Animal and Plant Health Inspection Service
Rural Utilities Service
Foreign-Trade Zones Board
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
Engineers Corps
Federal Energy Regulatory Commission
Agency for Toxic Substances and Disease Registry
Centers for Disease Control and Prevention
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Fish and Wildlife Service
Geological Survey
Indian Affairs Bureau
Land Management Bureau
Ocean Energy Management Bureau
Reclamation Bureau
Antitrust Division
Drug Enforcement Administration
Federal Aviation Administration
Federal Transit Administration
National Highway Traffic Safety Administration
Comptroller of the Currency
Internal Revenue Service
United States Mint
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
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Federal Retirement Thrift Investment Board.
Interim rule.
In light of emergency stay-at-home and shelter-in-place orders issued all over the country, the Federal Retirement Thrift Investment Board (FRTIB) is temporarily waiving the requirement to notarize a spouse's signature on withdrawal election forms.
This interim rule is effective April 17, 2020 and shall remain effective until withdrawn. The FRTIB will consider public comments regarding the duration of time that this rule should remain effective. Comments must be received by May 18, 2020.
You may submit comments using one of the following methods:
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Since March 23, 2020, the FRTIB has been operating under a mandatory telework status due to the coronavirus pandemic which has severely limited the ability to timely monitor mail and facsimiles. Therefore, we strongly encourage using the Federal Rulemaking Portal to submit comments.
The FRTIB administers the TSP, which was established by the Federal Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514. The TSP is a tax-deferred retirement savings plan for Federal civilian employees and members of the uniformed services. The TSP is similar to cash or deferred arrangements established for private-sector employees under section 401(k) of the Internal Revenue Code (26 U.S.C. 401(k)).
A spouse of a FERS or uniformed services TSP participant has an automatic legal entitlement to a survivor annuity. Annuities are purchased with the balance of the participant's TSP account, and such purchases are made pursuant a withdrawal election. Consequently, the default TSP withdrawal election is a joint life annuity with the 50% survivor benefit. The participant cannot make any other type of withdrawal unless the participant's spouse signs a written statement waiving his or her entitlement to a survivor annuity. This signed, written waiver (“spousal consent”) is a statutory requirement. 5 U.S.C. 8435(b) and (c). The statute does not, however, require spousal consent to be notarized.
The FRTIB Executive Director has the authority to issue regulations to administer the TSP. 5 U.S.C. 8474(b)(5). In 2003, the Executive Director published a regulation requiring spousal consent to be notarized. 68 FR 74450 (December 23, 2003).
The coronavirus pandemic has disrupted day-to-day life in an unprecedented way. These disruptions, which include mandatory business and school closures, stay-at-home/shelter-in-place orders, and quarantines have made it difficult and unsafe to have forms notarized in-person.
States are increasingly permitting remote online notarization. As of January 1, 2020, twenty-two states had already adopted laws that enable notaries to perform remote notarizations. In response to the coronavirus pandemic, at least 21 states have issued emergency orders that accelerate the effective dates of laws that would permit remote notarization or temporarily waive certain provisions of law that would otherwise impede the availability of remote notarization.
The FRTIB recognizes that many TSP participants will confront extraordinary uncertainty due to rapid evolution of state laws and unfamiliarity with the technology used for remote notarization. In addition, the TSP does not currently have the technological workflow to allow participants to submit remotely notarized forms electronically. Although the FRTIB is diligently working to add this capability, it is not yet available.
Under these conditions, the regulation requiring spousal consent to be notarized has become an extraordinary hurdle for married TSP participants who need to request a withdrawal during this difficult time. Therefore, the Executive Director has determined that is necessary to temporarily waive the notarization requirement for spousal consent.
Only the notarization requirement is waived. Married participants must still obtain their spouse's consent. The consent must be evidenced by the spouse's signature (or any electronic signature alternative that the TSP has deemed sufficient to constitute written consent). Participants are reminded that any intentional false statement or willful misrepresentation concerning their marital status or provision of their spouse's consent is punishable by fine or imprisonment of up to 5 years, or both. 18 U.S.C. 1001.
The Administrative Procedure Act, Public Law 79-404, 60 Stat. 237, generally requires that an agency publish an adopted rule in the
I certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation will affect Federal employees and members of the uniformed services who participate in the Thrift Savings Plan, which is a Federal defined contribution retirement savings plan created under the Federal Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514, and which is administered by the Agency.
I certify that this regulation does not require additional reporting under the criteria of the Paperwork Reduction Act.
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602, 632, 653, 1501-1571, the effects of this regulation on state, local, and tribal governments and the private sector have been assessed. This regulation will not compel the expenditure in any one year of $100 million or more by state, local, and tribal governments, in the aggregate, or by the private sector. Therefore, a statement under section 1532 is not required.
Alimony, Claims, Government employees, Pensions, Retirement.
For the reasons stated in the preamble, the FRTIB amends 5 CFR part 1650 as follows:
5 U.S.C. 8351, 8432d, 8433, 8434, 8435, 8474(b)5 and 8474(c)(1).
(c) * * *
(4) Unless the TSP granted the participant an exception under this subpart to the spousal notification requirement within 90 days of the date the withdrawal form is processed by the TSP, to show that the spouse has consented to a different total or partial withdrawal election or installment payment change and waived the right to this annuity with respect to the applicable amount, the participant must submit to the TSP record keeper a properly completed withdrawal request form, signed by his or her spouse. If the TSP granted the participant an exception to the signature requirement, the participant should enclose a copy of the TSP's approval letter with the withdrawal form.
(c) Unless the participant was granted an exception under this subpart to the signature requirement within 90 days of the date the withdrawal form is processed by the TSP, before obtaining an in-service withdrawal, a participant who is covered by FERS or who is a member of the uniformed services must obtain the consent of his or her spouse and waiver of the spouse's right to a joint and survivor annuity described in § 1650.61(c) with respect to the applicable amount.
To show the spouse's consent and waiver, a participant must submit to the TSP record keeper a properly completed withdrawal request form, signed by his or her spouse. Once a form containing the spouse's consent and waiver has been submitted to the TSP record keeper, the spouse's consent is irrevocable for that withdrawal.
Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); and the Federal Deposit Insurance Corporation (FDIC).
Interim final rule with request for comments.
The OCC, Board, and FDIC (collectively, the agencies) are adopting an interim final rule to amend the agencies' regulations requiring appraisals of real estate for certain transactions. The interim final rule defers the requirement to obtain an appraisal or evaluation for up to 120 days following the closing of a transaction for certain residential and commercial real estate transactions, excluding transactions for acquisition, development, and construction of real estate. Regulated institutions should make best efforts to obtain a credible valuation of real property collateral before the loan closing, and otherwise underwrite loans consistent with the principles in the agencies' Standards for Safety and Soundness and Real Estate Lending Standards. The agencies are providing this relief to allow regulated institutions to expeditiously extend liquidity to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the National Emergency declared in connection with coronavirus disease 2019 (COVID-19).
The interim final rule is effective April 17, 2020 through December 31, 2020. Comments on the interim final rule must be received no later than June 1, 2020.
Interested parties are encouraged to submit written comments
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You may review comments and other related materials that pertain to this rulemaking action by any of the following methods:
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The docket may be viewed after the close of the comment period in the same manner as during the comment period.
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All public comments will be made available on the Board's website at
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Title XI directs the agencies to prescribe appropriate standards for Title XI appraisals under the agencies' respective jurisdictions.
All federally related transactions must have Title XI appraisals. Title XI defines a federally related transaction as a real estate-related financial transaction
The agencies have used their safety and soundness authority to require evaluations for a subset of transactions for which an appraisal is not required.
The deferral of evaluations reflects the same considerations relating to the impact of COVID-19 as the deferral of appraisals. The agencies require evaluations for certain exempt transactions as a matter of safety and soundness. Evaluations do not need to comply with USPAP, but must be sufficiently robust to support a valuation conclusion. An evaluation can be less complex than an appraisal and usually takes less time to complete than an appraisal, but it also commonly involves physical property inspections. For these reasons, the agencies also are using their safety and soundness authority
By the end of the deferral period, regulated institutions must obtain appraisals or evaluations that are consistent with safe and sound banking practices, as required by the agencies' appraisal regulations.
The interim final rule allows a temporary deferral of the requirements for appraisals and evaluations under the agencies' appraisal regulations. The deferrals apply to both residential and commercial real estate-related financial transactions, excluding transactions for acquisition, development, and construction of real estate. The agencies are excluding transactions for acquisition, development, and construction of real estate because these loans present heightened risks not associated with financing existing real estate.
Under the interim final rule, regulated institutions may close a real estate loan without a contemporaneous appraisal or evaluation, subject to a requirement that institutions obtain the appraisal or evaluation, as would have been required under the appraisal regulations without the deferral, within a grace period of 120 days after closing of the transaction. While appraisals and evaluations can be deferred, the agencies expect institutions to use best efforts and available information to develop a well-informed estimate of the collateral value of the subject property. For purposes of risk-weighting of residential mortgage exposures, an institution's prudent underwriting estimation of the collateral value of the subject property will be considered to meet the agencies' appraisal and evaluation requirements during the deferral period.
The interim final rule adds a new, temporary provision to the appraisal regulations that provides a 120-day deferral of appraisal and evaluation requirements for all transactions secured by commercial or residential real estate during the COVID-19 pandemic, excluding transactions for acquisition, development, and construction of real estate. The interim final rule does not revise any of the existing appraisal exceptions or any other requirements with respect to the performance of evaluations.
The interim final rule will allow regulated institutions to quickly provide liquidity to owners of commercial and residential property. The temporary provision allowing regulated institutions to defer appraisals or evaluations for covered transactions will expire on December 31, 2020, unless extended by the agencies.
The interim final rule is effective April 17, 2020.
The agencies are issuing this interim final rule without prior notice and the opportunity for public comment and the 30-day delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).
The agencies believe that the public interest is best served by implementing the interim final rule as soon as possible. As discussed above, recent events have suddenly and significantly affected global economic activity, increasing businesses' and households' need to have timely access to liquidity from real estate equity. In addition, the spread of COVID-19 has greatly increased the difficulty of performing real estate appraisals and evaluations in a timely manner. This relief will allow regulated institutions to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a
The APA also requires a 30-day delayed effective date, except for (1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.
While the agencies believe that there is good cause to issue the rule without advance notice and comment and with an immediate effective date, the agencies are interested in the views of the public and request comment on all aspects of the interim final rule.
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.
For the same reasons set forth above with respect to APA requirements, the agencies are adopting the interim final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to any rule for which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.
As required by the Congressional Review Act, the agencies will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review.
In accordance with the requirements of the Paperwork Reduction Act of 1995
The Regulatory Flexibility Act (RFA)
Nevertheless, the agencies seek comment on whether, and the extent to which, the interim final rule would affect a significant number of small entities.
Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA),
Section 722 of the Gramm-Leach-Bliley Act
• Have the agencies organized the material to suit your needs? If not, how could this material be better organized?
• Are the requirements in the regulation clearly stated? If not, how could the regulation be more clearly stated?
• Does the regulation contain language or jargon that is not clear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand?
• What else could we do to make the regulation easier to understand?
As a general matter, the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531
Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending.
Administrative practice and procedure, Banks, banking, Federal Reserve System, Capital planning, Holding companies, Reporting and recordkeeping requirements, Securities, Stress testing
Banks, banking, Mortgages, Reporting and recordkeeping requirements, Savings associations.
For the reasons set forth in the joint preamble, the OCC amends part 34 of chapter I of title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 1, 25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j-3, 1828(o), 3331
(f)
(2)
(3)
For the reasons set forth in the joint preamble, the Board amends part 225 of chapter II of title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 1843(c)(8), 1844(b), 1972(l), 3106, 3108, 3310, 3331
(f)
(2)
(3)
For the reasons set forth in the joint preamble, the FDIC amends part 323 of chapter III of title 12 of the Code of Federal Regulations as follows:
12 U.S.C. 1818, 1819(a) (“Seventh” and “Tenth”), 1831p-1 and 3331
(g)
(2)
(3)
By order of the Board of Governors of the Federal Reserve System, April 10, 2020.
By order of the Board of Directors.
Federal Aviation Administration (FAA), DOT.
Final rule.
The FAA is adopting a new airworthiness directive (AD) for Robinson Helicopter Company (Robinson) Model R44 and R44 II helicopters. This AD was prompted by reports of cracking in certain tail rotor blades. This AD requires visually checking each tail rotor blade for a crack. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective May 22, 2020.
For service information identified in this final rule, contact Robinson Helicopter Company, 2901 Airport Drive, Torrance, CA 90505; telephone 310-539-0508; fax 310-539-5198; or at
You may examine the AD docket on the internet at
James Guo, Aerospace Engineer, Los Angeles ACO Branch, FAA, 3960 Paramount Blvd., Lakewood, California 90712; telephone 562-627-5357; email
The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Robinson Model R44 and R44 II helicopters with a tail rotor blade part number (P/N) C029-1 or P/N C029-2 installed. The NPRM published in the
Since the FAA issued the NPRM, the website address for Robinson changed. This AD updates that website address.
The FAA gave the public the opportunity to comment on the NPRM. The following presents the comments received on the NPRM and the FAA's response to each comment.
The FAA has reviewed the relevant information, considered the comments received, and determined that an unsafe condition exists and is likely to exist or develop on other products of the same type design and that air safety and the public interest require adopting the AD requirements as proposed with the changes described previously. These changes are consistent with the intent proposed in the NPRM for correcting the unsafe condition and will not increase the economic burden on any operator nor increase the scope of the AD.
The FAA has reviewed Robinson SB-83, dated May 30, 2012 (SB-83), which specifies, within 10 flight hours or by June 30, 2012, whichever occurs first, inserting a caution page into the Pilot's Operating Handbook. The caution page specifies inspecting the leading edges of each tail rotor blade for a crack before each flight. The caution page also advises that to reduce fatigue stress damage to the tail rotor blades, pilots should avoid maneuvers that require large left pedal inputs. SB-83 specifies that the caution page may be removed when the tail rotor blades are replaced with tail rotor blade P/N C029-3.
The FAA estimates that this AD affects 1,631 helicopters of U.S. Registry. The FAA estimates that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per work-hour.
Visually checking the tail rotor blades for a crack takes about 0.2 work-hour for an estimated cost of $17 per helicopter and $27,727 for the U.S. fleet per check cycle.
Replacing a tail rotor blade takes about 2 work-hours and parts cost about $3,080 for an estimated replacement cost of $3,250 per blade.
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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Will not affect intrastate aviation in Alaska, and
(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Robinson Helicopter Company (Robinson) Model R44 and R44 II helicopters, certificated in any category, with a tail rotor blade part number (P/N) C029-1 or P/N C029-2 installed.
This AD defines the unsafe condition as a crack in a tail rotor blade. This condition could result in the loss of the tail rotor and subsequent loss of control of the helicopter.
This AD is effective May 22, 2020.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Within 50 hours time-in-service after the effective date of this AD and thereafter before each flight:
(1) Visually check each tail rotor blade for a crack in the leading edge, paying particular attention to the area in the most inboard white paint stripe. Wipe the blades clean, if necessary, to ensure any potential crack is visible. The actions required by this paragraph may be performed by the owner/operator (pilot) holding at least a private pilot certificate and must be entered into the aircraft records showing compliance with this AD in accordance with 14 CFR 43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(2) If there is a crack, before further flight, replace the tail rotor blade.
(1) The Manager, Los Angeles ACO Branch, FAA, may approve AMOCs for this AD. Send your proposal to: James Guo, Aerospace Engineer, Los Angeles ACO Branch, FAA, 3960 Paramount Blvd., Lakewood, California 90712; telephone 562-627-5357; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, the FAA suggests that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
Robinson Helicopter Company R44 Service Bulletin SB-83, dated May 30, 2012, which is not incorporated by reference, contains additional information about the subject of this AD. For service information identified in this AD, contact Robinson Helicopter Company, 2901 Airport Drive, Torrance, CA 90505; telephone 310-539-0508; fax 310-539-5198; or at
Joint Aircraft Service Component (JASC) Code: 6410, Tail Rotor Blades.
Drug Enforcement Administration, Department of Justice.
Final rule.
The Drug Enforcement Administration (DEA) is designating the precursor chemical,
This rulemaking becomes effective May 18, 2020.
Scott A. Brinks, Regulatory Drafting and Policy Support Section (DPW), Diversion Control Division, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (571) 362-3261.
Norfentanyl is the immediate chemical intermediary in a synthesis process currently used by clandestine laboratory operators for the illicit manufacture of the schedule II controlled substance fentanyl. The distribution of illicitly manufactured fentanyl has caused an unprecedented outbreak of thousands of fentanyl-related overdoses in the United States in recent years. DEA believes that the control of norfentanyl as a schedule II controlled substance is necessary to prevent its diversion as an immediate chemical intermediary for the illicit manufacture of fentanyl.
DEA is extremely concerned with the recent increase in the illicit manufacture and distribution of fentanyl. Therefore, on September 17, 2019, DEA published a Notice of Proposed Rulemaking (NPRM) to designate the precursor chemical,
Under 21 U.S.C. 811(e), the Attorney General may place an immediate precursor into the same schedule as the controlled substance that the immediate precursor is used to make, if the substance meets the requirements of an immediate precursor under 21 U.S.C. 802(23).
The DEA is extremely concerned with the increase in the illicit manufacture and distribution of fentanyl abroad. Fentanyl is a synthetic opioid and was first synthesized in Belgium in the late 1950's. Fentanyl is controlled in schedule II of the CSA due to its high potential for abuse and dependence, and accepted medical use in treatment in the United States. Fentanyl was introduced into medical practice and is approved in the United States for anesthesia and analgesia. However, due to its pharmacological effects, fentanyl can serve as a substitute for heroin, oxycodone, and other opioids in opioid dependent individuals. The trafficking of fentanyl in the United States continues to pose an imminent hazard to the public safety. Since 2012, fentanyl has shown a dramatic increase in the illicit drug supply as a single substance, in mixtures with other illicit drugs (
The DEA has noted a significant increase in overdoses and overdose fatalities from fentanyl in the United States in recent years. A recent report
The increase of drug overdose deaths continued into 2017. According to the CDC,
The increase in overdose fatalities involving fentanyl coincides with a dramatic increase of law enforcement encounters of fentanyl. According to the National Forensic Laboratory Information System (NFLIS),
Fentanyl is not a naturally occurring substance. As such, the manufacture of fentanyl requires it to be produced through synthetic organic chemistry. Synthetic organic chemistry is the process for creating a new organic molecule through a series of chemical reactions, which involve precursor chemicals. In the early 2000's, a synthetic process, commonly known as the Siegfried method, was utilized to manufacture fentanyl in several domestic and foreign clandestine laboratories. 72 FR 20039. At that time, DEA had determined that two primary synthesis routes (
In 2017, the United Nations Commission on Narcotic Drugs placed NPP and ANPP in Table I of the Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (1988 Convention) in response to the international increase of fentanyl on the illicit drug market. As such, member states of the United Nations were required to regulate these precursor chemicals at the national level. In addition, the People's Republic of China regulated NPP and ANPP on February 1, 2018.
Recent law enforcement information indicates that illicit manufacturers of fentanyl also use other synthetic routes in response to regulations placed on NPP and ANPP. One of these other routes is the original published synthetic pathway to fentanyl, known as the Janssen method, previously thought to be beyond the skills of most clandestine laboratory operators. This synthetic route does not involve NPP or ANPP as precursors. This synthetic pathway involves the important precursors
According to DEA forensic laboratory data, the Janssen method was confirmed as the synthetic route used in 94 percent of 85 fentanyl drug exhibits that were evaluated to determine the synthetic route. These exhibits were seized in 2018. In addition, the number of law enforcement encounters of benzylfentanyl increased in 2017 and 2018. As stated above, benzylfentanyl is a precursor chemical used to synthesize norfentanyl in the Janssen method. According to NFLIS,
The DEA determined that norfentanyl is commercially available from both domestic and foreign chemical suppliers. The DEA has identified 30 domestic suppliers and 22 foreign suppliers of norfentanyl from Canada (3), China (7), Germany (2), Hong Kong (1), India (1), Japan (2), Switzerland (1), and the United Kingdom (5). Of the 30 domestic suppliers of norfentanyl, only one is a DEA registrant. As it appears that these other 29 suppliers are not registered to manufacture schedule II controlled substances, it is not likely these suppliers are manufacturing fentanyl. Norfentanyl is attractive to illicit manufacturers because of the lack of chemical regulations on this substance, it is readily available from chemical suppliers, and it can easily be converted to the schedule II controlled substance fentanyl, in a one-step chemical reaction.
Under 21 U.S.C. 811(e), the Attorney General may place an immediate precursor into the same schedule as the controlled substance that the immediate precursor is used to make. The substance must meet the requirements of an immediate precursor under 21 U.S.C. 802(23). The term “immediate precursor” is defined in 21 U.S.C. 802(23) meaning a substance being the principal compound used, or which is produced primarily for use in the manufacture of a controlled substance; which is an immediate chemical intermediary used or likely to be used in the manufacture of the controlled substance; and the control of which is necessary to prevent or limit the manufacture of such controlled substance.
The DEA finds that norfentanyl meets the three criteria for the definition of an immediate precursor under 21 U.S.C. 802(23). First, DEA finds that norfentanyl is produced primarily for use in the manufacture of the schedule II controlled substance fentanyl. As stated in the preceding section, under the Janssen method, norfentanyl is typically produced from the starting material benzylfentanyl and is then subjected to a simple one-step chemical reaction to obtain the schedule II controlled substance, fentanyl. The DEA is not aware of any legitimate use of benzylfentanyl other than in the synthesis of norfentanyl, and subsequently, fentanyl. The DEA has also not identified an industrial or other use for norfentanyl beyond the manufacture of fentanyl. DEA has not identified any other legitimate uses of norfentanyl and DEA did not receive comment to the contrary during the notice and comment period of the NPRM published on September 17, 2019. 84 FR 48815.
Second, DEA finds that norfentanyl is an immediate chemical intermediary used in the manufacture of the controlled substance fentanyl. As stated earlier, norfentanyl is produced as an intermediary in the fentanyl synthetic pathway. After it is synthesized, norfentanyl is subjected to a simple chemical reaction that converts it directly to fentanyl.
Third, DEA finds that controlling norfentanyl is necessary to prevent, curtail, and limit the unlawful manufacture of the controlled substance, fentanyl. The DEA believes this action is necessary to assist in preventing the possible theft of norfentanyl from legitimate firms. The DEA believes that clandestine manufacturers will attempt to procure unregulated chemicals in their efforts to synthesize fentanyl. As a schedule II substance, norfentanyl will be safeguarded to the same degree that pharmaceutical firms now safeguard the fentanyl that they produce. Since norfentanyl is an immediate chemical intermediary in the manufacture of fentanyl, the increased level of security is necessary to prevent diversion of norfentanyl from legitimate firms. DEA also believes control is necessary to prevent unscrupulous chemists from synthesizing norfentanyl and selling it (as an unregulated material) through the internet and other channels to individuals who may wish to acquire an unregulated precursor for the purpose of manufacturing fentanyl, a schedule II controlled substance.
The DEA believes that the control of norfentanyl is necessary to prevent its production and use in the illicit manufacture of fentanyl. Therefore, DEA is designating norfentanyl as an immediate precursor of fentanyl, a schedule II controlled substance, pursuant to 21 U.S.C. 802(23) and 21 U.S.C. 811(e).
Pursuant to 21 U.S.C. 811(e), once norfentanyl is designated as an immediate precursor under 21 U.S.C. 802(23), it may be placed directly into schedule II (or a schedule with a higher numerical designation). The immediate precursor provision in 21 U.S.C. 811(e)
As part of the proposed rulemaking published on September 17, 2019 (84 FR 48815), DEA specifically solicited input from all potentially affected parties regarding: (1) The types of legitimate industries using norfentanyl; (2) the legitimate uses of norfentanyl; (3) the size of the domestic market for norfentanyl; (4) the number of manufacturers of norfentanyl; (5) the number of distributors of norfentanyl; (6) the level of import and export of norfentanyl; (7) the potential burden these proposed regulatory controls of norfentanyl may have on legitimate commercial activities; (8) the potential number of individuals/firms that may be adversely affected by these proposed regulatory controls (particularly with respect to the impact on small businesses); and (9) any other information on the manner of manufacturing, distribution, consumption, storage, disposal, and uses of norfentanyl by industry and others.
As part of the proposed rulemaking published on September 17, 2019 (84 FR 48815), DEA solicited information on any possible legitimate uses of norfentanyl unrelated to fentanyl production (including industrial uses) in order to assess the potential commercial impact of scheduling norfentanyl. The DEA searched information in the public domain for legitimate uses of norfentanyl and could not document legitimate commercial uses for norfentanyl other than as an intermediary chemical in the manufacture of fentanyl. DEA sought, however, to document any unpublicized use(s) and other proprietary use(s) of norfentanyl not in the public domain. Therefore, DEA solicited comment on the uses of norfentanyl in the legitimate marketplace. The DEA also solicited comment on the regulatory burden to legitimate commercial activities that would result from the placement of norfentanyl in schedule II of the CSA. The DEA did not receive comment on these topics.
The DEA invited all interested parties to provide any information on any legitimate uses of norfentanyl in industry, commerce, academia, research and development, or other applications. The DEA sought both quantitative and qualitative data; however, DEA did not receive comments on these topics.
The DEA received 15 comments in response to the NPRM. Thirteen of the 15 commenters were in support of controlling norfentanyl as a schedule II immediate precursor. The other two commenters did not specifically object to this rule. One of those two commenters stated that substance abuse is a public health issue and not a law enforcement issue. The other stated that this rule is not sufficient to disrupt the fentanyl market in the United States because illicit fentanyl is not produced in the United States. The commenter proposed access restriction and harm reduction strategies, including increased public awareness of drugs mixed with fentanyl and increased law enforcement at entry locations, as additional recommendations to reduce fentanyl misuse and abuse in the United States.
Of the 13 commenters in support of controlling norfentanyl as a schedule II immediate precursor, four commenters also included statements that the control of norfentanyl is not the only solution to address the opioid epidemic. These commenters stated that control of norfentanyl will not solve the issue of fentanyl being shipped into our country from foreign producers; that control of norfentanyl is not the only policy that should be addressed and implemented, and that alternate pathways to fentanyl should be monitored; and that control of norfentanyl will not end the opioid epidemic.
With respect to the comments about illicit fentanyl being manufactured outside of the United States and shipped into the country from foreign producers, the designation of norfentanyl as a schedule II immediate precursor will subject this substance to the regulatory requirements of schedule II substances, including the import and export regulations. 21 CFR part 1312. The DEA believes that regulating the import and export of norfentanyl will reduce the quantity of norfentanyl destined to illicit fentanyl manufacturers, both domestically and internationally, by removing the United States as a transshipment point and as a source of diverted norfentanyl to foreign illicit fentanyl manufacturers.
