveys will each require approximately 30 minutes to complete. The key informant interview will be conducted with approximately 13 PIs. These interviews are expected to take one hour each. The total hour burden is expected to be 150.5 hours for this participant data collection effort.
Exhibit 2 shows the estimated annualized cost burden based on the respondents' time to participate in this project. The total cost burden is estimated to be $11,134.34.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) Whether the proposed collection of information is necessary for the proper performance of AHRQ's health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) of information; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All comments will become a matter of public record.
Office on Trafficking in Persons, Administration for Children and Families, HHS.
Request for public comment.
The Office on Trafficking in Persons (OTIP), Administration for Children and Families (ACF), U.S. Department of Health and Human Services (HHS) is proposing to collect data for the Domestic Victims of Human Trafficking Program (DVHT). The DVHT Program is inclusive of three distinct programs: The Domestic Victims of Human Trafficking and Services Outreach Program, Demonstration Grants to Strengthen the Response to Victims of Human Trafficking in Native Communities Program, and the Strengthen the Health Care Response for Victims of Human Trafficking Program grants. The data collection instruments are intended to collect information for all three DVHT programs.
Written comments and recommendations for the proposed information collection should be sent directly to the following: Office of Management and Budget, Paperwork Reduction Project, Email:
Copies of the proposed collection may be obtained by emailing
OTIP proposes to collect information to measure grant project performance, provide technical assistance to grantees, assess program outcomes, improve program evaluation, respond to congressional inquiries and mandated reports, and inform policy and program development that is responsive to the needs of victims.
The information collection captures information on participant demographics (
22 U.S.C. 7105(f).
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a final guidance for industry entitled “Hematologic Malignancies: Regulatory Considerations for Use of Minimal Residual Disease in Development of Drug and Biological Products for Treatment.” This guidance is intended to help sponsors planning to use minimal residual disease (MRD) as a biomarker in clinical trials conducted under an investigational new drug application (IND) or to support marketing approval of drugs and biological products for treating specific hematologic malignancies. An analysis of marketing applications showed inconsistent quality of MRD data. Based on this analysis and discussion at various public workshops on MRD, FDA identified a need to provide guidance on the use of MRD as a biomarker in regulatory submissions. This guidance finalizes the draft guidance of the same title issued on October 16, 2018.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of this guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or the Office of Communication, Outreach, and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Nicole Gormley, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 2310, Silver Spring, MD 20993-0002, 240-402-0210; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
FDA is announcing the availability of a final guidance for industry entitled “Hematologic Malignancies: Regulatory Considerations for Use of Minimal Residual Disease in Development of Drug and Biological Products for Treatment.” This guidance is intended to help sponsors planning to use MRD as a biomarker in clinical trials conducted under an IND or to support marketing approval of drugs and biological products for treating specific hematologic malignancies.
This guidance finalizes the draft guidance of the same title issued on October 16, 2018 (83 FR 52225). FDA considered comments received on the draft guidance as the guidance was finalized. Changes from the draft to the final guidance include editorial changes and clarifications throughout the document and the addition of definitions for individual-level and trial-level associations.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). This guidance represents the current thinking of FDA on “Hematologic Malignancies: Regulatory Considerations for Use of Minimal Residual Disease in Development of Drug and Biological Products for Treatment.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collection of information in 21 CFR part 312 for submitting INDs has been approved under OMB control
Persons with access to the internet may obtain the guidance at
Food and Drug Administration, HHS.
Notice of availability; extension of comment period.
The Food and Drug Administration (FDA or the Agency) is extending the comment period for the notice entitled “Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products; Draft Guidance for Industry; Availability” that appeared in the
FDA is extending the comment period for the notice published on December 20, 2019 (84 FR 70196). Submit either electronic or written comments on the draft guidance by March 19, 2020, to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance.
You may submit either electronic or written comments as follows.
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Office of Communication, Outreach and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002 or Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Stephen Ripley, Center for Biologics Evaluation and Research, Food and
In the
Persons with access to the internet may obtain the draft guidance at either
Office of the Assistant Secretary for Health, Office of the Secretary, Department of Health and Human Services.
Notice.
As stipulated by the Federal Advisory Committee Act, the U.S. Department of Health and Human Service is hereby giving notice that the Presidential Advisory Council on HIV/AIDS (PACHA or the Council) will be holding the 66th full Council meeting in Washington, DC. Agenda items will include: Discussion of
The Council meeting is scheduled to convene on Monday, February 10, 2020 from approximately 1:00 p.m. to 7:00 p.m. ET and Tuesday, February 11, 2020 from approximately 9:00 a.m. to 5:00 p.m. ET (times are tentative and subject to change). The meeting agenda will be posted on the PACHA web page at
Grand Hyatt Washington, 1000 H Street NW, Washington, DC 20001.
Ms. Caroline Talev, MPA, Public Health Analyst, Presidential Advisory Council on HIV/AIDS, 330 C Street SW, Room L609A, Washington, DC 20024; (202) 795-7622 or
PACHA was established by Executive Order 12963, dated June 14, 1995, as amended by Executive Order 13009, dated June 14, 1996 and is currently operating under the authority given in Executive Order 13889, dated September 27, 2019. The Council was established to provide advice, information, and recommendations to the Secretary regarding programs and policies intended to promote effective prevention and care of HIV infection and AIDS. The functions of the Council are solely advisory in nature.
The Council consists of not more than 25 members. Council members are selected from prominent community leaders with particular expertise in, or knowledge of, matters concerning HIV and AIDS, public health, global health, philanthropy, marketing or business, as well as other national leaders held in high esteem from other sectors of society. Council members are appointed by the Secretary or designee, in consultation with the White House.
Public attendance at the meeting is limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify Caroline Talev at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
National Institutes of Health, HHS.
Notice.
The Office of the Secretary of the Department of Health and Human Services (HHS) is seeking nominations for an individual to serve as a nonfederal public member on the Muscular Dystrophy Coordinating Committee.
Nominations are due by 5:00 p.m. EDT on February 28, 2020.
Nominations must be sent to Glen Nuckolls, Ph.D., by email to
Glen Nuckolls, Ph.D., by email to
The Muscular Dystrophy Coordinating Committee (MDCC) is a federal advisory committee established in accordance with the Muscular Dystrophy Community Assistance, Research, and Education Amendments of 2001 (MD-CARE Act; Pub. L. 107-84). The MD-CARE Act was reauthorized in 2008 by Public Law 110-361, and again in 2014 by Public Law 113-166. The MD-CARE Act specifies that the committee membership be composed of
Nominations must include contact information for the nominee, a current curriculum vitae or resume of the nominee and a paragraph describing the qualifications of the person to represent some portion(s) of the muscular dystrophy research, advocacy and/or patient care communities.
More information about the MDCC is available at
U.S. Immigration and Customs Enforcement, Department of Homeland Security.
60-Day notice.
In accordance with the Paperwork Reductions Act (PRA) of 1995 the Department of Homeland Security (DHS), U.S. Immigration and Customs Enforcement (ICE) will submit the following Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and clearance.
Comments are encouraged and will be accepted until March 27, 2020.
All submissions received must include the OMB Control Number 1653-0048 in the body of the letter, the agency name and Docket ID ICEB-2020-0001. All comments received will be posted without change to
(1)
(2)
For specific question related to collection activities, please contact: John Morris (202-732-5409),
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This notice allocates $8.285 billion of Community Development Block Grant mitigation (CDBG-MIT) funds to the Commonwealth of Puerto Rico pursuant to the requirements of the Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (Division B, Subdivision 1 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123).
Applicability Date: February 3, 2020.
Jessie Handforth Kome, Acting Director, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 7th Street SW, Room 7282, Washington, DC 20410, telephone number 202-708-3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 202-401-2044. (Except for the “800” number, these telephone numbers are not toll-free.) Email inquiries may be sent to
The Further Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2018 (Division B, Subdivision 1 of the Bipartisan Budget Act of 2018, Pub. L. 115-123, approved February 9, 2018) (the “Appropriations Act”), made available $28 billion in Community Development Block Grant disaster recovery (CDBG-DR) funds, and directed HUD to allocate not less than $12 billion for mitigation activities proportional to the amounts that CDBG-DR grantees received for qualifying disasters in 2015, 2016, and 2017. A
The CDBG-MIT Notice recognizes that CDBG-MIT funds are to be used for distinctly different purposes than CDBG-DR funds and that the level of funding and nature of programs and projects that are likely to be funded requires all CDBG-MIT grantees and their subrecipients to strengthen their program management capacity, financial management, and internal controls. Under the CDBG-MIT Notice, each grantee is required to strengthen its internal audit function, specify the criteria for subrecipient selection, increase subrecipient monitoring, and establish a process for promptly identifying and addressing conflicts under the grantee's conflict of interest policy. The CDBG-MIT Notice also states the Department's intent to establish special grant conditions for individual CDBG-MIT grants based upon the risks posed by the grantee, including risks related to the grantee's capacity to carry out the specific programs and projects proposed in its action plan. These conditions are designed to provide additional assurances that mitigation programs are implemented in a manner to prevent waste, fraud, and abuse and that mitigation projects are effectively operated and maintained.
The CDBG-MIT Notice acknowledges the governance and financial management challenges of the Commonwealth of Puerto Rico. For all CDBG-MIT grantees, the CDBG-MIT Notice references the Department's expectation that grantees will take steps to set in place substantial governmental policies and organizational structure to enhance the impact of HUD-funded investments. For the Commonwealth of Puerto Rico, this goal may be achieved through reforms in land ownership records and addressing the occurrence of informal housing, while enhancing the safety of the Commonwealth's residents. The CDBG-MIT Notice also notes that it is imperative that all CDBG-MIT grantees collect and supply sufficient revenues for future operation and maintenance costs of programs and projects funded with this CDBG-MIT grant. Additionally, prior to 2017, the Department of Housing of Puerto Rico (PRDOH), who has been designated as the entity responsible for administering the CDBG-DR allocations in response to Hurricanes Irma and Maria, had not previously administered CDBG-DR funds. Because PRDOH does not have previous experience managing CDBG-DR funds, HUD has reviewed the Commonwealth's Staffing Analysis Worksheet and determined that PRDOH must continue to secure staff and contractors to build its capacity and knowledge of federal requirements, including civil rights related program requirements. These considerations emerge as particular unmitigated risks for the Commonwealth of Puerto Rico, in light of the substantial amount of CDBG-MIT funding allocated under this notice and the general fiscal condition of the Commonwealth.
Accordingly, to further reduce the specific potential risks associated with the above challenges, this notice builds upon the requirements of the CDBG-MIT Notice and establishes additional grant conditions to reduce risk and support the successful implementation of this CDBG-MIT allocation by the Commonwealth of Puerto Rico. These measures are designed to augment and support HUD's continual technical assistance and monitoring efforts, undertaken in partnership with the grantee.
This notice allocates $8.285 billion in CDBG-MIT funds to the Commonwealth of Puerto Rico for mitigation activities in accordance with the Appropriations Act and the CDBG-MIT Notice. The grantee receiving an allocation of funds under this notice is subject to the requirements of the CDBG-MIT Notice, including waivers and alternative requirements, and any additional requirements imposed by this or future
In accordance with the Appropriations Act, the CDBG-MIT allocation is based on the grantee's proportional share of total CDBG-DR funds allocated for all eligible disasters in 2015, 2016, and 2017.
The Appropriations Act requires that prior to the obligation of CDBG-MIT funds by the Secretary, a grantee shall submit a plan to HUD for approval detailing the proposed use of all funds. The plan must include the criteria for eligibility, and how the use of these funds will address risks identified through a mitigation needs assessment of the most impacted and distressed areas. The definition of mitigation activities and the requirements for the submission of an action plan are identified in section II of the CDBG-MIT Notice.
The Commonwealth of Puerto Rico must submit the financial certification documentation required by section V.A.1.a of the CDBG-MIT Notice, as amended herein, and the implementation plan and capacity assessment required by section V.A.1.b. of the CDBG-MIT Notice. All deadlines for the submissions necessary for the Secretary's certification of financial controls, procurement processes and adequate procedures, and the implementation plan and capacity assessment referenced in the CDBG-MIT Notice, are determined by the applicability date of this notice.
The grantee must submit an action plan per the requirements of section V.A.2 of the CDBG-MIT Notice no later than September 4, 2020, unless the grantee requests, and HUD approves, an extension of the submission deadline as provided for in the CDBG-MIT Notice.
To begin expending CDBG-MIT funds, the grantee must follow the grant process in the CDBG-MIT Notice in section IV, with all timelines for grantee submissions to commence on the applicability date of this notice.
CDBG-MIT grants are subject to the requirements of the CDBG-MIT Notice, which include requirements of the Appropriations Act and waivers and alternative requirements. The waivers and alternative requirements provide additional flexibility in program design and implementation to eligible mitigation activities to lessen the impact of future disasters, while also ensuring that statutory requirements are met. All references to states and State grantees in the CDBG-MIT Notice and this notice shall include the Commonwealth of Puerto Rico. The Commonwealth may request additional waivers and alternative requirements from the Department as needed to address specific needs related to its mitigation activities. Waivers and alternative requirements are effective five days after they are published in the
This section of the notice establishes additional rules, waivers and alternative requirements, and grant conditions specific to the allocation of CDBG-MIT funds for the Commonwealth of Puerto Rico.
In addition to the appropriation of CDBG-MIT funds, the Appropriations Act requires HUD to allocate $2 billion of CDBG-DR funds to provide enhanced or improved electrical power systems in response to Hurricane Maria. HUD announced the allocation of these funds to the U.S. Virgin Islands and the Commonwealth of Puerto Rico and provided that the electrical power system allocation shall be governed by a subsequent notice. To enhance the use of the $2 billion allocated to enhance or improve electrical power systems, the grantee may wish to use CDBG-MIT funds to lessen the risks of disaster-related damage to electric power systems. However, successful efforts to restore, enhance, and improve electrical power systems, and guard this infrastructure against future disasters, will require coordination across multiple sources of Federal financial assistance provided for this purpose.
Therefore, the grantee is prohibited from using CDBG-MIT funds for mitigation activities to reduce the risk of disaster related damage to electric power systems until after HUD publishes the
The
II.B.1.
In response to the scale and complexity of the Grantee's mitigation activities and implementation, as a condition to HUD's obligation of CDBG-MIT funds the grantee shall request and submit to HUD any certification, observations, and recommendations by the Financial Oversight and Management Board (FOMB) established by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), that the action plan and any related program budgets are consistent with any reasonably related provisions of the applicable FOMB-certified budgets and fiscal plans. This condition shall not be interpreted to require a review and certification that is outside of the FOMB's authority.
The Secretary of HUD retains authority to permit the Grantee to access funds notwithstanding the certification requirement upon making a finding that doing so is necessary to effectuate the efficient administration of this grant award at his discretion. In exercising this authority, the Secretary of HUD may require conditions to address FOMB recommendations. The following conditions are imposed on each obligation of grant funds:
• HUD's Federal Financial Monitor shall review any obligation. HUD shall approve the obligation if the grantee satisfactorily resolves all findings of substantial noncompliance related to the use of grant funds and complies with all grant conditions in its grant agreement.
• The Grantee may not draw down funds for an activity in its action plan for mitigation until the Grantee submits to
• The Grantee shall enter into a Memorandum of Agreement with HUD for technical assistance to support compliant program launch within 90 days.
II.B.2.
II.B.2.a.
II.B.2.b.
i. Update its DRGR administration module to include a list of all grant-related internal audit issues (
ii. Update its DRGR administration module to include a summary of each open Single Audit recommendation for (1) the Grantee and/or (2) subrecipient along with the resolution or planned resolution of the audit recommendation;
iii. Update its DRGR administration module to include a summary of each open HUD OIG recommendation related to this grant together with its resolution or planned resolution;
iv. Update DRGR administration module to include a summary of each HUD monitoring recommendation related to this grant along with the resolution or planned resolution of the OIG recommendation; and,
v. Review its management and capacity plan and inform HUD of all updates, including an explanation for each missed milestone, if any.
HUD will review the information submitted by the grantee to determine whether the Grantee demonstrates capacity to make timely and effective corrective actions on identified deficiencies and compliance issues. If HUD determines the Grantee does not demonstrate such capacity, HUD may take additional corrective actions, such as restricting access to grant funds pending resolution of identified issues. If the Grantee fails to comply with this condition, HUD will block access to all or a portion of the grant funds, pending HUD on-site review of the Grantee's management controls.
II.B.3.
Section V.A.1.a of the CDBG-MIT Notice establishes the submission requirements that are required for HUD's certification of the proficiency of a CDBG-MIT grantees' financial controls and procurement processes, and adequate procedures for grants management. Among the required submissions are grantee procedures to detect and prevent fraud, waste, and abuse, including a requirement that each grantee indicate how it will “verify the accuracy of information provided by (CDBG-MIT) applicants.” To address the risk of fraudulent application information and reflect a connection to on-going efforts of the Commonwealth to update its 911 database, property tax records, and GIS maps to include all housing units and to help housing rehabilitation applicants clear title issues that have arisen in the course of federal disaster assistance efforts following Hurricane Maria, the Department is adding to the requirement in section V.A.1.a.(6)(v) of the CDBG-MIT Notice. Accordingly, the grantee's procedures to detect and prevent fraud, waste, and abuse must include how the grantee will verify the accuracy of information provided by applicants. The polices must address how the Commonwealth's CDBG-DR-funded planning activity to develop a uniform parcel registry and GIS database that contains ownership and parcel registry data is to be used to assist HUD, other third parties, and the public to verify the legal and physical address associated with CDBG-MIT activities.
Additionally, so that the uniform parcel registry and GIS database are available to support the detection and prevention of waste, fraud, and abuse in its CDBG-MIT grant, the grantee must adhere to its quarterly performance projections for the use of CDBG-DR funds related to the uniform parcel registry and GIS database activity, beginning with the quarter funds are available to the grantee and continuing each quarter until all funds are expended, unless HUD approves an amendment to the projections via the Quarterly Performance Report (QPR). If the grantee does not complete the
II.B.4.
In its action plan, the grantee must describe all resources, including user fees or Commonwealth or local resources, that have been identified for the operation and maintenance costs of projects assisted with CDBG-MIT funds. The action plan shall indicate that, within one year of approval of the action plan and annually thereafter, the Commonwealth shall submit an operation and maintenance plan to HUD which shall identify the source(s) and amount(s) of revenue that will be sufficient to operate and maintain infrastructure and public facility projects funded with CDBG-MIT funds and which shall identify the entity or entities responsible for the operation and maintenance of those projects.
II.B.5.
II.B.6.
II.B.7.
II.B.8.
All costs charged to the Grant or a subaward must comply with the cost principles specified at 2 CFR part 200, subpart E—Cost Principles. Neither the Grantee nor any subrecipient may charge a fee to the Grant or a subaward for the purpose of defraying costs of work performed by the Grantee or subrecipient that would otherwise be subject to such cost principles or would include an increment above allowable costs.
II.B.9.
II.B.10.
II.B.11.
II.B.12.
II.B.13. A
II.B.13.a. Based upon applicable regulations and guidance related to the construction labor costs resulting from the minimum wage established by Commonwealth of Puerto Rico Executive Order 2018-033, the grantee shall not take into account the minimum wage rate established by Executive Order 2018-033 for construction contracts entered by the Commonwealth when determining whether a wage cost is reasonable under the factors at 2 CFR 200.404. Before charging wage costs to this grant, the Grantee must make an independent determination that wages to be paid with grant funds are reasonable, using factors such as the prevailing wage established by the Department of Labor or other indicators of market wage rates for comparable labor in the geographic area, and the restraints or requirements imposed by such factors as sound business practices and arm's-length bargaining.
II.B.14.
(1) The Grantee must provide a monitoring plan for overseeing the performance of other agencies, existing subrecipients, and subrecipients that will receive subawards (used here to mean grant funds provided to another agency of the Grantee or to a subrecipient) under the approved action plan for mitigation with dates and areas of review. The monitoring plan shall include:
(a) An evaluation of each agency or subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate agency or subrecipient monitoring. The evaluation must include consideration of the following factors:
i. The agency or subrecipient's prior experience with the same or similar grant;
ii. The results of previous audits including whether the agency or subrecipient receives a Single Audit in accordance with 2 CFR part 200, subpart F—Audit Requirements, and the extent to which the same or similar grant has been audited as a major program;
iii. Whether the agency or subrecipient has new personnel or new or substantially changed systems; and,
iv. The extent and results of HUD monitoring, if the agency or subrecipient also receives Federal awards directly from HUD.
(b) A plan to monitor the activities of the agency or subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved, including:
i. Review of financial and performance reports required by the Grantee;
ii. Review of expenditures to determine that charges to the subaward by another agency or subrecipient conform to the cost principles at 2 CFR part 200, subpart E—Cost Principles, and are net of all applicable credits.
iii. Follow-up and ensuring that the agency or subrecipient takes timely and appropriate action on all deficiencies pertaining to the subaward as detected through audits, on-site reviews, and other means;
iv. Issuance of a management decision for audit findings pertaining to the subaward as required by § 200.521 Management decision; and,
v. A schedule of follow-up actions to be taken to resolve a finding of non-compliance and identify the official responsible for such actions.
(2) The Grantee must provide copies of agency memoranda of agreement and subrecipient agreements for subawards above $200 million or those evaluated by HUD to be the highest risk as well as a certification by the parties to each
(3) The Grantee must impose specific subaward conditions upon an agency or subrecipient as described in § 200.207 Specific conditions.
(4) The Grantee, based on the evaluation of risk posed by the agency or subrecipient, must ensure proper accountability and compliance with program requirements and achievement of performance goals by:
(a) Providing agencies or subrecipients with training and technical assistance on program-related matters;
(b) Performing on-site reviews of the agency's or subrecipient's program operations; and,
(c) Arranging for agreed-upon-procedures engagements as described in § 200.425 Audit services.
(5) The Grantee must verify that every agency (where not included in the audit of the grantee) or subrecipient is audited as required by Subpart F—Audit Requirements of 2 CFR part 200 when it is expected that the agency or subrecipient's subaward expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501 Audit requirements.
(6) The Grantee must consider whether the results of the agency or subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the Grantee's own records.
(7) The Grantee must take enforcement action against noncompliant agencies or subrecipients as described in § 200.338 Remedies for noncompliance of this part and in program regulations.
II.B.15.
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this notice are as follows: 14.218 and 14.228.
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for inspection at HUD's Funding Opportunities web page at:
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This notice allocates a total of $3,831,428,000 in Community Development Block Grant disaster recovery (CDBG-DR) funds appropriated by the Supplemental Appropriations for Disaster Relief Act, 2018, and the Additional Supplemental Appropriations for Disaster Relief Act, 2019. The combined amount of $3,831,428,000 in CDBG-DR funds is allocated by this notice for the purpose of assisting in long-term recovery from major disasters that occurred in 2017, 2018, and 2019. This notice also contains clarifications on waivers and alternative requirements that were included in the Prior Notices. Unless expressly limited to certain grantees, the amended waivers and alternative requirements apply to all CDBG-DR grants that are subject to the Prior Notices (previous grants for 2017 disasters and grants under this Notice).
Jessie Handforth Kome, Acting Director, Office of Block Grant Assistance, U.S. Department of Housing and Urban Development, 451 7th Street SW, Room 7282, Washington, DC 20410, telephone number 202-708-3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339. Facsimile inquiries may be sent to Ms. Kome at 202-708-0033. (Except for the”800” number, these telephone numbers are not toll-free.) Email inquiries may be sent to
Two public laws have been enacted that provide supplemental CDBG-DR appropriations. The Supplemental Appropriations for Disaster Relief Act, 2018 (Pub. L. 115-254, approved October 5, 2018) (2018 Appropriations Act) made available $1,680,000,000 in CDBG-DR funds for major disasters declared in 2018. The Additional Supplemental Appropriations for Disaster Relief Act, 2019 (Pub. L. 116-20, approved June 6, 2019) (2019 Appropriations Act) made $2,431,000,000 in CDBG-DR funds available for major disasters occurring in 2017, 2018, or 2019, of which $431,000,000 is for grantees that received funds in response to disasters occurring in 2017. Based on the unmet needs allocation methodology outlined in Appendix A, this notice allocates $3,400,428,000 in CDBG-DR funds in accordance with the 2018 Appropriations Act and the 2019 Appropriations Act (the “2018 and 2019 Appropriations Acts”), to address unmet disaster recovery needs through activities authorized under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301
When additional data becomes available for other disasters occurring in 2019, the remaining $272,072,000 from Public Law 116-20 will be allocated for those disasters in a subsequent notice. In
In accordance with the 2018 and 2019 Appropriations Acts, $2,500,000 of the amounts these acts made available will be transferred to the Department's Office of Community Planning and Development (CPD), Program Office Salaries and Expenses, for necessary costs of administering and overseeing CDBG-DR grants under the 2018 and 2019 Appropriations Acts. Additionally, in accordance with the 2019 Appropriations Act, $5,000,000 is to be transferred to CPD to provide necessary capacity building and technical assistance to grantees that receive a CDBG-DR grant under the 2018 and 2019 Appropriations Acts or future acts. As mentioned above, the 2019 Appropriations Act requires HUD to allocate $431,000,000 to address unmet infrastructure needs for grantees that received an allocation for a disaster that occurred in 2017, of which $331,442,114 shall be allocated to those grantees affected by Hurricane Maria.
The 2018 and 2019 Appropriations Acts provide that grants shall be awarded directly to a State, unit of general local government, or Indian tribe at the discretion of the Secretary. Unless noted otherwise, the term “grantee” refers to the entity receiving a grant from HUD under this notice. To comply with statutory requirements that funds be used for disaster-related expenses in the most impacted and distressed areas, HUD allocates funds using the best available data that covers all the eligible affected areas.
Grantees receiving an allocation of funds under this notice are subject to the requirements of the Prior Notices, as amended by this notice or by subsequent notices. Pursuant to the Prior Notices, each grantee receiving an allocation for a 2018 or 2019 disaster is required to primarily consider and address its unmet housing recovery needs. These grantees may, however, propose the use of funds for unmet economic revitalization and infrastructure needs unrelated to the grantee's unmet housing needs if the grantee demonstrates in its needs assessment that there is no remaining unmet housing need or that the remaining unmet housing need will be addressed by other sources of funds. Grantees receiving funds under this notice for an additional allocation for unmet infrastructure needs arising from a 2017 disaster must use those funds for unmet infrastructure needs.
Table 1 (below) shows the major disasters that grants under this notice may address and the minimum amount of funds from the combined allocations under the 2018 and 2019 Appropriations Acts that must be expended in the HUD-identified most impacted and distressed areas. The information in this table is based on HUD's review of the impacts from the qualifying disasters and estimates of unmet need.
Pursuant to the 2018 and 2019 Appropriations Acts, HUD has identified the most impacted and distressed areas based on the best available data for all eligible affected areas. A detailed explanation of HUD's allocation methodology is provided in Appendix A of this notice.
In some instances, HUD identified the entire jurisdiction of a grantee as the most impacted and distressed area. For all other grantees, at least 80 percent of the total funds provided to a grantee under this notice must address unmet disaster needs within the HUD-identified most impacted and distressed areas, as identified in the last column in Table 1. Note that if HUD designates a ZIP Code for 2018 and 2019 disasters as a most impacted and distressed area for purposes of allocating funds, the grantee may expand program operations to the whole county (county is indicated in parentheses next to the ZIP Code as a most impacted and distressed area. The grantee should indicate the decision to expand eligibility to the whole county in its action plan.
A grantee may determine where to use the remaining 20 percent of the allocation, but that portion of the allocation may only be used to address unmet disaster needs in those areas that the grantee determines are “most impacted and distressed” and received a presidential major disaster declaration pursuant to the disaster numbers listed in Table 1. A grantee may use up to 5 percent of the total grant award for grant administration and no more than 15 percent of the total grant award for planning activities. Therefore, HUD will include 80 percent of a grantee's expenditures for grant administration in its determination that 80 percent of the total award has been expended in the most impacted and distressed areas identified in Table 1. Additionally, expenditures for planning activities may be counted towards a grantee's 80 percent expenditure requirement, provided that the grantee describes in its action plan how those planning activities benefit the HUD-identified most impacted and distressed areas.
Funds allocated under this notice are subject to the requirements of the Prior Notices, as amended by this notice or subsequent notices. This notice outlines additional requirements imposed by the 2018 and 2019 Appropriations Acts that apply to funds allocated under this notice.
The 2018 and 2019 Appropriations Acts require that prior to the obligation of CDBG-DR funds a grantee shall submit a plan detailing the proposed use of all funds. The plan must include criteria for eligibility, and how the use of these funds will address long-term recovery and restoration of infrastructure and housing, economic revitalization, and mitigation in the most impacted and distressed areas. Therefore, the action plan submitted in response to this notice must describe
While CDBG-DR funding is a valuable resource for long-term recovery and mitigation in the wake of major disasters, HUD expects that grantees will take steps to set in place substantial State and local governmental policies to enhance the impact of HUD-funded investments and limit damage from future disasters. The
Grantees should note that a subsequent notice published on August 14, 2018 (83 FR 40314), which clarifies and/or modifies requirements in the February 9, 2018 notice, applies to grantees receiving funds under this notice. Specifically, grantees should note the following clarifications and modifications in the August 14, 2018 notice governing the use of these funds: Allowing for unmet economic revitalization and infrastructure needs (83 FR 40314), which are addressed in section I in this notice; the use of terminology around an evaluation of the cost or price of a product or service (83 FR 40317); additional requirements for the comprehensive disaster recovery website (83 FR 40317); clarification of working capital to aid in recovery (83 FR 40317); underwriting requirements (83 FR 40317); limitation of use of funds for eminent domain (83 FR 40317); increased public comment period (83 FR 40318); cost verification (83 FR 40318); additional criteria and specific conditions to mitigate risk (83 FR 40318-40319); the waiver of Section 414 of the Stafford Act as amended (83 FR 40319) and addressed in section IV.C.2. in this notice; modification of affordability periods for rental properties (83 FR 40320); clarification of the environmental review requirements (83 FR 40319); CDBG-DR housing assistance and FEMA's permanent and semi-permanent housing programs (83 FR 40320); rehabilitation and reconstruction cost-effectiveness (83 FR 40321); infrastructure planning and design (83 FR 40321); discipline and accountability in the environmental review and permitting of infrastructure projects (83 FR 40321); and CDBG-DR funds as match for FEMA 428 Public Assistance projects (83 FR 40321).
Additionally, HUD published a notice on June 20, 2019 entitled, “Updates to Duplication of Benefits Requirements Under the Stafford Act for Community Development Block Grant (CDBG) Disaster Recovery Grantees” (84 FR 28836) (2019 DOB Notice) and a second notice that implemented the 2019 DOB Notice by making corresponding amendments to the Prior Notices (Applicability of Updates to Duplication of Benefits Requirements Under the Stafford Act for Community Development Block Grant (CDBG) Disaster Recovery Grantees, published at 84 FR 28848) (the “Implementation Notice”). Those changes are explained in section IV.B.6. of this notice and in detail in the 2019 DOB Notice (84 FR 28836).
Finally, the February 9, 2018 notice was also amended by the February 19, 2019 notice (84 FR 4836) with a clarification on green building standards (84 FR 4844).
Each grantee must submit an action plan for disaster recovery pursuant the requirements of section VI.A.2 of the February 9, 2018 notice (83 FR 5849), as modified by the requirements of the August 14, 2018 notice (83 FR 40314), not later than 120 days after the applicability date of this notice. All requirements of the Prior Notices related to the action plan submission shall apply, including the public comment period which was extended to not less than 30 calendar days under the August 14, 2018 notice (83 FR 40318), and the manner of publication which must include prominent posting on the grantee's official website (83 FR 40317). Each grantee must publish the action plan in a manner that affords citizens, affected local governments, and other interested parties a reasonable opportunity to examine the contents and provide feedback. Each grantee must also submit the Financial Management and Grant Compliance submission and Pre-Award Implementation Plan pursuant to section VI.A.I of the February 9, 2018 notice. All deadlines for these submissions are determined by the applicability date of this notice.
In the Prior Notices, the Department included its intention to establish special grant conditions for individual CDBG-DR grants based upon the risks posed by the grantee, including risks related to the grantee's capacity to carry out the specific programs and projects proposed in its action plan. As described in the Prior Notices, these conditions will be designed to provide additional assurances that programs are implemented in a manner to prevent waste, fraud, and abuse and the Department has established specific criteria and conditions for each grant award as provided for at 2 CFR 200.205 and 200.207(a), respectively, to mitigate the risks of the grant.
To begin expending CDBG-DR funds, the grantee must follow the process outlined in the February 9, 2018 notice (83 FR 5846), unless otherwise amended below:
• Within 60 days of the applicability date of this notice (or when the grantee submits its action plan, whichever is earlier), submit documentation for the certification of financial controls and procurement processes and adequate procedures for grant management, as amended in section IV.B.1 of this notice. A grantee that received a certification of its financial controls and procurement processes pursuant to a 2016 or 2017 disaster may request that HUD rely on that certification for purposes of this allocation, provided, however, that grantees shall be required to provide updates to reflect any material changes in the submissions.
• Within 60 days of the applicability date of this notice (or when the grantee
• Additionally, all funds must be expended within 6 years of the date of obligation as described in section V of this notice.
Each grantee that received an allocation pursuant to Public Law 115-56 or Public Law 115-123 for 2017 disasters and an additional allocation in this notice for unmet infrastructure needs is required to submit a substantial amendment to its current action plan required by the Prior Notices. The substantial amendment must be submitted no later than 90 days after the applicability date of this notice. The substantial amendment must include the additional allocation of funds and address the requirements of the Prior Notices, as amended by this notice. Each grantee must follow the applicable substantial amendment process pursuant to section III.B of the August 14, 2018 notice (83 FR 40316). Based on the 2019 Appropriations Act, HUD will condition the availability of these funds for grantees that have entered into alternative procedures under section 428 of the Stafford Act as of the date of enactment of the 2019 Appropriations Act until such grantees have reached a final agreement on all fixed cost estimates within the timeline provided by FEMA.
This section of the notice describes rules, statutes, waivers, and alternative requirements that apply to each grantee receiving an allocation under this notice. The Secretary has determined that good cause exists to apply each waiver and alternative requirement established in the Prior Notices to grantees receiving funds under this notice and that such waivers and alternative requirements are not inconsistent with the overall purpose of title I of the HCDA. The Secretary's determination of good cause extends to each waiver or alternative requirement as amended by this notice. Grantees are reminded that all fair housing and nondiscrimination requirements, as well as environmental and labor requirements, continue to apply. The following requirements apply only to the CDBG-DR funds appropriated under the 2018 and 2019 Appropriations Acts (unless otherwise noted) and not to funds provided under the annual formula State or Entitlement CDBG programs, the Indian Community Development Block Grant program, or those provided under any other component of the CDBG program, such as the Section 108 Loan Guarantee Program, or any previous CDBG-DR appropriations, unless otherwise noted.
A grantee may request additional waivers and alternative requirements from the Department as needed to address specific needs related to its recovery activities, accompanied by data to support the request. Grantees should work with the assigned Community Planning and Development representatives to request any additional waivers or alternative requirements from HUD. Except where noted, the waivers and alternative requirements described below apply to all grantees under this notice. Pursuant to the requirements of the 2018 and 2019 Appropriations Acts, waivers and alternative requirements are effective 5 days after they are published in the
Except as described in this notice or the Prior Notices, statutory and regulatory provisions governing the State CDBG program shall apply to State grantees receiving a CDBG-DR grant. Except as described in this notice or the Prior Notices, statutory and regulatory provisions governing the entitlement CDBG program shall apply to any local government receiving a CDBG-DR grant. Based on the Prior Notices' treatment of grantees in the CDBG Insular areas program, all references to states and State grantees shall include the Commonwealth of the Northern Mariana Islands and the American Samoa. State and Entitlement CDBG regulations can be found at 24 CFR part 570. References to the action plan in these regulations shall refer to the action plan for disaster recovery required by section VI.A.2 of the February 9, 2018 notice. All references in this notice pertaining to timelines and/or deadlines are in terms of calendar days unless otherwise noted. The date of this notice shall mean the applicability date of this notice unless otherwise noted.
This notice extends the waivers and alternative requirements in the Prior Notices to states and local governments receiving grants under the 2018 and 2019 Appropriations Acts. Because the Prior Notices only govern grants to states, this notice amends the Prior Notices by adding regulations that apply to units of general local government the waivers previously granted by the Secretary (except in cases such as the timely distribution of funds, the consolidated plan waiver, or reimbursement where the Prior Notices already waive entitlement CDBG program regulations). Where requirements are different for units of general local government than the requirements applicable to states, this notice amends the Prior Notices to add the local government requirement.
IV.A.1. The Secretary amends the following sections of the February 9, 2018 notice to expand waivers to include waivers of the regulations that apply to local government grantees: In Section VI.A.2.,
IV.A.2.
Paragraph V.A.1.a.(2) is modified after the sentence that begins “A State grantee (including the Commonwealth of Puerto Rico and the U.S. Virgin Islands) has proficient procurement policies and processes if . . . ” to add the following sentence: “A local government grantee has proficient procurement policies and processes if it follows procurement requirements in the Uniform Administrative Requirements at 2 CFR 200.318 through 200.326, and imposes these requirements on its subrecipients.”
Paragraph VI.A.26 of the February 9, 2018 notice is modified by adding after the first paragraph, “Any local government receiving a CDBG-DR grant is subject to procurement requirements
IV.B.1.
A grantee that received a certification of its financial controls and procurement processes pursuant to a 2016 or 2017 disaster may request that HUD rely on that certification for purposes of this grant, provided, however, that grantees shall be required to provide updates to reflect any material changes in the submissions. This information must be submitted within 60 days of the applicability date of this notice. The grant agreement will not be executed until HUD has approved the grantee's certifications. The grantee must implement the CDBG-DR grant consistent with the controls, processes, and procedures as certified by HUD. HUD is requiring each grantee to submit (or update and resubmit, as applicable) all policies and procedures pertaining to its duplication of benefits procedures as outlined below:
(1) Duplication of benefits procedures. A grantee has adequate procedures to prevent the duplication of benefits if the grantee submits uniform processes that reflect the requirements of the February 9, 2018 notice (83 FR 5860) and the 2019 DOB Notice (84 FR 28836), including: (a) Verifying all sources of assistance received by the grantee or applicant, as applicable, prior to the award of CDBG-DR funds; (b) determining a grantee's or an applicant's remaining funding need(s) for CDBG-DR assistance before committing funds or awarding assistance; and (c) requiring beneficiaries to enter into a signed agreement to repay any duplicative assistance if they later receive additional assistance for the same purpose for which the CDBG-DR award was provided. The grantee must identify a method to monitor compliance with the agreement for a reasonable period and must articulate this method in its written administrative procedures, including the basis for the period in which the grantee will monitor compliance. This agreement must also include the following language: “
Policies and procedures of the grantee submitted to support the certification must provide that prior to the award of assistance, the grantee will use the best, most recent available data from FEMA, the Small Business Administration (SBA), insurers, and any other sources of local, State and Federal sources of funding to prevent the duplication of benefits. In developing these policies and procedures, grantees are directed to the 2019 DOB Notice (84 FR 28836). To be adequate, a grantee's policies and procedures must reflect the treatment of loans that is consistent with the requirements of the Declined Loans Provision and the section 1210 of the Disaster Recovery Reform Act of 2018 (DRRA) (division D of Pub. L. 115-254), as explained in section IV.B.6 of this notice and in the 2019 DOB Notice.
IV.B.2.
IV.B.3.
IV.B.4.
Grantees are reminded that expanding the eligible beneficiaries of their Hurricane Matthew activities or programs to include those impacted by Hurricane Florence requires the submission of a substantial action plan amendment in accordance with section VI.A.2.g of the November 21, 2016 notice (81 FR 83254). Additionally, all waivers and alternative requirements associated with a CDBG-DR grant apply to the use of the funds provided by that grant, regardless of which disaster (Matthew or Florence) the funded activity will address.
IV.B.5.
HUD is authorizing grantees under Public Laws 114-113, 114-223, 114-254, and 115-31 that also received a CDBG-DR grant under Public Law 115-254 or 116-20 to either: (a) continue to follow One-for-One Replacement Housing, Relocation, and Real Property Acquisition Requirements as provided in section VI.A.19. of the November 21, 2016 notice (81 FR 83266) for its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants; or (b) follow the requirements of section VI.A.23.a. through e. of the February 9, 2018 notice (83 FR 5858) for its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants. The grantee's programs under the most recent Public Laws (Pub. L. 115-254 or 116-20) are already required to follow the waiver and alternative requirement defined in the February 9, 2018 notice (83 FR 5858). If a grantee chooses to follow option (b) above, then it must identify this approach in its policies and procedures related to that particular activity and consistently apply that option for all displaced persons affected by that activity.
IV.B.6.
HUD subsequently published the 2019 DOB Notice, which revised the DOB requirements that apply to CDBG-DR grants for disasters declared between January 1, 2015, and December 31, 2021. HUD also published a separate notice that implemented the 2019 DOB Notice (84 FR 28848) (the “Implementation Notice”) by making corresponding amendments to the February 9, 2018 and August 14, 2018 notices. The amendments in the Implementation Notice provide that the 2019 DOB Notice shall supersede the 2011 DOB Notice for any new programs or activities submitted in an action plan or action plan amendment on or after June 25, 2019.
Accordingly, grantees must comply with the requirements of the Prior Notices, including amendments in the Implementation Notice. Because the applicability date of this notice is after June 25, 2019, provisions of the Implementation Notice that apply only to grants made before June 25, 2019 do not apply to grants under the 2018 and 2019 Appropriations Acts.
IV.B.7. The waiver and alternative requirement in section VI.A.6. of the February 9, 2018 notice is replaced with the following language to include 2018 and 2019 disaster grantees: “HUD is temporarily waiving the requirement for consistency with the consolidated plan (requirements at 42 U.S.C. 12706, 24 CFR 91.325(a)(5) and 91.225(a)(5)), because the effects of a major disaster alter a grantee's priorities for meeting housing, employment, and infrastructure needs. In conjunction, 42 U.S.C. 5304(e), to the extent that it would require HUD to annually review grantee performance under the consistency criteria, is also waived. Grantees are encouraged to incorporate disaster-recovery needs into their consolidated plan updates as soon as practicable, but any unmet disaster-related needs and associated priorities must be incorporated into the grantee's next consolidated plan update no later than its Fiscal Year 2020 update for 2017 disasters and Fiscal Year 2022 for 2018 and 2019 disasters.”
IV.C.1.
“10.
IV.C.2.
“
Grantees that received a CDBG-DR grant for a major disaster in 2015, 2016, or 2017 under Public Laws 114-113, 114-223, 114-254, or 115-31, and a CDBG-DR grant for a 2017, 2018, or 2019 major disaster under Public Laws 115-56, 115-123, 115-254, or 116-20 are subject to different alternative requirements with respect to protections afforded to tenants and homeowners under Section 414 of the Stafford Act.
To avoid the administrative burden of implementing two different URA alternative requirements, HUD is authorizing grantees under Public Laws 114-113, 114-223, 114-254, and 115-31 that also received a CDBG-DR grant under Public Law 115-56, 115-123, 115-254, or 116-20 to either: (a) Continue to follow Section 414 of the Stafford Act (or any grantee-specific alternative requirement previously authorized by HUD) for its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants; or (b) follow the waiver and alternative requirement described in the following paragraph for its Public Laws 114-113, 114-223, 114-254, and 115-31 CDBG-DR grants. The grantee's programs under the most recent Public Laws (Pub. L. 115-56, 115-123, 115-254, or 116-20) are already required to follow the waiver and alternative requirement defined below. If a grantee chooses to follow option (b) above then it must identify this approach in its policies and procedures related to that particular activity, and consistently apply that option for all displaced persons affected by that activity.
The waiver and alternative requirement is as follows: Section 414 of the Stafford Act (including its implementing regulation at 49 CFR 24.403(d)(1)), is waived to the extent that it would apply to real property acquisition, rehabilitation, or demolition of real property for a CDBG-DR funded project, undertaken by the grantee or subrecipient, commencing more than one (1) year after the Presidentially declared disaster, provided that the project was not planned, approved, or otherwise underway prior to the disaster. For purposes of this paragraph, a CDBG-DR funded project shall be determined to have commenced on the earliest of: (1) The date of an approved Release for Request of Funds (RROF) and certification, or (2) the date of completion of the site-specific review when a program utilizes tiered environmental reviews, or (3) the date of sign-off by the approving official when a project converts to exempt under 24 CFR 58.34(a)(12). The Secretary has the authority to waive provisions of the Stafford Act and its implementing regulations that the Secretary administers in connection with the obligation of CDBG-DR funds covered under this waiver and alternative requirement, or the grantees' use of these funds. The Department has determined that good cause exists for a waiver and that such waiver is not inconsistent with the overall purposes of title I of the HCDA. The waiver will simplify the administration of the disaster recovery process and reduce the administrative burden associated with the implementation of Stafford Act Section 414 requirements for projects commencing more than one (1) year after the date of the Presidentially declared disaster, considering the majority of such persons displaced by the disaster will have returned to their dwellings or found another place of permanent residence. This waiver does not apply with respect to persons that meet the occupancy requirements to receive a replacement housing payment under the URA nor does it apply to persons displaced or relocated temporarily by other HUD-funded programs or projects. Such persons' eligibility for relocation assistance and payments under the URA is not impacted by this waiver.”
IV.C.3
IV.C.4.
“37.
The 2018 and 2019 Appropriations Acts make the funds available for obligation by HUD until expended. This notice requires each grantee to expend 100 percent of its CDBG-DR grant on eligible activities within 6 years of HUD's obligation of funds under Public Laws 115-254 and 116-20 pursuant to an executed grant agreement. Furthermore, consistent with 31 U.S.C. 1555 and OMB Circular A-11, if the Secretary or the President determines
The Catalog of Federal Domestic Assistance numbers for the disaster recovery grants under this notice are as follows: 14.228 for State CDBG grantees and 14.218 for Entitlement CDBG Grantees.
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available for public inspection between 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, U.S. Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, an advance appointment to review the docket file must be scheduled by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Hearing- or speech-impaired individuals may access this number through TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).
The FAA Reauthorization Act of 2018 (Pub. L. 115-254) enacted on October 5, 2018, appropriated $1,680,000,000 through the Community Development Block Grant disaster recovery (CDBG-DR) program. The statutory text related to the allocation is as follows:
“For an additional amount for “Community Development Fund”, $1,680,000,000, to remain available until expended, for necessary expenses for activities authorized under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301
Public Law 116-20 appropriated $2,431,000,000 through the Community Development Block Grant disaster recovery (CDBG-DR) program. The statutory text related to the allocation is as follows:
“For an additional amount for “Community Development Fund,” $2,431,000,000, to remain available until expended, for necessary expenses for activities authorized under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301
“
As with prior CDBG-DR appropriations, HUD is not obligated to allocate funds for all major disasters occurring in the statutory timeframes. HUD is directed to use the funds “in the most impacted and distressed areas.” HUD has implemented this directive by limiting CDBG-DR formula allocations to grantees with major disasters that meet three standards:
(1) Individual Assistance/Individual and Households Program (IHP) designation. HUD has limited allocations to those disasters where FEMA had determined the damage was sufficient to declare the disaster as eligible to receive IHP funding.
(2) Concentrated damage. HUD has limited its estimate of serious unmet housing needs to counties and ZIP Codes with high levels of damage, collectively referred to as “most impacted areas.” For this allocation, HUD is defining most impacted areas as either most impacted counties—counties exceeding $10 million in serious unmet housing needs—and most impacted Zip Codes—ZIP Codes with $2 million or more of serious unmet housing needs. The calculation of serious unmet housing needs is described below.
(3) Disasters meeting the most impacted threshold. Only 2018 and 2019 disasters that meet this requirement for most impacted damage are funded if one or more county or ZIP Code meets the thresholds above. Note that this allocation only includes disasters declared as of October 4, 2019. Other 2019 disasters will be addressed in a future notice.
For disasters that meet the most impacted threshold described above, the unmet need allocations are based on the following factors summed together:
(1) Repair estimates for seriously damaged owner-occupied units without insurance (with some exceptions) in most impacted areas after FEMA and SBA repair grants or loans; an estimate for homeowners served by FEMA's Permanent Housing Construction program is also deducted from the homeowner unmet need estimate;
(2) Repair estimates for seriously damaged rental units occupied by very low-income renters in most impacted areas;
(3) Repair and content loss estimates for small businesses with serious damage denied by SBA; and
(4) The estimated local cost share for Public Assistance Category C to G projects.
The data HUD uses to calculate unmet needs for 2018 qualifying disasters come from the FEMA Individual Assistance program data on housing-unit damage as of July 17, 2019. The data for 2019 qualifying disasters is as of November 13, 2019.
The core data on housing damage for both the unmet housing needs calculation and the concentrated damage are based on home inspection data for FEMA's Individual Assistance program and SBA's disaster loan program. HUD calculates “unmet housing needs” as the number of housing units with unmet needs times the estimated cost to repair those units less repair funds already provided by FEMA and SBA.
Each of the FEMA inspected owner units are categorized by HUD into one of five categories:
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When owner-occupied properties also have a personal property inspection or only have a personal property inspection, HUD reviews the personal property damage amounts such that if the personal property damage places the home into a higher need category over the real property assessment, the personal property amount is used as follows::
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To meet the statutory requirement of “most impacted” in this legislative language, homes are determined to have a high level of damage if they have damage of “major-low” or higher. That is, they have a FEMA inspected real property damage of $8,000 or above, personal property damage $3,500 or above, or flooding 1 foot or above on the first floor.
Furthermore, a homeowner with flooding outside the 1 percent risk flood hazard area is determined to have unmet needs if they reported damage and no flood insurance to cover that damage. For homeowners inside the 1 percent risk flood hazard area, homeowners without flood insurance with flood damage below the greater of national median or 120 percent of Area Median Income are determined to have unmet needs. For non-flood damage, homeowners without hazard insurance with incomes below the greater of national median or 120 percent of Area Median Income are included as having unmet needs.
FEMA does not inspect rental units for real property damage so personal property damage is used as a proxy for unit damage. Each of the FEMA-inspected renter units are categorized by HUD into one of five categories:
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To meet the statutory requirement of “most impacted” for rental properties, homes are determined to have a high level of damage if they have damage of “major-low” or higher. That is, they have a FEMA personal property damage assessment of $2,000 or greater or flooding 1 foot or above on the first floor.
Furthermore, landlords are presumed to have adequate insurance coverage unless the unit is occupied by a renter with income less than the greater of the Federal poverty level or 50 percent of median income. Units occupied by a tenant with income less than the greater of the poverty level or 50 percent of median income are used to calculate likely unmet needs for affordable rental housing.
The average cost to fully repair a home for a specific disaster to code within each of the damage categories noted above is calculated using the median real property damage repair costs determined by the SBA for its disaster loan program for the subset of homes inspected by both SBA and FEMA for each eligible disaster.
Minimum multipliers are not less than the 1st quarter median for all Individual Assistance (IA) eligible disasters combined in each disaster year at the time of the allocation calculation, and maximum multipliers are not more than the 4th quarter median for all IA eligible disasters combined in each disaster year with data available as of the allocation. Because SBA is inspecting for full repair costs, their estimate is presumed to reflect the full cost to repair the home, which is generally more than the FEMA estimates on the cost to make the home habitable. If there is a match of fewer than 20 SBA inspections to FEMA inspections for any damage category, the minimum multiplier is used.
For each household determined to have unmet housing needs (as described above), their estimated average unmet housing need is equal to the average cost to fully repair a home to code less assistance from FEMA and SBA provided for repair to the home, based on their damage category (noted above).
Based on SBA disaster loans to businesses using data for 2018 disasters from as of date July 17, 2019 and for 2019 disasters from as of the date November 14, 2019, HUD calculates the median real estate and content loss by the following damage categories for each state:
For properties with real estate and content loss of $30,000 or more, HUD calculates the estimated amount of unmet needs for small businesses by multiplying the median damage estimates for the categories above by the number of small businesses denied an SBA loan, including those denied a loan prior to inspection due to inadequate credit or income (or a decision had not been made), under the assumption that damage among those denied at pre-inspection have the same distribution of damage as those denied after inspection.
To calculate 2018 and 2019 unmet needs for infrastructure projects, HUD obtained FEMA cost estimates (as of July 17, 2019 for the 2018 disasters and November 13, 2019 for 2019 disasters) of the expected local cost share to repair the permanent public infrastructure (Categories C to G) to their pre-storm condition.
To calculate additional infrastructure unmet needs for 2017 disasters, HUD compares the change in FEMA Category C to G local match cost estimates between March 2018 (when funds had been allocated under Pub. L. 115-23) and November 2019. For grantees impacted by Hurricane Maria—Puerto Rico and the Virgin Islands—the statutorily required allocation of $331,442,114 is allocated proportional based on their relative share of growth in Category C to G local match cost estimates. For other 2017 grantees where the November 2019 estimate exceeds the March 2018 estimate, each grantee is first increased dollar-for-dollar to their local match requirements. For any of the remaining funds of the required $431 million for 2017 disasters, they are allocated to the non-Maria disasters that have been funded at 100 percent or less of infrastructure match needs proportional to their share of eligible grantees' November 2019 estimated infrastructure match needs.
Once eligible entities are identified using the above criteria, the allocation to individual grantees represents their proportional share of the estimated unmet needs. For the formula allocation, HUD calculates total unmet recovery needs for eligible 2018 and 2019 disasters as the aggregate of:
• Serious unmet housing needs in most impacted counties;
• Serious unmet business needs; and
• Unmet infrastructure need.
Fish and Wildlife Service, Interior.
Notice of receipt of permit applications; request for comments.
We, the U.S. Fish and Wildlife Service, have received applications for permits to conduct activities intended to enhance the propagation or survival of endangered or threatened species under the Endangered Species Act. We invite the public and local, State, Tribal, and Federal agencies to comment on these applications. Before issuing any of the requested permits, we will take into consideration any information that we receive during the public comment period.
We must receive your written comments on or before February 26, 2020.
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Nathan Rathbun, 612-713-5343 (phone);
The Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
A recovery permit issued by us under section 10(a)(1)(A) of the ESA authorizes the permittee to conduct activities with endangered species for scientific purposes that promote recovery or for enhancement of propagation or survival of the species. Our regulations implementing section 10(a)(1)(A) for these permits are found at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
We invite local, State, and Federal agencies, Tribes, and the public to comment on the following applications.
Written comments we receive become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Moreover, all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
If we decide to issue permits to any of the applicants listed in this notice, we will publish a notice in the
We publish this notice under section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of initiation of reviews; request for information.
We, the U.S. Fish and Wildlife Service, are initiating 5-year status reviews of 66 species in California and Nevada under the Endangered Species Act. A 5-year review is based on the best scientific and commercial data available at the time of the review; therefore, we are requesting submission of any new information on these species that has become available since the last review.
To ensure consideration in our reviews, we are requesting submission of new information no later than March 27, 2020. However, we will continue to accept new information about any species at any time.
For how and where to submit information or questions, see Request for New Information.
For general questions, please contact Peter Erickson, 916-414-6741. For whom to contact with species-specific information or questions, see Request for New Information.
Individuals who are hearing impaired or speech impaired may call the Federal Relay Service at 800-877-8337 for TTY assistance.
Under the Endangered Species Act of 1973, as amended (Act; 16 U.S.C. 1531
A 5-year review considers all new information available at the time of the review. In conducting these reviews, we consider the best scientific and commercial data that have become available since the listing determination or most recent status review, such as:
(A) Species biology, including but not limited to population trends, distribution, abundance, demographics, and genetics;
(B) Habitat conditions, including but not limited to amount, distribution, and suitability;
(C) Conservation measures that have been implemented to benefit the species;
(D) Threat status and trends in relation to the five listing factors (as defined in section 4(a)(1) of the Act); and
(E) Other new information, data, or corrections, including but not limited to taxonomic or nomenclatural changes, identification of erroneous information contained in the List, and improved analytical methods.
Any new information will be considered during the 5-year review and will also be useful in evaluating the ongoing recovery programs for the species.
This notice announces our active review of the species listed in the table below.
To ensure that a 5-year review is complete and based on the best available scientific and commercial information, we request new information from all sources. See What Information Do We Consider in Our Review? for specific criteria. If you submit information, please support it with documentation such as maps, bibliographic references, methods used to gather and analyze the data, and/or copies of any pertinent publications, reports, or letters by knowledgeable sources.
To get more information on a species, submit information on a species, or review information we receive, please use the contact information for the Lead Fish and Wildlife Office for the species specified in the table above.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Comments and materials received will be available for public inspection, by appointment, during normal business hours at the offices to which the comments are submitted.
This document is published under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service (Service), have received two applications for an incidental take permit (ITP), one for the federally endangered Mount Hermon June beetle and one for the federally endangered Mount Hermon June beetle and Zayante band-winged grasshopper, under the Endangered Species Act of 1973, as amended. The County of Santa Cruz submitted a permit application that, if issued, would authorize take of the
Written comments should be received on or before February 26, 2020.
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Chad Mitcham, Fish and Wildlife Biologist, 805-677-3328 (by phone), or at the Ventura Fish and Wildlife office (by mail; see
We have received two applications for ITPs under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
The Service listed the Mount Hermon June beetle and Zayante band-winged grasshopper as endangered on January 24, 1997 (62 FR 3616). Section 9 of the ESA (16 U.S.C. 1538) prohibits the “take” of fish or wildlife species listed as endangered. “Take” is defined under the ESA to include the following activities: “[T]o harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct” (16 U.S.C. 1532); however, under section 10(a)(1)(B) of the ESA (16 U.S.C. 1539(a)(1)(B)), we may issue permits to authorize incidental take of listed wildlife species. Incidental take is take that is incidental to, and not the purpose of, carrying out of an otherwise lawful activity. Regulations governing ITPs for endangered wildlife are in the Code of Federal Regulations (CFR) at 50 CFR 17.22.
Take of listed plants is not prohibited under the ESA unless the action would violate State law. As such, take of plants cannot be authorized under an ITP. Plant species may be included on a permit in recognition of the conservation benefits provided them under an HCP. All species, including plants, covered by the ITP receive assurances under our “No Surprises” regulations (50 CFR 17.22(b)(5)). Issuance of an ITP also must not jeopardize the existence of federally listed fish, wildlife, or plant species.
Santa Cruz County has applied for a permit for incidental take of the Mount Hermon June beetle. The take would occur in association with renovation and upgrades of facilities and infrastructure at the County of Santa Cruz Juvenile Hall. Project activities would occur within a 0.427-acre (ac) area, within which 0.270 ac is suitable habitat for the Mount Hermon June beetle. The HCP includes avoidance and minimization measures for the Mount Hermon June beetle and mitigation for unavoidable loss of suitable habitat through the restoration of suitable habitat adjacent to the project site or the purchase of conservation credits at a Service-approved conservation bank.
Verizon Wireless has applied for a permit for incidental take of the Mount Hermon June beetle and Zayante band-winged grasshopper. The take would occur in association with the expansion of an existing wireless telecommunications facility. The site includes approximately 0.020 ac of suitable habitat for the Mount Hermon June beetle and Zayante band-winged grasshopper. The Service has designated the entire project site as critical habitat for the Zayante band-winged grasshopper. The HCP includes avoidance and minimization measures for the covered species and mitigation for unavoidable loss of suitable habitat through the purchase of conservation credits at a Service-approved conservation bank.
The Service has made preliminary determinations that issuance of these incidental take permits is neither a major Federal action that will significantly affect the quality of the human environment within the meaning of section 102(2)(C) of the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
If you wish to comment on the draft HCPs and categorical screening forms, you may submit comments by one of the methods in
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public view, we
We provide this notice under section 10 of the ESA (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
In accordance with the Marine Mammal Protection Act of 1972, as amended, we, the U.S. Fish and Wildlife Service, have developed a draft revised marine mammal stock assessment report for the southern sea otter stock in the State of California. We now make the draft stock assessment report available for public review and comment.
We will consider comments that are received or postmarked on or before April 27, 2020.
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Lilian Carswell, at the above street address, by telephone (805-677-3325), or by email (
We announce the availability for review and comment of a draft revised marine mammal stock assessment report (SAR) for the southern sea otter (
Under the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
To help accomplish the goal of maintaining marine mammal stocks at their OSPs, section 117 of the MMPA requires the Service and the National Marine Fisheries Service (NMFS) to prepare a SAR for each marine mammal stock that occurs in waters under U.S. jurisdiction. A SAR must be based on the best scientific information available; therefore, we prepare it in consultation with regional scientific review groups established under section 117(d) of the MMPA. Each SAR must include:
1. A description of the stock and its geographic range;
2. A minimum population estimate, current and maximum net productivity rate, and current population trend;
3. An estimate of the annual human-caused mortality and serious injury by source and, for a strategic stock, other factors that may be causing a decline or impeding recovery;
4. A description of commercial fishery interactions;
5. A categorization of the status of the stock; and
6. An estimate of the
The MMPA defines the PBR as “the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its OSP” (16 U.S.C. 1362(20)). The PBR is the product of the minimum population estimate of the stock (N
Section 117 of the MMPA also requires the Service and NMFS to review the SARs (a) at least annually for stocks that are specified as strategic stocks, (b) at least annually for stocks for which significant new information is available, and (c) at least once every 3 years for all other stocks. If our review of the status of a stock indicates that it has changed or may be more accurately determined, then the SAR must be revised accordingly.
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The southern sea otter SAR was last revised in 2017. Because the southern sea otter is listed as a threatened species under the ESA, the stock is considered strategic. Therefore, the Service reviews the stock assessment annually. In 2018, Service review concluded that revision was not warranted because the status of the stock had not changed, nor could it be more accurately determined. However, upon review in 2019, the Service determined that revision was warranted because the status of the stock may be subject to change. The range-wide population index (
The following table summarizes some of the information contained in the draft revised southern sea otter SAR, which includes the stock's N
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
In accordance with the MMPA, we include in this notice a list of the information sources and public reports upon which we based the SAR:
The authority for this action is the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361 et al.)
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management's (BLM) Steens Mountain Advisory Council (SMAC) Recreation and Visitor Use Subcommittee will meet as indicated below.