The DEA is the leading agency on enforcement of drug control laws and remains committed to protecting the public by interrupting and reducing drug supply and availability in the United States. The DEA believes that the control of norfentanyl as an immediate precursor of the schedule II controlled substance fentanyl will have a significant impact on reducing the supply of illicitly manufactured fentanyl; however, DEA remains aware that supply reduction is not the only aspect of combatting the opioid epidemic. The DEA realizes that a comprehensive approach, to include community outreach and education, is required to combat the opioid epidemic. In response to the comment regarding access restriction and harm reduction strategies and the comment stating that substance abuse is a public health issue and not a law enforcement issue, DEA intends this scheduling action to reduce the supply of illicitly manufactured fentanyl, which is part of a multi-faceted strategy to combat the opioid epidemic. DEA continues to work with other federal agencies on holistic and comprehensive approaches to reduce drug abuse; however, such approaches are beyond the scope of this rule.
This rulemaking finalizes two actions. It (1) designates norfentanyl as an immediate precursor for the schedule II controlled substance, fentanyl, under the definition set forth in 21 U.S.C. 802(23); and (2) controls norfentanyl as a schedule II substance pursuant to the authority in 21 U.S.C. 811(e).
The scheduling of norfentanyl as an immediate precursor of the schedule II controlled substance, fentanyl, subjects norfentanyl to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, dispensing, importing, and exporting of a schedule II controlled substance. The regulatory requirements will include the following:
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This rulemaking was developed in accordance with the principles of Executive Orders 12866, 13563, and 13771. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866. Executive Order 12866 classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. DEA has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f). Executive Order 13771 requires an agency, unless prohibited by law, to identify at least two existing regulations to be repealed when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation.
The scheduling of norfentanyl as an immediate precursor of the schedule II controlled substance, fentanyl, subjects norfentanyl to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, dispensing, importing, and exporting of a schedule II controlled substance. Norfentanyl is the immediate chemical intermediary in a synthesis process currently used by clandestine laboratory operators for the manufacture of the schedule II controlled substance fentanyl. The distribution of illicitly manufactured fentanyl has caused an unprecedented outbreak of thousands of fentanyl-related overdoses in the United States in recent years.
The DEA has not identified any industrial use for norfentanyl, other than its role as an intermediary chemical in the manufacture of fentanyl. Based on the review of import and quota information for ANPP and fentanyl, DEA believes the vast majority, if not all, of legitimate pharmaceutical fentanyl is produced from ANPP (schedule II immediate precursor for fentanyl), not norfentanyl. The quantities of ANPP permitted in the U.S., imported or manufactured pursuant to a quota, generally correspond with the quantities of legitimate pharmaceutical fentanyl produced in the United States. Additionally, DEA is not aware of norfentanyl being used for the manufacturing of legitimate pharmaceutical fentanyl; however, DEA cannot rule out the possibility that minimal quantities of norfentanyl are used for this purpose. If there are any quantities of norfentanyl used for the manufacturing of legitimate pharmaceutical fentanyl, the quantities are believed to be small and economically insignificant.
The DEA evaluated the costs and benefits of this action.
The DEA believes the market for norfentanyl for the legitimate manufacturing of pharmaceutical fentanyl is minimal. As stated above, the only use for norfentanyl of which DEA is aware is for the manufacturing of fentanyl. Any manufacturer, distributor, importer, or exporter of norfentanyl for the production of legitimate pharmaceutical fentanyl, if they exist at all, would incur costs. The primary costs associated with this rule include costs associated with complying with registration, physical security, labeling and packaging, quota, inventory, recordkeeping and reporting, and importation and exportation requirements. Other than the annual registration fees ($3,047 for manufacturers and $1,523 for distributors, importers, and exporters), due to the many unknowns and variability between entities, it is highly difficult to quantify the potential total cost burden of this regulation. However, any manufacturer that uses norfentanyl for legitimate pharmaceutical fentanyl production would already be registered with DEA and have all security and other handling processes in place, resulting in minimal cost. Any lost sales or profit attributed to those manufacturers or suppliers that are not for legitimate pharmaceutical fentanyl are excluded from the analysis as they are, whether passively or actively, facilitating the manufacture of illicit fentanyl.
The DEA has identified 30 domestic suppliers of norfentanyl, 29 of which are not registered with DEA to handle schedule II controlled substances. It is difficult to estimate how much norfentanyl is distributed by these suppliers. It is common for chemical distributors to have items on their catalog while not actually having any material level of sales. Based on the review of import and quota information for fentanyl and ANPP, where the quantities of ANPP imported and manufactured generally correspond with the quantities of fentanyl produced, DEA believes any quantity of sales from these distributors for the legitimate pharmaceutical fentanyl manufacturing is minimal. Suppliers for the legitimate use of norfentanyl are expected to choose the least-cost option, and stop selling the minimal quantities, if any, of norfentanyl, rather than incur the costs of complying with the regulatory requirements. Because DEA believes the quantities of norfentanyl supplied for the legitimate manufacturing of pharmaceutical fentanyl is minimal, DEA estimates that the cost of foregone sales is minimal; and thus, the cost of this rule is minimal.
This analysis excludes consideration of economic impact to those businesses that facilitate the manufacturing and distribution of norfentanyl for the manufacture of illicit fentanyl. The only use for norfentanyl of which DEA is currently aware is the manufacture of fentanyl. Although these suppliers are selling a currently unregulated substance, they wittingly or unwittingly facilitate the manufacturing of illicit fentanyl. As a law enforcement organization and as a matter of principle, DEA believes considering the economic utility of facilitating the manufacture of illicit fentanyl would be improper.
Controlling norfentanyl is expected to prevent, curtail, and limit the unlawful manufacture and distribution of the controlled substance, fentanyl. This action is also expected to assist preventing the possible theft or diversion of norfentanyl from any legitimate firms. As a schedule II substance, norfentanyl will be safeguarded to the same degree that pharmaceutical firms now safeguard the fentanyl that they produce. The DEA also believes control is necessary to prevent unscrupulous chemists from synthesizing norfentanyl and selling it (as an unregulated material) through the internet and other channels, to individuals who may wish to acquire an unregulated precursor for the purpose of manufacturing illicit fentanyl.
In summary, DEA conducted a qualitative analysis of costs and benefits. DEA believes this action will minimize the diversion of norfentanyl. The DEA believes the market for norfentanyl for the legitimate manufacturing of pharmaceutical fentanyl is minimal. Therefore, any potential cost as a result of this regulation is minimal. Therefore, the estimated economic impact of this rule is less than $100 million in any given year.
This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform 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. This rule 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, in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA), has reviewed this rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. As discussed above, the scheduling of norfentanyl as an immediate precursor of the schedule II controlled substance, fentanyl, subjects norfentanyl to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, dispensing, importing, and exporting of a schedule II controlled substance. Norfentanyl is the immediate chemical intermediary in a synthesis process currently used by clandestine laboratory operators for the illicit manufacture of the schedule II controlled substance fentanyl. The distribution of illicitly manufactured fentanyl has caused an unprecedented outbreak of thousands of fentanyl-related overdoses in the United States in recent years.
The DEA has not identified any use for norfentanyl, other than its role as an intermediary chemical in the manufacture of fentanyl. Based on the review of import and quota information for ANPP and fentanyl, DEA believes the vast majority, if not all, of legitimate pharmaceutical fentanyl is produced from ANPP (schedule II immediate precursor for fentanyl), not norfentanyl. The quantities of ANPP permitted in the U.S., imported or manufactured pursuant to a quota, generally correspond with the quantities of
The DEA has identified 30 domestic suppliers of norfentanyl. Based on the Small Business Administration size standard for chemical distributors and Statistics of United States Business data, 94.5 percent or 28.4 (rounded to 28) are estimated to be small entities. It is difficult to know how much norfentanyl is distributed by these suppliers. It is common for chemical distributors to have items on their catalog while not actually having any material level of sales. Based on the review of import and quota information for fentanyl and ANPP, where the quantities of ANPP imported and manufactured generally correspond with the quantities of fentanyl produced, DEA believes any quantity of sales from these distributors for the legitimate pharmaceutical fentanyl manufacturing is minimal. Therefore, DEA estimates the cost of this rule on any affected small entity is minimal.
Because of these facts, this rule will not result in a significant economic impact on a substantial number of small entities.
On the basis of information contained in the “Regulatory Flexibility Act” section above, DEA determined and certifies pursuant to the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501
This action does not impose a new collection of information under the Paperwork Reduction Act, 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.
Administrative practice and procedure, drug traffic control, reporting and recordkeeping requirements.
For the reasons set out above, DEA amends 21 CFR part 1308 as follows:
21 U.S.C. 811, 812, 871(b), 956(b), unless otherwise noted.
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Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve elements of a State Implementation Plan (SIP) submission from the State of Nebraska addressing the applicable requirements of the Clean Air Act (CAA) section 110 for the 2015 Ozone (O
This final rule is effective on May 18, 2020.
The EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2019-0083. All documents in the docket are listed on the
Lachala Kemp, Environmental Protection Agency, Region 7 Office, Air Quality Planning Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219; telephone number (913) 551-7214; email address
Throughout this document “we,” “us,” and “our” refer to EPA.
On May 9, 2019, the EPA proposed to approve Nebraska's infrastructure SIP submission for the 2015 O
The EPA is approving the infrastructure SIP submission received from the State of Nebraska on September 24, 2018. Specifically, the EPA is approving the following infrastructure elements of section 110(a)(2): (A) Through (C)(the permitting portion relevant to Part C), (D)(i)(I)—prongs 1 and 2, (D)(i)(II)—prong 3, (D)(ii), (E) through (H), and (J) through (M).
A Technical Support Document (TSD) in the docket provides additional details of this action, including an analysis of how the infrastructure SIP submission meets the applicable 110(a)(1) and (2) requirements for infrastructure SIPs. The EPA plans to take separate action on the infrastructure elements under section 110(a)(2)(D)(i)(II)—prong 4. The EPA is not addressing section 110(a)(2)(I)—Nonattainment Area Plan or Plan Revisions under Part D, as it is the EPA's interpretation of the CAA that these elements do not need to be addressed in the context of an infrastructure SIP submission.
The State met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The EPA determined that the submission satisfied the completeness criteria of 40 CFR part 51, appendix V. The State provided a public comment period for this SIP revision from August 7, 2018 to September 7, 2018, and at the same time, offered an opportunity for a public hearing. The State received no comments and no requests for a public hearing. In addition, as explained in more detail in the TSD, the infrastructure SIP submission meets the substantive requirements of the CAA for SIP submissions, including section 110 and implementing regulations.
The public comment period on the EPA's proposed rule opened May 9, 2019, the date of its publication in the
Notwithstanding the EPA statement from the TSD referenced by the commenter, the EPA does not currently see a deficiency in the Nebraska minor NSR program that warrants a disapproval of the infrastructure SIP submission with respect to section 110(a)(2)(C) or a finding under section 110(k) of the Act. In the TSD, the EPA stated that that Nebraska's minor NSR program adequately regulates construction and modification of stationary sources to protect the 2015 O
Nebraska has an approved minor NSR program that addresses the relevant pollutants. After further review of this issue, the EPA reaffirms its position that the State's minor source NSR program adequately regulates the construction and modification of stationary sources to protect the 2015 O
The EPA has reviewed the title 129, chapter 19, section 001 of the Nebraska Administrative Code and has determined that this State rule neither applies to nor limits the incorporation by reference of 40 CFR part 51, appendix W, as it does not pertain to appendix W. As stated in the TSD, Nebraska's authority to require or perform air quality modeling for PSD construction permitting is in the SIP-approved State regulations at title 129, chapter 19, section 019, which requires air quality modeling to be based on the applicable models, data bases, and other requirements specified in 40 CFR part 51, appendix W (Guideline on Air Quality Models). Title 129, chapter 19, section 019 does not contain an incorporation by reference date.
To the extent the commenter is concerned that title 129, chapter 019, section 019.01 adopts an older version of appendix W and that the State therefore lacks the requisite authority to use the 2017 revision to appendix W in PSD modeling, title 129, chapter 19, section 019.02 provides a process for modification or substitution with another model where an air quality model specified in 40 CFR part 51, appendix W, is inappropriate, and includes provisions for public comment concerning the modified or substituted model. The EPA interprets this provision to allow for Nebraska and it's sources to use updated appendix W models reflected in the most recent version of appendix W even if the undated reference in appendix W in title 129, chapter 19, section 019.02 could be interpreted to adopt a previous version of appendix W. These provisions are thus adequate to meet PSD and NSR requirements under section 110(a)(2)(C) and contribute to satisfying section 110(a)(2)(K).
With respect to CAA section 110(a)(2)(K) more generally, the EPA explained in its TSD that Neb. Rev. Stat. section 81-1504(5) provides Nebraska with the authority to encourage, participate in, or conduct studies, investigations, research and demonstrations relating to air pollution and its causes and effects. This statute is interpreted by the EPA to give Nebraska broad authority to conduct air quality modeling to predict the effect on ambient air quality of any emission of any air pollutant for which a NAAQS has been promulgated. Nebraska's September 24, 2018 infrastructure SIP submission also references Neb. Rev. Stat. section 81-1527, which provides for public inspection of information furnished to or obtained by Nebraska related to air sources, including emissions data. Thus, considering this statutory authority and the Nebraska regulations described above, the EPA finds that Nebraska's SIP has the authority to provide air quality modelling data to the EPA upon request. For these reasons, the EPA finds that Nebraska's SIP satisfies the requirements of CAA section 110(a)(2)(K).
To the extent the commenter suggests that the State's nonattainment NSR permitting program should regulate ammonia as a PM
Accordingly, the EPA finds that Nebraska's 2015 O
Concerning the EPA's analysis of whether Nebraska has adequate infrastructure and adequate funding to address CAA section 110(a)(2)(L), the EPA addressed the adequacy of Nebraska's Title V fee program, which was approved by the EPA on October 18, 1995.
Because the EPA articulated its proposed finding in the TSD based on information that was available in the docket during the public comment period, the EPA disagrees with the commenter that it must re-propose approval for its finding that Nebraska
The EPA is approving elements of the September 24, 2018, infrastructure SIP submission from the State of Nebraska, which address the requirements of CAA sections 110(a)(1) and (2) as applicable to the 2015 O
Based upon review of the State's infrastructure SIP submissions and relevant statutory and regulatory authorities and provisions referenced in those submissions or referenced in Nebraska's SIP, the EPA finds that Nebraska's SIP meets all applicable required elements of sections 110(a)(1) and (2) (except as otherwise noted) with respect to the 2015 O
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of the National Technology Transfer and Advancement Act (NTTA) because this rulemaking does not involve technical standards; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 16, 2020. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as set forth below:
42 U.S.C. 7401
(e)* * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving revisions to the State Implementation Plans (SIPs) for Iowa, Kansas, Missouri and Nebraska and is also approving revisions to the Operating Permit Programs for Iowa and Nebraska. The SIP revisions incorporate changes to the definition of chemical process plants under the States' Prevention of Significant Deterioration (PSD) regulations and change the same definition in the approved State operating permit programs. Consistent with an EPA regulation finalized in 2007, this action approves several State rules that modify the definition of chemical process plant to exclude ethanol manufacturing facilities that produce ethanol by natural fermentation processes. Approving these modified definitions into the SIP establishes that the PSD major source applicability threshold in the SIPs for these ethanol plants is 250 tons per year (tpy) (rather than 100 tpy) and removes the requirement to include fugitive emissions when determining if the source is major for PSD. In addition, this action approves changes to the Iowa and Nebraska Title V operating permit programs that remove the requirement to include fugitive emissions when determining if a source is major for Title V purposes. The EPA concludes that the changes to the State rules described herein are approvable because they are consistent with EPA regulations governing State PSD and Title V programs and will not interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in section 171 of the Clean Air Act (CAA)), or any other applicable requirement of the CAA.
This final rule is effective on May 18, 2020.
The EPA has established a docket for this action under Docket ID No. EPA-R07-OAR-2019-0532. All documents in the docket are listed on the
William Stone, Environmental Protection Agency, Region 7 Office, Air Quality Planning Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219; telephone number (913) 551-7714; email address
Throughout this document “we,” “us,” and “our” refer to EPA.
The EPA is approving revisions to SIPs received by EPA from Iowa on November 15, 2007, Kansas on November 23, 2009, Missouri on December 7, 2009, and March 20, 2019, and Nebraska on August 28, 2007, and September 11, 2018. The EPA is also approving revisions to the Iowa and Nebraska Operating Permit Programs. These revisions conform the State rules to changes to EPA regulations reflected in the EPA's final rule entitled “Prevention of Significant Deterioration, Nonattainment New Source Review (NA NSR), and Title V: Treatment of Certain Ethanol Production Facilities Under the `Major Emitting Facility' Definition” (hereinafter referred to as the “2007 Ethanol Rule”) as published in the
All of the aforementioned regulations are consistent with EPA's PSD program requirements in 40 CFR 51.166 and Title V program requirements in 40 CFR part 70, as amended in the 2007 Ethanol Rule. Further, all submissions have met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102.
Iowa published a Notice of Intended Action in the Iowa Administrative Bulletin on August 1, 2007. A public hearing was held on September 5, 2007. The public comment period closed on September 6, 2007. Iowa received six
Kansas published the proposed changes in the Kansas Register May 21, 2009. A public hearing was held on July 29, 2009. Kansas received three comment letters. Only one change was made to the proposed regulations based on public comments and that change was not relevant to this action.
Missouri published the proposed changes in the Missouri Register on December 31, 2008. A public hearing was held on February 3, 2009. Missouri received fifteen comments and made changes to the proposed regulations that were not relevant to this action. Missouri made additional changes to the regulations proposed to be approved by the EPA in this action that were published in the Missouri Register on August 1, 2018. Missouri received thirty-seven comments from nine sources including the EPA. Missouri made some changes to the proposed regulations that are relevant to this action based on comments received during the public comment period.
Nebraska published the proposed changes in the Omaha World-Herald on July 13, 2007. A public hearing was held on August 17, 2007. Nebraska did not receive any adverse comments for the proposed changes.
The SIP submissions also satisfied the completeness criteria of 40 CFR part 51, appendix V. In addition, these revisions meet the substantive SIP requirements of the CAA, including section 110 and implementing regulations. These revisions are also consistent with applicable EPA requirements of Title V of the CAA and 40 CFR part 70.
The public comment period on the EPA's proposed rule was open from November 12, 2019 through December 12, 2019 (84 FR 60968, November 12, 2019). During this period, EPA received two comments.
The TSDs also analyze the impact of increasing the threshold to 250 tpy on ozone and particulate matter (PM) precursors in each State. The analysis for ozone and secondary PM demonstrates that sources of this size will not cause any interference with attainment or maintenance of the standards in these States.
The EPA also describes requirements for each State's minor source NSR program because the facilities that would be below the 250 tpy PSD major source threshold under this rulemaking will still need to obtain minor source construction permits. The States are prohibited from issuing minor source NSR permits that would lead to a violation of the NAAQS. Additionally, Federal rules such as New Source Performance Standards and Maximum Achievable Control Technology regulations will control emissions of pollutants that ethanol plants could emit regardless of the major source status under PSD.
In addition, this action does not alter the regulation of greenhouse gas (GHG) emissions, which is a driver of climate change. Under the CAA, its implementing regulations, and the States' air regulations, GHG emissions from ethanol plants could increase regardless of whether the proposed changes to the SIP and Title V Operating permit programs are approved. Thus this action does not increase the allowable emissions of GHGs or change how GHGs are regulated by EPA and each State.
Also, in the same portion of that table we have removed the following sentence: “Iowa's rule incorporating EPA's 2008 `fugitive emissions rule' (published in the
The EPA is approving revisions to the Iowa, Kansas, Missouri and Nebraska SIPs and the Iowa and Nebraska Operating Permit Programs. We are taking final action after consideration of the two comments received on the notice of proposed rulemaking.
The revisions to State rules that EPA is approving change the definition of “major stationary source” under the States' PSD regulations and the Operating Permit Program for Iowa and Nebraska. This action approves changes to state regulations, which make clear that the PSD applicability threshold for certain ethanol plants is 250 tpy and remove the requirement to include fugitive emissions when determining if an ethanol plant is major for PSD and, in Iowa and Nebraska, Title V permitting. The EPA has determined that these revisions are consistent with EPA's PSD and Title V regulations and that approval of these revisions is consistent with the requirements of CAA section 110(l) and will not adversely impact air quality. The EPA's analysis is available in the technical support documents that were prepared for each State SIP and are in the docket for this action. Approval of the revisions to these SIPs will ensure consistency between the State and federally-approved rules and ensure Federal enforceability of the State's revised air program rules.
In this document, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Iowa, Kansas, Missouri, and Nebraska Regulations described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these materials generally available through
These materials have been approved by the EPA for inclusion in the SIPs and
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866.
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
The SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.
Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Operating permits, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the EPA amends 40 CFR parts 52 and 70 as set forth below:
42 U.S.C. 7401
(c) * * *
(c) * * *
(c) * * *
(c) * * *
42 U.S.C. 7401,
The additions read as follows:
(u) The Iowa Department of Natural Resources submitted revisions to Iowa Chapter 22.100 “Definitions for Title V Operating Permits” on November 15, 2007. The State revised the definition of “Stationary source categories” by revising the definition of “Chemical process plants” such that fugitive emissions from certain ethanol production facilities are not considered in determining whether the facility is subject to Title V permitting. The state effective date is October 4, 2007. This revision is effective May 18, 2020.
(q) The Nebraska Department of Environmental Quality submitted revisions to the Nebraska Administrative Code, Title 129, chapter 2, section 002.20 on November 19, 2010. Chapter 2, section 002.20 was revised to exclude ethanol production facilities from the definition of “chemical process plants” such that fugitive emissions are not considered in determining whether the facility is subject to Title V permitting. The state effective date is February 6, 2008.
This revision is effective May 18, 2020.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. This proposed AD was prompted by a report that cracks were detected on the left-hand (LH) and right-hand (RH) sides of the first rivet hole of the frame (FR) 43 foot coupling during scheduled maintenance. This proposed AD would require a rotating probe test of the fastener holes at FR43 on the LH and RH sides for any cracking, and on-condition actions if necessary, as specified in a European Union Aviation Safety Agency (EASA) AD, which will be incorporated by reference. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by June 1, 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
Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; 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 2020-0037, dated February 27, 2020; corrected February 28, 2020 (“EASA AD 2020-0037”) (also referred to as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211, -212, -214, -215, -216, -231, -232, and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes. Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability.
This proposed AD was prompted by a report that cracks were detected on the LH and RH sides of the first rivet hole of the FR 43 foot coupling during scheduled maintenance. The FAA is proposing this AD to address cracking in the foot coupling, which could affect the structural integrity of the airplane. See the MCAI for additional background information.
EASA AD 2020-0037 describes procedures for a rotating probe test (special detailed inspection) of the fastener holes at FR43 on the LH and RH sides for any cracking, and on-condition actions including a high frequency eddy current (rototest) inspection for cracks of the affected fastener holes, modification, and repair. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
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 2020-0037 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 2020-0037 will be incorporated by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2020-0037 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 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 2020-0037 that is required for compliance with EASA AD 2020-0037 will be available on the internet at
The FAA estimates that this proposed AD affects 867 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:
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 June 1, 2020.
None.
This AD applies to Airbus SAS Model airplanes specified in paragraphs (c)(1) through (4) of this AD, certificated in any category, as identified in European Union Aviation Safety Agency (EASA) AD 2020-0037, dated February 27, 2020; corrected February 28, 2020 (“EASA AD 2020-0037”).
(1) Model A318-111, -112, -121, and -122 airplanes.
(2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Model A320-211, -212, -214, -216, -231, -232, and -233 airplanes.
(4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 53, Fuselage.
This proposed AD was prompted by a report that cracks were detected on the left- and right-hand sides of the first rivet hole of the frame (FR) 43 foot coupling during scheduled maintenance. The FAA is proposing this AD to address cracking in the foot coupling, which could affect the structural integrity of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2020-0037.
(1) Where EASA AD 2020-0037 refers to its effective date, this AD requires using the effective date of this AD.
(2) The “Remarks” section of EASA AD 2020-0037 does not apply to this AD.
Although the service information referenced in EASA AD 2020-0037 specifies to submit certain information to the manufacturer, this AD does not include that requirement.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) For information about EASA AD 2020-0037, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 89990 6017; email
(2) For more information about this AD, contact Sanjay Ralhan, Aerospace Engineer, International Section, Transport Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-3223; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all Continental Aerospace Technologies, Inc. model GTSIO-520-C, GTSIO-520-D, GTSIO-520-H, GTSIO-520-K, GTSIO-520-L, GTSIO-520-M, GTSIO-520-N, IO-550-G, IO-550-N, IO-550-P, IO-550-R, IOF-550-N, IOF-550-P, IOF-550-R, TSIO-520-BE, TSIO-550-A, TSIO-550-B, TSIO-550-C, TSIO-550-E, TSIO-550-G, TSIO-550-K, TSIO-550-N, TSIOF-550-D, TSIOF-550-J, TSIOF-550-K, and TSIOF-550-P reciprocating aviation gasoline (AvGas) engines with a certain cross-flow cylinder assembly installed. This proposed AD was prompted by reports of in-flight engine failures due to fractured cross-flow cylinder assemblies. This proposed AD would require visual inspection and, depending on the results of the inspection, modification or replacement of the cross-flow cylinder assembly. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by June 1, 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 Continental Aerospace Technologies, Inc., 2039
You may examine the AD docket on the internet at
Boyce Jones, Aerospace Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: 404-474-5535; fax: 404-474-5606; 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
Except for Confidential Business Information as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Boyce Jones, Aerospace Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The FAA received reports of six in-flight engine failures due to fractured cross-flow cylinder assemblies, all of which resulted in the loss of oil pressure, loss of engine power, and forced landings. Analysis by the manufacturer identified that the casting vendor incorporated a new production tooling that created casting material build-up on the radius edge of the cross-flow cylinder assemblies. Fracture initiation began at the radius edge of cross-flow cylinder assembly. This condition, if not addressed, could result in failure of the engine, in-flight shutdown, and forced landing.
The FAA reviewed Continental Aerospace Technologies, Inc. Mandatory Service Bulletin (MSB) 18-08, Revision B, dated January 13, 2020. The MSB describes procedures for inspection, modification, or replacement of the cross-flow cylinder assembly. 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
The FAA is proposing this AD because it 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 visual inspection of the cross-flow cylinder assembly and, depending on the results of the visual inspection, modification or replacement of the cross-flow cylinder assembly.
The FAA estimates that this proposed AD affects 4,000 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary modification or replacement of the cross-flow cylinder assembly that would be required based on the results of the proposed visual inspection. The FAA has no way of determining the number of cross-flow cylinder assemblies that might need this modification or replacement.
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. The FAA does not control warranty coverage for affected individuals. As a result, the FAA has included all costs in our cost estimate.
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 June 1, 2020.
None.
This AD applies to Continental Aerospace Technologies, Inc. (Type Certificate previously held by Continental Motors, Inc.) model GTSIO-520-C, GTSIO-520-D, GTSIO-520-H, GTSIO-520-K, GTSIO-520-L, GTSIO-520-M, GTSIO-520-N, IO-550-G, IO-550-N, IO-550-P, IO-550-R, IOF-550-N, IOF-550-P, IOF-550-R, TSIO-520-BE, TSIO-550-A, TSIO-550-B, TSIO-550-C, TSIO-550-E, TSIO-550-G, TSIO-550-K, TSIO-550-N, TSIOF-550-D, TSIOF-550-J, TSIOF-550-K, and TSIOF-550-P reciprocating aviation gasoline (AvGas) engines, originally manufactured, rebuilt, or modified with a cross-flow cylinder assembly replacement, on or after November 1, 2014, and with a cross-flow cylinder assembly, part number (P/N) 658538, 658540, 658542, 658591, 658595, 658613, 658624, 658539, 658541, 658590, 658594, 658603, 658623, or 658630, installed.
Joint Aircraft System Component (JASC) Code 8530, Reciprocating Cylinder Section.
This AD was prompted by reports of in-flight engine failures due to fractured cross-flow cylinder assemblies. The FAA is issuing this AD to prevent failure of the engine. The unsafe condition, if not addressed, could result in failure of the engine, in-flight shutdown, and forced landing.
Comply with this AD within the compliance times specified, unless already done.
(1) If the engine has fewer than 500 engine operating hours on the effective date of this AD, no later than the next scheduled 100-hour/annual inspection after the effective date of this AD, perform a visual inspection of the cross-flow cylinder assembly in accordance with paragraphs III.1 through III.3, Action Required, of Continental Aerospace Technologies, Inc. Mandatory Service Bulletin (MSB) 18-08, Revision B, dated January 13, 2020 (“Continental Aerospace Technologies MSB18-08B”).
(i) If the radius corner angle of the cross-flow cylinder assembly shows casting flash build-up or a sharp radius edge, modify the cross-flow cylinder assembly in accordance with paragraphs III.4 through III.8, Action Required, of Continental Aerospace Technologies MSB 18-08B; or
(ii) If a fissure, crack or physical damage is identified, remove the cross-flow cylinder assembly and replace with a part eligible for installation.
(2) If the engine has 500 engine operating hours or greater on the effective date of this AD, at the next maintenance event after the effective date of this AD, not to exceed 50 engine operating hours after the effective date of this AD, perform a visual inspection of the cross-flow cylinder assembly in accordance with paragraphs III.1 through III.3, Action Required, of Continental Aerospace Technologies MSB18-08B.
(i) If the radius corner angle of the cross-flow cylinder assembly shows casting flash build-up or a sharp radius edge, modify the cross-flow cylinder assembly in accordance with paragraphs III.4 through III.8, Action Required, of Continental Aerospace Technologies MSB 18-08B; or
(ii) If a fissure, crack or physical damage is identified, remove the cross-flow cylinder assembly and replace with a part eligible for installation.
After the effective date of this AD, do not install any cross-flow cylinder assembly having a P/N identified in paragraph (c) of this AD on any affected engine unless the cross-flow cylinder assembly has been visually inspected and modified in accordance with paragraph III, Action Required, of Continental Aerospace Technologies MSB18-08B.
The reporting requirement in paragraph III, Action Required, of Continental Aerospace Technologies MSB18-08B is not required by this AD.
(1) For the purpose of this AD, “the next maintenance event” is the next scheduled 100-hour/annual inspection, overhaul, or the next time the airplane enters maintenance for a non-engine issue, whichever occurs first.
(2) For the purpose of this AD, “modify the cross-flow cylinder assembly” is the removal of the casting material build-up by blending the cross-flow cylinder assembly radius corner.
You may take credit for the visual inspection and modification that is required by paragraph (g) of this AD, if the inspection or modification was performed before the effective date of this AD using Continental Motors Aircraft Engine Service Bulletin 18-08, Revision A, dated January 11, 2019.
(1) The Manager, Atlanta ACO Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (m)(1) of this AD.
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(1) For more information about this AD, contact Boyce Jones, Aerospace Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park, Georgia 30337; phone: 404-474-5535; fax: 404-474-5606; email:
(2) For service information identified in this AD, contact Continental Aerospace Technologies, Inc., 2039 South Broad Street, Mobile, Alabama, 36615, United States; phone: 251-436-8299; website:
Commodity Futures Trading Commission.
Reopening of comment period.
On May 13, 2019, the Commodity Futures Trading Commission (Commission) published in the
The comment period for the proposed rule titled, Certain Swap Data Repository and Data Reporting Requirements, published on May 13, 2019 (84 FR 21044), is reopened. Comments must be received on or before May 20, 2020.
You may submit comments, identified by “Certain Swap Data Repository and Data Reporting Requirements” and RIN number 3038-AE32, by any of the following methods:
•
•
•
Please submit your comments using only one of these methods. To avoid possible delays with mail or in-person deliveries, submissions through the CFTC Comments Portal are encouraged.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
Benjamin DeMaria, Special Counsel, 202-418-5988,
On May 13, 2019, the Commission published in the
The comment period for the NPRM was set to close on July 29, 2019. Market participants
The Commission stated in the October 24, 2019 extension that it anticipated reopening the comment period for the NPRM to coincide with the comment periods for the additional planned Roadmap rulemakings in order to provide market participants with the opportunity to comment on all three Roadmap rulemakings at once.
The following appendix 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.
Environmental Protection Agency (EPA).
Supplemental notice of proposed rulemaking; extension of comment period.
The Environmental Protection Agency (EPA) is extending the comment period for a notice issued in the
Comments must be received on or before May 18, 2020.
You may send comments, identified by Docket ID No. EPA-HQ-OA-2018-0259, by the following method:
•
Out of an abundance of caution for members of the public and our staff, the EPA Docket Center and Reading Room will be closed to public visitors beginning at the close of business on March 31, 2020 (4:30 p.m.) to reduce the risk of transmitting COVID-19. Our Docket Center staff will continue to provide remote customer service via email, phone, and webform. We encourage the public to submit comments via
Cheryl A. Hawkins, Office of Science Advisor, Policy and Engagement (8104R), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (202) 564-7307; email address:
On March 18, 2020, EPA published a supplemental notice of proposed rulemaking (SNPRM) titled “Strengthening Transparency in Regulatory Science” (85 FR 15396), which includes clarifications, modifications and additions to certain provisions in the Strengthening Transparency in Regulatory Science Proposed Rulemaking, published on April 30, 2018 (83 FR 18768). The SNPRM proposed that the scope of the rulemaking apply to influential scientific information as well as significant regulatory decisions. That notice proposed definitions and clarified that the proposed rulemaking would apply to data and models underlying both pivotal science and pivotal regulatory science. In the SNPRM, EPA also proposed a modified approach to the public availability provisions for data and models that would underly significant regulatory decisions and an alternate approach. Finally, EPA requested comment on whether to use its housekeeping authority independently or in conjunction with appropriate environmental statutory provisions as authority for the rulemaking.
This document extends the public comment period for the proposed rule to ensure that the public has sufficient time to review and comment on the proposal.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a regional haze progress report State Implementation Plan (SIP) revision submitted by the State of Wyoming on November 28, 2017. The revision addresses the requirements for states to submit periodic reports describing progress toward reasonable progress goals established for regional haze and a determination of adequacy of the State's existing regional haze SIP and federal implementation plan (FIP). The regional haze progress report SIP revision also includes a revision to the Best Available Retrofit Technology (BART) requirements for Unit 3 at the Naughton Power Plant. The EPA acted on the BART revision for the Naughton Power Plant in a previous rulemaking and is not proposing to act on the BART revision in this rulemaking. The EPA is taking this action pursuant to section 110 of the Clean Air Act (CAA).
Written comments must be received on or before May 18, 2020.
Submit your comments, identified by Docket ID No. EPA-R08-OAR-2019-0623, to the Federal Rulemaking Portal:
Jaslyn Dobrahner, Air and Radiation Division, EPA, Region 8, Mailcode 8ARD-IO, 1595 Wynkoop Street, Denver, Colorado 80202-1129, (303) 312-6252,
Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.
On November 28, 2017, Wyoming submitted a Progress Report SIP revision (Progress Report) which: (1) Detailed the progress made toward achieving progress for improving visibility at Class I areas,
In section 169A of the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes “as a national goal the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory Class I Federal areas which impairment results from manmade air pollution.”
The EPA promulgated a rule to address regional haze on July 1, 1999.
The CAA requires each state to develop a SIP to meet various air quality requirements, including protection of visibility.
The EPA's Regional Haze Rule provides two paths to address regional haze. One is 40 CFR 51.308, requiring states to perform individual point source BART determinations and evaluate the need for other control strategies. The other method for addressing regional haze is through 40 CFR 51.309, and is an option for states termed the “Transport Region States” including Wyoming. Transport Region States can adopt regional haze strategies based on recommendations from the Grand Canyon Visibility Transport Commission (GCVTC) for protecting the 16 Class I areas on the Colorado Plateau.
Under both 40 CFR 51.308 and 40 CFR 51.309, states are required to submit progress reports that evaluate progress towards the reasonable progress goals for each mandatory federal Class I area within the state and in each Class I area outside the state that may be affected by emissions from within the state. In addition, the provisions also require states to submit, at the same time as the progress report, a determination of adequacy of the state's existing regional haze plan. The first progress report must be in the form of a SIP revision and is due 5 years after submittal of the initial regional haze SIP.
As a Transport Region State, Wyoming submitted its Progress Report SIP under 40 CFR 51.309, and exercised the option to meet the requirements contained in 40 CFR 51.309 for regional haze implementation plans.
On January 12, 2011, and April 19, 2012, Wyoming submitted regional haze SIP revisions addressing the requirements of 40 CFR 51.309 that superseded and replaced regional haze SIP revisions submitted on December 24, 2003, May 27, 2004 and November 21, 2008. On December 12, 2012, the EPA approved the SIP revisions as meeting the requirements of the Regional Haze Rule with the exception of 40 CFR 51.309(d)(4)(vii) and 40 CFR 51.309(g). On January 30, 2014, the EPA issued a final rule partially approving and partially disapproving the SIP revisions as meeting the requirements of 40 CFR 51.309(g), and promulgating a federal implementation plan (FIP) for those portions of the SIP that were disapproved (together referred to as the regional haze implementation plan).
Wyoming's Progress Report must meet the requirements set forth in 40 CFR 51.309(d)(10)(i). Wyoming's Progress Report must also include a determination of the adequacy of the existing implementation plan to ensure reasonable progress. 40 CFR 51.309(d)(10)(ii).
Wyoming's Progress Report must include a description of the status of implementation of all control measures included in the implementation plans for achieving reasonable progress goals for Class I areas both within and outside of the State. 40 CFR 51.309(d)(10)(i)(A).
In its Progress Report, Wyoming summarized the regional haze measures that were relied upon in the regional haze implementation plan, as well as SO
Additionally,
The EPA proposes to find that Wyoming has adequately addressed the applicable provisions under 40 CFR 51.309(d)(10)(i)(A) regarding the implementation status of control measures because the State's Progress Report provides documentation of the implementation of control measures within Wyoming, including the BART-eligible sources and reasonable progress sources in the State.
Wyoming's Progress Report must include a summary of the emissions reductions achieved throughout the State through implementation of control measures mentioned in 40 CFR 51.309(d)(10)(i)(A). 40 CFR 51.309(d)(10)(i)(B).
In its Progress Report, Wyoming presents information on emissions reductions achieved from the pollution control strategies discussed above. The State provides regional SO
The emissions
The EPA proposes to conclude that Wyoming has adequately summarized the emissions reductions achieved throughout the State in its Progress Report as required under 40 CFR 51.309(d)(10)(i)(B). In meeting this requirement, the EPA does not expect states to quantify emissions reductions for measures which have not yet been implemented or for which the compliance date has not yet been reached. However, for purposes of future progress reports, we recommend that Wyoming include additional quantitative details on the reductions of each major specific visibility-impairing pollutant and utilize the EPA's Clean Air Market Division (CAMD) database,
Pursuant to 40 CFR 51.309(d)(10)(i)(C), for each mandatory Class I area within the State, Wyoming must assess the following visibility conditions and changes, with values for most impaired and least impaired days
i. Assess the current visibility conditions for the most impaired and least impaired days.
ii. Analyze the difference between current visibility conditions for the most impaired and least impaired days and baseline visibility conditions.
iii. Evaluate the change in visibility impairment for the most impaired and least impaired days over the past five years.
In its Progress Report, Wyoming provides information on visibility conditions for the Class I areas within its borders. There are seven Class I areas located in Wyoming: Bridger Wilderness, Fitzpatrick Wilderness, Grand Teton National Park, North Absaroka Wilderness, Teton Wilderness, Washakie Wilderness and Yellowstone National Park. Monitoring and data representing visibility conditions in Wyoming's seven Class I areas is based on the three Interagency Monitoring of Protected Visual Environments (IMPROVE) monitoring sites located across the State (Table 5).
The Progress Report addressed current visibility conditions and the difference between current visibility conditions and baseline visibility conditions with values for the most impaired (20 percent worst days) and least impaired and/or clearest days (20 percent best days). Table 6: Visibility Progress in Wyoming's Class I Areas, shows the difference between the current period (represented by 2005-2009 data) and the baseline visibility data (represented by 2000-2004 data).
As shown in Table 6, all the IMPROVE monitoring sites within the State show improvement in visibility conditions between the baseline (2000-2004) and current (2005-2009) periods on both the 20 percent worst visibility and 20 percent best visibility days. When considering only anthropogenic impairment within the baseline (2000-2004) and most current (2012-2016) periods, all of the IMPROVE monitoring sites within the State also show improvement in visibility on the 20 percent most impaired days. Deciview improvement was consistent over the 2000-2014 time period, using 5-year rolling averages, on the 20 percent best days (Table 7).
In its Progress Report, Wyoming demonstrates that particulate organic matter was the largest contributor to light extinction on the 20 percent worst days.
The EPA proposes to conclude that Wyoming has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(C) to include summaries of monitored visibility data as required by the Regional Haze Rule.
Wyoming's Progress Report must include an analysis tracking the change over the past five years in emissions of pollutants contributing to visibility impairment from all sources and activities within the State. 40 CFR 51.309(d)(10)(i)(D).
In its Progress Report, Wyoming presents data from a 2008 emissions inventory, which leverages inventory development work performed by the Western Regional Air Partnership (WRAP) for the West-wide Jumpstart Air Quality Modeling Study (WestJumpAQMS)
Overall, Wyoming's emissions that affect visibility were reduced in all sectors for all pollutants (total) except for coarse and fine particulate matter categories. Wyoming cites increases in windblown and fugitive dust and enhancements in dust inventory methodologies as reasons for the increase in fine and coarse particulate matter emissions over the time period analyzed in the Progress Report.
The EPA proposes to conclude that Wyoming has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(D) to track changes in emissions of pollutants contributing to visibility impairment from all sources and activities within the State.
Wyoming's Progress Report must include an assessment of any significant changes in anthropogenic emissions within or outside the State that have occurred over the past five years that have limited or impeded progress in reducing pollutant emissions and improving visibility in Class I areas impacted by the State's sources. 40 CFR 51.309(d)(10)(i)(E).
In its Progress Report, Wyoming provided an assessment of any significant changes in anthropogenic emissions within or outside the State. On the 20% worst days over the 5-year period from 2005-2009, particulate organic matter and SO
Although not cited in Wyoming's Progress Report, at the time of the analysis done by the State for the Progress Report, not all BART and reasonable progress controls had been installed because compliance dates had
The EPA proposes to find that Wyoming has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(E) to assess significant changes in anthropogenic emissions of visibility impairing pollutants.
Wyoming's Progress Report must include an assessment of whether the current regional haze implementation plan elements and strategies are sufficient to enable the State, or other states with mandatory Class I areas affected by emissions from the State, to meet all established reasonable progress goals. 40 CFR 51.309(d)(10)(i)(F).
In its Progress Report, Wyoming provided an assessment of whether the current regional haze implementation plan elements and strategies are sufficient to enable the State, and other states with Class I areas affected by emissions from the State, to meet the reasonable progress goals established by the State. However, the EPA disapproved Wyoming's reasonable progress goals, and instead promulgated reasonable progress goals consistent with the emission limits finalized in the approved SIP and FIP.
Wyoming asserts that even with wildfire emissions included in the assessment of visibility impacts on Class I areas, visibility continues to improve at the State's Class I areas from 2000 through 2009 and into 2010. Indeed, key visibility metrics described previously, show: (1) A decrease in SO
Following the future implementation of remaining BART controls and the adjustment of the visibility metrics to account only for anthropogenic impairment, even greater visibility progress should be realized. Thus, Wyoming is confident that the current implementation plan elements and strategies are sufficient to make progress towards visibility goals and will not impede Class I areas outside of Wyoming from meeting their goals in the next planning period.
The EPA proposes to conclude that Wyoming has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(F) and proposes to agree with the State's determination that implementation plan elements are sufficient to enable the State and other states affected by emissions from Wyoming to make progress towards the current reasonable progress goals. The EPA views the requirement of this section as a qualitative assessment that should evaluate emissions and visibility trends, including expected emissions reductions from measures that have not yet been implemented.
Wyoming's Progress Report must include a review of the State's visibility monitoring strategy and any modifications to the strategy as necessary. 40 CFR 51.309(d)(10)(i)(G).
The monitoring strategy for regional haze in Wyoming relies upon participation in the IMPROVE network, which is the primary monitoring network for regional haze nationwide.
In its Progress Report, Wyoming summarizes the existing monitoring network, which includes three IMPROVE monitors, used to monitor visibility at the seven Class I areas in the State. The State relies solely on the IMPROVE monitoring network to track long-term visibility improvement and degradation and will continue to rely on the IMPROVE monitoring network, without modifications to the existing network, for complying with the regional haze monitoring requirements.
The EPA proposes to find that Wyoming adequately addressed the requirements of 40 CFR 51.309(d)(10)(i)(G) because the State reviewed its visibility monitoring strategy and determined that no further modifications to the strategy are necessary.
The provisions under 40 CFR 51.309(d)(10)(ii) require states to determine the adequacy of their existing implementation plan to meet existing reasonable progress goals and take one of the following actions:
(1) Submit a negative declaration to the EPA that no further substantive revision to the state's existing regional haze implementation plan is needed at this time.
(2) If the state determines that the implementation plan is or may be inadequate to ensure reasonable progress due to emissions from sources in another state(s) which participated in a regional planning process, the state must provide notification to the EPA and to the other state(s) which participated in the regional planning process with the state. The state must also collaborate with the other state(s) through the regional planning process for developing additional strategies to address the plan's deficiencies.
(3) Where the state determines that the implementation plan is or may be inadequate to ensure reasonable progress due to emissions from sources in another country, the state shall provide notification, along with available information, to the Administrator.
(4) If the state determines that the implementation plan is or may be inadequate to ensure reasonable progress due to emissions from sources within the state, then the state shall revise its implementation plan to address the plan's deficiencies within one year.
According to Wyoming, the IMPROVE data demonstrate that Wyoming is on track to either meet or exceed the State's reasonable progress goals. Thus, Wyoming's Progress Report provides a negative declaration to the EPA that no further substantive revisions to the regional haze implementation plan are needed to improve visibility in Class I areas beyond those controls already in place and scheduled to be installed in the future. The EPA proposes to conclude that Wyoming has adequately addressed 40 CFR 51.309(d)(10)(i)(G) because: (1) All controls required by the regional haze implementation plan or modified by subsequent action have been installed or are on track to be complete by the relevant compliance date, except those stayed by litigation; and (2) key visibility metrics described previously show a decrease in SO
The EPA is proposing to approve Wyoming's November 28, 2017, Regional Haze Progress Report as meeting the applicable regional haze requirements set forth in 40 CFR 51.309(d)(10).
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the proposed rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Environmental protection, Air pollution control, Carbon monoxide, Greenhouse gases, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to find that the Chicago-Naperville, IL-IN-WI area (Chicago area) is attaining the 2008 ozone National Ambient Air Quality Standard (NAAQS or standard) and to act in accordance with a request from the Wisconsin Department of Natural Resources (Wisconsin or the State) to redesignate the Wisconsin portion of the area to attainment for the 2008 ozone NAAQS. Wisconsin submitted this request on January 21, 2020. EPA is proposing to approve, as a revision to the Wisconsin State Implementation Plan (SIP), the State's plan for maintaining the 2008 ozone NAAQS through 2030 in the Chicago area. EPA is proposing to approve Wisconsin's 2025 and 2030 volatile organic compound (VOC) and oxides of nitrogen (NO
Comments must be received on or before May 18, 2020.
Submit your comments, identified by Docket ID No. EPA-R05-OAR-2020-0030 or EPA-R05-OAR-2020-0101 at
Michael Leslie, Environmental Engineer, Control Strategies Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 353-6680,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:
EPA is proposing to take several related actions. EPA is proposing to determine that the Chicago nonattainment area is attaining the 2008 ozone NAAQS, based on quality-assured and certified monitoring data for 2017-2019. The Wisconsin portion of the Chicago 2008 ozone area consists the portion of Kenosha County bounded by the I-94 corridor and the area east to Lake Michigan (Kenosha portion). The Kenosha portion has met the requirements for redesignation under section 107(d)(3)(E) of the Clean Air Act (CAA). EPA is thus proposing to change the legal designation of the Kenosha portion from nonattainment to attainment for the 2008 ozone NAAQS. EPA is also proposing to approve, as a revision to the Wisconsin SIP, the State's maintenance plan (such approval being one of the CAA criteria for redesignation to attainment status) for the Kenosha portion. The maintenance plan is designed to keep the Chicago area in attainment of the 2008 ozone NAAQS through 2030. EPA also finds adequate and is proposing to approve the newly-established 2025 and 2030 MVEBs for the Kenosha portion. Finally, EPA is proposing to approve the VOC RACT SIP revisions included in Wisconsin's January 21, 2020 and February 12, 2020 submittals because they satisfy the moderate VOC RACT requirements of the CAA for the Kenosha portion.
EPA has determined that ground-level ozone is detrimental to human health. On March 27, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm).
Upon promulgation of a new or revised NAAQS, section 107(d)(1)(B) of the CAA requires EPA to designate as nonattainment any areas that are violating the NAAQS, based on the most recent three years of quality assured ozone monitoring data. The Chicago area was originally designated as a marginal nonattainment area for the 2008 ozone NAAQS on June 11, 2012 (77 FR 34221), effective July 20, 2012. EPA reclassified the Chicago area from marginal to moderate nonattainment on May 4, 2016 (81 FR 26697), effective June 3, 2016. The Chicago area was again reclassified to serious on August 23, 2019 (84 FR 44238), effective September 23, 2019.
Section 107(d)(3)(E) of the CAA allows redesignation of an area to attainment of the NAAQS provided that: (1) The Administrator (EPA) determines that the area has attained the NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k) of the CAA; (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP, applicable Federal air pollutant control regulations, and other permanent and enforceable emission reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing the area has met all requirements applicable to the area for the purposes of redesignation under section 110 and part D of the CAA.
On April 16, 1992, EPA provided guidance on redesignations in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990 (57 FR 13498) and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:
1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton, Director, Technical Support Division, June 18, 1990;
2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992;
3. “Contingency Measures for Ozone and Carbon Monoxide (CO) Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992;
4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (the “Calcagni Memorandum”);
5. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;
6. “Technical Support Documents (TSDs) for Redesignation of Ozone and Carbon Monoxide (CO) Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;
7. “State Implementation Plan (SIP) Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting
8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993;
9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and
10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995.
For redesignation of a nonattainment area to attainment, the CAA requires EPA to determine that the entire Chicago area has attained the applicable NAAQS (CAA section 107(d)(3)(E)(i)). An area is attaining the 2008 ozone NAAQS as determined in accordance with 40 CFR 50.15 and appendix P of part 50, based on three complete, consecutive calendar years of quality-assured air quality data for all monitoring sites in the area. To attain the NAAQS, the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations (ozone design values) at each monitor must not exceed 0.075 ppm. The air quality data must be collected and quality-assured in accordance with 40 CFR part 58 and recorded in EPA's Air Quality System (AQS). Ambient air quality monitoring data for the 3-year period must also meet data completeness requirements. An ozone design value is valid if daily maximum 8-hour average concentrations are available for at least 90 percent of the days within the ozone monitoring seasons,
EPA has reviewed the available ozone monitoring data from monitoring sites in the Chicago area for the 2017-2019 period. These data have been quality assured, are recorded in the AQS, and have been certified. These data demonstrate that the Chicago area is attaining the 2008 ozone NAAQS. The annual fourth-highest 8-hour ozone concentrations and the 3-year average of these concentrations (monitoring site ozone design values) for each monitoring site are summarized in Table 1.
The Chicago area's 3-year ozone design value for 2017-2019 is 0.075 ppm,
EPA will not take final action to determine that the Chicago area is attaining the NAAQS nor to approve the redesignation of the Kenosha portion of the Chicago area if the design value of a monitoring site in the area violates the NAAQS after proposal but prior to final approval of the redesignation. As discussed in section IV.D.3. below, Wisconsin has committed to continue
As criteria for redesignation of an area from nonattainment to attainment of a NAAQS, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (
In making these determinations, EPA ascertained which CAA requirements are applicable to the Kenosha portion and the Wisconsin SIP and, if applicable, whether the required Wisconsin SIP elements are fully approved under section 110(k) and part D of the CAA. As discussed more fully below, SIPs must be fully approved only with respect to current applicable requirements of the CAA.
The September 4, 1992, Calcagni memorandum (
EPA is proposing to determine that the Chicago area has attained the 2008 ozone standard, under 40 CFR 51.918. If that determination is finalized, the requirements to submit certain planning SIPs related to attainment, including attainment demonstration requirements (the reasonably available control measures (RACM) requirement of section 172(c)(1) of the CAA, the reasonable further progress (RFP) and attainment demonstration requirements of sections 172(c)(2) and (6) and 182(b)(1) of the CAA, and the requirement for contingency measures of section 172(c)(9) of the CAA) would not be applicable to the area as long as it continues to attain the NAAQS and would cease to apply upon redesignation. In addition, in the context of redesignations, EPA has interpreted requirements related to attainment as not applicable for purposes of redesignation. For example, in the General Preamble EPA stated that:
The section 172(c)(9) requirements are directed at ensuring RFP and attainment by the applicable date. These requirements no longer apply when an area has attained the standard and is eligible for redesignation. Furthermore, section 175A for maintenance plans provides specific requirements for contingency measures that effectively supersede the requirements of section 172(c)(9) for these areas. “General Preamble for the Interpretation of Title I of the Clean Air Act Amendments of 1990,” (General Preamble) 57 FR 13498, 13564 (April 16, 1992).