The Recreation and Visitor Use Subcommittee of the SMAC will hold a public meeting on Thursday, February 13, 2020, from 1:00 to 4:30 p.m. and on Friday, February 14, 2020, from 8:30 a.m. to 12:30 p.m. at the Hilton Garden Inn in Bend, Oregon.
The Hilton Garden Inn is located at 425 SW Bluff Drive, Bend, Oregon 97702.
Tara Thissell, Public Affairs Specialist, 28910 Highway 20 West, Hines, Oregon 97738; telephone: 541-573-4519; email:
The SMAC was established on August 14, 2001, pursuant to the Steens Mountain Cooperative Management and Protection Act of 2000 (Steens Act) (Pub. L. 106-399). The SMAC provides representative advice to the BLM regarding new and unique approaches to management of the land within the bounds of the Steens Mountain Cooperative Management and Protection Area (CMPA), recommends cooperative programs and incentives for landscape management that meet human needs, and advises the BLM on maintenance and improvement of the ecological and economic integrity of the area.
The SMAC's Recreation and Visitor Use Subcommittee was established in 2019 and serves to research, discuss, and evaluate any recreation and visitor use issue in the Steens Mountain CMPA. Issues could relate to parking, hiking, motorized or non-motorized use, signage, interpretation, private to public land access by way of an easement or other agreement, or purchase or exchange of public and private land for improved recreation opportunities and contiguous landscape. The Subcommittee reviews all aspects of any recreation or visitor use issue, formulates suggestions for remedy, and proposes those solutions to the entire SMAC for further discussion and possible recommendation to the BLM.
The February 13 agenda includes an update from the Designated Federal Official, review of 2019 recreation statistics for the Steens Mountain area, discussion on the SMAC's definition of “reasonable access” and constituent feedback, and a discussion on recreation and visitor access at Home Creek Canyon.
The February 14 agenda includes a presentation on Redband trout populations and recreational fishing in the Steens Mountain area, information sharing regarding designated Wilderness and Wilderness Study Areas, review of sections of the Steens Mountain Cooperative Management and Protection Act of 2000 referencing economics, and an opportunity for subcommittee members to share information from their constituents and present research members have done between meetings. Any other matters that may reasonably come before the subcommittee may also be included.
Public comment periods are available on Thursday, February 13, at 3:30 p.m., and on Friday, February 14, at 11:15 a.m. Unless otherwise approved by the subcommittee chair, the public comment period will last no longer than 30 minutes. Each speaker may address the subcommittee for a maximum of 5 minutes. Sessions may end early if all business items are accomplished ahead of schedule or maybe extended if discussions warrant more time. All meetings are open to the public in their entirety.
Before including your address, phone number, email address, or other personal identifying information in your comments, please be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
43 CFR 1784.4-2.
Bureau of Land Management, Interior.
Notice of official filing.
The Bureau of Land Management (BLM) Colorado State Office is publishing this notice to inform the public of the official filing of the survey plat listed below. The survey, which was executed at the request of the U.S. Forest Service, is necessary for the management of these lands. The plat is available for viewing in the BLM Colorado State Office.
The plat described in this notice was filed on January 15, 2020.
You may submit written protests to the BLM Colorado State Office, Cadastral Survey, 2850 Youngfield Street, Lakewood, CO 80215-7093.
Randy Bloom, Chief Cadastral Surveyor for Colorado, (303) 239-3856;
The supplemental plat in Township 15 South, Range 67 West, Sixth Principal Meridian, Colorado, was accepted on January 8, 2020, and filed on January 15, 2020.
A person or party who wishes to protest the above survey must file a written notice of protest within 30 calendar days from the date of this publication at the address listed in the
Before including your address, phone number, email address, or other personal identifying information in your protest, please be aware that your entire protest, including your personal identifying information, may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
43 U.S.C. Chap. 3.
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management's (BLM), John Day-Snake Resource Advisory Council (RAC) will meet as indicated below:
The John Day-Snake RAC will meet Thursday and Friday, Feb. 20 and 21, 2020, at 1:00 p.m. Thursday and 8:00 a.m. Friday; and Thursday and Friday, Jun. 18 and 19, 2020, at 1:00 p.m. Thursday and 8:00 a.m. Friday. A public comment period will be offered at 8:05 a.m. on the second day of each meeting (Feb. 21 and Jun. 19).
The Feb. 20 and 21 meetings will be held at the Vale BLM Baker Field Office, 3100 H St., Baker City, Oregon; and the Jun. 18 and19 meetings will be held at the BLM Prineville District Office, 3050 NE 3rd St., Prineville, Oregon.
Larisa Bogardus, Public Affairs Officer, 3100 H St., Baker City, Oregon 97814; 541-219-6863;
The 15-member John Day-Snake RAC was chartered and appointed by the Secretary of the Interior. Their diverse perspectives are represented in commodity, conservation, and general interests. They provide advice to the BLM, and as needed, the U.S. Forest Service, resource managers regarding management plans and proposed resource actions on public land in central and eastern Oregon. All meetings are open to the public in their entirety. Information to be distributed to the RAC is requested before the start of each meeting.
Standing agenda items include management of energy and minerals, timber, rangeland and grazing, commercial and dispersed recreation, wildland fire and fuels, and wild horses and burros; review and/or recommendations regarding proposed actions by Vale or Prineville BLM Districts and the Wallowa-Whitman, Umatilla, Malheur, Ochoco and Deschutes National Forests; and any other business that may reasonably come before the RAC.
The Designated Federal Officer will attend the call, take minutes, and publish these minutes on the RAC web page.
All meetings are open to the public in their entirety. The public may send written comments to the RAC for consideration. Comments can be mailed to BLM Vale District; Attn. Don Gonzalez; 100 Oregon St.; Vale, Oregon 97918.
Before including your address, phone number, email address, or other personal identifying information in your comments, please be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee we will be able to do so.
43 CFR 1784.4-2.
National Park Service, Interior.
Notice.
The Sam Noble Oklahoma Museum of Natural History at the University of Oklahoma has completed
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the Sam Noble Oklahoma Museum of Natural History at the address in this notice by February 26, 2020.
Dr. Marc Levine, Associate Curator of Archaeology, Sam Noble Oklahoma Museum of Natural History, University of Oklahoma, 2401 Chautauqua Avenue, Norman, OK 73072-7029, telephone (405) 325-1994, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains and associated funerary objects under the control of the Sam Noble Oklahoma Museum of Natural History, Norman, OK. The human remains and associated funerary objects were removed from McIntosh County, OK.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the Sam Noble Oklahoma Museum of Natural History professional staff in consultation with representatives of the Caddo Nation of Oklahoma and the Wichita and Affiliated Tribes (Wichita, Keechi, Waco & Tawakonie), Oklahoma (hereafter referred to as “The Tribes”).
In 1940, human remains representing, at minimum, 137 individuals were removed from the Eufaula Mound site (34Mi45), also known as the Groseclose site, in McIntosh County, OK. The site lies at the confluence of the North Canadian and Canadian Rivers, approximately 80 kilometers west of Spiro Mounds. Following extensive damage to the site from agricultural activities and looting, excavations were carried out by the Works Progress Administration during May-August 1940. The project was funded by the Creek Indian Memorial Association, and fieldwork was supervised by Kenneth Orr. Materials recovered during the excavation were split between the Creek Memorial Museum (later known as the Creek Council House Museum) and the Sam Noble Museum. Additional associated funerary objects described in the excavation report were never delivered to the Museum. Instead, the most valuable items were sent to the Creek Memorial Museum and allegedly stolen during the early 1980s. In 1958, the Creek Indian Museum of Okmulgee donated one of these associated funerary objects from the 1940 excavation to the Museum. The site was later flooded following the construction of the Eufaula Dam in 1964.
The human remains from 34Mi45 include partial skeletons of one child, 3-12 years old; two adults greater than 20 years old of indeterminate sex; one young adult of indeterminate sex, 20-35 years old; one middle adult of indeterminate sex, 35-50 years old; one young adult female, 20-35 years old; one female greater than 50 years old; one adult male greater than 20 years old; two young adult males, 20-35 years old; and one middle adult male, 35-50 years old. Fragmentary skeletons include eighteen children, 3-12 years old; six adolescents, 12-20 yrs; nineteen young adults, 20-35 years old of indeterminate sex; one adult female greater than 20 years old; two middle adult females, 35-50 years old; two adult males greater than 20 years old; two middle adult males, 35-50 years old; six middle adults of indeterminate sex, 35-50 years old; three older adults greater than 50 years old of indeterminate sex; and sixty-seven adults of indeterminate sex, all greater than 20 years old. No known individuals were identified. The 177 associated funerary objects include 13 faunal bone fragments, one stone chert nodule, one sample of unmodified stone pebbles, one unmodified rock, four samples of small unmodified pebbles that may have been associated with rattles, three limestone pipes, one stone flake, seven projectile points, two stone earspools, one galena fragment, five red ochre pigment samples, 10 copper fragments, 121 ceramic sherds, one ceramic bead, two shell beads, one copper covered wooden blade, two wood mask fragments with the remains of a copper veneer, and one soil sample from a pipe bowl.
All of the human remains in this notice are determined to be Native American based on their archeological context and collection history. Furthermore, all of the human remains and associated funerary offerings were most likely interred during the local Harlan through early Norman phases (A.D. 1100-1300) of the Mississippian Period. Archaeological data, together with ethnohistoric data, ethnographic data, and tribal oral histories support the determination that the human remains and associated funerary offerings can be culturally affiliated with both the Caddo Nation of Oklahoma and the Wichita and Affiliated Tribes (Wichita, Keechi, Waco & Tawakonie), Oklahoma.
Officials of the Sam Noble Oklahoma Museum of Natural History have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of 137 individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A), the 177 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), a relationship of shared group identity that can be reasonably traced between the Native American human remains and associated funerary objects and The Tribes.
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Dr. Marc Levine, Associate Curator of Archaeology, Sam
The Sam Noble Oklahoma Museum of Natural History is responsible for notifying The Tribes that this notice has been published.
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice.
We, the Office of Surface Mining Reclamation and Enforcement (OSMRE), are notifying the public that we intend to grant funds to eligible applicants for purposes authorized under the Surface Mining Control and Reclamation Act of 1977 (SMCRA) Title IV Abandoned Mine Land (AML) Reclamation Program and Title V Regulatory Program. We will award these grants during fiscal year 2020.
Single points of contact or other interested State, Tribal, or local entities may submit written comments regarding AML Reclamation Program and Regulatory Program funding until February 26, 2020.
You may submit comments by any of the following methods:
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Yetunde Richardson, Office of Surface Mining Reclamation and Enforcement, 1849 C Street NW, MS 4551, Washington, DC 20240; Telephone (202) 208-2766.
We are notifying the public that we intend to grant funds to eligible applicants for purposes authorized under SMCRA's Title IV AML Reclamation Program. Additionally, we are notifying the public that we intend to grant funds to eligible applicants under SMCRA's Title V Regulatory Program for regulating coal mining within their jurisdictional borders. We will award these grants during fiscal year 2020. Eligible applicants are those States and Tribes with an AML reclamation program and/or a regulatory program that we approved under SMCRA, as amended, 30 U.S.C. 1201
SMCRA established the Abandoned Mine Reclamation Fund to receive the AML fees that, along with funds from other sources, are used to finance reclamation of AML coal mine sites. Title IV of SMCRA authorizes OSMRE to provide grants to eligible States and Tribes that are funded from permanent (mandatory) appropriations. Recipients use these funds: to reclaim the highest priority AML coal mine sites that were left abandoned prior to the enactment of SMCRA in 1977; to reclaim eligible non-coal sites; for projects that address the impacts of mineral development; and for non-reclamation projects.
Title V of SMCRA authorizes OSMRE to provide grants to States and Tribes to develop, administer, and enforce State and Tribal regulatory programs that address, among other things, the disturbances from coal mining operations. Additionally, upon our approval of a State or Tribal regulatory program, Title V authorizes a State to assume regulatory primacy and act as the regulatory authority within the State or Tribe, and to administer and enforce its approved SMCRA regulatory program. Our regulations at Title 30 of the Code of Federal Regulations, Chapter VII, implement these provisions of SMCRA.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
60-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit 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 27, 2020.
If you have additional comments, regarding 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: Pamela Eisert, Industry Liaison Analyst, Firearm & Ammunition Technology Division either by mail at 244 Needy Road, Martinsburg, WV 25405, by email at
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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Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
60-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit 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 27, 2020.
If you have additional comments, regarding 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: Renee Reid, FO/ESB—Mailstop (7.E-401) either by mail at 99 New York Ave. NE, Washington, DC 20226, by email at
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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2.
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If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
60-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will submit 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 27, 2020.
If you have additional comments, regarding 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: Matthew Varisco, Chief, Personnel Security Division, either by mail at 99 New York Avenue NE, Washington, DC 20226, by email at
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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If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
Notice is hereby given that on January 9, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CableLabs intends to file additional written notifications disclosing all changes in membership.
On August 8, 1988, CableLabs filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 12, 2019. A notice was published in the
Notice is hereby given that, on December 30, 2019, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Interchangeable Virtual Instruments Foundation, Inc. intends to file additional written notifications disclosing all changes in membership.
On May 29, 2001, Interchangeable Virtual Instruments Foundation, Inc. filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on February 8, 2019. A notice was published in the
Notice is hereby given that, on December 30, 2019, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and PXI Systems intends to file additional written notifications disclosing all changes in membership.
On November 22, 2000, PXI Systems filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on October 10, 2019. A notice was published in the
Notice is hereby given that, on December 26, 2019, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and DVD CCA intends to file additional written notifications disclosing all changes in membership.
On April 11, 2001, DVD CCA filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on May 15, 2019. A notice was published in the
Notice is hereby given that on January 2, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 301
In addition, Chroma ATE Inc., Guishan Taoyuan, TAIWAN; and Mstar Semiconductor, Inc., Hsinchu Hsein, TAIWAN, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open and UHD Alliance intends to file additional written notifications disclosing all changes in membership.
On June 17, 2015, UHD Alliance filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on October 15, 2019. A notice was published in the
Notice is hereby given that, on December 23, 2019, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CBI intends to file additional written notifications disclosing all changes in membership.
On May 24, 2019, CBI filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on September 13, 2019. A notice was published in the
Federal Bureau of Investigation, Department of Justice
60-Day notice.
The Department of Justice, Federal Bureau of Investigation, Training Division is submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
The Department of Justice encourages public comment and will accept input until March 27, 2020.
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 Kevin R. Furtick, Chief, Evaluation and Assessment Unit, 1234 Range Road, Quantico, VA,
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:
➢ Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Department of Justice, Federal Bureau of Investigation, Training Division, including whether the information will have practical utility;
➢ Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
➢ Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
➢ Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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If additional information is required contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
Bureau of Justice Statistics, Department of Justice.
60-Day Notice.
The Department of Justice (DOJ), Office of Justice Programs, Bureau of Justice Statistics, 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 27, 2020.
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 Zhen Zeng, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531 (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
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(a) At midyear (last weekday in the month of June), the total number of inmates confined in jail facilities and the total number of persons under jail supervision, but not confined;
(b) At midyear, inmate counts by sex, juvenile status, race/Hispanic origin, probation and parole status, conviction status, severity of charge (felony or misdemeanor), and U.S. citizenship status;
(c) At midyear, the numbers of inmates held for federal authorities, state prison authorities, American Indian or Alaska Native tribal governments, and other local jails;
(d) On the weekend prior to midyear, whether the jail had a weekend program that allows offenders to serve their sentences of confinement only on weekends, and the number of program participants;
(e) Rated capacity at midyear;
(f) The date and count for the greatest number of confined inmates during the 30-day period in June;
(g) The average daily population by sex during the 12-month period from July 1 of last year to June 30 of current year;
(h) The number of new admissions into jail, and final discharges from jail, by sex during the 12-month period from July 1 of last year to June 30 of current year;
(i) At midyear, the number of staff members employed by the facility by sex and occupation (
The ASJ is the only national collection that tracks annual changes in the local jail population in the United States. The ASJ is fielded every year except in the years when BJS conducts the Census of Jails (OMB Control No. 1121-0100). BJS requests clearance for the 2020-22 ASJ under OMB Control No. 1121-0094. The ASJ was last approved under OMB Control No. 1121-0094 (exp. date 01/31/2019), where it was bundled with the Mortality in Correctional Institutions-Jails (MCI, formerly the Deaths in Custody Reporting Program, OMB Control No. 1121-0249) and Survey of Jails in Indian Country (OMB Control No. 1121-0329). In 2017, the ASJ was separated from the MCI-Jails and became a stand-alone collection again.
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If additional information is required, contact: Melody Braswell, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE, 3E.405A, Washington, DC 20530.
On January 21, 2020, the Department of Justice lodged a proposed consent decree with the United States District Court for the District of Colorado in the lawsuit entitled
The lawsuit seeks injunctive relief and civil penalties for violations of the Clean Air Act, the Colorado Air Pollution Prevention and Control Act (“Colorado Act”), Colorado's federally approved State Implementation Plan (“Colorado SIP”), and Colorado Air Quality Control Commission Regulation Number 7 (“Regulation No. 7”) at condensate tank systems (referred to in the consent decree as “tank systems”) owned and operated by K.P. Kauffman Company, Inc. (“KPK”) in the Denver-Julesburg Basin in Colorado, an area designated as non-attainment for the National Ambient Air Quality Standards for ground-level ozone. The violations relate to alleged failures to adequately design, operate, and maintain vapor control systems at the tank systems, resulting in emissions of volatile organic compounds (“VOC”) and other pollutants to the atmosphere.
The proposed consent decree requires KPK to implement injunctive relief at 67 condensate tank systems to ensure that its vapor control systems adequately capture and control potential VOC emissions. The consent decree design, inspection, and preventative maintenance measures are intended to result in substantial reductions in VOC emissions from KPK tank systems throughout Colorado's Denver-Julesburg Basin. In addition to injunctive relief, the proposed Consent Decree requires KPK to pay a $1 million civil penalty, split evenly between the United States and the State of Colorado, and to undertake projects to mitigate environmental harm. Entering into and fully complying with the proposed consent decree will release KPK from past civil liability at the tank systems and associated vapor control systems for violations of the Colorado SIP and Regulation No. 7 relating to VOC emissions from condensate storage tanks.
The publication of this notice opens a period for public comment on the consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the consent decree may be examined and downloaded at this Justice Department website:
Please enclose a check or money order for $31.25 (25 cents per page reproduction cost) payable to the United States Treasury.
Mine Safety and Health Administration, Labor.
Request for public comments.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Mine Safety and Health Administration (MSHA) is soliciting comments on the information collection for Health Standards for Diesel Particulate Matter Exposure (Underground Coal Mines).
All comments must be received on or before March 27, 2020.
You may submit comment as follows. Please note that late, untimely filed comments will not be considered.
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission.
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• MSHA will post your comment as well as any attachments, except for information submitted and marked as confidential, in the docket at
Sheila McConnell, Director, Office of Standards, Regulations, and Variances, MSHA, at
Section 103(h) of the Federal Mine Safety and Health Act of 1977 (Mine Act), 30 U.S.C. 813(h), authorizes MSHA to collect information necessary to carry out its duty in protecting the safety and health of miners. Further, section 101(a) of the Mine Act, 30 U.S.C. 811, authorizes the Secretary of Labor to develop, promulgate, and revise as may be appropriate, improved mandatory health or safety standards for the protection of life and prevention of injuries in coal and metal and nonmetal mines.
MSHA establishes standards and regulations for diesel-powered equipment in underground coal mines that provide additional important protection for coal miners who work on and around diesel-powered equipment. The standards are designed to reduce the risks to underground coal miners of serious health hazards that are associated with exposure to high concentrations of diesel particulate matter. The standards in sections 72.510(a) & (b), and 72.520(a) & (b) contain information collection requirements for underground coal mine operators.
Section 72.510(a) requires underground coal mine operators to provide annual training to all miners who may be exposed to diesel emissions. The training must include: Health risks associated with exposure to diesel particulate matter; methods used in the mine to control diesel particulate concentrations; identification of the personnel responsible for maintaining those controls; and actions miners must take to ensure that controls operate as intended. Under Section 72.510(b) underground coal mine operators are required to keep a record of the training for one year.
Section 72.520(a) and (b) requires underground coal mine operators to maintain an inventory of diesel powered equipment units together with a list of information about any unit's emission control or filtration system. The list must be updated within 7 calendar days of any change.
MSHA is soliciting comments concerning the proposed information collection related to Health Standards for Diesel Particulate Matter Exposure (Underground Coal Mines). MSHA is particularly interested in comments that:
• Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information has practical utility;
• Evaluate the accuracy of MSHA's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
• Suggest methods to enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Background documents related to this information collection request are available at
This information collection request concerns provisions for Health Standards for Diesel Particulate Matter Exposure (Underground Coal Mines). MSHA has updated the data with respect to the number of respondents, responses, burden hours, and burden costs supporting this information collection request from the previous information collection request.
Comments submitted in response to this notice will be summarized and included in the request for Office of Management and Budget approval of the proposed information collection request; they will become a matter of public record and will be available at
Mine Safety and Health Administration, Labor.
Notice.
This notice is a summary of petitions for modification submitted to the Mine Safety and Health Administration (MSHA) by the parties listed below.
All comments on the petitions must be received by MSHA's Office of Standards, Regulations, and Variances on or before February 26, 2020.
You may submit your comments, identified by “docket number” on the subject line, by any of the following methods:
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MSHA will consider only comments postmarked by the U.S. Postal Service or proof of delivery from another delivery service such as UPS or Federal Express on or before the deadline for comments.
Sheila McConnell, Office of Standards, Regulations, and Variances at 202-693-9440 (voice),
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and Title 30 of the Code of Federal Regulations Part 44 govern the application, processing, and disposition of petitions for modification.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 (Mine Act) allows the mine operator or representative of miners to file a petition to modify the application of any mandatory safety standard to a coal or other mine if the Secretary of Labor (Secretary) determines that:
1. An alternative method of achieving the result of such standard exists which will at all times guarantee no less than the same measure of protection afforded the miners of such mine by such standard; or
2. The application of such standard to such mine will result in a diminution of safety to the miners in such mine.
In addition, the regulations at 30 CFR 44.10 and 44.11 establish the requirements for filing petitions for modification.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment must be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results must be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
The petitioner states that:
(a) Peabody currently uses the 3M Airstream helmet to provide miners with respirable protection against coal mine dust, a protection with long-term health benefits.
(b) 3M is discontinuing the Airstream helmet by June 1, 2020 due to disruption in their component supply but it will offer the
(c) There are currently no replacement 3M PAPRs that meet the MSHA standard for permissibility.
(d) The Versaflo
The petitioner proposes the following alternative method:
(1) The operator is petitioning to use the
(2) The equipment will be examined at least weekly by a qualified person according to 30 CFR 75.512-2 and examination results will be recorded weekly and may be expunged after one year.
(3) The operator will comply with 30 CFR 75.323.
(4) A qualified person under 30 CFR 75.151 will monitor for methane as is required in the mine.
(5) Qualified miners will receive training regarding the information in the Decision and Order before using equipment in the relevant part of the mine. A record of the training will be kept and available upon request.
(6) Within 60 days of the Decision and Order becoming finalized, the operator will submit proposed revisions to 30 CFR 75.370, mine ventilation, to be approved under the 30 CFR part 48 training plan by the Coal Mine Safety and Health District Manager. The revisions will specify initial and refresher training and when the revisions are conducted, the MSHA Certificate of Training (Form 5000-23) will be completed. Comments will be made on the certificate to note non-permissible testing equipment training.
(7) The operator is responsible for all people, including contractors, using the above equipment. The petitioner asserts that the alternative method will guarantee no less than the same measure of protection afforded the miners under the mandatory standard.
Wage and Hour Division, Department of Labor.
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Wage and Hour Division is soliciting comments concerning its proposal to extend Office of Management and Budget (OMB) approval of the Information Collection: Housing Occupancy Certificate—Migrant and Seasonal Agricultural Worker Protection Act. A copy of the proposed information request can be obtained by contacting the office listed below in the
Written comments must be submitted to the office listed in the
You may submit comments identified by OMB Control Number 1235-0006, by either one of the following methods:
Robert Waterman, Division of Regulations, Legislation, and Interpretation, Wage and Hour, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210; telephone: (202) 693-0406 (this is not a toll-free number). Copies of this notice may be obtained in alternative formats (Large Print, Braille, Audio Tape, or Disc), upon request, by calling (202) 693-0023 (not a toll-free number). TTY/TTD callers may dial toll-free (877) 889-5627 to obtain information or request materials in alternative formats.
I.
II.
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
III.
The Legal Services Corporation's Board of Directors and its six committees will meet January 30-February 1, 2020. On Thursday, January 30, the first meeting will commence at 1:00 p.m., Central Standard Time (CST), with each meeting thereafter commencing promptly upon adjournment of the immediately preceding meeting. On Friday, January 31, the first meeting will commence at 8:15 a.m. (CST), with the next meeting commencing promptly upon adjournment of the immediately preceding meeting. On Saturday, February 1, the open session meeting of the Board of Directors will commence at 8:00 a.m. (CST). The closed session meeting of the Board of Directors will commence promptly upon adjournment of the open session of the Board of Directors meeting.
DoubleTree by Hilton Hotel, 424 W Markham Street, Little Rock, Arkansas 72201.
Unless otherwise noted herein, the Board and all committee meetings will be open to public observation. Members of the public who are unable to attend in person but wish to listen to the public proceedings may do so by following the telephone call-in directions provided below.
•
•
• Once connected to the call, your telephone line will be
• To participate in the meeting during public comment press #6 to “UNMUTE” your telephone line, once you have concluded your comments please press *6 to “MUTE” your line.
Members of the public are asked to keep their telephones muted to eliminate background noises. To avoid disrupting the meeting, please refrain from placing the call on hold if doing so will trigger recorded music or other sound. From time to time, the presiding Chair may solicit comments from the public.
Open, except as noted below.
* Please note that all times in this notice are in
** Any portion of the closed session consisting solely of briefings does not fall within the Sunshine Act's definition of the term “meeting” and, therefore, the requirements of the Sunshine Act do not apply to such portion of the closed session. 5 U.S.C. 552b(a)(2) and (b).
A verbatim written transcript will be made of the closed session of the Board, Institutional Advancement Committee, and Audit Committee meetings. However, the transcript of any portions of the closed sessions falling within the relevant provisions of the Government in the Sunshine Act, 5 U.S.C. 552b(c)(6) and (10), will not be available for public inspection.
A copy of the General Counsel's Certification that, in his opinion, the closing is authorized by law will be available upon request.
9. Consider and act on other business
10. Consider and act on motion to adjourn the open session meeting and proceed to a closed session
Karly Satkowiak, Special Counsel, at (202) 295-1633. Questions may be sent by electronic mail to
Non-confidential meeting materials will be made available in electronic format at least 24 hours in advance of the meeting on the LSC website, at
LSC complies with the American's with Disabilities Act and Section 504 of the 1973 Rehabilitation Act. Upon request, meeting notices and materials will be made available in alternative formats to accommodate individuals with disabilities. Individuals who need other accommodations due to disability to attend the meeting in person or telephonically should contact Katherine Ward, at (202) 295-1500 or
Office of Management and Budget (OMB).
Notice.
This report is being published as required by the Statutory Pay-As-You-Go (PAYGO) Act of 2010. The Act requires that OMB issue an annual report and a sequestration order, if necessary.
Erin O'Brien. 202-395-3106.
This report can be found at
2 U.S.C. 934.
This Report is being published pursuant to section 5 of the Statutory Pay-As-You-Go (PAYGO) Act of 2010, Public Law 111-139, 124 Stat. 8, 2 U.S.C. 934, which requires that OMB issue an annual PAYGO report, including a sequestration order if necessary, no later than 14 working days after the end of a congressional session.
This Report describes the budgetary effects of all PAYGO legislation enacted during the first session of the 116th Congress and presents the 5-year and 10-year PAYGO scorecards maintained by OMB. Because neither the 5-year nor 10-year scorecard shows a debit for the budget year, which for purposes of this Report is fiscal year 2020,
The budget year balance on each of the PAYGO scorecards is zero because two laws, the Bipartisan Budget Act of 2019 (Pub. L. 116-37), and the Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019 (Pub. L. 116-69), directed changes to the balances of the scorecards. Public Law 116-37 removed all balances included on the scorecards at the time of enactment, and Public Law 116-69 shifted the debits on both scorecards from fiscal year 2020 to fiscal year 2021. The changes directed by these laws are discussed in more detail in section IV of this report.
During the first session of the 116th Congress, no laws with PAYGO effects were enacted with emergency requirements under section 4(g) of the PAYGO Act, 2 U.S.C. 933(g). Six laws had estimated budgetary effects on direct spending and/or revenues that were excluded from the calculations of the PAYGO scorecards due to provisions excluding all or part of the law from section 4(d) of the PAYGO Act, 2 U.S.C. 933(d).
PAYGO legislation is authorizing legislation that affects direct spending or revenues, and appropriations legislation that affects direct spending in the years after the budget year or affects revenues in any year.
This PAYGO Act's requirement of deficit neutrality is based on two cumulative scorecards that tally the cumulative budgetary effects of PAYGO legislation as averaged over rolling 5- and 10-year periods starting with the budget year. The 5-year and 10-year PAYGO scorecards for each congressional session begin with the balances of costs or savings carried over from previous sessions and then tally the costs or savings of PAYGO laws enacted in the most recent session. The 5-year PAYGO scorecard for the first session of the 116th Congress began with balances of costs of $3,293 million in 2020 and $1,646 million in 2021 through 2023. Added to those balances were the budgetary effects of PAYGO legislation through Public Law 116-36. Section 102 of Public Law 116-37 eliminated those balances, resetting each year of the scorecards to zero. The completed 5-year scorecard for the session shows that PAYGO legislation enacted during the session was estimated to have PAYGO budgetary effects that increased the deficit by an average of $514 million each year from 2020 through 2024.
The 10-year PAYGO scorecard for the first session of the 116th Congress began with balances of costs of $2,064 million in 2020 and $1,032 million in 2021 through 2028. Added to those balances were the budgetary effects of PAYGO legislation through Public Law 116-36. Section 102 of Public Law 116-37 eliminated those balances. The completed 10-year scorecard for the session shows that PAYGO legislation for the session increased the deficit by an average of $657 million each year from 2020 through 2029. Section 1801 of Public Law 116-69 deducted the costs from the scorecard in 2020 and added those costs to the scorecard in 2021. Therefore, the 2020 column of the
In the first session of the 116th Congress, 33 laws were enacted that were determined to constitute PAYGO legislation. Of the 33 enacted PAYGO laws, 14 laws were estimated to have PAYGO budgetary effects (costs or savings) in excess of $500,000 over one or both of the 5-year or 10-year PAYGO windows. These were:
• Medicaid Extenders Act of 2019, Public Law 116-3;
• Consolidated Appropriations Act, 2019, Public Law 116-6;
• Pesticide Registration Improvement Extension Act of 2018; Public Law 116-8;
• John D. Dingell, Jr. Conservation, Management, and Recreation Act, Public Law 116-9;
• Medicaid Services Investment and Accountability Act of 2019, Public Law 116-16;
• Additional Supplemental Appropriations for Disaster Relief Act, 2019, Public Law 116-20;
• Blue Water Navy Vietnam Veterans Act of 2019, Public Law 116-23;
• Taxpayer First Act, Public Law 116-25;
• To provide for a 2-week extension of the Medicaid community mental health services demonstration program, and for other purposes, Public Law 116-29;
• Sustaining Excellence in Medicaid Act of 2019, Public Law 116-39;
• Fostering Undergraduate Talent by Unlocking Resources for Education Act, Public Law 116-91;
• National Defense Authorization Act for Fiscal Year 2020, Public Law 116-92;
• Consolidated Appropriations Act, 2020, Public Law 116-93; and
• Further Consolidated Appropriations Act, 2020, Public Law 116-94.
In addition to the laws identified above, 19 laws enacted in this session were estimated to have negligible budgetary effects on the PAYGO scorecards—costs or savings of less than $500,000 over both the 5-year and 10-year PAYGO windows.
Six laws enacted in the first session of the 116th Congress had estimated budgetary effects on direct spending and revenues that were excluded from the calculations for the PAYGO scorecards due to provisions in law excluding all or part of the law from section 4(d) of the PAYGO Act. Two laws were excluded entirely from the scorecards:
• Never Forget the Heroes: James Zadroga, Ray Pfeifer, and Luis Alvarez Permanent Authorization of the September 11th Victim Compensation Fund Act, Public Law 116-34; and
• Bipartisan Budget Act of 2019, Public Law 116-37.
In addition, budgetary effects in four laws were excluded by provisions excluding certain portions of those laws from the scorecards:
• Consolidated Appropriations Act, 2019, Public Law 116-6;
• Continuing Appropriations Act, 2020, and Health Extenders Act of 2019, Public Law 116-59;
• Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019, Public Law 116-69; and
• Further Consolidated Appropriations Act, 2020, Public Law 116-94.
Two laws were enacted prior to issuance of this report that required direct adjustments to the totals on the PAYGO scorecards.
Section 102 of Public Law 116-37, the Bipartisan Budget Act of 2019 (BBA), includes a provision that states, “Effective on the date of enactment of this Act, the balances on the PAYGO scorecards established pursuant to paragraphs (4) and (5) of section 4(d) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(d)) shall be zero.” Accordingly, these scorecards show the removal of the balances on the scorecards from laws enacted prior to the BBA.
Section 1801 of Public Law 116-69, Further Continuing Appropriations Act, 2020, and Further Health Extenders Act of 2019, includes a provision that states, “For the purposes of the annual report issued pursuant to section 5 of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 934) after adjournment of the first session of the 116th Congress, and for determining whether a sequestration order is necessary under such section, the debit for the budget year on the 5-year scorecard, if any, and the 10-year scorecard, if any, shall be deducted from such scorecard in 2020 and added to such scorecard in 2021.” Accordingly, both the 5- and 10-year scorecards deduct the debit from 2020 and add that debit to 2021.
As shown on the scorecards, the budgetary effects of PAYGO legislation enacted in the first session of the 116th
The totals shown in 2021 through 2029 will remain on the scorecards that are used to record the budgetary effects of PAYGO legislation enacted in the second session of the 116th Congress, and will be used in determining whether a sequestration order will be necessary in the future. On the 5-year scorecard for the second session of the 116th Congress, 2021 through 2024 will show balances of costs. On the 10-year scorecard, 2021 through 2029 will show balances of costs.
Executive Office of the President, Office of Management and Budget.
Notice of availability of the OMB Final Sequestration Report to the President and Congress for FY 2020.
OMB is issuing the
January 21, 2020.
The OMB Sequestration Reports to the President and Congress are available on-line on the OMB home page at:
Thomas Tobasko, 6202 New Executive Office Building, Washington, DC 20503, Email address:
Section 254 of the Balanced Budget and Emergency Deficit Control Act of 1985 requires the Office of Management and Budget (OMB) to issue a Final Sequestration Report 15 calendar days after the end of a congressional session. This report meets that requirement and finds that, for fiscal year 2020, enacted appropriations are at or below the defense and non-defense caps after accounting for cap adjustments. As a result, a sequestration of discretionary budget authority is not required in 2020.
National Credit Union Administration (NCUA).
Notice.
The National Credit Union Administration (NCUA) will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice.
Comments should be received on or before February 26, 2020 to be assured of consideration.
Send comments regarding the burden estimates, or any other aspect of the information collections, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by contacting Dawn Wolfgang at (703) 548-2279, emailing
By Gerard Poliquin, Secretary of the Board, the National Credit Union Administration, on January 22, 2020.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
February 20, 2020; 8:30 a.m.-3:30 p.m.
If you are interested in attending this meeting, you are required to attend in person. To help facilitate your entry into the building, please contact Una Alford (
Nuclear Regulatory Commission.
License amendment application; opportunity to comment, request a hearing, and petition for leave to intervene.
The U.S. Nuclear Regulatory Commission (NRC) is considering issuance of an amendment to Combined Licenses (NPF-91 and NPF-92), issued to Southern Nuclear Operating Company, Inc. (SNC), and Georgia Power Company, Oglethorpe Power Corporation, MEAG Power SPVM, LLC, MEAG Power SPVJ, LLC, MEAG Power SPVP, LLC, Authority of Georgia, and the City of Dalton, Georgia (collectively, SNC), for construction and operation of the Vogtle Electric Generating Plant (VEGP), Units 3 and 4, located in Burke County, Georgia.
Submit comments by February 26, 2020. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received before this date. A request for a hearing or petition for leave to
You may submit comments by any of the following methods:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Donald Habib, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-000; telephone: 301-415-1035; email:
Please refer to Docket ID NRC-2008-0252 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
•
•
•
Please include Docket ID NRC-2008-0252 in your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
The NRC is considering issuance of an amendment to facility Operating License Nos. NPF-91 and NPF-92, issued to SNC for operation of the VEGP Units 3 and 4, located in Burke County, Georgia.
The proposed changes would revise the normal thermal loads for the passive containment cooling system tank; revise the accident thermal loads for the exterior walls below grade and basemat in the auxiliary building; and update the critical section tables for the auxiliary building basemat, concrete walls, and floors, the shield building roof, and the spent fuel pool west wall in the Updated Final Safety Analysis Report.
Before any issuance of the proposed license amendment, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended (the Act), and NRC's regulations.
The NRC has made a proposed determination that the license amendment request involves no significant hazards consideration. Under the NRC's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not (1) involve a significant increase in the probability or consequences of an accident previously evaluated; or (2) create the possibility of a new or different kind of accident from any accident previously evaluated; or (3) involve a significant reduction in a margin of safety. As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below:
1. Does the proposed amendment involve a significant increase in the probability or consequences of an accident previously evaluated?
Response: No.
The design functions of the nuclear island structures are to provide support, protection, and separation for the seismic Category 1 mechanical and electrical equipment located in the nuclear island. The nuclear island structures are structurally designed to meet seismic Category 1 requirements as defined in Regulatory Guide 1.29.
The proposed changes to revise the normal thermal loads for the [passive containment cooling system (PCS)] tank; revise the accident thermal loads for the exterior walls below grade and basemat in the auxiliary building; and update the critical section tables for the auxiliary building basemat, concrete walls, and floors, the shield building roof, and the [spent fuel pool (SPF)] west wall do not have an adverse impact on the response of the nuclear island structures to safe shutdown earthquake ground motions or loads to anticipated or postulated accident conditions. The proposed changes do not adversely affect the design function of any [structures, systems, and components (SSCs)] contained within the nuclear island. This change does not involve any accident initiating components or events, thus leaving the probabilities of an accident unaltered. The changes do not impact the support, design, or operation of mechanical and fluid systems. There is no change to plant systems or the response of systems to postulated accident conditions. There is no change to the predicted radioactive releases due to normal operation or postulated accident conditions. The plant response to previously evaluated accidents or external events is not adversely affected, nor do the proposed changes create any new accident precursors.
Therefore, the proposed amendment does not involve a significant increase in the probability or consequences of an accident previously evaluated.
2. Does the proposed amendment create the possibility of a new or different kind of accident from any accident previously evaluated?
Response: No.
The proposed changes to revise the normal thermal loads for the PCS tank; revise the accident thermal loads for the exterior walls below grade and basemat in the auxiliary building; and update the critical section tables for the auxiliary building basemat, concrete walls, and
Therefore, the proposed amendment does not create the possibility of a new or different kind of accident from any accident previously evaluated.
3. Does the proposed amendment involve a significant reduction in a margin of safety?
Response: No.
The proposed changes to revise the normal thermal loads for the PCS tank; revise the accident thermal loads for the exterior walls below grade and basemat in the auxiliary building; and update the critical section tables for the auxiliary building basemat, concrete walls, and floors, the shield building roof, and the SPF west wall do not alter any safety-related equipment, applicable design codes, code compliance, design function, or safety analysis. These changes maintain conformance to American Institute of Steel Construction (AISC) N690 and American Concrete Institute (ACI) 349-01. The criteria and requirements of AISC N690 and ACI 349-01 provide a margin of safety to structural failure. The design of the nuclear island SSCs conform to criteria and requirements in AISC N690 and ACI 349-01 and therefore, maintains the margin of safety. The change does not alter any design function, design analysis, or safety analysis input or result, and sufficient margin exists to justify departure. Consequently, no safety analysis or design basis acceptance limit/criterion is challenged or exceeded by the proposed change, thus the margin of safety is not reduced.
Therefore, the proposed amendment does not involve a significant reduction in a margin of safety.
The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the license amendment request involves no significant hazards consideration.
The NRC is seeking public comments on this proposed determination that the license amendment request involves no significant hazards consideration. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination.
Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day notice period if the Commission concludes the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period should circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example, in derating or shutdown of the facility. Should the Commission take action prior to the expiration of either the comment period or the notice period, the Commission will publish a notice of issuance in the
Within 60 days after the date of publication of this notice, any persons (petitioner) whose interest may be affected by this action may file a request for a hearing and a petition to intervene (petition) with respect to the action. Petitions shall be filed in accordance with the Commission's “Agency Rules of Practice and Procedure” in 10 CFR part 2. Interested persons should consult a current copy of 10 CFR 2.309, which is available at the NRC's PDR, located at One White Flint North, Room O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland 20852. The NRC's regulations are accessible electronically from the NRC Library on the NRC's website at
As required by 10 CFR 2.309, a petition shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements: (1) The name, address, and telephone number of the petitioner; (2) the nature of the petitioner's right to be made a party to the proceeding; (3) the nature and extent of the petitioner's property, financial, or other interest in the proceeding; and (4) the possible effect of any decision or order which may be entered in the proceeding on the petitioner's interest. The petition must also set forth the specific contentions which the petitioner seeks to have litigated at the proceeding.
Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner intends to rely in proving the contention at the hearing. The petitioner must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner intends to rely to establish those facts or expert opinion to support its position on the issue. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the proceeding. The contention must be one which, if proven, would entitle the petitioner to relief. A petitioner who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party.
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing with respect to resolution of that person's admitted contentions consistent with the NRC's regulations, policies, and procedures.
Petitions for leave to intervene must be filed no later than 60 days from the date of publication of this notice. Requests for hearing, petitions for leave to intervene, and motions for leave to file new or amended contentions that are filed after the 60-day deadline will not be entertained absent a determination by the presiding officer that the filing demonstrates good cause by satisfying the three factors in 10 CFR 2.309(c)(1)(i) through (iii).
If a hearing is requested, and the Commission has not made a final determination on the issue of no significant hazards consideration, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, then any hearing held would take place before the issuance of any amendment unless the Commission finds an imminent danger to the health or safety of the public, in which case it will issue an appropriate order or rule under 10 CFR part 2.
A State, local governmental body, Federally-recognized Indian Tribe, or agency thereof, may submit a petition to the Commission to participate as a party under 10 CFR 2.309(h)(1).
The petition should state the nature and extent of the petitioner's interest in the proceeding. The petition should be submitted to the Commission by March 27, 2020. The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document, and should meet the requirements for petitions set forth in this section, except that under 10 CFR 2.309(h)(2) a State, local governmental body, or Federally-recognized Indian Tribe, or agency thereof does not need to address the standing requirements in 10 CFR 2.309(d) if the facility is located within its boundaries. A State, local governmental body, Federally-recognized Indian Tribe, or agency thereof may also have the opportunity to participate under 10 CFR 2.315(c).
If a hearing is granted, any person who does not wish, or is not qualified, to become a party to the proceeding may, in the discretion of the presiding officer, be permitted to make a limited appearance pursuant to the provisions of 10 CFR 2.315(a). A person making a limited appearance may make an oral or written statement of position on the issues, but may not otherwise participate in the proceeding. A limited appearance may be made at any session of the hearing or at any prehearing conference, subject to the limits and conditions as may be imposed by the presiding officer. Details regarding the opportunity to make a limited appearance will be provided by the presiding officer if such sessions are scheduled.
All documents filed in NRC adjudicatory proceedings, including a request for hearing, a petition for leave to intervene (petition), any motion or other document filed in the proceeding prior to the submission of a request for hearing or petition to intervene, and documents filed by interested governmental entities participating under 10 CFR 2.315(c), must be filed in accordance with the NRC's E-Filing rule (72 FR 49139; August 28, 2007, as amended at 77 FR 46562, August 3, 2012). The E-Filing process requires participants to submit and serve all adjudicatory documents over the internet, or in some cases to mail copies on electronic storage media. Detailed guidance on making electronic submissions may be found in the Guidance for Electronic Submissions to the NRC and on the NRC website at
To comply with the procedural requirements of E-Filing, at least 10 days prior to the filing deadline, the participant should contact the Office of the Secretary by email at
Information about applying for a digital ID certificate is available on the NRC's public website at
A person filing electronically using the NRC's adjudicatory E-Filing system may seek assistance by contacting the NRC Electronic Filing Help Desk through the “Contact Us” link located on the NRC's public website at
Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing stating why there is good cause for not filing electronically and requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the
Documents submitted in adjudicatory proceedings will appear in the NRC's electronic hearing docket which is available to the public at
For further details with respect to this action, see the application for license amendment dated December 13, 2019 (ADAMS Accession No. ML19347C046).
For the Nuclear Regulatory Commission.
Notice of public meetings.
The National Nanotechnology Coordination Office (NNCO), on behalf of the Nanoscale Science, Engineering, and Technology (NSET) Subcommittee of the Committee on Technology, National Science and Technology Council (NSTC), will facilitate stakeholder discussion of targeted nanotechnology topics through workshops, webinars, and Community of Interest meetings between the publication date of this Notice and December 31, 2020.
The NNCO will hold one or more workshops, webinars, networks, and Community of Interest teleconferences between the publication date of this Notice and December 31, 2020.
Attendance information, including addresses, will be posted on
For information regarding this Notice, please contact Patrice Pages at
These public meetings address the charge in the 21st Century Nanotechnology Research and Development Act for NNCO to provide “for public input and outreach . . . by the convening of regular and ongoing public discussions”. Workshop and webinar topics may include strategic planning; technical subjects; environmental, health, and safety issues related to nanomaterials (nanoEHS); business case studies; or other areas of potential interest to the nanotechnology community. Areas of focus for the Communities of Interest may include research on nanoEHS; nanotechnology education; nanomedicine; nanomanufacturing; or other areas of potential interest to the nanotechnology community. The Communities of Interest are not intended to provide any government agency with advice or recommendations; such action is outside of their purview.
The official closing price for a listed security is generally determined each day through a closing auction conducted by that security's primary listing exchange. A closing auction is a point in time event conducted at the end of each trading day pursuant to a process set forth in the primary listing exchange's rules
• Market-on-close (“MOC”) orders, which are orders to either buy or sell a security that are specifically designated to be executed at a security's official closing price;
• limit-on-close (“LOC”) orders, which are orders to either buy or sell a security at a specific price or better that are specifically designated to execute in that security's closing auction; and
• imbalance-only orders, which are limit orders (
On May 5, 2017, Bats BZX Exchange, Inc. (now known as Cboe BZX Exchange, Inc.) (“BZX” 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 January 17, 2018, the Commission, acting through authority delegated to the Division of Trading and Markets,
On October 4, 2018, BZX filed Amendment No. 2 to the proposed rule change to address a comment made by NYSE and Nasdaq in their statements. The Commission published Amendment No. 2 for comment in the
In response to the NYSE and Nasdaq Petitions, the Commission has conducted a de novo review of BZX's proposal, giving careful consideration to the entire record—including BZX's amended proposal, the Petitions for Review, and all comments and statements submitted—to determine whether the proposal is consistent with the requirements of the Act and the rules and regulations issued thereunder that are applicable to a national securities exchange. Under Section 19(b)(2)(C) of the Act, the Commission must approve the proposed rule change of a self-regulatory organization (“SRO”) if the Commission finds that the proposed rule change is consistent with the requirements of the Act and the applicable rules and regulations thereunder; if it does not make such a finding, the Commission must disapprove the proposed rule change.
The Commission has considered whether the proposal is consistent with the Act, including Section 6(b)(8) of the
For the reasons discussed further herein, BZX has met its burden to show that the proposed rule change is consistent with the Act, and this order sets aside the Approval Order and approves BZX's proposed rule change, as amended. In particular, the Commission concludes that the record before the Commission demonstrates that Cboe Market Close should introduce and promote competitive forces among national securities exchanges for the execution of MOC orders. In addition, the record demonstrates that Cboe Market Close should not disrupt the closing auction price discovery process nor should it materially increase the risk of manipulation of official closing prices. Therefore, and as explained further below, the Commission finds the proposal consistent with Sections 6(b)(8) and 6(b)(5) of the Act.
The Commission recognizes that Cboe Market Close, once implemented, would introduce a new match process for non-BZX listed securities, and more generally, could potentially contribute to new dynamics in certain aspects of the public equity markets. The Commission and Commission staff regularly monitor changes in the equity markets, including changes in market quality and investor outcomes (among other things), and will be mindful of potential effects associated with Cboe Market Close. To that end, no later than one year after the date that Cboe Market Close becomes effective, the Commission staff will advise the Commission of its assessment of any post-implementation effects or changes on market quality or investor outcomes. The Commission and Commission staff regularly receive input from the public, including investors, other exchanges and markets, and other market participants on matters related to market quality, investor outcomes and related issues. For convenience, we are providing an email box as a method for members of the public who wish to submit data, analyses or observations concerning any such matters, including in respect of post-implementation effects or changes associated with Cboe Market Close, to communicate with the Commission's staff. That email box is:
BZX proposes to introduce Cboe Market Close, a match process for MOC orders
BZX Members
Members would be required to mark as “short” or “short exempt” all short sale MOC orders. MOC orders marked short would be rejected, while MOC orders marked short exempt would be accepted and processed by the System.
At the MOC Cut-Off Time, the System would match for execution all buy and sell MOC orders entered into the System with execution priority determined based on time-received.
BZX states that it is proposing to adopt Cboe Market Close in response to requests from market participants, particularly buy-side firms, for an alternative to the primary listing exchanges' closing auctions that still provides an execution at a security's official closing price.
BZX contends that the proposal would not compromise the price discovery function performed by the primary listing exchanges' closing auctions because Cboe Market Close would only accept, match, and execute MOC orders, which are designated to execute at the security's official closing price.
The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission received a number of comment letters addressing the proposed rule change's consistency with these provisions, specifically focusing on its potential effect on: (1) Competition; (2) price discovery and fragmentation; (3) issuers and other market participants; (4) market complexity and operational risk; and (5) manipulation. The Commission addresses each of these issues below.
First, the Commission addresses arguments raised that the proposal is inconsistent with Section 6(b)(8) of the Act because it would burden competition by, among other things, free-riding on the investments of the primary listing exchanges in their closing auctions. We find that, on the contrary, the proposal will not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, and, in fact, it should promote competition among MOC order execution venues and foster price competition for MOC order execution fees.
Second, the Commission addresses comments regarding the proposal's consistency with Section 6(b)(5) of the Act. These commenters argue that the proposal would fragment the execution of MOC orders and thereby disrupt closing auction price discovery, increase market complexity and operational risk, and increase the risk of manipulation through, among things, information asymmetries. The Commission finds, based on Cboe Market Close's design and the record before us, that the proposal is consistent with Section 6(b)(5) of the Act. As explained below, because Cboe Market Close will only execute MOC orders against other MOC orders, it should not disrupt the closing auction price discovery process. Furthermore, Cboe Market Close should not significantly increase market complexity and operational risk because it will simply constitute an additional optional MOC order execution venue for market participants, and an optional data feed that market participants may choose to monitor for information regarding the total size of matched MOC orders via Cboe Market Close. Lastly, as discussed below, Cboe Market Close should not materially increase the risk of manipulation through information asymmetries because the information that may be discerned by participants of Cboe Market Close is of limited usefulness, and BZX has made detailed commitments regarding its plans to surveil, detect, and prevent against any potential manipulation through the use of Cboe Market Close.
A number of commenters addressed the proposal's effect on competition. Some commenters supporting the proposal stated that it would increase competition among exchanges for executions of orders at the close.
One commenter argued that the proposal does not unduly burden competition as exchanges often attempt to compete by adopting functionality or fee schedules developed by competitors.
In contrast, other commenters argued that the proposal would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Act, including by “free-riding” on the investments the primary listing exchanges have made in their closing auctions.
Nasdaq and NYSE further stated that BZX is not proposing to develop its own auction or improve the functionality of the closing auctions in the primary listing exchanges, but rather merely using the price generated by the listing exchanges through their proprietary processes.
Nasdaq also argued that the proposal undermines intra-market competition, by removing orders from Nasdaq's auction book.
Nasdaq and NYSE also disputed the purported benefits of the proposal for market participants.
BZX asserted that the proposal would enhance rather than burden competition by promoting competition in the use of MOC orders.
BZX also challenged the assertion that it was “free-riding” on the primary listing exchanges' closing auctions.
BZX also asserted that Cboe Market Close would create benefits for market participants beyond price competition.
BZX and other commenters have provided evidence that, over the past several years, closing auction fees have steadily increased and are significantly higher than fees for intraday trading.
While the development and ongoing costs associated with the primary listing exchanges' closing auctions may play a role in the fees for closing auctions, NYSE and Nasdaq have not provided any data or details to support this assertion.
While the primary listing exchanges and other commenters argue that BZX is “free riding” on investments of the primary listing exchanges in the development and maintenance of the closing auction process—and thus impeding competition in a manner inconsistent with the Act—this concern must be evaluated against the enhanced competition that the proposal should provide. In particular, BZX has demonstrated that the proposal will not impose a burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because it should promote competition among MOC order execution venues and foster price competition for MOC order execution fees, areas which currently appear to be lacking the same competitive forces as intraday trading. In this regard, as discussed above, commenters assert that the primary listing exchanges have taken advantage of the “monopoly” they have on orders seeking a closing price to impose high per share fees for orders executed in the closing auctions.
Moreover, in the highly competitive environment of the current national market system with numerous exchanges competing for order flow, it is commonplace for exchanges to attempt to mimic or build upon various functionalities of their competitors.
In addition to the proposal's intended effect on price competition, the Commission also believes that the proposal may result in other benefits to market participants generally, including execution quality competition for MOC orders. The Commission believes that implementation of Cboe Market Close could incent other venues, including the primary listing exchanges, as well as ATSs and off-exchange matching venues, to continue to innovate and compete to attract MOC orders to their venues. As noted above, BZX stated that it would be unable to attract MOC order flow solely on the basis of lower execution fees, and asserted that it and the primary listing exchanges would continually need to improve their technology and quality of their MOC order execution offerings in order to compete for such order flow. The proposal would also provide an opportunity for market participants to assess and compare their experience in seeking to execute MOC orders on different national securities exchanges and off-exchange venues, which would foster further competition and may enhance the quality and efficiency of MOC order executions.
The primary listing exchanges argue that the proposal diminishes incentives to invest in enhancements to closing auctions. But, in the Commission's view, the proposal could actually incent these exchanges to innovate and enhance their closing auctions in order to compete for MOC orders despite the additional costs of obtaining a closing execution on the primary listing exchange, to the extent the costs for such executions will indeed be higher than those for Cboe Market Close.
Among such factors that market participants may consider in determining the venue to which it will send MOC orders are regulatory protections, including Regulation SCI. The requirements of Regulation SCI were designed to strengthen the infrastructure of the U.S. securities markets and improve its resilience when technological issues arise.
NYSE and Nasdaq stated that there are additional costs due to compliance with the heightened Regulation SCI requirements for their closing auction systems that would put them at a competitive disadvantage. Although Cboe Market Close systems, as proposed, would also be subject to Regulation SCI as “SCI systems,” based on the Regulation SCI rule definitions, they would not be “critical SCI systems,” and thus would not be subject to the heightened requirements of the regulation. Similarly, off-exchange MOC matching systems of ATSs and broker-dealers would not be “critical SCI systems” and further, may not be subject to any of the requirements of Regulation SCI if such entities do not meet the definition of “SCI entity” under the regulation.
Additionally, the Commission believes that some market participants could potentially view the lack of these heightened protections for Cboe Market Close as a potential risk that may factor into their determination as to whether to send MOC orders to BZX or to the primary listing exchanges. Commenters, including the listing exchanges, emphasized the importance of the closing auctions to the operation of the markets, and touted such closing auctions' reliability, integrity, stability, and resiliency.
In addition, the primary listing exchanges advanced several theories as to how the proposal could undermine other types of competition, such as intramarket competition, by diverting orders away from the primary listing exchanges and thereby preventing such orders from interacting and competing on a primary listing exchange. But this result is not unique to Cboe Market Close. In particular, when one exchange innovates, makes enhancements, or modifies exchange fees, it may result in market participants sending more order flow to one exchange and less volume to other exchanges, thereby potentially decreasing intramarket competition among orders on a particular exchange. Thus, enhancing competition between exchanges will, in many cases, have an inverse effect on intramarket competition. The Commission does not believe this to be an inappropriate burden on competition in this case.
Several commenters referenced the Commission's order disapproving a Nasdaq proposal to create a Benchmark Order (“Benchmark Disapproval Order”) in arguing that BZX has not satisfied its obligation to demonstrate that the proposal is consistent with the Act.
Similarly, SIFMA relied on the Benchmark Disapproval Order in asserting that BZX is proposing to offer a function identical to that currently offered by broker-dealers, yet would benefit from regulatory immunity as well as the limits on liability contained in BZX Rule 11.16.
With respect to regulatory immunity, SIFMA asserted that both courts and the Commission have stated that regulatory immunity applies only in situations where an exchange is exercising its regulatory authority over its member, pursuant to the Act.
BZX argued that its proposal does not implicate the same issues as the Benchmark Disapproval Order because the Commission's disapproval rested primarily on its finding that it raised issues under the Market Access Rule.
BZX responded to SIFMA's comments on regulatory immunity and its limitation on liability rule by stating that the concerns raised were “not germane to whether the [p]roposal is consistent with the Act,” and further stated that it believed it would be inappropriate in the context of a filing on one proposed rule change to set a new standard on an issue that has broad application to all exchange services as well as National Market System Plans.
The Commission does not believe that the differing regulatory standards applicable to Cboe Market Close and the primary listing exchanges' closing auctions create an unfair burden on competition. This is because, as discussed above, the Commission believes that, Cboe Market Close differs from the primary listing exchanges' closing auctions in design, utility, and function. As also discussed above, the fact that closing auction systems are subject to the heightened requirements of Regulation SCI for critical SCI systems could encourage market participants to send MOC orders to closing auctions on the primary listing exchanges due to the additional regulatory protections required of such systems.
With regard to SIFMA's comments regarding competition with broker-dealer services and the applicability of limitations on liability, the Commission believes Cboe Market Close may compete with the off-exchange matching services operated by broker-dealers.
With respect to the judicial doctrine of regulatory immunity, the Commission has taken the position that immunity from suit “is properly afforded to the exchanges when engaged in their traditional self-regulatory functions—where the exchanges act as regulators of their members,” including “the core adjudicatory and prosecutorial functions that have traditionally been accorded absolute immunity, as well as other functions that materially relate to the exchanges' regulation of their members,” but should not “extend to functions performed by an exchange itself in the operation of its own market, or to the sale of products and services arising out of those functions.”
Many commenters addressed the potential effects of the proposal on price discovery in the closing auctions on the primary listing exchanges, including the effect of additional fragmentation of MOC interest among multiple execution venues.
Some commenters stated that the proposal would harm price discovery in the closing auctions on the primary listing exchanges.
Nasdaq also expressed concern that the availability of Cboe Market Close could affect the behavior of limit orders,
Moreover, Nasdaq argued that even if the proposal only resulted in fewer MOC orders submitted to Nasdaq closing auctions, investors would be harmed because the official closing price could potentially represent a stale or undermined price.
Nasdaq also argued that the proposal would harm price discovery because fragmentation of MOC orders would directly affect closing auctions for which Nasdaq only received MOC orders. Nasdaq contended that, if all those MOC orders were removed from the Nasdaq closing auction, the last sale price would become the official closing price, as opposed to the price being determined through the price discovery process of its closing auction.
The Pitt/Spatt Report submitted by Nasdaq states that, according to formal auction theory, the auction price and bidding behaviors of auction participants are determined by the rules of the auction.
NYSE argued that even though Cboe Market Close would only accept MOC orders, it could materially affect official closing prices determined through a NYSE closing auction.
NYSE stated that producing a reliable and accurate closing price for a security requires transparency into the “full information” about the volume of buy and sell orders and the extent of any imbalances.
NYSE also asserted that information to be disseminated by BZX on the amount of matched MOC volume could discourage liquidity providers from participating in the closing process because they would surmise that their orders would be less likely to interact with market orders in the closing auction.
NYSE also argued that the proposal would detrimentally affect price discovery on the NYSE Arca and NYSE American automated closing auctions. NYSE stated that in the six months prior to June 2017 there were 130 instances where the official closing price determined through a NYSE Arca closing auction was based entirely on paired-off market order volume.
Multiple commenters stated that one of the benefits of a centralized closing auction conducted by the primary listing exchange is that it allows market participants to fairly assess supply and demand such that the closing prices reflect both market sentiment and total market participation.
In contrast, several commenters stated that the proposal would not negatively affect price discovery in the primary listing exchanges' closing auctions because Cboe Market Close would only execute MOC orders that can be paired-off against other MOC orders, and not orders that directly affect price discovery, such as limit orders, including LOC orders.
In response to concerns regarding the effect of the proposal on the price discovery process, BZX argued that it expects the Cboe Market Close would have no effect on price discovery because the proposal would only match MOC orders and would require the Exchange to publish the number of matched shares in advance of the primary listing exchanges' cut-off times on a data feed that is available free of charge.
In response to NYSE and Nasdaq comments regarding the consistency of the Cboe Market Close with Amendment 12 of the LULD Plan, BZX asserted that while the amendment to the LULD Plan cited by NYSE and Nasdaq granted the primary listing exchange the ability to set the re-opening price, the amendment did not mandate the consolidation of orders at the primary listing exchange following a trading halt.
In response to NYSE's arguments regarding the effect on a DMM's ability to price the close, BZX argued that this point highlights what it believes to be an additional benefit of allowing it to compete with NYSE's closing auction.
The Commission has carefully analyzed and considered the proposal's potential effects, if any, on the primary listing exchanges' closing auctions, including their price discovery functions, and the reliability and integrity of closing prices. The Commission finds that BZX has demonstrated that based on the design of the proposal, Cboe Market Close should not disrupt the price discovery process in the closing auctions of the primary listing exchanges.
Importantly, Cboe Market Close will only accept, match, and execute unpriced MOC orders with other unpriced MOC orders (
The orders identified above affect the determination of an official closing price because they directly affect the total number of shares that are executed in an auction. More specifically, a limit order or LOC order would only execute in a closing auction if the official closing price is at or better than that order's limit price. In addition, in a closing auction, the imbalance amount of MOC orders (
Several commenters made assertions that matched MOC order flow provides informational content regarding the depth of the market that indicates true supply and demand and contributes to market participants' decisions regarding order submission and ultimately price formation.
And the Commission disagrees with NYSE that, in order for the Commission to approve the proposed rule change, BZX should also disclose the balance of unpaired shares that were submitted to Cboe Market Close.
Furthermore, the Commission does not find Nasdaq's concern regarding its inability to confirm the accuracy of information disseminated by BZX compelling. A fundamental aspect of the national market system is reliance by national securities exchanges on information disseminated by another exchange, supplemented by Commission oversight of such legally enforceable obligations. Indeed, all national securities exchanges, including Nasdaq, regularly rely on information disseminated by other national securities exchanges in other contexts, such as for the handling, routing, and execution of orders.
The Pitt/Spatt Report argues that, according to formal auction theory, bidding behaviors and closing price outcomes will be affected by the introduction of the Cboe Market Close. But, even if some market participants choose to send their MOC orders to the Cboe Market Close, the Commission believes that closing price efficiency is unlikely to be affected.
It is possible that the unpaired shares from Cboe Market Close could be sent to a broker-dealer who offers off-exchange executions at the closing price. However, as a general matter, data show that most traders do not execute orders at the official closing price by trading off-exchange with broker-dealers.
Some commenters also argued that the proposal would affect the submission of LOC orders to the primary listing exchanges. But as BZX stated, LOC orders by their terms specify a price and therefore provide price protection. Thus, utilization of a LOC order suggests that a market participant is price sensitive and uniquely interested in obtaining an execution at, or better than, its specified price. By contrast, MOC orders do not specify a price and are submitted by market participants who may be less price sensitive and who may prioritize other aspects of a closing execution over price.
As discussed above, Nasdaq and NYSE also asserted that the Cboe Market Close could discourage submission of orders in the intraday trading session and closing auctions in certain circumstances, such as if there were a large amount of paired-off MOC orders in Cboe Market Close and a subsequent lack of imbalance information disseminated on the primary listing exchanges.
The Commission also disagrees with commenters that asserted that the proposal would inhibit DMMs' ability to establish closing prices because they would no longer have full visibility into the size and composition of MOC interest.
Nor does the Commission agree with those commenters that argued that the proposal contradicts the Commission's approval of Amendment 12 to the LULD Plan.
As discussed above, NYSE and Nasdaq argued that if the proposed rule change resulted in the removal of all MOC orders from the primary listing exchanges' closing auctions, and circumstances arose such that due to other factors no closing auction could be held, in accordance with NYSE Arca's and Nasdaq's rules the official closing price would be the consolidated last sale price.
First, the data and analyses that commenters provided did not analyze subsequent price changes on the next trading day following the closing auction. Thus, it is unclear whether the price differentials between the official closing price and the price of the last sale prior to the closing auction indicate better or worse price discovery or efficiency. A large difference between a reference price (
In addition, the Commission acknowledges that it may be possible that following implementation of the Cboe Market Close there could be instances in which no MOC orders participate in a primary listing exchange's closing auction. But the fact that the majority of MOC orders today continue to be executed in the closing auctions on the primary listing exchanges
Further, the use of the consolidated last sale price as the official closing price in situations when a primary listing exchange does not conduct a closing auction is not mandated by the Act or rules thereunder, but rather is established by the rules of that exchange.
Commenters, including Nasdaq and NYSE, also argued that the proposal is inconsistent with Section 6(b)(5) of the Act because it would fragment the markets beyond what currently occurs through off-exchange closing price matching by broker-dealers. Nasdaq and NYSE stated that such off-exchange activity is structurally different from Cboe Market Close and thus asserted that it would be inappropriate to analogize to such off-exchange activity in evaluating the proposal.
In addition, NYSE provided data that focused on existing off-exchange matching services.
BZX stated that several off-exchange venues currently offer executions at the official closing price and therefore provide a forum to which participants may choose to send MOC orders in lieu of sending MOC or LOC orders to the primary listing exchange.
Moreover, other commenters argued that the proposal could increase transparency, reliability and price discovery at the close by incenting brokers that would otherwise seek to match MOC orders off-exchange to re-direct their MOC orders to a public exchange.
BZX presented several critiques in response to NYSE's data regarding the effect of off-exchange MOC activity on closing auction price formation. First, BZX stated that NYSE did not provide the number of closing auctions included in its data set.
BZX further argued that it is possible that low volume securities with severe imbalances would be subject to price variations between the last sale and the official closing price, regardless of the amount of off-exchange closing activity.
Furthermore, despite assertions from Nasdaq and NYSE that BZX did not provide data on the effect of off-exchange MOC activity on closing auction price formation,
In addition, BZX stated that it also found similar patterns “when it analyzed securities based on their [average daily volume] instead of auction size.”
BZX added that there is no support for a contention that the effect of the proposal on price discovery may be greater because more market participants might use an exchange offering as opposed to a non-exchange offering.
As Nasdaq and NYSE noted,
However, if the Commission were to consider analyses regarding off-exchange MOC activity, the Commission notes that the NYSE analysis, when comparing price differences across securities, did not distinguish whether the observed price differences were due to the removal of MOC orders from the primary listing exchange or due to liquidity or other differences not controlled for in the analysis. As described above, NYSE provided an analysis comparing price differences between securities in which 75% of the total closing volume was executed off-exchange, and securities in which 25% of the total closing volume was executed off-exchange. NYSE argued that securities with more off-exchange MOC activity have more closing price volatility. However, the Commission believes that closing price volatility and off-exchange activity may be correlated with unobserved liquidity factors. For example, small stocks tend to have high trading costs (
In connection with the consideration of the proposal, the staff from the Commission's Division of Economic and Risk Analysis (“DERA”) sought to explore the correlation of closing price discovery and efficiency with existing off-exchange MOC activity.
NYSE and Nasdaq both stated that the Commission should not attempt to estimate the effect of Cboe Market Close through a comparison to off-exchange MOC trading because of the structural differences between off-exchange MOC trading and Cboe Market Close.
As previously stated, the Commission agrees with NYSE and Nasdaq that the structure of existing mechanisms to conduct off-exchange MOC trading may not, in all instances, be identical to Cboe Market Close.
Furthermore, even though NYSE's and Nasdaq's critiques of the methodology of the DERA Analysis are not relevant to this order, the Commission notes that it is not persuaded by the findings of the Amihud/Mendelson Report because it believes there are two methodological flaws in that study that lead to an overstatement of the economic significance of the findings. First, the Amihud/Mendelson Report expresses the changes in
In support of its proposal, BZX stated that Nasdaq and NYSE Arca operate closing auctions for securities listed on other exchanges and that these closing auctions produce independent prices that may differ from a security's official closing price determined in the closing auction conducted by the security's primary listing exchange.
In response, both Nasdaq and NYSE distinguished the Cboe Market Close from competing closing auctions currently operated by Nasdaq and NYSE Arca for securities listed on other exchanges. Nasdaq stated that the BZX proposal is a price-matching order type and not a competitive single-priced auction that offers price discovery.
Nasdaq further argued that competing closing auctions cause minimal fragmentation, as volumes in those auctions are “miniscule.”
In contrast, other commenters stated that these competing closing auctions may attract price-setting limit orders from the primary listing exchange and impede price discovery, unlike the BZX proposal which is limited to market orders.
As noted above, BZX stated that, unlike Cboe Market Close, the competing closing auctions operated by Nasdaq and NYSE Arca accept price-setting limit orders, in addition to MOC orders, and therefore may harm price discovery.
The Commission believes, as some commenters argued, that there are certain fundamental differences between BZX's proposed Cboe Market Close and existing competing closing auctions. First, BZX's proposed Cboe Market Close is not a closing auction. Further, as NYSE and Nasdaq stated, their existing competing, single-priced closing auctions accept LOC orders (which specify target prices) and therefore, produce closing prices independent from those determined through the primary listing exchanges' closing auctions. As pointed out by BZX, this could affect the closing price on the primary listing exchange by potentially diverting LOC orders that contribute to price discovery away from the primary listing exchange's closing auction.
Several commenters stated that the proposal could harm issuers, particularly small and mid-cap companies.
In addition, commenters stated that closing prices play an important role in the pricing of pooled investment vehicles, derivative securities, and benchmark indices.
Moreover, some commenters argued that the centralization of liquidity at the open and close of trading, and how primary listing exchanges perform during the opening and closing, are important factors for issuers in determining where to list their securities.
BZX stated that because the proposal only matches paired-off MOC orders, it “would not adversely impact the trading environment for issuers and their securities.”
As discussed above, BZX has demonstrated that because Cboe Market Close will only execute paired-off MOC orders, it should not disrupt the price discovery process.
Several commenters addressed the potential effect of the proposal on market complexity and operational risk to the securities markets.
Some of these commenters believed that the proposal would not introduce significant additional complexity or operational risk. For example, two commenters argued that the proposal could enhance the resiliency of the closing auction process by providing market participants an additional mechanism through which to execute orders at the official closing price in the event of a disruption at a primary listing exchange.
In contrast, other commenters argued that the proposal would add unnecessary market complexity and operational risk to the securities markets. Nasdaq asserted that the proposal would impair the statutory objective of fair and orderly markets by “fostering complexity and fragmentation in the securities markets.”
One commenter also argued that the proposal increases operational risk and complexity at a critical point of the trading day by forcing market participants whose orders did not match in Cboe Market Close to quickly send MOC orders from one exchange to another before the cut-off time at the primary listing exchange closing auction.
In response, BZX argued that the proposal would not increase market complexity or operational risks.
BZX also argued that modern software can easily and simply add volume data disseminated by the primary listing exchanges regarding the closing auction and data regarding matched MOC orders from the Cboe Market Close.
The Cboe Market Close will offer market participants an additional venue to which they may send orders for execution at the official closing price and an additional data feed that some market participants may choose to monitor. However, as several commenters stated, many market participants already monitor multiple data feeds, and the Commission believes that the market participants that monitor information disseminated by BZX relating to Cboe Market Close would likely already maintain systems and software that are able to aggregate such feeds. While NYSE and Nasdaq argue that many closing auction
Further, the Commission notes that exchanges currently offer a wide array of proprietary market data products providing expansive trading information, including auction information.
In addition, in response to comments regarding the potential for other exchanges and venues to adopt similar functionality that would require monitoring of even more data feeds, again the Commission believes that those participants that would choose to monitor such data feeds likely already have the capability to monitor and aggregate information from multiple data feeds.
Finally, the Commission believes that because BZX will disseminate the amount of paired-off shares well in advance of the order entry cut-off times for the primary listing exchanges' closing auctions, the proposal is reasonably designed to limit market complexity and risk by giving market participants adequate time to review the necessary data, make informed decisions about closing order submission, and route orders to the primary listing exchange when desired.
Several commenters asserted that the proposal would increase the risk of manipulation. Commenters argued that the proposal increases opportunities for manipulation due, in part, to the information asymmetries that they argue Cboe Market Close would create. For example, Nasdaq argued that information obtained by Cboe Market Close participants regarding their paired-off MOC orders could be used to gauge the depth of the market, the direction and magnitude of existing imbalances, and the likely depth remaining at Nasdaq, creating manipulation opportunities and undermining fair and orderly markets.
While Nasdaq acknowledged that information asymmetries exist today as a result of broker-dealer MOC order matching services, it argued that BZX, “as a neutral platform, is more likely to gather orders from multiple brokers and enable a small number of participants to gain actionable asymmetric information,” which could potentially change the Nasdaq closing price.
Nasdaq further argued that information asymmetries can undermine public confidence in the markets.
In contrast, BZX argued that information asymmetries are inherent in trading, including the primary listing exchanges closing auctions.
While commenters argue that those who participate in Cboe Market Close would be able to discern the direction of an imbalance and use such information to manipulate the closing price, the Commission believes the utility of such gleaned information is limited. In particular, a market participant would only be able to determine the direction of the imbalance, and would have difficulty determining the magnitude of any imbalance, as it would only know the unexecuted size of its own order.
Likewise, while a market participant would be able to determine whether its own order made up a large or small percentage of the paired-off shares for a security in Cboe Market Close, it would not be able to determine the composition of same-side or contra-side MOC orders submitted to Cboe Market Close, nor would such information enable it to determine the composition of orders submitted to the primary listing exchange, competing auctions, ATSs, or other off-exchange matching services.
Further, the Commission believes information asymmetries as those described by commenters exist today and are inherent in trading, including with respect to closing auctions. For example, any party to a trade gains valuable insight regarding the depth of the market when an order is executed or partially executed. In addition, on NYSE, not only DMMs,
The Commission believes that the same arguments apply with respect to BZX's proposal. In particular, as discussed above, even if a market participant becomes aware of the
Given the limited usefulness of information that can be discerned from participants of Cboe Market Close, the Commission also believes it is unlikely that the proposal will have a negative effect on public confidence in the markets or on market participants' use of LOC orders in the close. This is not to say that merely because some information asymmetries exist in the market today and are inherent in all trading that those created by Cboe Market Close need not be carefully considered. Rather, after careful consideration and analysis of the proposal and the information that may be gleaned from Cboe Market Close, its utility, and potential use, the Commission believes BZX has demonstrated that the potential for increased manipulation due to information asymmetries created by this proposal is negligible and that it is in line with other proposals that have similarly introduced certain limited information asymmetries into the market but been found by the Commission to be consistent with the Act, as described above.
Commenters advanced several other theories as to how the proposal could enhance the risk of manipulation.
Some commenters did not believe Cboe Market Close would increase manipulation. For example, one commenter stated that incentives to manipulate the closing price already exist and it is unlikely the proposal would result in increased manipulation of the market close.
In response, BZX argued that the proposal does not introduce any specific or new ways to manipulate the closing price.
The Commission recognizes that, with or without Cboe Market Close, the potential exists that there may be market participants who may seek to engage in manipulative or illegal trading activity, including with respect to closing prices.
Lastly, some commenters argued that BZX and other exchanges would need to develop new cross-market surveillance systems in order to address these risks and expressed concerns regarding the costs and complexities of doing so.
In response, BZX made several arguments as to why it does not believe that the proposal creates a potential for increased manipulation.
BZX also highlighted the cross-market surveillance that FINRA conducts on its behalf.
With respect to manipulative or illegal trading activity more broadly, self-regulatory organizations such as
For the reasons discussed above, the Commission believes that the proposal raises only a minimal risk of increased manipulation, and this, coupled with the detailed commitments made by BZX to enhance surveillance and share surveillance plans with the Commission staff,
With respect to NYSE's comment on the potential challenges that time differences or cross-market activity may pose in identifying manipulative activity,
BZX filed Amendment No. 2 to the proposed rule change in response to the statements submitted by Nasdaq and NYSE which stated, among other arguments, that Cboe Market Close would potentially cause BZX to violate Rule 201(b) of Regulation SHO.
Rule 201(b) of Regulation SHO generally requires that trading centers, such as the Exchange, establish, maintain, and enforce written policies and procedures that are reasonably designed to (i) prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid if the price of that covered security decreases by 10% or more from that
In Amendment No. 2, the Exchange recognized that since the Cboe Market Close will match buy and sell MOC orders at 3:35 p.m. without knowing the later determined execution price (namely, the official closing price as determined by the primary listing exchange), there is a possibility that a short sale MOC order that is matched for execution in the Cboe Market Close could result in an execution price that violates Rule 201 of Regulation SHO. To prevent such a violation of Rule 201 of Regulation SHO, the Exchange proposed to reject all short sale MOC orders that are designated for participation in the Cboe Market Close. The Exchange noted, however, that MOC orders marked “short exempt” are not subject to the short sale circuit breaker restriction under Regulation SHO, and would therefore be accepted for participation in the Cboe Market Close.
One commenter addressed the proposed Amendment No. 2.
For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
By the Commission.
Securities and Exchange Commission.
Notice of meeting.
The Securities and Exchange Commission Small Business Capital Formation Advisory Committee, established pursuant to Section 40 of the Securities Exchange Act of 1934 as added by the SEC Small Business Advocate Act of 2016, is providing notice that it will hold a public meeting. The public is invited to submit written statements to the Committee.
The meeting will be held on Tuesday, February 4, 2020, from 9:30 a.m. to 3:30 p.m. (ET) and will be open to the public. Seating will be on a first-come, first-served basis. Written statements should be received on or before February 4, 2020.
The meeting will be held at the Commission's headquarters, 100 F Street NE, Washington, DC. The meeting will be webcast on the Commission's website at
• Use the Commission's internet submission form (
• Send an email message to
• Send paper statements to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
Statements also will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. (ET). All statements received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.
Julie Z. Davis, Senior Special Counsel, Office of the Advocate for Small Business Capital Formation, at (202) 551-5407, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-3628.
The meeting will be open to the public. Persons needing special accommodations because of a disability should notify the contact person listed in the section above entitled
Pursuant to Section 19(b)(1)
The Exchange proposes to amend its Schedule of Fees and Charges to remove the ineligibility for certain discounts when an issuer transfers an Exchange Traded Product or Structured Product off the Exchange (except to an Exchange affiliate) in a trailing 12-month period. The Exchange proposes to implement the fee changes effective January 10, 2020. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend its Schedule of Fees and Charges to remove the ineligibility for certain discounts when an issuer transfers an Exchange Traded Product (“ETP”) or Structured Product off the Exchange (except for transfers to an Exchange affiliate) in a trailing 12-month period.
The proposed change responds to the current extremely competitive environment for ETP listings in which issuers can readily favor competing venues or transfer their listings if they deem fee levels at a particular venue to be excessive, or discount opportunities available at other venues to be more favorable. The Exchange's current annual fees for ETPs are based on the number of shares outstanding per issuer and provide incentives for issuers to list multiple series of certain securities on the Exchange. In response to the competitive environment for listings, the Exchange adopted a competitive pricing structure that combines higher minimum annual fees for certain securities with discounts for issuers that list multiple ETPs and Structured Products.
The Exchange proposes to implement the fee changes effective January 10, 2020.
Currently, the Exchange offers non-mutually exclusive “Fund Family” and “High Volume Products” discounts for ETPs and Structured Products that are set forth in Section 9 of the Schedule of Fees and Charges. Eligibility for the discounts is subject to the limitation that an issuer that transfers a Product off the Exchange (except for transfers to an Exchange affiliate) in a trailing 12-month period beginning January 1, 2020 is ineligible for either or both discounts for the following calendar year. The Exchange proposes to remove this limitation from the Schedule of Fees and Charges.
The purpose of the proposed change is to encourage more issuers to qualify for the discounts by removing the restriction on achieving or retaining them. Although the limitation is a reasonable attempt to incentivize issuers to maintain listings on the Exchange and discourage transfers to and from the Exchange solely for the purpose of securing one or more discounts, the Exchange believes that removing the limitation outweighs those considerations because it would result in more issuers qualifying for and retaining discounts while enhancing competition among issuers and listing venues, to the benefit of all market participants. The proposed change described above is not otherwise intended to address other issues, and the Exchange is not aware of any significant problems that market participants would have in complying with the proposed changes.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
As discussed above, the Exchange operates in a highly competitive market for the listing of ETPs. Specifically, ETP issuers can readily favor competing venues or transfer listings if they deem fee levels at a particular venue to be excessive, or discount opportunities available at other venues to be more favorable. The Exchange's current annual fees for ETPs are based on the number of shares outstanding per issuer and provide incentives for issuers to list multiple series of certain securities on the Exchange. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange believes that the ongoing competition among the exchanges with respect to new listings and the transfer of existing listings among competitor exchanges demonstrates that issuers can choose different listing markets in response to fee changes. Accordingly, competitive forces constrain exchange listing fees. Stated otherwise, changes to exchange listing fees can have a direct effect on the ability of an exchange to compete for new listings and retain existing listings.
Given this competitive environment, the Exchange believes that the proposed change is a reasonable attempt to encourage more issuers to qualify for discounts that the Exchange offers by removing restrictions on achieving or retaining them, thereby enhancing competition among issuers and listing venues.
The Exchange believes the proposal equitably allocates its fees among its market participants. In the prevailing competitive environment, issuers can readily favor competing venues or transfer listings if they deem fee levels at a particular venue to be excessive, or discount opportunities available at other venues to be more favorable. The proposed removal of the limitation on discounts for ETPs and Structured Products is equitable because it would apply uniformly to all issuers and to all ETPs and Structured Products listed on the Exchange either generically or pursuant to a rule filing with the Commission. For the same reasons, the proposal neither targets nor will it have a disparate impact on any particular category of market participant.
The Exchange believes that the proposal is not unfairly discriminatory. In the prevailing competitive environment, issuers are free to list elsewhere if they believe that alternative venues offer them better value. The Exchange believes it is not unfairly discriminatory to remove an eligibility restriction on issuers transferring Products off the Exchange because removal of the restriction would apply to and potentially benefit all issuers equally.
Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
2:00 p.m. on Wednesday, January 29, 2020.
The meeting will be held at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matters of the closed meeting will consist of the following topics:
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Selective Service System.
Notice.
The following forms have been submitted to the Office of Management and Budget (OMB) for extension of clearance in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35):
Copies of the above identified form can be obtained upon written request to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
Written comments and recommendations for the proposed extension of clearance of the form should be sent within 30 days of the publication of this notice to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
A copy of the comments should be sent to the Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20503.
Selective Service System.
Notice.
The following forms have been submitted to the Office of Management and Budget (OMB) for extension of clearance in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35):
Copies of the above identified form can be obtained upon written request to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
Written comments and recommendations for the proposed extension of clearance of the form should be sent within 30 days of the publication of this notice to the Selective Service System, Reports Clearance Officer, 1515 Wilson Boulevard, Arlington, Virginia 22209-2425.
A copy of the comments should be sent to the Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20503.
The Small Business Administration publishes an interest rate for Military Reservist Economic Injury Disaster Loans (13 CFR 123.512) on a quarterly
Office of the United States Trade Representative.
Notice and request for comments.
On January 23, 2018, the President imposed a safeguard measure on imports of certain solar products pursuant to a Section 201 investigation. On February 14, 2018, the U.S. Trade Representative established procedures for interested persons to request product-specific exclusions from application of the safeguard measure and comment on the submitted requests. Based on the requests and comments received, the U.S. Trade Representative granted certain requests on June 13, 2019, including a request to exclude from the safeguard measure bifacial solar panels that consist only of bifacial solar cells. This notice establishes procedures for interested persons to submit comments, and respond to comments, on whether the U.S. Trade Representative should maintain the exclusion of bifacial solar panels from the safeguard measure, withdraw the exclusion, or take some other action within his authority with respect to this exclusion.
Victor Mroczka, Office of WTO and Multilateral Affairs, at
On January 23, 2018, the President issued Proclamation 9693 (83 FR 3541) to impose a safeguard measure under section 201 of the Trade Act of 1974 (19 U.S.C. 2251) with respect to certain crystalline silicon photovoltaic (CSPV) cells and other products (CSPV products) containing these cells. The Proclamation directed the U.S. Trade Representative to establish procedures for interested persons to request product-specific exclusions from the safeguard measure. It also authorized the U.S. Trade Representative, after consultation with the Secretaries of Commerce and Energy, to exclude products by modifying the Harmonized Tariff Schedule of the United States (HTSUS) with publication of a determination in the
On February 14, 2018, the U.S. Trade Representative issued a notice setting out the procedures to request a product exclusion and opened a public docket.
Based on the February 2018 notice, the Office of the U.S. Trade Representative (USTR) received 48 product exclusion requests and 213 subsequent comments responding to the various requests. The exclusion requests generally fell into seven categories, one of which concerned bifacial solar panels.
On September 19, 2018, and June 13, 2019, the U.S. Trade Representative granted certain product exclusion requests and modified the HTSUS accordingly.
On October 9, 2019, the U.S. Trade Representative concluded, based on an evaluation of newly available information and after consultation with the Secretaries of Commerce and Energy, that maintaining the exclusion would undermine the objectives of the safeguard measure. Accordingly, the U.S. Trade Representative published a notice withdrawing the exclusion of bifacial solar panels, effective as of October 28, 2019.
On October 21, 2019, Invenergy Renewables LLC filed a complaint with the U.S. Court of International Trade alleging that USTR failed to provide notice and comment required under the Administrative Procedure Act (APA), 5 U.S.C. 551
USTR is concerned that: (1) The bifacial solar panel exclusion will result in significant increases in imports of bifacial solar panels and therefore will undermine the objectives of the safeguard measure; (2) the precise definition of bifacial solar panels excluded from the safeguard measure may require clarification; and (3) the exclusion in the June 2019 notice is broader than the category of products described in the exclusion requests submitted as of March 16, 2018.
For these reasons, USTR is seeking public comment on whether the U.S. Trade Representative should maintain the exclusion of bifacial solar panels from the safeguard measure, withdraw the exclusion, or take some other action within his authority with respect to this exclusion.
The U.S. Trade Representative specifically requests information or views regarding the following, with sufficient evidence to support a particular position:
• Global and United States production and production capacity for bifacial solar panels prior to and following the exclusion of these products in the June 2019 notice, along with any information on expected changes in production and production capacity for the remaining term of the safeguard measure (
• Projections for the production and importation into the United States of bifacial solar panels for the remaining term of the safeguard measure.
• Import data and entry documentation to establish the level of bifacial solar panels imported into the United States prior to and following the exclusion of these products in the June 2019 notice.
• Projections of demand for bifacial solar panels by companies building or planning to build solar facilities or otherwise to install bifacial solar panels.
• Contracts, purchase orders, or other agreements that establish sales or other transactions, including those between suppliers and customers, regarding bifacial solar panels that have been or will be imported into the United States and such agreements regarding bifacial solar panels that have been or will be produced in the United States.
• Production cost and price differential between the manufacture and distribution of monofacial and bifacial solar panels.
• Substitutability or competitiveness between monofacial and bifacial solar panels in the United States.
• Domestic production and production capacity of bifacial solar cells or bifacial solar panels in the United States.
• Whether the U.S. Trade Representative should modify the exclusion to implement a tariff-rate quota (TRQ) on the importation of bifacial solar panels that enter with no additional duty and, if so, the level (
• The potential impact, if any, on the domestic workforce and economy in general should the exclusion be withdrawn.
• Any other information or data that interested persons consider relevant to the U.S. Trade Representative's evaluation.
After the submission of comments on whether the U.S. Trade Representative should maintain the exclusion of bifacial solar panels from the safeguard measure, withdraw the exclusion, or take some other action within his authority with respect to this exclusion, interested persons will have an opportunity to respond to comments. Interested persons can view the submitted comments on
Responses to comments should indicate whether they support or oppose a particular view and provide reasons for that position. As with the initial round of comments, responses should address the information or factors identified above with sufficient evidence to support or oppose the particular view in question. If a supporter or opponent of a particular view fails to provide evidence in its control that is relevant to one of the factors listed above, USTR may conclude, that the omitted evidence would not support the supporter or opponent's position.
As with the initial determination to exclude bifacial solar panels from the safeguard measure, the U.S. Trade Representative will consult with the Secretaries of Commerce and Energy regarding the comments, responses, and supporting evidence received in response to this notice to determine what, if any, action to take regarding the exclusion of bifacial solar panels from the safeguard measure.
At this time, USTR is not evaluating any other exclusion determinations and is not accepting additional requests for exclusion from the safeguard measure or requests to withdraw exclusions. USTR will continue monitoring developments in the U.S. market for CSPV products and, if warranted, provide for additional exclusion requests at a future date.
USTR seeks comments and responses to comments with respect to the issues described in Sections B and C through a public comment process. To be assured of consideration, you must submit written comments by 11:59 p.m. EST on February 17, 2020, and any written responses to those comments by 11:59 p.m. EST on February 27, 2020. All comments must be in English and must identify on the reference line of the first page of the submission “Comments or Responses on the Exclusion of Bifacial Solar Panels From the Safeguard Measure on Solar Products.”
We strongly encourage commenters to make on-line submissions using the
The
Comments or responses based on this notice may entail the submission of business confidential information. In that event, the submitter must provide both a public version for publication and a confidential version. The file name for the business confidential version should begin with the characters `BC.' The first page of the confidential version, and each subsequent page that actually contains business confidential information, must be clearly marked `BUSINESS CONFIDENTIAL' on the top of the page. Moreover, the submission should clearly indicate, via brackets, highlighting, or other means, the specific information that is business confidential. The submitter also must certify that the information is business confidential and would not customarily be released to the public.
As indicated above, a submitter that provides a version containing business confidential information also must provide a public version of the submission with the relevant information redacted. The file name of the public version should begin with the character `P.' The `BC' and `P' should be followed by the name of the person or
We emphasize that submitters are strongly encouraged to file comments through
As noted, we will publish non-confidential versions of submissions in the docket for public inspection. You can view submissions on
Federal Highway Administration (FHWA), DOT.
Notice of intent to prepare a Limited-Scope Supplemental Environmental Impact Statement.
The FHWA is issuing this notice to advise the public that a Limited-Scope Supplemental Environmental Impact Statement will be prepared for the proposed Southern Connector/Champlain Parkway project in the City of Burlington, Chittenden County, Vermont.
Rob Sikora, Environmental Program Manager, Federal Highway Administration, 87 State Street, Room 216, Montpelier, Vermont 05602. Telephone: (802) 828-4573.
The FHWA, in cooperation with the Vermont Agency of Transportation (VTrans) and the City of Burlington, will prepare a Limited-Scope Supplemental Environmental Impact Statement (EIS) for the Burlington Southern Connector/Champlain Parkway between Interstate 189 and Main Street in Burlington, Vermont.
The Southern Connector/Champlain Parkway project has a long history with National Environmental Policy Act (NEPA) reviews dating back to the 1970's. The most recent NEPA document for the project was a Final Supplemental EIS approved by FHWA on September 22, 2009 and a Record of Decision (ROD) issued on January 13, 2010 identifying the Selected Alternative and the reasons for its selection. On October 11, 2019, the FHWA published a notice to rescind the ROD in order to re-evaluate the project's impacts to low-income and minority populations in accordance with 23 CFR 771.129. Based on the environmental re-evaluation, FHWA has determined that a Limited-Scope Supplemental EIS should be prepared for the project to address changes subsequent to 2010 in FHWA guidance and methodology for performing environmental justice analyses, updated demographic information contained in the latest available census data, and to provide additional opportunities for meaningful public involvement.
The Supplemental EIS will be limited in the scope of issues, and only assess impacts to low-income and minority populations. Based on the Executive Order 12898 Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and FHWA's “Guidance on Environmental Justice and NEPA,” it is FHWA's policy to identify and address any disproportionately high and adverse effects of FHWA actions on the health or environment of low-income and minority populations to the greatest extent practicable and permitted by law. The Supplemental EIS review will also address a limited portion of the project along the Pine Street section of the Selected Alternative, between Maple Street and Main Street.
Public involvement is a critical component of the National Environmental Policy Act (NEPA) review and Federal-aid highway project development process. A Draft Limited-Scope Supplemental EIS will be made available for review and comment by Federal and state resource agencies and the public. A public hearing will be held at an accessible location in Burlington at the time the document is made available. In addition to the public hearing, and as needed during the project's NEPA review, FHWA will work with VTrans and the City of Burlington to plan, organize and provide public involvement opportunities and project status updates through the project website, local media, and a project open house. Public notice will be given of the time and place of public meetings and hearings through local newspapers and the project website at
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for 12 individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these hard of hearing and deaf individuals to continue to operate CMVs in interstate commerce.
The exemptions were applicable on January, 14, 2020. The exemptions expire on January 14, 2022. Comments must be received on or before February 26, 2020.
You may submit comments identified by the Federal Docket Management System (FDMS) Docket No. FMCSA-2012-0154, Docket No. FMCSA-2012-0332, Docket No. FMCSA-2013-0122, or Docket No. FMCSA-2013-0123 using any of the following methods:
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•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, 202-366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2012-0154, FMCSA-2012-0332, FMCSA-2013-0122, or FMCSA-2013-0123), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding hearing found in 49 CFR 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5—1951.
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3, 1971).
The 12 individuals listed in this notice have requested renewal of their exemptions from the hearing standard in § 391.41(b)(11), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the 12 applicants has satisfied the renewal conditions for obtaining an exemption from the hearing requirement. The 12 drivers in this notice remain in good standing with the Agency. In addition, for Commercial Driver's License (CDL) holders, the Commercial Driver's License Information System and the Motor Carrier Management Information System are searched for crash and violation data. For non-CDL holders, the Agency reviews the driving records from the State Driver's Licensing Agency. These factors provide an adequate basis for predicting each driver's ability to continue to safely operate a CMV in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each of these drivers for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
As of January 14, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following 12 individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers:
The drivers were included in docket number FMCSA-2012-0154, FMCSA-2012-0332, FMCSA-2013-0122, or FMCSA-2013-0123. Their exemptions are applicable as of January 14, 2020, and will expire on January 14, 2022.
The exemptions are extended subject to the following conditions: (1) Each driver must report any crashes or accidents as defined in § 390.5; and (2) report all citations and convictions for disqualifying offenses under 49 CFR 383 and 49 CFR 391 to FMCSA; and (3) each driver prohibited from operating a motorcoach or bus with passengers in interstate commerce. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. In addition, the exemption does not exempt the individual from meeting the applicable CDL testing requirements. Each exemption will be valid for 2 years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 12 exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the hearing requirement in § 391.41 (b)(11). In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for seven individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to continue to operate CMVs in interstate commerce.
The exemptions were applicable on January 21, 2020. The exemptions expire on January 21, 2022. Comments must be received on or before February 26, 2020.
You may submit comments identified by the Federal Docket Management System (FDMS) Docket No. FMCSA-2013-0107; Docket No. FMCSA-2015-0119; Docket No. FMCSA-2015-0320 using any of the following methods:
•
•
•
•
To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, 202-366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2013-0107; FMCSA-2015-0119; FMCSA 2015-0320), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding epilepsy found in 49 CFR 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
The seven individuals listed in this notice have requested renewal of their exemptions from the epilepsy and seizure disorders prohibition in § 391.41(b)(8), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the seven applicants has satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition. The seven drivers in this notice remain in good standing with the Agency, have maintained their medical monitoring and have not exhibited any medical issues that would compromise their ability to safely operate a CMV during the previous 2-year exemption period. In addition, for Commercial Driver's License (CDL) holders, the Commercial Driver's License Information System and the Motor Carrier Management Information System are searched for crash and violation data. For non-CDL holders, the Agency reviews the driving records from the State Driver's Licensing Agency. These factors provide an adequate basis for predicting each driver's ability to continue to safely operate a CMV in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
As of January 21, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following seven individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers:
The drivers were included in docket numbers FMCSA-2013-0107; FMCSA-2015-0119; and FMCSA-2015-0320. Their exemptions are applicable as of January 21, 2020, and will expire on January 21, 2022.
The exemptions are extended subject to the following conditions: (1) Each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based on its evaluation of the seven exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the epilepsy and seizure disorders prohibition in § 391.41(b)(8). In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for 2 years unless revoked earlier by FMCSA.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to renew exemptions for two individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these hard of hearing and deaf individuals to continue to operate CMVs in interstate commerce.
The exemptions were applicable on October 22, 2019. The exemptions expire on October 22, 2021.
Ms. Christine A. Hydock, Chief, Medical Programs Division, 202-366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
On November 21, 2019, FMCSA published a notice announcing its decision to renew exemptions for two individuals from the hearing standard in 49 CFR 391.41(b)(11) to operate a CMV in interstate commerce and requested comments from the public (84 FR 64393). The public comment period ended on December 23, 2019, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(11).
The physical qualification standard for drivers regarding hearing found in § 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American National Standard (formerly ASA Standard) Z24.5-1951.
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3, 1971).
FMCSA received no comments in this proceeding.
Based upon its evaluation of the two renewal exemption applications, FMCSA announces its decision to exempt the following drivers from the hearing requirement in § 391.41 (b)(11).
As of October 22, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following two individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers (84 FR 64393):
The drivers were included in docket number FMCSA-2014-0387. Their exemptions are applicable as of October 22, 2019, and will expire on October 22, 2021.
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Motor Carrier Safety Administration (FMCSA), U.S. Department of Transportation (DOT).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for its review and approval and invites public comment. FMCSA requests approval to extend an existing ICR titled, “Transportation of Hazardous Materials, Highway Routing.” The information reported by States, the District of Columbia, Indian tribes, and U.S. Territories is necessary to identify designated/restricted routes and restrictions or limitations affecting how motor carriers may transport certain hazardous materials on their highways, including dates that such routes were established and information on subsequent changes or new hazardous materials routing designations.
FMCSA received one anonymous comment to the 60-day
Please send your comments by February 26, 2020. OMB must receive
All comments should reference Federal Docket Management System (FDMS) Docket Number FMCSA-2019-0140. 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/Federal Motor Carrier Safety Administration, and sent via electronic mail to
Ms. Suzanne Rach, Office of Enforcement and Compliance, Hazardous Materials Division, FMCSA, West Building 6th Floor, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone: 202-385-2307; email
In 49 CFR 397.73, FMCSA requires that each State, the District of Columbia, Indian tribes, and U.S. Territories, through its routing agency, provide information identifying new, or changes to existing, hazardous materials routing designations within its jurisdiction within 60 days after their establishment (or 60 days of the change). That information is collected and consolidated by FMCSA and published annually, in whole or as updates, in the
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of denials.
FMCSA announces its decision to deny applications from 41 individuals who requested an exemption from the Federal Motor Carrier Safety Regulations (FMCSRs) prohibiting persons with a clinical diagnosis of epilepsy or any other condition that is likely to cause a loss of consciousness or any loss of ability to operate a commercial motor vehicle (CMV) from operating CMVs in interstate commerce.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
FMCSA received applications from 41 individuals who requested an exemption from the FMCSRs prohibiting persons with a clinical diagnosis of epilepsy or any other condition that is likely to cause a loss of consciousness or any loss of ability to operate a CMV from operating CMVs in interstate commerce.
FMCSA has evaluated the eligibility of these applicants and concluded that granting these exemptions would not provide a level of safety that would be equivalent to, or greater than, the level of safety that would be obtained by complying with § 391.41(b)(8).
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a
The Agency has determined that these applicants do not satisfy the eligibility criteria or meet the terms and conditions of the Federal exemption and granting these exemptions would not provide a level of safety that would be equivalent to, or greater than, the level of safety that would be obtained by complying with § 391.41(b)(8). Therefore, the 41 applicants in this notice have been denied exemptions from the physical qualification standards in § 391.41(b)(8).
Each applicant has, prior to this notice, received a letter of final disposition regarding his/her exemption request. Those decision letters fully outlined the basis for the denial and constitute final action by the Agency. This notice summarizes the Agency's recent denials as required under 49 U.S.C. 31315(b)(4) by periodically publishing names and reasons for denial.
The following 41 applicants do not meet the minimum time requirement for being seizure-free, either on or off of anti-seizure medication:
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to renew exemptions for 77 individuals from the vision requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these individuals to continue to operate CMVs in interstate commerce without meeting the vision requirement in one eye.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates provided below.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
On December 4, 2019, FMCSA published a notice announcing its decision to renew exemptions for 77
FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with the current regulation § 391.41(b)(10).
The physical qualification standard for drivers regarding vision found in § 391.41(b)(10) states that a person is physically qualified to drive a CMV if that person has distant visual acuity of at least 20/40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses, distant binocular acuity of a least 20/40 (Snellen) in both eyes with or without corrective lenses, field of vision of at least 70° in the horizontal meridian in each eye, and the ability to recognize the colors of traffic signals and devices showing red, green, and amber.
FMCSA received no comments in this proceeding.
Based on its evaluation of the 77 renewal exemption applications and comments received, FMCSA confirms its decision to exempt the following drivers from the vision requirement in § 391.41(b)(10).
As of December 3, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following 34 individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (64 FR 40404; 64 FR 66962; 66 FR 63289; 67 FR 68719; 68 FR 2629; 68 FR 52811; 68 FR 61860; 68 FR 64944; 70 FR 48797; 70 FR 61165; 70 FR 61493; 70 FR 67776; 72 FR 64273; 73 FR 46973; 73 FR 54888; 74 FR 11988; 74 FR 21427; 74 FR 37295; 74 FR 48343; 74 FR 53581; 74 FR 62632; 76 FR 29026; 76 FR 34136; 76 FR 44652; 76 FR 49528; 76 FR 53708; 76 FR 55463; 76 FR 61143; 76 FR 64171; 76 FR 70215; 78 FR 20376; 78 FR 24798; 78 FR 27281; 78 FR 30954; 78 FR 34141; 78 FR 34143; 78 FR 41188; 78 FR 41975; 78 FR 46407; 78 FR 47818; 78 FR 52602; 78 FR 56986; 78 FR 63307; 78 FR 64280; 78 FR 68137; 78 FR 77782; 78 FR 78477; 79 FR 63211; 79 FR 69985; 80 FR 2471; 80 FR 8927; 80 FR 33007; 80 FR 37718; 80 FR 44188; 80 FR 48411; 80 FR 50917; 80 FR 59225; 80 FR 59230; 80 FR 62161; 80 FR 63869; 80 FR 67472; 80 FR 67476; 81 FR 1284; 81 FR 11642; 81 FR 15404; 82 FR 18818; 82 FR 32919; 82 FR 35043; 82 FR 47295; 82 FR 47312; 82 FR 47313; 83 FR 2306; 83 FR 3861):
The drivers were included in docket numbers FMCSA-1999-5748; FMCSA-2002-12844; FMCSA-2003-15892; FMCSA-2005-21711; FMCSA-2008-0231; FMCSA-2009-0054; FMCSA-2009-0154; FMCSA-2011-0124; FMCSA-2011-0142; FMCSA-2013-0025; FMCSA-2013-0027; FMCSA-2013-0028; FMCSA-2013-0029; FMCSA-2013-0030; FMCSA-2013-0165; FMCSA-2014-0297; FMCSA-2014-0298; FMCSA-2015-0055; FMCSA-2015-0056; FMCSA-2015-0070; FMCSA-2015-0071; and FMCSA-2017-0019. Their exemptions are applicable as of December 3, 2019, and will expire on December 3, 2021.
As of December 5, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following four individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (76 FR 64169; 76 FR 75943; 78 FR 62935; 78 FR 65032; 78 FR 76395; 80 FR 67481; 83 FR 2306):
The drivers were included in docket numbers FMCSA-2011-26690; and FMCSA-2013-0166. Their exemptions are applicable as of December 5, 2019, and will expire on December 5, 2021.
As of December 6, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following four individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (70 FR 57353; 70 FR 72689; 72 FR 62897; 74 FR 60021; 76 FR 70210; 78 FR 66099; 80 FR 67481; 83 FR 2306):
The drivers were included in docket number FMCSA-2005-22194. Their exemptions are applicable as of December 6, 2019, and will expire on December 6, 2021.
As of December 15, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following nine individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (80 FR 70060; 81 FR 16265; 83 FR 2306):
The drivers were included in docket number FMCSA-2015-0072. Their exemptions are applicable as of December 15, 2019, and will expire on December 15, 2021.
As of December 17, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following three individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (78 FR 62935; 78 FR 76395; 80 FR 67481; 83 FR 2306):
The drivers were included in docket number FMCSA-2013-0166. Their exemptions are applicable as of December 17, 2019, and will expire on December 17, 2021.
As of December 22, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following individual has satisfied the renewal conditions for
The driver was included in docket number FMCSA-2011-0142. The exemption is applicable as of December 22, 2019, and will expire on December 22, 2021.
As of December 24, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following nine individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (78 FR 63302; 78 FR 64274; 78 FR 77778; 78 FR 77780; 80 FR 67481; 83 FR 2306):
The drivers were included in docket numbers FMCSA-2013-0168; and FMCSA-2013-0169. Their exemptions are applicable as of December 24, 2019, and will expire on December 24, 2021.
As of December 27, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following nine individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (64 FR 27027; 64 FR 51568; 66 FR 53826; 66 FR 63289; 66 FR 66966; 67 FR 10471; 67 FR 19798; 68 FR 64944; 68 FR 69434; 69 FR 19611; 70 FR 48797; 70 FR 53412; 70 FR 57353; 70 FR 61493; 70 FR 67776; 70 FR 72689; 70 FR 74102; 74 FR 60021; 76 FR 75942; 78 FR 67452; 80 FR 67481; 83 FR 2306):
The drivers were included in docket numbers FMCSA-1999-5578; FMCSA-2001-10578; FMCSA-2002-11426; FMCSA-2005-21711; and FMCSA-2005-22194. Their exemptions are applicable as of December 27, 2019, and will expire on December 27, 2021.
As of December 31, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315, the following three individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (68 FR 61857; 68 FR 75715; 71 FR 646; 72 FR 71998; 74 FR 65846; 76 FR 78729; 78 FR 67454; 78 FR 67462; 79 FR 4803; 80 FR 67481; 83 FR 2306):
The drivers were included in docket numbers FMCSA-2003-16241; and FMCSA-2013-0170. Their exemptions are applicable as of December 31, 2019, and will expire on December 31, 2021.
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to renew exemptions for seven individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to continue to operate CMVs in interstate commerce.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates provided below.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
On December 4, 2019, FMCSA published a notice announcing its decision to renew exemptions for seven individuals from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) to operate a CMV in interstate commerce and requested comments from the public (84 FR 66440). The public comment period ended on January 3, 2020, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received no comments in this proceeding.
Based on its evaluation of the seven renewal exemption applications, FMCSA announces its decision to exempt the following drivers from the epilepsy and seizure disorders prohibition in § 391.41(b)(8).
In accordance with 49 U.S.C. 31136(e) and 31315(b), the following groups of drivers received renewed exemptions in the month of November and are discussed below.
As of November 6, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following four individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers (84 FR 66440):
The drivers were included in docket number FMCSA-2011-0389; FMCSA-2013-0107; and FMCSA-2016-0011. Their exemptions are applicable as of November 6, 2019, and will expire on November 6, 2021.
As of November 14, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following three individuals have satisfied the renewal conditions for obtaining an exemption from the epilepsy and seizure disorders prohibition in the FMCSRs for interstate CMV drivers (84 FR 66440): Gary J. Gress (PA); Kenneth Lewis (NC); and Sean Moran (MA).
The drivers were included in docket number FMCSA-2017-0181. Their exemptions are applicable as of November 14, 2019, and will expire on November 14, 2021.
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to renew exemptions for 11 individuals from the hearing requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these hard of hearing and deaf individuals to continue to operate CMVs in interstate commerce.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates provided below.
Ms. Christine A. Hydock, Chief, Medical Programs Division, 202-366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
On August 28, 2019, FMCSA published a notice announcing its decision to renew exemptions for 11 individuals from the hearing standard in 49 CFR 391.41(b)(11) to operate a CMV in interstate commerce and requested comments from the public (84 FR 45199). The public comment period ended on September 27, 2019, and no comments were received.
FMCSA has evaluated the eligibility of these applicants and determined that renewing these exemptions would achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(11).
The physical qualification standard for drivers regarding hearing found in § 391.41(b)(11) states that a person is physically qualified to drive a CMV if that person first perceives a forced whispered voice in the better ear at not less than 5 feet with or without the use of a hearing aid or, if tested by use of an audiometric device, does not have an average hearing loss in the better ear greater than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a hearing aid when the audiometric device is calibrated to American
This standard was adopted in 1970 and was revised in 1971 to allow drivers to be qualified under this standard while wearing a hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3, 1971).
FMCSA received no comments in this proceeding.
Based upon its evaluation of the 11 renewal exemption applications, FMCSA announces its decision to exempt the following drivers from the hearing requirement in § 391.41 (b)(11).
As of May 8, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following 10 individuals have satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers (84 FR 45199):
The drivers were included in docket number FMCSA-2014-0383. Their exemptions are applicable as of May 8, 2019, and will expire on May 8, 2021.
As of May 21, 2019, and in accordance with 49 U.S.C. 31136(e) and 31315(b), Timothy Gallagher (PA) has satisfied the renewal conditions for obtaining an exemption from the hearing requirement in the FMCSRs for interstate CMV drivers. (84 FR 45199)
This driver was included in docket number FMCSA-2014-0102. The exemption is applicable as of May 21, 2019, and will expire on May 21, 2021.
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt seven individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have “no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause loss of consciousness or any loss of ability to control a CMV.” The exemptions enable these individuals who have had one or more seizures and are taking anti-seizure medication to operate CMVs in interstate commerce.
The exemptions were applicable on January 10, 2020. The exemptions expire on January 10, 2022.
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
On December 4, 2019, FMCSA published a notice announcing receipt of applications from seven individuals requesting an exemption from the epilepsy and seizure disorders prohibition in 49 CFR 391.41(b)(8) and requested comments from the public (84 FR 66446). The public comment period ended on January 3, 2020, and one comment was received.
FMCSA has evaluated the eligibility of these applicants and determined that granting exemptions to these individuals would achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with § 391.41(b)(8).
The physical qualification standard for drivers regarding epilepsy found in § 391.41(b)(8) states that a person is physically qualified to drive a CMV if that person has no established medical history or clinical diagnosis of epilepsy or any other condition which is likely to cause the loss of consciousness or any loss of ability to control a CMV.
In addition to the regulations, FMCSA has published advisory criteria
FMCSA received one comment in this proceeding that supported granting these exemptions.
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be
The Agency's decision regarding these exemption applications is based on the 2007 recommendations of the Agency's Medical Expert Panel (MEP). The Agency conducted an individualized assessment of each applicant's medical information, including the root cause of the respective seizure(s) and medical information about the applicant's seizure history, the length of time that has elapsed since the individual's last seizure, the stability of each individual's treatment regimen and the duration of time on or off of anti-seizure medication. In addition, the Agency reviewed the treating clinician's medical opinion related to the ability of the driver to safely operate a CMV with a history of seizure and each applicant's driving record found in the Commercial Driver's License Information System for commercial driver's license (CDL) holders, and interstate and intrastate inspections recorded in the Motor Carrier Management Information System. For non-CDL holders, the Agency reviewed the driving records from the State Driver's Licensing Agency (SDLA). A summary of each applicant's seizure history was discussed in the December 4, 2019,
These seven applicants have been seizure-free over a range of 18 years while taking anti-seizure medication and maintained a stable medication treatment regimen for the last 2 years. In each case, the applicant's treating physician verified his or her seizure history and supports the ability to drive commercially.
The Agency acknowledges the potential consequences of a driver experiencing a seizure while operating a CMV. However, the Agency believes the drivers granted this exemption have demonstrated that they are unlikely to have a seizure and their medical condition does not pose a risk to public safety.
Consequently, FMCSA finds that in each case exempting these applicants from the epilepsy and seizure disorder prohibition in § 391.41(b)(8) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption are provided to the applicants in the exemption document and includes the following: (1) Each driver must remain seizure-free and maintain a stable treatment during the 2-year exemption period; (2) each driver must submit annual reports from their treating physicians attesting to the stability of treatment and that the driver has remained seizure-free; (3) each driver must undergo an annual medical examination by a certified ME, as defined by § 390.5; and (4) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy of his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the seven exemption applications, FMCSA exempts the following drivers from the epilepsy and seizure disorder prohibition, § 391.41(b)(8), subject to the requirements cited above:
In accordance with 49 U.S.C. 31315(b), each exemption will be valid for 2 years from the effective date unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained prior to being granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew exemptions for 76 individuals from the vision requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) for interstate commercial motor vehicle (CMV) drivers. The exemptions enable these individuals to continue to operate CMVs in interstate commerce without meeting the vision requirements in one eye.
Each group of renewed exemptions were applicable on the dates stated in the discussions below and will expire on the dates stated in the discussions below. Comments must be received on or before February 26, 2020.
You may submit comments identified by the Federal Docket Management System (FDMS) Docket No. FMCSA-1999-5748, Docket No. FMCSA-2001-10578, Docket No. FMCSA-2003-15268, Docket No. FMCSA-2003-15892, Docket No. FMCSA-2005-20027, Docket No. FMCSA-2005-21711, Docket No. FMCSA-2005-22194, Docket No. FMCSA-2005-22727, Docket No. FMCSA-2006-26653, Docket No. FMCSA-2007-0017, Docket No. FMCSA-2007-2663, Docket No. FMCSA-2007-27897, Docket No. FMCSA-2007-28695, Docket No. FMCSA-2009-0154, Docket No. FMCSA-2009-0303, Docket No. FMCSA-2011-0092, Docket No.
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To avoid duplication, please use only one of these four methods. See the “Public Participation” portion of the
Ms. Christine A. Hydock, Chief, Medical Programs Division, (202) 366-4001,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-1999-5748; FMCSA-2001-10578; FMCSA-2003-15268; FMCSA-2003-15892; FMCSA-2005-20027; FMCSA-2005-21711; FMCSA-2005-22194; FMCSA-2005-22727; FMCSA-2006-26653; FMCSA-2007-0017; FMCSA-2007-2663; FMCSA-2007-27897; FMCSA-2007-28695; FMCSA-2009-0154; FMCSA-2009-0303; FMCSA-2011-0092; FMCSA-2011-0140; FMCSA-2011-0275; FMCSA-2011-0325; FMCSA-2011-26690; FMCSA-2013-0026; FMCSA-2013-0027; FMCSA-2013-0028; FMCSA-2013-0029; FMCSA-2013-0030; FMCSA-2013-0165; FMCSA-2013-0166; FMCSA-2013-0167; FMCSA-2013-0168; FMCSA-2013-0170; FMCSA-2013-0174; FMCSA-2015-0053; FMCSA-2015-0055; FMCSA-2015-0056; FMCSA-2015-0070; FMCSA-2015-0071; FMCSA-2015-0072; FMCSA-2015-0345; FMCSA-2015-0347; FMCSA-2017-0026; and FMCSA-2017-0027), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
To view comments, as well as any documents mentioned in this notice as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to
Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption from the FMCSRs for no longer than a 5-year period if it finds such exemption would likely achieve a level of safety that is equivalent to, or greater than, the level that would be achieved absent such exemption. The statute also allows the Agency to renew exemptions at the end of the 5-year period. FMCSA grants medical exemptions from the FMCSRs for a 2-year period to align with the maximum duration of a driver's medical certification.
The physical qualification standard for drivers regarding vision found in 49 CFR 391.41(b)(10) states that a person is physically qualified to drive a CMV if that person has distant visual acuity of at least 20/40 (Snellen) in each eye without corrective lenses or visual acuity separately corrected to 20/40 (Snellen) or better with corrective lenses, distant binocular acuity of a least 20/40 (Snellen) in both eyes with or without corrective lenses, field of vision of at least 70° in the horizontal meridian in each eye, and the ability to recognize the colors of traffic signals and devices showing red, green, and amber.
The 76 individuals listed in this notice have requested renewal of their exemptions from the vision standard in § 391.41(b)(10), in accordance with FMCSA procedures. Accordingly, FMCSA has evaluated these applications for renewal on their merits and decided to extend each exemption for a renewable 2-year period.
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b), FMCSA will take immediate steps to revoke the exemption of a driver.
In accordance with 49 U.S.C. 31136(e) and 31315(b), each of the 76 applicants has satisfied the renewal conditions for obtaining an exemption from the vision standard (see 64 FR 40404; 64 FR 66962; 66 FR 53826; 66 FR 66966; 66 FR 66969; 68 FR 37197; 68 FR 52811; 68 FR 61860; 68 FR 69432; 68 FR 69434; 70 FR 2701; 70 FR 16887; 70 FR 48797; 70 FR 57353; 70 FR 61165; 70 FR 61493; 70 FR 71884; 70 FR 72689; 70 FR 74102; 71 FR 644; 71 FR 4632; 72 FR 8417; 72 FR 36099; 72 FR 39879; 72 FR 46261; 72 FR 52419; 72 FR 54971; 72 FR 54972; 72 FR 62896; 72 FR 62897; 72 FR 64273; 72 FR 67340; 72 FR 71993; 72 FR 71995; 72 FR 71998; 73 FR 1395; 73 FR 5259; 73 FR 6246; 74 FR 34395; 74 FR 37295; 74 FR 43221; 74 FR 43223; 74 FR 48343; 74 FR 49069; 74 FR 53581; 74 FR 60021; 74 FR 60022; 74 FR 62632; 74 FR 65845; 74 FR 65847; 75 FR 1450; 75 FR 1451; 75 FR 4623; 76 FR 25766; 76 FR 37169; 76 FR 37885; 76 FR 44652; 76 FR 50318; 76 FR 53708; 76 FR 55469; 76 FR 62143; 76 FR 64164; 76 FR 64169; 76 FR 64171; 76 FR 70210; 76 FR 70212; 76 FR 70215; 76 FR 75940; 76 FR 75943; 76 FR 78728; 76 FR 78729; 76 FR 79760; 77 FR 539; 77 FR 543; 77 FR 545; 77 FR 3554; 77 FR 10608; 78 FR 22598; 78 FR 24798; 78 FR 27281; 78 FR 34143; 78 FR 37270; 78 FR 37274; 78 FR 41188; 78 FR 41975; 78 FR 46407; 78 FR 47818; 78 FR 52602; 78 FR 56986; 78 FR 56993; 78 FR 62935; 78 FR 63302; 78 FR 63307; 78 FR 64271; 78 FR 64280; 78 FR 65032; 78 FR 66099; 78 FR 67454; 78 FR 67460; 78 FR 67462; 78 FR 68137; 78 FR 76395; 78 FR 76704; 78 FR 76705; 78 FR 76707; 78 FR 77780; 78 FR 77782; 78 FR 78475; 78 FR 78477; 79 FR 1908; 79 FR 2748; 79 FR 3919; 79 FR 4803; 79 FR 6993; 79 FR 14333; 79 FR 53708; 80 FR 31635; 80 FR 31640; 80 FR 33007; 80 FR 36395; 80 FR 37718; 80 FR 40122; 80 FR 44188; 80 FR 48411; 80 FR 49302; 80 FR 50915; 80 FR 53383; 80 FR 59225; 80 FR 59230; 80 FR 62161; 80 FR 62163; 80 FR 63839; 80 FR 63869; 80 FR 67472; 80 FR 67476; 80 FR 67481; 80 FR 70060; 80 FR 79414; 80 FR 80443; 81 FR 1284; 81 FR 1474; 81 FR 11642; 81 FR 15401; 81 FR 15404; 81 FR 16265; 81 FR 44680; 81 FR 48493; 82 FR 37499; 82 FR 47312; 83 FR 2292; 83 FR 2306; 83 FR 2311; 83 FR 3861; 83 FR 4537; 83 FR 6922; 83 FR 6925; 83 FR 18648; or 83 FR 24589). They have submitted evidence showing that the vision in the better eye continues to meet the requirement specified at § 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past 2 years indicates each applicant continues to meet the vision exemption requirements. These factors provide an adequate basis for predicting each driver's ability to continue to drive safely in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of 2 years is likely to achieve a level of safety equal to that existing without the exemption.
In accordance with 49 U.S.C. 31136(e) and 31315(b), the following groups of drivers received renewed exemptions in the month of February and are discussed below. As of February 9, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315, the following 61 individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (64 FR 40404; 64 FR 66962; 66 FR 53826; 66 FR 66966; 66 FR 66969; 68 FR 37197; 68 FR 52811; 68 FR 61860; 68 FR 69432; 68 FR 69434; 70 FR 2701; 70 FR 16887; 70 FR 48797; 70 FR 57353; 70 FR 61165; 70 FR 61493; 70 FR 71884; 70 FR 72689; 70 FR 74102; 71 FR 644; 71 FR 4632; 72 FR 8417; 72 FR 36099; 72 FR 39879; 72 FR 46261; 72 FR 52419; 72 FR 54971; 72 FR 54972; 72 FR 62896; 72 FR 62897; 72 FR 64273; 72 FR 67340; 72 FR 71993; 72 FR 71995; 72 FR 71998; 73 FR 1395; 73 FR 5259; 73 FR 6246; 74 FR 34395; 74 FR 37295; 74 FR 43221; 74 FR 43223; 74 FR 48343; 74 FR 49069; 74 FR 53581; 74 FR 60021; 74 FR 60022; 74 FR 62632; 74 FR 65845; 74 FR 65847; 75 FR 1450; 75 FR 1451; 75 FR 4623; 76 FR 25766; 76 FR 37169; 76 FR 37885; 76 FR 44652; 76 FR 50318; 76 FR 53708; 76 FR 55469; 76 FR 62143; 76 FR 64164; 76 FR 64169; 76 FR 64171; 76 FR 70210; 76 FR 70212; 76 FR 70215; 76 FR 75940; 76 FR 75943; 76 FR 78728; 76 FR 78729; 76 FR 79760; 77 FR 543; 77 FR 545; 77 FR 3554; 78 FR 22598; 78 FR 24798; 78 FR 27281; 78 FR 34143; 78 FR 37270; 78 FR 37274; 78 FR 41188; 78 FR 41975; 78 FR 46407; 78 FR 47818; 78 FR 52602; 78 FR 56986; 78 FR 56993; 78 FR 62935; 78 FR 63302; 78 FR 63307; 78 FR 64271; 78 FR 64280; 78 FR 65032; 78 FR 66099; 78 FR 67454; 78 FR 67460; 78 FR 67462; 78 FR 68137; 78 FR 76395; 78 FR 76704; 78 FR 76705; 78 FR 76707; 78 FR 77780; 78 FR 77782; 78 FR 78475; 78 FR 78477; 79 FR 2748; 79 FR 3919; 79 FR 4803; 79 FR 53708; 80 FR 31635; 80 FR 31640; 80 FR 33007; 80 FR 36395; 80 FR 37718; 80 FR 40122; 80 FR 44188; 80 FR 48411; 80 FR 49302; 80 FR 50915; 80 FR 53383; 80 FR 59225; 80 FR 59230; 80 FR 62161; 80 FR 62163; 80 FR 63839; 80 FR 63869; 80 FR 67472; 80 FR 67476; 80 FR 67481; 80 FR 70060; 80 FR 79414; 80 FR 80443; 81 FR 1284; 81 FR 11642; 81 FR 15401; 81 FR 15404; 81 FR 16265; 81 FR 44680; 82 FR 37499; 82 FR 47312; 83 FR 2306; 83 FR 3861; 83 FR 4537; 83 FR 6922; and 83 FR 6925):
The drivers were included in docket numbers FMCSA-1999-5748; FMCSA-2001-10578; FMCSA-2003-15268; FMCSA-2003-15892; FMCSA-2005-20027; FMCSA-2005-21711; FMCSA-2005-22194; FMCSA-2005-22727; FMCSA-2006-26653; FMCSA-2007-0017; FMCSA-2007-2663; FMCSA-2007-27897; FMCSA-2007-28695; FMCSA-2009-0154; FMCSA-2009-0303; FMCSA-2011-0092; FMCSA-2011-0140; FMCSA-2011-0275; FMCSA-2011-26690; FMCSA-2013-0026; FMCSA-2013-0027; FMCSA-2013-0028; FMCSA-2013-0029; FMCSA-2013-0030; FMCSA-2013-0165; FMCSA-2013-0166; FMCSA-2013-0167; FMCSA-2013-0168; FMCSA-2013-0170; FMCSA-2015-0053; FMCSA-2015-0055; FMCSA-2015-0056; FMCSA-2015-0070; FMCSA-2015-0071; FMCSA-2015-0072; and FMCSA-2015-0345. Their exemptions are applicable as of February 9, 2020, and will expire on February 9, 2022.