1. Wisconsin has met all applicable requirements of section 110 and part D of the CAA applicable to the Kenosha portion for purposes of redesignation.
a. Section 110 General Requirements for Implementation Plans.
Section 110(a)(2) of the CAA delineates the general requirements for a SIP. Section 110(a)(2) provides that the SIP must have been adopted by the state after reasonable public notice and hearing, and that, among other things, it must: (1) Include enforceable emission limitations and other control measures, means or techniques necessary to meet the requirements of the CAA; (2) provide for establishment and operation of appropriate devices, methods, systems and procedures necessary to monitor ambient air quality; (3) provide for implementation of a source permit program to regulate the modification and construction of stationary sources within the areas covered by the plan; (4) include provisions for the implementation of part C prevention of significant deterioration (PSD) and part D new source review (NSR) permit programs; (5) include provisions for stationary source emission control measures, monitoring, and reporting; (6) include provisions for air quality modeling; and, (7) provide for public and local agency participation in planning and emission control rule development.
Section 110(a)(2)(D) of the CAA requires SIPs to contain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of certain air pollutants,
In addition, EPA believes that other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's ozone attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated to attainment of the 2008 ozone NAAQS. The section 110 and part D requirements which are
We have reviewed Wisconsin's SIP and have concluded that it meets the general SIP requirements under section 110 of the CAA, to the extent those requirements are applicable for purposes of redesignation.
b. Part D Requirements.
Section 172(c) of the CAA sets forth the basic requirements of air quality plans for states with nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 2 of part D, which includes section 182 of the CAA, establishes specific requirements for ozone nonattainment areas depending on the areas' nonattainment classifications.
The Chicago area is classified as serious under subpart 2 for the 2008 ozone NAAQS. As such, the area is subject to the subpart 1 requirements contained in section 172(c) and section 176. Similarly, the area is subject to the subpart 2 requirements contained in sections 182(a), (b), and (c) (marginal, moderate, and serious nonattainment area requirements). A thorough discussion of the requirements contained in section 172(c) and 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).
i. Subpart 1 Section 172 Requirements.
CAA Section 172(b)requires states to submit SIPs meeting the requirements of section 172(c) no later than three years from the date of the nonattainment designation.
Section 172(c)(1) requires the plans for all nonattainment areas to provide for the implementation of all RACM as expeditiously as practicable and to provide for attainment of the primary NAAQS. Under this requirement, a state must consider all available control measures, including reductions that are available from adopting RACT on existing sources. Because attainment has been reached in the Chicago area, no additional measures are needed to provide for attainment and section 172(c)(1) requirements are no longer considered to be applicable, as long as the area continues to attain the standard until redesignation.
The RFP requirement under section 172(c)(2) is defined as progress that must be made toward attainment. EPA approved Wisconsin's RFP plan and RFP contingency measures on February 13, 2019 (84 FR 3701).
Section 172(c)(3) requires submission and approval of a comprehensive, accurate and current inventory of actual emissions. This requirement was superseded by the inventory requirement in section 182(a)(1) discussed below.
Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA has previously approved Wisconsin's NSR program on October 6, 2014 (79 FR 160064) and February 7, 2017 (82 FR 9515). However, EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that the NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Wisconsin has demonstrated that the Kenosha portion will be able to maintain the 2008 ozone NAAQS without part D NSR in effect; therefore, EPA concludes that the state need not have a fully approved part D NSR program prior to approval of the redesignation request.
Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the standard. Because attainment has been reached, no additional measures are needed to provide for attainment.
Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, we believe the Wisconsin SIP meets the requirements of section 110(a)(2) for purposes of redesignation.
Section 172(c)(9) requires the SIP to provide for the implementation of contingency measures if the area fails to make reasonably further progress or to attain the NAAQS by the attainment deadline. As noted previously, EPA approved Wisconsin's contingency measures for purposes of RFP on February 13, 2019 (84 FR 3701). With respect to contingency measures for failure to attain the NAAQS by the attainment deadline, this requirement is not relevant for purposes of redesignation because the Chicago area has demonstrated monitored attainment of the 2008 ozone NAAQS. (General Preamble, 57 FR 13564).
ii. Section 176 Conformity Requirements.
Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity), as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.
EPA interprets the conformity SIP requirements
iii. Subpart 2 Section 182(a), (b), and (c) Requirements.
Section 182(a)(1) requires states to submit a comprehensive, accurate, and current inventory of actual emissions from sources of VOC and NO
Under section 182(a)(2)(A), states with ozone nonattainment areas that were designated prior to the enactment of the 1990 CAA amendments were required to submit, within six months of classification, all rules and corrections to existing VOC RACT rules that were required under section 172(b)(3) prior to the 1990 CAA amendments. The Kenosha portion is not subject to the section 182(a)(2) RACT “fix up” requirement for the 2008 ozone NAAQS because it was designated as nonattainment for this standard after the enactment of the 1990 CAA amendments and because Wisconsin complied with this requirement for the Kenosha portion under the prior 1-hour ozone NAAQS.
Section 182(a)(2)(B) requires each state, with a marginal ozone nonattainment area that implemented or was required to implement a vehicle inspection and maintenance (I/M) program prior to the 1990 CAA amendments, to submit a SIP revision for an I/M program no less stringent than that required prior to the 1990 CAA amendments or already in the SIP at the time of the CAA amendments, whichever is more stringent. For the purposes of the 2008 ozone standard and the consideration of Wisconsin's redesignation request for this standard, the Kenosha portion is not subject to the section 182(a)(2)(B) requirement, because the area was designated as nonattainment for the 2008 ozone standard after the enactment of the 1990 CAA amendments and because Wisconsin complied with this requirement for the Kenosha portion under the prior 1-hour ozone NAAQS.
Section 182(a)(3)(B) requires the submission of an emission statement SIP. EPA approved Wisconsin's emission statement SIP for the Kenosha portion for the 2008 ozone NAAQS on February 13, 2019 (84 FR 3701).
Section 182(b)(1) requires the submission of an attainment demonstration and RFP plan. Wisconsin submitted an attainment demonstration and RFP plan for the Kenosha portion on April 17, 2017. EPA approved Wisconsin's RFP plan and RFP contingency measures for the Kenosha portion for the 2008 ozone NAAQS on February 13, 2019 (84 FR 3701). Because attainment has been reached, section 182(b)(1) requirements are no longer considered to be applicable, as long as the area continues to attain the standard. If EPA finalizes approval of the redesignation of the area, EPA will take no further action on the attainment demonstration submitted by Wisconsin.
Section 182(b)(2) requires states with moderate nonattainment areas to implement VOC RACT with respect to each of the following: (1) All sources covered by a Control Technology Guideline (CTG) document issued between November 15, 1990, and the date of attainment; (2) all sources covered by a CTG issued prior to November 15, 1990; and, (3) all other major non-CTG stationary sources. Wisconsin submitted VOC RACT SIP revisions on January 21, 2020 and February 12, 2020. For the reasons discussed in section VI., below, EPA is proposing to approve the SIP revisions submitted by Wisconsin as meeting the section 182(b)(2) moderate RACT requirements for the Kenosha portion under the 2008 ozone NAAQS.
Section 182(b)(3) requires states to adopt Stage II gasoline vapor recovery regulations. On May 16, 2012 (77 FR 28772), EPA determined that the use of onboard vapor recovery technology for capturing gasoline vapor when gasoline-powered vehicles are refueled is in widespread use throughout the highway motor vehicle fleet and waived the requirement that current and former ozone nonattainment areas implement Stage II vapor recovery systems on gasoline pumps. EPA approved a revision to Wisconsin's Stage II program on November 4, 2013 (78 FR 65875) because the State has demonstrated that onboard refueling vapor recovery systems will be in widespread use in southeast Wisconsin by 2016, making Stage II redundant.
Section 182(b)(4) requires an I/M program for each state with a moderate ozone nonattainment area. EPA approved Wisconsin's I/M program on August 16, 2001 (66 FR 42949) and approved revisions to the program on September 19, 2013 (78 FR 57501). EPA approved Wisconsin's I/M program certification for the Kenosha portion for the 2008 ozone NAAQS on February 13, 2019 (84 FR 3701).
Regarding the source permitting and offset requirements of sections 182(a)(2)(C), 182(a)(4), and 182(b)(5), Wisconsin currently has a fully-approved part D NSR program in place. EPA approved Wisconsin's NSR SIP on January 18, 1995 (60 FR 3538) and February 7, 2017 (82 FR 9515). Further, EPA approved Wisconsin's SIP revision addressing the NSR requirements for the 2008 ozone NAAQS, on May 3, 2019 (84 FR 18989). In addition, EPA approved Wisconsin's PSD program on October 6, 2014 (79 FR 60064). The State's PSD program will become effective in the Kenosha portion upon redesignation of the area to attainment.
Section 182(f) requires states with moderate nonattainment areas to implement NO
Section 182(c) contains the requirements for areas classified as serious. On August 23, 2019 (84 FR 44238), EPA reclassified the Chicago area from moderate to serious and established August 3, 2020 and March 23, 2021 as the due dates for serious area SIP revisions. No requirements under section 182(c) became due prior to Wisconsin's submission of the complete redesignation request for the Kenosha portion, and, therefore, none are applicable to the area for purposes of redesignation.
Thus, as discussed above, with approval of Wisconsin's section 182(b)(2) VOC RACT SIP, EPA finds that the Kenosha portion will satisfy all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.
2. The Kenosha portion has a fully approved SIP for purposes of redesignation under section 110(k) of the CAA.
At various times, Wisconsin has adopted and submitted, and EPA has approved, provisions addressing the various SIP elements applicable for the
To redesignate an area from nonattainment to attainment, section 107(d)(3)(E)(iii) of the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from the implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable emission reductions. EPA has determined that Wisconsin has demonstrated that the observed ozone air quality improvement in the Chicago area is due to permanent and enforceable reductions in VOC and NO
In making this demonstration, the State has calculated the change in emissions between 2011 and 2017. The reduction in emissions and the corresponding improvement in air quality over this time period can be attributed to several regulatory control measures that the Chicago area and upwind areas have implemented in recent years. In addition, Wisconsin provided an analysis to demonstrate the improvement in air quality was not due to unusually favorable meteorology. Based on the information summarized below, EPA finds that Wisconsin has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emissions reductions.
1. Permanent and enforceable emission controls implemented.
a. Regional NO
On May 12, 2005, EPA published CAIR, which required eastern states, including Wisconsin, to prohibit emissions consistent with annual and ozone season NO
On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA published CSAPR to replace CAIR and to address the good neighbor provision for the 1997 ozone NAAQS, the 1997 PM
b. Wisconsin Point Source NO
The NO
c. Federal Emission Control Measures.
Reductions in VOC and NO
2. Emission reductions.
Wisconsin is using a 2011 emissions inventory as the nonattainment year. This is appropriate because it was one of the years used to designate the Chicago area as nonattainment. Wisconsin is using 2017 as the attainment year, which is appropriate because it is one of the years in the 2017-2019 period used to demonstrate attainment.
Wisconsin created the point source emission inventory using annually reported point source emissions, the EPA's Clean Air Markets Division database and approved EPA techniques for emissions calculation (
There is one EGU point source facility located in the Kenosha portion. For this facility, Wisconsin used the ozone season NO
Wisconsin tabulated the 2011 and 2017 emissions inventories for non-EGU point sources using the emissions data reported annually by each facility operator to the Wisconsin air emissions inventory (AEI). The AEI calculates emissions for each individual emissions unit or process line by multiplying fuel or process throughput by the appropriate emission factor that is derived from mass balance analysis, stack testing, continuous emissions monitoring, engineering analysis, or EPA's Factor Information Retrieval database. The emission calculations in the AEI also account for any operating control equipment.
For the area sources, emissions inventory estimates were based on the 2011 NEI version 2, except for the residential and commercial portable fuel containers and Stage II refueling categories as described below. Emission calculation methodologies used in developing 2011 nonpoint emissions
For the 2017 attainment year, area source emissions inventory estimates were based on the data interpolation between the 2016 base year and the 2023 projection year of EPA's 2016 version 1 emissions modeling platform. Methodologies used to develop 2016 and 2023 emissions modeling data are available in the EPA's National Emissions Inventory Collaborative Wiki v1 release page.
On-road mobile source emissions were developed in conjunction with the Southeastern Wisconsin Regional Planning Commission (SEWRPC), the Metropolitan Planning Organization for the Kenosha portion. On-road mobile sources are motorized mobile equipment that are primarily used on public roadways. Examples of on-road mobile sources include cars, trucks, buses and road motorcycles. Wisconsin used the Motor Vehicle Emission Simulator (MOVES), the EPA's recommended mobile source model, to develop on-road emissions rates. The version used was MOVES2014b.
The modeling inputs to MOVES include detailed transportation data (
The methodology for the 2011 and 2017 non-road emissions categories were developed using the EPA's MOVES2014b model, using the same summer day temperatures used for the on-road modeling. The model was run for Kenosha County for the months of June, July and August. Summer day emissions were calculated by dividing the total emissions over these three months by 92 (the number of days in the three months). Emissions were then allocated from the full county to the eastern Kenosha County area based on surrogates such as population, land area and water area, depending on the category.
For commercial marine, aircraft and rail locomotive (MAR) categories, the annual emissions estimates used for Kenosha County are those in the EPA's 2011 NEI version 2.
For the year 2017, the annual emissions estimates used for Kenosha County were obtained by linearly interpolating between the 2016 and 2023 values in the EPA's 2016 emissions modeling platform, version 1.
Summer day emissions for these MAR categories were estimated by dividing the annual emissions by 365. This same value was used in the EPA's 2011 version 6.3 emissions modeling platform. The allocation of the full county emissions to the eastern Kenosha County area is based on surrogates, such as population, land area and water area, depending on the MAR category.
Emissions for Illinois and Indiana were based on inventories developed by those states in 2016 for an earlier round of redesignation requests. For the current document, 2011 and 2030 emissions are directly taken from these earlier inventories, whereas 2017 and 2025 emissions were determined by interpolation from these inventories. The original inventories are in Wisconsin's 2016 redesignation request.
Using the inventories described above, Wisconsin's submittal documents changes in VOC and NO
As shown in Tables 2 and 3, NO
3. Meteorology.
Wisconsin included an analysis to further support its demonstration that the improvement in air quality between the nonattainment year violations and the attainment year is due to permanent and enforceable emission reductions and not unusually favorable meteorology. Wisconsin analyzed the maximum fourth-highest 8-hour ozone values for May, June, July, August, and September, for years 2000 to 2017.
First, the maximum 8-hour ozone concentration at each monitor in the Kenosha portion was compared to the number of days where the maximum temperature was greater than or equal to 80 °F. While there is a clear trend in decreasing ozone concentrations at all monitors, there is no such trend in the temperature data.
Wisconsin also examined the relationship between the average summer temperature for each year of the 2000-2017 period and the fourth-highest 8-hour ozone concentration. Given the similarity of ozone concentrations observed at each monitor and the regional nature of ozone formation, Wisconsin conducted this analysis using the average fourth-highest 8-hour ozone concentration from all monitors in the Kenosha portion. While there is some correlation between average summer temperatures and ozone concentrations, this correlation does not exist over the study period. The linear regression lines for each data set demonstrate that the average summer temperatures have increased over the 2000 to 2017 period, while average ozone concentrations have decreased. Because the correlation between temperature and ozone formation is well established, these data suggest that reductions in precursors are responsible for the reductions in ozone concentrations in the Kenosha portion, and not unusually favorable summer temperatures.
Finally, Wisconsin analyzed the relationship between average summertime relative humidity and average fourth-highest 8-hour ozone concentrations. The data did not show a correlation between relative humidity and ozone concentrations.
As discussed above, Wisconsin identified numerous Federal rules that resulted in the reduction of VOC and NO
As one of the criteria for redesignation to attainment section 107(d)(3)(E)(iv) of the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to
The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five elements: (1) An attainment emission inventory; (2) a maintenance demonstration; (3) a commitment for continued air quality monitoring; (4) a process for verification of continued attainment; and (5) a contingency plan. In conjunction with its request to redesignate the Kenosha portion to attainment for the 2008 ozone NAAQS, Wisconsin submitted a SIP revision to provide for maintenance of the 2008 ozone NAAQS through 2030, more than 10 years after the expected effective date of the redesignation to attainment. As discussed below, EPA proposes to find that Wisconsin's ozone maintenance plan includes the necessary components and to approve the maintenance plan as a revision of the Wisconsin SIP.
1. Attainment inventory.
EPA is proposing to determine that the Chicago area has attained the 2008 ozone NAAQS based on monitoring data for the period of 2017-2019. Wisconsin selected 2017 as the attainment emissions inventory year to establish attainment emission levels for VOC and NO
2. Has the state documented maintenance of the ozone standard in the Kenosha portion?
Wisconsin has demonstrated maintenance of the 2008 ozone NAAQS through 2030 by ensuring that current and future emissions of VOC and NO
Wisconsin is using emissions inventories for the years 2025 and 2030 to demonstrate maintenance. 2030 is more than 10 years after the expected effective date of the redesignation to attainment and 2025 was selected to demonstrate that emissions are not expected to spike in the interim between the attainment year and the final maintenance year. The emissions inventories were developed as described below.
Wisconsin estimated the future year point source emissions by applying growth factors to the 2017 attainment year emissions inventory. Wisconsin's 2025 area source emissions were estimated primarily by interpolating between EPA's 2023 and 2028 modeling inventories, while 2030 area source emissions were estimated by extrapolating EPA's 2023 and 2028 modeling inventories.
The methodology for the 2025 and 2030 projected non-road emissions categories were developed using the EPA's MOVES2014b model, using the same summer day temperatures used for the on-road modeling. The model was run for Kenosha County for the months of June, July and August. Summer day emissions were calculated by dividing the total emissions over these three months by 92 (the number of days in the three months). Emissions were then allocated from the full county to the eastern Kenosha County area based on surrogates such as population, land area and water area, depending on the category.
For all source categories except commercial MAR, the MOVES2014b model was run for Kenosha County at summer day temperatures, assuming the model's default growth projections.
For the three MAR categories, the 2025 and 2030 emissions were calculated by linearly interpolating or extrapolating from the 2023 and 2028 values from EPA's 2016 Emissions Modeling Platform, Version 1. To avoid underestimating 2030 emissions, if the extrapolated emissions for 2030 were less than those for 2028, the 2030 emissions were set equal to those for 2028.
On-road mobile source emissions were developed in conjunction with the SEWRPC and were calculated from emission factors produced by EPA's MOVES2014a model and data extracted from the region's travel-demand model.
Projected emissions data are shown in Tables 4 through 5 below.
In summary, Wisconsin's maintenance demonstration for the Kenosha portion shows maintenance of the 2008 ozone NAAQS by providing emissions information to support the demonstration that future emissions of NO
3. Continued air quality monitoring.
Wisconsin has committed to continue to operate the ozone monitors listed in Table 1 above. Wisconsin has committed to consult with EPA prior to making changes to the existing monitoring network should changes become necessary in the future. Wisconsin remains obligated to meet monitoring requirements, to continue to quality assure monitoring data in accordance with 40 CFR part 58, and to enter all data into the Air Quality System (AQS) in accordance with Federal guidelines.
4. Verification of continued attainment.
Wisconsin has confirmed that it has the legal authority to enforce and implement the requirements of the maintenance plan for the Kenosha portion. This includes the authority to adopt, implement, and enforce any subsequent emission control measures determined to be necessary to correct future ozone attainment problems.
Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic update of the area's emissions inventory. Wisconsin will continue to operate the current ozone monitors located in the Kenosha portion. There are no plans to discontinue operation, relocate, or otherwise change the existing ozone monitoring network other than through revisions in the network approved by the EPA.
In addition, to track future levels of emissions, Wisconsin will continue to develop and submit to EPA updated emission inventories for all source categories at least once every three years, consistent with the requirements of 40 CFR part 51, subpart A, and 40 CFR 51.122. The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002 (67 FR 39602). The CERR was replaced by the Annual Emissions Reporting Requirements on December 17, 2008 (73 FR 76539). The most recent triennial inventory for Wisconsin was compiled for 2014. Point source facilities covered by Wisconsin's emission statement rule, Wisconsin Administrative Code NR 438, will continue to submit VOC and NO
5. What is the contingency plan for the Kenosha portion?
Section 175A of the CAA requires that the state adopt a maintenance plan, as a SIP revision, that includes such contingency measures as EPA deems necessary to ensure that the state will promptly correct a violation of the NAAQS that occurs after redesignation of the area to attainment of the NAAQS. The maintenance plan must identify: The contingency measures to be considered and, if needed for maintenance, adopted and implemented; a schedule and procedure for adoption and implementation; and a time limit for action by the state. The state should also identify specific indicators to be used to determine when the contingency measures need to be considered, adopted, and implemented. The maintenance plan must include a commitment that the state will implement all measures with respect to the control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d) of the CAA.
As required by section 175A of the CAA, Wisconsin has adopted a contingency plan for the Kenosha portion to address possible future ozone air quality violations. The contingency plan adopted by Wisconsin has two levels of response, a warning level response and an action level response.
In Wisconsin's plan, a warning level response will be triggered when an annual fourth highest monitored value of 0.075 ppm or higher is monitored within the maintenance area. A warning level response will require Wisconsin to conduct a study. The study would include the two elements. The first element would assess whether actual emissions have deviated significantly from the emissions projections contained in this maintenance plan for the Kenosha portion, along with an evaluation of which sectors and states are responsible for any emissions increases. Second, Wisconsin would investigate whether unusual meteorological conditions during the high ozone year led to the high monitored ozone concentrations. The study will evaluate whether the trend, if any, is likely to continue and, if so, the control measures necessary to reverse the trend. The study will consider ease and timing of implementation as well as economic and social impacts and will be completed no later than May 1st of the next season. Implementation of necessary controls in response to a warning level response trigger will take place no later than 18 months from the completion of the study.
In Wisconsin's plan, an action level response would be triggered if a three-year design value exceeds the level of the 2008 ozone NAAQS (0.075 ppm). When an action level response is triggered, Wisconsin will determine what additional control measures are needed to ensure future attainment of the 2008 ozone NAAQS. Control measures selected will be adopted and implemented within 18 months from the close of the ozone season that prompted the action level. Wisconsin may also consider if significant new regulations not currently included as part of the maintenance provisions will be implemented in a timely manner and would thus constitute an adequate contingency measure response.
Wisconsin included the following list of potential contingency measures in its maintenance plan. However, Wisconsin is not limited to the measures on this list:
To qualify as a contingency measure, emissions reductions from that measure must not be factored into the emissions projections used in the maintenance plan. Wisconsin notes that because it is not possible to determine what control measures will be appropriate in the future, the list is not comprehensive.
EPA has concluded that Wisconsin's maintenance plan adequately addresses the five basic components of a maintenance plan: Attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. In addition, as required by section 175A(b) of the CAA, Wisconsin has committed to submit to EPA an updated ozone maintenance plan eight years after redesignation of the Kenosha portion to cover an additional ten years beyond the initial 10-year maintenance period. Thus, EPA finds that the maintenance plan SIP revision submitted by Wisconsin for the Kenosha portion meets the requirements of section 175A of the CAA, and EPA proposes to approve it as a revision to the Wisconsin SIP.
Under section 176(c) of the CAA, new transportation plans, programs or projects that receive Federal funding or support, such as the construction of new highways, must “conform” to (
Under the CAA, states are required to submit, at various times, control strategy SIPs for nonattainment areas and maintenance plans for areas seeking redesignations to attainment of the ozone standard and maintenance areas.
Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment must be established, at minimum, for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, Transportation Conformity Rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and how to revise the MVEB, if needed, subsequent to initially establishing a MVEB in the SIP.
As discussed earlier, Wisconsin's maintenance plan includes NO
EPA finds adequate and is proposing to approve the MVEBs for use to determine transportation conformity in the Kenosha portion of the Chicago area, because EPA has determined that the area can maintain attainment of the 2008 ozone NAAQS for the relevant maintenance period with mobile source emissions at the levels of the MVEBs.
A “safety margin” is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. As noted in Tables 4 and 5 above, the emissions in the Kenosha portion are projected to have safety margins of 171.38 tons/day for NO
Wisconsin is not allocating any of the safety margin to the mobile source sector. Wisconsin can request an allocation to the MVEBs of the available safety margins reflected in the demonstration of maintenance in a future SIP revision.
Sections 172(c)(1) and 182(b)(2) of the CAA require states to implement RACT in ozone nonattainment areas classified as moderate (and higher). Specifically, these areas are required to implement RACT for all major VOC and NO
EPA's SIP Requirements Rule for the 2008 ozone NAAQS indicates that states may meet RACT through the establishment of new or more stringent requirements that meet RACT control levels, through a certification that previously adopted RACT controls in their SIPs approved by EPA for a prior ozone NAAQS also represent adequate RACT control levels for attainment of the 2008 ozone NAAQS, or with a combination of these two approaches. In addition, a state may submit a negative declaration in instances where there are no CTG sources.
Wisconsin previously addressed RACT requirements in the Kenosha portion in developing attainment plans for the 1979 and 1997 ozone standards. Wisconsin has previously adopted RACT rules for VOC emission sources in the nonattainment areas under Wisconsin Administrative Code NR 420. Wisconsin has evaluated the previously adopted regulations and determined that these rules still satisfy RACT. Wisconsin's submittal describes the VOC RACT program for the Kenosha portion. The submittal provided a list of the CTGs for which RACT requirements have been codified in the Wisconsin Administrative Code.
Wisconsin has not adopted VOC RACT regulations for four CTGs: Shipbuilding and ship repair, aerospace manufacturing, fiberglass boat manufacturing, and the oil and natural gas industry. In addition, while Wisconsin has adopted rules to cover industrial adhesive use, metal and plastic parts coatings, and automobile and light-duty truck manufacturing, the Wisconsin Administrative Code does not reflect the most recently published CTGs for these categories.
Wisconsin performed an applicability analysis for these categories in the Kenosha portion. Wisconsin's analysis took the following steps to make this determination: First, Wisconsin relied on the Wisconsin Air Emissions Inventory to create a list of all the VOC emitting facilities in the Kenosha portion. Wisconsin searched the list for facilities having the applicable CTG Standard Industrial Classification (SIC) codes. Second, Wisconsin searched the Wisconsin Air Resource Program database, which contains facility and emissions information about all Wisconsin companies that have obtained an air pollution control permit for sources located within the partial county nonattainment area with the applicable SIC codes. Third, Wisconsin searched the membership directories found on the applicable SIC code organizations' websites. Finally, Wisconsin searched the ReferenceUSA database for facilities located within the
Wisconsin's analysis determined that there are no facilities for the following CTGs in the Kenosha nonattainment area: Shipbuilding and ship repair, aerospace manufacturing, fiberglass boat manufacturing, oil and natural gas industry, miscellaneous industrial adhesives, and automobile and light-duty truck assembly coatings. Wisconsin provided negative declarations for these CTG categories.