As of February 12, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following three individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (81 FR 1474; 81 FR 48493; and 83 FR 6925):
The drivers were included in docket number FMCSA-2015-0347. Their exemptions are applicable as of February 12, 2020, and will expire on February 12, 2022.
As of February 16, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following nine individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (83 FR 2292; 83 FR 2311; 83 FR 18648; and 83 FR 24589):
The drivers were included in docket numbers FMCSA-2017-0026; and FMCSA-2017-0027. Their exemptions are applicable as of February 16, 2020, and will expire on February 16, 2022.
As of February 22, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following two individuals have satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (77 FR 539; 77 FR 10608; 79 FR 6993; 81 FR 15401; and 83 FR 6925):
The drivers were included in docket number FMCSA-2011-0325. Their exemptions are applicable as of February 22, 2020, and will expire on February 22, 2022.
As of February 27, 2020, and in accordance with 49 U.S.C. 31136(e) and 31315(b), the following individual has satisfied the renewal conditions for obtaining an exemption from the vision requirement in the FMCSRs for interstate CMV drivers (79 FR 1908; 79 FR 14333; 81 FR 15401; and 83 FR 6925):
The driver was included in docket number FMCSA-2013-0174. The exemption is applicable as of February 27, 2020, and will expire on February 27, 2022.
The exemptions are extended subject to the following conditions: (1) Each driver must undergo an annual physical examination (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirements in 49 CFR 391.41(b)(10), and (b) by a certified medical examiner (ME), as defined by § 390.5, who attests that the driver is otherwise physically qualified under § 391.41; (2) each driver must provide a copy of the ophthalmologist's or optometrist's report to the ME at the time of the annual medical examination; and (3) each driver must provide a copy of the annual medical certification to the employer for retention in the driver's qualification file or keep a copy of his/her driver's qualification if he/her is self-employed. The driver must also have a copy of the exemption when driving, for presentation to a duly authorized Federal, State, or local enforcement official. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315(b).
During the period the exemption is in effect, no State shall enforce any law or regulation that conflicts with this exemption with respect to a person operating under the exemption.
Based upon its evaluation of the 76 exemption applications, FMCSA renews the exemptions of the aforementioned drivers from the vision requirement in § 391.41(b)(10), subject to the requirements cited above. In accordance with 49 U.S.C. 31136(e) and 31315(b), each exemption will be valid for two years unless revoked earlier by FMCSA.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0012 by any one of the following methods:
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Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel REALITY CHECK is:
The complete application is available for review identified in the DOT docket as MARAD-2020-0012 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121.
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By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0006 by any one of the following methods:
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Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel RED JACKET is:
The complete application is available for review identified in the DOT docket as MARAD-2020-0006 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121.
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By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD 2020-0007 by any one of the following methods:
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Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel THE DODO is:
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Where do I go to read public comments, and find supporting information?
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0008 one of the following methods:
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•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel LAPIS LAZULI is:
The complete application is available for review identified in the DOT docket as MARAD-2020-0008 at
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0009 by any one of the following methods:
•
•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel MOLI is:
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0005 by any one of the following methods:
•
•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, email
As described by the applicant the intended service of the vessel TWENTY FOUR VII 2 is:
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121.
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0010 by any one of the following methods:
•
•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey
As described by the applicant the intended service of the vessel PELICAN is:
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirements of the coastwise trade laws to allow the carriage of no more than twelve passengers for hire on vessels, which are three years old or more. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before February 26, 2020.
You may submit comments identified by DOT Docket Number MARAD-2020-0011 by any one of the following methods:
•
•
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Room W23-453, Washington, DC 20590. Telephone 202-366-9309, Email
As described by the applicant the intended service of the vessel GRYPHON is:
Please submit your comments, including the attachments, following the instructions provided under the above heading entitled
Go to the docket online at
Yes. Be aware that your entire comment, including your personal identifying information, will be made publicly available.
If you wish to submit comments under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Department of Transportation, Maritime Administration, Office of Legislation and Regulations, MAR-225, W24-220, 1200 New Jersey Avenue SE, Washington, DC 20590. Include a cover letter setting forth with specificity the basis for any such claim and, if possible, a summary of your submission that can be made available to the public.
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to
49 CFR 1.93(a), 46 U.S.C. 55103, 46 U.S.C. 12121
* * *
By Order of the Maritime Administrator.
Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC).
Joint notice and request for comment.
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), the OCC, the Board, and the FDIC (the agencies) may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. On October 4, 2019, the agencies, under the auspices of the Federal Financial Institutions Examination Council (FFIEC), requested public comment for 60 days on a proposal to revise and extend the Consolidated Reports of Condition and Income (Call Reports) (FFIEC 031, FFIEC 041, and FFIEC 051) and the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101), which are currently approved collections of information.
The comment period for the October 2019 notice ended on December 3, 2019. As described in the
In addition, the agencies are giving notice they are sending the collections to OMB for review.
Comments must be submitted on or before February 26, 2020.
Interested parties are invited to submit written comments to any or all of the agencies. All comments, which should refer to the “Call Report and FFIEC 101 Reporting Revisions,” will be shared among the agencies.
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You may review comments and other related materials that pertain to these information collections following the close of the 30-Day comment period for this notice by any of the following methods:
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All public comments are available on the Board's website at
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Additionally, commenters may send a copy of their comments to the OMB desk officer for the agencies by mail to the Office of Information and Regulatory Affairs, U.S. Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503; by fax to (202) 395-6974; or by email to
For further information about the proposed revisions to the information collections discussed in this notice, please contact any of the agency staff whose names appear below. In addition, copies of the report forms for the Call Report and the FFIEC 101 can be obtained at the FFIEC's website (
All of the proposed changes discussed below affect the Call Reports, while a number of the changes also affect the FFIEC 101. On December 27, 2019, the Board separately proposed to make revisions to the Consolidated Financial Statements for Holding Companies (FR Y-9C)
The agencies propose to extend for three years, with revision, the FFIEC 031, FFIEC 041, and FFIEC 051 Call Reports.
The estimated average burden hours collectively reflect the estimates for the FFIEC 051, the FFIEC 041, and the FFIEC 031 reports for each agency. When the estimates are calculated by type of report across the agencies, the estimated average burden hours per quarter are 36.70 (FFIEC 051), 50.11(FFIEC 041), and 95.42 (FFIEC 031). The estimated burden hours for the currently approved reports are 40.27 (FFIEC 051), 53.72 (FFIEC 041), and 95.60 (FFIEC 031), so the revisions proposed in this notice would represent a reduction in estimated average burden hours per quarter of 3.57 (FFIEC 051), 3.61 (FFIEC 041), and 0.18 (FFIEC 031). The change in burden is predominantly due to changes associated with the community bank leverage ratio final rule. The reduction in average burden hours is significantly less for the FFIEC 031 than for the FFIEC 041 or the FFIEC 051 because greater percentages of institutions that would be eligible to report under the proposed community bank leverage ratio framework currently file the FFIEC 041 or the FFIEC 051 than the FFIEC 031.
The Call Report information collections are mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 324 (for state member banks), 12 U.S.C. 1817 (for insured state nonmember commercial and savings banks), and 12 U.S.C. 1464 (for federal and state savings associations). At present, except for selected data items and text, these information collections are not given confidential treatment.
Banks and savings associations submit Call Report data to the agencies each quarter for the agencies' use in monitoring the condition, performance, and risk profile of individual institutions and the industry as a whole. Call Report data serve a regulatory or public policy purpose by assisting the agencies in fulfilling their shared missions of ensuring the safety and soundness of financial institutions and the financial system and protecting consumer financial rights, as well as agency-specific missions affecting national and state-chartered institutions, such as conducting monetary policy, ensuring financial stability, and administering federal deposit insurance. Call Reports are the source of the most current statistical data available for identifying areas of focus for on-site and off-site examinations. Among other purposes, the agencies use Call Report data in evaluating institutions' corporate applications, including interstate merger and acquisition applications for which the agencies are required by law to determine whether the resulting institution would control more than 10 percent of the total amount of deposits of insured depository institutions in the United States. Call Report data also are used to calculate institutions' deposit insurance assessments and national banks' and federal savings associations' semiannual assessment fees.
The agencies propose to extend for three years, with revision, the FFIEC 101 report.
Each advanced approaches institution
The agencies use data reported in the FFIEC 101 to assess and monitor the levels and components of each reporting entity's applicable capital requirements and the adequacy of the entity's capital under the Advanced Capital Adequacy Framework
On October 4, 2019, the agencies proposed revisions to the Call Reports and the FFIEC 101 that would implement various changes to the agencies' regulatory capital rule
The agencies also proposed a change in the scope of the FFIEC 031 Call Report; a change in the reporting of construction, land development, and other land loans with interest reserves in the Call Report; and Call Report instructional revisions for the reporting of operating lease liabilities and home equity lines of credit (HELOCs) that convert from revolving to non-revolving status.
The comment period for the October 2019 notice ended on December 3, 2019. The agencies received comments on the proposed reporting changes covered in the notice from four entities: Three bankers' associations and one savings association. These comments are addressed in the following sections of this notice.
Except for the proposed TLAC holdings rule, final rules have been adopted for all of the regulatory capital rulemakings addressed in the October 2019 notice. The capital-related reporting changes discussed in the October 2019 notice will be effective in the same quarters as the effective dates of the various capital rules that have been finalized (see Section III below). However, because the proposed TLAC holdings rule has not been finalized, at this time the agencies are not proceeding with the implementation of the TLAC-related reporting changes proposed in the October 2019 notice. Once the proposed TLAC holdings rule is finalized, the agencies plan to issue a 30-day
After carefully considering the comments received on the October 2019 notice, the agencies are adopting the reporting changes proposed in that notice (other than for TLAC) with modifications discussed in the following sections of this notice.
On July 22, 2019, the agencies published a final rule amending their regulatory capital rule to make a number of burden-reducing changes to the capital rule (capital simplifications rule).
The agencies proposed revisions to Call Report Schedule RC-R, Regulatory Capital, in all three versions of the Call Report to implement the associated changes to the agencies' regulatory capital rule effective as of the March 31, 2020, report date, consistent with the final rule that effectively permits early adoption of the capital simplifications rule.
The revisions in the capital simplifications rule would make a number of changes to the calculation of common equity tier 1 (CET1) capital, additional tier 1 capital, and tier 2 capital for non-advanced approaches institutions that do not apply to advanced approaches institutions. Thus, the capital simplifications rule results in different sets of calculations for these tiers of regulatory capital for non-advanced approaches institutions and advanced approaches institutions. At present, the FFIEC 031 and the FFIEC 041 Call Reports are completed by both non-advanced approaches institutions and advanced approaches institutions while only non-advanced approaches institutions are eligible to file the FFIEC 051 Call Report. To mitigate the complexity of revising existing Schedule RC-R, Part I, Regulatory Capital Components and Ratios, to incorporate the different sets of regulatory capital calculations for non-advanced approaches institutions and advanced approaches institutions, and to reflect the effects of the capital simplifications rule in both the FFIEC 031 and FFIEC 041 Call Reports, the agencies proposed in the October 2019 notice to require all advanced approaches institutions to file the FFIEC 031 Call Report effective as of the March 31, 2020, report date.
In the October 2019 notice, the agencies proposed a number of revisions that would simplify the capital calculations on each version of Schedule RC-R, Part I, effective March 31, 2020, and thereby reduce reporting burden. Because both non-advanced approaches institutions and advanced approaches institutions file the FFIEC 031 Call Report, the FFIEC 031 Call Report would include two different sets of calculations (one that incorporates the effects of the capital simplifications rule and another that does not) in adjacent columns in the affected portion of Schedule RC-R, Part I. An institution would complete only the column for the set of calculations applicable to that institution. For the March 31, 2020, report date, non-advanced approaches institutions that file the FFIEC 031 Call Report and elect to adopt the capital simplifications rule on January 1, 2020, would complete the column for the set of calculations that incorporates the effects of the capital simplifications rule. Non-advanced approaches institutions that elect to wait to adopt the capital simplifications rule on April 1, 2020, and all advanced approaches institutions would complete the column for the set of calculations that does not reflect the effects of the capital simplifications rule (
Because advanced approaches institutions currently are not permitted to file the FFIEC 051 Call Report and, as proposed in the October 2019 notice, would not be permitted to file the FFIEC 041 Call Report, the FFIEC 041 and FFIEC 051 Call Reports would include a single column for the capital calculation in Schedule RC-R, Part I, that would be revised effective March 31, 2020, to incorporate the effects of the capital simplifications rule. For the March 31, 2020, report date, non-advanced approaches institutions that file the FFIEC 041 or FFIEC 051 Call Report and elect to adopt the capital simplifications rule on January 1, 2020, would complete the capital calculation column in Schedule RC-R, Part I, as revised for the capital simplifications rule. The agencies would provide instructions for non-advanced approaches institutions that file the FFIEC 041 or FFIEC 051 Call Report that elect to wait to adopt the capital simplifications rule on April 1, 2020, on how to complete Schedule RC-R, including the capital calculation column, for the March 31, 2020, report date in accordance with the capital rule in effect before the capital simplifications rule's revised effective date of January 1, 2020. Such non-advanced approaches institutions would use these instructions on a one-time basis for the March 31, 2020, report date only. Beginning with the June 30, 2020, report date, all non-advanced approaches institutions that file the FFIEC 041 or FFIEC 051 Call Report would complete Schedule RC-R as revised for the capital simplifications rule.
In connection with proposing that all advanced approaches institutions file the FFIEC 031 Call Report in the October 2019 notice, the agencies proposed to remove certain items from the FFIEC 041 Call Report that apply only to advanced approaches institutions. Thus, for Schedule RC-R, Part I, in the FFIEC 041 Call Report, the agencies proposed to remove items 30.b, 32.b, 34.b, 35.b, 40.b, 41 through 43 (Column B only), 45.a, 45.b, and 46.b. The agencies proposed to renumber items 30.a, 32.a, 34.a, 35.a, 40.a, and 46.a as items 30, 32, 34, 35, 40, and 46, respectively.
In the capital simplifications rule, the agencies increased the thresholds for
The current regulatory capital calculations in Call Report Schedule RC-R, which do not yet reflect the revisions contained in the capital simplifications rule, require that an institution's capital cannot include MSAs, certain temporary difference DTAs, and significant investments in the common stock of unconsolidated financial institutions in an amount greater than 10 percent of CET1 capital, on an individual basis, and those three data items combined cannot comprise more than 15 percent of CET1 capital. When the reporting of regulatory capital calculations by non-advanced approaches institutions in accordance with the capital simplifications rule takes effect, this calculation would be revised in Schedule RC-R, Part I, to require that only MSAs or temporary difference DTAs in an amount greater than 25 percent of CET1 capital, on an individual basis, could not be included in a non-advanced approaches institution's regulatory capital. The 15 percent aggregate limit would be removed. In addition, the capital simplifications rule combines the current three categories of investments in financial institutions (non-significant investments in the capital of unconsolidated financial institutions, significant investments in the capital of unconsolidated financial institutions that are in the form of common stock, and significant investments in the capital of unconsolidated financial institutions that are not in the form of common stock) into a single category, investments in the capital of unconsolidated financial institutions, and applies a limit of 25 percent of CET1 capital on the amount of these investments that can be included in capital. Any investments in excess of the 25 percent limit would be deducted from regulatory capital using the corresponding deduction approach.
Consistent with the current capital rule, an institution must risk weight MSAs, temporary difference DTAs, and investments in the capital of unconsolidated financial institutions that are not deducted. The agencies proposed revisions to allow institutions to enter values into the Column K—250% risk weight on Schedule RC-R, Part II, in the FFIEC 051 Call Report, which is currently shaded out, and remove footnote two on the second page of Schedule RC-R, Part II, and the corresponding footnote on subsequent pages of Schedule RC-R, Part II, in all three versions of the Call Reports effective as of the March 31, 2020, report date to accommodate the capital simplifications rule revisions to the risk weight for MSAs and temporary difference DTAs. Consistent with the capital simplifications rule, non-advanced approaches institutions will not be required to differentiate among categories of investments in the capital of unconsolidated financial institutions. The risk weight for such equity exposures generally will be 100 percent, provided the exposures qualify for this risk weight.
In order to implement these regulatory capital changes from a regulatory reporting perspective, the agencies proposed in their October 2019 notice to make a number of revisions to Schedule RC-R, Part I, for non-advanced approaches institutions effective March 31, 2020. Specifically, in Schedule RC-R, Part I, in the FFIEC 041 and FFIEC 051 Call Reports, the agencies proposed to remove item 11 and modify item 13 to reflect the consolidation of all investments in unconsolidated financial institutions into a single category and apply a single 25 percent of CET1 capital limit to these investments. The agencies proposed to modify items 14 and 15 to reflect the 25 percent of CET1 capital limit for MSAs and certain temporary difference DTAs, respectively. The agencies also proposed to remove item 16, which applies to the aggregate 15 percent limitation that was removed from the capital rule for non-advanced approaches institutions. In the FFIEC 031 Call Report, the agencies proposed to create two columns for existing items 11 through 19. Column A would be reported by non-advanced approaches institutions that elect to adopt the capital simplifications rule on January 1, 2020, in the March 2020 Call Report and by all non-advanced approaches institutions beginning in the June 2020 Call Report using the definitions under the capital simplifications rule. Column A would not include items 11 or 16, and items 13 through 15 would be designated as items 13.a through 15.a to reflect the new calculation methodology. Column B would be reported by advanced approaches institutions and by non-advanced approaches institutions that elect to wait to adopt the capital simplifications rule on April 1, 2020, in the March 2020 Call Report and only by advanced approaches institutions beginning in the June 2020 Call Report using the existing definitions. Existing items 13 through 15 would be designated as items 13.b through 15.b to reflect continued use of the existing calculation methodology.
The agencies did not propose any changes to the form to incorporate the minority interest revisions. However, the agencies proposed to modify the instructions for the existing minority interest items in all versions of the Call Report to reflect the ability of non-advanced approaches institutions to use the revised method under the capital simplifications rule to calculate minority interest in existing items 4, 22,
Two commenters opposed the agencies' proposal to require all advanced approaches institutions and Category III institutions to file the FFIEC 031 Call Report because this requirement could impact the reporting burden of numerous small depository institution subsidiaries of holding companies that are advanced approaches and Category III institutions. The agencies agree with the commenters with respect to Category III institutions, and therefore they will allow such institutions that are not otherwise required to file the FFIEC 031 Call Report to file the FFIEC 041 Call Report. To do so, the agencies will retain three existing data items for reporting supplementary leverage ratio information and countercyclical capital buffer information in the FFIEC 041 Call Report for use by Category III institutions. Specifically, the agencies will retain items 45.a and 45.b (renumbered as items 55.a and 55.b) in the FFIEC 041 to collect supplementary leverage ratio information from institutions with domestic offices only and total assets less than $100 billion that are subsidiaries of banking organizations subject to Category III capital standards. Additionally, the agencies will retain item 46.b (renumbered as item 52.b) in the FFIEC 041 to collect countercyclical capital buffer information from Category III institutions.
In proposing to require all advanced approaches institutions to file the FFIEC 031 Call Report (including those advanced approaches institutions that currently file the FFIEC 041 Call Report) in conjunction with the implementation of the capital simplifications rule, the agencies sought to retain a streamlined and straightforward Part I of Schedule RC-R for the more than 1,400 non-advanced approaches institutions that filed the FFIEC 041 Call Report (based on data as of September 30, 2019). When the capital simplifications rule takes effect in the first quarter of 2020, allowing advanced approaches institutions currently filing the FFIEC 041 Call Report to continue to do so, rather than requiring them to begin filing the FFIEC 031 Call Report as had been proposed, would subject all institutions filing the FFIEC 041 to the complexity of the same dual column structure for items 11 through 19 of Schedule RC-R, Part I, that is discussed above in the context of the FFIEC 031 reporting form. The benefit of a simple, straightforward Part I of Schedule RC-R in the FFIEC 041 Call Report that would be applicable only to the more than 1,400 non-advanced approaches institutions is expected to offset the impact on the small group of less than 20 advanced approaches institutions that currently file the FFIEC 041 Call Report of having to migrate to the FFIEC 031 Call Report when the capital simplifications rule takes effect. Thus, the agencies are not adopting the commenters' recommendation to permit advanced approaches institutions currently eligible to file the FFIEC 041 to continue to file this version of the Call Report.
In addition, as a consequence of the technical amendments that the capital simplifications rule made to the agencies' capital rule effective October 1, 2019, the agencies are clarifying when an institution must report the amount of distributions and discretionary bonus payments in Schedule RC-R, Part I, item 48 (which would be renumbered as item 54). The agencies are clarifying the instructions for renumbered item 54 to explain that an institution must report the amount of distributions and discretionary bonus payments made during the calendar quarter ending on the report date if the amount of its capital conservation buffer that it reported for the previous calendar quarter-end report date was less than its applicable required buffer percentage on that previous calendar quarter-end report date. This change will enhance the agencies' ability to monitor compliance with the limitations on distributions and discretionary bonus payments. Institutions must comply with this instructional clarification beginning with the March 31, 2020, report date.
In November 2019, the agencies published a final rule to provide a simplified alternative measure of capital adequacy, the community bank leverage ratio (CBLR), for qualifying community banking organizations with less than $10 billion in total consolidated assets (CBLR final rule).
In addition, the FDIC recently approved a final rule regarding the application of the CBLR framework to the deposit insurance assessment system (CBLR assessments final rule).
Under the CBLR final rule, banking organizations that have less than $10 billion in total consolidated assets, meet risk-based qualifying criteria, and have a leverage ratio of greater than 9 percent are eligible to opt into the CBLR framework. A banking organization that opts into the CBLR framework, maintains a leverage ratio of greater than 9 percent, and meets the other qualifying criteria will not be subject to other risk-based and leverage capital requirements and, in the case of an insured depository institution (IDI), is considered to have met the well capitalized capital ratio requirements for purposes of the agencies' prompt corrective action framework.
Under the CBLR final rule, a bank or savings association (bank) that opts into the CBLR framework (CBLR bank) may opt out of the CBLR framework at any time, without restriction, by reverting to the generally applicable capital requirements in the agencies' capital rule
As described in the CBLR final rule, a banking organization that no longer meets the qualifying criteria for the CBLR framework will be required within two consecutive calendar quarters (grace period) either to once again satisfy the qualifying criteria or demonstrate compliance with the generally applicable capital requirements. During the grace period, the bank would continue to be treated as a CBLR bank and would be required to report its leverage ratio and related components in Call Report Schedule RC-R, Part I, in the manner described in this notice.
In the October 2019 notice, the agencies proposed reporting revisions to the Call Reports for banks that qualify for and opt into the CBLR framework, consistent with the CBLR final rule. The agencies also proposed in the October 2019 notice that the reporting changes to the Call Reports to implement the CBLR framework would take effect in the same quarter as the effective date of the final rule adopting the CBLR framework.
As provided in the CBLR final rule, the numerator of the community bank leverage ratio will be tier 1 capital, which is currently reported in Schedule RC-R, Part I, item 26. Therefore, the agencies are not proposing any changes related to the numerator of the community bank leverage ratio.
As provided in the CBLR final rule, the denominator of the community bank leverage ratio will be average total consolidated assets. Specifically, average total consolidated assets would be calculated in accordance with the existing reporting instructions for Schedule RC-R, Part I, items 36 through 39. The agencies did not propose any substantive changes related to the denominator of the community bank leverage ratio. However, the agencies are proposing to move existing items 36 through 39 of Schedule RC-R, Part I, and renumber them as items 27 through 30 of Schedule RC-R, Part I, to consolidate all of the community-bank-leverage-ratio-related capital items earlier in Schedule RC-R, Part I.
As provided in the CBLR final rule, a CBLR bank will calculate its community bank leverage ratio by dividing tier 1 capital by average total consolidated assets (as adjusted), and the community bank leverage ratio would be reported as a percentage, rounded to four decimal places. Since this calculation is essentially identical to the existing calculation of the tier 1 leverage ratio in Schedule RC-R, Part I, item 44, the agencies are not proposing a separate item for the community bank leverage ratio in Schedule RC-R, Part I. Instead, the agencies proposed to move the tier 1 leverage ratio from item 44 of Part I and renumber it as item 31, and rename the item the Leverage Ratio, as this ratio would apply to all institutions (as the community bank leverage ratio for qualifying institutions or the tier 1 leverage ratio for all other institutions).
As provided in the CBLR final rule, a CBLR bank will need to satisfy certain qualifying criteria in order to be eligible to opt into the CBLR framework. The proposed items identified below would collect information necessary to ensure that a bank continuously meets the qualifying criteria for using the CBLR framework.
Specifically, a CBLR bank is a bank that is not an advanced approaches institution and meets the following qualifying criteria:
• A leverage ratio of greater than 9 percent;
• Total consolidated assets of less than $10 billion;
• Total trading assets and trading liabilities of 5 percent or less of total consolidated assets; and
• Total off-balance sheet exposures (excluding derivatives other than sold credit derivatives and unconditionally cancelable commitments) of 25 percent or less of total consolidated assets.
Accordingly, the agencies proposed to collect the items described below for community bank leverage ratio reporting purposes.
In proposed item 32 of Schedule RC-R, Part I, a CBLR bank would report total assets, as reported in Call Report Schedule RC, item 12.
In proposed item 33, a CBLR bank would report the sum of trading assets from Schedule RC, item 5, and trading liabilities from Schedule RC, item 15, in Column A. The bank would also report that sum divided by total assets from Schedule RC, item 12, and expressed as a percentage in Column B. As provided in the CBLR final rule, trading assets and trading liabilities would be added together, not netted, for purposes of this calculation. Also as discussed in the CBLR final rule, a bank would not meet the definition of a qualifying community banking organization for purposes of the CBLR framework if the percentage reported in Column B is greater than 5 percent.
In proposed items 34.a through 34.d, a CBLR bank would report information related to commitments, other off-balance sheet exposures, and sold credit derivatives.
In proposed item 34.a, a CBLR bank would report the unused portion of conditionally cancelable commitments. This amount would be the amount of all unused commitments less the amount of unconditionally cancelable commitments, as discussed in the planned CBLR final rule and defined in the agencies' capital rule.
In proposed item 34.b, a CBLR bank would report total securities lent and borrowed, which would be the sum of Schedule RC-L, items 6.a and 6.b.
In proposed item 34.c, a CBLR bank would report the sum of certain other off-balance sheet exposures and sold credit derivatives. Specifically, a CBLR bank would report the sum of self-liquidating, trade-related contingent items that arise from the movement of goods; transaction-related contingent items (performance bonds, bid bonds, warranties, and performance standby letters of credit); sold credit protection in the form of guarantees and credit derivatives; credit-enhancing representations and warranties; financial standby letters of credit; forward agreements that are not derivative contracts; and off-balance sheet securitizations. A CBLR bank would not include derivatives that are not sold credit derivatives, such as foreign exchange swaps and interest rate swaps, in proposed item 34.c.
In proposed item 34.d, a CBLR bank would report the sum of proposed items 34.a through 34.c in Column A. The bank would also report that sum divided by total assets from Schedule RC, item 12, and expressed as a percentage in Column B. As discussed in the planned CBLR final rule, a bank would not be eligible to opt into the CBLR framework if this percentage is greater than 25 percent.
In proposed item 35, a CBLR bank would report the total of unconditionally cancellable commitments, which would be calculated consistent with the instructions for existing Schedule RC-R, Part II, item 19. This item is not used specifically to calculate a bank's
In proposed item 36, a CBLR bank would report the amount of investments in the capital instruments of an unconsolidated financial institution that would qualify as tier 2 capital. Since the CBLR framework does not have a total capital requirement, a CBLR bank is neither required to calculate tier 2 capital nor make any deductions that would be taken from tier 2 capital. Therefore, if a CBLR bank has investments in the capital instruments of an unconsolidated financial institution that would qualify as tier 2 capital of the CBLR bank under the generally applicable capital requirements (tier 2 qualifying instruments), and the CBLR bank's total investments in the capital of unconsolidated financial institutions exceed 25 percent of its CET1 capital, the CBLR bank is not required to deduct the tier 2 qualifying instruments. A CBLR bank is required to make a deduction from CET1 capital or tier 1 capital only if the sum of its investments in the capital of an unconsolidated financial institution is in a form that would qualify as CET1 capital or tier 1 capital instruments of the CBLR bank and the sum exceeds the 25 percent CET1 threshold. The agencies believe it is important to continue collecting information on the amount of investments in tier 2 qualifying instruments as excessive investments similarly could warrant the agencies' use of their reservation of authority.
In proposed item 37, a CBLR bank would be required to report its allocated transfer risk reserve (ATRR), as currently calculated and reported in Schedule RC-R, Part II, item 30. In proposed items 38.a through 38.c, a CBLR bank that has adopted Accounting Standards Update (ASU) No. 2016-13 on credit losses must report the amount of any allowances for credit losses on purchased credit-deteriorated loans and leases held for investment, held-to-maturity debt securities, and other financial assets measured at amortized cost, as currently calculated and reported in Schedule RC-R, Part II, Memorandum items 4.a through 4.c. The amount of the ATRR, if any, is necessary to calculate capital and surplus and corresponding limits in a number of the OCC's regulations, including investment securities limits (12 CFR part 1) and lending limits (12 CFR part 32). After an institution adopts ASU 2016-13, allowances for credit losses on purchased credit-deteriorated assets similarly would affect the calculation of these limits. While these limits apply directly to institutions supervised by the OCC, a number of federal or state laws may apply the OCC's calculation of certain limits to state-chartered institutions supervised by the FDIC or the Board. Therefore, the agencies are proposing to retain this information for all CBLR banks. As CBLR banks would not complete Schedule RC-R, Part II, this information would otherwise not be readily available for the agencies to calculate the relevant regulatory limits for these institutions.
Because a CBLR bank would not be subject to the generally applicable capital requirements, a CBLR bank would not need to complete any of the items in Schedule RC-R, Part I, after proposed item 38, nor would the bank need to complete Schedule RC-R, Part II, Risk-Weighted Assets.
In connection with moving the leverage ratio calculations and inserting items for the CBLR qualifying criteria in Schedule RC-R, Part I, existing items 27 through 35 of Schedule RC-R, Part I, will be renumbered as items 39 through 47. Existing items 40 through 43 will be renumbered as items 48 through 51, while existing items 46 through 48 will be renumbered as items 52 through 54. For advanced approaches institutions filing the FFIEC 031 Call Report, existing items 45.a and 45.b for total leverage exposure and the supplementary leverage ratio, respectively, will be renumbered as items 55.a and 55.b.
As proposed in the October 2019 notice, a CBLR bank would indicate that it has elected to apply the CBLR framework by completing Schedule RC-R, Part I, items 32 through 38. Institutions not subject to the CBLR framework would be required to report all data items in Schedule RC-R, Part I, except for items 32 through 38.
While not specifically part of the CBLR final rule, the agencies currently collect information in Call Report Schedule RC-C, Part I, “Loans and Leases,” Memorandum item 13, from institutions that have a significant amount of construction, land development, and other land loans with interest reserves in relation to their total regulatory capital as reported as of the previous calendar year-end report date. At present, total regulatory capital is defined as total capital reported on Schedule RC-R, Part I, item 35 (FFIEC 051) or item 35.a (FFIEC 031 or FFIEC 041). While CBLR banks would no longer report their total capital in Schedule RC-R, Part I, the agencies believe it is still important to collect this information from CBLR banks that have a significant amount of construction, land development, and other land loans with interest reserves. Therefore, effective March 31, 2021,
Two commenters addressed certain aspects of the proposed CBLR reporting revisions. Aspects of the proposed CBLR reporting revisions on which no comments were received, including the proposed change in the reporting threshold for Schedule RC-C, Part I, Memorandum item 13, would be implemented as proposed.
One commenter supported “the proposed line item additions to RC-R, Part I reporting to support changes to the leverage ratio,” but the other commenter recommended removing
The agencies have considered these comments and will retain proposed items 35 through 38.c for reporting by CBLR banks in Schedule RC-R, Part I, as proposed for the reasons cited in the October 2019 notice.
The agencies also will retain the proposed movement of the data items related to the leverage ratio to a position immediately after the calculation of tier 1 capital (designated items 27 through 31 of Schedule RC-R, Part I, as it would be revised) as well as the placement of the proposed data items to be completed only by CBLR banks, including those within the grace period (designated items 32 through 38.c of Schedule RC-R, Part I, as it would be revised). Because all institutions are subject to a leverage ratio requirement, all institutions must calculate and report the ratio's numerator, which is tier 1 capital, and its denominator, which is based on average total assets. As a consequence, items 1 through 31 of Part I would be applicable to and completed by all institutions. Moving the leverage ratio data items as proposed would allow CBLR banks to avoid completing the remainder of Schedule RC-R after item 38.c of Part I, which the agencies believe will be less confusing for CBLR banks than having to complete the leverage ratio items in their current location in Part I of the schedule, which is after numerous items that will not be applicable to CBLR banks.
Furthermore, the agencies will modify the formatting of Schedule RC-R, Part I, to better distinguish the data items that should be completed only by CBLR banks and those that should be completed only by those institutions applying the generally applicable capital requirements. This will be accomplished by improving the captioning before Schedule RC-R, Part I, item 32, which is the first data item to completed only by CBLR banks, and between items 38.c, which is the final data item only for CBLR banks, and item 39, which is the first data item applicable only to other institutions subject to the generally applicable capital requirements. The portion of Schedule RC-R, Part I, applicable only to CBLR banks also will be marked by bordering. These modifications to the formatting of Part I should functionally achieve an outcome similar to the comment suggesting that Part I be split into Parts 1, 2, and 3 with existing Part II then renumbered as Part 4.
In addition, the agencies acknowledge that, under the CBLR final rule, an institution that is eligible to opt into the CBLR framework may choose to opt into or out of this framework at any time and for any reason. Accordingly, the agencies see merit in a commenter's recommendation that an institution should report its status as of the report date regarding the use of the CBLR framework. Therefore, the agencies propose to add a “yes/no” item 31.a to Schedule RC-R, Part I, after item 31, “Leverage ratio,” in which each institution would report whether it has a CBLR framework election in effect as of the quarter-end report date. An institution would answer “yes” if it qualifies for the CBLR framework (even if it is within the grace period) and has elected to adopt the framework as of that report date. Otherwise, the institution would answer “no.” Captioning after the “yes/no” response to item 31.a would indicate which of the subsequent data items in Schedule RC-R should be completed based on the response to item 31.a. This “yes/no” response should assist an institution in understanding which specific data items it should complete in the rest of Schedule RC-R. The response also should assist users of Schedule RC-R in understanding the regulatory capital regime an institution is following as of the report date. The agencies are not adopting a commenter's recommendation to add additional data items relating to use of the CBLR, for example by differentiating between banks that currently meet the CBLR qualifying criteria and those that are within the grace period, as the agencies do not need this additional level of detail in the Call Report.
The agencies believe these modifications to the format and structure of Part I of Schedule RC-R will limit the burden on reporting institutions and lessen possible confusion, including for users of Schedule RC-R and for those qualifying community institutions that elect to adopt the CBLR framework. Redlined drafts of Call Report Schedule RC-R in all three versions of the Call Report as it is proposed to be revised, with the modifications described in this Section II.C.4., will be available on the FFIEC's Reporting Forms web page.
On November 1, 2019, the agencies published a final rule to revise the
Under the tailoring final rule, the most stringent set of standards (Category I) applies to U.S. global systemically important banks (GSIBs). The second set of standards (Category II) applies to banking organizations that are very large or have significant international activity, but are not GSIBs. Like Category I, this category generally includes standards that are based on standards that reflect agreements reached by the Basel Committee on Banking Supervision. The third set of standards (Category III) applies to banking organizations with $250 billion or more in total consolidated assets that do not meet the criteria for Category I or II. The third set of standards also applies to banking organizations with total consolidated assets of $100 billion or more, but less than $250 billion, that meet or exceed other specified risk-based indicators. The fourth set of standards (Category IV) applies to banking organizations with total consolidated assets of $100 billion or more that do not meet the thresholds for one of the other categories.
Under the tailoring final rule, depository institution subsidiaries generally are subject to the same category of standards that apply at the holding company level.
Based on the proposed capital and liquidity requirements that would apply to institutions subject to Category I, II, III, or IV capital standards in the domestic interagency tailoring and foreign interagency tailoring NPRs, the agencies proposed in their October 2019 notice to amend certain regulatory reporting forms to clarify the reporting requirements for those institutions that would be subject to those proposed rules. Specifically, the agencies proposed changes to Call Report Schedule RC-R, Part I, Regulatory Capital Components and Ratios, and FFIEC 101 Schedule A, Advanced Approaches Regulatory Capital, to provide clarification for institutions subject to Category III capital standards.
In addition, the agencies proposed in the October 2019 notice that all institutions subject to Category I, II, or III capital standards would be required to file the FFIEC 031 Call Report. While the agencies proposed to require all advanced approaches institutions to file the FFIEC 031 Call Report in connection with the capital simplifications rule (see Section II.B., above), the tailoring rules would narrow the scope of institutions calculating risk-weighted assets under the advanced approaches. In the October 2019 notice, the agencies stated that they expected the revision in the scope of advanced approaches institutions to have little, if any, impact on current institutions, as all institutions with total consolidated assets of $100 billion or more or with foreign offices already are required to file the FFIEC 031, which generally aligns with the standards for Category I, II, and III institutions. However, the agencies noted in the October 2019 notice that, under the domestic interagency tailoring and foreign interagency tailoring NPRs, institutions that are subsidiaries of institutions subject to Category I, II, or III capital standards also are considered Category I, II, or III institutions. The tailoring final rule maintains the application of the same category of capital standards to depository institution holding companies and their depository institution subsidiaries. Thus, the proposed change in scope for the FFIEC 031 under the October 2019 notice meant that depository institutions considered Category I, II, or III institutions, but not required to file the FFIEC 031 Call Report at that time, would have been required to begin filing the FFIEC 031.
The agencies noted that modifying the scope of the Call Report in this manner would enable them to streamline Schedule RC-R, Part I, of the FFIEC 041 report by removing data items that apply only to the limited number of institutions then considered advanced approaches institutions that were then also eligible to file the FFIEC 041 report and to any future institutions that would, absent this change in scope, be eligible to file the FFIEC 041 report.
In order to implement the clarifications for institutions subject to Category III capital standards, as discussed above, the agencies proposed to require all Category III institutions to file the FFIEC 031 Call Report and to revise the caption for Schedule RC-R, Part I, item 45, “Advanced approaches institutions only: Supplementary leverage ratio information,” on the FFIEC 031 Call Report. Specifically, the agencies proposed to clarify that item 45 (proposed to be renumbered as item 55) applies to “advanced approaches and Category III institutions” on the FFIEC 031 report form. Item 45 would be removed from the FFIEC 041 report form. The instructions for Schedule RC-R, Part I, item 45 (proposed to be renumbered as item 55), in the FFIEC 031-FFIEC 041 instruction book also would be revised in the same manner. The general instructions for Schedule RC-R, Part I, in the FFIEC 031-FFIEC 041 instruction book also would be clarified to indicate that Category III institutions are not required to calculate risk-weighted assets according to the advanced approaches rule, but are subject to the supplementary leverage ratio and countercyclical capital buffer.
To implement the clarification for institutions subject to Category III capital standards, the agencies proposed to revise the instructions for the scope of the FFIEC 101. Specifically, because Category III institutions are not required to calculate risk-weighted assets according to the advanced approaches rule, the FFIEC 101 instructions would be revised to clarify that top-tier Category III bank holding companies, savings and loan holding companies, and insured depository institutions, and all Category III U.S. intermediate holding companies, must complete FFIEC 101 Schedule A, SLR Tables 1 and 2, only and would not complete or file any other part of the FFIEC 101. In addition, any Category III banking organization that is a consolidated subsidiary of a top-tier Category III bank holding company, savings and loan holding company, U.S. intermediate holding company, or insured depository institution would not complete or file any part of the FFIEC 101. Instead, Category III subsidiary banking organizations that file Call Reports would report SLR data in Call Report Schedule RC-R, Part I, item 45 (proposed to be renumbered as item 55).
All Category IV institutions would not complete or file any part of the FFIEC 101.
Two commenters addressed the agencies' proposal to require all institutions subject to Category I, II, or III capital standards to file the FFIEC 031 Call Report. One commenter observed that institutions that are subsidiaries of Category I, II, and III institutions, and therefore also considered Category I, II, and III institutions, will experience increases in overall reporting burden if they currently file the FFIEC 041 Call Report, but now must file the FFIEC 031 Call Report. The other commenter explicitly stated that the agencies should not expand the scope of the FFIEC 031 to require subsidiaries of Category I, II, and III institutions that previously were eligible to file the FFIEC 041 Call Report to file the FFIEC 031 Call Report. This commenter recommended that the agencies confirm that subsidiary depository institutions that currently file the FFIEC 041 or FFIEC 051 Call Report should continue to do so rather than “filing the more burdensome FFIEC 031.”
As previously discussed in Section II.B.3., the agencies have reviewed these comments and are modifying the proposed change in scope as it applies to Category III institutions not currently required to file the FFIEC 031 Call Report. Accordingly, Category III institutions that have less than $100 billion in total assets and have no foreign offices (as defined in the Call Report instructions) would be eligible to file the FFIEC 041 Call Report and would not be required to file the FFIEC 031. Such institutions also would not be eligible to file the FFIEC 051 Call Report. As previously mentioned, to accommodate this modification to the originally proposed change in scope for Category III institutions, the agencies will retain existing SLR information items 45.a and 45.b (proposed to be renumbered as items 55.a and 55.b), as well as existing item 46.b for the countercyclical capital buffer (proposed to be renumbered as item 56.b), in Schedule RC-R, Part I, in the FFIEC 041 Call Report rather than removing these three items from this report as had been proposed. However, the agencies would require all Category I and II institutions, including depository institution subsidiaries of Category I and II institutions, to file the FFIEC 031 Call Report as proposed. As advanced approaches institutions, depository institutions that are Category I and II institutions are not eligible to file the FFIEC 051 Call Report.
Two commenters recommended that Category III institutions should not be required to file the FFIEC 101. Such institutions are not required to calculate risk-weighted assets according to the advanced approaches rule, but are subject to the supplementary leverage ratio (SLR). Thus, the only portions of the FFIEC 101 report applicable to Category III institutions are Supplementary Leverage Ratio Tables 1 and 2. However, one commenter noted that depository institution subsidiaries of Category III institutions, which are themselves considered Category III institutions, are not required to complete these two tables in the FFIEC 101 and instead report specified SLR data only in Call Report Schedule RC-R, Part I.
In support of their recommendation to eliminate SLR data from the FFIEC 101, these commenters asserted that holding companies that report detailed SLR information in the FFIEC 101 report duplicate information in the Board's FR Y-15.
Both commenters also noted that Table 13 of the Pillar 3 disclosures
Although the agencies recognize the existence of overlaps between the SLR information in the FR Y-15, Table 13 of the Pillar 3 disclosures, and SLR Tables 1 and 2 of the FFIEC 101, the latter serves, or can serve, as the source for some or all of the SLR information in the other two. Therefore, the agencies do not agree with the comments that SLR Tables 1 and 2 in the FFIEC 101 duplicate other available information and will retain these tables.
In addition, one commenter suggested that if the requirement to complete SLR Tables 1 and 2 is retained for top-tier Category III banking organizations, as proposed, “a change to Line 2.20 Tier 1 capital for Category III firms to account for Tier 1 capital calculation differences would be appropriate.” On the FFIEC 101 reporting form, the caption for Item 2.20 currently says, “Tier 1 capital (from Schedule A, item 45).” The agencies note that the existing instructions for Item 2.20 already state that an institution “that does not complete Schedule A, except for the SLR disclosures, must use the corresponding item as reported on the institution's Schedule RC-R of the Call Report or Schedule HC-R of the FR Y-9C, as applicable.” Thus, the Item 2.20 instructions already address the commenter's suggestion. However, the agencies will modify the caption for Item 2.20 to clarify the source for the amount of Tier 1 capital to be reported in this item.
On November 19, 2019, the agencies announced that they had finalized the proposed revisions to the SLR for certain central bank deposits of banking organizations predominantly engaged in custodial activities.
In the October 2019 notice, the agencies proposed changes to the instructions for Call Report Schedule
In the October 2019 notice, the agencies proposed to modify the instructions for the calculation of the total leverage exposure to enable an institution that qualifies as a “custodial banking organization” to exclude deposits placed at a “qualifying central bank” from the total leverage exposure reported in Schedule RC-R, Part I, item 45.a (which would become item 54.a of Part I, as proposed above). The excluded deposits would be limited to the amount of deposit liabilities on the consolidated balance sheet of the custodial banking organization that are linked to fiduciary or custody and safekeeping accounts.
In the October 2019 notice, the agencies also proposed to revise the total leverage exposure calculation that would be reported on the FFIEC 101 Schedule A through the addition of a new data item for the qualifying central bank deduction to the calculations of the total leverage exposure in SLR Tables 1 and 2 of this schedule. The new reporting item would be placed between existing data items 1.7 and 1.8 in SLR Table 1 and between data items 2.2 and 2.3 in SLR Table 2.
The agencies received no comments on the proposed changes to Call Report Schedule RC-R, Part I, and FFIEC 101 Schedule A for the SLR for custodial banks and will implement the changes as proposed.
On November 19, 2019, the agencies announced that they had adopted a final rule implementing a new approach for calculating the exposure amount of derivative contracts under the capital rule: The standardized approach for counterparty credit risk (SA-CCR final rule).
The SA-CCR final rule replaces the current exposure methodology (CEM) with SA-CCR in the capital rule for advanced approaches institutions. The final rule requires banking organizations subject to Category I and II standards (Category I and II banking organizations) in the agencies' tailoring final rule,
The SA-CCR final rule also requires Category I and Category II banking organizations to use SA-CCR to determine the exposure amount of derivative contracts for purposes of calculating total leverage exposure for the supplementary leverage ratio. If a Category III banking organization chooses to use SA-CCR to calculate its total risk-weighted assets, it must use SA-CCR to determine the exposure amount of derivative contracts for its total leverage exposure. Where a banking organization has the option to choose among the approaches applicable to such banking organization under the capital rule, it must use the same approach for all purposes.
Furthermore, the final rule allows a clearing member banking organization to recognize the counterparty credit risk-reducing effect of client collateral in replacement cost and potential future exposure (PFE) for purposes of calculating total leverage exposure under certain circumstances. In particular, this treatment applies to a clearing member banking organization's exposure from its client-facing derivative transactions. For such exposures, a clearing member banking organization would use SA-CCR, as applied for risk-based capital purposes, which permits recognition of both cash and non-cash forms of margin in the form of financial collateral received from a client to offset the replacement cost and PFE components for client-facing derivative transactions.
In the October 2019 notice, the agencies proposed to revise the instructions for Call Report Schedule RC-R, Part II, as well as for SLR Table 2 in FFIEC 101 Schedule A, to implement the changes to the calculation of the exposure amount of derivative contracts under the agencies' capital rule.
Additionally, the SA-CCR final rule notes that the FDIC is unable to incorporate the SA-CCR methodology into the deposit insurance assessment pricing methodology for highly complex institutions
A banking organization that applies the generally applicable capital requirements must report the notional amount and regulatory capital exposure amount of its derivatives exposures in Schedule RC-R, Part II. In the October 2019 notice, the agencies proposed to revise the instructions for Schedule RC-R, Part II, to be consistent with SA-CCR. Generally, the proposed revisions to the reporting of derivatives elements in Schedule RC-R, Part II, are driven by the treatment of cleared derivatives' variation margin (settled-to-market versus collateralized-to-market), netting provisions impacting the calculations of notional and exposure amounts, and attributions of derivatives to cleared versus noncleared derivatives. The General Instructions for Schedule RC-R, Part II, and the instructions for Schedule RC-R, Part II, items 20, 21, and Memorandum items 1 through 3 would be revised.
In connection with their calculation of the supplementary leverage ratio, Category I, II, and III banking organizations must report the exposure amount of their derivatives in SLR Table 2 of FFIEC 101 Schedule A. In the October 2019 notice, the agencies proposed to revise the instructions for SLR Table 2 to be consistent with SA-CCR. Institutions that continue to use the CEM would use the current FFIEC 101 Schedule A instructions to complete SLR Table 2.
The agencies did not receive comments specifically addressing their proposals to revise the instructions for Schedule RC-R, Part II, and for FFIEC 101 Schedule A, SLR Table 2, consistent with the SA-CCR final rule. However, two commenters submitted similar questions and requests for clarifications related to certain derivatives reporting issues. In Schedule RC-R, Part II, Memorandum item 3, institutions report the notional principal amounts of centrally cleared derivative contracts by remaining maturity. Commenters sought clarification as to whether, for purposes of reporting derivatives referred to as settled-to-market contracts in Memorandum item 3, the remaining maturity of such derivatives should be the remaining maturity used to determine the conversion factor for the calculation of the PFE of these contracts or the contractual remaining maturity of these contracts. The derivatives information reported in Memorandum items 1 through 3 of Schedule RC-R, Part II, is collected to assist the agencies in understanding, and assessing the reasonableness of, the credit equivalent amounts of the over-the-counter derivatives and the centrally cleared derivatives reported in Schedule RC-R, Part II, items 20 and 21, column B. Accordingly, when reporting settled-to-market centrally cleared derivative contracts in Memorandum item 3, the remaining maturity used to determine the applicable conversion factor should be the basis for reporting. The agencies will clarify the instructions for Memorandum item 3 to address the reporting of settled-to-market contracts.
Both commenters stated that the Call Report instructions do not explain whether institutions should report notional amounts in Schedule RC-L, Derivatives and Off-Balance Sheet Items, and Schedule RC-R, Part II, Risk-Weighted Assets, for derivatives that have matured, but have associated unsettled receivables or payables that are reported as assets or liabilities, respectively, on the balance sheet as of the quarter-end report date. In seeking clarification of the reporting requirements for such situations, the commenters recommended that notional amounts not be reported for derivatives that have matured. The agencies agree and will clarify the Call Report instructions to so indicate.
For purposes of reporting notional amounts in the Call Report, one commenter recommended that the agencies clarify whether the notional amount as defined in U.S. generally accepted accounting principles (GAAP)
Both commenters addressed the reporting of the fair value of collateral held against over-the-counter (OTC) derivative exposures by type of collateral and type of derivative counterparty in Schedule RC-L, item 16.b, and questioned whether this information is meaningful. One commenter requested clarification of the purpose for collecting this information while the other recommended that the agencies no longer collect this information. The data items for reporting the fair value of collateral are applicable to institutions with total assets of $10 billion or more. In general, the agencies use this information in their oversight and supervision of banks engaging in OTC derivative activities. The breakdown of the fair value of collateral posted for OTC derivative exposures in item 16.b provides the agencies with important insights into the extent to which collateral is used as part of the credit risk management practices associated with derivative credit exposures to different types of counterparties and changes over time in the nature and extent of the collateral protection. As a result of the agencies' review of Schedule RC-L in 2016 during their most recent statutorily mandated review of existing Call Report data items,
On December 13, 2019, the agencies published a final rule that conforms the HVCRE exposure definition in section 2 of the capital rule
The agencies' adoption of the HVCRE final rule supersedes the July 6, 2018, interagency statement.
The changes to the HVCRE exposure definition discussed above would also affect the instructions for Schedule G—Wholesale Exposure in the FFIEC 101. Therefore, the agencies also will make conforming revisions to the FFIEC 101 instructions to align with the new HVCRE exposure definition in the final rule effective as of the June 30, 2020, report date.
In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, “Leases,” which added Topic 842, Leases, to the Accounting Standards Codification (ASC). Once ASU 2016-02 is effective for an institution, the ASU's accounting requirements, as amended by certain subsequent ASUs, supersede ASC Topic 840, Leases.
The most significant change that ASC Topic 842 makes to the previous lease accounting requirements is to lessee accounting. Under the lease accounting standards in ASC Topic 840, lessees recognize lease assets and lease liabilities on the balance sheet for capital leases, but do not recognize operating leases on the balance sheet. The lessee accounting model under Topic 842 retains the distinction between operating leases and capital leases, which the new standard labels finance leases. However, the new standard requires lessees to record a right-of-use (ROU) asset and a lease liability on the balance sheet for operating leases. (For finance leases, a lessee's lease asset also is designated an ROU asset.) In general, the new standard permits a lessee to make an accounting policy election to exempt leases with a term of one year or less at their commencement date from on-balance sheet recognition.
For institutions that are public business entities, as defined under U.S. GAAP, Topic 842 is currently in effect. For institutions that are not public business entities, the FASB recently amended the effective date of the new standard so that Topic 842 will now take effect for fiscal years beginning after December 15, 2020, and interim reporting periods within fiscal years beginning after December 15, 2021.
The Call Report Supplemental Instructions for March 2019
The agencies considered the views expressed by these institutions and proposed in the October 2019 notice to require that operating lease liabilities be reported on the Call Report balance sheet in Schedule RC, item 20, “Other liabilities.” In Schedule RC-G, Other Liabilities, operating lease liabilities would be reported in item 4, “All other liabilities.” In subitems of Schedule RC-G, item 4, institutions must itemize and describe any components of this item in amounts greater than $100,000 that exceed 25 percent of the amount reported in item 4. Because of the expected prevalence of operating lease liabilities, the agencies also proposed to add a new subitem with the preprinted caption “Operating lease liabilities” to item 4 to facilitate the reporting of these liabilities when their amount exceeds the reporting threshold for itemizing and describing components of “All other liabilities.” These changes would take effect as of the March 31, 2020, report date.
The agencies received no comments on these proposed revisions for operating lease liabilities and will implement them as proposed.
Institutions report the amount outstanding under revolving, open-end lines of credit secured by 1-4 family residential properties (commonly known as home equity lines of credit or HELOCs) in item 1.c.(1) of Schedule RC-C, Part I, Loans and Leases. The amounts of closed-end loans secured by 1-4 family residential properties are reported in Schedule RC-C, Part I, item 1.c.(2)(a) or (b), depending on whether the loan is a first or a junior lien.
A HELOC is a line of credit secured by a lien on a 1-4 family residential property that generally provides a draw period followed by a repayment period. During the draw period, a borrower has revolving access to unused amounts under a specified line of credit. During the repayment period, the borrower can no longer draw on the line of credit, and the outstanding principal is either due immediately in a balloon payment or repaid over the remaining loan term through monthly payments. Because the Call Report instructions do not address the reporting treatment for a home equity line of credit when it reaches its end-of-draw period and converts from
In September 2015, to address this absence of instructional guidance and promote consistency in reporting, the agencies proposed to clarify the instructions for reporting loans secured by 1-4 family residential properties by specifying that after a revolving open-end line of credit has converted to non-revolving closed-end status, the loan should be reported as closed-end in Schedule RC-C, Part I, item 1.c.(2)(a) or (b), as appropriate.
The agencies continue to believe that it is important to collect accurate data on loans secured by 1-4 family residential properties in the Call Report. Consistent classification of HELOCs based on the status of the draw period is particularly important for the agencies' safety and soundness monitoring. Due to the structure of HELOCs discussed above, borrowers generally are not required to make principal repayments during the draw period, which may create a financial shock for borrowers when they must make a balloon payment or begin regular monthly repayments after the draw period. With some institutions reporting HELOCs past the draw period as revolving, this increases the amounts outstanding, charge-offs, recoveries, past dues, and nonaccruals reported in the open-end category relative to the amounts reported by institutions that treat HELOCs past the draw period as closed-end, which makes the data less useful for agency comparisons and safety and soundness monitoring. In addition, in ASU No. 2019-04,
Therefore, in the October 2019 notice, the agencies re-proposed to clarify the Call Report instructions for Schedule RC-C, Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b), to address continuing diversity in reporting practices by stating that revolving, open-end lines of credit secured by 1-4 family residential properties that have converted to non-revolving closed-end status should be reported as closed-end loans. The effect of this clarification would extend to the instructions for numerous data items elsewhere in the Call Report that reference the Schedule RC-C, Part I, loan category definitions for open-end and closed-end loans secured by 1-4 family residential properties and were identified in the October 2019 notice. That notice also identified a limited number of Call Report data items to which this instructional clarification would not be applied.
To address prior comments regarding the time needed for any systems changes, the agencies proposed that compliance with the clarified instructions would not be required until the March 31, 2021, report date. The October 2019 notice further proposed that institutions not currently reporting in accordance with the clarified instructions would be permitted, but not required, to report in accordance with the clarified instructions before that date.
Three commenters opposed the agencies' proposal to require that HELOCs that have converted to non-revolving closed-end status should be reported as closed-end loans. Commenters cited the numerous data items in multiple Call Report schedules that would be affected by this proposed instructional clarification and the reconfiguration of systems that would need to be undertaken as well as a definitional conflict between the Call Report instructions as the agencies proposed to clarify them and the instructions for the Board's FR Y-14M report filed by holding companies with total consolidated assets of $100 billion or more.
One commenter also requested that the agencies clarify the reporting treatment for “drawdowns of a HELOC Flex product that contain `lock-out' features,” which was described as the borrower's exercise of an option to convert a draw on the line of credit to “a fixed rate interest structure with defined payments and term.”
After considering the comments received, the agencies will not implement the proposed clarification to the instructions for Schedule RC-C, Part I, items 1.c.(1), 1.c.(2)(a), and 1.c.(2)(b) that would result in revolving, open-end lines of credit secured by 1-4 family residential properties that have converted to non-revolving closed-end status being reported as closed-end loans. In light of the guidance in the instructions for the Board's FR Y-14M report that directs reporting entities to continue to report HELOCs that are no longer revolving credits in the Home Equity schedule, the agencies propose to adopt this treatment for Call Report purposes. However, recognizing the existing diversity in practice in which some institutions report HELOCs that have converted from revolving to non-revolving status as closed-end loans in
The agencies also agree with commenters' suggestion to create a memorandum item in Schedule RC-C, Part I, in which institutions would report the amount of HELOCs that have converted to non-revolving closed-end status that are included in item 1.c.(1), “Revolving, open-end loans secured by 1-4 family residential properties and extended under lines of credit.” This new Memorandum item 16 in Schedule RC-C, Part I, would enable the agencies to monitor the proportion of an institution's home equity credits in revolving and non-revolving status and changes therein and assess whether changes in this proportion in relation to changes in past due and nonaccrual home equity credits and charge-offs and recoveries of such credits warrant supervisory follow-up. Memorandum item 16 would be collected quarterly in the FFIEC 031 and the FFIEC 041 Call Reports and semiannually as of June 30 and December 31 in the FFIEC 051 Call Report. To provide time needed for any systems changes, the agencies propose to implement this new memorandum item as of the March 31, 2021, report date in the FFIEC 031 and the FFIEC 041 Call Reports and as of the June 30, 2021, report date in the FFIEC 051 Call Report.
As stated in their October 2019 notice, the agencies plan to make the capital-related reporting changes described in Sections II.B. through II.G. effective the same quarters as the effective dates of the various final capital rules discussed in this notice. Thus, the reporting revisions to the Call Report and the FFIEC 101, as applicable, would take effect March 31, 2020, for the capital simplifications rule, the community bank leverage ratio rule, and the tailoring final rule. In this regard, the filing of the FFIEC 031 Call Report by all institutions that are advanced approaches institutions under the tailoring final rule and the filing of the FFIEC 031 or FFIEC 041 Call Report by institutions considered Category III institutions under this rule would take effect as of March 31, 2020. Non-advanced approaches institutions may elect to wait to adopt the capital simplifications rule for reporting purposes until the June 30, 2020, report date. The reporting revisions to the Call Report and the FFIEC 101, as applicable, would take effect June 30, 2020, for the custodial bank supplementary leverage ratio final rule, the standardized approach for counterparty credit risk on derivative contracts final rule, and the high volatility commercial real estate exposures final rule. However, the mandatory compliance date for reporting in accordance with the standardized approach for counterparty credit risk final rule is the March 31, 2022, report date.
In addition, the reporting of operating lease liabilities as “All other liabilities” in Call Report Schedule RC-G would take effect March 31, 2020, and the change in the reporting of construction, land development, and other land loans with interest reserves in Call Report Schedule RC-C, Part I, would take effect March 31, 2021. The requirement to continue reporting HELOCs that convert to closed-end status as open-end loans in Schedule RC-C, Part I, would apply to those HELOCs that convert on or after January 1, 2021, with pre-2021 conversions subject to the transition guidance described in Section II.I. above; new Memorandum item 16 in Schedule RC-C, Part I, for HELOCs in non-revolving closed-end status that are reported as open-end loans would take effect March 31, 2021, in the FFIEC 031 and the FFIEC 041 Call Reports and June 30, 2021, in the FFIEC 051 Call Report.
The specific wording of the captions for the new or revised Call Report data items discussed in this notice and the numbering of these data items should be regarded as preliminary.
Public comment is requested on all aspects of this joint notice. Comment is specifically invited on:
(a) Whether the proposed revisions to the collections of information that are the subject of this notice are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
(b) The accuracy of the agencies' estimates of the burden of the information collections as they are proposed to be revised, including the validity of the methodology and assumptions used;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of information collections on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Comments submitted in response to this joint notice will be shared among the agencies.
Federal Deposit Insurance Corporation.
Financial Crimes Enforcement Network (“FinCEN”), Treasury.
Notice and request for comments.
As part of its continuing effort to reduce paperwork and respondent burden, FinCEN invites comments on the proposed renewal, without change, to a currently approved information collection regarding registration of money services businesses regulations and FinCEN Form 107—Registration of Money Services Business (“RMSB”). Money services businesses (“MSBs”) must register with FinCEN using FinCEN Form 107, renew their registration every two years, and maintain a list of their agents. This request for comments is made pursuant to the Paperwork Reduction Act of 1995.
Written comments are welcome and must be received on or before March 27, 2020.
Comments may be submitted by any of the following methods:
•
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Please submit comments by one method only. All comments submitted in response to this notice will become a matter of public record. Therefore, you should submit only information that you wish to make publicly available.
The FinCEN Resource Center at 800-767-2825 or electronically at
FinCEN exercises regulatory functions under the Currency and Financial Transactions Reporting Act of 1970, as amended by the USA PATRIOT Act of 2001 and other legislation. This legislative framework is commonly referred to as the Bank Secrecy Act (“BSA”).
Under 31 U.S.C. 5330 and its implementing regulation (31 CFR 1022.380), MSBs
Each MSB, with a few exceptions, must register with the FinCEN. The information required by 31 U.S.C 5330 and any other information required by FinCEN Form 107 must be reported in the manner and to the extent required by the form.
A person that is an MSB solely because that person serves as an agent of another MSB is not required to register.
The information collected and retained under the regulations addressed in this notice assists Federal, state, and local law enforcement, as well as regulatory authorities, in the identification, investigation, and prosecution of money laundering and other matters. The collection of information is mandatory.
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. Records required to be retained under the BSA must be retained for five years. Generally, information collected pursuant to the BSA is confidential, but may be shared as provided by law with regulatory and law enforcement authorities.
Commodity Futures Trading Commission.
Final rule.
The Commodity Futures Trading Commission (Commission) is amending certain regulations applicable to registered derivatives clearing organizations (DCOs). The amendments address certain risk management and reporting obligations, clarify the meaning of certain provisions, simplify processes for registration and reporting, and codify existing staff relief and guidance, among other things. In addition, the Commission is adopting technical amendments to certain provisions, including certain delegation provisions, in other parts of its regulations.
Eileen A. Donovan, Deputy Director, 202-418-5096,
Section 5b(c)(2) of the Commodity Exchange Act (CEA) sets forth core principles with which a DCO must comply in order to be registered and to maintain registration as a DCO (DCO Core Principles),
Since the part 39 regulations were adopted, Commission staff has worked with DCOs to address questions regarding interpretation and implementation of the requirements established in the regulations. In May 2019, the Commission proposed certain changes to its part 39 regulations (Proposal)
The Commission invited commenters to provide data and analysis regarding any aspect of the proposed rulemaking and received a total of 14 substantive comment letters in response.
In the discussion below, the Commission highlights topics of particular interest to commenters and discusses comment letters that are representative of the views expressed on those topics. The discussion does not explicitly respond to every comment submitted; rather, it addresses the most significant issues raised by the proposed rulemaking and analyzes those issues in the context of specific comments.
The Commission is adopting as proposed two amendments in part 1 of its regulations in order to remove inapplicable provisions and to clarify when certain requirements do not apply.
Regulation 1.20(d)(1) requires a futures commission merchant (FCM) to obtain from each depository with which the FCM deposits futures customer funds, a written acknowledgment that meets certain requirements set forth in § 1.20(d)(3) through (6). Regulation 1.20(d)(1) further provides, however, that an FCM is not required to obtain a written acknowledgment from a DCO that has adopted rules that provide for the segregation of customer funds in accordance with all relevant provisions of the CEA and the Commission's rules and orders thereunder. The Commission proposed to amend § 1.20(d) to clarify that the requirements listed in § 1.20(d)(3) through (6) do not apply to a DCO, or to an FCM that clears through that DCO, if the DCO has adopted rules that provide for the segregation of customer funds. The Commission also proposed to amend § 1.20(d)(7) and (8) to explicitly account for FCMs that deposit customer funds with a DCO and thus are not required to obtain a written acknowledgment letter.
ICE, FIA, and ISDA supported the proposed changes, with FIA and ISDA noting that clarifying the applicability of § 1.20(d)(3) through (6) avoids redundant information-sharing arrangements.
In 2011, the Commission removed and replaced § 39.2, which previously had exempted DCOs from all Commission regulations except for those specified therein (§ 39.2 exemption).
However, the Commission did not adopt those superseding regulations, and §§ 1.59, 1.63, and 1.69 became applicable to DCOs with the removal of the § 39.2 exemption. Therefore, the Commission proposed to restore DCOs' exemption from §§ 1.59, 1.63, and 1.69 by removing “clearing organization” from the definition of “self-regulatory organization” in each of those regulations. The Commission also proposed to amend § 1.64 to remove language that the amendments to the other provisions would render unnecessary. The Commission did not receive any comments on the proposed changes to §§ 1.59, 1.63, 1.64, and 1.69.
Regulation 39.2 sets forth definitions applicable to terms used in part 39 of the Commission's regulations. After § 39.2 was adopted, the Commission adopted definitions for some of the same terms that apply in other Commission regulations. The Commission is adopting changes to five definitions in § 39.2 in order to maintain consistency with terms defined elsewhere in Commission regulations and to provide clarity with respect to the use of these terms.
The Commission is removing § 39.19(b)(3), which defines “business day,” and moving the definition of “business day” to § 39.2 to make clear that it applies wherever the term is used in part 39. The Commission is also clarifying that the term “Federal holiday” in the “business day” definition refers to the schedule of U.S. federal holidays established under 5 U.S.C. 6103, and adding “any holiday on which a [DCO] and its domestic financial markets are closed” rather than “foreign holiday,” as originally proposed, to the list of exceptions to the definition of “business day.”
The Commission received two comments on the proposed changes to the definition of “business day.” CME suggested substituting “market holiday” for “foreign holiday” in the definition of “business day” to also recognize days that are not Federal holidays when U.S. markets are closed. ICE supported the Commission defining “foreign holiday” and adding the term to the list of exceptions to the definition of “business day,” but also noted potential conflicts between the proposed definition of “business day” in § 39.2 and the definition of “business day” in §§ 1.3 and 39.19(b)(3).
The Commission agrees that any day on which markets are closed should not be considered a business day, and therefore is adopting the proposed definition of “business day” with the substitution of “any holiday on which a [DCO] and its domestic financial markets are closed” for “foreign holiday,” to encompass both foreign and U.S. market holidays.
In proposing to define “business day” in § 39.2, the Commission also proposed to remove the definition in § 39.19(b)(3), to avoid any conflict between those provisions. The Commission is removing the definition of “business day” from § 39.19(b)(3). The Commission recognizes that the definition of “business day” in § 39.2 differs slightly from the definition of “business day” in § 1.3, but notes that the definition in § 39.2 is meant specifically for application to part 39.
The Commission is removing the definition of “customer” and modifying the definition of “customer account or customer origin” in § 39.2 because those terms were defined in § 1.3 after § 39.2 was adopted.
ICE commented that, for DCOs organized outside of the United States, references to customer accounts under the proposed definitions do not distinguish appropriately between customer accounts carried by FCM clearing members and customer accounts carried by non-FCM clearing members, which may be subject to segregation and other requirements under non-U.S. law rather than under the CEA. ICE therefore suggested that the Commission clarify the application of the definitions to non-U.S. DCOs. In response to ICE's comment, the Commission notes that “customer” is defined in § 1.3 to mean “any person who uses a [FCM] . . . .”
The Commission is adopting as proposed the definition of “enterprise risk management” because the term is used in § 39.10(d), which is discussed below. The Commission did not receive any comments on the proposed definition.
The Commission is adopting the definition of “fully collateralized position” in conjunction with proposed exceptions from several part 39 regulations for DCOs that clear fully collateralized positions, as discussed below. Nadex requested clarification of the meaning of the word “counterparty” in the definition of “fully collateralized,” and suggested replacing the word with “party” because “counterparty” implies that the DCO need only hold sufficient funds to cover the maximum possible loss that the counterparty may sustain, but to be fully collateralized the DCO must hold sufficient funds to cover the maximum possible loss of each party. In response to Nadex's comment, the Commission is including “party,” in addition to “counterparty,” in the definition of “fully collateralized position” to make clear that the definition is intended to include each party to a contract.
The Commission is adding “chief information security officer” (CISO) to the list of positions identified in the definition of “key personnel” in § 39.2. Nadex requested clarification that it is sufficient for a staff member to be assigned the responsibilities of a CISO in addition to other responsibilities of their role. Nadex also requested guidance confirming that the CISO may be employed by the DCO or by an affiliate, and that, with respect to a DCO that is also a designated contract market (DCM), an individual may fulfill the role of CISO for both the DCM and DCO.
The Commission confirms that a DCO staff member may be assigned the responsibilities of a CISO in addition to other responsibilities of their role; the CISO may be employed by the DCO or by an affiliate; and, for a DCO that is also a DCM, an individual may fulfill the role of CISO for both the DCM and DCO.
The Commission is adopting several changes to its procedures for registration as a DCO generally as proposed. These changes include: Revisions to § 39.3(a)(1) to improve the clarity and consistency of the text; revisions to Form DCO to correspond to other proposed revisions to the part 39 regulations; providing greater flexibility in § 39.3(a)(3) for DCO applicants submitting supplemental information; clarifying references in § 39.3(a)(5) to the portion of the Form DCO cover sheet and other application materials that will be made public; and, in new § 39.3(a)(6), permitting the Commission to extend the 180-day review period for DCO applications for any period of time to which the applicant agrees in writing. The Commission did not receive any comments on these proposed changes.
The Commission is adopting as proposed the change to § 39.3(b)(2) to correct inaccurate language. In § 39.3(b)(2), which is the Commission's delegation of authority to the Director of the Division of Clearing and Risk to stay an application for DCO registration that is materially incomplete, the Commission is adopting a change to replace the inaccurate “designation” with “registration.” The Commission did not receive any comments on this change.
The Commission is adopting as proposed three changes to procedures in § 39.3(a)(2) for a registered DCO requesting an amended order of registration, to reflect current Commission practice. The rule will no longer require use of Form DCO to request an amended order of registration under § 39.3(a)(2), and an applicant will only need to file amended exhibits and other information when filing a Form DCO to update a pending application under § 39.3(a)(4). The Commission also is adopting new § 39.3(d) to establish a separate process for such requests.
ICE supported the proposal to eliminate using Form DCO to request an amended registration order, and stated that it believes the modification to § 39.3(a)(2) will help streamline the process for a DCO to file a request for an amended order.
Regulation § 39.3(d) establishes the procedure for a dormant DCO to reinstate its registration before it can begin “listing or relisting” products for clearing. The Commission is adopting as proposed changes to § 39.3(d), renumbered as § 39.3(e), to correct inaccurate language. Specifically, the Commission is adopting an amendment to replace “listing or relisting” with “accepting” to more accurately describe a DCO's activities. The Commission did not receive any comments on these proposed changes.
The Commission is adopting as proposed changes to § 39.3(e), renumbered as § 39.3(f), to codify requirements for a DCO requesting vacation of its registration, and provide greater transparency to any DCO that is considering vacating its registration.
The Commission is adopting changes to § 39.3(f), renumbered as § 39.3(g), to simplify the requirements for a DCO to request a transfer of open interest and to separate the process from the procedures used to report a change to a
Under the amendments to § 39.3(g), a DCO seeking to transfer its open interest will be required to submit rules for Commission approval pursuant to § 40.5,
CME and ICE generally supported the proposed changes to § 39.3(g) regarding requests to transfer open interest. CME noted that a DCO cannot unilaterally transfer to another DCO open interest associated with contracts that are subject to the rules of a DCM, as those transfers must be authorized by the DCM through rule amendment or otherwise. CME referred to procedures under § 38.3(d) for a DCM to transfer open interest associated with contracts listed on a DCM to another DCM, in connection with a change of registration. The Commission agrees that where a DCO is requesting transfer of open interest under § 39.3(g) for contracts listed on a DCM, the DCM also would be subject to applicable Commission regulations, including part 38.
CME and ICE also supported use of the rule approval process under § 40.5 for submission of requests to transfer open interest. ICE suggested that it may be appropriate for a transfer to take effect pursuant to a self-certification under § 40.6 where the transfer does not raise any particular novel issues or concerns. ICE further requested that the Commission clarify that it may, in appropriate circumstances, take action on a transfer request in less than 45 days, both in circumstances that do not raise particular concerns and in exigent or distressed circumstances in which the full period may not be necessary or feasible. The Commission declines to adopt ICE's suggestion to permit a transfer of open interest to be made pursuant to § 40.6 and is adopting the requirement to submit such requests under § 40.5 as proposed. The Commission only has ten business days to review rules submitted pursuant to § 40.6, which the Commission believes is not sufficient time to review rules related to transfers of open interest. The Commission reviews transfers of open interest to ensure that clearing members have sufficient notice of the transfer, because there may be clearing members of the transferring DCO that are not members of the receiving DCO. Such clearing members may need time to become members of the receiving DCO or to close out their positions, and if they are FCMs that clear for customers, to transfer their customers to other FCMs if necessary. The Commission also reviews the transfer plans (typically there is a transition agreement between the DCOs) to make sure that the associated risks will be adequately managed. The Commission confirms, however, that under § 40.5(g), it has the ability to expedite its approval of a request where appropriate.
ICE also suggested clarification of procedures for transfers between a registered DCO and a clearing organization that is not a registered DCO (such as a foreign clearing organization that is either an exempt DCO or otherwise not subject to DCO registration based on its activities). As the Commission noted in the Proposal, under the existing regulatory framework, all futures positions and U.S. customer swap positions must be cleared by a registered DCO, while proprietary swap positions of U.S. persons may be cleared by a registered or exempt DCO.
The Commission is adopting two non-substantive changes to its procedures for implementing DCO rules and clearing new products in § 39.4, to remove or correct certain references. The Commission did not receive any comments on the proposed amendments to § 39.4 and is adopting them as proposed.
Regulation 39.4(a) specifies that an applicant for registration or a registered DCO may request, pursuant to the procedures set forth in § 40.5, that the Commission approve any or all of its rules prior to their implementation. In practice, the Commission's review of applications for DCO registration includes review of the applicant's rules, which are required to be submitted as Exhibit A-2 to Form DCO. The Commission's issuance of an order of registration as a DCO constitutes an approval of the applicant's rules that were submitted as part of the application. Accordingly, the Commission is deleting the reference in § 39.4(a) to an applicant for registration, as it is unnecessary for an applicant to separately request approval of its rules.
Regulation 39.4(e) establishes certain procedural requirements that apply to a DCO seeking approval for a futures account portfolio margining program. Under § 39.4(e), a DCO seeking to provide a portfolio margining program under which securities would be held in a futures account is required to petition the Commission for an order “under section 4d of the [CEA].” To conform terminology to other provisions in part 39 which distinguish between futures accounts subject to section 4d(a) of the CEA and cleared swaps accounts subject to section 4d(f) of the CEA, the Commission is substituting “section 4d(a)” for “section 4d” in § 39.4(e).
The Commission is amending certain regulations in part 39 to address fully collateralized positions, which do not pose the full range of risks that the regulations are meant to address. As discussed in the Proposal, fully collateralized positions do not expose DCOs to many of the risks that traditionally margined products do, as
The amendments are based on an assessment of how the DCO Core Principles and part 39 apply to fully collateralized positions, as well as the relief previously granted to DCOs that clear such positions. The Commission believes the amendments will not negatively impact prudent risk management at any DCO, regardless of the types of products cleared. The amendments to each provision are discussed in this section, whereas specific comments are addressed in conjunction with the discussion of those provisions further below.
As discussed above, the Commission is adopting a definition of “fully collateralized position” as a contract cleared by a DCO that requires the DCO to hold, at all times, funds in the form of the required payment sufficient to cover the maximum possible loss that a party or counterparty could incur upon liquidation or expiration of the contract.
Regulation 39.11(a)(1) requires a DCO to maintain financial resources sufficient to meet its financial obligations to its clearing members notwithstanding a default by the clearing member creating the largest financial exposure for the DCO in extreme but plausible market conditions. Regulation 39.11(c)(1)
Regulation 39.11(e)(1)(ii) requires that the financial resources allocated by a DCO to meet the requirements of § 39.11(a)(1) (
Regulation 39.12(a)(5)(i) requires a DCO to require its clearing members to provide the DCO with periodic financial reports that allow the DCO to assess whether participation requirements are being met on an ongoing basis. Regulation 39.12(a)(5)(i)(B)
Regulation 39.13(h)(3) requires a DCO to conduct stress testing on a daily basis with respect to each large trader who poses significant risk to a clearing member or the DCO, and at least on a weekly basis with respect to each clearing member account, by house origin and by each customer origin. The Commission is adding new § 39.13(h)(3)(iii) to exclude clearing member accounts that hold only fully collateralized positions from the stress testing requirements in § 39.13(h)(3)(i) and (ii). As discussed above, DCOs hold, at all times, the full potential loss of fully collateralized positions cleared by the DCO, and a DCO does not face the risk of default from accounts that only hold fully collateralized positions. As a result, such stress tests would not provide DCOs new information on accounts that only clear fully collateralized positions.
Regulation 39.16(a) requires a DCO to have rules and procedures designed to allow for the efficient, fair, and safe management of events during which clearing members become insolvent or otherwise default on their obligations to the DCO. Regulation 39.16(b) and (c)
Regulation 39.19(c)(1)(i) requires a DCO to submit to the Commission a daily report containing information on initial margin, daily variation margin payments, other daily cash flows, and end-of-day positions. The Commission is amending § 39.19(c)(1)(i) such that the enumerated daily reporting is not required with respect to fully collateralized positions. Because fully collateralized positions do not pose a credit risk to the DCO or other participants, the Commission does not need daily reporting of this information with respect to fully collateralized positions.
The Commission is adopting several amendments to § 39.10(c) to permit greater flexibility in the reporting requirements applicable to the Chief Compliance Officer (CCO) for DCOs engaged in substantial activities not related to clearing. These amendments are intended to make the process of preparing the CCO's annual report more efficient, to improve clarity and consistency of the regulations, and to require that the CCO's annual report describe the process by which the report is provided to the board of directors or senior officer so that compliance with existing regulations is evident outside the context of an examination of the DCO's board of directors' meeting minutes or other records. Unless stated otherwise below, the Commission did not receive any comments on the proposed amendments to § 39.10(c) and is adopting them as proposed.
The Commission is amending § 39.10(c)(1)(ii) to permit a DCO's CCO to report to the senior officer responsible for the DCO's clearing activities if the DCO engages in substantial activities not related to clearing (for example, if the DCO is also a DCM). The Commission is also amending § 39.10(c)(4)(i) to permit the CCO to submit the annual report to the same individual (or to the board of directors) for internal review. CME supported these proposed amendments, noting that the senior officer responsible for the DCO's clearing activities is most familiar with the day-to-day operations of the DCO and its personnel and is therefore generally best positioned to ensure that the compliance program implemented by the CCO is appropriately designed to ensure compliance with the CEA and Commission regulations.
The Commission is amending § 39.10(c)(3)(i) to permit the CCO's annual report to incorporate by reference the parts of its most recent CCO annual report containing descriptions of the DCO's written policies and procedures, to the extent that such policies and procedures have not materially changed since they were most recently described in a previously submitted CCO annual report submitted within the five-year period prior to the date of the CCO annual report containing such incorporation by reference. CME strongly supported these proposed revisions, noting that they reduce the requirement to provide duplicative information contained in previous reports and thus reduce the administrative burden on both the DCO's compliance staff and Commission staff. CME also commented that the five-year timeframe for re-introducing materially unchanged policies is appropriate.
The Commission is amending § 39.10(c)(3)(ii)(A), which requires the CCO to prepare an annual report that reviews each “core principle and applicable Commission regulation,” and with respect to each, identifies the compliance policies and procedures that are designed to ensure compliance “with the core principle,” to change the latter language to “with each core principle and applicable regulation.” The Commission is also amending § 39.10(c)(3)(ii) to clarify that, for SIDCOs and subpart C DCOs, this includes the Commission's regulations in subpart C of part 39. In addition, the regulation now requires that the compliance policies and procedures be identified “by name, rule number, or other identifier.”
The Commission is amending § 39.10(c)(4)(i) to require that the CCO's annual report describe the process by which it was submitted to the board of directors or the senior officer. In response to a comment described below, rather than requiring that the CCO's annual report include the date on which it was submitted to the board of directors or the senior officer, the Commission is further amending § 39.10(c)(4)(i) to require that it be accompanied by a cover letter, notice, or other document that specifies the date of submission. Lastly, the Commission is amending § 39.10(c)(4)(ii) to remove the requirement that the annual report be submitted concurrently with the DCO's fiscal year-end audited financial statement to be consistent with a change to § 39.19(c)(3)(iv) explained below.
CME stated that including within the annual report the date on which the annual report was submitted to the board of directors or the senior officer, per the proposed amendments to § 39.10(c)(4)(i), is problematic because the report would need to be prepared and distributed “well in advance” of a board or committee meeting or other intended date. CME noted that a change of meeting date or agenda could render the date included in the report inaccurate. CME therefore recommended that the CCO's annual report include the intended date of submission, but that a cover sheet be added to the report after the meeting that either confirms that the date within the report is correct or provides an alternative date specifying when the report was actually provided. The Commission agrees that the revisions, as proposed, could cause the report to be inaccurate in the event of a delay or other scheduling change. In light of CME's comments, the Commission is not including in § 39.10(c)(4)(i) the proposed requirement that the CCO's annual report include the date of submission and is replacing it with a requirement that the annual report be accompanied by a cover letter, notice, or other document that specifies the date of submission.
Nadex suggested that the Commission consider conforming the language of the CCO's duties and annual report requirements in § 39.10 with that of § 3.3, which pertains to the CCOs of FCMs, swap dealers, and major swap participants. The Commission is not adopting this change, because recent amendments to § 3.3 were largely intended to more closely harmonize these requirements with corresponding rules of the Securities and Exchange Commission (SEC) for CCOs of security-based swap dealers and major security-
The Commission is adopting new § 39.10(d), which requires a DCO to have a program of enterprise risk management and to identify as its enterprise risk officer an appropriate individual that exercises the full responsibility and authority to manage the DCO's enterprise risk management function.
ICE was generally supportive of § 39.10(d) as proposed, and CME agreed with several aspects of the proposal. MGEX recognized the value that an enterprise risk management program provides in ensuring the integrity of DCOs and the financial markets and agreed that a DCO should assess and manage the broad array of risks identified in the Proposal. MGEX requested that the Commission grant a longer time period for compliance to allow DCOs adequate time to implement the program, given the extensive nature of an enterprise risk management program and the work that will be involved in developing such a program. The Commission is giving DCOs one year to comply with the amendments to the regulations.
The Commission did not receive any comments specifically on §§ 39.10(d)(1), (d)(2), or (d)(3), and is finalizing these paragraphs as proposed.
The Commission received several responses to a request for comment regarding whether the enterprise risk officer should be required to report directly to the board of directors of the organization for which the enterprise risk officer is responsible for managing the risks. OCC stated that, generally, the enterprise risk officer should report directly to the board of directors, or to an appropriate committee of the board of directors, but also commented that a DCO should have the discretion to determine whether the enterprise risk officer should report directly to the board of directors, a committee of the board, or the senior officer responsible for a DCO's clearing activities. CME commented that the enterprise risk officer should have access to the board of directors and its relevant committees and should provide regular reports to the board or its relevant committees, but did not believe it is necessary for the enterprise risk officer to have a direct administrative reporting relationship to the board or its committees. Nadex stated that the enterprise risk officer should not report to the DCO's board of directors because the purpose of a board of directors is to provide oversight and strategic guidance to the organization, not management of specific individuals within the organization. Nadex suggested that the enterprise risk officer provide reports to the board but could report to the DCO's chief executive officer, chief risk officer, or other appropriate officer of the DCO or a parent company.
In light of the comments, the Commission has concluded that a DCO should have the discretion to determine whether its enterprise risk officer will report directly to the board of directors, to an appropriate committee of the board of directors, or to the senior officer responsible for the DCO's clearing activities. Regardless of the formal reporting relationship, however, the Commission believes that the enterprise risk officer should have access to the board of directors to ensure that the board receives reports and information from the enterprise risk officer. The Commission is therefore finalizing proposed § 39.10(d)(4) with additional language requiring such access.
The Commission also requested comment as to whether a DCO's chief risk officer should be permitted to also serve as its enterprise risk officer, and commenters generally were supportive. Nadex noted that the two positions “do not have conflicting purposes.” OCC noted that a chief risk officer is typically the individual with the greatest authority, independence, resources, expertise, and access to relevant information necessary to fulfill the responsibilities of managing the DCO's enterprise risk management function. CME commented that whether a DCO's chief risk officer should also be permitted to serve as the overall organization's enterprise risk officer depends on the organizational structure related to the DCO and the structure of the broader corporate group, while Nodal stated that a DCO should have “complete discretion” to identify the appropriate person to serve as the enterprise risk officer, including whether that person may also be the DCO's chief risk officer. MGEX noted that, due to existing chief risk officer responsibilities of administering similar risk management programs, the chief risk officer may be the most adept individual to manage an enterprise-wide risk management framework. MGEX further argued that allowing the same person to fill both roles would also prevent fragmenting risk management oversight responsibilities while being less time-consuming and less costly for smaller DCOs, adding that it would be “effectively impossible” for smaller DCOs to have a fully independent employee or officer, thereby furthering the need for flexibility in who can fulfill such role. LCH recommended that the role of the enterprise risk officer be included in the role and responsibilities of the chief risk officer to reduce duplication of responsibilities and benefit from efficiencies that can be derived from combining “these related roles.”
In response to the comments, the Commission believes that a DCO should generally have the discretion to allow the DCO's enterprise risk officer and its chief risk officer to be the same individual and, therefore, is finalizing the regulation as proposed, without adding language prohibiting this practice. However, the Commission notes that § 39.10(d)(4), as finalized, requires the enterprise risk officer to have, among other things, the independence and resources necessary to fulfill the responsibilities of the position. The Commission believes that, for larger, more complex DCOs, it may be challenging to meet this requirement if one individual performs the functions of both roles.
In response to a request for clarification from Nadex, the Commission confirms that the regulations, as finalized, do not require that an individual be assigned the title of “Enterprise Risk Officer.” It is sufficient that the DCO be able to identify the individual assigned the responsibilities of the position and that the other applicable requirements are satisfied.
Lastly, when the Commission adopted the requirement in § 39.13(c) that a DCO have a chief risk officer, it stated that, given the importance of the risk management function and the comprehensive nature of the responsibilities of a DCO's CCO under § 39.10, the Commission expected that a DCO's chief risk officer and its CCO would be two different individuals.
The Commission is adopting various changes to § 39.11 to make the language more closely match that of Core Principle B, address inconsistencies in how DCOs treat excess collateral on deposit when conducting stress tests, ensure that customer funds are properly accounted for when a DCO is calculating its largest financial exposure, require DCOs to provide certain information to aid the Commission's review of their financial statements, and to clarify or conform a number of provisions. Unless stated otherwise below, the Commission did not receive any comments on the proposed amendments to § 39.11 and is adopting them as proposed.
The Commission is revising the language in § 39.11(a) to make it more consistent with Core Principle B.
Regulation 39.11(a)(1) requires a DCO to maintain financial resources sufficient to meet its financial obligations to its clearing members notwithstanding a default by the clearing member creating the largest financial exposure for the DCO in extreme but plausible market conditions. The Commission is deleting § 39.11(b)(1)(i), which permits margin to be used to satisfy the requirements of § 39.11(a)(1), because the required initial margin amount on deposit for the clearing member will be applied before determining the largest financial exposure for the DCO in extreme but plausible market conditions. Therefore, the margin would not be available to also cover the exposure.
OCC supported the removal of § 39.11(b)(1)(i), under the assumption that a DCO could also net other margin it requires a clearing member to have on deposit when calculating its largest financial exposure. OCC requested that, if the Commission does not believe that a DCO should net such additional required margin on deposit, the Commission interpret such additional required margin on deposit as “[a]ny other financial resource deemed acceptable by the Commission” under current § 39.11(b)(1)(vi), proposed to be renumbered § 39.11(b)(1)(v).
The Commission is adopting additional minimum requirements that a DCO will have to follow in determining its financial exposure in accordance with § 39.11(c)(1). In particular, the Commission is adding § 39.11(c)(2)(i)(A) to require a DCO to calculate its largest financial exposure net of the clearing member's required initial margin amount on deposit. In response to questions and requests for clarification from OCC, ICE, FIA, and ISDA, the regulation specifies that this required margin includes any add-ons, such as concentration charges and liquidity charges, and only required margin (including add-ons) may be considered. In other words, the DCO is not permitted to take into account excess collateral on deposit. Additionally, the Commission is adopting § 39.11(c)(2)(ii) to require that when stress tests produce losses in both customer and house accounts, a DCO must combine the customer and house stress test losses of each clearing member using the same stress test scenario. New § 39.11(c)(2)(iii) allows a DCO to net gains in the house account with losses in the customer account, if permitted by its rules, but explicitly prohibits a DCO from netting losses in the house account with gains in the customer account. New § 39.11(c)(2)(iv), as modified to address comments, allows a DCO, with respect to a clearing member's cleared swaps customer account, to net customer gains against customer losses only to the extent permitted by the DCO's rules. In light of the comments, the Commission confirms that the purpose of § 39.11(c)(2)(iv) is to confirm that, while all customer positions must be included in calculating largest net exposure, netting between such positions must be done in a manner consistent with what is permitted by the DCO's rules. The Commission is also specifying that the requirements of § 39.11(c) do not apply to fully collateralized positions.
A number of commenters supported proposed § 39.11(c)(2)(i)(A). For example, SIFMA AMG stated that the various proposed revisions to § 39.11(c)(2) would require DCOs to make more prudent assumptions when calculating default fund requirements, improve the process of sizing the financial resources package, and standardize assumptions and enable customers to make apples-to-apples comparisons between DCOs. Mr. Barnard stated that proposed § 39.11(c)(2)(i)(A) would prudently focus a DCO's analysis on the resources that would actually be available to it during times of stress, further enhance the financial soundness of DCOs, and improve protection for market participants and the public. He also noted that the proposal is consistent with the PFMIs, which provide that central counterparties should not use collateral beyond the margin requirement for purposes of calculating their available resources,
The Commission is amending § 39.11(d)(2)(iv) by replacing the phrase “those obligations” with “the total amount required under paragraph (a)(1) of this section.” The Commission did not receive any comments on this change.
The Commission did receive other comments on assessments. SIFMA AMG stated that the Commission should not allow DCOs to count unfunded liabilities, such as assessments, towards “cover one” and “cover two” calculations because they are highly likely to be unreliable during times of stress. Similarly, FIA and ISDA requested that the Commission amend § 39.11(d)(2) to prohibit the use of assessments because assessments are unfunded resources. Because the Commission had only proposed the clarifying change to § 39.11(d)(2)(iv) noted above and had not proposed to prohibit assessments entirely, the Commission would need to consider this in a separate proposal.
Lastly, ICE questioned the impact on § 39.11(d)(2)(iv) of the Commission's clarification of how a DCO must calculate its largest financial exposure under § 39.11(a)(1). In response, the Commission is further amending § 39.11(d)(2)(iv) to clarify that the value of the assessments may be determined by using the largest financial exposure in extreme but plausible market conditions prior to netting against required initial margin on deposit.
Regulation 39.11(e)(1)(ii) requires that the financial resources allocated by a DCO to meet the requirements of § 39.11(a)(1) (
Regulation 39.11(e)(1)(ii) further requires that those resources include cash, U.S. Treasury obligations, or high quality, liquid, general obligations of a sovereign nation (
Regulation 39.11(f) sets forth reporting requirements for DCOs concerning the financial resources they are required to maintain pursuant to § 39.11(a). After § 39.11(f) was adopted, the Commission adopted §§ 39.33(a) and 39.39(d), which set forth financial resources requirements for SIDCOs and subpart C DCOs, and financial resources requirements for the recovery and wind-down plans of SIDCOs and subpart C DCOs, respectively. The Commission is amending several provisions of § 39.11(f) by adding the words “and §§ 39.33(a) and 39.39(d), if applicable,” to clarify that financial resources reporting by SIDCOs and subpart C DCOs should encompass all financial resources requirements applicable to them under part 39.
The Commission is amending § 39.11(f)(1)(ii) to require a DCO to file with the Commission each fiscal quarter, or at any time upon Commission request, a financial statement of the DCO, including the balance sheet, income statement, and statement of cash flows. Prior to this amendment, the regulation permitted the DCO to file the financial statement of the DCO or its parent company. Some DCOs that are part of a complex corporate structure file the financial statements of their parent companies, which makes it difficult to accurately assess the financial strength of the DCO.
The amendment to § 39.11(f)(1)(ii) also requires a DCO to prepare its financial statement in accordance with U.S. generally accepted accounting principles (U.S. GAAP), except that a DCO that is incorporated or organized under the laws of any foreign country may prepare its financial statement in accordance with either U.S. GAAP or the International Financial Reporting Standards issued by the International Accounting Standards Board (IFRS).
However, in response to comments, the Commission is not adopting the proposed amendments to § 39.11(f)(1)(ii) and § 39.11(f)(2)(i) that would have required the balance sheet to identify any assets allocated to satisfy the requirements of § 39.11(a)(1) or § 39.11(a)(2) as held for that purpose.
MGEX requested clarification regarding the application of the proposed revisions to § 39.11(f)(1)(ii) on an entity that is a DCO and also has non-DCO operations. MGEX noted that it is both a DCO and a DCM, and its financial statements show revenue and expenses from all sources and activities, not just those pertaining to MGEX's activities as a DCO. The Commission confirms that the revisions are intended to address the case of a DCO that is a separate legal entity from its parent company, in which case the Commission would expect to receive financial statements for the DCO disaggregated from that of its parent. In the case of a DCO with revenue and expenses from non-DCO activity, such as if the same legal entity were also a DCM, the Commission would not require or expect the entity to separate its clearing-related and non-clearing-related financial information in its financial statements.
MGEX further suggested that the proposed revisions to § 39.11(f)(1)(ii) requiring that the financial statement provided be that of the DCO and not the parent company should only apply to DCOs that are part of a complex corporate structure, and not to simple parent/subsidiary structures. MGEX stated that compiling and submitting separate financial statements for a simple parent/subsidiary structure would result in increased expenses while providing no material benefit. The Commission is declining to adopt this suggestion because the Commission believes there is value in understanding the financial condition of a DCO separate from that of its parent company, as separate legal entities should be able to prepare separate financial statements, and because there is no bright line distinguishing between simple and complex corporate structures.
SIFMA AMG suggested that the Commission require DCOs to prepare quarterly and annual reports as required by § 39.11(f) in accordance with U.S. GAAP. Eurex and LCH supported the proposal in § 39.11(f)(1)(ii) to allow non-U.S. DCOs to use either U.S. GAAP or IFRS. LCH also recommended that the CFTC allow non-U.S. DCOs to report in currencies other than the U.S. dollar, stating that this would allow the quarterly reports to align with the reporting currency of the entity's audited year-end financial statements and would simplify the reconciliation process proposed in § 39.11(f)(2). The Commission is declining LCH's suggestion because if a DCO were to report in currencies other than the U.S. dollar, Commission staff would need to convert the currencies to U.S. dollars to properly analyze the reports, which would require staff to make decisions about exchange rates. To the extent that a DCO that does business in a foreign currency must make conversions to U.S. dollars as part of preparing its financial statements, it is more appropriate to permit the DCO to determine the exchange rate it uses as long as the information is presented with sufficient clarity to allow Commission staff to evaluate the reasonableness of the decision.
CME supported the proposal in § 39.11(f)(1)(ii) and § 39.11(f)(2)(i) to identify assets required to meet the resource requirements of § 39.11(a)(1) and (2). However, CME stated that the balance sheet may not be the most appropriate financial statement to identify assets satisfying these requirements. CME noted certain requirements of U.S. GAAP that may preclude a company from including this information on its balance sheet. Eurex noted similar issues for financial statements prepared in accordance with IFRS. Given these concerns, the Commission is not adopting the proposed changes in this regard. However, the Commission encourages DCOs to identify the assets required to meet the resource requirements of § 39.11(a)(1) and (2) to the extent that they can, given applicable accounting standards. The Commission notes that providing such information would facilitate its review of DCOs' financial statements and potentially reduce the burden on DCOs to respond to staff inquiries regarding their financial statements and compliance with § 39.11(a)(1) and (2).
The Commission is amending § 39.11(f)(1)(iv) to incorporate the language of current § 39.11(f)(4), which requires a DCO to submit its quarterly report no later than 17 business days after the end of the DCO's fiscal quarter (or at a later time as permitted by the Commission in its discretion in response to a DCO's request for an extension).
The amendment does not incorporate changes suggested by commenters, described below, because the reporting dates currently in effect are the same as those for FCMs under the Commission's regulations. The Commission believes that DCOs should be aligned with FCMs rather than DCMs because FCMs, unlike DCMs, hold initial margin and default funds and collect variation margin, which clearly and directly relate to the financial resources available to DCOs. In addition, the timing of the fourth quarter report allows Commission staff to verify the accuracy of a DCO's quarterly financial reports; numerous differences between that report and the year-end report may signal that the DCO has deficient processes and procedures pertaining to preparation of financial statements.
CME recommended that, for the first three quarters of the fiscal year, the due dates for submitting the DCO quarterly financial resource reports be aligned with the due dates for a DCM's submission of financial resource reports pursuant to § 38.1101(f)(4), which requires the reports to be filed no later than 40 calendar days after the end of the DCM's first three fiscal quarters. CME also recommended that the due date to submit a DCO's financial resource report for the fourth quarter of the fiscal year be aligned with the due date for submitting audited year-end financial statements pursuant to current § 39.19(c)(3)(iv) and proposed § 39.11(f)(2)(ii), which is not more than 90 days after the end of the DCO's fiscal year end. CME argued that the proposed requirement in § 39.11(f)(2)(iii)(A) for a DCO to submit a reconciliation where material differences exist between the balance sheet in the audited year-end financial statement with the balance sheet in the DCO's financial statement for the last quarter of the fiscal year, discussed below, would be unnecessary if the Commission harmonized the submission due date for a DCO's financial resources report for the last quarter of the fiscal year with the submission due date for the audited year-end financial statements.
The Commission is amending § 39.11(f)(2)(iii)(A) to require a DCO to annually submit a reconciliation, including appropriate explanations, of its balance sheet in the audited year-end financial statement with the balance sheet in the DCO's financial statement for the last quarter of the fiscal year when material differences exist or, if no material differences exist, a statement so indicating. LCH recommended defining “material” as 10 percent of either the (1) six-month liquidity test, or (2) 12-month capital cost-based financial resources test. The Commission believes that DCOs should retain reasonable discretion to define “material” for these purposes and therefore declines to include this suggestion.
Regulation 39.11(f)(3) requires a DCO to provide to the Commission certain documentation related to its quarterly financial reporting.
The Commission also is renumbering § 39.11(f)(3)(iii), which concerns providing copies of agreements establishing or amending a credit facility, insurance coverage, or other arrangement, as § 39.11(f)(3)(ii), and adding language specifying that copies of the agreements should evidence or support the DCO's ability to meet applicable financial resources and liquidity resources requirements.
After § 39.11 was adopted, the Division of Clearing and Risk advised DCOs that the quarterly financial report required under paragraph (f) should be accompanied by a certification as to the accuracy of the report signed by the person responsible for the accuracy and completeness of the report.
Regulation 39.12 implements Core Principle C, which requires a DCO to establish admission and continuing eligibility standards for its members, as well as standards for determining the eligibility of agreements, contracts, or transactions submitted to the DCO for clearing. Several provisions in § 39.12 require a DCO to “adopt” or “establish” rules. The Commission is amending those provisions to require a DCO to “have” rules.
The Commission did not receive any comments on the proposed changes to § 39.12, and is adopting the changes as proposed.
The Commission is adopting several changes to § 39.13, which sets out risk management requirements for DCOs. Unless stated otherwise below, the Commission did not receive any comments on the proposed amendments to § 39.13 and is adopting them as proposed.
Regulation 39.13(b) requires a DCO to establish and maintain written policies, procedures, and controls, approved by its board of directors, which establish an appropriate risk management framework. The introductory heading to this provision states that it is a “[d]ocumentation requirement.” The Commission is replacing “[d]ocumentation requirement” with “[r]isk management framework” and the words “establish and maintain” with “have and implement” to make it clear that a DCO is not only required to have a documented risk management framework but to put it into action.
Regulation 39.13(f) requires that a DCO, “through margin requirements and other risk control mechanisms, shall limit its exposure to potential losses from defaults by its clearing members to ensure that” the DCO's operations would not be disrupted and non-defaulting clearing members would not be exposed to unanticipated or uncontrollable losses. Recognizing that a DCO cannot ensure protection from that which it cannot anticipate, the Commission is revising § 39.13(f) to require a DCO to “limit its exposure to potential losses from defaults by clearing members through margin requirements and other risk control mechanisms reasonably designed to ensure that . . . .”
The Commission had proposed to change “to ensure that” to “to minimize the risk that.” However, in this instance, the Commission has decided to adopt language suggested by commenters because the Commission believes that it better articulates the DCO's obligations. ICE supported replacing “ensure” with “minimize the risk” in § 39.13(f) and making conforming changes. However, FIA and ISDA expressed concern that the change, if interpreted to alter a DCO's existing obligations, would increase the potential for non-defaulting clearing members to be exposed to uncapped liability. FIA and ISDA suggested revising the language to instead require a DCO to “limit its exposure to potential losses from defaults by clearing members through margin requirements and other risk control mechanisms
Regulation 39.13(g)(2)(i) requires that a DCO have initial margin requirements that are commensurate with the risks of each product and portfolio. The Commission is amending § 39.13(g)(2)(i) to delete the statement in the existing regulation that such risks “includ[e] but are not limited to jump-to-default risk or similar jump risk.” The Commission had proposed to amend the regulation to keep this statement and add a statement that such risks also include “concentration of positions.” However, upon considering comments on the proposal, the Commission is concerned that including and adding to a list of examples of types of risks might be interpreted to mean that a DCO does not have to consider risks not mentioned. The Commission reiterates that a DCO should consider a range of risks, including, for example, jump-to-default risk, concentration risk, correlation risk, and other risks associated with the particular products and portfolios it clears. However, the Commission further notes that DCOs have discretion with respect to how they identify, label, and address such risks; therefore, the Commission is declining to define such terms.
LCH commented in support of the proposed revisions to § 39.13(g)(2)(i). However, although FIA and ISDA agreed that a DCO should consider concentration risk when establishing initial margin requirements, they requested that the Commission define this term in a re-proposed rule. FIA and ISDA further suggested that concentration risk could be defined to include positions that cannot be closed in a two-day period. Alternatively, they suggested that concentration risk could be more broadly defined. FIA and ISDA recommended that initial margin should cover concentration risk over the period that it would take to liquidate a defaulting participant's positions, and that initial margin requirements should consider the concentration risk of open positions relative to product liquidity and percentage of open interest. FIA and ISDA also recommended that a DCO's initial margin requirements evaluate concentration risk at an account level. Finally, FIA and ISDA requested that the Commission require in a re-proposal that a DCO consider other risk factors, such as correlation and pro-cyclicality, when determining its initial margin requirements. However, as explained above, the Commission has determined that including in § 39.13(g)(2)(i) a list of examples of types of risks might be interpreted to mean that a DCO does not have to consider risks not mentioned. Instead, a DCO should consider a range of risks based on the particular products and portfolios it clears, and it has discretion in how it identifies and addresses such risks.
Regulation 39.13(g)(3) requires that a DCO's systems for generating initial margin requirements, including its theoretical models, be reviewed and validated by a qualified and independent party on a regular basis. The provision further provides that the validation may be conducted by independent contractors or employees of the DCO, as long as they are not responsible for the development or operation of the systems and models being tested. The Commission is adopting proposed amendments to this provision to specify that “on a regular basis” means annually and to also permit employees of an affiliate of the DCO to conduct the validations, as long as the affiliate's employees are not responsible for the development or operation of the systems and models being tested. In addition, the Commission is further modifying § 39.13(g)(3) to specify that, where no material changes have been made to a DCO's margin model, previous validations can be reviewed and affirmed as part of the annual review process, as recommended by several commenters. The Commission is adopting this change because it agrees with commenters that it is unnecessarily burdensome to require DCOs to revalidate models that have not changed since the previous validation.
ICE expressed support for permitting employees of an affiliate of the DCO to conduct initial margin model validations. LCH also supported the proposed changes to § 39.13(g)(3). Nodal argued that requiring annual validations of a DCO's systems for generation of initial margin requirements, even for theoretical models, is unnecessary because theoretical models do not change from year to year. Nodal added that annual validations would present an undue burden for certain DCOs due to the significant cost and time involved in obtaining an independent validation. Nodal requested that, if the Commission requires annual validations as proposed, it exclude theoretical models from the annual validation requirement to the extent that they have not materially changed since the prior independent validation. CME commented that, in revising § 39.13(g)(3), the Commission should consider the provisions of the Bank Holding Company Supervision Manual, which allows banks to take varying approaches to model validations from year to year.
FIA and ISDA supported the proposal to replace the requirement to review and validate margin models on a “regular basis” with a requirement to do so “on
FIA and ISDA also requested that the Commission withdraw the proposal to allow employees of an affiliate of a DCO to conduct an initial margin model validation and instead require in a re-proposed rule that a qualified and independent third party must conduct the initial margin model validation. FIA and ISDA argued that employees who validate an initial margin model used by more than one affiliated DCO may fail to analyze whether a single model is appropriate for different products cleared by different affiliated DCOs. FIA and ISDA further suggested that the Commission re-propose several adjustments to a DCO's initial margin model validation process to increase transparency. The Commission believes it is appropriate to permit a DCO's employees or employees of an affiliate of the DCO to conduct the validations, provided they are not responsible for development or operation of the systems and models being tested. Since § 39.13(g)(3) has been in place, the Commission has not encountered any issues with employees of a DCO conducting the validations; therefore, the Commission believes it is appropriate to permit employees of an affiliate of the DCO to conduct the validations.
To be consistent with other Commission regulations, the Commission is amending § 39.13(g)(4) to substitute the phrase “conceptual basis” for the phrase “theoretical basis” in the discussion of spread margin. LCH supported the proposed changes.
The Commission is adopting new § 39.13(g)(7)(iii) to clarify that, in conducting back tests of initial margin requirements, a DCO should compare portfolio losses only to those components of initial margin that capture changes in market risk factors.
LCH supported the proposed changes to § 39.13(g)(7)(iii). ICE agreed that portfolio back testing of the statistical performance of the core margin model should be solely based upon market risk factors that can be directly measured and tested. However, ICE commented that, when performing back testing to assess whether the DCO has collected sufficient margin to meet its coverage requirement, the DCO should include all of the margin model's charges and add-ons, “in other words, all of the margin resources available to mitigate the risk of the position (excluding any voluntary excess posted by a clearing member).” In contrast, although SIFMA AMG agreed that clarification is necessary in this regard, it suggested that margin add-ons, which it noted are outside of the model framework, should not be included when back testing a margin model. SIFMA AMG stated that excluding the impact of these and other similar add-ons will reduce the likelihood of misrepresenting the actual margin coverage produced by a DCO's models, as their inclusion may result in margin breaches going undetected. In addition, SIFMA AMG stated that margin add-ons are often calculated at the sole discretion of the DCO and are not readily replicable by market participants. SIFMA AMG further stated that DCOs should disclose these back-testing results at the contract level, rather than the account level, to increase transparency and facilitate enhanced risk monitoring by all market participants.
In response to the comments, the Commission notes that comparing portfolio losses only to components of initial margin that capture changes in market risk factors reduces the likelihood of misrepresenting the actual margin coverage produced by a DCO's models, as the inclusion of other components may result in margin breaches going undetected.
Regulation 39.13(g)(8)(i) requires a DCO to collect initial margin on a gross basis for each clearing member's customer account(s). The Commission is revising § 39.13(g)(8)(i) to clarify that initial margin must be collected on a gross basis only at the end-of-day settlement cycle.
OCC supported the proposed changes. The Commission also received two comments specific to its statement in the Proposal that, notwithstanding the proposed change to the rule text, a DCO should also collect customer initial margin from its clearing members on a gross basis during any intraday settlement cycle in which the DCO collects customer initial margin if the DCO is able to calculate the margin accurately.
In response to the comment from FIA and ISDA, the Commission reiterates that it recommends that a DCO should collect customer initial margin from its clearing members on a gross basis during any intraday settlement cycle in which the DCO collects customer initial margin, but only if it is able to calculate the margin accurately. The Commission further reiterates that it would not expect a DCO to collect customer initial margin on an intraday basis if it would create significant operational problems for the DCO or its clearing members.
Furthermore, the Commission is adopting amendments to § 39.13(g)(8)(i)(B) to require a DCO to have rules that require its clearing members to provide reports to the DCO each day setting forth end-of-day gross positions of each individual customer account within each customer origin of the clearing member. The Commission is requiring that the daily reports specify positions of “each individual customer account” instead of “each beneficial owner,” as originally proposed, to be consistent with the information that DCOs must report to the Commission pursuant to § 39.19(c)(1), as discussed below.
OCC commented that the proposed changes to § 39.13(g)(8)(i)(B) would introduce a significant shift in the burden to maintain customer-level records from FCMs and introducing brokers to a DCO. OCC stated that virtually every FCM clears through multiple DCOs, so requiring a DCO to collect and report this customer-level information to the Commission does not in fact allow the Commission to appropriately understand the risks associated with individual customers without further aggregating the data that various DCOs receive from an individual FCM. OCC represented that it and its clearing members would need to make significant operational changes to obtain this information and report it daily, and OCC would need to make corresponding rule changes.
MGEX noted that while FCMs know and have a relationship with their customers, clearing members do not necessarily have such a relationship with the customers of FCMs for which they clear. Therefore, a rule requiring clearing members to report customer level information is impractical, and
ICE supported the transparency associated with reporting of additional customer level information, but noted that the Commission should further consider the costs to clearing members and DCOs of developing new operational systems and procedures that the proposal would necessitate, and consider ways to phase in any new requirements to allow for the necessary development of new operational systems and procedures, at both the DCO and clearing member levels. ICE commented that DCOs and market participants should also have the opportunity to consider whether the changes could affect other longstanding practices, such as the treatment by DCOs of the risk in the customer account on a net basis, and encouraged the Commission to work with and consult the industry as a whole to implement any changes to current practices.
Regulation 39.13(g)(8)(ii) provides that a DCO must require its clearing members to collect customer initial margin from their customers, “for non-hedge positions, at a level that is greater than 100 percent of the [DCO]'s initial margin requirements with respect to each product and swap portfolio.” Shortly after this provision was first adopted, the Commission became aware that it was being interpreted by DCOs in a way that would have significantly increased margin requirements for customers in a way that the Commission did not intend. This was addressed at the time through an interpretative letter issued by the Division of Clearing and Risk that accurately reflected the Commission's original intent.
The Commission received three comments in support of the proposed changes to § 39.13(g)(8)(ii) and one comment in opposition. OCC supported the proposed changes and stated, in response to a specific request for comment from the Commission, that further clarification on what would be considered “commensurate with the risk presented” is unnecessary. ICE supported the proposed changes to § 39.13(g)(8)(ii) giving DCOs discretion in determining the percentage by which customer initial margin requirements must exceed the DCO's clearing initial margin requirements. CME supported codification of the staff interpretation but was concerned that the proposed changes to § 39.13(g)(8)(ii) would shift the burden of determining the appropriate level of additional customer margin from FCM clearing members to DCOs. As a result, CME requested that § 39.13(g)(8)(ii) be further amended to state that “the [DCO] shall have reasonable discretion in determining clearing initial margin requirements for products or portfolios and whether and by how much customer initial margin requirements for categories of customers determined to have heightened risk profiles by their clearing members must exceed, at a minimum, the [DCO]'s clearing initial margin requirements by a standardized amount.” The Commission is adopting similar revisions, in order to confirm that the changes to § 39.13(g)(8)(ii) are not intended to shift the burden of determining the appropriate level of additional customer margin from clearing members to the DCO.
FIA and ISDA commented that the proposed change to customer initial margin requirements may impose an operationally impractical regime for clearing members to collect initial margin from customers, arguing that the proposed amendments would give DCOs too much discretion and encourage DCOs to apply differing measures to assess additional margin. FIA and ISDA believe that clearing members would benefit from a common approach to additional margin among DCOs. FIA and ISDA recommended that, regardless of whether the Commission adopts the proposed change, it should codify earlier no-action relief which clarifies that the initial margin requirements in § 39.13(g)(8)(ii) do not apply to security futures positions.
With respect to the applicability of § 39.13(g)(8)(ii) to security futures positions, the Commission notes that the interpretative guidance provided in CFTC Letter No. 12-08 is still in effect. The Commission further notes that it has received similar comments in connection with a recently proposed joint rulemaking issued by the Commission and the SEC on this topic, and believes that it is more appropriate to consider whether or not to codify this relief as part of that rulemaking.
Regulation 39.13(g)(12) requires a DCO to apply “haircuts” to the assets that it accepts in satisfaction of initial margin obligations, and to evaluate the appropriateness of the haircuts on at least a quarterly basis. Regulation 39.11(d)(1) requires a DCO to evaluate on a monthly basis its haircuts for assets that are used to meet the DCO's financial resources obligations set forth in § 39.11(a) (
The Commission received one comment in support of the proposal and one comment in opposition. FIA and ISDA stated that the proposed change is appropriate given the frequent changes in the value of assets held for initial margin. LCH disagreed with the proposed change, stating that, in normal market conditions, haircuts do not significantly change, or may not change at all, from month to month. LCH suggested that haircut reviews continue to be required on a quarterly basis, but that the Commission enhance § 39.13(g)(12) by mandating that DCOs review haircuts more frequently in the event of specific scenarios, such as breach of back testing or high market volatility, which would affect the valuation and liquidity of eligible collateral.
Regulation 39.13(h)(1)(i) requires a DCO to impose risk limits on each clearing member, by house origin and by each customer origin, in order to prevent a clearing member from carrying positions for which the risk exposure exceeds a specified threshold relative to the clearing member's and/or the DCO's financial resources. The Commission proposed to amend the provision to specify that risk limits
The Commission has determined not to adopt the proposed changes to § 39.13(h)(1) at this time, but will continue to consider this issue further. The Commission remains concerned about positions that may be difficult to liquidate, particularly concentrated positions. As the Commission mentioned in the Proposal, recent events, including a significant loss from a default at a central counterparty outside of the Commission's jurisdiction, highlight the importance of addressing such positions. However, the Commission believes that DCOs should address difficult-to-liquidate positions using the DCO's margin methodology and consider whether and what other measures may be appropriate.
OCC opposed the proposed change, in favor of addressing difficult-to-liquidate positions through a DCO's margin methodology. OCC argued that margin requirements can more effectively account for the liquidity risk associated with specific positions held by specific clearing members, because margin requirements can be tailored to the risks and particular attributes of each relevant product, portfolio, and market. The margin requirements can then serve as one input a DCO uses in determining the appropriate risk limits. FIA and ISDA noted that the proposed imposition of hard risk limits on positions that may be difficult to liquidate would be a significant departure from current risk management practices for clearing members. FIA and ISDA suggested that the Commission should withdraw the proposed change to § 39.13(h)(1)(i) and consult with DCOs and clearing members about how to best risk-manage positions that are difficult to liquidate. LCH agreed that DCOs should have procedures in place to address clearing members with large positions that may be difficult to liquidate in the event of a default. However, LCH suggested that, rather than setting bright-line limits on the maximum size of such positions, the Commission should require DCOs to have measures in place, such as margin add-ons, to address concentration risk. LCH stated that this would be an appropriate approach because the mitigants against concentration risk of certain positions in any one clearing member would be built into the DCO's risk model. LCH further indicated that setting and maintaining such hard limits may result in market fragmentation or artificial limits that are not risk related and may inadvertently create disincentives to clearing.
Regulation 39.13(h)(5)(ii) requires a DCO to, on a periodic basis, review the risk management policies, procedures, and practices of each of its clearing members, which address the risks that such clearing members may pose to the DCO, and to document such reviews. The Commission is adopting an amendment to this regulation to clarify that DCOs should, having conducted such reviews, “take appropriate actions to address concerns identified in such reviews,” and that the documentation of the reviews should include “the basis for determining what action was appropriate to take.”
The Commission received one comment in support of the proposal and two comments in opposition. LCH supported the proposed changes regarding clearing member risk management policies and procedures. FIA and ISDA stated that the proposed change that would require a DCO to take appropriate actions to address concerns resulting from a review of a clearing member's risk management policies and procedures is unnecessary. ICE opposed requiring DCOs to supervise or impose changes in the risk management policies of clearing members, and commented that any such requirement would be more appropriate at the designated self-regulatory organization (DSRO) level, rather than the DCO level.
In response to ICE's suggestion that clearing member risk reviews should be conducted by a DSRO, the Commission notes that not all clearing members are subject to the supervision of a DSRO. The Commission disagrees with FIA and ISDA's comment that requiring a DCO to take appropriate actions to address concerns resulting from a review of a clearing member's risk management policies and procedures is unnecessary. As the Commission stated in the Proposal, absent such follow-up, the reviews would lack purpose.
The Commission is codifying its existing practices for evaluating cross-margining programs in new § 39.13(i), which requires a DCO that seeks to implement or modify a cross-margining program with one or more other clearing organizations to submit rules for Commission approval pursuant to § 40.5. However, the Commission is not adopting the proposed requirement that a DCO provide, at a minimum, specific information needed to facilitate the Commission's review of the rule filing. Rather, the Commission is requiring that a DCO submit information sufficient for the Commission to understand the risks that would be posed by the program and the means by which the DCO would address and mitigate those risks. The Commission believes that leaving it to the discretion of the DCO to determine what information to provide, yet giving the Commission the ability to request any additional information it may need to conduct its review of a cross-margining program, is appropriate given that cross-margining programs can vary greatly, depending on the products, participants, and clearing organizations involved. The Commission notes, however, there may be instances where a cross-margining program would require approval beyond the § 40.5 submission. For example, a cross-margining program between a registered DCO and a clearing organization that is not registered with the Commission may require relief from section 4d of the CEA for FCM customers to be eligible to participate.
The Commission received one comment in support of the proposal and one comment in opposition. FIA and ISDA supported the proposal, stating that it would increase transparency and improve the ability of clearing members to manage the risks associated with positions subject to cross-margining. They recommended that the Commission consider including in its evaluation the credit and liquidity risk management, settlement, and default management-related principles identified in the PFMIs. In addition, FIA and ISDA suggested that the Commission should require DCOs participating in a cross-margining arrangement to consult with their respective clearing members.
OCC opposed the proposal to require a DCO to provide specific types of information, arguing that it would reduce the Commission's flexibility to determine what types of information are necessary for it to review in specific circumstances. OCC suggested that a DCO should not be required to provide each of the specified types of information when it is requesting the Commission's approval to update an existing cross-margining program, where analyzing factors unrelated to the change for which it is requesting approval would create an unnecessary burden. OCC suggested that instead the Commission should issue guidance on what information it may require in its review of a cross-margining program. OCC further requested that, should the Commission nonetheless choose to require specific types of information in proposed § 39.13(i), the information should only be required when the Commission reviews a new cross-
In response to FIA and ISDA's comment on consulting with clearing members, the Commission notes that § 40.5(a)(8) requires a DCO to provide a brief explanation of any substantive opposing views expressed by its members that were not incorporated into the rule, or a statement that no such opposing views were expressed. The Commission recognizes that § 40.5(a)(8) does not require consultation with clearing members. Because the Commission did not propose this requirement, it cannot adopt it at this time but may consider it in conjunction with a future rulemaking.
The Commission considered OCC's recommendation that a DCO be able to submit cross-margining rules pursuant to § 40.6,
The Commission is adopting as proposed amendments to § 39.15, which concerns a DCO's treatment of clearing member and customer funds. Regulation 39.15(b)(2)(ii) is being amended to permit a DCO to file rules for Commission approval pursuant to § 40.5, rather than request a Commission order, to allow the DCO and its clearing members to commingle cleared swaps, foreign futures, or foreign options with futures and options in an account subject to the requirements of section 4d(a) of the CEA (
The Commission is also amending § 39.15(d) to require the “prompt,” but not necessarily simultaneous, transfer of a customer's positions and related funds from one clearing member to another clearing member “as necessary.” The Commission had proposed this change because, although a DCO may transfer positions from one clearing member to another, the DCO does not generally transfer funds.
ICE generally supported the proposed amendments to § 39.15, including allowing commingling of swaps in a futures account pursuant to rules submitted under § 40.5 rather than pursuant to a separate Commission order under section 4d of the CEA. LCH, FIA, and ISDA supported the proposed amendment to § 39.15(d) to require the prompt, but not necessarily simultaneous, transfer of a customer's positions and related funds. FIA and ISDA noted that clearing members transfer positions before related collateral is transferred under current market practice. LCH noted that proposed § 39.15(d) reflects how funds are transferred, especially where there is third-party involvement and the simultaneous transfer of funds may not be possible.
The Commission did not receive any comments on the proposed technical changes to § 39.15(b)(2)(iii) and (e) and is adopting those changes as proposed.
Regulation 39.16(b) requires a DCO to have a default management plan and, among other things, test the plan at least on an annual basis. The Commission is adopting an amendment to § 39.16(b), as further modified in response to a comment from FIA and ISDA, to require that the DCO include clearing members and participants in a test of its default management plan on at least an annual basis to the extent the plan relies on their participation. The Commission continues to believe, as noted in the Proposal, that a DCO should ensure that a sufficient portion of its clearing membership participates in such testing.