For the remaining CTG category, miscellaneous metal and plastic parts coatings, Wisconsin's analysis identified three facilities in the Kenosha County 2008 ozone nonattainment area. For two of the facilities, KKSP Precision Machining LLC (Facility Identification 230198760) and IEA, Inc. (Facility Identification 230167520), Wisconsin determined that the emissions were well below the CTG applicability threshold of 15 lb VOC per day, or equivalently, 3 tons per year. The remaining facility, Insinkerator (Facility Identification 230167630), was found to have CTG-applicable emissions of 3.1 tons per year in 2017, which is above the CTG threshold. Insinkerator entered into an Administrative Order (AM-20-01) with Wisconsin which establishes permanent and enforceable emission limits, among other requirements, on this facility, which are consistent with the control requirements and limits set forth in the 2008 Miscellaneous Metal and Plastic Parts Coatings CTG. AM-20-01 was submitted to EPA for incorporation into the SIP on February 12, 2020.
Wisconsin has certified that the VOC RACT rules previously adopted by the state and approved into Wisconsin's SIP continue to meet VOC RACT requirements for the Kenosha portion under the 2008 ozone NAAQS. Wisconsin has adequately documented its analysis of sources in the area to support its negative declarations for the shipbuilding and ship repair, aerospace manufacturing, fiberglass boat manufacturing, oil and natural gas industry, miscellaneous industrial adhesives, and automobile and light-duty truck assembly coatings categories. Wisconsin's analysis of sources in the area and subsequent documentation of potential applicability under the 2008 Miscellaneous Metal and Plastic Parts Coatings CTG properly identified Insinkerator as the only facility which would be subject to the requirements of this CTG. Finally, Wisconsin has submitted for incorporation into the SIP Administrative Order (AM-20-01), which contains limits and associated requirements for Insinkerator that are consistent with those set forth in the CTG. EPA finds Wisconsin's VOC RACT SIP submittals to be approvable as meeting the moderate VOC RACT requirements of section 182(b)(2) of the CAA.
EPA is proposing to determine that the Chicago area is attaining the 2008 ozone NAAQS, based on quality-assured and certified monitoring data for 2017-2019. EPA is proposing to approve Wisconsin's January 21, 2020 and February 12, 2020 VOC RACT submittals as meeting the moderate SIP requirements of section 182(b)(2) of the CAA. EPA is proposing to determine that upon final approval of Wisconsin's VOC RACT submittals, the Kenosha portion will have met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is thus proposing to change the legal designation of the Kenosha portion of the Chicago-Naperville, IL-IN-WI area from nonattainment to attainment for the 2008 ozone NAAQS. EPA is also proposing to approve, as a revision to the Wisconsin SIP, the state's maintenance plan for the area. The maintenance plan is designed to keep the Kenosha portion in attainment of the 2008 ozone NAAQS through 2030. Finally, EPA finds adequate and is proposing to approve the newly-established 2025 and 2030 MVEBs for the Kenosha portion.
In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference Wisconsin Administrative Order AM-20-01, effective January 9, 2020. EPA has made, and will continue to make, these documents generally available through
Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Oxides of nitrogen, Ozone, Volatile organic compounds.
Environmental protection, Air pollution control, National parks, Wilderness areas.
Environmental Protection Agency (EPA).
Proposed rule; extension of comment period.
The Environmental Protection Agency (EPA) is extending the comment period for the proposed rule entitled “Financial Responsibility Requirements under CERCLA Section 108(b) for Classes of Facilities in the Chemical Manufacturing Industry.” This proposal was published on February 21, 2020, and the public comment period was scheduled to end on April 21, 2020. However, a number of public interest groups have requested additional time to develop and submit comments on the proposal. In response to the request for additional time, EPA is extending the comment period through May 6, 2020.
Comments must be received on or before May 6, 2020.
Submit your comments, identified by Docket ID No. EPA-HQ- SFUND-2019-0086, at
For more information on this document, contact Charlotte Mooney, U.S. Environmental Protection Agency, Office of Resource Conservation and Recovery, Mail Code 5303P, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone (703) 308-7025 or (email)
On February 21, 2020, EPA published in the
The comment period for the proposed rule was scheduled to end on April 21, 2020. Since publication, EPA has received a request from several public interest groups to extend that comment period to allow for additional time to develop comments on the proposed rule due to general disruptions associated with the COVID-19 pandemic.
After considering this request for additional time, EPA has decided to extend the comment period until May 6, 2020.
Environmental protection, Financial responsibility, Hazardous substances, Chemicals.
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing significant new use rules (SNURs) under the Toxic Substances Control Act (TSCA) for chemical substances which are the subject of premanufacture notices (PMNs). This action would require persons to notify EPA at least 90 calendar days before commencing manufacture (defined by statute to include import) or processing of any of these chemical substances for an activity that is designated as a significant new use by this proposed rule. This action would further require that persons not commence manufacture or processing for the significant new use until they have submitted a Significant New Use Notice, and EPA has conducted a review of the notice, made an appropriate determination on the notice under TSCA, and has taken any risk management actions as are required as a result of that determination.
Comments must be received on or before May 18, 2020.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2020-0138, 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
You may be potentially affected by this action if you manufacture, process, or use the chemical substances contained in this proposed rule. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Manufacturers or processors of one or more subject chemical substances (NAICS codes 325 and 324110),
This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA. Chemical importers are subject to the TSCA section 13 (15 U.S.C. 2612) import provisions promulgated at 19 CFR 12.118 through 12.127 and 19 CFR 127.28. Chemical importers must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA, which would include the SNUR requirements should these proposed rules be finalized. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B. In addition, pursuant to 40 CFR 721.20, any persons who export or intend to export a chemical substance that is the subject of this proposed rule on or after May 18, 2020 are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)) and must comply with the export notification requirements in 40 CFR part 707, subpart D.
1.
2.
EPA is proposing these SNURs under TSCA section 5(a)(2) for chemical substances which were the subjects of PMNs P-18-59, P-18-60, and P-18-381. These proposed SNURs would require persons who intend to manufacture or process any of these chemical substances for an activity that is designated as a significant new use to notify EPA at least 90 days before commencing that activity.
The record for the proposed SNURs on these chemicals was established as docket EPA-HQ-OPPT-2020-0138. That record includes information considered by the Agency in developing these proposed SNURs.
TSCA section 5(a)(2) (15 U.S.C. 2604(a)(2)) authorizes EPA to determine that a use of a chemical substance is a “significant new use.” EPA must make this determination by rule after considering all relevant factors, including the four TSCA section 5(a)(2) factors listed in Unit III. In the case of a determination other than not likely to present unreasonable risk, the applicable review period must also expire before manufacturing or processing for the new use may commence.
General provisions for SNURs appear in 40 CFR part 721, subpart A. These provisions describe persons subject to the rule, recordkeeping requirements, exemptions to reporting requirements, and applicability of the rule to uses occurring before the effective date of the rule. Provisions relating to user fees appear at 40 CFR part 700. Pursuant to 40 CFR 721.1(c), persons subject to these SNURs must comply with the same SNUN requirements and EPA regulatory procedures as submitters of PMNs under TSCA section 5(a)(1)(A) (15 U.S.C. 2604(a)(1)(A)). In particular, these requirements include the information submission requirements of TSCA sections 5(b) and 5(d)(1) (15 U.S.C. 2604(b) and 2604(d)(1)), the exemptions authorized by TSCA sections 5(h)(1), 5(h)(2), 5(h)(3), and 5(h)(5) and the regulations at 40 CFR part 720. Once EPA receives a SNUN, EPA must either determine that the use is not likely to present an unreasonable risk of injury under the conditions of use for the chemical substance or take such regulatory action as is associated with an alternative determination before the manufacture or processing for the significant new use can commence. If EPA determines that the use is not likely to present an unreasonable risk, EPA is required under TSCA section 5(g) to make public, and submit for publication in the
TSCA section 5(a)(2) states that EPA's determination that a use of a chemical substance is a significant new use must be made after consideration of all relevant factors, including:
• The projected volume of manufacturing and processing of a chemical substance.
• The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance.
• The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance.
• The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.
In determining what would constitute a significant new use for the chemical substances that are the subject of these SNURs, EPA considered relevant information about the toxicity of the chemical substances, and potential human exposures and environmental releases that may be associated with the conditions of use of the substances, in the context of the four bulleted TSCA section 5(a)(2) factors listed in this unit. During its review of these chemicals, EPA identified certain conditions of use that are not intended by the submitters, but reasonably foreseen to occur. EPA is proposing to designate those reasonably foreseen conditions of use as significant new uses.
EPA is proposing significant new use and recordkeeping requirements for chemical substances in 40 CFR part 721, subpart E. In this unit, EPA provides the following information for each chemical substance:
• PMN number.
• Chemical name (generic name, if the specific name is claimed as CBI).
• Chemical Abstracts Service (CAS) Registry number (if assigned for non-confidential chemical identities).
• Basis for the SNUR.
• Potentially Useful Information. This is information identified by EPA that would help characterize the potential health and/or environmental effects of the chemical substance in support of a request by the PMN submitter to modify the TSCA Order, or if a manufacturer or processor is considering submitting a SNUN for a significant new use designated by the SNUR.
• CFR citation assigned in the regulatory text section of these proposed rules.
The regulatory text section of these proposed rules specifies the activities designated as significant new uses. Certain new uses, including production volume limits and other uses designated in the proposed rules, may be claimed as CBI.
The chemical substances that are the subject of these proposed SNURs are undergoing premanufacture review. In addition to those conditions of use intended by the submitter, EPA has identified certain other reasonably foreseen conditions of use. EPA has preliminarily determined that the chemicals under their intended conditions of use are not likely to present an unreasonable risk. However, EPA has not assessed risks associated with the reasonably foreseen conditions of use for these chemicals. EPA is proposing to designate these reasonably foreseen and other potential conditions of use as significant new uses. As a result, before those conditions of use can occur, they must first go through a separate, subsequent EPA review and determination process associated with a SNUN.
The substances subject to these proposed rules are as follows:
• Use other than as an intermediate.
• Use of the PMN substance without a NIOSH-certified respirator with an assigned protection factor of at least 1000.
The proposed SNUR would designate as a “significant new use” these conditions of use.
• Use other than as described in the PMN.
• Manufacture or processing of the substance in a manner that results in inhalation exposure.
• Release of a manufacture, processing or use stream containing the PMN substance to water exceeding a surface water concentration of 7.3 ppb.
The proposed SNUR would designate as a “significant new use” these conditions of use.
• Use other than the confidential use described in the PMN.
• Manufacture or processing in a manner that results in inhalation exposure.
• Use in a consumer product that is spray applied.
The proposed SNUR would designate as a “significant new use” these conditions of use.
During review of the PMNs submitted for the chemical substances that are the subject of these proposed SNURs and as further discussed in Unit IV, EPA identified certain other reasonably foreseen conditions of use, in addition to those conditions of use intended by the submitter. EPA has preliminarily determined that these chemicals under the intended conditions of use are not likely to present an unreasonable risk. However, EPA has not assessed risks associated with the reasonably foreseen conditions of use. EPA is proposing to designate these reasonably foreseen and other potential conditions of use as significant new uses. As a result, before those conditions of use can occur, they must first go through a separate, subsequent EPA review and determination process associated with a SNUN.
EPA is proposing these SNURs because the Agency wants:
• To have an opportunity to review and evaluate data submitted in a SNUN before the notice submitter begins manufacturing or processing a listed chemical substance for the described significant new use.
• To be obligated to make a determination under TSCA section 5(a)(3) regarding the use described in the SNUN, under the conditions of use. The Agency will either determine under TSCA section 5(a)(3)(C) that the significant new use is not likely to present an unreasonable risk, including an unreasonable risk to a potentially exposed or susceptible subpopulation identified as relevant by the Administrator under the conditions of use, or make a determination under TSCA section 5(a)(3) (A) or (B) and take the required regulatory action associated with the determination, before manufacture or processing for the significant new use of the chemical substance can occur.
• To be able to complete its review and determination on each of the PMN substances, while deferring analysis on the significant new uses proposed in these rules unless and until the Agency receives a SNUN.
Issuance of a proposed SNUR for a chemical substance does not signify that the chemical substance is listed on the TSCA Inventory. Guidance on how to determine if a chemical substance is on the TSCA Inventory is available on the internet at
To establish a significant new use, EPA must determine that the use is not ongoing. The chemical substances subject to this proposed rule were undergoing premanufacture review at the time of signature of this proposed rule and were not on the TSCA Inventory. In cases where EPA has not received a notice of commencement (NOC) and the chemical substance has not been added to the TSCA Inventory, no person may commence such activities without first submitting a PMN. Therefore, for the chemical substances subject to these proposed SNURs, EPA concludes that the proposed significant new uses are not ongoing.
EPA designates April 2, 2020 as the cutoff date for determining whether the new use is ongoing. The objective of EPA's approach is to ensure that a person cannot defeat a SNUR by initiating a significant new use before the effective date of the final rule.
Persons who begin commercial manufacture or processing of the chemical substances for a significant new use identified on or after that date would have to cease any such activity upon the effective date of the final rule. To resume their activities, these persons would have to first comply with all applicable SNUR notification requirements and EPA would have to take action under TSCA section 5 allowing manufacture or processing to proceed. In developing this proposed rule, EPA has recognized that, given EPA's general practice of posting proposed rules on its website a week or more in advance of
EPA recognizes that TSCA section 5 does not require development of any particular new information (
In the absence of a rule, Order, or consent agreement under TSCA section 4 covering the chemical substance, persons are required only to submit information in their possession or control and to describe any other information known to or reasonably ascertainable by them (see 40 CFR 720.50). However, upon review of PMNs and SNUNs, the Agency has the authority to require appropriate testing. Unit IV. lists potentially useful information for all SNURs listed here. Descriptions are provided for informational purposes. The potentially useful information identified in Unit IV. will be useful to EPA's evaluation in the event that someone submits a SNUN for the significant new use. Companies who are considering submitting a SNUN are encouraged, but not required, to develop the information on the substance, which may assist with EPA's analysis of the SNUN.
EPA strongly encourages persons, before performing any testing, to consult with the Agency pertaining to protocol selection. Furthermore, pursuant to TSCA section 4(h), which pertains to reduction of testing in vertebrate animals, EPA encourages consultation with the Agency on the use of alternative test methods and strategies (also called New Approach Methodologies, or NAMs), if available, to generate the recommended test data. EPA encourages dialog with Agency representatives to help determine how best the submitter can meet both the data needs and the objective of TSCA section 4(h).
The potentially useful information described in Unit IV. may not be the only means of providing information to evaluate the chemical substance associated with the significant new uses. However, submitting a SNUN without any test data may increase the likelihood that EPA will take action under TSCA section 5(e) or 5(f). EPA recommends that potential SNUN submitters contact EPA early enough so that they will be able to conduct the appropriate tests.
SNUN submitters should be aware that EPA will be better able to evaluate SNUNs which provide detailed information on the following:
• Human exposure and environmental release that may result from the significant new use of the chemical substances.
According to 40 CFR 721.1(c), persons submitting a SNUN must comply with the same notification requirements and
EPA has evaluated the potential costs of establishing SNUN requirements for potential manufacturers and processors of the chemical substances subject to this proposed rule. EPA's complete economic analysis is available in the docket under docket ID number EPA-HQ-OPPT-2020-0138.
Additional information about these statutes and Executive Orders can be found at
This proposed rule would establish SNURs for 3 new chemical substances that were the subject of PMNs. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011).
According to the PRA, 44 U.S.C. 3501
The information collection requirements related to this action have already been approved by OMB pursuant to PRA under OMB control number 2070-0012 (EPA ICR No. 574). This action does not impose any burden requiring additional OMB approval. If an entity were to submit a SNUN to the Agency, the annual burden is estimated to average between 30 and 170 hours per response. This burden estimate includes the time needed to review instructions, search existing data sources, gather and maintain the data needed, and complete, review, and submit the required SNUN.
Send any comments about the accuracy of the burden estimate, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques, to the Director, Regulatory Support Division, Office of Mission Support (2822T), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001. Please remember to include the OMB control number in any correspondence, but do not submit any completed forms to this address.
Pursuant to section 605(b) of the RFA, 5 U.S.C. 601
Based on EPA's experience with proposing and finalizing SNURs, State, local, and Tribal governments have not been impacted by these rulemakings, and EPA does not have any reasons to believe that any State, local, or Tribal government will be impacted by this proposed rule. As such, EPA has determined that this proposed rule does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments subject to the requirements of UMRA sections 202, 203, 204, or 205 (2 U.S.C. 1531-1538
This action would not have a substantial direct effect on 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999).
This proposed rule would not have Tribal implications because it is not expected to have substantial direct effects on Indian Tribes. This proposed rule would not significantly nor uniquely affect the communities of Indian Tribal governments, nor does it involve or impose any requirements that affect Indian Tribes. Accordingly, the requirements of Executive Order 13175 (65 FR 67249, November 9, 2000), do not apply to this proposed rule.
This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because this is not an economically significant regulatory action as defined by Executive Order 12866, and this action does not address environmental health or safety risks disproportionately affecting children.
This proposed rule is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001), because this action is not expected to affect energy supply, distribution, or use and because this action is not a significant regulatory action under Executive Order 12866.
In addition, since this action does not involve any technical standards, NTTAA section 12(d), 15 U.S.C. 272 note, does not apply to this action.
This action does not entail special considerations of environmental justice related issues as delineated by Executive Order 12898 (59 FR 7629, February 16, 1994).
Environmental protection, Chemicals, Hazardous substances, Reporting and recordkeeping requirements.
Therefore, it is proposed that 40 CFR part 721 is amended as follows:
15 U.S.C. 2604, 2607, and 2625(c).
(a)
(2) The significant new uses are:
(i)
(ii)
(b)
(1)
(2)
(a)
(2) The significant new uses are:
(i)
(ii)
(b)
(1)
(2)
(3)
(a)
(2) The significant new uses are:
(i)
(ii) [Reserved]
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
This proposed rule would establish 2020 harvest specifications and management measures for Pacific whiting, shortbelly rockfish and cowcod taken in the U.S. exclusive economic zone off the coasts of Washington, Oregon and California consistent with the Magnuson-Stevens Fishery Conservation and Management Act, the Pacific Whiting Act of 2006, and other applicable laws. This rule proposes 2020 harvest specifications for Pacific whiting including the U.S. and coastwide Total Allowable Catch (TAC), the 2020 tribal allocation for the Pacific whiting fishery, allocations for three commercial whiting sectors, and set-asides for Pacific whiting research and incidental mortality in other fisheries. The proposed rule would also adjust the 2020 harvest specifications for shortbelly rockfish and cowcod. The proposed measures are intended to help prevent overfishing, achieve optimum yield, and ensure that management measures are based on the best scientific information available.
Comments on this proposed rule must be received no later than May 4, 2020.
You may submit comments on this document, identified by NOAA-NMFS-2020-0027 by any of the following methods:
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•
This proposed rule is accessible via the internet at the Office of the Federal Register website at
Stacey Miller, phone: 503-231-6290, and email:
This proposed rule includes actions for the Pacific whiting tribal and non-tribal fisheries, shortbelly rockfish and cowcod. These actions are combined into one proposed rule because they all relate to establishing catch limits and management measures for Pacific Coast groundfish stocks in 2020. This rule proposes determining the 2020 Pacific whiting coastwide TAC, and establishing the Pacific whiting U.S. TAC based on the coastwide TAC, tribal allocation, allocations for three commercial whiting sectors, and set-asides for research and incidental mortality of Pacific whiting as recommended by the Pacific Fishery Management Council (Council); increasing the 2020 annual catch limit (ACL) for shortbelly rockfish; and eliminating the 2020 annual catch target (ACT) and reducing the research set-aside for cowcod. The allocations for Pacific whiting would be effective until December 31, 2020. The adjusted catch limits for cowcod and shortbelly would supersede those put in place for 2020 through the 2019-2020 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures (83 FR 63970, December 12, 2018), and are being analyzed as part of the 2021-2022 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures, which are anticipated to be effective on January 1, 2021.
The transboundary stock of Pacific whiting is managed through the Agreement Between the Government of the United States of America and the Government of Canada on Pacific Hake/Whiting of 2003, Nov. 21, 2003, T.I.A.S. 08-625 (Agreement). The Agreement establishes bilateral bodies to implement its terms, including: The Joint Management Committee (JMC), which recommends the TAC for Pacific whiting; the Joint Technical Committee (JTC), which conducts the Pacific whiting stock assessment; the Scientific Review Group (SRG), which reviews the stock assessment; and the Advisory Panel (AP), which provides stakeholder input to the JMC.
The Agreement establishes a default harvest policy of F-40 percent, which means a fishing mortality rate that would reduce the spawning biomass, calculated on a per recruit basis, to 40 percent of what it would have been in absence of fishing mortality. The U.S. and Canada may choose a different fishing mortality rate if they determine that scientific evidence demonstrates that a different rate is necessary to sustain the offshore Pacific whiting resource. The Agreement also explicitly allocates 73.88 percent of the Pacific whiting TAC to the U.S. and 26.12 percent of the TAC to Canada.
Based on the advice from the Treaty's JTC, SRG, and AP, the Treaty specifies that the JMC shall recommend to the parties an overall Pacific whiting TAC by March 25th of each year. In years when the JMC does make a TAC recommendation to the parties, NMFS (under the delegation of authority from the Secretary of Commerce) approves the U.S. TAC with concurrence from the Department of State. The U.S. TAC is allocated into tribal and non-tribal sectors.
The 2020 JMC negotiations were held from March 11-13, 2020, via the internet, but did not result in a bilateral agreement on the coastwide TAC. Based on the most current information, the stock assessment estimates a TAC of 666,458 metric tons (mt) based on the default harvest policy. The final Canadian proposal was 390,000 mt and the final U.S. proposal was 555,000 mt for the adjusted coastwide TAC. The Agreement does not specify a procedure for when the JMC does not agree on a coastwide TAC. However, the 2006 Pacific Whiting Act (16 U.S.C. 7006(c)) identifies procedures for when the JMC does not recommend a final TAC. The Act states that NMFS (as delegated by the Secretary of Commerce) should establish the Pacific whiting TAC, taking into account recommendations from the JMC, JTC, SRG, AP, and Council. The Act requires NMFS to base the TAC decision on the best scientific information available, and use the default harvest rate unless scientific information indicates a different rate is necessary to sustain the Pacific whiting resource. The Act also requires NMFS to establish the U.S. share of the TAC based on the U.S./Canada percentage split and adjustments specified in the Agreement.
The JTC completed a stock assessment for Pacific whiting in February 2020 (available at
The Pacific whiting relative spawning stock is estimated to be 1.196 million mt, or 65 percent of unfished levels at the start of 2020. The estimated biomass has declined since 2017, during a time of record catches and as the very large 2010 year class ages and mortality surpasses increased production. Projections show that even in the absence of fishing, the stock is expected to decline from 65 percent to 62 percent of unfished biomass.
The stock is considered healthy, and the joint probability that the relative spawning stock biomass is both below 40 percent of unfished level and that fishing mortality is above the relative fishing intensity of the Agreement's F-40 percent default harvest rate is estimated to be 4.3 percent.
NMFS considered information and recommendations from the Treaty's JMC, JTC, SRG, AP, and the Council. The stock assessment from the JTC and the SRG peer review are the best scientific information available for determining the coastwide Pacific whiting TAC. NMFS heard testimony from the AP and JMC at the March 2020 meeting. The Council discussed Pacific whiting during its April 2020 meeting and did not make any specific recommendations regarding the 2020 Pacific whiting TAC.
NMFS initially considered setting the TAC resulting from the default harvest rate (666,458 mt) and all of the potential adjusted coastwide TACs discussed during the AP and JMC March 2020 meeting. This includes the U.S. initial (597,500 mt) and final positions (555,000 mt), and the Canadian initial (300,000 mt) and final positions (390,000 mt). However, because Canada's proposed TACs are well below the TACs that support a sustainable whiting resource according to the stock assessment and would have negative economic impact on the U.S. fleet with little economic impact on Canada's fleet, we excluded them from further consideration.
NMFS therefore evaluated coastwide TACs ranging from 555,000 mt to 666,458 mt in developing our proposed coastwide TAC of 575,000 mt. The stock assessment supports that most of the TACs within this range would provide adequate opportunity for both Canadian and U.S. fleets, while sustainably managing the Pacific whiting resource.
The Act directs NMFS to use the default harvest rate set out in the Agreement unless NMFS determines that a different rate is necessary to sustain the offshore whiting resource. The Agreement specifies a default harvest rate of “F-40 percent” which is the fishing mortality rate that would reduce the relative spawning stock biomass, calculated on a per recruit basis (a measure of stock reproductive potential) to 40 percent of what it would have been in the absence of fishing mortality. Although there is not a default biomass level, the JMC, since implementation of the Agreement, has focused on choosing a TAC designed to prevent the relative spawning stock biomass from falling below 40 percent of what it would have been in the absence of fishing mortality, often called B40. NMFS will follow the same practice of choosing a TAC designed to prevent the relative spawning stock biomass from falling below this biomass level.
To determine the impact of a specific TAC on relative spawning stock biomass, we applied an estimate of the Pacific whiting fleet's utilization rate, the proportion of the TAC removed through fishing effort, to the range of TACs we considered. Over the last ten years, neither the U.S. nor the Canadian fleets have ever caught the entire TAC. The 10-year (2010-2019) average utilization rate is 71.3 percent of the coastwide TAC. The five-year average utilization rate from 2010-2014 is higher (78.1 percent) than the ten-year average, while the 5-year average utilization rate from 2015-2019 is lower (64.5 percent). These averages provide a realistic range for projecting the utilization rates in 2020 and 2021.
The stock assessment indicates that applying any of the estimated average utilization rates to the range of coastwide TACs we considered results in relative spawning stock biomass levels above B40 percent after one fishing year (49-53 percent relative spawning stock biomass). When applying these coastwide TACs for 2 years, a TAC of 666,458 mt with the higher utilization rates at 71 percent or higher results in relative spawning stock biomass levels below B40 percent (37 and 39 percent). Using the same approach, a coastwide TAC of 597,500 mt and the highest utilization rate (78.08 percent) would also result in the relative spawning stock biomass level to fall below B40 percent by the beginning
Using the same approach as described above, TACs of 575,000 mt and 555,000 mt combined with the highest utilization rate being considered, result in a projected harvest of 448,960 mt and 433,344 mt, respectively. The stock assessment indicates that these levels of harvest in 2020 would result in an estimated relative spawning stock biomass of 51 percent at the beginning of 2021, which is well above the B40 percent level, and an estimated relative spawning stock biomass of 40—41 percent at the beginning of 2022.