OCC supported the proposed change but stated that a DCO should have broad discretion to determine whether a “sufficient portion” of its clearing membership is participating. OCC noted that the number of clearing members that participate in a default management test is not necessarily indicative of whether a DCO's default management plan has been tested effectively, and that other factors must also be considered.
FIA and ISDA generally supported the proposed change but recommended that the rule refer to clearing members and “participants” so that, if a DCO's rules allow non-clearing members to participate in an auction of a defaulting clearing member's positions, a sufficient portion of such participants should be required to participate in the testing of the DCO's default management plan. FIA and ISDA further suggested that participation in testing should be tied to asset classes so that only clearing members that carry positions, or participants that trade, in a particular asset class are required to participate in tests of a DCO's default management plan for that particular asset class. Lastly, FIA and ISDA recommended that DCOs should be required to coordinate the testing of their respective default management plans so that the requirement to participate in testing of the plan does not place an undue burden on clearing members.
Nodal commented that the requirement to include clearing members in a test of a DCO's default management plan is not necessary for a DCO that does not rely exclusively on clearing member auctions. Nodal requested that the Commission limit the application of the proposed rule, if adopted, to those DCOs that primarily rely on a clearing member auction process in their default management
As to FIA and ISDA's suggestion that participation in testing should be tied to asset classes, the Commission believes that this decision is in the DCO's discretion. Lastly, as to FIA and ISDA's recommendation that DCOs should be required to coordinate the testing of their respective default management plans, the Commission encourages DCOs to coordinate the testing of their default management plans to the extent possible to avoid placing an undue burden on clearing members and participants.
Regulation 39.16(c) requires a DCO to adopt procedures that would permit the DCO to take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of a default by one of its clearing members. The Commission proposed to amend § 39.16(c)(1) to require a DCO to have a default committee that would be convened in the event of a default involving substantial or complex positions to help identify market issues with any action the DCO is considering. The default committee would be required to include clearing members and could include other participants to help the DCO efficiently manage the house or customer positions of the defaulting clearing member. In light of the strong divergence in the views expressed in the comments received on this proposal, the Commission has determined not to adopt the proposed changes to § 39.16(c)(1) at this time. The Commission wishes to give industry stakeholders some time to come closer to consensus on this issue.
Some comments generally supported the proposal. MFA supported the proposal to allow non-clearing members to participate in a DCO's default committee. MFA noted, however, that the proposal permits but does not require customer participation, and requested that the Commission affirmatively mandate customer involvement. MFA understands that DCOs already have the authority to voluntarily include customers in their default committees, but that they have chosen not to do so.
FIA and ISDA generally supported the proposed requirement that a DCO have a standing default committee. They recommended, however, that, absent exigent circumstances, the default committee convene whenever a material default occurs, not only when a default involving substantial or complex positions occurs. FIA and ISDA also supported the proposed requirement that the default committee include clearing members, but they recommended that clearing members be allowed to voluntarily participate on default management committees.
Mr. Saguato supported the proposal to have clearing member and customer participation on a DCO's default committee. Mr. Saguato suggested that the Commission explore the costs and benefits of further increasing and formalizing the role of clearing members and their customers in the default process, as Mr. Saguato believes clearing members should have a primary role in setting default procedures. Furthermore, SIFMA AMG agreed that DCOs should have a standing committee to address all defaults.
Other comments opposed the proposal. ICE did not believe that requiring the use of a default committee that includes clearing members and other participants is advisable. ICE noted that it is not clear what criteria would be used to determine whether a default scenario is “complex” or “substantial,” or who would make the determination. ICE commented that it is not feasible for these and other considerations to be addressed in a rule, which therefore weighs against mandating the use of a default committee.
MGEX urged the Commission to permit a DCO's pre-existing risk or risk management committee to also serve as the default committee. MGEX indicated that allowing this type of dual-purpose committee would offer smaller entities with less complex product offerings a more immediate and efficient implementation, while avoiding the potential difficulty in finding sufficient clearing member interests to fill two separate committees.
CME commented that the proposal to require a default committee and clearing member participation on that committee risks unnecessarily prolonging and overcomplicating the default management process. CME also stated that a DCO's default management plan should account for the risks from substantial and/or complex portfolios, and these types of portfolios should be addressed in the design and testing phases of a DCO's default management plan and its day-to-day risk management. Lastly, CME noted that providing information on a defaulted clearing member's portfolio to the clearing members on the DCO's default committee, independent of their participation in subsequent liquidation or auction processes, increases the risk of information leakage and disadvantageous pricing.
Nodal commented that requiring a DCO to have a default committee that includes clearing members or other participants is not likely to assist in efficiently managing the positions of the defaulting member; instead, it would add unnecessary complexity to what is already an efficient process. Nodal further stated that having clearing members on a default committee could create the potential for conflicts for any clearing member or participant selected, as well as introduce an element of self-interest or potential gaming within the decision-making of the default procedure and response. Finally, OCC commented that “substantial or complex positions” should not include exchange-traded products.
The Commission is adopting an amendment to § 39.16(c)(2)(ii) to require that a DCO have default procedures that include public notice on the DCO's website of a declaration of default. However, the final rule differs from the proposal in that it does not require “immediate” public notice of a default. Instead, the final rule is silent on the timing of the notice. The Commission believes that a DCO should provide public notice as quickly as possible, taking into account the potential negative impact that it might have on the DCO's ability to manage the default.
The Commission had requested comment as to whether the timing of the announcement would potentially impact the market or the DCO's ability to manage the default. SIFMA AMG agreed with the proposal to require a DCO's default procedures to include immediate public notice on the DCO's website of a declaration of default. CME recommended that the Commission permit DCOs to exercise discretion on the timing of a public notice of a declaration of default where such notification could negatively impact the ability of the DCO to manage the default. CME noted that mandatory immediate public notification runs the risk of causing disadvantageous pricing for liquidation or auctions, which could increase the costs to the DCO of managing the clearing member default, and if losses are incurred, could ultimately increase the risk of mutualizing losses among its clearing members.
Mr. Saguato commented that requiring immediate public notice of a declaration of default is unnecessary and potentially counterproductive to an effective default management process
OCC suggested that the Commission consider whether “prompt” public notice on the DCO's website would be more appropriate for consistency with the timing of other activities a DCO must perform pursuant to its default management plan and the responsibility of a clearing member to provide the DCO with prompt notice if it becomes insolvent. OCC noted that requiring immediate public notice may result in a DCO notifying the public of a default before the DCO has complete information about the default, which may trigger market panic before the DCO is able to understand the circumstances giving rise to the default and the market impact.
Eurex opposed the requirement to provide immediate public notice, arguing that it could adversely affect the DCO's ability to manage a default and may interfere with the DCO's existing notification practices with respect to porting, for example. Nodal, FIA, and ISDA noted that the timing of an announcement of a default could potentially affect the market and the ability of the DCO, clearing members, and customers to manage the risks and consequences of the default. Therefore, Eurex, Nodal, FIA, and ISDA recommended that the Commission allow a DCO to have flexibility in the manner and timing of these notices. MGEX generally agreed that public notice of a default is vital for promoting the integrity and stability of financial markets, but suggested that the Commission give DCOs discretion with respect to the timing of posting such notice, which would allow the DCO to consider the nature of the default and any circumstances warranting flexibility.
ICE commented that, depending on the facts and circumstances of a default, an immediate announcement could potentially impact the market and the DCO's ability to manage the default. ICE therefore suggested that DCOs should be required to provide public notice of a default “as soon as practicable under the circumstances.”
Regulation 39.16(c)(2)(iii)(C) requires any allocation of a defaulting clearing member's positions to be proportional to the size of the participating or accepting clearing member's positions in the same product class at the DCO. The Commission is adopting an amendment to this provision to provide that the DCO shall not require a clearing member to bid for a portion of, or accept an allocation of, the defaulting clearing member's positions that is not proportional to the size of the bidding or accepting clearing member's positions in the same product class at the DCO. This amendment is intended to clarify that a clearing member that wishes to voluntarily bid for or accept more than its proportional share should be allowed to do so, provided that the clearing member has the ability to manage the risk of the new positions. It also clarifies that the provision applies to both auctions and allocations.
The Commission had proposed to further amend § 39.16(c)(2)(iii)(C) to provide that the size of the participating or accepting clearing member's positions in the same product class at the DCO should be measured by the clearing initial margin requirement for those positions. The Commission requested comment as to whether the Commission should require DCOs to take into consideration other indicators of active participation in a market, such as open interest, volume, and/or other criteria. All of the commenters opposed the proposed change, arguing that there are many factors that should be taken into consideration. The Commission found the comments persuasive and therefore is not adopting the proposed change.
CME commented that initial margin required as the basis for determining limits on potential bidding and allocation requirements under proposed § 39.16(c)(2)(iii)(C) may offer a poor approximation for the risk management capacity, capital availability, and credit quality of a clearing member. CME suggested that a given clearing member's initial margin requirements at the time of a clearing member default are a function of the size and directionality of the clearing member's portfolio, the variance of which over time creates an arbitrary standard by which to limit the ability of a DCO to require a clearing member to bid on a defaulter's portfolio. Therefore, CME suggested that, to the extent a limit on forced bidding or allocations is imposed, it should be based on a clearing member's risk management capacity, capital sufficiency, and credit quality, not solely its initial margin requirement.
ICE disagreed that mandatory bidding, or other auction terms, should be set by regulation; rather, they should be left to the DCO to determine in its rules and procedures, subject to regulatory oversight. ICE noted that there is no single approach to determining the level of a mandatory bid, or other relevant terms of participation.
In response to the Commission's request for comment as to whether it should require DCOs to take into consideration other indicators of active participation in a market, MGEX observed that DCOs already have ample tools to handle these situations, such as security deposits and various forms of margin, which take different risk factors into consideration. OCC stated that the amount of initial margin a clearing member holds at a DCO for a given product or product class is not always a good indicator of that member's qualification to bid on or accept an allocation of certain products or product classes. OCC argued that a DCO should be given discretion to consider several criteria, including a clearing member's initial margin for a given product or product class, open interest, volume, and risk management capabilities.
In response to a request from Nadex, the Commission is adopting new § 39.16(e) to provide that a DCO may satisfy the requirements of paragraphs (a), (b), and (c) of § 39.16 (which relate to a DCO's default management plan and procedures) by having rules that permit it to clear only fully collateralized positions. This rule was not included in the Proposal, but the Commission believes it is appropriate to include it in the final rule because it is consistent with other exceptions for fully collateralized positions adopted herein.
Nadex requested that the Commission further amend § 39.16 to indicate that the requirements thereof do not apply to DCOs that clear only fully collateralized contracts. Nadex noted that in 2014, in response to its request for interpretative relief, the Division of Clearing and Risk issued an interpretative letter stating that Nadex's fully collateralized requirements satisfy the requirements of § 39.16.
Regulation 39.17(a)(1) requires a DCO to maintain adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules and the resolution of disputes. The Commission is adopting an amendment
Regulation 39.17(b) permits a DCO's board of directors to delegate its responsibility for compliance with the requirements of § 39.17(a) to the DCO's risk management committee. The Commission is amending § 39.17(b) by replacing “risk management committee” with “an appropriate committee.”
FIA and ISDA supported the proposed amendments on the assumption that the Commission does not seek to impose any new obligations on clearing members. ICE also supported the proposed amendments and suggested that the Commission should consider permitting a DCO's board to broaden the delegation of this responsibility to the president of the DCO or an equivalent officer.
The Commission confirms that it is not seeking to impose any new obligations on clearing members. Rather, the purpose of the amendment is to remind DCOs of their obligation to comply with their own rules as well as enforce them against their clearing members. The Commission, however, declines to adopt ICE's suggestion regarding the scope of permissible delegation at this time; the Commission may consider it in a future proposal where comment could be sought.
Regulation 39.19 implements Core Principle J, which requires that each DCO provide to the Commission all information that the Commission determines to be necessary to conduct oversight of the DCO. The Commission is amending § 39.19 to clarify certain existing requirements, and also to adopt multiple new reporting requirements. These changes to § 39.19 will enhance the Commission's ability to conduct effective and efficient oversight of DCO compliance with the DCO Core Principles and Commission regulations. The Commission received comments on a number of the proposed changes to § 39.19. As further detailed below, the Commission modified several of the proposed requirements in response to comments. Unless stated otherwise below, the Commission did not receive any comments on the proposed amendments to § 39.19 and is adopting them as proposed.
The Commission is revising the text of § 39.19(a) to match the text of Core Principle J. The revisions are not meant to alter the meaning of the provision.
Regulation 39.19(b)(1) requires a DCO to submit the information required by the section to the Commission electronically and in a format and manner specified by the Commission, unless otherwise specified by the Commission or its designee. To simplify the text while retaining the originally-intended flexibility, the Commission is deleting the phrase “[u]nless otherwise specified by the Commission or its designee” and the term “electronically.” The Commission is also adding new § 39.19(b)(2) to require that when making a submission pursuant to the section, an employee of a DCO must certify that he or she is duly authorized to make such a submission on behalf of the DCO. This provision codifies existing practices with respect to the use of the CFTC Portal for submissions pursuant to § 39.19. Finally, the Commission is removing existing § 39.19(b)(3) and moving the definition of “business day” to § 39.2, as discussed above. Existing § 39.19(b)(2) is renumbered as § 39.19(b)(3). The Commission continues to believe, as noted in the Proposal, that it is appropriate to codify existing practices with respect to the use of the CFTC Portal for submissions pursuant to § 39.19.
ICE opposed the proposal to codify the certification requirement in § 39.19(b)(2). ICE asserted that the requirement is unnecessary because it is extraordinarily unlikely that unauthorized submissions are being made by DCO personnel. ICE further argued that this requirement creates an unnecessary compliance burden. Nadex requested clarification regarding this requirement, asking whether a DCO would be required to maintain separate documentation that identifies the employees authorized to make submissions on behalf of the DCO. Nadex also requested clarification regarding which DCO employees have the authority to authorize other employees to make submissions for the DCO. Lastly, Nadex requested clarification as to whether the certification should be included in the text of the submission or if it will appear in the CFTC Portal in the form of a confirmation statement.
In response to ICE's comment, the Commission notes that, although they are not common, unauthorized submissions have occurred. In response to Nadex's questions, the Commission notes that DCOs have discretion to determine who is authorized to make submissions on their behalf and, under the rule, they would not be required to maintain separate documentation that identifies the employees authorized to make submissions on behalf of the DCO. With respect to the location of the certification, the Commission will incorporate the certification into the section of the portal form where users certify as to the accuracy and completeness of the submission. Completing this section of the portal form will satisfy the certification requirements of § 39.19(b)(2).
Regulation 39.19(c)(1)(i) requires a DCO to report to the Commission on a daily basis margin, cash flow, and position information for each clearing member, by house origin and by each customer origin. The Commission is amending § 39.19(c)(1)(i) to require a DCO to also report margin, cash flow, and position information by individual customer account. This is information that DCOs currently provide in accordance with the Part 39 Reporting Guidebook,
The final rule differs from the proposal in order to clarify that subparagraph (D) does not require a DCO to calculate risk sensitivities on the Commission's behalf. Rather, the rule requires a DCO only to report the risk sensitivities and valuation data for end-of-day positions that the DCO generates, creates, or calculates in connection with managing the risks associated with those end-of-day positions. The final rule is also modified to provide that a DCO is required to provide any legal entity identifiers and internally-generated identifiers for each individual customer account only if the DCO has this information associated with an account.
The Commission notes that the changes to § 39.19(c)(1)(i) to require reporting of information “by each individual customer account” are meant to reflect the information that DCOs currently report, to varying degrees, as explained above. The Commission notes that the requirement to report information “by each individual customer account” does not require a DCO to mandate that its clearing members look through an omnibus account that the clearing member carries for another registrant to ascertain the customers of that registrant. Similarly, in addition to providing for reporting by individual customer account, the daily reporting specifications have for several years included fields for reporting certain risk sensitivities, as well as reporting unique customer identifiers or legal entity identifiers. Ultimately, the changes to § 39.19(c)(1)(i) are not intended to require DCOs to report any information that they do not currently have, or do not currently report, subject to any operational or technological limitations that have been discussed with Commission staff. When Commission staff determines in the future that additional information regarding risk sensitivities and valuation data is needed, staff will engage with the DCOs, consistent with past practice, to facilitate efficient and effective reporting of this data.
Several commenters appeared to have adopted the view that the proposed amendment to § 39.19(c)(1)(i) to include individual customer account information would be a significant departure from existing requirements, when in fact this change is not intended to meaningfully alter the existing reporting structure, except to the extent that, as clarified below, the information that DCOs already are providing to the Commission is now subject to a mandatory reporting requirement. MGEX, ICE, and OCC opposed the proposed amendments to § 39.19(c)(1)(i) to require DCOs to report the required information by individual customer account. MGEX stated that reporting margin and cash flows by individual customer account is problematic because some DCOs currently do not calculate variation margin by individual customer account, and therefore, are not in a position to provide that data. MGEX stated that this is also problematic to the extent that the proposal would require a DCO to impose rules on non-clearing member FCMs that clear through an omnibus account at a clearing member FCM, where the DCO does not have a direct relationship with the non-clearing member FCM. Lastly, MGEX stated that complying with this proposed requirement would require a significant undertaking by DCOs. MGEX maintained that the current daily reporting structure strikes an appropriate balance between providing the Commission with sufficient information without being overly burdensome.
ICE asserted that, given that the Commission has not previously required DCOs to report individual customer information for futures positions, and given the substantial time and resources that DCOs will need to expend related to such reporting, the Commission should consult with industry further before adopting the proposed changes.
OCC asserted that if the Commission wishes to obtain information regarding individual customers, the Commission should amend the regulations governing FCMs and introducing brokers (IBs), rather than obtaining that information from DCOs. OCC also stated that clearing members may not have individual customer account information; for example, when clearing members receive omnibus position data from IBs, which do not include individual customer positions. OCC also suggested that the Commission would face practical challenges in connecting individual customer data from multiple sources—various FCMs and IBs—across DCOs. OCC further stated that, while those DCOs that clear swaps already report on a daily basis certain individual customer-level information for swap transactions, a DCO such as OCC that does not clear swap transactions does not currently have the infrastructure necessary to collect and report customer-level information daily.
Additionally, OCC opposed the specific requirement that DCOs calculate risk sensitivities on the Commission's behalf. OCC argued that risk sensitivities may be calculated in a variety of ways depending on the assumptions underlying the calculations and, under the proposal, the Commission would have the raw data necessary to calculate risk sensitivities based on its own assumptions and inputs. With respect to the proposed requirement to report risk sensitivities and valuation data, ICE requested that the Commission clarify what information should be reported, on what basis, and with what parameters.
Alternatively, OCC suggested that the Commission establish an effective date for these requirements that adequately accounts for the changes to systems, rules, and procedures that DCOs will need to make to comply with the requirements. OCC also requested that the Commission clarify how it would expect a DCO to calculate cash flows and valuation data, and clarify the format in which such information must be submitted. With respect to “cash flows” specifically, OCC requested that the Commission clarify whether “cash flows” include customer-level initial margin, mark-to-market value changes, changes in collateral value, or other components.
OCC requested that the Commission clarify that, although proposed § 39.19(c)(1)(i)(D) would require a DCO to provide any legal entity identifiers and internally-generated identifiers for individual customer accounts, this requirement does not require a DCO to obtain from its clearing members a legal entity identifier for each customer, and does not require a DCO to independently validate this information. CME suggested that proposed § 39.19(c)(1)(i) be modified to require that DCOs have rules that require clearing members to report individual customer account information to the DCO, using legal entity identifiers to identify the customers, and that the provision also specifically require that DCOs report customer information by
FIA and ISDA expressed concern regarding the burdens that proposed § 39.19(c)(1) may impose on clearing members. Specifically, FIA and ISDA stated that the large trader position reporting requirements and the ownership-and-control reporting requirements are based upon account control, while the proposed daily reporting requirements are based upon account ownership. FIA and ISDA stated that if clearing members will be required to provide new information to the DCO so that the DCO can comply with the new daily reporting requirement for individual customer accounts, then the Commission should conduct a cost-benefit analysis of this requirement as it pertains to clearing members and provide clearing members an opportunity to comment on the proposed requirement.
ICE suggested that the Commission further modify § 39.19(c)(1)(i) to move the reporting deadline from 10:00 a.m. to 12:00 p.m. ICE asserted that the current deadline provides insufficient time for operational processes related to data finalization. ICE also asserted that complying with the 10:00 a.m. deadline would become more difficult if the additional reporting requirements discussed above are added. LCH requested that the Commission delay the compliance date for these changes until after the Commission has updated its Part 39 Reporting Guidebook to clarify the specific information to be reported in relation to individual customer accounts.
The Commission is adopting the changes to § 39.19(c)(1)(ii)(C) as proposed. Regulation 39.19(c)(1)(i) requires DCOs to submit certain information to the Commission on a daily basis,
The Commission is adopting the changes to § 39.19(c)(2) as proposed. Regulation 39.19(c)(2) requires a DCO to submit to the Commission the financial resources report required by § 39.11(f). The Commission adopted § 39.19(c)(2) so that each DCO reporting requirement would be included in § 39.19. The Commission is revising the text of § 39.19(c)(2) to be more consistent with the text of § 39.11(f);
The Commission is adopting the changes to § 39.19(c)(3)(ii) as proposed. Regulation 39.19(c)(3)(ii) requires a DCO to file with the Commission its audited year-end financial statements or, if there are no financial statements available for the DCO, the consolidated audited year-end financial statements of the DCO's parent company. Consistent with the goal of centralizing DCO reporting obligations in § 39.19, the purpose of this provision is to include in § 39.19 the requirement in § 39.11(f)(2) that DCOs submit audited year-end financial statements to the Commission. The Commission did not receive any substantive comments on § 39.19(c)(3)(ii).
The Commission is adopting the changes to § 39.19(c)(3)(iv) as proposed. Regulation 39.19(c)(3)(iv) requires a DCO to submit concurrently to the Commission all reports required by paragraph (c)(3) within 90 days after the end of the DCO's fiscal year and only permits the Commission to provide an extension of time if it determines that a DCO's failure to submit the report on time “could not be avoided without unreasonable effort or expense.” The Commission is eliminating this requirement to provide itself with the flexibility to grant extensions of time under additional circumstances when appropriate. Additionally, the Commission is removing the requirement that reports be submitted concurrently, which will provide DCOs with the flexibility to submit reports required under § 39.19(c)(3) as they are completed. The Commission did not receive any comments on these changes.
The Commission is adopting a technical amendment to § 39.19(c)(4)(i), which concerns reporting of a decrease in a DCO's financial resources. The amendment adds a reference to the financial resources requirements of § 39.33. The Commission also is renumbering the subparagraphs for the sake of clarity. The Commission did not receive any comments on these changes.
The Commission is adopting new § 39.19(c)(4)(ii)
OCC supported proposed § 39.19(c)(4)(ii) but suggested that, when calculating liquidity resources to determine whether reporting is required, the margin on deposit should not be included in the calculation. OCC asserted that excluding margin on deposit from the calculation will align this requirement with the proposed changes to § 39.11. OCC also indicated that including margin on deposit in this calculation may skew the results of the calculation to create a less accurate measure of the resources a DCO has to manage a potential default. Alternatively, OCC suggested that, if margin on deposit is included in the calculation, the DCO should compare the liquidity resources of the clearing
The Commission is adopting the proposed changes to § 39.19(c)(4)(v), which is being renumbered as § 39.19(c)(4)(vi). This provision requires a DCO to notify the Commission immediately when the DCO requests that a clearing member reduce its positions. The Commission is deleting from this provision the language limiting notice to circumstances when “the [DCO] has determined that the clearing member has exceeded its exposure limit, has failed to meet an initial or variation margin call, or has failed to fulfill any other financial obligation to the [DCO].” This change is necessary because the Commission believes a DCO's request to a clearing member to reduce its positions is a sufficiently significant step that the Commission should be notified regardless of the reason for the request. The Commission did not receive any comments on the proposed changes to this provision.
The Commission is adopting the proposed changes to § 39.19(c)(4)(ix), and is renumbering it as § 39.19(c)(4)(x). This provision requires a DCO to report to the Commission no later than two business days following the departure or addition of key personnel, as defined in § 39.2. The Commission is clarifying that the notification requirement applies to both temporary and permanent replacements, and must include contact information. The Commission notes that the required contact information includes the individual's name, title, office address, email address, and phone number. The Commission did not receive any comments on the proposed changes to this provision.
The Commission is adopting new § 39.19(c)(4)(xi) to require a DCO to report a change to the legal name under which it operates. As the Commission noted in the Proposal, however, the DCO's registration order (and any other orders the DCO received from the Commission) would not need to be changed to reflect the legal name change. The Commission did not receive any comments on the proposed changes to this provision.
The Commission is adopting new § 39.19(c)(4)(xiii) to require a DCO to report a change in any liquidity funding arrangement it has in place. The Commission believes that receiving this information will assist it in overseeing the liquidity risk management of DCOs.
ICE opposed the new requirement on the grounds that reporting is unnecessary, provided that the DCO continues to satisfy the liquidity and other financial resource requirements, and provided that the liquidity funding changes are consistent with the policies and procedures of the DCO. CME and ICE suggested that the Commission incorporate a materiality threshold into the new requirement. Specifically, CME argued that, with respect to SIDCOs, the focus should be on capturing and reporting material changes to liquidity funding arrangements that allow for resources to be treated as qualifying liquidity resources.
In response to commenters' requests that a materiality threshold be incorporated into the reporting requirement, the Commission notes that the requirement includes a materiality element, along with a non-exclusive list of reportable events. Specifically, the rule requires reporting for “a change in provider, change in the size of the facility, change in expiration date, or any other material changes or conditions.” In response to the comment that reporting changes in liquidity funding arrangements is unnecessary, the Commission believes that such reporting will not be burdensome because it does not expect reportable changes to be frequent. The Commission is adopting § 39.19(c)(4)(xiii) as proposed.
The Commission is adopting new § 39.19(c)(4)(xiv) to require a DCO to report a new relationship with, or termination of a relationship with, any settlement bank used by the DCO or approved for use by the DCO's clearing members. The new rule differs from the proposal in that the reporting requirement only applies when a new settlement bank is added or an existing settlement bank relationship is terminated, rather than when the DCO changes its arrangements with a settlement bank. Also, the rule requires reporting within three business days, as opposed to one business day, as previously proposed. Consistent with the observation of one commenter, the Commission believes that the three-day requirement is properly aligned with the requirement in § 1.20(g)(4) that DCOs file an acknowledgment letter within three business days after opening a futures customer funds account at a depository.
ICE opposed the proposed requirement. ICE argued that the purpose of the requirement is unclear, noting that DCOs can have relationships with multiple settlement banks and that those relationships can be changed for commercial, operational, or other reasons in the ordinary course of business. CME, ICE, and Eurex suggested that the Commission incorporate a materiality threshold into the requirement that a DCO report a change in its arrangements with any settlement bank. Specifically, CME and OCC suggested that a DCO only be required to report when it starts using a new settlement bank or ceases using an existing settlement bank. Eurex stated that incorporating a materiality threshold into this requirement would align it with the current reporting requirement related to changes in credit facility funding arrangements, and with the proposed reporting requirement related to changes in liquidity funding arrangements. ICE suggested that reporting be limited to defaults or significant failures by a settlement bank. CME and OCC asserted that the reporting requirement should be designed to avoid unnecessary reports of routine administrative or operational changes, and similar immaterial changes, at settlement banks. CME also suggested that DCOs be required to report changes in settlement bank arrangements within three business days, to make the rule consistent with the requirement that DCOs file acknowledgment letters within three business days.
The Commission is adopting new § 39.19(c)(4)(xv) to require a DCO to report to the Commission no later than one business day after learning of any material issues or concerns regarding the performance, stability, liquidity, or financial resources of any settlement bank used by the DCO or approved for use by the DCO's clearing members. ICE opposed the proposed requirement, suggesting that DCOs should not be required to report operational problems
The Commission has determined not to adopt proposed § 39.19(c)(4)(xvi) at this time.
The Commission is adopting new § 39.19(c)(4)(xix) to require a DCO to notify the Commission no later than two business days after any change to the start and end dates of its fiscal year. The new rule differs from the proposal in that notice is required within two business days, rather than immediately, as previously proposed. This change will better align the notice period with other requirements in § 39.19(c)(4). ICE agreed that notice of a change in fiscal year is appropriate; however, ICE stated that it is unclear why such notice needs to be immediate, on par with notice of a default and similar events.
The Commission is adopting new § 39.19(c)(4)(xx) to require a DCO to report to the Commission no later than 15 days after any change in the DCO's independent public accounting firm. The Commission had proposed to require that the change be reported within one business day, but agrees with a comment from Nodal. Nodal opposed the requirement that the change be reported to the Commission within one business day, asserting that it places an undue burden on the DCO. Nodal instead suggested that the change be reported within 15 business days, arguing that 15 business days is more reasonable and consistent with requirements of other financial regulators, specifically, a regulation imposed by the Federal Deposit Insurance Corporation that requires insured depository institutions to report a change in independent accounting firm within 15 days.
The Commission is adopting new § 39.19(c)(4)(xxi) to codify in § 39.19 the requirement (currently in § 39.32(a)(3)(i) and adopted in this rulemaking in § 39.24(a)(3)(i), as discussed further below) that a DCO report to the Commission any major decision of the DCO's board of directors. ICE opposed the proposed requirement, asserting that board decisions are not necessarily categorized as major or minor. ICE also noted that board decisions are routinely disclosed to clearing members and other interested parties pursuant to § 39.32(a)(3), and are disclosed to the Commission through a variety of processes, including §§ 40.5 and 40.6. ICE requested that the Commission clarify specific categories of events that must be reported. ICE also requested that DCOs not be required to report decisions before they are implemented or announced publicly. Nadex requested clarification as to what constitutes a “major decision,” whether the DCO has discretion to determine which decisions qualify as major, and regarding the scope of such discretion. Nadex further requested clarification as to whether the DCO must provide an updated notice if the original board decision is amended or withdrawn before being implemented. Lastly, Nadex requested confirmation that the notice will be confidential, the DCO will not be required to post the notice on its website, and that the notice will not be posted on the Commission's website.
In response to these comments, the Commission notes that existing § 39.32(a)(3)(i) (moved in this rulemaking to § 39.24(a)(3)(i)) already requires that SIDCOs and subpart C DCOs disclose “major decisions of the board of directors” to the Commission, and to clearing members and other relevant stakeholders. The Commission proposed § 39.19(c)(4)(xxii) (renumbered as paragraph (xxi) in the final) simply to include this existing obligation in § 39.19 so that all of a DCO's reporting obligations are set forth in one place. The Commission further reiterates that DCOs have reasonable discretion to determine whether a board decision is major, though DCOs should develop and implement procedures to determine if a board decision is major and therefore reportable. A DCO would have to provide an updated notice if the original board decision is amended or withdrawn before being implemented, otherwise the Commission will be misinformed in relying on the original notice. Lastly, the Commission confirms that the notice will be considered confidential, as are all submissions received pursuant to § 39.19, and will not be posted on the Commission's website, nor required to be posted on the DCO's website.
The Commission is adopting new § 39.19(c)(4)(xxiii) to require a DCO to report to the Commission no later than one business day after any issue occurs with a DCO's margin model, including margin models for cross-margined portfolios, that materially affects the DCO's ability to calculate or collect initial margin or variation margin. The final rule differs from the proposal in
OCC, FIA, and ISDA supported the proposed requirement. OCC requested clarification regarding the contents of the report, specifically whether a DCO may comply with the requirement by supplying the Commission with a copy of the margin model issue report that DCOs also registered with the SEC must submit to the SEC pursuant to Regulation Systems Compliance and Integrity.
Nodal and ICE opposed the proposed requirement. Nodal argued that the proposed requirement is prescriptive, overbroad, and vague, especially to the extent that it requires reporting any issue, irrespective of its materiality, when no actual positions are affected by the issue. ICE argued that margin models face exceedances and other circumstances that are addressed through established processes, and that significant margin model problems are subject to existing reporting requirements.
Several commenters suggested that the proposed regulation include a materiality threshold. Nodal suggested that DCOs only be required to report margin model issues that materially affect the DCO's ability to calculate or collect variation or initial margin, and an actual position is affected. CME and LCH made the same suggestion, although CME suggested that an actual position must be materially impaired to trigger the reporting requirement. LCH commented that limiting reporting to material issues would minimize the reporting of immaterial or non-significant information and thereby ensure that the Commission focuses on those margin model issues that merit its attention. ICE suggested that reporting should be limited to margin model issues that are material to the operation of the DCO. LCH also noted that DCOs can detect and resolve margin model issues during daily back testing.
The Commission agrees with commenters that reporting should be limited to those margin model issues that “materially” affect the DCO's ability to calculate or collect initial margin or variation margin. The Commission believes that reporting only margin model issues that materially affect the DCO's ability to calculate or collect initial margin or variation margin, as opposed to all margin model issues, strikes an appropriate balance between supplying the Commission with information needed for effective oversight of DCOs, without placing an undue burden on the DCOs. The Commission confirms that a DCO may supply the Commission with a copy of the margin model issue report that it submits to the SEC pursuant to Regulation Systems Compliance and Integrity, but the DCO must supplement that report by providing the Commission with an explanation of the cause of the issue with the margin model.
The Commission is adopting new § 39.19(c)(4)(xxiv) to require a DCO that is required to maintain recovery and wind-down plans pursuant to § 39.39(b) to submit its plans to the Commission no later than the date on which it is required to have the plans. The new rule also permits a DCO that is not required to maintain recovery and wind-down plans pursuant to § 39.39(b), but which nonetheless maintains such plans, to submit the plans to the Commission. If a DCO subsequently revises its plans, the DCO will be required to submit the revised plans to the Commission along with a description of the changes and the reason for those changes. The Commission included this requirement because § 39.39(b) requires SIDCOs and subpart C DCOs to maintain recovery and wind-down plans, but there is currently no explicit requirement that the DCOs submit the plans to the Commission.
FIA and ISDA suggested that the Commission replace the requirement that a DCO submit its recovery and wind-down plans no later than the date on which it is required to have the plans with the actual date that a DCO is required to have plans, because it is otherwise difficult to discern exactly when a DCO must submit its plans. CME suggested that DCOs be required to submit their recovery and wind-down plans to the Commission annually, but that DCOs only be required to submit revised or updated plans if the changes are material.
In response to FIA and ISDA's comment, the Commission notes that the actual date by which a SIDCO or (new) subpart C DCO would be required to maintain a recovery and wind-down plan depends upon (a) when it is designated or elects subpart C status, (b) whether it requests relief pursuant to § 39.39(f), and (c) whether, and to what extent, the Commission were to grant such relief. That date cannot be ascertained in advance of a designation/election, potential request, and/or decision on such a request. In response to CME's suggestion that DCOs only be required to submit updated or revised plans when the changes are material, the Commission believes that, given the importance of recovery and wind-down plans to planning for and, in the unlikely event, addressing the bankruptcy of, or executing the resolution of, a DCO, it is important that the Commission have on hand, on an ongoing basis, an accurate and current version of the DCO's recovery and wind-down plans. The date of such a bankruptcy or resolution (and the corresponding urgent need for current information) cannot be determined in advance. For these reasons, the Commission is adopting § 39.19(c)(4)(xxv) as proposed (renumbered as § 39.19(c)(4)(xxiv)).
The Commission has determined not to adopt proposed new § 39.19(c)(4)(xxvi), which would have required a DCO to provide notice to the Commission no later than 30 calendar days prior to accepting a new product for clearing.
FIA and ISDA supported the proposed notice requirement for new products accepted for clearing, but MGEX, Nodal, CBOE, OCC, ICE, and CME opposed it. The commenters opposed to the proposed notice requirement offered several interrelated and overlapping reasons for their opposition, but the thrust of their arguments was that the proposed requirement is unnecessary and would be burdensome and inefficient because it needlessly duplicates and is inconsistent with the existing, well-functioning self-certification regime in § 40.2 for listing a new product for trading on a DCM or SEF. In addition, CME argued that the proposed 30-day notice requirement is inconsistent with section 5c(c) of the CEA. Lastly, commenters raised a number of concerns regarding how the term “new product” might be defined. Due to the many thoughtful and detailed comments addressing this provision, the Commission wishes to give further consideration to this issue and may address it in a separate rulemaking.
The Commission is adopting the proposed changes to § 39.19(c)(5), which requires a DCO to provide to the
The Commission is adopting changes to § 39.21(c) and removing § 39.21(d) in order to clarify the information that a DCO must publicly disclose on its website and to assist the public in locating the information. Regulation 39.21(c) requires a DCO to disclose publicly and to the Commission information concerning: (1) The terms and conditions of each contract, agreement, and transaction cleared and settled by the DCO; (2) each clearing and other fee that the DCO charges its clearing members; (3) the margin-setting methodology; (4) the size and composition of the financial resource package available in the event of a clearing member default; (5) daily settlement prices, volume, and open interest for each contract, agreement, or transaction cleared or settled by the DCO; (6) the DCO's rules and procedures for defaults in accordance with § 39.16; and (7) any other matter that is relevant to participation in the clearing and settlement activities of the DCO. Regulation 39.21(d) requires the DCO to post all of this information, as well as the DCO's rulebook and a list of its current clearing members, on the DCO's website, unless otherwise permitted by the Commission.
The Commission is removing § 39.21(d) and incorporating its requirements into § 39.21(c). The Commission reiterates that, as it clarified in the Proposal, a DCO must make each of the items of information listed in § 39.21(c) available separately on the DCO's website and not just in the DCO's rulebook, to assist members of the public in locating the relevant information, and potentially facilitate greater uniformity across DCO websites.
FIA and ISDA supported the proposed requirement that a DCO make certain information available on its website as opposed to in its rulebook. Nadex noted that it does not object to moving the requirements of § 39.21(d) into § 39.21(c), but requested confirmation that the exemptive relief granted in CFTC Letter No. 14-04,
Regulation 39.21(c)(4) requires a DCO to disclose publicly the size and composition of its financial resource package available in the event of a clearing member default. The Commission is amending § 39.21(c)(4) by adding the words “updated as of the end of the most recent fiscal quarter or upon Commission request and posted as promptly as practicable after submission of the report to the Commission under § 39.11(f)(1)(i)(A).” This change makes the frequency of public disclosure of a DCO's financial resources in the event of a clearing member default consistent with § 39.11(f)(1)(i)(A), which requires a DCO to report this information to the Commission each fiscal quarter or at any time upon Commission request. The Commission believes it is reasonable to require a DCO to update this information publicly with the same frequency. The final rule differs from the proposal, which would have required that the update be posted “concurrently” with the submission of the report.
ICE suggested changing the term “concurrently” in proposed § 39.21(c)(4) to “as promptly as practicable,” because for DCOs that are subsidiaries of public companies, it may not be feasible to make such a public disclosure until relevant financial statements for the public parent have been disclosed in accordance with all securities law requirements. MGEX agreed that updating the financial resource information on a quarterly basis seems reasonable, but noted that all subpart C DCOs are already making this data available each quarter in accordance with the CPMI-IOSCO Public Quantitative Disclosure Standards for Central Counterparties
The Commission is accepting ICE's suggestion to replace “concurrently” in proposed § 39.21(c)(4) with “as promptly as practicable,” to permit DCOs flexibility in situations in which posting updated information concurrently would not be possible. In response to MGEX's recommendation, the Commission notes that a DCO's publication of its Quantitative Disclosure would not fulfill the requirements of § 39.21(c)(4), for the same reasons that it stated in the Proposal that each of the disclosures required under § 39.21(c)(4) must be presented separately on the DCO's website.
Regulation 39.21(c)(5) requires a DCO to disclose publicly daily settlement prices, volume, and open interest for each contract, agreement, or transaction cleared or settled by the DCO. The Commission is amending § 39.21(c)(5) to clarify that DCOs are expected to publicly disclose volume and open interest, as well as settlement prices, on a daily basis in order to comply with § 39.21(c)(5). Although § 39.21(c)(5) does not specify a period of time the information must remain on the website as noted in the Proposal, the Commission encourages DCOs to make several days' worth of information available on their websites, as certain DCOs already do.
The Commission is adopting new § 39.21(c)(8) to include in the list of required public disclosures the
The Commission is removing § 39.32 in subpart C of part 39, which set forth the requirements for governance arrangements for SIDCOs and subpart C DCOs, and adopting new §§ 39.24, 39.25, and 39.26 in subpart B consistent with Core Principles O, P, and Q, thereby making these requirements applicable to all DCOs. Core Principle O requires a DCO to establish governance arrangements that are transparent to fulfill public interest requirements and to permit the consideration of the views of owners and participants. Core Principle O also requires a DCO to establish and enforce appropriate fitness standards for directors, members of any disciplinary committee, members of the DCO, any other individual or entity with direct access to the settlement or clearing activities of the DCO, and any other party affiliated with any of the foregoing individuals or entities. Core Principle P requires a DCO to establish and enforce rules to minimize conflicts of interest in the decision-making process of the DCO and establish a process for resolving such conflicts of interest. Core Principle Q requires a DCO to ensure that the composition of its governing board or committee includes “market participants.”
Consistent with Core Principle Q, new § 39.26 requires that a DCO include market participants and individuals who are not executives, officers, or employees of the DCO or an affiliate thereof on the DCO's governing board or board-level committee. The Commission interprets “governing board or board-level committee” to mean the group with the ultimate decision-making authority. The Commission had proposed to define “market participant” for purposes of § 39.26 as “any clearing member of the [DCO] or customer of a clearing member, or an employee, officer, or director of such entity.” However, given comments received, as discussed below, the Commission is declining to adopt this definition at this time.
CME, SIFMA AMG, and Mr. Barnard agreed with the Commission's proposal to codify the governance arrangements applicable to SIDCOs and subpart C DCOs within proposed §§ 39.24 through 39.26, and to make them applicable to all DCOs. Mr. Barnard believed the standards are clearly appropriate for all DCOs and will enhance risk management and governance, thus further improving the protection for market participants and the public.
CME agreed with the definition of market participant as set forth in proposed § 39.26. CME stated that it has benefited from having a board of directors, oversight committee, and risk committees consisting of a variety of market participants with differing views and expertise. CME also appreciated that the Commission proposed a principles-based approach by allowing each DCO to determine the best representation of market participants for its governing board or committee for its risk management governance purposes, while also allowing each DCO to continue to comply with relevant state and securities laws.
SIFMA AMG and MFA supported the adoption of a definition of “market participant” to require that the composition of a DCO's governing board or committee include “market participants.” SIFMA AMG and MFA, however, both shared concerns that the definition of “market participant” as proposed in § 39.26 was a broad term that extends beyond customers and could permit DCOs to choose only persons associated with clearing members and/or DCO employees, officers, or directors to serve on the DCO's board of directors. SIFMA AMG and MFA requested that the Commission amend § 39.26 to explicitly require customer participation on DCOs' governing bodies, such as the board of directors and advisory committees. SIFMA AMG suggested that, had Congress intended for only clearing members to be on DCO governing boards, Congress would have stated so specifically. However, Congress chose to use the term “market participants,” which SIFMA AMG suggested that the Commission correctly defined as including clearing members and customers.
Mr. Saguato agreed with the benefits of multi-stakeholder representation at the board level of a DCO and a more direct engagement of market participants in the governance and supervision of a DCO. He further suggested that the Commission consider requiring at least half of the representatives of a DCO's risk committee be comprised of market participants, in particular clearing members, to transform risk committees from “mere advisory committees” to a committee with decision-making power. Mr. Saguato also suggested that the Commission consider requiring a DCO's board of directors to provide formal and comprehensive explanations to market participants and the Commission any time that the DCO dissents from the deliberations of the risk committee.
Nodal agreed that a DCO needs to be responsive to its clearing members and its customers. However, Nodal suggested that the Commission further interpret “governing board or committee” within proposed § 39.26 to include the board of the DCO's parent company to the extent it has relevant decision-making authority over the DCO.
ICE agreed that there might be benefits in some cases to having market participants on a DCO's board or governing body. However, ICE opposed requiring a DCO to include market participants on its board of directors or other governing body. ICE suggested that the Commission's approach is overly prescriptive and that the CEA, including Core Principle Q, does not mandate any particular form of market participation. ICE suggested that the Commission interpret “governing board or committee” to allow market participation through risk or other committees rather than the governing board itself. ICE suggested that it is not uniformly necessary for clearing members or their customers to participate on the board of directors or other governing body of a DCO. Further, ICE suggested that requiring the same approach for every DCO, regardless of differences in organizational structure, membership, cleared products mix, business considerations, jurisdiction of organization, and other relevant factors, is unnecessarily rigid and could lead to risks and conflicts that the Commission has not considered. For example, ICE argued that, depending on the corporate structure of a DCO, participation on the board of directors or governing body might bring fiduciary and other duties in favor of the DCO, which might expose a participant to legal liability and pose conflicts of interest with the participant's other activities. ICE believes that, while exculpatory provisions, indemnifications, and other rules might mitigate or cover some of these risks, it might not be possible to do so completely or in all cases.
In addition, ICE disagreed with the Commission's suggestion to allow non-voting representation by market
Nadex suggested that fully collateralized, non-intermediated DCOs be exempt from compliance with proposed §§ 39.24 and 39.26 as retail individuals, like those of Nadex's market participants, are not industry professionals, are not familiar with the DCO's internal operations in the same way that FCMs and other sophisticated members are familiar with “traditional” DCOs' business and operations, do not have an ownership interest or financial stake in the DCO or its default waterfall, and therefore are not as substantially involved in the DCO's governance. Nadex further suggested that solicitation of the views of Nadex's market participants as to the governance of the DCO would not likely provide significant value as compared with the burden and cost of reviewing such responses and could hinder the efficient operation of Nadex's board.
In response to the comments on § 39.26, the Commission notes that the requirement to include market participants on a DCO's governing board or committee is a statutory requirement under Core Principle Q, applicable to all DCOs regardless of whether it is restated in the Commission's regulations. In response to ICE's suggestion that the Commission interpret “governing board or committee” to allow market participation through risk or other committees rather than the governing board itself, the Commission believes that this interpretation could permit a DCO to create a lower-level committee that does not have the same decision-making authority as its board or board-level committee, thereby preventing market participation on the DCO's governing board or committee, which is contrary to the statutory requirement of Core Principle Q. Further, the Commission agrees with CME's comment that § 39.26 takes a principles-based approach that allows each DCO to determine the best representation of market participants on its governing board or committee for its risk management governance purposes, while also allowing each DCO to continue to comply with relevant state and securities laws. In response to Nodal's request that the Commission further interpret “governing board or committee” to include the board of the DCO's parent company to the extent that it has relevant decision-making authority over the DCO, the Commission agrees that market participant representation on the board of the DCO's parent company may be appropriate where the DCO does not have its own board and the board of the DCO's parent company serves as the ultimate decision-making authority for the DCO.
While the Commission expects that a DCO clearing for the customers of FCMs would generally have customer representation on the DCO's board or board-level committee, the Commission is not revising § 39.26 to explicitly require that a DCO include a customer on its board or board-level committee as requested by SIFMA AMG and MFA. The Commission reiterates that § 39.26 is designed to enhance risk management and controls by promoting transparency of a DCO's governance arrangements by taking into account the interests of a DCO's clearing members and, where relevant, the clearing members' customers.
The Commission is, however, sympathetic to Nadex's concerns that the burden and cost of including market participants that are primarily retail and not exposed to the risk of lost margin or the default of the DCO's other customers may not be warranted for fully collateralized, non-intermediated DCOs. In light of this and other comments in this regard, the Commission wishes to give further consideration as to how to define “market participant” and declines to define it at this time.
The Commission notes that Mr. Saguato's suggestion that the Commission should require that at least half of the representatives of a DCO's risk committee be comprised of market participants is beyond the scope of the proposal, as it prescribes the composition of a DCO's risk committee rather than that of its governing body. Mr. Saguato's suggestion that the Commission require a DCO's board to provide formal and comprehensive explanations to market participants and the Commission any time that the DCO dissents from the deliberations of the risk committee is also beyond the scope of the proposal.
Regulation 39.27(c) requires a DCO that provides clearing services outside the United States to identify and address conflict of law issues, specify a choice of law, be able to demonstrate the enforceability of its choice of law in relevant jurisdictions, and be able to demonstrate that its rules, procedures, and contracts are enforceable in all relevant jurisdictions. In addition, Form DCO requires each applicant for DCO registration that provides or will provide clearing services outside the United States to provide a memorandum to the Commission that would, among other things, analyze the insolvency issues in the jurisdiction where the applicant is based.
The Commission is amending § 39.27(c) by adding paragraph (3), which requires a DCO that provides clearing services outside the United States to ensure on an ongoing basis that the memorandum required in Exhibit R of Form DCO is accurate and up to date, and to submit an updated memorandum to the Commission promptly following all material changes to the analysis or content contained in the memorandum.
ICE suggested that, instead of on an ongoing basis, the memorandum be reviewed and updated at regular intervals, such as every three years, or within a defined timeframe after a material change to the law. The Commission is declining ICE's suggestion because the purpose of the requirement is to ensure the DCO's ongoing monitoring of applicable legal requirements and prompt notification to the Commission if material changes occur. In response to ICE's comment, the Commission confirms that, while changes to the memorandum and filing of updates are expected to occur infrequently, the DCO has a continuing obligation to ensure that the information in the memorandum is current.
Regulation 39.33(a)(1) requires a SIDCO or a subpart C DCO that is systemically important in multiple jurisdictions, or that is involved in activities with a more complex risk profile, to maintain financial resources sufficient to enable it to meet its
Regulation 39.33(c)(1) requires a SIDCO or subpart C DCO to maintain eligible liquid resources sufficient to meet its obligations to perform settlements with a high degree of confidence under a wide range of stress scenarios that should include the default of the clearing member creating the largest aggregate liquidity obligation for the SIDCO or subpart C DCO. The Commission is amending § 39.33(c)(1) by adding the phrase “in all relevant currencies” to clarify that the “largest aggregate liquidity obligation” means the total amount of cash, in each relevant currency, that the defaulted clearing member would be required to pay to the DCO during the time it would take to liquidate or auction the defaulted clearing member's positions, as reasonably modeled by the DCO. When evaluating its largest aggregate liquidity obligation on a day-to-day basis over a multi-day period, a SIDCO or subpart C DCO may use its liquidity risk management model.
Regulation 39.33(d) requires a SIDCO or a subpart C DCO to undertake due diligence to confirm that each of its liquidity providers has the capacity to perform its commitments to provide liquidity, and to regularly test its own procedures for accessing its liquidity resources. The Commission is amending the regulation to additionally require a SIDCO with access to deposit accounts and related services at a Federal Reserve Bank to use such services “where practical.”
MGEX agreed that proposed § 39.33(d)(5) would further enhance a SIDCO's financial integrity and management of liquidity risk. MGEX further urged the Commission to advocate for other DCOs' ability to have accounts at a Federal Reserve Bank, as allowing broader access would not only lower the credit and liquidity risks faced by DCOs under the Commission's jurisdiction, it would also advance the Commission's goal of enhancing the protection of customer funds and help mitigate the disparity or competitive disadvantage that otherwise results based on a DCO's size or systemic importance. SIFMA AMG also supported proposed § 39.33(d)(5) and recommended that the Commission expand the requirements to all DCOs.
CME recommended that the Commission revise proposed § 39.33(d)(5) to clarify that a decision on whether the use of a Federal Reserve Bank's accounts and services is “practical” should take into account a SIDCO's ability to effectively manage its overall risk. Specifically, CME urged that a SIDCO should have the flexibility to strike the appropriate balance between using commercial banks (in their capacities as custodians and cash depositories) and a Federal Reserve Bank in order to allow a SIDCO to diversify its counterparty relationships to holistically manage its liquidity and operational risks. CME was of the view that, in the event of a clearing member default, commercial banks may more efficiently monetize non-cash collateral and can move collateral internally without the restraints of the Federal Reserve Banks' operating timelines.
As to MGEX's suggestion that the Commission advocate for all DCOs to have the ability to hold accounts at a Federal Reserve Bank, the Commission reiterates its view that section 806(a) of the Dodd-Frank Act supports Federal Reserve Banks acting as depositories for all registered DCOs, not just SIDCOs.
Regulation 39.36 requires a SIDCO or a subpart C DCO to conduct stress tests of its financial and liquidity resources and to regularly conduct sensitivity analyses of its margin models. The Commission is amending § 39.36(a)(6) to clarify that a SIDCO or subpart C DCO that is subject to the minimum financial resources requirement set forth in § 39.11(a)(1), rather than § 39.33(a), should use the results of its stress tests to support compliance with that requirement.
The Commission is also amending § 39.36(b)(2)(ii) to replace the words “produce accurate results” with “react appropriately” to more accurately reflect that the purpose of a sensitivity analysis is to assess whether the margin model will react appropriately to changes of inputs, parameters, and assumptions. Furthermore, the Commission is amending § 39.36(d), which requires each SIDCO and subpart C DCO to “regularly” conduct an assessment of the theoretical and empirical properties of its margin model for all products it clears, to clarify that the assessment should be conducted “on at least an annual basis (or more frequently if there are material relevant market developments).” Lastly, the Commission is amending § 39.36(e) by adding the heading “[i]ndependent validation” to the provision. The Commission did not receive comments on these changes.
Regulation 39.37(a) and (b) requires a SIDCO or a subpart C DCO to publicly disclose its responses to the CPMI-IOSCO Disclosure Framework (Disclosure Framework)
Regulation 39.37(c) requires a SIDCO or a subpart C DCO to disclose, to the public and to the Commission, relevant basic data on transaction volume and values. The Commission is amending § 39.37(c) to explicitly state that a SIDCO or a subpart C DCO must disclose relevant basic data on transaction volume and values that are consistent with the standards set forth in the CPMI-IOSCO Public Quantitative Disclosure Standards for Central Counterparties.
SIFMA AMG supported the proposed requirement in § 39.37(b)(2) to require a SIDCO or a subpart C DCO to show all deletions and additions made to the immediately preceding version of the Disclosure Framework, as SIFMA AMG believes it is extremely useful in understanding the evolution of a SIDCO's or a subpart C DCO's Disclosure Framework. SIFMA AMG recommended, however, that § 39.37(b)(2) require a SIDCO or a subpart C DCO to provide the Commission with notice of
As to SIFMA AMG's suggestion that the Commission require a consistent format for SIDCOs' and subpart C DCOs' Disclosure Framework and provide a deadline for publishing such disclosures, the Commission believes it would be more appropriate for these changes to be made by CPMI-IOSCO, and not the Commission, so that these changes would be applicable to all central counterparties.
To request registration as a DCO, § 39.3(a)(2) requires an applicant to file a complete Form DCO, which includes a cover sheet, all applicable exhibits, and any supplemental materials, as provided in appendix A to part 39.
The Commission proposed to amend Form DCO to better describe the required exhibits in a manner that is consistent with the amendments to the relevant regulations as described herein; the modifications to Form DCO do not make any other substantive changes. The Commission did not receive any comments on the proposed changes to Form DCO, and the Commission is adopting it as proposed.
The Commission proposed to amend the Subpart C Election Form to better reflect the requirements in subpart C of part 39 and to more closely align the format of the Subpart C Election Form with Form DCO by specifying the information and/or documentation that must be provided by a DCO as part of its petition for subpart C election. The Commission did not receive any comments on the proposed changes to the Subpart C Election Form, and the Commission is adopting it as proposed.
Regulation 140.94 includes delegation of authority from the Commission to the Director of the Division of Clearing and Risk. The Commission proposed to revise § 140.94 to conform to the changes to part 39 contained in the Proposal, without making any substantive change to the scope of delegation. The Commission did not receive any comments on these changes and is adopting them as proposed.
In addition to the comments discussed above, the Commission received several general comments that addressed matters outside the scope of the Proposal. The Commission appreciates the additional feedback. Because these comments do not address proposed changes and are therefore outside the scope of this rulemaking, the Commission may take the comments under advisement for future rulemakings.
FIA and ISDA stated that the financial resources requirement that the Commission imposes on DCOs under § 39.11 should ensure that a DCO's own capital contribution is set at an appropriate level to align the interests of the DCO with those of its clearing members. They argued that the DCO should be required to contribute an amount to the default waterfall that is material to, and commensurate with the amount of risk cleared by, the DCO. They also argued that having sufficient “skin in the game” relative to the aggregate default fund would incentivize the DCO and its shareholders to engage in prudent risk management prior to and during a stress event because they would share in any resulting losses. They further argued that setting a DCO's minimum financial resources based, in part, upon a DCO's capital contribution would help to ensure the DCO's resiliency in variable market conditions. SIFMA AMG agreed, stating that a DCO's “skin in the game” is currently “generally very low” compared to the risk the DCO is responsible for managing but should be “meaningful” to appropriately incentivize the DCO's management and shareholders to manage the risks brought into clearing. SIFMA AMG recommended that the Commission lead an analytical study on “the optimal level of [DCO] capital and its specific allocation to [skin in the game] and provide a robust capital framework and requirement for [skin in the game] to the industry to further strengthen DCO resilience.” Similarly, Mr. Saguato encouraged the Commission to look into the ratios between clearinghouses' own capital and members' guaranty fund deposits in the default waterfall and to analyze the effects they have on clearinghouses' risk profiles.
SIFMA AMG stated that DCOs should not be permitted to count unfunded assessments towards resources available to the DCO pursuant to § 39.11(b)(1)(v), which is being renumbered as § 39.11(b)(1)(iv).
SIFMA AMG suggested that the Commission require DCOs to make their quarterly and annual reports required under § 39.11(f) publicly available concurrent with their submission to the Commission. In addition, SIFMA AMG recommended that full financial statements be prepared for each DCO at the DCO legal entity level and, where DCOs have structured themselves with mechanisms to limit recovery to a defined pool of assets, such DCOs should publicly disclose specific information regarding the total available recourse assets, including, but not limited to, the manner in which the assets are maintained and whether the DCO's capital is funded or unfunded and the manner by which it is segregated. The Commission encourages DCOs to make their financial reports available to the public.
MFA expressed support for the fair and open access provisions of § 39.12, in particular with respect to increasing customers' access to DCOs through direct membership. MFA noted that
ICE recommended that the Commission clarify in § 39.13(g)(1), which was not proposed to be amended, that the reference to “on a regular basis” means annually.
FIA and ISDA suggested, with respect to § 39.13(g)(8)(iii), that the Commission should address in a re-proposed rule the initial margin issues for separate accounts raised in CFTC Letter No. 19-17.
In connection with § 39.15 generally, LCH suggested that the Commission allow a DCO to use its own money, securities, or other property to deposit additional collateral in a cleared swaps customer account to prevent a shortfall without desegregating the account. LCH was of the view that allowing DCOs to deposit their own resources as a “buffer” would be consistent with the FCM's ability to make such deposits pursuant to part 22 of the Commission's regulations and further the CFTC's policy objectives to ensure that customer accounts remain segregated. LCH further stated that DCO “buffer collateral” supports strong risk management and could protect against customer account shortfalls in possible instances of operational risk or error at the DCO, which LCH believes FCMs' “buffer collateral” would not address. LCH's suggestion is beyond the scope of § 39.15 as well as the amendments to § 39.15 adopted herein.
With regard to the rule and product certification processes set forth in part 40 of the Commission's regulations, SIFMA AMG suggested that the Commission require a DCO to obtain market feedback prior to filing any certification for a new or amended rule or product. SIFMA AMG suggested that the Commission require all DCO submissions to: (1) Certify that the DCO solicited market feedback and that the summary provided includes all material supporting and opposing views; (2) summarize all material supporting and opposing views received from a DCO's advisory committee and other market participants within all such submissions; and (3) delineate whether such views are from clearing members or customers. The Commission did not propose to amend its part 40 regulations in this rulemaking.
The Regulatory Flexibility Act (RFA) requires that agencies consider whether the regulations they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis on the impact.
The Paperwork Reduction Act of 1995 (PRA)
The Commission did not receive any comments regarding its PRA burden analysis in the preamble to the Proposal. The Commission is revising collection 3038-0076 to reflect the adoption of amendments to part 39, as discussed below, with changes to reflect adjustments that were made to the final rules in response to comments on the Proposal. The Commission does not believe the rule amendments as adopted impose any other new collections of information that require approval of OMB under the PRA.
Subpart A establishes the procedures and information required for applications for registration as a DCO, including submission of a completed Form DCO accompanied by all applicable exhibits. The Commission is adopting changes to § 39.3(a)(2) that remove the requirement that DCOs use Form DCO to request an amended order of registration. In addition, the Commission is adopting changes that would move governance requirements from Subpart C to Subpart A, and making corresponding amendments to Form DCO to require that the information be included in an application for registration as a DCO, which the Commission previously estimated would move 22 burden hours per respondent from the Subpart C Election Form to Form DCO. Accordingly, the Commission's original burden estimate of two respondents, with one response annually, has not changed.
The Commission is estimating that the change to 39.3(a)(2) to eliminate the requirement for DCOs to use Form DCO to request an amended order of DCO registration will result in a decrease of one burden hour. The aggregate burden estimate for Form DCO is as follows:
The Commission also is adopting as proposed the changes to § 39.3 regarding requests for extension of the review of a DCO application, vacation of a DCO's registration, and transfer of positions. The Commission is adopting new § 39.3(a)(6), which will permit the Commission to extend the 180-day review period for DCO applications specified in § 39.3(a)(1) for any period of time to which the applicant agrees in writing. The Commission estimates that there would be two requests for extension of the DCO application per year, one per respondent, and that it will take one hour per report. The aggregate estimate for the agreement in writing to extend the application review period pursuant to § 39.3(a)(6) is as follows:
The Commission is adopting amendments to § 39.3(e) to codify statutory requirements regarding vacation of registration. The revised regulation specifies information that a DCO must include in its request to vacate, and requires a DCO to continue to maintain its books and records after its registration has been vacated for the requisite statutory and regulatory retention periods. The Commission estimated that there would be one request to vacate every three years and that it would take three hours per report. The annual aggregate reporting burden for the request to vacate requirement has been divided to reflect the estimate of one request to vacate a DCO registration pursuant to § 39.3(e)(1) every three years as follows:
For recordkeeping by a DCO that has requested to vacate its registration, the Commission is adding this recordkeeping burden to OMB control number 3038-0076, which currently includes 16 responses and 50 burden hours for the recordkeeping requirement of registered DCOs. The Commission is also transferring the 100 recordkeeping burden hours currently contained in OMB control number 3038-0069 to OMB control number 3038-0076. The burden for the request to vacate requirement has been divided to reflect the estimate of one record of the request to vacate a DCO registration pursuant to § 39.3(e)(1) every three years. The combined annual aggregate recordkeeping burden estimate for subparts A and B of part 39 under OMB control number 3038-0076 is as follows:
The Commission proposed changes to § 39.3(f), to be renumbered as § 39.3(g), to simplify the requirements for requesting a transfer of open interest. The rule submission filing is covered by OMB control number 3038-0093, which reflects that there are 50 reports annually and that it takes two hours per response. The Commission is of the view that to the extent that the request to transfer open interest would be submitted as part of a new rule or rule amendment filing pursuant to § 40.5, the proposed change is already covered by OMB control number 3038-0093 and there is no change in the burden estimates.
Currently, § 39.10(c)(3) requires the CCO of a DCO to prepare, and to submit to the Commission and the DCO's board of directors, an annual compliance report containing specified information regarding the DCO's compliance with the core principles and Commission regulations. The burden for CCO annual reports, which is currently covered by OMB control number 3038-0081, is being moved to OMB control number 3038-0076. OMB control number 3038-0081 reflects that there are 12 respondents that submit CCO annual reports annually and that it takes 80 hours to complete and submit the report, and 960 hours in the aggregate. The number of respondents has been updated to 16 to reflect the current number of registered DCOs. The Commission is adopting changes that allow a DCO to incorporate by reference certain sections of prior annual compliance reports. Specifically, if the sections of the CCO annual report that describe the DCO's compliance policies and procedures have not materially changed, the current report may reference a prior year's report, provided that the referenced report was filed within the prior five years. The Commission estimates that this change will decrease the burden of preparing the CCO annual report by ten hours per respondent, and 160 hours in aggregate, by not requiring the report to repeat potentially lengthy descriptions of policies and procedures that have already been adequately described in a CCO annual report previously submitted to the Commission.
The Commission is adopting a requirement that the CCO annual report must identify, by name, rule number, or other identifier, the policies and procedures intended to comply with each core principle and applicable regulation. The Commission estimates the change will add two hours to the burden of preparing each report, and 32 hours in the aggregate. Lastly, the Commission is adopting an amendment to § 39.10(c)(4) to require that the CCO annual report describe the process by which the report is submitted to the DCO's board or senior officer. This requirement will require DCOs to memorialize in the report a process they are already required to follow. Nonetheless, the Commission anticipates an increase of one hour in the burden for each report, and 16 hours in the aggregate due to this change. Overall, the Commission estimates that the net impact of these increases and reductions to the CCO annual report burden due to the changes is expected to be a decrease of seven hours per respondent in the existing information collection burden associated with the CCO annual report.
The Commission is adding § 39.13(i), which sets forth the procedure for DCOs to submit information related to their proposed cross-margining programs with other DCOs (or other clearing organizations). Regulation § 39.13(i) requires that the DCO provide this information as part of a rule filing submitted for Commission approval pursuant to § 40.5. The rule submission filing is covered by OMB control number 3038-0093, which reflects that there are 50 reports annually and that it takes 2 hours per response. The Commission is of the view that to the extent that the cross-margining program would be submitted as part of a new rule or rule amendment filing pursuant to § 40.5, the proposed changes is already covered by OMB control number 3038-0093 and there is no change in the burden estimates.
Existing § 39.11(f) requires DCOs to provide to the Commission quarterly reports of their financial resources, and § 39.19(c)(3) requires DCOs to prepare and submit audited annual financial statements. The Commission is adding § 39.11(f)(2), which incorporates in § 39.11 the annual reporting requirement that currently exists in § 39.19(c)(3). This change simply moves the existing requirement to a different location, and does not alter the existing information collection burden associated with this requirement. Accordingly, the burden for annual financial reports is being moved from OMB control number 3038-0069 to OMB control number 3038-0076, and the burden for quarterly financial reports is being moved from OMB control number 3038-0066 to OMB control number 3038-0076. The Commission is cancelling OMB control numbers 3038-0069 and 3038-0066.
The Commission is amending § 39.11(f)(2) to require that, concurrently with filing the required annual financial report, a DCO also provide: (1) A reconciliation, including appropriate explanations, of its balance sheet in the certified annual financial statements with the DCO's most recent quarterly report when material differences exist or, if no material differences exist, a statement so indicating, and (2) such further information as may be necessary to make the required statements not misleading. The Commission estimates that this change will add an additional 20 hours per report, and 320 hours in the aggregate, to the current burden of 2606 hours per respondent, and 41,696 hours in the aggregate, in OMB control number 3038-0069, which as noted above, is being moved to OMB control number 3038-0076.
Finally, the Commission is not adopting proposed changes to § 39.11(f)(2)(i) that would have required the annual report to identify the DCO's own capital allocated to the DCO's compliance with § 39.11(a)(1), and also identify each of the DCO's financial resources allocated to the DCO's compliance with § 39.11(a)(2). The Commission previously estimated that the proposed change would add an additional 14 hours per report and 224 hours in the aggregate to the annual report burden, and has reduced its per report and total burden estimates because this additional requirement will not be adopted. The total annual burden hour estimate for this requirement, which is being moved from OMB control number 3038-0069 to OMB control number 3038-0076, is stated below.
The Commission estimates that the aggregate result of these changes will be to increase the information collection burden associated with annual financial reports from 2606 hours to 2626 hours for each DCO. The revised estimated aggregate burden for the audited annual financial statements is as follows:
The Commission is removing from § 39.11(f)(3) the requirement that certain documentation be filed quarterly; instead, DCOs would only need to include the information in their first quarterly report submission and upon any subsequent change, for an expected reduction of three hours per report. Proposed § 39.11(f)(1)(v) would have required a DCO to identify in its quarterly report the financial resources allocated to meeting its obligations under § 39.11(a)(1) and (a)(2), with an expected increase of one hour per report. The Commission has determined not to adopt this change and has reduced the burden hour estimate by one hour per report. The Commission has adjusted the burden hour estimate for quarterly reporting to reflect these changes, which result in an overall reduction in burden of three hours per report. The estimated aggregate burden for the quarterly reports as amended is as follows:
The Commission is adopting the amendment to § 39.11(f)(1)(ii), which required a DCO to file with the Commission a financial statement of the DCO or of its parent company, to require that the financial statement provided be that of the DCO and not the parent company. The Commission is further adopting changes to the periodic financial reporting requirements in § 39.11(f)(1)(ii) and (f)(2)(i) to permit quarterly and annual financial statements to be prepared in accordance with U.S. GAAP for DCOs incorporated or organized under U.S. law and in accordance with either U.S. GAAP or IFRS for DCOs incorporated or organized under the laws of any foreign country. As the Commission noted in the Proposal, these changes are not expected to affect the burden.
The Commission proposed to amend § 39.19(c)(1)(i)(A)-(C), which requires a DCO to report margin, cash flow, and position information by house origin and separately by customer origin, to report this information by individual customer account as well. The Commission also proposed to amend § 39.19(c)(1)(i)(D) to specify that, with respect to end-of-day position information, DCOs must report both unadjusted and risk-adjusted position information. Although the Commission is clarifying, in response to comments, that certain information is required to be provided only where it is in the possession of the DCO, these clarifications do not affect the Commission's prior burden estimates. The burden associated with these changes is anticipated to result in an increase from 0.1 to 0.5 hours per report, and 2000 in the aggregate. The burden increase for daily financial reports is being moved from OMB control number 3038-0069 to OMB control number 3038-0076.
Separately, the Commission is adopting changes to § 39.19(c)(1)(i) to codify relief previously granted to fully
The Commission is adopting amendments to § 39.13(g)(8)(i)(B) to require a DCO to have rules requiring its FCM clearing members to report customer information about futures (as well as swaps) to DCOs. This is a new information collection that is not covered by an existing OMB control number. The burden applicable to FCM clearing members is estimated as follows:
Regulations 39.18(g) and (h) require a DCO to provide notice regarding certain exceptional events or planned changes related to a DCO's automated systems. These notice requirements are adopted by reference in § 39.19(c)(4). Regulation 39.19(c)(4) also requires a DCO to notify the Commission of the occurrence of other specified events; for example, a decrease in financial resources or the default of a clearing member. The information collection burden associated with these notices required under § 39.19(c)(4) is currently addressed by OMB Control No. 3038-0069, but is being moved to OMB control number 3038-0076 and consolidated with the burden in OMB control number 3038-0076 that is currently associated with § 39.18(g) and (h). The Commission is also amending § 39.16(c)(2)(ii) to require that a DCO provide public notice of a declaration of default on its website. The estimated burden of § 39.16(c)(2)(ii) is included in the estimate for event-specific reporting because it is related to the requirement under § 39.19(c)(4)(vii) that a DCO provide immediate notice to the Commission regarding the default of a clearing member. In addition, the Commission is adding to § 39.19(c)(4) several events for which DCOs will be required to provide notification if such events occur.
The Commission determined not to adopt several proposed notice requirements, and has reduced the burden estimate for event-specific notice requirements by 6 responses annually, from 20 to 14. The aggregate revised burden estimate of § 39.19(c)(4) being transferred to OMB control number 3038-0076 is as follows:
The Commission is revising § 39.21 to clarify that information regarding the financial resource package available in the event of a clearing member default, which a DCO is required to post on its website pursuant to § 39.21, should be updated at least quarterly, consistent with the requirement in § 39.11(f)(1)(i)(A) to report this information to the Commission each fiscal quarter or at any time upon Commission request. The Commission is also clarifying that other information specified in § 39.21 must be disclosed separately on the DCO's website, and not provided solely in the DCO's posted rulebook. This is a new information collection that is not covered by an existing OMB control number. The changes are estimated to add an average of two hours per response, and eight hours per respondent annually (4 quarterly reports × 2 hours per report) to OMB control number 3038-0076, for an aggregate estimated burden as follows:
As noted above, the Commission is incorporating governance provisions from subpart C, which only applies to a limited subset of DCOs, into subpart B, which is applicable to all DCOs. Therefore, the information collection burden currently associated with the governance standards of § 39.32, which results from required disclosure of major board decisions and governance arrangements, has been reallocated to § 39.24. The burden associated with subpart C governance provisions, which is currently covered by OMB control number 3038-0081, is being moved to OMB control number 3038-0076. The aggregate burden of these requirements would increase because they will be applicable to all registered DCOs. The aggregate burden estimate for § 39.24 that is associated with the required ongoing disclosure of major board decisions and governance arrangements by registered DCOs, including DCOs that are not currently subject to subpart C, is estimated as follows:
The Commission is adopting changes to § 39.27 that will require a DCO that provides clearing services outside the United States to ensure that the legal opinion that a DCO must obtain to provide those services is accurate and up to date. The new subsection also requires the DCO to submit an updated legal memorandum to the Commission following all material changes to the analysis or content contained in the memorandum. This requirement will apply only to DCOs offering clearing services outside the U.S. This is a new information collection that is not covered by an existing OMB control number. The Commission expects that circumstances necessitating submission of an updated legal memorandum will occur infrequently, not more than once every three years, and has estimated the aggregate burden as follows:
Because the Commission is removing and reserving § 39.32 and Exhibit B of the subpart C Election Form and moving the governance requirements to Form DCO and § 39.24, the corresponding information collection burden under § 39.32, currently covered by OMB control number 3038-0081, will be eliminated and the burden under the subpart C Election Form will be
Additionally, the Commission is updating the estimated numbers of respondents for subpart C to reflect the current number of SIDCOs and subpart C DCOs, and a reduction, from five to one, in the anticipated number of DCOs newly electing to be subject to subpart C. The Commission is also updating the number of responses for the rescission notices that must be provided to clearing members based on an average of the current number of clearing members at subpart C DCOs. The Commission also is combining burden estimates that previously were estimated separately for SIDCOs only and for all subpart C DCOs; that distinction was made in the initial implementation of subpart C but is no longer necessary since the subpart C rules have been in place for several years. The revised estimated aggregate reporting burden related to the subpart C Election Form, notices and disclosure being transferred to OMB control number 3038-0076 is as follows:
Additionally, the Commission is adding to § 39.37 a notification requirement regarding changes to the PFMI disclosure framework for SIDCOs and subpart C DCOs, which is expected to increase, by one hour, the existing information collection burden of 80 hours per response. The aggregate estimated burden for § 39.37 is stated below:
Because the Commission is moving all of the burden estimates for subpart C from OMB control number 3038-0081 to OMB control number 3038-0076 and cancelling information collection 3038-0081, the existing burden estimates for §§ 39.33, 39.36, 39.38, and 39.39, and certain disclosures under § 39.37, as updated to reflect the current number of SIDCOs and subpart C DCOs, are restated below. In addition, for the quantitative disclosures required under § 39.37, which may be updated as frequently as quarterly, the Commission has updated the number of reports per respondent from one to four annually, and has distributed the existing 35 burden hours among the four reports (35/4=8.75, rounded to 9). The updated subpart C reporting burden estimates for the changes to Subpart C—Provisions is as follows:
With respect to the subpart C recordkeeping burden that the Commission is moving from OMB control number 3038-0081 to OMB control number 3038-0076, the Commission also has combined the burden estimates for financial and liquidity resources, and liquidity resource due diligence and testing because these requirements apply to the same set of respondents. As noted above, the general recordkeeping requirements that were previously estimated separately for SIDCOs and all subpart C DCOs also have been combined. The updated subpart C recordkeeping burden estimates are restated below:
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.
In the Proposal, the Commission established, based on the subject matter of the proposals, that it did not consider any of the proposed changes contained therein to have any significant impact on price discovery. The Commission received no responses from commenters with respect to its analysis regarding price discovery. For the remaining areas, where the Commission believed the costs or benefits of the Proposal were significant, the Commission addressed, section by section, the qualitative costs or benefits associated with the Proposal. Where reasonably possible, the Commission has endeavored to estimate quantifiable costs and benefits. Where quantification is not feasible, the Commission identifies and describes costs and benefits qualitatively. The Commission requested comments on the costs and benefits associated with the proposed rules. In particular, the Commission requested that commenters provide data and any other information or statistics that the commenters relied on to reach any conclusions regarding the Commission's proposed considerations of costs and benefits. The Commission received comments that indirectly address the costs and benefits of the proposal. These comments are discussed as relevant below.
The Commission notes that 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 rules 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 or effect on U.S. commerce under section 2(i) of the CEA.
The baseline for the Commission's consideration of the costs and benefits of this rulemaking are the following requirements prior to taking into account the final amendments being adopted herein: (1) The DCO Core Principles set forth in section 5b(c)(2) of the CEA; (2) the general provisions applicable to DCOs under subparts A and B of part 39 of the Commission's regulations; (3) the Commission's regulations in subpart C of part 39, which establish additional standards for compliance with the core principles for those DCOs that are designated as SIDCOs or have elected to opt-in to the subpart C requirements in order to achieve status as a qualified central counterparty (QCCP); (4) Form DCO in Appendix A to part 39; (5) Subpart C Election Form in Appendix B to part 39; and (6) §§ 1.20(d) and 140.94.
The Commission notes that some of the rules codify existing no-action relief and other guidance issued by Commission staff. To the extent that market participants have relied upon such relief or staff guidance, the actual costs and benefits of the rules, as discussed in this section, may not be as significant.
ICE commented that the Commission insufficiently considered the costs and benefits of those proposed rules not related to Project KISS and that the Commission should re-propose those rules in a separate rulemaking that more fully considers costs to DCOs. CME stated that the proposed amendments, in aggregate, will increase, rather than reduce, the regulatory burdens on DCOs and the markets they clear. The Commission acknowledges these comments and, as discussed further below, notes that it has modified or determined not to finalize many of the proposed rules in light of specific comments related to costs.
Regulation 1.20(d)(1) requires an FCM to obtain a written acknowledgment
The Commission did not receive comments on the costs associated with these amendments. As to the benefits, FIA and ISDA commented that clarifying the applicability of § 1.20(d)(3) through (6) avoids redundant information-sharing arrangements.
The Commission believes the amendments to § 1.20(d) will benefit FCMs and DCOs by reducing uncertainty as to when an FCM must obtain a written acknowledgment from a DCO.
The Commission does not believe the amendments would impose any additional costs on DCOs or FCMs, as it is clarifying the circumstances under which an acknowledgment letter would not be required.
As to the costs and benefits in light of the section 15(a) factors, in consideration of section 15(a)(2)(B) of the CEA, the Commission believes that the amendments to § 1.20(d) would not negatively impact the protection of market participants and the public, including DCOs' clearing members and their customers, as the amendments merely clarify the instances in which a DCO, or an FCM that clears through that DCO, would not need to file an acknowledgment letter because the DCO has adopted rules that provide for the segregation of customer funds. The Commission believes that the amendments to § 1.20(d) will result in an incremental increase in efficiency for FCMs that follows from reducing any previous uncertainty regarding when they must obtain an acknowledgment letter. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
Regulation 39.2 sets forth definitions applicable to terms used in part 39 of the Commission's regulations. The Commission proposed amendments to the definition of “business day,” “customer,” “customer account or customer origin,” and “key personnel” in § 39.2 to maintain consistency with terms defined elsewhere in Commission regulations and to provide clarity with respect to the use of these terms. The Commission is also adding new definitions for “enterprise risk management” and “fully collateralized position” to correspond with amendments that the Commission proposed elsewhere in part 39.
The Commission did not receive comments on the costs or benefits associated with these amendments. The Commission received comments from CME, ICE, and Nadex that suggested clarifications to the proposed definitions, and the Commission has incorporated these suggestions in the final rule.
The amendments to § 39.2 benefit DCOs by clarifying existing part 39 requirements, such as what constitutes a Federal holiday for purposes of applying the definition of “business day.” The new definitions in § 39.2 for “enterprise risk management” and “fully collateralized position” are necessary to understanding the new rules for an enterprise risk management framework it is adopting in § 39.10(d) and exceptions from several requirements for fully collateralized positions throughout part 39, and hence benefit DCOs by helping them understand the new rules mentioned above. The amendments to the definitions of “customer” and “customer account or customer origin” also have the benefit of clarification as they help to avoid conflicts with similar terms defined in § 1.3.
The Commission does not believe the new and amended definitions in § 39.2 would impose additional costs on DCOs, as they are not imposing additional requirements, but rather defining terms that are used in other provisions.
In addition to the discussion above, the Commission evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(B) of the CEA, the Commission believes that, to the extent that the amended definitions provide clarity, reduce any previous uncertainty, or help to avoid conflicts with similar terms that are defined in different sections, these effects, individually and in aggregate, may yield increased efficiency for DCOs. After considering the other section 15(a) factors, the Commission believes they are not implicated by the amendments.
The Commission is adopting several changes to its procedures for DCO registration, including: Application procedures—§ 39.3(a), stay of application review—§ 39.3(b), request to amend an order of registration—§ 39.3(a)(2) and § 39.3(d), dormant registration—§ 39.3(e), vacation of registration—§ 39.3(f), and request for transfer of registration and open interest—§ 39.3(g).
The amendments to § 39.3(a) improve clarity and consistency of the rules, provide greater flexibility to DCO applicants submitting supplemental information, clarify references to the portion of the Form DCO cover sheet and other application materials that will be made public; and, in new § 39.3(a)(6), permit the Commission to extend the 180-day review period for DCO applications for any period of time to which the applicant agrees in writing. Furthermore, the Commission is amending § 39.3(a)(2) to eliminate the required use of Form DCO to request an amended order of registration from the Commission.
In § 39.3(b)(2), the Commission is clarifying the stay of the application review process and adopting a change to replace the inaccurate “designation” with “registration.
In § 39.3(d), the Commission is also adopting a new rule to establish a separate process for requests to amend an order of registration.
Regulation § 39.3(e) establishes the procedure for a dormant DCO to reinstate its registration before it can begin “listing or relisting” products for clearing. The Commission is renumbering § 39.3(d) as § 39.3(e) and adding clarification and accuracy by replacing “listing or relisting” with “accepting.”
Amendments to § 39.3(f) renumber current § 39.3(e) as § 39.3(f)(1) and add provisions under § 39.3(f)(1) regarding procedures for a DCO seeking to vacate its registration. The Commission is also adopting § 39.3(f)(2) to streamline the process of notifying all registered entities of a vacation request filed with the Commission by requiring the Commission to post the required documents on its website.
In § 39.3(f), which is renumbered as § 39.3(g), the Commission is simplifying the requirements for requesting a transfer of open interest and removing references to transfers of registration and requirements regarding corporate changes. Furthermore, the amendments will require transfer requests to be submitted under § 40.5.
In addition, the Commission is revising Form DCO to correspond with amendments to part 39 and to reflect Commission staff's experience with DCO applications. Finally, the Commission is revising the Subpart C Election Form to better reflect the requirements in subpart C of part 39 and to more closely align the format of the Subpart C Election Form with Form DCO by specifying the information and/or documentation that must be provided by a DCO as part of its petition for subpart C election.
The Commission did not receive comments on the costs associated with these amendments.
The Commission believes the amendments to the DCO registration procedures in § 39.3, Form DCO, and the Subpart C Election Form will make the procedures more transparent to applicants. This should allow prospective DCO applicants to more efficiently prepare complete applications, which should reduce the need for Commission staff to request additional information after receiving the application and therefore reduce the overall time needed to review an application. For example, the Commission is modifying Form DCO to clarify the types of information that are required and align the exhibits with the amendments under part 39. Similarly, the Commission is modifying the Subpart C Election Form to more closely align its format with Form DCO. These amendments may reduce an applicant's time and resources used in responding to staff inquiries during the application review process, as DCO applicants would be better able to provide more complete, accurate, and nuanced application materials. The amendments to § 39.3 also adapt certain language to better reflect terminology applicable to DCOs in § 39.3(a)(1) through (2) and (b), which could help to avoid confusion for potential DCO applicants and existing DCOs. Furthermore, the Commission is codifying its long-standing procedures for staying an application in § 39.3(a)(6) to provide DCO applicants with greater transparency of the registration process.
The Commission is amending § 39.3(a)(2) and Form DCO to eliminate the required use of Form DCO to request an amended order of registration from the Commission. This change better reflects current practice, where a DCO is permitted to file a request for an amended order with the Commission rather than submitting Form DCO. Similarly, the Commission is specifying in § 39.3(f) the types of information that the Commission currently requests to determine whether to vacate an order of registration, which will provide DCOs with more transparency as to the types of information that are required as part of a request to vacate an order of registration. The recordkeeping requirements in § 39.3(f)(1)(iii) through (iv), which require a vacated DCO to continue to maintain the books and records that it would otherwise be required to maintain as a registered DCO, provide the benefit of ensuring that a DCO does not vacate its registration and destroy its books and records in order to hinder or avoid Commission action.
The Commission is also streamlining the procedures for requesting a transfer of open interest by separating those procedures in existing § 39.3(g) from the procedures to notify the Commission of a DCO corporate structure or ownership change. Under the amendments to § 39.3(g), a DCO seeking to transfer its open interest will be required to submit rules for Commission approval pursuant to § 40.5, rather than submitting a request for an order at least three months prior to the anticipated transfer. This will simplify the existing requirements and permit the transfer to take effect after a 45-day Commission review period.
The Commission believes DCOs would not incur any additional costs associated with the procedures to request an amended order of registration in § 39.3(d), as a DCO would incur the same costs if requesting to amend its order of registration by using the current Form DCO.
As to the procedures to vacate a DCO's registration in § 39.3(f), the Commission believes the costs would not be substantial. Any costs incurred by DCOs would more likely be due to the recordkeeping requirements in § 39.3(f)(1)(iii) through (iv), which require a vacated DCO to continue to maintain the books and records that it would otherwise be required to maintain as a registered DCO pursuant to § 1.31(b).
Finally, the Commission is amending § 39.3(g) to permit a DCO seeking to transfer its open interest to submit rules for Commission approval pursuant to § 40.5, rather than submitting a request for an order at least three months prior to the anticipated transfer. The Commission does not anticipate that DCOs would incur any additional costs as a result of these procedural changes beyond the costs to prepare a § 40.5 rule submission, which are likely to be similar to the costs of requesting an order approving the transfer. Additionally, the information requested in § 39.3(g) reflects information that DCOs are already required to provide in order to transfer their open interest.
As an alternative, ICE suggested that it may be appropriate for a transfer to take effect pursuant to a rule self-certification under § 40.6 where the transfer does not raise any particular novel issues or concerns. ICE further requested that the Commission clarify that it may, in appropriate circumstances, take action on a transfer request in less than 45 days, both in circumstances that do not raise particular concerns and in exigent or distressed circumstances in which the full period may not be necessary or feasible. The Commission considered ICE's suggestions but still believes that the 45-day review period under § 40.5, rather than the 10 business day review period under § 40.6(a), is necessary in order to determine whether any concerns exist. However, the Commission notes that the same outcome—a shorter review period where circumstances allow—can be achieved by the Commission acting on a transfer request in less than 45 days as permitted by § 40.5(g).
The Commission does not believe DCOs would incur additional costs from any of the other amendments to the DCO registration procedures in § 39.3. In addition to the discussion above, the Commission evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. The Commission believes that the changes to the registration procedures will maintain the protection of market participants and the public by ensuring that DCOs are in compliance with the DCO Core Principles and Commission regulations. The changes will also increase efficiency by making the registration process more transparent. This will enable DCOs and DCO applicants to provide more complete documentation in a more concise manner, thereby reducing the time and resources needed to comply with such procedures. To the extent that the changes to the registration procedures act to streamline the application process, as well as to establish the process for vacating a DCO's registration, those changes will result in a more efficient process for registering as a DCO and for vacating that registration.
Additionally, the Commission believes that the amendments to
The Commission is amending certain regulations in part 39 to address fully collateralized positions, which do not pose the same risks that the regulations are meant to address. As discussed in above, fully collateralized positions do not expose DCOs to many of the risks that traditionally margined products do, as full collateralization prevents a DCO from being exposed to credit risk stemming from the inability of a clearing member or customer of a clearing member to meet a margin call or a call for additional capital. This limited exposure and full collateralization of that exposure renders certain provisions of part 39 inapplicable or unnecessary. As a result, the Division of Clearing and Risk has granted relief from certain provisions of part 39 to DCOs that clear fully collateralized positions.
The amendments are based on an assessment of how the DCO Core Principles and part 39 apply to fully collateralized positions, as well as the relief previously granted to DCOs that clear such positions. The Commission believes the amendments will not negatively impact prudent risk management at any DCO, regardless of the types of products cleared. The costs and benefits of these changes are discussed in conjunction with the discussion of the related provisions below.
The Commission is amending § 39.10(c) as proposed. These amendments will allow a DCO to have its CCO report to the senior officer responsible for the DCO's clearing activities. This would provide DCOs with flexibility to structure the management and oversight of the CCO based on the DCO's particular corporate structure, size, and complexity. This may increase efficiency, reduce costs, and improve the quality of the oversight of the CCO, as the senior officer overseeing the DCO's clearing activities would be better positioned to provide day-to-day oversight of the CCO. The Commission believes that this amendment will not increase costs to DCOs since it does not require any change in their practices.
The Commission is also amending certain requirements in § 39.10(c) relating to the CCO annual report to permit DCOs to incorporate by reference, for up to five years, any descriptions of written policies and procedures that have not materially changed since they were described within the most recent CCO annual report. CME noted that these revisions would reduce the requirement to provide duplicative information contained in previous reports and thus reduce the administrative burden on the DCO's compliance staff. The Commission agrees with CME's comment.
The Commission is amending § 39.10(c) to require that a DCO identify its compliance policies and procedures by name, rule number, or other identifier; describe the process by which the annual report was submitted to the board of directors or senior officer; and allow incorporation by reference in limited circumstances. The Commission notes that a number of DCOs already provide this information. Therefore, the Commission expects that the changes to § 39.10(c) would not impose additional costs on those DCOs, but would impose additional costs on DCOs that do not currently provide this information. The Commission did not receive comments on the costs associated with this amendment.
Furthermore, Nadex suggested that the Commission consider conforming the language of the CCO's duties and annual report requirements in § 39.10 with that of § 3.3, which pertains to the CCOs of FCMs, swap dealers, and major swap participants. The Commission may consider this in a separate proposal.
As to the costs and benefits in light of the section 15(a) factors, the Commission believes that certain of the changes to § 39.10(c) will enhance the protection of market participants and the public. Specifically, the changes to a CCO's reporting lines, along with the added clarity regarding proper identification of the compliance policies and procedures in the CCO annual report, is anticipated to enhance the compliance function at DCOs, which may have the corresponding effect of improving the protections for market participants and the public. Additionally, in consideration of section 15(a)(2)(B) of the CEA, the amendment to permit incorporation by reference in the CCO annual report will increase efficiency in preparing that report. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is adopting § 39.10(d) to require a DCO to have a program of enterprise risk management that identifies and assesses sources of risk and their potential impact on the operations and services of the DCO and identify an enterprise risk officer. The Commission believes that requiring DCOs to establish and maintain an enterprise risk management program may encourage DCOs to strengthen their existing programs, especially if a DCO lacks an enterprise risk management program that is commensurate with industry best practices. This may benefit the resiliency of individual DCOs' operations by requiring DCOs to proactively identify potential risks on an enterprise-wide basis beyond those that a DCO might otherwise identify pursuant to its compliance with specific requirements in part 39. Compliance with § 39.10(d) by DCOs who are affiliated with other registered entities such as DCMs, SEFs, and swap data repositories may also benefit the financial markets more broadly, as risks identified and addressed by the DCO may also apply to their affiliates within the derivatives markets.
The Commission has found that DCOs that proactively identify and manage foreseeable risks have generally
MGEX expressed concern regarding the burdens of developing an enterprise risk management program and also raised the possibility that procedures developed as part of the enterprise risk management program might conflict with other risk management procedures. The Commission notes that it has sought to avoid requiring specific standards and methodologies with respect to enterprise risk management, preferring instead that DCOs develop a program based on the specific characteristics of that DCO. Regulation 39.10(d)(3), as adopted, requires a DCO to follow generally accepted standards and industry best practices in the development and review of its enterprise risk management framework, assessment of the performance of its enterprise risk management program, and management and mitigation of risk to the derivatives clearing organization. In the interests of offering guidance, the Commission specified in the Proposal two industry standards as examples of the types of standards that would reasonably be considered in the development of an enterprise risk management program.
LCH, in responding to a request for comment regarding whether the same individual should be permitted to serve as both the chief risk officer and the enterprise risk officer, suggested that requiring separate individuals to serve the two roles would be duplicative and inefficient. The Commission has finalized § 39.10(d) without adding language prohibiting the same individual from serving both roles, although it has noted that the nature and structure of the organization could be such that it will not be possible for one individual to do so without violating the requirements of the position.
The Commission has added additional language to § 39.10(d)(4) requiring that the enterprise risk officer have access to the board of directors to ensure that the board receives reports and information from the enterprise risk officer, regardless of the formal reporting relationship. The Commission believes that such access will improve governance by ensuring that issues or concerns regarding enterprise risk management will be conveyed to the board. The Commission does not believe that requiring such access will impose any material costs.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(D) of the CEA, the Commission believes that the proposal to require a DCO to have a formal enterprise risk management program will improve DCO risk management practices by ensuring that DCOs have a process for identifying and assessing potential risks to the DCO on an enterprise-wide basis, thereby enhancing protection of market participants and the public and the financial integrity of the derivatives markets. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is amending § 39.11 to, among other things: Make it more consistent with Core Principle B; clarify certain items including how a DCO's largest financial exposure should be calculated in § 39.11(c); require that the financial statements submitted each quarter be that of the DCO and not the parent company; require that financial statements be prepared in accordance with U.S. GAAP or, for a DCO that is incorporated or organized under the laws of any foreign country, IFRS; and require a DCO to annually submit a reconciliation of its balance sheet in the audited year-end financial statement with the balance sheet in the DCO's financial statement for the last quarter of the fiscal year when material differences exist. Except where noted below, the Commission is amending § 39.11 as proposed.
The Commission is finalizing additional minimum requirements that a DCO will have to follow in determining its financial exposure in accordance with § 39.11(c)(1). In particular, the Commission is requiring a DCO to calculate its largest financial exposure net of the clearing member's required initial margin amount on deposit. Additionally, the Commission is requiring that when stress tests produce losses in both customer and house accounts, a DCO must combine the customer and house stress test losses of each clearing member using the same stress test scenario. New § 39.11(c)(2)(iii) allows a DCO to net gains in the house account with losses in the customer account, if permitted by its rules, but explicitly prohibits a DCO from netting losses in the house account with gains in the customer account. New § 39.11(c)(2)(iv) allows a DCO, with respect to a clearing member's cleared swaps customer account, to net customer gains against customer losses only to the extent permitted by the DCO's rules. The Commission also is amending the requirements of § 39.11(c) to state that they do not apply to fully collateralized positions.
Commenters generally supported the proposed amendments to § 39.11(c) and there were no comments related to costs. In response to questions and requests for clarification, the Commission is modifying proposed § 39.11(c)(2)(i) to clarify that, for purposes thereof, required margin includes any add-ons, such as concentration charges and liquidity charges, and that only required margin (including add-ons) may be considered.
The Commission believes these adjustments to the methodology used to calculate a DCO's financial resources requirement in § 39.11(c) will focus a DCO's analysis on the resources that would actually be available to it during times of stress. This approach is consistent with guidance issued by CPMI-IOSCO suggesting that, when assessing the adequacy of their financial resources, central counterparties should take into account only prefunded
Several changes made to § 39.11, such as amending § 39.11(d)(2) to replace the phrase “those obligations” with “the total amount required under paragraph (a)(1) of this section” and the amendments to § 39.11(e)(1)(iii) and § 39.11(e)(3) to clarify that a DCO may use a committed line of credit or similar facility to satisfy § 39.11(e)(1)(ii) or § 39.11(e)(2) as long as it is not counted twice, are clarifications that do not impose additional burdens but have the benefit of more clearly articulating what is required. The Commission is finalizing these rules as proposed. The Commission is amending § 39.11(f)(1)(ii) to require that the financial statement provided be that of the DCO and not the parent company in order to better and more accurately assess the financial strength of the DCO. The Commission believes it would also benefit the DCO to be able to assess its compliance with Core Principle B and § 39.11 and its financial health separately from that of its parent. MGEX suggested that the proposed revisions to § 39.11(f)(1)(ii) requiring that the financial statement provided be that of the DCO and not the parent company should only apply to DCOs that are part of a complex corporate structure, and not to simple parent/subsidiary structures. MGEX stated that compiling and submitting separate financial statements for a simple parent/subsidiary structure would result in increased expenses while providing no material benefit. The Commission is declining to adopt this suggestion because the Commission believes it will benefit from understanding the financial condition of a DCO separately from that of its parent company and will be better equipped to protect market participants and the public with this additional information. Moreover, separate legal entities should be able to prepare separate financial statements, and there is no bright line distinguishing between simple and complex corporate structures. The Commission acknowledges that the rule may be more costly for certain DCOs relative to MGEX's suggested alternative, but the Commission does not believe that these additional costs will be large.
The Commission is not adopting its proposed changes to § 39.11(f)(1)(ii) and § 39.11(f)(2)(i) that would have required DCOs to identify assets required to meet the resource requirements of § 39.11(a)(1) and (2). The Commission is persuaded by comments from CME and Eurex that certain requirements of U.S. GAAP and IFRS, respectively, may preclude a company from including this information on its balance sheet. Instead, the Commission is encouraging DCOs to identify the assets required to meet the resource requirements of § 39.11(a)(1) and (2) to the extent that they can, given applicable accounting standards. The Commission notes that providing such information would facilitate its review of DCOs' financial statements and potentially reduce the burden on DCOs to respond to staff inquiries regarding their financial statements and compliance with § 39.11(a)(1) and (2). The Commission is amending the periodic financial reporting requirements in § 39.11(f)(1)(ii) and (f)(2)(i) to permit quarterly and annual financial statements to be prepared in accordance with U.S. GAAP for DCOs incorporated or organized under U.S. law and in accordance with either U.S. GAAP or IFRS for DCOs incorporated or organized under the laws of any foreign country. These amendments will retain flexibility for non-U.S. DCOs and provide greater transparency to DCOs and DCO applicants of the financial reporting requirements. The Commission is also requiring in § 39.11(f)(2) that, in addition to its audited year-end financial statement, a DCO submit a reconciliation, including appropriate explanations, of its balance sheet when material differences exist between it and the balance sheet in the DCO's financial statement for the last quarter of the fiscal year or, if no material differences exist, a statement so indicating. Without such an explanation, Commission staff may be under the impression that the representations are false or incorrect. This requirement gives DCOs the opportunity to correct any discrepancies and avoid unnecessary follow-up questions from Commission staff.
The Commission is amending § 39.11(f)(1)(iv) to incorporate the language of current § 39.11(f)(4), which requires a DCO to submit its quarterly report no later than 17 business days after the end of the DCO's fiscal quarter (or at a later time as permitted by the Commission in its discretion in response to a DCO's request for an extension). CME recommended that, for the first three quarters of the fiscal year, the due dates for submitting the DCO quarterly financial resource reports be aligned with the due dates for a DCM's submission of financial resource reports pursuant to § 38.1101(f)(4), which requires the reports to be filed no later than 40 calendar days after the end of the DCM's first three fiscal quarters. The Commission is declining to take CME's recommendation because the reporting dates currently in effect are the same as those for FCMs and broker/dealers reporting dates under the Commission's regulations. The Commission believes that DCO financial report filings should be aligned with FCMs rather than with DCMs because FCMs, unlike DCMs, hold initial margin and default funds and collect variation margin, which clearly and directly relate to the financial resources available to DCOs. The Commission acknowledges that § 39.11(f)(1)(iv) may be more costly for CME and other DCOs that are affiliated with DCMs relative to CME's suggested alternative, but the Commission does not believe that these additional costs will be large.
DCOs could incur initial costs to recalibrate the method by which they compute their financial resources to comply with § 39.11(c). If a DCO does not have financial resources sufficient to comply with § 39.11(a)(1) based on its computation pursuant to § 39.11(c), the DCO would have to procure additional financial resources. Because DCOs vary in terms of their size and level of clearing activity, the Commission believes they are better positioned to provide cost estimates in this regard.
DCOs may incur costs to prepare their own financial statements (as opposed to being included in the financial statements of the parent company) in accordance with § 39.11(f)(1)(ii). For DCOs that already prepare their own financial statements, the Commission believes that incremental costs will be minimal. Had the Commission adopted MGEX's suggestion to apply the requirement that the financial statement provided be that of the DCO and not the parent company only to DCOs that are part of a complex corporate structure, DCOs that are part of a simple parent/subsidiary structure would have avoided the additional costs of preparing their own financial statements, but at the cost of first analyzing whether the corporate structure was simple or complex for purposes of triggering the requirement and potentially needing to justify that analysis to the Commission. Additionally, DCOs may incur minimal costs to prepare a reconciliation of their
Had the Commission adopted LCH's suggestion that non-U.S. DCOs be allowed to submit financial reports using currencies other than the U.S. dollar, such DCOs may have experienced reduced costs in preparing their financial reports, but the Commission believes that staff will be better able to protect the financial integrity of markets if it has all financial reports in U.S. dollars. Adopting LCH's suggestion would have required Commission staff to convert such currencies to U.S. dollars to complete its analysis, which would have required staff to make decisions about exchange rates. This, in turn, could have led to staff determining that the DCO failed to comply with one or more financial resources requirements even if a reasonable exchange rate used by the DCO would have demonstrated compliance with such requirements. Such a determination could potentially cost the DCO in terms of the time and effort to address staff's determination and potentially taking remedial action for failing to comply with requirements.
The Commission is revising § 39.11(f)(3) to clarify that a DCO must send the documentation to the Commission required under paragraphs (i)(A) and (i)(B) of that section only upon the DCO's first submission under § 39.11(f)(1) and in the event of any change thereafter. Not requiring that this documentation be prepared and sent to the Commission every quarter may reduce DCOs' reporting costs.
LCH also suggested defining “material” for the purposes of annual reporting requirements as 10 percent of either the (1) six-month liquidity test, or (2) 12-month capital cost-based financial resources test. The Commission believes that DCOs should retain discretion to define “material” for these purposes and therefore declines to include this suggestion. Providing DCOs with additional discretion should not impose significant costs on DCOs.
The Commission believes DCOs may incur additional costs associated with complying with the certification requirements in § 39.11(f)(4). These costs may be reduced for DCOs that already provide them. The Commission recognizes that a DCO may have to develop a process in certifying its financial reports; however, the Commission believes that these costs may be reduced for DCOs to the extent that they already have this process in place.
The Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A) of the CEA, the Commission believes that the amendments to § 39.11 will result in improved protections for market participants and the public. Specifically, the adjustments to the methodology used to calculate a DCO's financial resources requirement in § 39.11(c) and the corresponding improvements to a DCO's stress testing results are expected to enhance the safety and soundness of DCOs and their ability to manage their risks, thereby better protecting DCOs' clearing members and their customers, market participants, and the public. Additionally, in further consideration of section 15(a)(2)(A) of the CEA, the proposal to require in § 39.11(f)(1)(ii) the financial statement of the DCO and not that of its parent company, is expected to better and more accurately assess the financial strength of the DCO, which will ultimately serve to protect market participants and the public and further the financial integrity of derivatives markets. In consideration of section 15(a)(2)(B) of the CEA, the Commission believes that, to the extent that the amendments to § 39.11 will result in increased clarity or transparency, those changes are anticipated to result in an incremental increase in efficiency. In consideration of section 15(a)(2)(D) of the CEA, the Commission believes the adjustments to the methodology used to calculate a DCO's financial resources requirement in § 39.11(c) would focus a DCO's analysis on the resources that would actually be available to it during times of stress, thereby improving the DCO's risk management practices. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
SIFMA AMG stated that DCOs should not be permitted to count unfunded assessments towards resources available to the DCO pursuant to current § 39.11(b)(1)(v), which is being renumbered § 39.11(b)(1)(iv). Similarly, FIA and ISDA requested that the Commission amend § 39.11(d)(2) to prohibit the use of assessments because assessments are unfunded resources. In contrast, ICE suggested that the Commission clarify that in applying the 20 percent limitation on the use of assessments per proposed § 39.11(d)(2), the calculation should be based on the exposure prior to netting against initial margin. The Commission may consider these suggestions in future proposals.
Regulation 39.12(b)(2) provides that a DCO shall adopt rules providing that all swaps with the same terms and conditions are economically equivalent within the DCO. As it was not the intention of the Commission to require DCOs that do not clear swaps to adopt the rules required under this provision, the Commission is revising § 39.12(b)(2) so that it explicitly applies only to DCOs that clear swaps.
The Commission did not receive any comments on the benefits or costs associated with the changes to § 39.12.
Amendments to § 39.12 would reduce rulebook drafting costs for future DCO applicants that do not intend to accept swaps for clearing.
The Commission believes the amendments to § 39.12 would not impose costs on DCOs or swaps market participants, as they would not be clearing swaps through a DCO that does not accept swaps for clearing.
The Commission has considered the section 15(a) factors and believes that they are not implicated by these amendments.
Regulation 39.13(b) requires a DCO to establish and maintain written policies, procedures, and controls, approved by its board of directors, which establish an appropriate risk management framework. The introductory heading to this provision states that it is a “[d]ocumentation requirement.” The Commission is replacing “[d]ocumentation requirement” with “[r]isk management framework” and replacing the words “establish and maintain” with “have and implement.” This has the benefit of making clear the existing requirement that a DCO is not only required to have a documented risk management framework but to put it into action. The Commission did not receive any comments on these changes. The Commission does not believe the amendments will impose any additional costs on DCOs, as it simply clarifies the existing requirement.
Regulation 39.13(f) requires a DCO to limit its exposure to potential losses from clearing member defaults to “ensure” that the DCO's operations would not be disrupted and non-defaulting clearing members would not be exposed to unanticipated or uncontrollable losses. Recognizing that
Specifically, FIA and ISDA requested that the Commission retain the original language because they stated that changing “ensure” to “minimize the risk” would increase the potential for non-defaulting clearing members to be exposed to uncapped liability. FIA and ISDA suggested revising the language to require that “[a] derivatives clearing organization shall limit its exposure to potential losses from defaults by clearing members through margin requirements and other risk control mechanisms reasonably designed to ensure that . . . .”
The Commission notes that the change in § 39.13(f) clarifies, but does not alter a DCO's existing obligations under this provision. Therefore, the Commission believes that the amendments will not impose any additional costs on DCOs and will facilitate DCOs' compliance with the rule.
Regulation 39.13(g)(2)(i) requires that a DCO have initial margin requirements that are commensurate with the risks of each product and portfolio, including any unusual characteristics of, or risks associated with, particular products or portfolios. The regulation currently notes that such risks include but are not limited to jump-to-default risk or similar jump risk. The Commission proposed to amend § 39.13(g)(2)(i) to note that such risks also include “concentration of positions.”
The Commission is amending § 39.13(g)(2)(i) to delete the existing requirement that such risks “includ[e] but are not limited to jump-to-default risk or similar jump risk,” and to remove the proposed reference to “concentration of positions.” The Commission is concerned that including and adding to a list of examples of types of risks might be interpreted to mean that a DCO does not have to consider risks not mentioned. The Commission reiterates that a DCO should consider a range of risks, including, for example, jump-to-default risk, concentration risk, correlation risk, and other risks associated with the particular products and portfolios it clears. The Commission notes that, by not enumerating the risks that should be considered, DCOs are given greater discretion with respect to how they identify, label, and address such risks. The Commission believes that this flexibility will benefit DCOs in complying with this provision, and notes that this change clarifies, but does not alter a DCO's existing obligations under this provision. Therefore, the Commission does not believe the amendments will impose additional costs on DCOs. To the extent that § 39.13(g)(2)(i) no longer includes a list of types of risks to be considered, a DCO may incur higher costs in accurately determining the types of risks that should be considered. The Commission did not receive comments on the costs associated with these amendments.
Regulation 39.13(g)(3) requires a DCO to have its systems for initial margin requirements reviewed and validated by a qualified and independent party on a regular basis. The Commission is revising this regulation to change “on a regular basis” to “an annual basis.” Additionally, § 39.13(g)(3) provides that an employee of the DCO may conduct such independent validations as long as they are not responsible for the development or operation of the systems and models being tested. The Commission is amending § 39.13(g)(3) to expand the pool of eligible employees to include employees of an affiliate of the DCO, which will provide DCOs with greater flexibility in selecting appropriate staff to conduct the validations. In addition, in response to commenters' suggestions, the Commission is amending § 39.13(g)(3) to specify that, where no material changes to the margin model have occurred, previous validations can be reviewed and affirmed as part of the annual review process.
The Commission believes that this amendment will benefit DCOs by providing greater flexibility and reducing their costs in obtaining an independent validation, while maintaining the independence of the validation and not otherwise reducing the benefits associated with the independent validation.
ICE expressed support for permitting employees of an affiliate of the DCO to conduct initial margin model validations. FIA and ISDA, however, requested that the Commission withdraw this proposal and instead require in a re-proposed rule that a qualified and independent third party conduct the validations. FIA and ISDA stated that employees that validate an initial margin model used by more than one affiliated DCO may not independently analyze whether the same model is appropriate for different products cleared by the affiliated DCOs. FIA and ISDA also noted that, to the extent that the inherent conflict of interest in model validation results in a compromised margin model, there will be costs to the clearing members, as well as the markets. The Commission believes it is appropriate to permit a DCO's employees or employees of an affiliate of the DCO to conduct the validations, provided they are not responsible for development or operation of the systems and models being tested (as required under § 39.13(g)(3)). Since § 39.13(g)(3) has been in place, the Commission has not encountered any issues with employees of a DCO conducting the validations; therefore, the Commission believes it is appropriate to permit employees of an affiliate of the DCO to conduct the validations. Having a third party conduct the validations may be more costly than having a DCO's employees or employees of an affiliate of the DCO conduct the validations.
Nodal commented that if the proposal requires annual validations of theoretical models, it would place an undue burden on certain DCOs due to the significant cost and time that would be involved in obtaining an independent validation for models that do not change from year-to-year. In response to Nodal's comment and similar suggestions by CME, FIA, and ISDA, the Commission is specifying in the final rule that where no material changes to the margin model have occurred, previous validations can be reviewed and affirmed as part of the annual review process. The Commission believes that this modification addresses Nodal's concerns about costs while ensuring the benefits of requiring DCOs to validate their margin models on an annual basis.
To be consistent with terminology used in other Commission regulations, the Commission in § 39.13(g)(4) is substituting the phrase “conceptual basis” for the phrase “theoretical basis” in the discussion of spread margin. The Commission received one comment in support of the proposed change, but did not otherwise receive comments on the costs associated with the change. The Commission does not believe the amendment will impose additional costs on DCOs, as it simply clarifies the existing requirement and does not alter the meaning of the rule.
The Commission is adopting new § 39.13(g)(7)(iii) to clarify that, in conducting back tests of initial margin requirements, a DCO should compare portfolio losses only to those components of initial margin that capture changes in market risk factors. This change is expected to ensure that back testing of a DCO's initial margin model is more appropriately calibrated.
The Commission did not receive any comments on the costs associated with the proposal. Commenters disagreed with which elements should be
Regulation 39.13(g)(8)(i) requires a DCO to collect initial margin on a gross basis for each clearing member's customer account(s). The Commission is amending § 39.13(g)(8)(i) to permit a DCO to collect customer initial margin from its clearing members on a gross basis only during its end-of-day settlement cycle. The Commission did not receive any comments on the costs associated with the proposal, and does not believe the amendments would impose any additional costs on DCOs. The Commission believes that DCOs will benefit from the amendment because it clarifies when a DCO is required to collect customer initial margin, and it provides DCOs with more flexibility in meeting the requirements in light of the operational issues that may arise intraday.
The Commission is adopting amendments to § 39.13(g)(8)(i)(B) to require a DCO to have rules that require its clearing members to provide reports to the DCO each day setting forth end-of-day gross positions of each individual customer account within each customer origin of the clearing member. In response to an industry comment about the burden of DCOs maintaining customer-level records, the final rule requires that the daily reports specify positions of “each individual customer account” instead of “each beneficial owner,” as originally proposed. In addition, the Commission is clarifying that a DCO shall have rules that require only its clearing members to provide the specified reports to the DCO.
The Commission received two comments on the costs and benefits associated with the proposed amendments. ICE noted the benefit of additional transparency associated with reporting customer-level information, but asked that the Commission consider the costs to clearing members and DCOs of developing new operational systems and procedures that the proposal would necessitate, and consider ways to phase in any new requirements to allow for the necessary development of new operational systems and procedures, at both the DCO and clearing member levels. OCC stated that the proposal would introduce a significant shift in the burden to maintain customer-level records from FCMs and introducing brokers to a DCO. OCC also questioned the benefits of the proposal, stating that, because virtually every FCM clears through multiple DCOs, requiring a DCO to collect and report customer-level information to the Commission does not in fact allow the Commission to appropriately understand the risks associated with individual customers without further aggregating the data that various DCOs receive from an individual FCM. OCC represented that it and its clearing members would need to make significant operational changes to obtain this information and report it daily, and OCC would need to make corresponding rule changes.
The Commission believes that these changes provide additional transparency, as identified by ICE, and the Commission has further modified § 39.13(g)(8)(i)(B) to address the costs identified in the comments received by the Commission.
Regulation 39.13(g)(8)(ii) provides that a DCO must require its clearing members to collect customer initial margin from their customers, for non-hedge positions, at a level that is greater than 100 percent of the DCO's initial margin requirements with respect to each product and swap portfolio. Consistent with the Division of Clearing and Risk's 2012 interpretation on customer margining, the Commission is adopting revisions to § 39.13(g)(8)(ii) to permit DCOs to continue the practice of establishing customer initial margin requirements based on the type of customer account and by applying prudential standards that result in FCMs collecting customer initial margin at levels commensurate with the risk presented by each customer account. The Commission is also adopting additional clarifying revisions to state that the DCO shall have reasonable discretion in determining clearing initial margin requirements for products or portfolios and whether and by how much customer initial margin requirements for categories of customers determined to have heightened risk profiles by their clearing members must exceed, at a minimum, the DCO's clearing initial margin requirements by a standardized amount, because the Commission believes that this better articulates the DCO's obligations. The Commission further confirms that the changes to § 39.13(g)(8)(ii) are not intended to shift the burden of determining the appropriate level of additional customer margin from clearing members to the DCO, but instead, are intended to clarify existing requirements. To the extent that the changes clarify existing requirements, the Commission believes that it will not impose additional costs on DCOs, but that DCOs will benefit from regulatory clarity.
OCC and ICE supported the proposed changes to § 39.13(g)(8)(ii), noting that DCOs will benefit from additional discretion in determining the percentage by which customer initial margin requirements must exceed the DCO's clearing initial margin requirements. CME supported codification of the 2012 interpretation on customer margining, but was concerned that the proposed changes to § 39.13(g)(8)(ii) would shift the burden of determining the appropriate level of additional customer margin from FCM clearing members to DCOs, and proposed edits to address the issue. FIA and ISDA commented that the proposed change to customer initial margin requirements may impose an operationally impractical regime for clearing members to collect initial margin from customers.
Regulation 39.13(g)(12) requires a DCO to apply appropriate reductions in value to reflect credit, market, and liquidity risks (haircuts), to the assets that it accepts in satisfaction of initial margin obligations. This provision also requires a DCO to evaluate the appropriateness of the haircuts “on at least a quarterly basis.” Regulation 39.11(d)(1) requires that haircuts be evaluated on a monthly basis for assets that are used to meet the DCO's financial resources obligations set forth in § 39.11(a). The Commission is adopting amendments to § 39.13(g)(12) to align it with § 39.11(d)(1) by requiring that DCOs evaluate the appropriateness of the haircuts that they apply to assets accepted in satisfaction of initial margin obligations on a monthly basis.
While LCH questioned the benefit of the proposal, suggesting that haircuts may not significantly change on a monthly basis, FIA and ISDA disagreed, noting that the value of assets held for initial margin can change frequently. In addition, the changes will align the § 39.13(g)(12) requirement with the § 39.11(d)(1) standard that DCOs are
Regulation 39.13(h)(1)(i) requires a DCO to impose risk limits on each clearing member, by house origin and by each customer origin, in order to prevent a clearing member from carrying positions for which the risk exposure exceeds a specified threshold relative to the clearing member's and/or the DCO's financial resources. The Commission proposed to clarify that such risk limits should also be imposed to address positions that may be difficult to liquidate.
The Commission has determined not to adopt the proposed changes to § 39.13(h)(1) at this time, but will continue to consider this issue further. The Commission remains concerned about positions that may be difficult to liquidate, particularly concentrated positions. However, the Commission believes that DCOs should address difficult-to-liquidate positions using the DCO's margin methodology and consider whether and what other measures may be appropriate. The comments received from OCC, FIA, ISDA, and LCH in this regard have contributed to the Commission's decision.
Regulation 39.13(h)(5)(ii) requires a DCO to, on a periodic basis, review the risk management policies, procedures, and practices of each of its clearing members, which address the risks that such clearing members may pose to the DCO, and to document such reviews. The Commission is adopting an amendment to § 39.13(h)(5)(ii) to clarify that DCOs should, having conducted such reviews, take appropriate actions to address concerns identified in such reviews, and that the documentation of the reviews should include the basis for determining what action was appropriate to take.
The Commission did not receive any comments on the costs associated with the proposed amendments. However, ICE, FIA, and ISDA questioned the benefits of the rule, while LCH supported the change. FIA and ISDA stated that the proposal is unnecessary, and ICE suggested that such supervision should instead be conducted at the DSRO level.
The Commission believes that there may be incremental costs associated with requiring DCOs to address concerns identified in reviews of their clearing members' risk management policies. In response to ICE's suggestion that clearing member risk reviews should be conducted by a DSRO, the Commission notes that not all clearing members are subject to the supervision of a DSRO. Finally, the Commission disagrees with FIA and ISDA's comment that the proposed amendments are unnecessary. As the Commission stated in the Proposal, absent such follow-up, the reviews would lack purpose.
The Commission is codifying its existing practices for evaluating cross-margining programs in new § 39.13(i), which requires a DCO that seeks to implement or modify a cross-margining program with one or more other clearing organizations to submit rules for Commission approval pursuant to § 40.5. However, the Commission is not adopting the proposed requirement that a DCO provide, at a minimum, specific information needed to facilitate the Commission's review of the rule filing. Rather, the Commission is requiring that a DCO submit information sufficient for the Commission to understand the risks that would be posed by the program and the means by which the DCO would address and mitigate those risks. The Commission believes that leaving it to the discretion of the DCO to determine what information to provide, yet giving the Commission the ability to request any additional information it may need to conduct its review of a cross-margining program, is appropriate given that cross-margining programs can vary greatly, depending on the products, participants, and clearing organizations involved.
The Commission received comments on the costs and benefits associated with the proposed amendments from OCC, FIA, and ISDA. OCC opposed the proposal to require a DCO to provide specific types of information, arguing that it would reduce the Commission's flexibility to determine what types of information are necessary for it to review in specific circumstances. OCC suggested that a DCO should not be required to provide each of the specified types of information when it is requesting the Commission's approval to update an existing cross-margining program, where analyzing factors unrelated to the change for which it is requesting approval would create an unnecessary burden. OCC suggested that instead the Commission should issue guidance on what information it may require in its review of a cross-margining program. OCC further requested that, should the Commission nonetheless choose to require specific types of information in proposed § 39.13(i), the information should only be required when the Commission reviews a new cross-margining program and not when the Commission reviews changes to an existing cross-margining program. OCC also suggested that DCOs should be able to submit a cross-margining program under either § 40.5 or § 40.6(a), and requested that the Commission only apply the § 40.5 review process to a new cross-margining program.
FIA and ISDA recommended that the Commission consider including in its evaluation the credit and liquidity risk management, and settlement and default management-related principles identified in the PFMIs to increase transparency and improve the ability of clearing members to manage the risks associated with positions subject to cross-margining. Because the Commission did not propose this requirement, it cannot adopt it at this time but may consider it in conjunction with a future rulemaking.
In response to OCC's comment about the costs associated with DCOs including specified information in a § 40.5 in this regard, the Commission is modifying the rule text to remove the specific information that should be included, but is retaining the rule text stating that the Commission may request additional information in support of a rule submission filed under § 39.13(i), and may approve such rules in accordance with § 40.5. The Commission is declining to take OCC's recommendation to include the specified information as guidance. The Commission believes that the information that a DCO should submit is dependent on the facts and circumstances and that the specified information as proposed may be inadequate. The Commission also acknowledges OCC's observation that some of the specified information may not be necessary in some situations. Were the Commission to adopt instead OCC's suggestion to include the specified information as guidance, DCOs might rely upon the guidance to their detriment and incur costs associated with preparing unnecessary information to include in their request for approval under § 40.5. The Commission is also declining to permit DCOs to submit cross-margining programs or modifications to cross-margining programs under § 40.6. Because cross-margining programs involve two or more clearing organizations' rules and operations, they are too complex to be evaluated within the 10 business days provided under § 40.6, which is why they historically required approval by the Commission. The Commission also believes that a rule submission for an existing cross-margining program can raise as many
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A) of the CEA, the Commission believes that the amendments to § 39.13 will aid in the protection of market participants and the public by enhancing certain risk management requirements of DCOs. For example, amendments to § 39.13(g)(12) will require DCOs to increase the frequency by which they evaluate the appropriateness of haircuts that they apply to initial margin collateral. Given that initial margin is held for risk management purposes, assessing haircuts more frequently would enhance a DCO's ability to manage its risks. In addition, the amendments to § 39.13 will help preserve the efficiency and financial integrity of the derivatives markets by enhancing certain risk management requirements of DCOs. For example, the amendments to § 39.13(g)(7)(iii), which clarify that in conducting back tests of initial margin requirements, a DCO should compare portfolio losses only to those components of initial margin that capture changes in market risk factors, may help to ensure that a DCO can more accurately confirm that it is collecting sufficient margin to meet its coverage requirements. The Commission also believes that the amendments to § 39.13 will strengthen and promote sound risk management practices across DCOs, their clearing members, and clearing members' customers. Specifically, the amendments enhance, clarify, and provide flexibility in complying with several DCO risk management requirements, which will aid DCOs in efficiently allocating their risk management attention and resources. Finally, in consideration of section 15(a)(2)(E) of the CEA, the Commission notes the public interest in promoting and protecting public confidence in the safety and security of the financial markets. DCOs are essential to risk management in the financial markets, both systemically and on an individual firm level. The amendments, by enhancing, clarifying, and providing flexibility beyond current requirements, promote the ability of DCOs to perform these risk management functions. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is amending § 39.15(b)(1) to clarify that “funds and assets” are equivalent to “money, securities, and property,” to better align the language of § 39.15(b)(1) with the language in the CEA. Furthermore, § 39.15(b)(2)(ii) requires a DCO to file a petition for an order pursuant to section 4d(a) of the CEA in order for the DCO and its clearing members to commingle customer positions in futures, options, and swaps in a futures customer account subject to section 4d(a) of the CEA.
The Commission is amending § 39.15(b)(2)(ii) to permit a DCO to file rules for Commission approval pursuant to § 40.5 in order for the DCO and its clearing members to commingle such positions. This better aligns the requirements of § 39.15(b)(2)(ii) with § 39.15(b)(2)(i), which requires a DCO that wants to commingle futures, options, and swaps in a cleared swaps customer account to file rules for Commission approval.
Regulation 39.15(d) requires a DCO to have rules providing for the prompt transfer of all or a portion of a customer's portfolio of positions and related funds at the same time from the carrying clearing member to another clearing member, without requiring the close-out and re-booking of the positions prior to the requested transfer. Based on feedback received from DCOs, the Commission is amending § 39.15(d) to delete the words “at the same time,” thus requiring the “prompt,” but not necessarily simultaneous, transfer of a customer's positions and related funds. The Commission is further amending this provision to require the transfer of related funds “as necessary,” recognizing that the transfer of customer positions will not always require the transfer of funds.