Overall, the stock assessment indicates that the relative spawning stock biomass of Pacific whiting has a high probability of being lower at the beginning of 2021 than 2020, ranging from an 81 percent probability with no harvest to a 97 percent probability at the default harvest rate. Although a decline is probable even in the absence of fishing pressure, the decline is relatively modest and does not threaten the sustainability of the resource. At the actual harvest rates under consideration the stock assessment indicates there is less than 33 percent chance of relative spawning stock biomass falling below B40 percent in 1 year, a less than 10 percent probability of falling below B25 percent, and essentially no chance of falling below B10 percent after 1 year.
Continuing these harvest levels into a second year does have an increased chance of relative spawning stock biomass falling below B40 percent. Two years of actual harvests above approximately 460,000 mt result in a greater than 50 percent probability of falling below B40 percent, a 20 percent probability of falling below B25 percent, and a 4 percent probability of falling below B10 percent. The best scientific information available indicates that reduction from last year's coastwide TAC (597,500 mt), and deviation from the Act's default harvest rate, would support the long-term sustainability of the stock.
The Pacific whiting fishery is the highest volume fishery on the West Coast of the United States, providing hundreds of jobs. In 2019, total revenue was estimated to be $29 million in the non-tribal shoreside sector and $35 million in the at-sea whiting sector. The total non-tribal ex-vessel revenue in 2019 is estimated to have been about $64 million. This is higher than the 2015-2019 inflation-adjusted average of approximately $54 million. Maintaining access to the Pacific whiting resource is important for both direct fishery participants and West Coast fishing communities.
The starting and ending proposals from Canada, 300,000 mt and 390,000 mt, represent a 49 percent and 35 percent reduction from the 2019 TAC, respectively. Reductions of this magnitude would have negative economic impact on U.S. coastal communities. Canada's proposed TACs reflect their concern with the declining Pacific whiting biomass as the 2010 year class ages, as well as uncertainty of the recent recruitment strength since the stock assessment is not able to predict cohort strength until they are detected by the acoustic survey and fishery. However, the stock assessment indicates that the higher TACs proposed by the U.S. continue to provide a sustainable Pacific whiting resource and result in the relative spawning stock biomass levels above B40 percent after 1 year, and at or above B40 percent after 2 years of fishing. Because of these factors, NMFS has preliminarily determined that a large reduction is not appropriate but supports a measured reduction from last year's TAC.
The Act requires NMFS to make the necessary adjustments to the TAC specified in the Agreement (Paragraph 5 of Article II). The Agreement (Paragraph 5 of Article II) requires adjustments to the coastwide TAC to account for overages if either U.S. or Canadian catch in the previous year exceeded its individual TAC, or carryovers, if U.S. or Canadian catch was less than its individual TAC in the previous year. Both the U.S. and Canada harvested less than their individual TACs in 2019, and therefore carryover is applied to the 2020 individual TACs.
Taking into account the percentage shares for each country (26.12 percent for Canada and 73.88 percent for the U.S.) and the adjustments for uncaught fish, as required by the Act, we recommend a final adjusted coastwide TAC of 575,000 mt, with a final adjusted TAC for Canada of 150,190 mt (129,822 mt + 20,367 mt carryover adjustment), and a final adjusted TAC for the US of 424,810 mt (367,202 mt + 57,608 mt carryover adjustment). This recommendation is consistent with the best available scientific information, provisions of the Agreement, and the Whiting Act.
The regulations at 50 CFR 660.50(d) identify the procedures for implementing the treaty rights that Pacific Coast treaty Indian tribes have to harvest groundfish in their usual and accustomed fishing areas in U.S. waters. Tribes with treaty fishing rights in the area covered by the Pacific Coast Groundfish FMP request allocations, set-asides, or regulations specific to the tribes during the Council's biennial harvest specifications and management measures process. The regulations state that the Secretary will develop tribal allocations and regulations in consultation with the affected tribe(s) and, insofar as possible, with tribal consensus.
NMFS allocates a portion of the U.S. TAC of Pacific whiting to the tribal fishery, following the process established in 50 CFR 660.50(d). The tribal allocation is subtracted from the U.S. Pacific whiting TAC before allocation to the non-tribal sectors.
Four Washington coastal treaty Indian tribes including the Makah Indian Tribe, Quileute Indian Tribe, Quinault Indian Nation, and the Hoh Indian Tribe (collectively, the “Treaty Tribes”), can participate in the tribal Pacific whiting fishery. Tribal allocations of Pacific whiting have been based on discussions with the Treaty Tribes regarding their intent for those fishing years. The Hoh Tribe has not expressed an interest in participating in the Pacific whiting fishery to date. The Quileute Tribe and Quinault Indian Nation have expressed interest in beginning to participate in the Pacific whiting fishery at a future date. To date, only the Makah Tribe has prosecuted a tribal fishery for Pacific whiting, and has harvested Pacific whiting since 1996 using midwater trawl gear. Table 1 below provides a recent history of U.S. TACs and annual tribal allocation in mt.
In 2009, NMFS, the states of Washington and Oregon, and the Treaty Tribes started a process to determine the long-term tribal allocation for Pacific whiting. However, these groups have not yet determined a long-term allocation. In order to ensure Treaty Tribes continue to receive allocations, this rule proposes the 2020 tribal allocation of Pacific whiting. This allocation is not intended to set precedent for future allocations.
In exchanges between NMFS and the Treaty Tribes during November and December 2019, the Makah Tribe indicated their intent to participate in the tribal Pacific whiting fishery in 2020 and requested 17.5 percent of the U.S. TAC. The Quinault Indian Nation and Quileute Indian Tribe both informed NMFS in December 2019 that they will not participate in the 2020 fishery. The Hoh Indian Tribe has, in previous years, indicated in conversations with NMFS that they have no plans to fish for whiting in the foreseeable future and will contact NMFS if that changes. NMFS will contact the Tribes during the proposed rule comment period to refine the 2020 allocation before allocating the final U.S. TAC between the tribal and non-tribal whiting fisheries. NMFS proposes a tribal allocation that accommodates the Makah Tribe's request of 17.5 percent of the U.S. TAC. The proposed 2020 U.S.TAC is 424,810 mt, and therefore the proposed 2020 tribal allocation is 74,342 mt. NMFS has determined that the current scientific information regarding the distribution and abundance of the coastal Pacific whiting stock indicates the 17.5 percent is within the range of the tribal treaty right to Pacific whiting.
The U.S. non-tribal whiting fishery is managed under the Council's Pacific Coast Groundfish FMP. Each year, the Council recommends the amount of Pacific whiting to accommodate incidental mortality of Pacific whiting in research activities and non-groundfish fisheries based on estimates of scientific research catch and estimated bycatch mortality in non-groundfish fisheries. At its November 2019 meeting, the Council recommended an incidental mortality set-aside of 1,500 mt for 2020. This is consistent with the amount set-aside for research and incidental mortality each year since 2014. This rule proposes the Council's recommendations.
In addition to the tribal allocation, this proposed rule establishes the fishery harvest guideline (HG), called the non-tribal allocation. The proposed 2020 fishery HG for Pacific whiting is 348,968 mt. This amount was determined by deducting the 74,342 mt tribal allocation and the 1,500 mt allocation for scientific research catch and fishing mortality in non-groundfish fisheries from the total U.S. TAC of 424,810 mt. The Council recommends the research and bycatch set-aside on an annual basis, based on estimates of scientific research catch and estimated bycatch mortality in non-groundfish fisheries. The regulations further allocate the fishery HG among the three non-tribal sectors of the Pacific whiting fishery: The catcher/processor (C/P) Coop Program, the Mothership (MS) Coop Program, and the Shorebased Individual Fishing Quota (IFQ) Program. The C/P Coop Program is allocated 34 percent (118,649 mt for 2020), the MS Coop Program is allocated 24 percent (83,752 mt for 2020), and the Shorebased IFQ Program is allocated 42 percent (146,567 mt for 2020). The fishery south of 42° N lat. may not take more than 7,328 mt (5 percent of the Shorebased IFQ Program allocation) prior to May 15, the start of the primary Pacific whiting season north of 42° N lat.
The environmental assessment for the 2019-2020 harvest specifications rule (see Electronic Access) analyzed a range of TAC alternatives for 2020, and the final 2020 TAC falls within this analyzed range. In addition, via the 2019-2020 harvest specifications rulemaking process, the public had an opportunity to comment on the 2019-2020 TACs for whiting, just as they did for all species in the groundfish FMP. NMFS follows this process because, unlike for all other groundfish species, the TAC for whiting is decided in a highly abbreviated annual process from February through April of every year, and the normal rulemaking process would not allow for the fishery to open with the new TAC on the annual season opening date of May 15.
Shortbelly rockfish and cowcod south of 40°10′ N latitude are managed under the Pacific Coast Groundfish FMP. The FMP requires that the Council set harvest specifications and management measures for groundfish at least biennially. NMFS established 2019 and 2020 harvest specifications including overfishing limits (OFLs), allowable biological catches (ABCs), ACLs and management measures such as annual catch targets (ACTs) for groundfish stocks in December 2018 (83 FR 63970, December 12, 2018). In June 2019, the Council and NMFS received public comment from affected stakeholders that low catch limits for two stocks, cowcod south of 40°10′ N latitude and shortbelly rockfish, were preventing vessels from harvesting co-occurring healthy fish stocks because of increased bycatch levels. The Council held meetings in September and November 2019 to identify a range of alternatives for each stock and select final preferred alternatives to recommend for implementation. This proposed rule is based on the Council's final recommendations made at its November 2019 meeting. The Council deemed the proposed regulations consistent with and necessary to implement the proposed actions in a March 19, 2020 letter. The Analysis identifies the preferred alternatives and other decision points and is posted on the NMFS West Coast Region web page (see
The Council and NMFS consider the proposed actions consistent with provisions in the Pacific Coast Groundfish FMP, which allows changes to the harvest specifications and adjustments to management measures on a schedule other than the typical
This rule proposes to implement the Council recommendation from its November 2019 meeting, to increase the 2020 ACL for shortbelly rockfish to 3,000 mt. The remaining shortbelly rockfish catch limits for 2020, including the OFL and ABC, are unchanged from those implemented in the 2019-2020 Pacific Coast Groundfish Biennial Harvest Specifications (83 FR 63970, December 12, 2018). The proposed changes are summarized in Table 3 below.
Shortbelly rockfish (
Historically, shortbelly rockfish was most abundant off central California from Monterey Bay to Point Reyes, common in southern California, and only rarely encountered north of Cape Mendocino, California. In recent years, shortbelly rockfish distribution has extended north of Cape Mendocino, California and into Oregon and Washington waters, the principal fishing areas the midwater trawl fishery operates in to harvest Pacific whiting. While shortbelly rockfish bycatch was historically low in the Pacific whiting fishery, the recent shift in distribution and a likely increase in abundance, is resulting in increased bycatch of shortbelly rockfish in the Pacific whiting midwater trawl fishery.
Shortbelly rockfish was last assessed in 2007. The assessment, available on the Council's website at
In addition to examining NMFS survey data for trends in shortbelly rockfish biomass and distribution, the Analysis describes that forage species other than shortbelly rockfish (specifically northern anchovy) were unusually abundant, and that there was higher than average production of several marine predators in 2018-19.
Shortbelly rockfish is not targeted by west coast fisheries. Given its importance as a forage species, the Council considered classifying shortbelly rockfish as an ecosystem component species in the 2013-14 biennial management cycle following the revision of National Standard 1 guidelines. The Council decided to retain shortbelly rockfish as a stock actively managed in the fishery in the Pacific Coast Groundfish FMP, which requires that the Council set an OFL, ABC, and ACL for this stock as part of the biennial harvest specifications process. The shortbelly rockfish default harvest control rule is used to set the ACL each biennial cycle. The current default harvest control rule is a constant catch value intended to accommodate observed bycatch levels, discourage targeting, and continue to protect the availability of shortbelly rockfish as a forage species. The Council recommended a low ACL of 50 mt in 2011-2012 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures (76 FR 27508, May 11, 2011) to discourage development of any targeted fishery, and accommodate incidental bycatch of shortbelly rockfish, while allowing the remaining harvestable surplus of the stock to be available as forage fish in the ecosystem. The ACL was increased from 50 to 500 mt in the 2015-2016 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures (80 FR 12567, March 10, 2015) to accommodate a potential increase in bycatch as a midwater rockfish fishery re-emerged following the rebuilding of widow rockfish.
Shortbelly rockfish catch remained low and well below the ACL of 500 mt until 2017 when it increased from 30 mt to 320 mt. The Analysis describes annual catch of shortbelly rockfish. High bycatch of shortbelly rockfish in the whiting sectors resulted in the fishery exceeding the ACLs in 2018 (508 mt) and 2019 (approximately 655 mt).
In the absence of this proposed rule to increase the 2020 shortbelly rockfish ACL, a future shortbelly rockfish overage could result in early closure of the Pacific whiting and non-whiting midwater trawl fisheries, which could have negative economic consequences for vessels, processors, and communities. The magnitude of economic losses due to early fishery closure from attaining the shortbelly rockfish ACL is difficult to project and is dependent on which fisheries would close and when they would close. The Analysis describes impacts of potential closures of the midwater trawl fisheries targeting whiting and pelagic rockfish
This action proposes changes to the shortbelly ACL are consistent with Section 5.5.1 of the Pacific Coast Groundfish FMP, which states:
“. . .OFLs, ABCs, ACLs, OYs, ACTs, HGs, and quotas may only be modified in cases where a harvest specification announced at the beginning of the biennial fishing period is found to have resulted from incorrect data or from computational errors. If the Council finds that such an error has occurred, it may recommend the Secretary publish a notice in the
The 2018 West Coast Groundfish Observer Program data and estimates of shortbelly rockfish bycatch were not available when setting the 2019 and 2020 harvest specifications and this new information compels this consideration.
Increasing the shortbelly rockfish ACL to 3,000 mt for the final half of the 2020 fishing year would accommodate incidental bycatch of the shortbelly rockfish stock given recent high bycatch in groundfish trawl fisheries, while continuing to minimize bycatch, discourage development of a targeted fishery for shortbelly rockfish, and continuing to protect the availability of shortbelly rockfish as important forage in the California Current Ecosystem.
The increase of the 2020 ACL is not anticipated to induce targeting of shortbelly. Industry has indicated that shortbelly rockfish is not currently marketable and does not expect it to become so in the near future. The low ex-vessel price of $0.01-$0.03 per pound in recent years supports industry reports that the fish is primarily used as fishmeal or discarded at-sea. The median West Coast limited entry trawl permitted vessel has variable operating costs of $0.46 per pound, according to the most recent Economic Data Collection Report, and is unlikely to pursue a targeting strategy for such a low value species, as the revenues would be less than typical operating costs. Industry also provided testimony that they avoid catching shortbelly rockfish because the spines of shortbelly rockfish degrade Pacific whiting quality as they are impinged in the codend.
The proposed rule continues to protect the availability of shortbelly rockfish as important forage in the California Current Ecosystem. Scientific information currently available provides evidence of above average forage conditions in the California Current Ecosystem with higher abundances of forage species such as anchovy and a high overall shortbelly rockfish population in 2018-2019. Further, the higher ACL under the proposed rule is well below the shortbelly rockfish OFL of 6,950 mt, and ABC of 5,789 mt.
The proposed rule is an accountability measure that addresses the operational issue of a low ACL that resulted in ACL overages in 2018 and 2019. National Standard 1 Guidelines state: ”On an annual basis, the Council must determine as soon as possible after the fishing year if an ACL was exceeded. If an ACL was exceeded, AMs must be implemented as soon as possible to correct the operational issue that caused the ACL overage, as well as any biological consequences to the stock or stock complex resulting from the overage when it is known.”
The proposed increase would improve the performance and effectiveness of the ACL by increasing the ACL to better correspond with recent trends in shortbelly rockfish abundance and bycatch rates in the groundfish fishery. This would reduce the risk of an ACL overage in 2020, which would potentially close midwater trawl fisheries and cause adverse economic impacts to West Coast fishing communities while continuing to protect the availability of shortbelly rockfish as important forage in the California Current Ecosystem.
This proposed rule would remove the cowcod ACT of 6 mt and reduce the research catch set-aside to 1 mt for cowcod south of 40°10′ N. latitude in 2020. The ACL would remain at 10 mt. The 2020 cowcod annual vessel limit would increase from 858 pounds (.4 mt) to 1,264 pounds (.6 mt) for affected participants in the limited entry trawl fishery south of 40°10′ N. latitude. The proposed changes are summarized in Table 4 below. This action would reduce the risk that vessels in the trawl IFQ program reach their annual vessel limit for cowcod in 2020 and have to cease fishing in the trawl IFQ program for the remainder of the year.
Updated information on cowcod research conducted by the Northwest Fisheries Science Center and other entities indicates that a lower set-aside will accommodate planned research activities without a risk of exceeding the ACL.
Cowcod south of 40°10′ N latitude was declared overfished in January 2000. In 2001, NMFS closed most of their habitat in the Southern California Bight (SCB) south of Point Conception at 34°27′ N latitude to bottom fishing. The Council adopted and NMFS implemented a rebuilding plan for the
Harvest specifications and management measures for cowcod in the 2019-20 biennial management period were based on the 2013 rebuilding analysis and consistent with the rebuilding plan provisions. Cowcod stock assessments and rebuilding analyses are available on the Council's website at
The 2020 cowcod harvest specifications and management measures were established as part of the 2019-2020 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures (83 FR 63970, December 12, 2018). The Stock Assessment and Fishery Evaluation (SAFE) document posted on the Council's website at
The Southwest Fisheries Science Center completed a new stock assessment for cowcod in 2019 and the spawning stock depletion at the start of 2019 is at 57 percent of unfished levels, which is above the 40 percent target. The 2019 stock assessment is available on the Council's website at
To keep mortality of the stocks managed under the Pacific Coast Groundfish FMP within the ACLs, the Council also recommends management measures. Pacific Coast Groundfish FMP Section 6.2D describes the process for modifying management measures, which includes a two Council meeting process and a regulatory amendment. Management measures are intended to rebuild overfished stocks, prevent catch from exceeding the ACLs, and allow for the harvest of healthy stocks. The 2019-2020 Pacific Coast Groundfish Biennial Harvest Specifications and Management Measures established an ACT of 6 mt for both 2019 and 2020 to address the uncertainty in research impacts and ensure total mortality is within the ACL. The ACT functions as a fishery harvest guideline and is the amount allocated across groundfish trawl and non-trawl fisheries. The current specifications allocated 2 mt of cowcod for research. Updated information on cowcod research is now available and indicates that a lower set-aside of 1 mt would accommodate planned research activities. Over the past several years, cowcod harvest has consistently been far below the ACL and ACT.
The Pacific Coast Groundfish Trawl Catch Share Program (75 FR 60868, October 1, 2010 and 75 FR 78343, December 15, 2010) issued IFQ to limited entry trawl participants. In addition to IFQ, the program established annual vessel limits for IFQ species to prevent any one entity from having excessive control of a stock during a fishing year. The 2020 cowcod annual vessel limit of 858 pounds (389.182 kg) is based on an apportionment (17.7 percent) of the trawl allocation of the 6 mt ACT (Table 3).
The low overall catch limits of cowcod have prevented the Shorebased IFQ bottom trawlers from accessing healthy co-occurring groundfish stocks and in some years have resulted in vessels ending their fishing season early. Although the cowcod stock is now rebuilt, the timing of the biennial groundfish specification cycle means that the fleet would not benefit from less restrictive cowcod catch limits until 2021. This proposed action would reduce the risk that vessels fishing south of 40°10′ N lat. in the groundfish trawl IFQ program would reach their annual vessel limit for cowcod in 2020 and have to cease fishing in the trawl IFQ program for the remainder of the year, which would result in severe adverse economic impacts for those vessels and the fishing communities reliant on the trawl fishery south of 40°10′ N lat.
This proposed rule would be implemented under the statutory and regulatory authority of section 304(b) and 305(d) of the Magnuson-Stevens Act, and the Pacific Whiting Act of 2006. With this proposed rule, NMFS, acting on behalf of the Secretary, would ensure that the FMP is implemented in a manner consistent with treaty rights of four Treaty Tribes to fish in their “usual and accustomed grounds and stations” in common with non-tribal citizens.
NMFS notes that the public comment period for this proposed rule is 15 days. As a result of the requirements to amend reallocation provisions and announce Pacific whiting harvest guidelines by the Pacific whiting season start date, May 15th, NMFS has determined that a 15-day comment period best balances the interest in allowing the public adequate time to comment on the proposed measures while implementing the management measures and announcing the Pacific whiting allocations.
Pursuant to section 304 (b)(1)(A) and 305 (d) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the Pacific Coast Groundfish FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment. In making its final determination, NMFS will take into account the complete record, including the data, views, and comments received during the comment period.
Pursuant to Executive Order 13175, this proposed rule was developed after meaningful consultation and collaboration with tribal officials from the area covered by the Pacific Coast Groundfish FMP. Under the Magnuson-Stevens Act at 16 U.S.C. 1852(b)(5), one of the voting members of the Pacific Council must be a representative of an Indian tribe with federally recognized fishing rights from the area of the Council's jurisdiction. In addition, regulations implementing the Pacific Coast Groundfish FMP establish a procedure by which the tribes with treaty fishing rights in the area covered by the Pacific Coast Groundfish FMP request new allocations or regulations specific to the tribes, in writing, before the first of the two meetings at which
The Office of Management and Budget has determined that this proposed rule is not significant for purposes of Executive Order 12866. This proposed rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.
The Council and NMFS prepared an Integrated Analysis for the shortbelly rockfish and cowcod actions, which address the statutory requirements of the Magnuson-Stevens Act, the National Environmental Policy Act, Presidential Executive Order 12866, and the Regulatory Flexibility Act. As part of this Analysis, an environmental assessment (EA) was prepared that describes the impact on the human environment that would result from implementation of the proposed shortbelly rockfish action. The full suite of alternatives analyzed by the Council can be found on the Council's website at
Initial Regulatory Flexibility Analyses (IRFA) were prepared for this action, as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action is contained in the
Under the RFA, the term “small entities” includes small businesses, small organizations, and small governmental jurisdictions. The Small Business Administration has established size criteria for entities involved in the fishing industry that qualify as small businesses. A business involved in fish harvesting is a small business if it is independently owned and operated and not dominant in its field of operation (including its affiliates) and if it has combined annual receipts, not in excess of $11 million for all its affiliated operations worldwide (see 80 FR 81194, December 29, 2015). A wholesale business servicing the fishing industry is a small business if it employs 100 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. A seafood processor is a small business if it is independently owned and operated, not dominant in its field of operation, and employs 750 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. For purposes of rulemaking, NMFS is also applying the seafood processor standard to catcher processors because Pacific whiting Catcher-Processors (C/Ps) earn the majority of the revenue from processed seafood product.
This proposed rule would affect how Pacific whiting is allocated to the following sectors/programs: Tribal, Shorebased IFQ Program Trawl Fishery, MS Coop Program Whiting At-sea Trawl Fishery, and C/P Coop Program Whiting At-sea Trawl Fishery. The amount of Pacific whiting allocated to these sectors is based on the U.S. TAC. We expect one tribal entity to fish for Pacific whiting in 2020. Tribes are not considered small entities for the purposes of RFA. Impacts to tribes are nevertheless considered in this analysis. As of January 2020, the Shorebased IFQ Program is composed of 167 Quota Share permits/accounts (134 of which were allocated whiting quota pounds), and 41 first receivers, two of which are designated as whiting-only receivers and 15 that may receive both whiting and non-whiting. These regulations also directly affect participants in the MS Co-op Program, a general term to describe the limited access program that applies to eligible harvesters and processors in the MS sector of the Pacific whiting at-sea trawl fishery. This program currently consists of six MS processor permits, and a catcher vessel fleet currently composed of a single co-op, with 34 Mothership/Catcher Vessel (MS/CV) endorsed permits (with three permits each having two catch history assignments). These regulations also directly affect the C/P Co-op Program, composed of 10 C/P endorsed permits owned by three companies that have formed a single coop. These co-ops are considered large entities from several perspectives; they have participants that are large entities, and have in total more than 750 employees worldwide including affiliates. Although there are three non-tribal sectors, many companies participate in two sectors and some participate in all three sectors. As part of the permit application processes for the non-tribal fisheries, based on a review of the Small Business Administration size criteria, permit applicants are asked if they considered themselves a “small” business, and they are asked to provide detailed ownership information. Data on employment worldwide, including affiliates, are not available for these companies, which generally operate in Alaska as well as the West Coast and may have operations in other countries as well. NMFS has limited entry permit holders self-report size status. For 2020, all 10 CP permits reported they are not small businesses, as did 8 mothership catcher vessels. There is substantial, but not complete overlap between permit ownership and vessel ownership so there may be a small number of additional small entity vessel owners who will be impacted by this rule. After accounting for cross participation, multiple QS account holders, and affiliation through ownership, NMFS estimates that there are 106 non-tribal entities directly affected by these proposed regulations, 85 of which are considered “small” businesses.
This rule will allocate Pacific whiting between tribal and non-tribal harvesters (a mixture of small and large businesses). Tribal fisheries consist of a mixture of fishing activities that are similar to the activities that non-tribal fisheries undertake. Tribal harvests may be delivered to both shoreside plants and motherships for processing. These processing facilities also process fish harvested by non-tribal fisheries. The effect of the tribal allocation on non-tribal fisheries will depend on the level of tribal harvests relative to their allocation and the reapportionment process. If the tribes do not harvest their entire allocation, there are opportunities during the year to reapportion unharvested tribal amounts to the non-tribal fleets. For example, in 2019 NMFS reapportioned 40,000 mt of the original 77,251 mt tribal allocation. This reapportionment was based on conversations with the tribes and the best information available at the time, which indicated that this amount would not limit tribal harvest opportunities for the remainder of the year. The reapportioning process allows unharvested tribal allocations of Pacific whiting to be fished by the non-tribal fleets, benefitting both large and small entities. The revised Pacific whiting allocations for 2019 following the reapportionment were: Tribal 37,251 mt, C/P Co-op 136,912 mt; MS Co-op 96,644 mt; and Shorebased IFQ Program 169,126 mt.
The prices for Pacific whiting are largely determined by the world market because most of the Pacific whiting harvested in the U.S. is exported. The U.S. Pacific whiting TAC is highly variable, as have subsequent harvests and ex-vessel revenues. For the years 2015 to 2019, the total Pacific whiting fishery (tribal and non-tribal) averaged harvests of approximately 281,205 mt annually. The 2019 U.S. non-tribal fishery had a catch of approximately 312,500 mt, and the tribal fishery landed approximately 4,000 mt.
Impacts to Makah catcher vessels who elect to participate in the tribal fishery are measured with an estimate of ex-vessel revenue. In lieu of more complete information on tribal deliveries, total ex-vessel revenue is estimated with the 2019 average shoreside ex-vessel price of Pacific whiting, which was $200 per mt. At that price, the proposed 2020 tribal allocation of 74,342 mt would have an ex-vessel value of $14.9 million.