The Commission is amending § 39.15(e), which relates to permitted investments of customer funds, to clarify that the regulation applies to any investment of customer funds or assets, including cleared swaps customer collateral, as defined in § 22.1. At the time § 39.15(e) was adopted, the Commission had not yet adopted regulations concerning cleared swaps customer funds but intended for § 39.15(e) to also apply to those funds. This change ensures that cleared swaps customer collateral will receive the same safekeeping as other funds and assets invested by DCOs and would reflect the Commission's intent.
The Commission did not receive any comments on the costs and benefits of the proposed changes.
This approach will reduce the burden on DCOs while providing the Commission with sufficient means to determine whether the customer funds will be adequately protected. The Commission believes the amendments to § 39.15(b)(2)(ii) will streamline the procedures for a request to commingle customer funds. As discussed above, the amendment may potentially reduce costs for DCOs that would otherwise have to petition the Commission for an order providing relief from section 4d of the CEA in order to commingle such customer funds.
Amendments to § 39.15(d) were meant to reflect common practice and provide greater flexibility to DCOs in transferring positions and funds. The Commission also notes that simultaneous transfer of funds may not be possible when a third party is involved, hence bringing further clarification to the rule. Amendments to § 39.15(e) also benefits customers as, under the new rules, their collateral will receive the same safekeeping as other funds and assets invested by DCOs.
The Commission expects costs related to amendments to § 39.15 to be de minimis. To the extent that amendments to § 39.15(b)(2)(ii), which requires a DCO to file rules for Commission approval pursuant to § 40.5, is more costly than what DCOs are currently required to file, there might be additional costs to DCOs. The Commission does not believe these additional costs will be significant.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A) of the CEA, the Commission believes that the amendments to § 39.15 will aid in the protection of market participants and the public, specifically customers of clearing members, by providing clarity on several requirements related to the
The Commission is amending § 39.16(b) to require a DCO to include clearing members and participants in an annual test of its default management plan to the extent the plan relies on their participation. Although the Commission did not receive comments specifically addressing the costs or benefits associated with these amendments, commenters generally suggested that DCOs should be given greater flexibility and discretion in the extent to which clearing members participate in tests of a DCO's default management plan. As a result, the Commission is modifying the language in the final regulation to require participation of clearing members and participants to add the phrase “to the extent the plan relies on their participation.” This change is intended to provide greater flexibility to DCOs while promoting participation in testing and ensuring that clearing members and participants are prepared in the event of a default. To comply with this requirement, a DCO may incur costs to coordinate clearing members' participation. However, the Commission believes that many DCOs already involve clearing members in their tests as a matter of best practice. The Commission believes that greater flexibility in this regard would have no detrimental impact on the benefits anticipated from, and may alleviate some of the costs associated with, clearing member participation in testing of a DCO's default management plan.
The Commission has determined not to finalize at this time a proposal to amend § 39.16(c)(1) to require a DCO to establish a default committee, but may re-propose the rule in the future. The default committee would have been required to include clearing members and could have included other participants, and would be convened in the event of a default involving substantial or complex positions to help identify any market issues that the DCO is considering. Commenters' views were mixed, with several commenters opposing the proposal and others supporting it. Opposing comments noted costs associated with reduced efficiency of the default management process.
For example, CME believes the proposal to require a default committee and clearing member participation on that committee risks unnecessarily prolonging and overcomplicating the default management process. CME further indicated that the proposed requirements could trigger resource scarcity at clearing members precisely when trading expertise is most needed—
Mr. Saguato supported the proposal to have clearing member and customer participation on a DCO's default committee. Mr. Saguato suggested that the Commission explore the costs and benefits of further increasing and formalizing the role of clearing members and their customers in the default process, as Mr. Saguato believes clearing members should have a primary role in setting default procedures. In light of the strong divergence in the views expressed in the comments received, the Commission has determined to forego adopting the proposed changes to § 39.16(c)(1) at this time. The Commission wishes to give industry stakeholders holding these divergent views time to come closer to consensus on this issue.
As to Mr. Saguato's suggestion, the Commission will explore such costs and benefits if it moves forward with another proposed rulemaking on this issue. As to CME's comment that the proposal to require a default committee and clearing member participation on that committee risks unnecessarily prolonging and overcomplicating the default management process, the Commission notes that the proposed rule would have had the benefit of helping to ensure that clearing members and participants have input into the default management process and that the interests of clearing members and participants are considered in default management decisions.
Furthermore, the Commission is requiring in § 39.16(c)(2)(ii) that a DCO's default procedures include public notice on the DCO's website of a declaration of default. The Commission believes that such notice should occur as quickly as possible, taking into account the potential negative impact that it might have on the ability of the DCO to manage the default, but did not specify timing in the final rule. The Commission's proposal would have required immediate public notice of a default, but the Commission modified the proposal in light of comments in opposition to the requirement that such notice be immediate and suggestions by commenters that DCOs have flexibility in the manner and timing of these notices. Commenters did generally support providing public notice of a clearing member's default with that modification. For example, MGEX generally agreed that public notice of a default is vital for promoting the integrity and stability of financial markets; however, MGEX suggested that the Commission give DCOs some discretion with respect to the timing of posting such notice, which would allow DCOs to take into consideration the nature of the default and any circumstances warranting flexibility. CME believes mandatory immediate public notification runs the risk of causing disadvantageous pricing for liquidation or auctions, which could increase the costs to the DCO of managing the clearing member default, and if losses are incurred, could ultimately increase the risk of mutualizing losses among its clearing members. OCC, ICE, FIA, ISDA, Eurex, and Nodal indicated that immediate public notice could potentially impact the market and the DCO's ability to manage the default. Similarly, Mr. Saguato added that requiring immediate public notice of a declaration of default is unnecessary and potentially
The Commission believes that providing public notice of a default will help to promote the integrity and stability of financial markets at little cost to DCOs and will avoid the potential costs described by commenters associated with immediate public notice.
Lastly, § 39.16(c)(2)(iii)(C) requires any allocation of a defaulting clearing member's positions to be proportional to the size of the participating or accepting clearing member's positions in the same product class at the DCO. The Commission is amending this provision to clarify that a DCO may not require a clearing member to bid for a portion of, or accept an allocation of, the defaulting clearing member's positions that is not proportional to the size of the bidding or accepting clearing member's positions in the same product class at the DCO. The Commission did not receive comments on the costs or benefits of the proposed changes. The Commission did receive, however, comments that were opposed to the aspect of the proposed rule that would have required DCOs to use initial margin requirement as the basis for determining limits on potential bidding and allocation requirements. Therefore, the Commission is modifying the proposed change to not require the use of initial margin requirement as the metric in this regard. The final rule will ensure that clearing members have the flexibility, but not the requirement, to participate in auctions and allocations beyond the proportional size of their respective positions, while providing DCOs with discretion in measuring the size of clearing members' portfolios for purposes of determining limits on potential bidding and allocation requirements. The Commission has not identified any costs associated with this change.
As to the costs and benefits in light of the section 15(a) factors, in consideration of section 15(a)(2)(A) of the CEA, the Commission believes that the amendments to § 39.16(c)(2)(ii) to require that a DCO have default procedures that include public notice on the DCO's website of a declaration of default will aid in the protection of market participants and the public by ensuring public notice of a default. In further consideration of section 15(a)(2)(A) of the CEA, the Commission believes the amendments to § 39.16(c)(2)(iii)(C) regarding the allocation of a defaulting clearing member's positions will protect clearing members from involuntarily having to bid on or accept defaulting positions that are not in proportion to the size of their positions in the relevant product class, while also providing clearing members with the flexibility to voluntarily bid on or accept more than a proportional share of the defaulting positions if that clearing member has the ability to manage the risk of those new positions. In consideration of section 15(a)(2)(B) and (D) of the CEA, the Commission believes the amendments to § 39.16(b) support the financial integrity of the derivatives markets and promote sound risk management practices by requiring DCOs to have greater clearing member participation in a test of their default management plans to the extent appropriate and ensure that clearing members are permitted, but not required, to bid on or accept defaulting positions that are not in proportion to the size of their positions in the relevant product class. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
Regulation 39.17(a) codifies Core Principle H, which requires a DCO to maintain adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules and dispute resolution. The Commission is making a technical change to § 39.17(a)(1) to emphasize that a DCO is required to monitor and enforce compliance by both itself and its members with the DCO's rules. The Commission also is amending § 39.17(b), which permits a DCO's board of directors to delegate its responsibility for compliance with the requirements of § 39.17(a) to the DCO's risk management committee, to allow a DCO to delegate such responsibility to a committee other than the risk management committee. While ICE supported the proposed amendments, there were no comments related to the costs or benefits of these changes. The Commission is adopting the amendments as proposed.
The amendment to § 39.17(a)(1) will help clarify DCOs' responsibilities but is otherwise non-substantive, while the amendment to § 39.17(b) will allow DCOs more discretion in delegating the compliance function to the most appropriate committee.
The Commission does not believe the amendments to § 39.17(a)(1) or (b) will impose any additional costs on DCOs or their members because the changes are technical in nature.
ICE suggested that the Commission should consider permitting a DCO's board to broaden the delegation of this responsibility to the president of the DCO or an equivalent officer. The Commission declines to adopt ICE's suggestion at this time; the Commission may consider it in a future proposal where comment could be sought and the costs and benefits could be considered.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(D) of the CEA, the Commission believes that the amendments to § 39.17 will promote sound risk management practices by emphasizing the importance of compliance with DCO rules and by providing DCOs with additional flexibility in structuring their governance arrangements. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
Regulation 39.19 implements Core Principle J, which requires that each DCO provide to the Commission all information that the Commission determines to be necessary to conduct oversight of the DCO. The Commission is adopting several amendments to § 39.19 to add new requirements, clarify certain existing requirements, and incorporate other changes to part 39 via updated cross-references and other technical amendments. The purpose of the amendments to § 39.19 is to assist DCOs by centralizing many of their ongoing reporting requirements into § 39.19, and by providing additional detail with respect to certain requirements. The Commission also is adopting additional reporting requirements to enhance Commission oversight of DCOs' compliance with the Core Principles and Commission regulations.
The amendments to § 39.19 may be divided into two groups to facilitate consideration of the costs and benefits associated with these changes. The first group of changes consists of the changes to § 39.19 that clarify existing reporting requirements and, in certain instances, incorporate into § 39.19 reporting requirements previously contained elsewhere within part 39. The Commission believes that the costs and benefits associated with this group of changes are minimal because, as noted above, these changes do not alter the substantive reporting obligations of DCOs. The second group of changes consist of new requirements under the daily reporting requirements in
The Commission is amending the daily reporting requirements of § 39.19(c)(1)(i)(A) through (C) to require that DCOs report margin, cash flow, and position information by individual customer account, in addition to the existing requirement that DCOs report this information by house origin and customer origin. The Commission also is amending § 39.19(c)(1)(i)(D) to require that, with respect to end-of-day position information, DCOs must report the positions themselves (
This information, individually and in aggregate, will assist the Commission in identifying customer positions across clearing members and DCOs. Analyzing positions at the customer level is a crucial element of an effective risk surveillance program, and incorporating risk sensitivities and valuation data into position information better informs Commission staff of the assumptions embedded in the position information. Identifying customers whose positions create the most risk to a DCO's clearing members assists the Commission in determining whether adequate measures are in place to address those risks and whether the Commission needs to take proactive steps to see that those risks are mitigated, thereby enhancing the protections afforded to the markets generally. The Commission believes that enhancing the supervision of DCOs and clearing members, especially identifying and mitigating the risks that individual customers and clearing members may present to a single DCO or to multiple DCOs, will result in increased safety and soundness of the markets, which will benefit DCOs, clearing members, and market participants.
The Commission believes DCOs may incur costs associated with these amendments, although not substantial costs. Several commenters expressed concern regarding the burden associated with reporting this information. All of the concerns were of a general nature; no commenter provided quantification of the additional burdens that this requirement would impose. In fact, as noted above, DCOs already are reporting this information, subject to existing technological and operational limitations. In response to comments, the Commission modified the rule text to clarify that it is not requiring DCOs to calculate risk sensitivities or valuation data on behalf of the Commission, or to obtain legal entity identifiers from clearing members. Lastly, with respect to daily reporting requirements, as explained above, DCOs already report most of this information. Because staff guidance regarding the format and manner of this reporting is periodically updated, there may be costs associated with making technical changes to accommodate these updates. The Commission notes that any costs associated with complying with new or modified technical specifications for data intake would be borne by the DCOs irrespective of the amended daily reporting requirements.
The other set of new reporting requirements are the event-specific reporting requirements that the Commission is adding to § 39.19(c)(4), including: a decrease in liquidity resources in § 39.19(c)(4)(ii); a legal name change in § 39.19(c)(4)(xi); a change in any liquidity funding arrangement in § 39.19(c)(4)(xiii); a change in settlement bank arrangements in § 39.19(c)(4)(xiv); a change in the DCO's fiscal year in § 39.19(c)(4)(xix); a change in the DCO's accounting firm in § 39.19(c)(4)(xx); major decisions of the DCO's board in § 39.19(c)(4)(xxi); and issues with a DCO's margin model in § 39.19(c)(4)(xxiii) or settlement bank in § 39.19(c)(4)(xv). The Commission believes it is important for it to be notified of these events due to their potential impact on a DCO's operations.
The Commission expects that the cost burden associated with the changes to the event-specific reporting requirements under § 39.19(c)(4) will not be substantial. First, the events that would trigger such reporting do not occur very often. Additionally, where reporting is required under § 39.19(c)(4), the level of detail a DCO is required to provide is limited to a brief notice with only the pertinent details of the incident or event. Although commenters expressed the view generally that the event-specific reporting requirements were unnecessarily burdensome, especially with regard to the anticipated frequency of certain reportable events, no commenter quantified any burdens associated with any of the new event-specific reporting requirements. Nevertheless, as explained above, the Commission modified several of the event-specific reporting requirements to address commenters' concerns. These modifications include, for example, limiting reporting of margin model issues to those that are “material,” limiting instances that would require notification to the Commission regarding settlement bank arrangements, and extending the deadline to report changes to a DCOs independent accounting firm.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A) and (D) of the CEA, the Commission believes that the amendments to § 39.19 promote the protection of market participants and the public and contribute to sound risk management practices by providing the Commission with timely information that is critical to its risk surveillance efforts. Also, in consideration of section 15(a)(2)(D) of the CEA, the Commission believes that requiring DCOs to provide notice to the Commission of certain additional events under § 39.19, such as a decrease in liquidity resources, settlement bank issues, and margin model issues, could further incentivize DCOs to avoid those risks, or to mitigate them more effectively if they do occur. Additionally, event-specific reporting will enhance the Commission's ability to identify trends or changes in market conditions, whether within the operations of a particular DCO, across DCOs, or in the marketplace generally, and to develop an appropriate supervisory response. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is amending the public reporting requirements of § 39.21 to require that DCOs make each of the items of information listed in proposed § 39.21(c)
The Commission did not receive any comments on the costs of the amendments to § 39.21. One commenter, MGEX, recommended that the Commission explicitly acknowledge that a DCO's publication of its Quantitative Disclosure, which subpart C DCOs are already required by § 39.37 to make available each quarter, fulfills the requirement of § 39.21(c)(4). The Commission is adopting § 39.21(c)(4) and is not adopting MGEX's suggestion. The Commission believes that the cost of separately disclosing information on the DCO's financial resources in the event of a default is minimal.
The Commission believes that the amendments to § 39.21 will benefit market participants and the public by making sure that important information regarding DCOs' operations is up-to-date, complete and easily accessible.
The Commission believes costs associated with the amendments to § 39.21 to be minimal because the amendments require a DCO to separately make public information that would otherwise be made public in its rulebook. The Commission also believes that the cost of separately disclosing information on the DCO's financial resources in the event of a default is minimal.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A), (B), and (D) of the CEA, the Commission believes that the amendments to § 39.21 would enhance existing protection of market participants and the public; promote the efficiency and financial integrity of the derivatives markets; and aid in sound risk management practices by ensuring that key public information about the DCO's operations is readily accessible, complete, and current. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is removing § 39.32, which sets forth requirements for governance arrangements for SIDCOs and subpart C DCOs, and adopting new §§ 39.24, 39.25, and 39.26, which incorporates all of the requirements of § 39.32. Therefore, all DCOs, including SIDCOs and subpart C DCOs, are subject to the same governance fitness standards, conflict of interest requirements, and board composition requirements, which most DCOs already meet in order to be considered a QCCP. This gives DCOs clear direction on how to comply with Core Principles O, P, and Q,
CME commented that it has benefited from having a board of directors, oversight committee, and risk committees consisting of a variety of market participants with differing views and expertise. CME also appreciated the Commission taking a principles-based approach by allowing each DCO to determine the best representation of market participants for its governing board or committee for its risk management governance purposes, while also allowing each DCO to continue to comply with relevant state and securities laws. Mr. Barnard said the governance standards in §§ 39.24, 39.25, and 39.26 will enhance risk management and governance, thus further improving the protection for market participants and the public. Mr. Saguato agreed with the benefits of a multi-stakeholder representation at the board level of a DCO and a more direct engagement of market participants in the governance and supervision of DCOs.
Incorporating the requirements of § 39.32 to new §§ 39.24, 39.25, and 39.26 ensures that all DCOs, including SIDCOs and subpart C DCOs, will be subject to the same governance fitness standards, conflict of interest requirements, and board composition requirements. To the extent some DCOs were not already meeting these standards, this change benefits markets and market participants by improving the governance fitness standards and avoiding conflicts of interest for DCOs operating in those markets. This change also benefits DCOs by giving them clear direction on how to comply with Core Principles O, P, and Q. Furthermore, § 39.26 will require that a DCO's governing board or committee include market participants, which will benefit DCOs and markets by enhancing risk management and governance decisions through inclusion of various stakeholders in a DCO's governing board or governing committee.
The Commission believes that DCOs may incur costs to comply with the requirements in §§ 39.24, 39.25, and 39.26, to the extent they are not already doing so. However, the Commission notes that some DCOs must already comply with these standards and will not face incremental costs. The Commission further believes that non-U.S. DCOs that are neither SIDCOs nor subpart C DCOs are generally held to similar requirements by their home country regulators and would also not incur additional costs.
As an alternative, ICE suggested that DCOs should have the flexibility to consider the means for providing market participant representation best suited to its business. Nadex commented that fully collateralized, non-intermediated DCOs should be exempt from compliance with proposed §§ 39.24 and 39.26 as the solicitation of retail individuals, like those of Nadex's market participants, would not likely provide significant value as compared with the burden and cost of reviewing such responses and could hinder the efficient operation of Nadex's board. Nadex noted that its market participants are not industry professionals, are not familiar with the DCO's internal operations in the same way that FCMs and other sophisticated members are familiar with “traditional” DCOs' business and operations, do not have an ownership interest or financial stake in the DCO or its default waterfall, and therefore, are not as substantially involved in the DCO's governance.
The Commission has considered the alternative suggested by commenters and notes that the requirement to include market participants on a DCO's governing board or committee is a statutory requirement under Core Principle Q. Additionally, the Commission believes that the alternatives suggested by commenters could permit a DCO to create a lower-level committee that does not have the same decision-making authority as its board or board-level committee, which would weaken the benefits described herein.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. Although the Commission believes that most, if not all, DCOs already comply with these requirements, to the extent they do not, the Commission believes the adoption of §§ 39.24, 39.25, and 39.26 would improve DCO risk management practices by promoting transparency of governance arrangements and making sure that the interests of a DCO's clearing members and, where relevant, their customers are taken into account. This would further enhance the protection of market participants and the public and the financial integrity of the derivatives markets. The Commission also believes that the required inclusion of market participants will enhance a DCO's sound risk management practices, as the inclusion of the DCO's market participants could provide a DCO's board of directors or board-level committee with additional derivatives product knowledge and risk management expertise. The Commission further believes that this amendment would benefit market participants, as well as improve the integrity of financial markets, by mitigating any potential conflict of interest that could arise if a DCO's board of directors or board-level committee is composed solely of DCO executives. The Commission acknowledges that DCOs that are not already complying with these requirements might incur additional costs to do so, but the Commission expects that this includes only a few DCOs.
The Commission is amending § 39.27(c) to require a DCO that provides clearing services outside the United States to ensure that the memorandum required in Exhibit R of Form DCO remains accurate and up-to-date. This will ensure that the DCO remains aware of any potential choice of law issues that may impact the enforceability of the DCO's rules, procedures, and contracts in all relevant jurisdictions. The Commission did not receive any comments related to the costs or benefits of amendments to § 39.27(c).
The Commission believes that amendments to § 39.27(c) will benefit the integrity of derivatives markets by making sure that the DCO remains aware of any potential choice of law issues that may impact the enforceability of the DCO's rules, procedures, and contracts in all relevant jurisdictions.
The Commission believes this requirement will not impose additional costs on DCOs that already maintain compliance with § 39.27(c), as DCOs with prudent risk management practices should continuously assess their rules, procedures, and policies against the laws and regulations of the jurisdictions in which they operate.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. The Commission believes that the amendments to § 39.27(c) will improve the integrity of derivatives markets while not imposing any additional costs.
Regulation 39.33(a)(1) requires a SIDCO or a subpart C DCO that is systemically important in multiple jurisdictions, or that is involved in activities with a more complex risk profile, to maintain financial resources sufficient to enable it to meet its financial obligations to its clearing members notwithstanding a default by the two clearing members creating the largest combined loss in extreme but plausible market conditions. The Commission is amending § 39.33(a)(1) by replacing the phrase “largest combined loss” with “largest combined financial exposure” in order to be consistent with Core Principle B and § 39.11(a)(1) regarding DCO financial resources requirements. The Commission is also amending § 39.33(c)(1) to clarify that the “largest aggregate liquidity obligation” means the total amount of cash, in each relevant currency, that the defaulted clearing member would be required to pay to the DCO.
Furthermore, the Commission is amending § 39.33(d) to require that a SIDCO use available Federal Reserve Bank accounts and services where practical. This requirement would further enhance a SIDCO's financial integrity and management of liquidity risk, thereby promoting the financial integrity of the derivatives markets, while permitting SIDCOs to consider lower cost alternatives where appropriate.
The Commission did not receive any comments on the costs or benefits associated with these changes.
The Commission believes that the amendment to § 39.33(a)(1) makes the requirement more consistent with Core Principle B and § 39.11(a)(1) regarding DCO financial resources requirements and benefits DCOs by bringing added uniformity and clarification. Furthermore, the Commission believes the changes to § 39.33(c)(1) will reduce currency risk for SIDCOs and subpart C DCOs by ensuring that these DCOs have sufficient liquidity in the relevant currency of corresponding obligations during the time it would take to liquidate or auction a defaulted clearing member's positions. This requirement improves the financial stability of markets. Additionally, amendments to § 39.33(d) will also enhance the financial integrity of derivatives markets and reduce potential costs for SIDCOs by allowing them to use lower cost alternatives if practical.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(D) of the CEA, the Commission believes the amendments to § 39.33(c)(1) will promote sound risk management policies by reducing currency risk for SIDCOs and subpart C DCOs by ensuring that these DCOs have sufficient liquidity in the relevant currency of corresponding obligations during the time it would take to liquidate or auction a defaulted clearing member's positions. The Commission also believes that the amendments to § 39.33(d)(5) will promote sound risk management practices by requiring SIDCOs with access to accounts and services at a Federal Reserve Bank to use those accounts and services where practical, thereby reducing investment risk as compared to holding funds at a commercial bank. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
Regulation 39.36 requires a SIDCO or a subpart C DCO to conduct stress tests
The Commission also is amending § 39.36(b)(2)(ii) to replace the words “produce accurate results” with “react appropriately” to more accurately reflect that the purpose of a sensitivity analysis is to assess whether the margin model will react appropriately to changes of inputs, parameters, and assumptions. The Commission is further amending § 39.36(d), which requires each SIDCO and subpart C DCO to “regularly” conduct an assessment of the theoretical and empirical properties of its margin model for all products it clears, to clarify that the assessment should be conducted on at least an annual basis (or more frequently if there are material relevant market developments). Lastly, the Commission is amending § 39.36(e) by adding the heading “[i]ndependent validation” to the provision. Because these changes are meant to clarify existing requirements, the Commission does not expect SIDCOs and subpart C DCOs to incur additional costs. The Commission did not receive any comments on the costs or benefits associated with these changes.
In addition to the discussion above, the Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(A) and (B) of the CEA, respectively, the Commission believes that the amendments will protect market participants and the public, and promote the financial integrity of SIDCOs and the derivatives markets by, for example, ensuring that SIDCOs continue to test their margin models with sufficient frequency. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
Under § 39.37, a SIDCO or a subpart C DCO is required to publicly disclose its responses to the CPMI-IOSCO Disclosure Framework
The Commission believes that amendments to § 39.37(b)(2) will help the Commission understand any material changes to the DCO's system or environment, allowing the Commission to more effectively improve the safety and financial integrity of the marketplace. Amendments to § 39.37(c) will improve public disclosure of relevant basic data on transaction volume and values, which can help promote competition and market integrity.
The Commission notes that most of the amendments to subpart C of part 39 clarify existing requirements and, as a result, the Commission does not expect that SIDCOs and subpart C DCOs would incur additional costs. The Commission believes any cost associated with the required reporting notice within amended § 39.37(b) would be nominal for SIDCOs and subpart C DCOs, as they already are required to periodically update the information publicly.
The Commission has evaluated the costs and benefits in light of the specific considerations identified in section 15(a) of the CEA. In consideration of section 15(a)(2)(D) of the CEA, the Commission believes that the amendments will enhance the sound risk practices of centralized clearing by providing clearing members and their customers with more timely and transparent notice of a DCO's changes to its Disclosure Framework, thereby allowing these market participants, prospective DCO market participants, the Commission, and the public to more easily identify and analyze changes made since the DCO's last posted Disclosure Framework. The Commission has considered the other section 15(a) factors and believes that they are not implicated by the amendments.
The Commission is amending § 140.94 to provide the Director of the Division of Clearing and Risk with delegated authority to review DCO registration applications, determine whether an application is materially complete, request additional information in support of an application, stay the running of the 180-day review period for an application, and request additional information in support of a rule submission. The Commission believes that DCOs will benefit from the delegation of authority, as it will promote a more efficient process to address these aspects of registration and rule certification. The Commission has not identified any costs on DCOs or their members associated with the amendments to § 140.94. The Commission did not receive any comments on the costs or benefits of these changes. The Commission has considered the section 15(a) factors and believes that they are not implicated by these changes.
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 the promotion of competition. In the Proposal, the Commission requested comment on whether: (1) The proposed rulemaking implicates any other specific public interest to be protected by the antitrust laws; (2) the proposed rulemaking is anticompetitive and, if it is, what the anticompetitive effects are; and (3) there are less anticompetitive means of achieving the relevant purposes of the
The Commission has considered the rulemaking to determine whether it is anticompetitive and has identified no anticompetitive effects. Because the Commission has determined that the rules are not anticompetitive and have no anticompetitive effects, the Commission has not identified any less anticompetitive means of achieving the purposes of the CEA.
Brokers, Commodity futures, Consumer protection, Definitions, Reporting and recordkeeping requirements, Swaps.
Application form, Business and industry, Commodity futures, Consumer protection, Default rules and procedures, Definitions, Enforcement authority, Participant and product eligibility, Reporting and recordkeeping requirements, Risk management, Settlement procedures, Swaps, Treatment of funds.
Authority delegations (Government agencies), Conflict of interests, Organization and functions (Government agencies).
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).
(d) * * *
(1) A futures commission merchant must obtain a written acknowledgment from each bank, trust company, derivatives clearing organization, or futures commission merchant prior to or contemporaneously with the opening of an account by the futures commission merchant with such depositories;
(7) Where a written acknowledgment is required, the futures commission merchant shall promptly file a copy of the written acknowledgment with the Commission in the format and manner specified by the Commission no later than three business days after the opening of the account or the execution of a new written acknowledgment for an existing account, as applicable.
(8) Where a written acknowledgment is required, a futures commission merchant shall obtain a new written acknowledgment within 120 days of any changes in the following:
(a) * * *
(1)
(a) * * *
(1)
(a) * * *
(1)
(a) * * *
(7)
7 U.S.C. 2, 7a-1, and 12a; 12 U.S.C. 5464; 15 U.S.C. 8325.
For the purposes of this part:
(1) Clearing credit default swaps, credit default futures, or derivatives that reference either credit default swaps or credit default futures and
(2) Any other activity designated as such by the Commission pursuant to § 39.33(a)(3).
(1) Is registered as a derivatives clearing organization under section 5b of the Act;
(2) Is not a systemically important derivatives clearing organization; and
(3) Has become subject to the provisions of subpart C of this part, pursuant to § 39.31.
(a)
(2)
(3)
(4)
(5)
(6)
(b) * * *
(2) * * *
(i) The Commission hereby delegates, until it orders otherwise, to the Director of the Division of Clearing and Risk or the Director's designee, with the concurrence of the General Counsel or the General Counsel's designee, the authority to notify an applicant seeking registration as a derivatives clearing organization that the application is materially incomplete and the running of the 180-day period under section 6(a) of the Act is stayed.
(c)
(d)
(2) A derivatives clearing organization shall provide to the Commission, upon the Commission's request, any additional information and documentation necessary to review a request to amend an order of registration.
(3) The Commission shall issue an amended order of registration upon a Commission determination, in its own discretion, that the derivatives clearing organization would maintain compliance with the Act and the Commission's regulations in this chapter upon amendment to the order. If deemed appropriate, the Commission may issue an amended order of registration subject to conditions.
(4) The Commission may decline to issue an amended order based upon a Commission determination, in its own discretion, that the derivatives clearing organization would not continue to maintain compliance with the Act and the Commission's regulations in this chapter upon amendment to the order.
(e)
(f)
(i) The date that the vacation should take effect, which must be at least ninety days after the request was submitted;
(ii) A description of how the derivatives clearing organization intends to transfer or otherwise unwind all open positions at the derivatives clearing organization and how such actions reflect the interests of affected clearing members and their customers;
(iii) A statement that the derivatives clearing organization will continue to maintain its books and records for the requisite statutory and regulatory retention periods after its registration has been vacated; and
(iv) A statement that the derivatives clearing organization will continue to make its books and records available for inspection by any representative of the Commission or the United States Department of Justice after its registration has been vacated, as required by § 1.31 of this chapter.
(2)
(g)
(2)
(i) The underlying agreement that governs the transfer;
(ii) A description of the transfer, including the reason for the transfer and the impact of the transfer on the rights and obligations of clearing members and market participants holding the positions that comprise the derivatives clearing organization's open interest;
(iii) A discussion of the transferee's ability to comply with the Act, including the core principles applicable to derivatives clearing organizations, and the Commission's regulations in this chapter, as applicable;
(iv) The transferee's rules marked to show changes that would result from acceptance of the transferred positions;
(v) A list of products for which the derivatives clearing organization requests transfer of open interest; and
(vi) A representation by the transferee that it is in and will maintain compliance with any applicable provisions of the Act, including the core principles applicable to derivatives clearing organizations, and the Commission's regulations upon the transfer of the open interest.
(3)
(a)
(e)
(c) * * *
(1) * * *
(ii) The chief compliance officer shall report to the board of directors or the senior officer of the derivatives clearing organization or, if the derivatives clearing organization engages in substantial activities not related to clearing, the senior officer responsible for the derivatives clearing organization's clearing activities. The board of directors or the senior officer shall approve the compensation of the chief compliance officer.
(iv) A change in the designation of the individual serving as the chief compliance officer of the derivatives clearing organization shall be reported to the Commission in accordance with the requirements of § 39.19(c)(4)(x).
(3)
(i) Contain a description of the derivatives clearing organization's written policies and procedures, including the code of ethics and conflict of interest policies; provided that, to the extent that the derivatives clearing organization's written policies and procedures have not materially changed since they were most recently described in an annual report to the Commission, and if the annual report containing the most recent description was submitted within the last five years, the annual report may instead incorporate by reference the relevant descriptions from the most recent annual report containing the description;
(ii) Review each core principle and applicable Commission regulation in this chapter including, in the case of systemically important derivatives clearing organizations and subpart C derivatives clearing organizations, regulations in subpart C of this part, and with respect to each:
(A) Identify, by name, rule number, or other identifier, the compliance policies and procedures that are designed to ensure compliance with each core principle and applicable regulation in this chapter;
(v) Describe any material compliance matters, including incidents of noncompliance, since the date of the last annual report, and describe the corresponding action taken.
(4) * * *
(i) Prior to submitting the annual report to the Commission, the chief compliance officer shall provide the annual report to the board of directors or the senior officer of the derivatives clearing organization or, if the derivatives clearing organization engages in substantial activities not related to clearing, the senior officer responsible for the derivatives clearing organization's clearing activities, for review. Submission of the report to the board of directors or the senior officer shall be recorded in the board minutes or otherwise, as evidence of compliance with the requirement in this paragraph (c)(4)(i). The annual report shall describe the process by which it was submitted to the board of directors or the senior officer. When submitted to the Commission, the annual report shall be accompanied by a cover letter, notice, or other document that specifies the date on which it was submitted to the board of directors or the senior officer.
(ii) The annual report shall be submitted to the Secretary of the Commission in the format and manner specified by the Commission not more than 90 days after the end of the derivatives clearing organization's fiscal year. The report shall include a certification by the chief compliance officer that, to the best of his or her knowledge and reasonable belief, and under penalty of law, the annual report is accurate and complete.
(d)
(2)
(3)
(4)
The revisions and additions read as follows:
(a)
(2) Enable the derivatives clearing organization to cover its operating costs for a period of at least one year, calculated on a rolling basis. A derivatives clearing organization shall identify and adequately manage its general business risks and hold sufficient liquid resources to cover potential business losses that are not related to clearing members' defaults, so that the derivatives clearing organization can continue to provide services as a going concern.
(b) * * *
(1) Financial resources available to satisfy the requirements of paragraph (a)(1) of this section may include:
(i) The derivatives clearing organization's own capital;
(ii) Guaranty fund deposits;
(iii) Default insurance;
(iv) Potential assessments for additional guaranty fund contributions, if permitted by the derivatives clearing organization's rules; and
(v) Any other financial resource deemed acceptable by the Commission.
(c)
(2) When calculating its largest financial exposure, a derivatives clearing organization:
(i) In netting its exposure against the clearing member's initial margin, shall:
(A) Use only that portion of the margin amount on deposit (including initial margin and any add-ons) that is required; and
(B) Use customer margin (including initial margin and any add-ons) only to the extent permitted by parts 1 and 22 of this chapter, as applicable;
(ii) Shall combine the customer and house stress test losses of each clearing member using the same stress test scenarios;
(iii) May net any gains in the house account with losses in the customer account, if permitted by the derivatives clearing organization's rules, but shall not net losses in the house account with gains in the customer account; and
(iv) With respect to a clearing member's cleared swaps customer account, may net customer gains against customer losses only to the extent permitted by the derivatives clearing organization's rules.
(3) A derivatives clearing organization shall, on a monthly basis, make a reasonable calculation of its projected operating costs over a 12-month period in order to determine the amount needed to meet the requirements of paragraph (a)(2) of this section. The derivatives clearing organization shall have reasonable discretion in determining the methodology used to compute such projected operating costs. The Commission may review the methodology and require changes as appropriate.
(d) * * *
(2) * * *
(iv) The derivatives clearing organization shall only count the value of assessments, after the haircut, to meet up to 20 percent of the total amount required under paragraph (a)(1) of this section. The value of the assessments may be determined by using the largest financial exposure in extreme but plausible market conditions prior to netting against required initial margin on deposit.
(e) * * *
(1) * * *
(ii) * * *
(A) Calculate the average daily settlement variation pay for each clearing member over the last fiscal quarter;
(B) Calculate the sum of those average daily settlement variation pays; and
(C) Using that sum, calculate the average of its clearing members' average daily settlement variation pays.
(iii) If the total amount of the financial resources required pursuant to the calculation set forth in paragraph (e)(1)(ii) of this section is insufficient to enable the derivatives clearing organization to fulfill its obligations during a one-day settlement cycle, the derivatives clearing organization may take into account a committed line of credit or similar facility for the purpose of meeting the remainder of the requirement of this paragraph (e) (subject to the limitation in paragraph (e)(3) of this section).
(iv) A derivatives clearing organization is not subject to paragraph (e)(1)(ii) of this section for fully collateralized positions.
(2) The financial resources allocated by the derivatives clearing organization to meet the requirements of paragraph (a)(2) of this section must include unencumbered, liquid financial assets (
(3) A committed line of credit or similar facility may be allocated, in whole or in part, to satisfy the requirements of either paragraph (e)(1)(ii) or (e)(2) of this section, but not both paragraphs.
(4)(i) Assets in a guaranty fund shall have minimal credit, market, and liquidity risks and shall be readily accessible on a same-day basis;
(f) * * *
(1)
(i) * * *
(A) The amount of financial resources necessary to meet the requirements of paragraph (a) of this section and §§ 39.33(a) and 39.39(d), if applicable;
(ii) Provide the Commission with a financial statement, including the balance sheet, income statement, and statement of cash flows, prepared in accordance with U.S. generally accepted accounting principles, of the derivatives clearing organization;
(iii) Report to the Commission the value of each individual clearing member's guaranty fund deposit, if the derivatives clearing organization reports having guaranty fund deposits as a financial resource available to satisfy the requirements of paragraph (a)(1) of this section and §§ 39.33(a) and 39.39(d), if applicable.
(iv) The calculations required by this paragraph (f) shall be made as of the last business day of the derivatives clearing organization's fiscal quarter. The report shall be submitted not later than 17 business days after the end of the derivatives clearing organization's fiscal quarter, or at such later time as the Commission may permit, in its discretion, upon request by the derivatives clearing organization.
(2)
(ii) The report required by paragraph (f)(2)(i) of this section shall be submitted not later than 90 days after the end of the derivatives clearing organization's fiscal year, or at such later time as the Commission may permit, in its discretion, upon request by the derivatives clearing organization.
(iii) A derivatives clearing organization shall submit concurrently with the audited year-end financial statement required by paragraph (f)(2)(i) of this section:
(A) A reconciliation, including appropriate explanations, of its balance sheet in the audited year-end financial statement with the balance sheet in the derivatives clearing organization's financial statement for the last quarter of the fiscal year when material differences exist or, if no material differences exist, a statement so indicating; and
(B) Such further information as may be necessary to make the statements not misleading.
(3)
(A) Sufficient documentation explaining the methodology used to compute its financial resources requirements under paragraph (a) of this section and §§ 39.33(a) and 39.39(d), if applicable; and
(B) Sufficient documentation explaining the basis for its determinations regarding the valuation and liquidity requirements set forth in paragraphs (d) and (e) of this section.
(ii) A derivatives clearing organization shall provide to the Commission copies of any agreements establishing or amending a credit facility, insurance coverage, or other arrangement evidencing or otherwise supporting the derivatives clearing organization's conclusions regarding its:
(A) Financial resources available to satisfy the requirements of paragraph (a) of this section and §§ 39.33(a) and 39.39(d), if applicable; and
(B) Liquidity resources available to satisfy the requirements of paragraph (e) of this section and § 39.33(c), if applicable.
(4)
(a)
(1) * * *
(i) A derivatives clearing organization shall not have restrictive clearing member standards if less restrictive requirements that achieve the same objective and that would not materially increase risk to the derivatives clearing organization or clearing members could be adopted;
(4)
(5)
(ii) A derivatives clearing organization shall require clearing members that are futures commission merchants to provide the financial reports that are specified in § 1.10 of this chapter to the derivatives clearing organization.
(iii) A derivatives clearing organization shall require clearing members that are not futures commission merchants to make the periodic financial reports provided pursuant to paragraph (a)(5)(i) of this section available to the Commission upon the Commission's request or, in lieu of imposing the requirement in this paragraph (a)(5)(iii), a derivatives clearing organization may provide such financial reports directly to the Commission upon the Commission's request.
(iv) A derivatives clearing organization shall have rules that require clearing members to provide to the derivatives clearing organization, in a timely manner, information that concerns any financial or business developments that may materially affect the clearing members' ability to continue to comply with participation requirements under this section.
(v) The requirements in paragraphs (a)(5)(i) and (iii) of this section shall not apply with respect to non-futures commission merchant clearing members of a derivatives clearing organization that only clear fully collateralized positions.
(6)
(b) * * *
(1) A derivatives clearing organization shall have appropriate requirements for determining the eligibility of agreements, contracts, or transactions submitted to the derivatives clearing organization for clearing, taking into account the derivatives clearing organization's ability to manage the risks associated with such agreements, contracts, or transactions. Factors to be considered in determining product eligibility include, but are not limited to:
(2) A derivatives clearing organization that clears swaps shall have rules providing that all swaps with the same terms and conditions, as defined by product specifications established under derivatives clearing organization rules, submitted to the derivatives clearing organization for clearing are economically equivalent within the derivatives clearing organization and may be offset with each other within the derivatives clearing organization.
The revisions and additions read as follows:
(b)
(f)
(1) The operations of the derivatives clearing organization would not be disrupted; and
(2) Non-defaulting clearing members would not be exposed to losses that non-defaulting clearing members cannot anticipate or control.
(g) * * *
(2) * * *
(i) A derivatives clearing organization shall have initial margin requirements that are commensurate with the risks of each product and portfolio, including any unusual characteristics of, or risks associated with, particular products or portfolios.
(3)
(4) * * *
(i) A derivatives clearing organization may allow reductions in initial margin requirements for related positions if the price risks with respect to such positions are significantly and reliably correlated. The price risks of different positions will only be considered to be reliably correlated if there is a conceptual basis for the correlation in addition to an exhibited statistical correlation. That conceptual basis may include, but is not limited to, the following:
(7) * * *
(iii) In conducting back tests of initial margin requirements, a derivatives clearing organization shall compare portfolio losses only to those components of initial margin that capture changes in market risk factors.
(8)
(B) For purposes of calculating the gross initial margin requirement for each clearing member's customer account(s), a derivatives clearing organization shall have rules that require its clearing members to provide to the derivatives clearing organization reports each day setting forth end-of-day gross positions of each individual customer account within each customer origin of the clearing member.
(C) A derivatives clearing organization may not, and may not permit its clearing members to, net positions of different customers against one another.
(D) A derivatives clearing organization may collect initial margin for its clearing members' house accounts on a net basis.
(ii)
(12)
(h) * * *
(1) * * *
(i) A derivatives clearing organization shall impose risk limits on each clearing member, by house origin and by each customer origin, in order to prevent a clearing member from carrying positions for which the risk exposure exceeds a specified threshold relative to the clearing member's and/or the derivatives clearing organization's financial resources. The derivatives clearing organization shall have reasonable discretion in determining:
(3) * * *
(iii) The requirements in paragraphs (h)(3)(i) and (ii) of this section do not apply with respect to clearing member accounts that hold only fully collateralized positions.
(5) * * *
(i) A derivatives clearing organization shall have rules that:
(ii) A derivatives clearing organization shall review the risk management policies, procedures, and practices of each of its clearing members, which address the risks that such clearing members may pose to the derivatives clearing organization, on a periodic basis, take appropriate action to address concerns identified in such reviews, and document such reviews and the basis for determining what action was appropriate to take.
(i)
(2) The Commission may request additional information in support of a rule submission filed under this paragraph (i), and may approve such rules in accordance with § 40.5 of this chapter.
(b)
(2)
(A) Identification of the products that would be commingled, including product specifications or the criteria that would be used to define eligible products;
(D) Analysis of the liquidity of the respective markets for the eligible products, the ability of clearing members and the derivatives clearing organization to offset or mitigate the risk of such eligible products in a timely manner, without compromising the financial integrity of the account, and, as appropriate, proposed means for addressing insufficient liquidity;
(F) A description of the financial, operational, and managerial standards or requirements for clearing members that would be permitted to commingle eligible products;
(H) A description of the financial resources of the derivatives clearing organization, including the composition and availability of a guaranty fund with respect to the eligible products that would be commingled;
(I) A description and analysis of the margin methodology that would be applied to the commingled eligible products, including any margin reduction applied to correlated positions, and any applicable margin rules with respect to both clearing members and customers;
(J) An analysis of the ability of the derivatives clearing organization to manage a potential default with respect to any of the eligible products that would be commingled;
(K) A discussion of the procedures that the derivatives clearing organization would follow if a clearing member defaulted, and the procedures that a clearing member would follow if a customer defaulted, with respect to any of the commingled eligible products in the account; and
(L) A description of the arrangements for obtaining daily position data with respect to eligible products in the account.
(ii)
(iii)
(d)
(e)
(a)
(b)
(c) * * *
(1) A derivatives clearing organization shall have procedures that would permit the derivatives clearing organization to take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of a default on the obligations of a clearing member to the derivatives clearing organization.
(2) A derivatives clearing organization shall have rules that set forth its default procedures, including:
(ii) The actions that the derivatives clearing organization may take upon a default, which shall include public notice of a declaration of default on its website and the prompt transfer, liquidation, or hedging of the customer or house positions of the defaulting clearing member, as applicable, and which may include, in the discretion of the derivatives clearing organization, the auctioning or allocation of such positions to other clearing members;
(iii) * * *
(C) The derivatives clearing organization shall not require a clearing member to bid for a portion of, or accept an allocation of, the defaulting clearing member's positions that is not proportional to the size of the bidding or accepting clearing member's positions in the same product class at the derivatives clearing organization;
(d) * * *
(1) A derivatives clearing organization shall have rules that require a clearing member to provide prompt notice to the derivatives clearing organization if it becomes the subject of a bankruptcy petition, receivership proceeding, or the equivalent;
(e)
(a)
(1) Maintain adequate arrangements and resources for the effective monitoring and enforcement of compliance (by itself and its clearing members) with the rules of the derivatives clearing organization and the resolution of disputes;
(3) Report to the Commission regarding rule enforcement activities and sanctions imposed against clearing members as provided in paragraph (a)(2) of this section, in accordance with § 39.19(c)(4)(xvi).
(b)
(a)
(b)
(2)
(3)
(c)
(1)
(A) Initial margin requirements and initial margin on deposit for each clearing member, by house origin and by each customer origin, and by each individual customer account;
(B) Daily variation margin, separately listing the mark-to-market amount collected from or paid to each clearing member, by house origin and by each customer origin, and by each individual customer account;
(C) All other daily cash flows relating to clearing and settlement including, but not limited to, option premiums and payments related to swaps such as coupon amounts, collected from or paid to each clearing member, by house origin and by each customer origin, and by each individual customer account; and
(D) End-of-day positions, including as appropriate the risk sensitivities and valuation data that the derivatives clearing organization generates, creates, or calculates in connection with managing the risks associated with such positions, for each clearing member, by house origin and by each customer origin, and by each individual customer account. The derivatives clearing organization shall identify each individual customer account using both a legal entity identifier and any internally-generated identifier, where available, within each customer origin for each clearing member.
(ii) The report shall contain the information required by paragraphs (c)(1)(i)(A) through (D) of this section for:
(C) All securities positions that are:
(
(
(2)
(3)
(i) The annual report of the chief compliance officer required by § 39.10; and
(ii) Audited year-end financial statements of the derivatives clearing organization as required by § 39.11(f)(2).
(iii) [Reserved]
(iv) The reports required by this paragraph (c)(3) shall be filed not later than 90 days after the end of the derivatives clearing organization's fiscal year, or at such later time as the Commission may permit, in its discretion, upon request by the derivatives clearing organization.
(4)
(A) The total value of the financial resources as of the close of business the day the 25 percent threshold was reached;
(B) If reporting a decrease in value from the previous business day, the total value of the financial resources immediately prior to the 25 percent decline;
(C) A breakdown of the value of each financial resource reported in each of
(D) A detailed explanation for the decrease.
(ii)
(A) The total value of the liquidity resources as of the close of business the day the 25 percent threshold was reached;
(B) If reporting a decrease in value from the previous business day, the total value of the liquidity resources immediately prior to the 25 percent decline;
(C) A breakdown of the value of each liquidity resource reported in each of paragraphs (c)(4)(ii)(A) and (B) of this section, calculated in accordance with the requirements of § 39.11(e) or § 39.33(c), as applicable, including the value of each individual clearing member's guaranty fund deposit if the derivatives clearing organization reports guaranty fund deposits as a liquidity resource; and
(D) A detailed explanation for the decrease.
(iii)
(A) Pro forma financial statements reflecting the derivatives clearing organization's estimated future financial condition following the anticipated decrease for reports submitted prior to the anticipated decrease and current financial statements for reports submitted after such a decrease; and
(B) A detailed explanation for the decrease or anticipated decrease in the balance.
(iv)
(v)
(vi)
(A) The name of the clearing member;
(B) The time the clearing member was contacted;
(C) The number of positions for futures and options, and for swaps, the number of outstanding trades and notional amount, by which the derivatives clearing organization requested the reduction;
(D) All products that are the subject of the request; and
(E) The reason for the request.
(vii)
(A) The name of the clearing member;
(B) The time the clearing member was contacted;
(C) The products that are subject to the determination;
(D) The number of positions for futures and options, and for swaps, the number of outstanding trades and notional amount, that are subject to the determination; and
(E) The reason for the determination.
(viii)
(A) The name of the clearing member;
(B) The products the clearing member defaulted upon;
(C) The number of positions for futures and options, and for swaps, the number of outstanding trades and notional amount, the clearing member defaulted upon; and
(D) The amount of the financial obligation.
(ix)
(
(
(
(B)
(C)
(D)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
(A) The institution of any legal proceedings which may have a material adverse financial impact on the derivatives clearing organization;
(B) Any event, circumstance or situation that materially impedes the derivatives clearing organization's ability to comply with this part and is not otherwise required to be reported under this section; or
(C) A material adverse change in the financial condition of any clearing member that is not otherwise required to be reported under this section.
(xviii)
(xix)
(xx)
(xxi)
(xxii)
(A) Exceptional events as required by § 39.18(g); or
(B) Planned changes as required by § 39.18(h).
(xxiii)
(xxiv)
(5)
(i) Any information related to its business as a clearing organization, including information relating to trade and clearing details.
(ii) A written demonstration, containing supporting data, information and documents, that the derivatives clearing organization is in compliance with one or more core principles and relevant provisions of this part.
(a)
(b) * * *
(2)
The revisions and additions read as follows:
(a)
(b)
(c)
(3) Information concerning its margin-setting methodology;
(4) The size and composition of the financial resource package available in the event of a clearing member default, updated as of the end of the most recent fiscal quarter or upon Commission request and posted as promptly as practicable after submission of the report to the Commission under § 39.11(f)(1)(i)(A);
(5) Daily settlement prices, volume, and open interest for each contract, agreement, or transaction cleared or settled by the derivatives clearing organization, posted no later than the business day following the day to which the information pertains;
(6) The derivatives clearing organization's rulebook, including rules and procedures for defaults in accordance with § 39.16;
(7) A current list of all clearing members;
(8) A list of all swaps that the derivatives clearing organization will accept for clearing that identifies which swaps on the list are required to be cleared, in accordance with § 50.3(a) of this chapter; and
(9) Any other information that is relevant to participation in the clearing and settlement activities of the derivatives clearing organization.
A derivatives clearing organization shall enter into, and abide by the terms of, each appropriate and applicable domestic and international information-sharing agreement, and shall use relevant information obtained from each such agreement in carrying out the risk management program of the derivatives clearing organization.
(a)
(i) Are written;
(ii) Are clear and transparent;
(iii) Place a high priority on the safety and efficiency of the derivatives clearing organization; and
(iv) Explicitly support the stability of the broader financial system and other relevant public interest considerations of clearing members, customers of clearing members, and other relevant stakeholders.
(2) The board of directors shall make certain that the derivatives clearing organization's design, rules, overall strategy, and major decisions appropriately reflect the legitimate interests of clearing members, customers of clearing members, and other relevant stakeholders.
(3) To the extent consistent with other statutory and regulatory requirements on confidentiality and disclosure:
(i) Major decisions of the board of directors shall be clearly disclosed to clearing members, other relevant stakeholders, and to the Commission; and
(ii) Major decisions of the board of directors having a broad market impact shall be clearly disclosed to the public.
(b)
(1) Are clear and documented;
(2) To an extent consistent with other statutory and regulatory requirements on confidentiality and disclosure, are disclosed, as appropriate, to the Commission, other relevant authorities, clearing members, customers of clearing members, owners of the derivatives clearing organization, and to the public;
(3) Describe the structure pursuant to which the board of directors, committees, and management operate;
(4) Include clear and direct lines of responsibility and accountability;
(5) Clearly specify the roles and responsibilities of the board of directors and its committees, including the establishment of a clear and documented risk management framework;
(6) Clearly specify the roles and responsibilities of management;
(7) Describe procedures pursuant to which the board of directors oversees the chief risk officer, risk management committee, and material risk decisions;
(8) Provide risk management and internal control personnel with sufficient independence, authority, resources, and access to the board of directors so that the operations of the derivatives clearing organization are consistent with the risk management framework established by the board of directors;
(9) Assign responsibility and accountability for risk decisions, including in crises and emergencies; and
(10) Assign responsibility for implementing the:
(i) Default rules and procedures required by §§ 39.16 and 39.35, as applicable;
(ii) System safeguard rules and procedures required by §§ 39.18 and 39.34, as applicable; and
(iii) Recovery and wind-down plans required by § 39.39, as applicable.
(c)
(i) Directors;
(ii) Members of any disciplinary committee;
(iii) Members of the derivatives clearing organization;
(iv) Any other individual or entity with direct access to the settlement or clearing activities of the derivatives clearing organization; and
(v) Any other party affiliated with any individual or entity described in this paragraph.
(2) A derivatives clearing organization shall maintain policies to make certain that:
(i) The board of directors consists of suitable individuals having appropriate skills and incentives;
(ii) The performance of the board of directors and the performance of individual directors is reviewed on a regular basis; and
(iii) Managers have the appropriate experience, skills, and integrity necessary to discharge operational and risk management responsibilities.
A derivatives clearing organization shall:
(a) Establish and enforce rules to minimize conflicts of interest in the decision-making process of the derivatives clearing organization;
(b) Establish a process for resolving such conflicts of interest; and
(c) Describe procedures for identifying, addressing, and managing conflicts of interest involving members of the board of directors.
A derivatives clearing organization shall ensure that the composition of the governing board or board-level committee of the derivatives clearing organization includes market participants and individuals who are not executives, officers, or employees of the derivatives clearing organization or an affiliate thereof.
(c) * * *
(3) The derivatives clearing organization shall ensure on an ongoing basis that the memorandum required in paragraph (b) of Exhibit R to appendix A to this part is accurate and up to date and shall submit an updated memorandum to the Commission promptly following all material changes to the analysis or content contained in the memorandum.
(a) * * *
(1) Notwithstanding the requirements of § 39.11(a)(1), each systemically important derivatives clearing organization and subpart C derivatives clearing organization that, in either case, is systemically important in multiple jurisdictions or is involved in activities with a more complex risk profile shall maintain financial resources sufficient to enable it to meet its financial obligations to its clearing members notwithstanding a default by the two clearing members creating the largest combined financial exposure to the derivatives clearing organization in extreme but plausible market conditions.
(c) * * *
(1) * * *
(i) Notwithstanding the provisions of § 39.11(e)(1)(ii), each systemically important derivatives clearing organization and subpart C derivatives clearing organization shall maintain eligible liquidity resources, in all relevant currencies, that, at a minimum, will enable it to meet its intraday, same-day, and multiday obligations to perform settlements, as defined in § 39.14(a)(1), with a high degree of confidence under a wide range of stress scenarios that should include, but not be limited to, a default by the clearing member creating the largest aggregate liquidity obligation for the systemically important derivatives clearing organization or subpart C derivatives clearing organization in extreme but plausible market conditions.
(d) * * *
(5) A systemically important derivatives clearing organization with access to accounts and services at a Federal Reserve Bank, pursuant to section 806(a) of the Dodd-Frank Act, 12 U.S.C. 5465(a), shall use such accounts and services where practical.
(a) * * *
(5) * * *
(ii) Using the results to assess the adequacy of, and to adjust, its total amount of financial resources; and
(6) Use the results of stress tests to support compliance with the minimum financial resources requirement set forth in § 39.11(a)(1) or § 39.33(a), as applicable.
(b) * * *
(2) * * *
(ii) Testing of the ability of the models or model components to react appropriately using actual or hypothetical datasets and assessing the impact of different model parameter settings.
(d)
(e)
(b)(1) Review and update its responses disclosed as required by paragraph (a) of this section at least every two years and following material changes to the systemically important derivatives clearing organization's or subpart C derivatives clearing organization's system or the environment in which it operates. A material change to the systemically important derivatives clearing organization's or subpart C derivatives clearing organization's system or the environment in which it operates is a change that would significantly change the accuracy and usefulness of the existing responses; and
(2) Provide notice to the Commission of updates to its responses required by paragraph (b)(1) of this section following material changes no later than ten business days after the updates are made. Such notice shall be accompanied by a copy of the text of the responses that shows all deletions and additions made to the immediately preceding version of the responses;
(c) Disclose, publicly and to the Commission, relevant basic data on transaction volume and values consistent with the standards set forth in the Public Quantitative Disclosure Standards for Central Counterparties published by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions;
(a) * * *
(2)
7 U.S.C. 2(a)(12), 12a, 13(c), 13(d), 13(e), and 16(b).
(c) * * *
(1) The authority to review applications for registration as a derivatives clearing organization filed with the Commission under § 39.3(a)(1) of this chapter, to determine that an application is materially complete pursuant to § 39.3(a)(2) of this chapter, to request additional information in support of an application pursuant to § 39.3(a)(3) of this chapter, to extend the review period for an application pursuant to § 39.3(a)(6) of this chapter, to stay the running of the 180-day review period if an application is incomplete pursuant to § 39.3(b)(1) of this chapter, to review requests for amendments to orders of registration filed with the Commission under § 39.3(d)(1) of this chapter, to request additional information in support of a request for an amendment to an order of registration pursuant to § 39.3(d)(2) of this chapter, and to request additional information in support of a rule submission pursuant to § 39.3(g)(3) of this chapter;
(4) All functions reserved to the Commission in § 39.10(c)(4)(iv) of this chapter;
(5) All functions reserved to the Commission in § 39.11(b)(1)(v), (b)(2)(ii), (c)(1) and (3), and (f)(1), and (2) of this chapter;
(6) All functions reserved to the Commission in § 39.12(a)(5)(iii) of this chapter;
(7) All functions reserved to the Commission in § 39.13(g)(8)(ii), (h)(1)(i)(C), (h)(1)(ii), (h)(3)(i) and (ii), and (h)(5)(i)(C) of this chapter;
(8) The authority to request additional information in support of a rule submission under §§ 39.13(i)(2) and 39.15(b)(2)(iii) of this chapter;
(9) All functions reserved to the Commission in § 39.19(c)(2), (c)(3)(iv), and (c)(5) of this chapter;
(10) All functions reserved to the Commission in § 39.20(a)(5) of this chapter;
(11) All functions reserved to the Commission in § 39.21(c) of this chapter;
(12) All functions reserved to the Commission in § 39.31 of this chapter; and
(13) The authority to approve the requests described in §§ 39.34(d) and 39.39(f) of this chapter.
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Tarbert and Commissioners Quintenz, Behnam, Stump, and Berkovitz voted in the affirmative. No Commissioner voted in the negative.
Clearinghouses—often called central counterparties or CCPs—are what make our futures, options, and much of our swaps markets work. Once a buyer and seller enter into a derivatives trade, the CCP takes on each party's credit risk for the duration of the contract. Hundreds of thousands of trades occur in the United States because market participants never need to worry about counterparties not making good on their payment obligations. The entire risk of an exchange or even several exchanges is centralized within a given CCP. As a consequence, CCPs are the “risk controllers”
As Chairman, I have emphasized that one of the most critical responsibilities of the CFTC is supervising CCPs on a daily basis.
Part 39 of our regulations implements our statutory principles-based framework for the supervision and regulation of derivatives clearinghouses.
I am therefore pleased to support the final amendments to Part 39 before the Commission today. The final amendments
I am pleased to support today's final rule that amends the Commission's regulations governing derivatives clearing organizations (DCOs).
Before highlighting aspects of the final rule, I would like to review the importance of central clearing, DCOs, and the Commission's oversight over these institutions. DCOs play a truly crucial role in the futures and swap markets by serving as a central counterparty to every transaction that they clear. When a transaction is cleared, the DCO guarantees performance of the contract until final settlement so that market participants do not bear counterparty credit risk to each other. The DCO sets collateral and daily-mark-to-market requirements, according to rules enforced by the CFTC, and otherwise maintains the financial integrity of cleared transactions, under CFTC-supervision. The CFTC's Division of Clearing and Risk (DCR) regularly examines DCOs for compliance with the Commission's regulations; reviews new DCO rules; and assesses how DCOs manage market and liquidity risks.
Central clearing has long been a hallmark of the futures market, dating back to the 1920s and functioning extremely well since then. Following Congress' 2010 amendments to the Commodity Exchange Act (CEA),
I am proud that the CFTC is one of only a few authorities around the world to have issued DCO rules that are consistent with the internationally-recognized CPMI-IOSCO
The amendments set forth in today's final rule include new requirements for: Governance; reporting clearing members' positions to the Commission; reporting changes in liquidity funding and settlement bank arrangements; determining initial margin requirements; default management procedures; enterprise risk management; reviewing haircuts on assets submitted as initial margin; exemptions for DCOs clearing only fully-collateralized contracts; cross-margining programs; transfers of open interest; and public disclosures issued in response to an CPMI-IOSCO initiative.
I would like to highlight some of the provisions of the final rule. Regarding reporting to the Commission, a DCO will be required to report daily the amounts of initial and variation margin for “individual customer accounts” held within each futures commission merchant (FCM)-clearing member's overall “customer account.”
In conclusion, I am pleased that in finalizing these new rules, the Commission has genuinely taken the public's comments into account, reviewing input not only from the DCOs themselves, but also from the market participants that clear their trades at DCOs, including investment funds, futures commission merchants, and other financial institutions. I recognize that commenters raised important issues that are beyond the scope of, or not included in, today's rulemaking concerning the relationship between a DCO and its members. While the Commission will continue to consider the public's views on these issues, the Commission is focused on ensuring DCOs comply with the CEA's core principles. I hope that the DCOs, their members, and their members' customers can continue working in good faith to find constructive solutions to other issues not included here.