The proposed rule would primarily affect limited entry trawl vessels, especially midwater trawl vessels targeting Pacific whiting and semi-pelagic rockfish (
The proposed rule would directly impact two groups: Quota share owners of cowcod south of 40°10′ N latitude and catcher vessel owners who operate vessels south of 40°10′ N latitude and have the potential to encounter cowcod. There are 62 entities that own 2020 cowcod quota and 7 vessels that caught cowcod south of 40°10′ N. latitude in 2019 that would be impacted by this rule. The preferred cowcod alternative would have neutral to positive impacts for limited entry trawl participants who own quota for this species and/or fish south of 40°10′ N latitude. Quota owners that are able to sell increased quota amounts may benefit. Most IFQ vessels do not operate south of 40°10′ N latitude and would experience no impacts from the preferred alternative.
NMFS considered two alternatives for the Pacific whiting action: The “No Action” and the “Proposed Action.” NMFS considered a range of alternatives for the Pacific whiting coastwide TAC. A coastwide TAC of 555,000 mt has greater economic impacts for 2020 than what is proposed is this rule (a coastwide TAC of 575,000 mt). Higher coastwide TACs considered in the range (597,500 mt and 666,480 mt) would have less economic impact for 2020. However, 2020 assessment projections indicate these higher catch levels may result in near-term stock biomass declines below target levels. This is contrary to the Whiting Act and Agreement, which requires sustainable management of the Pacific whiting resource.
NMFS did not consider a broader range of alternatives to the proposed tribal allocation. The tribal allocation is based primarily on the requests of the tribes. These requests reflect the level of participation in the fishery that will allow them to exercise their treaty right to fish for Pacific whiting. Under the Proposed Action alternative, NMFS proposes to set the tribal allocation percentage at 17.5 percent, as requested by the Tribes. This would yield a tribal allocation of 74,342 mt for 2020. Consideration of a percentage lower than the tribal request of 17.5 percent is not appropriate in this instance. As a matter of policy, NMFS has historically supported the harvest levels requested by the Tribes. Based on the information available to NMFS, the tribal request is within their tribal treaty rights. A higher percentage would arguably also be within the scope of the treaty right. However, a higher percentage would unnecessarily limit the non-tribal fishery.
Under the no action alternative, NMFS would not set a coastwide TAC or make an allocation to the tribal sector. This alternative was considered, but the Act requires the U.S. to establish TACs to sustainably manage the Pacific whiting resource. The regulatory framework provides for a tribal allocation on an annual basis only. Therefore, the no action alternative would result in no allocation of Pacific whiting to the tribal sector in 2020, which would be inconsistent with NMFS' responsibility to manage the fishery consistent with the tribes' treaty rights. Given that there is a tribal request for allocation in 2020, this alternative received no further consideration.
The Council and NMFS considered three alternatives for shortbelly rockfish: No action, specifying a 2020 ACL of 3,000 mt and specifying a 2020 ACL of 4,184 mt. Under the no action alternative, NMFS would not change the 2020 ACL for shortbelly rockfish. This no action alternative has the highest risk of an early fishery closure and lost revenue for Pacific whiting and LE non-whiting midwater trawl fisheries and communities. The range of predicted impacts in terms of foregone income is $4.6 million to $175.2 million depending on whether there is a late season closure in December or an earlier closure in June.
The proposed measure for shortbelly rockfish would reduce the risk of an early closure for midwater trawl fisheries due to the possibility of high bycatch of shortbelly rockfish in 2020, and avoid the adverse economic impacts to West Coast fishing communities that would result from such closures or constraints. The proposed measure to establish the 2020 ACL at 3,000 mt rather than the alternative of 4,184 mt,
The Council and NMFS considered no action and alternatives to provide relief on limited entry trawl participants fishing south of 40°10′ N latitude, including removing the ACT and adjustments to the research set-aside amounts. Under the no action alternative, NMFS would not change the ACT or research set-aside amounts. This no action alternative would result in potential loss of revenue if vessels reach their cowcod individual vessel limit and are required to cease fishing for the remainder of the year.
The proposed measure for cowcod would eliminate the 2020 ACT of 6 mt for cowcod south of 40°10′ N latitude and reduce the research set-aside amount to 1 mt. The annual vessel limit for cowcod would increase from 858 lbs (.4 mt) to 1,264 lbs (.6 mt). This alternative meets the stated purpose and need to reduce the risk that IFQ vessels south of 40°10′ N latitude will reach their individual vessel limits of cowcod in 2020 and have to cease fishing in the IFQ fishery for the remainder of the year, which would result in adverse economic impacts on those vessels and fishing communities in the area. The Council considered an alternative to remove the ACT of 6 mt and reduce the research set-aside to 0.5 mt. This alternative may have resulted in a lesser economic impact on vessels and fishing communities, but it did not provide an adequate amount of cowcod for research.
NMFS determined this proposed rule would not adversely affect small entities. The reapportioning process allows unharvested tribal allocations of Pacific whiting, fished by small entities, to be fished by the non-tribal fleets, benefitting both large and small entities. The shortbelly and cowcod measures will assist small entities by reducing the risk of early closures due to bycatch. The shortbelly rockfish and cowcod measures are temporary and will be in effect for less than 1 year.
NMFS has prepared IRFAs and is requesting comments on this conclusion. See
There are no reporting, recordkeeping or other compliance requirements in the proposed rule.
No Federal rules have been identified that duplicate, overlap, or conflict with this action.
Fisheries, Fishing, Indian Fisheries.
For the reasons set out in the preamble, 50 CFR part 660 is proposed to be amended as follows:
16 U.S.C. 1801
(f) * * *
(4)
(d) * * *
(1) * * *
(ii) * * *
(D)
United States African Development Foundation. ACTION: Notice of meeting.
The US African Development Foundation (USADF) will hold its quarterly meeting of the Board of Directors to discuss the agency's programs and administration. This meeting location will be held via teleconference. For teleconference details, see the provided contact information.
The meeting date is Tuesday, April 21, 2020, 10:30 a.m. to 12:00 p.m.
Ms. Nina-Belle Mbayu, (202) 233-8808,
Public Law 96-533 (22 U.S.C.§ 290h).
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by May 18, 2020 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public that we have added Indonesia to the list of regions that the Animal and Plant Health Inspection Service considers to be affected with African swine fever (ASF). We have taken this action because of confirmation of ASF in Indonesia.
Indonesia was added to the APHIS list of regions considered affected with ASF on December 13, 2019.
Dr. John Grabau, Regionalization Evaluation Services, Veterinary Services, APHIS, 920 Main Campus Drive, Suite 200, Raleigh, NC 27606. Phone: (919) 855-7738; email:
The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of specified animals and animal products to prevent introduction into the United States of various animal diseases, including African swine fever (ASF). ASF is a highly contagious animal disease of wild and domestic swine. It can spread rapidly in swine populations with extremely high rates of morbidity and mortality. A list of regions where ASF exists or is reasonably believed to exist is maintained on the Animal and Plant Health Inspection Service (APHIS) website at
Section 94.8(a)(3) of the regulations states that APHIS will add a region to the list referenced in § 94.8(a)(2) upon determining ASF exists in the region, based on reports APHIS receives of outbreaks of the disease from veterinary officials of the exporting country, from the World Organization for Animal Health (OIE), or from other sources the Administrator determines to be reliable, or upon determining that there is reason to believe the disease exists in the region. Section 94.8(a)(1) of the regulations specifies the criteria on which the Administrator bases the reason to believe ASF exists in a region. Section 94.8(b) prohibits importation of pork and pork products from regions listed in accordance with § 94.8 except if processed and treated in accordance with the provisions specified in that section or consigned to an APHIS-approved establishment for further processing. Section 96.2 restricts the importation of swine casings that originated in or were processed in a region where ASF exists, as listed under § 94.8(a).
On December 17, 2019, the veterinary authorities of the Republic of Indonesia reported to the OIE the occurrence of ASF in that country. This confirmation of the ASF outbreak supported APHIS' action on December 13, 2019, adding the Republic of Indonesia to the list of regions where ASF exists or is reasonably believed to exist. This notice serves as an official record and public notification of that action.
As a result, pork and pork products from Indonesia, including casings, are subject to APHIS import restrictions designed to mitigate the risk of ASF introduction into the United States.
Pursuant to the Congressional Review Act (5 U.S.C. 801
7 U.S.C. 1633, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
Rural Utilities Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, the United States Department of Agriculture's Rural Utilities Service (RUS) invites comments on this information collection for which approval from the Office of Management and Budget (OMB) will be requested.
Comments on this notice must be received by June 16, 2020.
Pamela Bennett, Rural Development Innovation Center, Regulations Management Division, U.S. Department of Agriculture, 1400 Independence Avenue SW, STOP 0793, Room 4015 South Building, Washington, DC 20250-0793. Telephone: (202) 720-9639. Email:
The Office of Management and Budget's (OMB) regulation (5 CFR part 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies an information collection that RUS is submitting to OMB for approval. 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 will have practical utility; (b) 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; (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 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.
Copies of this information collection can be obtained from Pamela Bennett, Rural Development Innovation Center, Regulations Management Division, at (202) 720-9639. All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
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 that the Washington Advisory Committee (Committee) will hold a meeting via teleconference on Friday, May 8, 2020 at 2:00 p.m. Pacific Time. The purpose of the meeting for the Committee to discuss their hearing on Voting Rights and Felony Convictions in Washington.
The meeting will be held on Friday, May 8, 2020 at 200 p.m. PT
Brooke Peery, Designated Federal Officer (DFO), at
Members of the public may listen to the discussion. This meeting is available to the public through the above listed toll free number. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. 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 also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit Office, U.S. Commission on Civil Rights, 300 N. Los Angeles St., Suite 2010, Los Angeles, CA 90012 or emailed to Angelica Trevino at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available at:
On February 11, 2020, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the Iowa Foreign Trade Zone Corporation, grantee of FTZ 107, requesting an expansion of Subzone 107A subject to the existing activation limit of FTZ 107 on behalf of Winnebago Industries, Inc., in Forest City and Charles City, Iowa.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) preliminarily finds that 20 companies subject to the administrative review of the antidumping duty (AD) order on laminated woven sacks (LWS) from the People's Republic of China (China) are part of the China-wide entity because none filed a separate rate application (SRA) or separate rate certification (SRC). The period of review (POR) is August 1, 2018 through July 31, 2019. Interested parties are invited to comment on these preliminary results.
Applicable April 17, 2020.
Kabir Archuletta, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2593.
On August 2, 2019, Commerce published a notice of opportunity to
Pursuant to a request from Laminated Woven Sacks Fair Trade Coalition and its individual members, Polytex Fibers Corporation and ProAmpac Holdings Inc. (collectively, the petitioners),
The product covered by this order is laminated woven sacks. Laminated woven sacks are bags or sacks consisting of one or more plies of fabric consisting of woven polypropylene strip and/or woven polyethylene strip, regardless of the width of the strip; with or without an extrusion coating of polypropylene and/or polyethylene on one or both sides of the fabric; laminated by any method either to an exterior ply of plastic film such as biaxially-oriented polypropylene (BOPP) or to an exterior ply of paper that is suitable for high quality print graphics. Effective July 1, 2007, laminated woven sacks are classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were previously classifiable under HTSUS subheading 6305.33.0020. The HTSUS subheadings are provided for convenience and customs purposes only; the written product description of the scope of the order is dispositive. For a full description of the scope of the order,
Commerce is conducting this administrative review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213.
Commerce no longer considers the non-market economy (NME) entity as an exporter conditionally subject to an AD administrative review.
In proceedings involving NME countries, such as China, Commerce maintains a rebuttable presumption that the export activities of all companies within the country are subject to government control.
Interested parties are invited to comment on these preliminary results and may submit case briefs and/or written comments, filed electronically via Enforcement and Compliance's Antidumping and Countervailing Duty
Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to Commerce within 30 days of the date of publication of this notice.
Unless otherwise extended, Commerce intends to issue the final results of this administrative review, which will include the results of its analysis of all issues raised in the case briefs, within 120 days of the publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Upon issuance of the final results of this review, Commerce will determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise covered by this review.
The following cash deposit requirements will be effective upon publication of the final results of this review for shipments of the subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by sections 751(a)(2)(C) of the Act: (1) For previously investigated or reviewed Chinese and non-Chinese exporters not listed above that received a separate rate in a prior segment of this proceeding, the cash deposit rate will continue to be the existing exporter-specific rate; (2) for all Chinese exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be that for the China-wide entity (
This notice also serves as a reminder to importers of their responsibility under 19 CFR 315.402(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 double antidumping duties.
We are issuing and publishing these preliminary results in accordance with sections 751(a)(1) and 777(i) of the Act, and 19 CFR 351.213(h) and 351.221(b)(4).
The merchandise covered by the order is laminated woven sacks. Laminated woven sacks are bags or sacks consisting of one or more plies of fabric consisting of woven polypropylene strip and/or woven polyethylene strip, regardless of the width of the strip; with or without an extrusion coating of polypropylene and/or polyethylene on one or both sides of the fabric; laminated by any method either to an exterior ply of plastic film such as biaxially-oriented polypropylene (“BOPP”) or to an exterior ply of paper that is suitable for high quality print graphics;
Effective July 1, 2007, laminated woven sacks are classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were previously classifiable under HTSUS subheading 6305.33.0020. Laminated woven sacks are also classifiable under HTSUS 6305.33.0040. If entered with plastic coating on both sides of the fabric consisting of woven polypropylene strip and/or woven polyethylene strip, laminated woven sacks may be classifiable under HTSUS subheadings 3923.21.0080, 3923.21.0095, and 3923.29.0000. If entered not closed on one end or in roll form (including sheets, lay-flat tubing, and sleeves), laminated woven sacks may be classifiable under other HTSUS subheadings including 3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500. If the polypropylene strips and/or polyethylene strips making up the fabric measure more than 5 millimeters in width, laminated woven sacks may be classifiable under other HTSUS subheadings including 4601.99.0500, 4601.99.9000, and 4602.90.0000. Although HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) is correcting the antidumping duty (AD) orders on acetone from Belgium, the Republic of South Africa (South Africa), and the Republic of Korea (Korea).
Applicable April 17, 2020.
Alex Cipolla, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4956.
On March 31, 2020, Commerce published in the
AD duties will be assessed on unliquidated entries of acetone from Belgium, South Africa, and Korea entered, or withdrawn from warehouse, for consumption on or after September 24, 2019 (which is the date of publication of the
These corrected orders are published in accordance with sections 706(a) and 736(a) of the Act and 19 CFR 351.211(b).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Commerce) finds that the producers/exporters subject to this administrative review made sales of finished carbon steel flanges (flanges) from India at less than normal value during the period of review (POR), February 8, 2017 through July 31, 2018.
Applicable April 17, 2020.
Fred Baker, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2924.
This administrative review covers 37 producers/exporters of the subject merchandise. Commerce selected two companies, the Norma Group
The scope of the
All issues raised by the parties in their case and rebuttal briefs are listed in the appendix to this notice and addressed in the Issues and Decision Memorandum. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on our analysis of the comments received, and for the reasons explained in the Issues and Decision Memorandum, Commerce made certain changes to the preliminary weighted-average dumping margin for the Norma Group, and the companies not selected for individual examination in this administrative review.
For these final results, we determine that the following weighted-average dumping margins exist for the period February 8, 2017 through July 31, 2018:
For the rate for non-selected respondents in an administrative review, generally, Commerce looks to section 735(c)(5) of the Tariff Act of 1930, as amended (the Act), which provides instructions for calculating the all-others rate in a market economy investigation. Under section 735(c)(5)(A) of the Act, the all-others rate is normally “an amount equal to the weighted-average of the estimated weighted-average dumping margins established for exporters and producers
We intend to disclose the calculations performed for these final results to parties in this proceeding within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(1), Commerce shall determine and U.S. Customs and Border Protection (CBP) shall assess antidumping duties on all appropriate entries. For Gupta, because its weighted-average dumping margin is not zero or
For Norma, we will instruct CBP to liquidate its entries during the POR imported by the importers identified in its questionnaire responses without regard to antidumping duties because its weighted-average dumping margin in these final results is zero.
For companies that were not selected for individual examination, we will instruct CBP to liquidate unreviewed entries based on the methodology described in the “Rate for Non-Selected Respondents” section, above.
Consistent with Commerce's assessment practice, for entries of subject merchandise during the POR produced by any company upon which we initiated an administrative review, for which they did not know that the merchandise was destined for the United States, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction.
We intend to issue instructions to CBP 15 days after publication of the final results of this administrative review.
The following deposit requirements for estimated antidumping duties will be effective upon publication of the notice of these final results of review for all shipments of flanges from India entered, or withdrawn from warehouse, for consumption on or after the date of publication as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rates for the reviewed companies will be the rates established in these final results of review, except if the rate is less than 0.50 percent and, therefore,
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 and/or countervailing duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties and/or countervailing duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as the only reminder to parties subject to APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing notice of these final results in accordance with sections 751(a) and 777(i)(1) of the Act. Note that Commerce has temporarily modified certain of its requirements for serving documents containing business proprietary information, until May 19, 2020, unless extended.
National Institute of Standards and Technology, Department of Commerce.
Notice.
The National Institute of Standards and Technology (NIST or Institute) invites and requests nomination of individuals for appointment to seven existing Federal Advisory Committees (Committees): Board of Overseers of the Malcolm Baldrige National Quality Award; Judges Panel of the Malcolm Baldrige National Quality Award; Information Security and Privacy Advisory Board; Manufacturing Extension Partnership Advisory Board; National Construction Safety Team Advisory Committee; Advisory Committee on Earthquake Hazards Reduction; and Visiting Committee on Advanced Technology. NIST will consider nominations received in response to this notice for appointment to the Committees, in addition to nominations already received. Registered Federal lobbyists may not serve on NIST Federal Advisory Committees in an individual capacity.
Nominations for all Committees will be accepted on an ongoing basis and will be considered as and when vacancies arise.
See below.
The Board of Overseers of the Malcolm Baldrige National Quality Award (Board) was established in accordance with 15 U.S.C. 3711a(d)(2)(B), pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Board shall review the work of the private sector contractor(s), which assists the Director of NIST in administering the Malcolm Baldrige National Quality Award (Award). The Board will make such suggestions for the improvement of the Award process as it deems necessary.
2. The Board shall make an annual report on the results of Award activities to the Director of NIST, along with its recommendations for the improvement of the Award process.
3. The Board will function solely as an advisory committee under the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
4. The Board will report to the Director of NIST.
1. The Board will consist of at least five and approximately 12 members selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance, and for their preeminence in the field of organizational performance excellence. There will be a balanced representation from U.S. service, manufacturing, nonprofit, education, and health care industries. The Board will include members familiar with the quality, performance improvement operations, and competitiveness issues of manufacturing companies, service companies, small businesses, nonprofits, health care providers, and educational institutions.
2. Board members will be appointed by the Secretary of Commerce for three-year terms and will serve at the discretion of the Secretary. All terms will commence on March 1 and end on the last day of February of the appropriate years.
1. Members of the Board shall serve without compensation, but may, upon request, be reimbursed travel expenses, including per diem, as authorized by 5 U.S.C. 5701
2. The Board will meet at least annually, but usually two times a year. Additional meetings may be called as deemed necessary by the NIST Director or by the Chairperson. Meetings are usually one day in duration.
3. Board meetings are open to the public. Board members do not have access to classified or proprietary information in connection with their Board duties.
1. Nominations are sought from the private and public sector as described above.
2. Nominees should have established records of distinguished service and shall be familiar with the quality improvement operations and competitiveness issues of manufacturing companies, service companies, small businesses, educational institutions, health care providers, and nonprofit organizations. The category (field of eminence) for which the candidate is qualified should be specified in the nomination letter. Nominations for a particular category should come from organizations or individuals within that category. A summary of the candidate's qualifications should be included with the nomination, including (where applicable) current or former service on Federal advisory boards and Federal employment. In addition, each nomination letter should state that the person agrees to the nomination, acknowledges the responsibilities of serving on the Board, and will actively participate in good faith in the tasks of the Board. Besides participation at meetings, it is desired that members be able to devote the equivalent of seven days between meetings to either developing or researching topics of potential interest, and so forth, in furtherance of their Board duties.
3. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse Board membership.
Contact Information: Robyn Verner, Designated Federal Officer, Baldrige Performance Excellence Program, NIST, 100 Bureau Drive, Mail Stop 1020, Gaithersburg, MD 20899-1020; telephone 301-975-2361; fax 301-975-4967; or via email at
The Judges Panel of the Malcolm Baldrige National Quality Award (Panel) was established in accordance with 15 U.S.C. 3711a(d)(1) and the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Panel will ensure the integrity of the Malcolm Baldrige National Quality Award (Award) selection process. Based on a review of results of examiners' scoring of written applications, Panel members will vote on which applicants' merit site visits by examiners to verify the accuracy of quality improvements claimed by applicants. The Panel will also review results and findings from site visits, and recommend Award recipients.
2. The Panel will ensure that individual judges will not participate in the review of applicants as to which they have any real or perceived conflict of interest.
3. The Panel will function solely as an advisory body, and will comply with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
4. The Panel will report to the Director of NIST.
1. The Panel will consist of no less than 9, and not more than 12, members selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance. There will be a balanced representation from U.S. service, manufacturing, small business, nonprofit, education, and health care industries. The Panel will include members familiar with the quality improvement operations and competitiveness issues of manufacturing companies, service companies, small businesses, nonprofits, health care providers, and educational institutions.
2. Panel members will be appointed by the Secretary of Commerce for three-year terms and will serve at the discretion of the Secretary. All terms will commence on March 1 and end on the last day of February of the appropriate year.
1. Members of the Panel shall serve without compensation, but may, upon request, be reimbursed travel expenses, including per diem, as authorized by 5 U.S.C. 5701
2. The Panel will meet three times per year. Additional meetings may be called as deemed necessary by the NIST Director or by the Chairperson. Meetings are usually one to four days in duration. In addition, each Judge must attend an annual three-day Examiner training course.
3. When approved by the Department of Commerce Chief Financial Officer and Assistant Secretary for Administration, Panel meetings are closed or partially closed to the public.
1. Nominations are sought from all U.S. service and manufacturing industries, small businesses, education, health care, and nonprofits as described above.
2. Nominees should have established records of distinguished service and shall be familiar with the quality improvement operations and competitiveness issues of manufacturing companies, service companies, small businesses, health care providers, educational institutions, and nonprofit organizations. The category (field of eminence) for which the candidate is qualified should be specified in the nomination letter. Nominations for a particular category should come from organizations or individuals within that category. A summary of the candidate's qualifications should be included with the nomination, including (where applicable) current or former service on federal advisory boards and federal employment. In addition, each nomination letter should state that the person agrees to the nomination, acknowledges the responsibilities of serving on the Panel, and will actively participate in good faith in the tasks of the Panel. Besides participation at meetings, it is desired that members be either developing or researching topics of potential interest, reading Baldrige applications, and so forth, in furtherance of their Panel duties.
3. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse Panel membership.
The ISPAB (Committee or Board) was originally chartered as the Computer System Security and Privacy Advisory Board by the Department of Commerce pursuant to the Computer Security Act of 1987 (Pub. L. 100-235). The E-Government Act of 2002 (Pub. L. 107-347, Title III), amended Section 21 of the National Institute of Standards and Technology Act (15 U.S.C. 278g-4), including changing the Committee's name, and the charter was amended accordingly.
1. The Board will identify emerging managerial, technical, administrative, and physical safeguard issues relative to information security and privacy.
2. The Board will advise NIST, the Secretary of Homeland Security, and the Director of the Office of Management and Budget (OMB) on information security and privacy issues pertaining to Federal Government information systems, including through review of proposed standards and guidelines developed by NIST.
3. The Board shall report to the Director of NIST.
4. The Board reports annually to the Secretary of Commerce, the Secretary of Homeland Security, the Director of OMB, the Director of the National Security Agency, and the appropriate committees of the Congress.
5. The Board will function solely as an advisory body, in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Director of NIST will appoint the Chairperson and the members of the ISPAB, and members serve at the discretion of the NIST Director. Members will be selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance.
2. The ISPAB will consist of a total of 12 members and a Chairperson, for a total of 13.
• The Board will include four members from outside the Federal Government who are eminent in the information technology industry, at least one of whom is representative of small or medium sized companies in such industries.
• The Board will include four members from outside the Federal Government who are eminent in the fields of information technology, or related disciplines, but who are not employed by or representative of a producer of information technology.
• The Board will include four members from the Federal Government who have information system management experience, including experience in information security and privacy, at least one of whom shall be from the National Security Agency.
1. Members of the Board, other than full-time employees of the Federal government, will not be compensated for their services, but will, upon request, be allowed travel expenses pursuant to 5 U.S.C. 5701
2. Meetings of the ISPAB are usually two to three days in duration and are usually held quarterly. ISPAB meetings are open to the public, including the press. Members do not have access to classified or proprietary information in connection with their ISPAB duties.
1. Nominations are being accepted in all three categories described above.
2. Nominees should have specific experience related to information security or privacy issues, particularly as they pertain to Federal information technology. Letters of nomination should include the category of membership for which the candidate is applying and a summary of the candidate's qualifications for that specific category. Also include (where applicable) current or former service on Federal advisory boards and any Federal employment. Each nomination letter should state that the person agrees to the nomination, acknowledges the responsibilities of serving on the ISPAB, and that they will actively participate in good faith in the tasks of the ISPAB.
3. Besides participation at meetings, it is desired that members be able to devote a minimum of two days between meetings to developing draft issue papers, researching topics of potential interest, and so forth in furtherance of their ISPAB duties.
4. Selection of ISPAB members will not be limited to individuals who are nominated. Nominations that are received and meet the requirements will be kept on file to be reviewed as ISPAB vacancies occur.
5. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse ISPAB membership.
The MEP Advisory Board (Board) is authorized under section 501 of the American Innovation and Competitiveness Act (Pub. L. 114-329); codified at 15 U.S.C. 278k(m), as amended, in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Board will provide advice on MEP activities, plans, and policies.
2. The Board will assess the soundness of MEP plans and strategies.
3. The Board will assess current performance against MEP program plans.
4. The Board will function solely in an advisory capacity, and in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
5. The Board shall transmit through the Director of NIST an annual report to the Secretary of Commerce for transmittal to Congress not later than 30 days after the submission to Congress of the President's annual budget request each year. The report shall address the status of the MEP program.
1. The Board shall consist of not fewer than 10 members, appointed by the Director of NIST and broadly representative of stakeholders. At least 2 members shall be employed by or on an advisory board for an MEP Center, at least 5 members shall be from U.S. small businesses in the manufacturing sector, and at least 1 member shall represent a community college. No member shall be an employee of the Federal Government.
2. The Director of NIST shall appoint the members of the Board. Members shall be selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance. Board members serve at the discretion of the Director of NIST.
3. The term of office of each member of the Board shall be three years, except that vacancy appointments shall be for the remainder of the unexpired term of the vacancy. Any person who has completed two consecutive full terms of service on the Board shall thereafter be ineligible for appointment during the one-year period following the expiration of the second term.
1. Members of the Board will not be compensated for their services but will, upon request, be allowed travel and per diem expenses as authorized by 5 U.S.C. 5701
2. The Board will meet at least biannually. Additional meetings may be called by the Director of NIST or the Designated Federal Officer (DFO) or his or her designee.
3. Committee meetings are open to the public.
1. Nominations are being accepted in all categories described above.
2. Nominees should have specific experience related to manufacturing and industrial extension services. Letters of nomination should include the category of membership for which the candidate is applying and a summary of the candidate's qualifications for that specific category. Each nomination letter should state that the person agrees to the nomination and acknowledges the responsibilities of serving on the MEP Advisory Board.
3. Selection of MEP Advisory Board members will not be limited to individuals who are nominated. Nominations that are received and meet
4. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse MEP Advisory Board membership.
The NCST Advisory Committee (Committee) was established in accordance with the National Construction Safety Team Act, Public Law 107-231 and the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Committee shall advise the Director of NIST on carrying out the National Construction Safety Team Act (Act), review the procedures developed under section 2(c)(1) of the Act, and review the reports issued under section 8 of the Act.
2. The Committee functions solely as an advisory body, in accordance with the provisions of the Federal Advisory Committee Act.
3. The Committee shall report to the Director of NIST.
4. On January 1 of each year, the Committee shall transmit to the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Commerce, Science, and Transportation of the Senate a report that includes: (1) An evaluation of National Construction Safety Team (Team) activities, along with recommendations to improve the operation and effectiveness of Teams, and (2) an assessment of the implementation of the recommendations of Teams and of the Committee.
1. The Committee shall consist of no less than 4 and no more than 12 members. Members shall reflect the wide diversity of technical disciplines and competencies involved in the National Construction Safety Teams investigations. Members shall be selected on the basis of established records of distinguished service in their professional community and their knowledge of issues affecting the National Construction Safety Teams.
2. The Director of NIST shall appoint the members of the Committee, and they will be selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance.
1. Members of the Committee shall not be compensated for their services but may, upon request, be allowed travel and per diem expenses in accordance with 5 U.S.C. 5703.
2. Members of the Committee shall serve as Special Government Employees (SGEs), will be subject to the ethics standards applicable to SGEs, and are required to file an annual Executive Branch Confidential Financial Disclosure Report.
3. The Committee shall meet at least once per year. Additional meetings may be called whenever requested by the NIST Director or the Designated Federal Officer (DFO); such meetings may be in the form of telephone conference calls and/or videoconferences.
1. Nominations are sought from industry and other communities having an interest in the National Construction Safety Teams investigations.
2. Nominees should have established records of distinguished service. The field of expertise that the candidate represents should be specified in the nomination letter. Nominations for a particular field should come from organizations or individuals within that field. A summary of the candidate's qualifications should be included with the nomination, including (where applicable) current or former service on federal advisory boards and federal employment. In addition, each nomination letter should state that the nominee agrees to the nomination, acknowledges the responsibilities of serving on the Committee, and will actively participate in good faith in the tasks of the Committee.
3. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse Committee membership.
The Advisory Committee on Earthquake Hazards Reduction (Committee) was established in accordance with the National Earthquake Hazards Reduction Program Reauthorization Act of 2004, Public Law 108-360 (42 U.S.C. 7704(a)(5)) and the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Committee will act in the public interest to assess trends and developments in the science and engineering of earthquake hazards reduction; effectiveness of the National Earthquake Hazards Reduction Program (Program) in carrying out the activities under section (a)(2) of the Earthquake Hazards Reduction Act of 1977, as amended, (42 U.S.C. 7704(a)(2)); the need to revise the Program; and the management, coordination, implementation, and activities of the Program.
2. The Committee will function solely as an advisory body, in accordance with the provisions of the Federal Advisory Committee Act.
3. The Committee shall report to the Director of NIST.
4. The Committee shall report to the Director of NIST at least once every two years on its findings of the assessments and its recommendations for ways to improve the Program. In developing recommendations, the Committee shall consider the recommendations of the United States Geological Survey (USGS) Scientific Earthquake Studies Advisory Committee (SESAC).
1. The Committee shall consist of not fewer than 11, nor more than 17
2. The Director of NIST shall appoint the members of the Committee. Members shall be selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance.
3. The term of office of each member of the Committee shall be three years, except that vacancy appointments shall be for the remainder of the unexpired term of the vacancy and that members shall have staggered terms such that the Committee will have approximately one-third new or reappointed members each year.
1. Members of the Committee shall not be compensated for their services, but may, upon request, be allowed travel and per diem expenses in accordance with 5 U.S.C. 5701
2. Members of the Committee shall serve as Special Government Employees (SGEs) and will be subject to the ethics standards applicable to SGEs and are required to file an annual Executive Branch Confidential Financial Disclosure Report.
3. The Committee members shall meet face-to-face at least once per year. Additional meetings may be called whenever requested by the NIST Director; such meetings may be in the form of telephone conference calls and/or videoconferences.
4. Committee meetings are open to the public.
1. Members will be drawn from industry and other communities having an interest in the Program, such as, but not limited to, research and academic institutions, industry standards development organizations, state and local government, and financial communities, who are qualified to provide advice on earthquake hazards reduction and represent all related scientific, architectural, and engineering disciplines.
2. Any person who has completed two consecutive full terms of service on the Committee shall be ineligible for appointment for a third term during the two-year period following the expiration of the second term.
3. Nominees should have established records of distinguished service. The field of expertise that the candidate represents should be specified in the nomination letter. Nominations for a particular field should come from organizations or individuals within that field. A summary of the candidate's qualifications should be included with the nomination, including (where applicable) current or former service on federal advisory boards and federal employment. In addition, each nomination letter should state that the nominee agrees to the nomination, acknowledges the responsibilities of serving on the Committee, and will actively participate in good faith in the tasks of the Committee.
4. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad based and diverse Committee membership.
The VCAT (Committee) was established in accordance with 15 U.S.C. 278 and the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
1. The Committee shall review and make recommendations regarding general policy for NIST, its organization, its budget, and its programs, within the framework of applicable national policies as set forth by the President and the Congress. 15 U.S.C. 278(a).
2. The Committee shall provide an annual report, through the Director of NIST, to the Secretary of Commerce for submission to the Congress not later than 30 days after the submittal to Congress of the President's annual budget request in each year. Such report shall deal essentially, though not necessarily exclusively, with policy issues or matters which affect NIST, or with which the Committee in its official role as the private sector policy adviser of NIST is concerned. Each such report shall identify areas of research and research techniques of the Institute of potential importance to the long-term competitiveness of United States industry, in which the Institute possesses special competence, which could be used to assist United States enterprises and Untied States industrial joint research and development ventures. 15 U.S.C. 278(h)(1). The Committee shall submit, through the Director of NIST, to the Secretary and the Congress such additional reports on specific policy matters as it deems appropriate. 15 U.S.C. 278(h)(2).
3. The Committee will function solely as an advisory body, in accordance with the provisions of the Federal Advisory Committee Act, as amended, 5 U.S.C. App.
4. The Committee shall report to the Director of NIST.
1. The Director of NIST shall appoint the members of the Committee. Members shall be selected on a clear, standardized basis, in accordance with applicable Department of Commerce guidance. 15 U.S.C. 278(a). Members shall be selected solely on the basis of established records of distinguished service; shall provide representation of a cross-section of traditional and emerging United States industries; and shall be eminent in fields such as business, research, new product development, engineering, labor, education, management consulting, environment, and international relations. No employee of the Federal Government shall serve as a member of the Committee. 15 U.S.C. 278(b).
2. Members of the Committee shall serve as Special Government Employees (SGEs) and will be subject to the ethics standards applicable to SGEs.
3. The Committee shall consist of not fewer than nine members appointed by the Director of NIST, a majority of whom shall be from United States industry. 15 U.S.C. 278(a). The term of office of each member of the Committee shall be three years, except that vacancy appointments shall be for the remainder of the unexpired term of the vacancy. 15 U.S.C. 278(c)(1). Members shall serve at the discretion of the Director of NIST.
4. Any person who has completed two consecutive full terms of service on the Committee shall be ineligible for appointment for a third term during the one-year period following the expiration o the second term. 15 U.S.C. 278(c)(1).
5. Pursuant to 15 U.S.C. 278(f), the Committee chairperson and vice chairperson shall be elected by the members of the Committee at each annual meeting occurring in an even-numbered year. The vice chairperson shall perform the duties of the chairperson in his or her absence. In case a vacancy occurs in the position of the chairperson or vice chairperson, the Committee shall elect a member to fill such vacancy.
6. Members of the Committee will not be compensated for their services, but will, upon request, be allowed travel expenses in accordance with 5 U.S.C. 5701
7. Pursuant to 15 U.S.C. 278(g), the Committee may, with the concurrence o a majority of its members, permit the appointment of a staff consisting of not more than four professional staff members and such clerical staff members as may be necessary. Such staff members shall be appointed by the Director after consultation with the chairperson of the Committee and assigned at the direction of the Committee.
8. Subcommittees: Pursuant to 15 U.S.C. 278(e), the Committee shall have an executive committee, and may delegate to it such powers and functions of the Committee as it deems appropriate. The Committee and/or the Director of NIST may establish such other subcommittees, task forces, and working groups consisting of members from the parent Committee as may be necessary, subject to the provisions of FACA, the FACA implementing regulations, and applicable Department of Commerce guidance. Subcommittees must report back to the Committee and any recommendations based on their work will be deliberated and agreed upon by the Committee prior to dissemination to NIST.
1. Meetings of the VCAT usually take place at the NIST headquarters in Gaithersburg, Maryland. The Committee will meet at least twice each year at the call of the chairperson or whenever one-third of the members so request in writing. The Committee shall not act in the absence of a quorum, which shall consist of a majority of the members of the Committee not having a conflict of interest in the matter being considered by the Committee. 15 U.S.C. 278(d).
2. Generally, Committee meetings are open to the public.
1. Nominations are sought from all fields described above.
2. Nominees should have established records of distinguished service and shall be eminent in fields such as business, research, new product development, engineering, labor, education, management consulting, environment and international relations. The category (field of eminence) for which the candidate is qualified should be specified in the nomination letter. Nominations for a particular category should come from organizations or individuals within that category. A summary of the candidate's qualifications should be included with the nomination, including (where applicable) current or former service on Federal advisory boards and Federal employment. In addition, each nomination letter should state that the candidate agrees to the nomination, acknowledges the responsibilities of serving on the VCAT, and will actively participate in good faith in the tasks of the VCAT.
3. The Department of Commerce is committed to equal opportunity in the workplace and seeks a broad-based and diverse VCAT membership.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of an incidental harassment authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to Halibut Point Marine Services, LLC (HPMS) to incidentally harass, by Level A and Level B harassment only, marine mammals during construction activities associated with the Old Sitka Dock North Dolphins Expansion Project in Sitka, Alaska.
This Authorization is effective from October 1, 2020 through February 28, 2021.
Leah Davis, Office of Protected Resources, NMFS, (301) 427-8401. Electronic copies of the application and supporting documents, as well as a list of the references cited in this document, may be obtained online at:
The MMPA prohibits the “take” of marine mammals, with certain exceptions. Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stocks for taking for certain subsistence uses (referred to in shorthand as “mitigation”); and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
The definitions of all applicable MMPA statutory terms cited above are included in the relevant sections below.
On July 30, 2019, NMFS received a request from HPMS for an IHA to take marine mammals incidental to dock expansion activities. The application was deemed adequate and complete on October 21, 2019. HPMS's request is for take of a small number of seven species of marine mammals by Level B harassment and Level A harassment. Neither HPMS nor NMFS expects serious injury or mortality to result from this activity and, therefore, an IHA is appropriate.
HPMS is proposing to add two additional dolphin structures and modify two existing dolphin structures at their deep-water dock facility in Sitka Sound. The cruise industry is a major sector of Sitka's economy, and the current HPMS facility currently does not meet the industry-required specifications for mooring newer, larger cruise vessels that are becoming increasingly more common. Construction at the dock facility will include vibratory pile installation and removal of temporary, template pile structures, vibratory and impact installation of permanent piles comprising the dolphins, and down-the-hole drilling to install bedrock anchors for the permanent piles. Vibratory pile removal and installation, impact pile installation, and drilling activity will introduce underwater sounds that may result in take, by Level A and Level B harassment, of marine mammals across approximately 55.9km
A detailed description of the planned project is provided in the
A notice of NMFS's proposal to issue an IHA to HPMS was published in the
As included in the draft authorization, the final authorization includes a measure stating that “Should environmental conditions deteriorate such that marine mammals within the entire shutdown zone would not be visible (
The effective period for the final IHA is October 1, 2020 to February 28, 2021, rather than one year as described in the proposed IHA.
Additionally, NMFS made several adjustments to the source levels included in the proposed IHA. The Commission informally noted that the reference distance for the impact pile driving source levels (Austin
NMFS also made several changes to the take estimate included in the proposed IHA. As described further in the
NMFS made several changes to the mitigation measures included in the proposed IHA (see
Based on the Commission's recommendation, NMFS has also updated the reporting requirements for dead or injured marine mammals to require HPMS to cease the specified activities until NMFS notifies HPMS that they may resume.
Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history, of the potentially affected species. Additional information regarding population trends and threats may be found in NMFS's Stock Assessment Reports (SARs;
Table 1 lists all species with expected potential for occurrence in Sitka, AK and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. For taxonomy, we follow Committee on Taxonomy (2019). PBR is defined by the MMPA 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 optimum sustainable population (as described in NMFS' SARs). While no mortality is anticipated or authorized here, PBR and annual serious injury and mortality from anthropogenic sources are included here as gross indicators of the status of the species and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For
All species that could potentially occur in the project area are included in Table 1. However, the temporal and/or spatial occurrence of western north Pacific gray whales, northern right whale, fin whale, sperm whale, pacific white-sided dolphin, Dall's porpoise, California sea lion, and Northern fur seal is such that take is not expected to occur, and they are not discussed further beyond the explanation provided here.
Marine mammal monitoring reports are available for three recent construction projects in the Sitka area (Gary Paxton Industrial Park Dock Modification Project, 82 FR 47717, October 13, 2017; Biorka Island Dock Replacement Project, 82 FR 50397, October 31, 2017; O'Connell Bridge Lightering Float Pile Replacement Project, 84 FR 27288, June 12, 2019). These reports were referenced in determining marine mammals likely to be present within the Old Sitka Dock project area. NMFS acknowledges seasonal differences between the Old
North Pacific Right Whale, fin whale, sperm whale, Dall's porpoise, and northern fur seal have not been reported in monitoring reports available for the recent Sitka-area, and were not observed during the Straley
In addition, the northern sea otter may be found in Sitka. However, northern sea otters are managed by the U.S. Fish and Wildlife Service and are not considered further in this document.
A detailed description of the of the species likely to be affected by the project, including brief introductions to the species and relevant stocks as well as available information regarding population trends and threats, and information regarding local occurrence, were provided in the
Underwater noise from impact and vibratory pile driving and down-the-hole drilling activities associated with the Old Sitka Dock North Dolphins Expansion Project have the potential to result in harassment of marine mammals in the vicinity of the action area. The
This section provides an estimate of the number of incidental takes authorized through this IHA, which will inform both NMFS' consideration of “small numbers” and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as any act of pursuit, torment, or annoyance, which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes are primarily by Level B harassment, as use of the acoustic sources (
As described previously, no mortality is anticipated or authorized for this activity. Below we describe how the take is estimated.
Generally speaking, we estimate take by considering: (1) Acoustic thresholds above which NMFS believes the best available science indicates marine mammals will be behaviorally harassed or incur some degree of permanent hearing impairment; (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) and the number of days of activities. We note that while these basic factors can contribute to a basic calculation to provide an initial prediction of takes, additional information that can qualitatively inform take estimates is also sometimes available (
Using the best available science, NMFS has developed acoustic thresholds that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur PTS of some degree (equated to Level A harassment).
Level B Harassment for non-explosive sources—Though significantly driven by received level, the onset of behavioral disturbance from anthropogenic noise exposure is also informed to varying degrees by other factors related to the source (
For the purpose of Level B harassment zone calculation, HPMS's activity includes the use of continuous (vibratory pile driving and removal, down-the-hole drilling) and impulsive (impact pile driving) sources, and therefore the 120 and 160 dB re 1 μPa (rms) are applicable.
Level A harassment for non-explosive sources—NMFS' Technical Guidance for Assessing the Effects of Anthropogenic Sound on Marine Mammal Hearing (Version 2.0) (Technical Guidance, 2018) identifies dual criteria to assess auditory injury (Level A harassment) to five different marine mammal groups (based on hearing sensitivity) as a result of exposure to noise from two different types of sources (impulsive or non-impulsive). HPMS's activity includes the use of impulsive (impact pile driving, down-the-hole drilling) and non-impulsive (vibratory pile driving and removal) sources.
These thresholds are provided in the table below. The references, analysis, and methodology used in the development of the thresholds are described in NMFS 2018 Technical Guidance, which may be accessed at
Here, we describe operational and environmental parameters of the activity that will feed into identifying the area ensonified above the acoustic thresholds, which include source levels and transmission loss coefficient.
The sound field in the project area is the existing background noise plus additional construction noise from the project. Marine mammals are expected to be affected via sound generated by the primary components of the project (
The project includes vibratory and impact pile installation of steel pipe piles, vibratory removal of steel pipe piles, and down-the-hole drilling. Source levels of pile installation and removal activities are based on reviews of measurements of the same or similar types and dimensions of piles available in the literature. Source levels for each pile size and activity are presented in Table 3. Source levels for vibratory installation and removal of piles of the same diameter are assumed to be the same.
Transmission loss (TL) is the decrease in acoustic intensity as an acoustic pressure wave propagates out from a source. TL parameters vary with frequency, temperature, sea conditions, current, source and receiver depth, water depth, water chemistry, and bottom composition and topography. The general formula for underwater TL is:
TL = B * Log
Absent site-specific acoustical monitoring with differing measured transmission loss, a practical spreading value of 15 is used as the transmission loss coefficient in the above formula. Site-specific transmission loss data for Old Sitka Dock are not available, therefore the default coefficient of 15 is used to determine the distances to the Level A and Level B harassment thresholds.
When the NMFS Technical Guidance (2016) was published, in recognition of the fact that ensonified area/volume could be more technically challenging to predict because of the duration component in the new thresholds, we developed a User Spreadsheet that includes tools to help predict a simple isopleth that can be used in conjunction with marine mammal density or occurrence to help predict takes. We note that because of some of the assumptions included in the methods used for these tools, we anticipate that isopleths produced are typically going to be overestimates of some degree, which may result in some degree of overestimate of Level A harassment take. However, these tools offer the best way to predict appropriate isopleths when more sophisticated 3D modeling methods are not available, and NMFS continues to develop ways to quantitatively refine these tools, and will qualitatively address the output where appropriate. For stationary sources such as pile driving, NMFS User Spreadsheet predicts the distance at which, if a marine mammal remained at that distance the whole duration of the activity, it would incur PTS. Inputs used in the User Spreadsheet, and the resulting isopleths are reported below.
In this section we provide the information about the presence, density, or group dynamics of marine mammals that will inform the take calculations. We describe how the information provided above is brought together to produce a quantitative take estimate.
Straley
The largest Level A harassment zone for low-frequency cetaceans extends 809.8m from the source during impact pile driving of 48-inch piles (or impact pile driving of 30-inch steel piles, as necessary) (Table 6). HPMS is planning to implement activity-specific shutdown zones (Table 8), which, especially in combination with the already low likelihood of gray whales entering the area, NMFS expects to eliminate the potential for Level A harassment take of gray whale. Therefore, Level A harassment takes of gray whale are not authorized.
Two minke whales were taken during the Biorka Island Dock Replacement project at the mouth of Sitka Sound (Turnagain Marine Construction, 2018). Based on monitoring data from Biorka Island, three Level B harassment takes of minke whale were authorized for the Sitka O'Connell Bridge project, however, no minke whale takes were reported. Both projects occurred in the month of June. Straley
The largest Level A harassment zone for low-frequency cetaceans extends 809.8m from the source during impact pile driving of 48-inch piles (or impact pile driving of 30-inch steel piles, as necessary) (Table 6). HPMS will implement activity-specific shutdown zones (Table 8), which, especially in combination with the already low likelihood of minke whales entering the area, are expected to eliminate the potential for Level A harassment take of minke whale. Therefore, takes of minke whale by Level A harassment were not requested, and are not authorized.
Humpback whales frequent the action area and are likely to enter the Level B harassment zone during construction. Humpback whales typically occur in groups of two to four animals in the area (Straley
For ESA Section 7 consultation purposes, NMFS estimates that 93.9 percent of humpback whales in the project area are from the non-listed Hawaii DPS, and 6.1 percent of humpback whales in the project area are from the threatened Mexico DPS (Wade
The largest Level A harassment zone for humpback whale extends 809.8m from the source during impact pile driving of 48-inch piles (Table 6). HPMS will implement activity-specific shutdown zones (Table 8), which, given the behavior and visibility of humpback whales, are expected to eliminate the potential for Level A harassment take of humpback whale. Therefore, takes of humpback whale by Level A harassment were not requested, and are not authorized.
Forty-four (44) killer whales were observed during 190 hours of observation from Whale Point between September and May from 1994 to 2002 (Straley
During work on GPIP Dock, groups of five and 10 individuals were seen a few times, but, typically, single whales were observed near the mouth of Silver Bay (Turnagain Marine Construction, 2017). Straley
The largest Level A harassment zone for mid-frequency cetaceans extends 28.8m from the source during impact installation of the 48-inch piles (or impact pile driving of 30-inch steel piles, as necessary) (Table 6). HPMS will implement activity-specific shutdown zones (Table 8), which, given the small size of the zone and the visibility of killer whales, are expected to eliminate the potential for Level A harassment take of killer whale. Therefore, takes of killer whale by Level A harassment were not requested, and are not authorized.
Harbor porpoises commonly frequent nearshore waters, but are not common in the project vicinity. Monthly tallies from observations from Sitka's Whale Park show harbor porpoises occurring infrequently in or near the action area in March, April, and October between 1994 to 2002 (Straley
The mean group size of harbor porpoise in Southeast Alaska is estimated at two to three individuals (Dahlheim
Given the size of the Level A harassment zones for impact pile driving and DTH drilling and the relative expected frequency of harbor porpoises entering the zone, we are requiring a shutdown zone that is smaller than the area within which Level A harassment could occur in order to ensure that pile driving and DTH drilling are not interrupted to the degree that the activities are extended over additional days. Therefore, there is a small chance that Level A harassment could occur. NMFS authorized Level A harassment take of one harbor porpoise on each day that impact pile driving is expected occur (see
Harbor seals are common in the inside waters of southeastern Alaska, including in Sitka Sound and within the project action area. They were observed during most months of monitoring (September through May) from Whale Park between 1994 and 2002, except in December and May (Straley
Straley
Harbor seals haul out of the water periodically to rest, give birth, and nurse their pups. According to the Alaska Fisheries Science Center's (AFSC) list of harbor seal haul-out locations, the closest listed haulout (id CE49) is located in Sitka Sound approximately 6.4 km (3.5 nmi) southwest, of the project site (AFSC, 2019).
NMFS proposed to authorize 171 Level B harassment takes (3 animals in a group × 3 groups per day × 19 days = 171 Level B harassment takes), estimating that three groups of three harbor seals may enter the Level B harassment zone on each project day. However, as suggested by the Commission, NMFS contacted the AFSC regarding the haulout numbers at the CE49 haulouts, as these locations are in close proximity to the Level B harassment zone. AFSC advised that the current abundance estimate for the CE49 haulouts is 28 individuals from August 2011 (Erin Richmond, pers. comm., January 2020). As such, NMFS is instead authorizing 532 Level B harassment takes of harbor seals, estimating that each of the 28 seals at haulout CE49 is likely to enter the Level B harassment zone on each in-water work day (28 animals × 19 project days = 532 Level B harassment takes).
Given the size of the zone and the relative expected frequency of harbor seals entering the zone, we are proposing a to require a shutdown zone that is smaller than the area within which Level A harassment could occur to ensure that pile driving and DTH drilling are not interrupted to the degree that the activities are extended over additional days. Therefore, there is a small chance that Level A harassment could occur. NMFS authorized Level A harassment take of one harbor seal on each day that impact pile driving is expected occur (see
Steller sea lions are common in the project area. They were observed during every month of monitoring (September to May) between 1994 and 2002 (Straley
During Straley
During the summer months, sea lions are seen in the project area daily. Two to three individual sea lions feed on fish carcasses dumped adjacent to the project site from fishing charter operations in a nearby private marina. However, during the project timing of fall and winter, the charter fishing operations are not underway and the sea lions are not as active in the area (McGraw, pers. comm., 2019).
HPMS estimated, and NMFS concurred, that two groups of eight Steller sea lions (maximum group size observed during the Sitka GPIP dock construction (Turnagain Marine Construction, 2017)) may occur within the Level B harassment zone on each of the 19 days of in-water construction (8 animals in a group × 2 groups each day × 19 days = 304 Level B harassment takes). Therefore, NMFS authorized 304 Level B harassment takes of Steller sea lions.
The largest Level A harassment zone for otariids extends 28.7m from the source during impact pile driving of 48-inch piles (Table 6). HPMS is planning to implement activity-specific shutdown zones (Table 8), which, given the small size of the Level A harassment zones, are expected to eliminate the potential for Level A harassment take of Steller sea lion. Therefore, Level A harassment take of Steller sea lions was not requested, and is not authorized.
Recognizing that western distinct population (WDPS) and eastern distinct population (EDPS) Steller sea lions overlap in northern Southeast Alaska, NMFS has determined that for management purposes the proportion of WDPS Steller sea lions in that area will be calculated based on Table 5 from Hastings et al. (2020) using the row for all non-pups 1+ years old from the “western stock region” (
In order to issue an IHA under section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting such activity or other means of effecting the least practicable adverse impact upon the affected species or stocks and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, we carefully consider two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned), the likelihood of effective implementation (probability implemented as planned), and;
(2) the practicability of the measures for applicant implementation, which may consider such things as cost, impact on operations, and, in the case of a military readiness activity, personnel safety, practicality of implementation, and impact on the effectiveness of the military readiness activity.
In addition to the measures described later in this section, HPMS will employ the following standard mitigation measures:
• Conduct briefings between construction supervisors and crews and the marine mammal monitoring team prior to the start of all pile driving activity and when new personnel join the work, to explain responsibilities, communication procedures, marine mammal monitoring protocol, and operational procedures;
• For in-water heavy machinery work other than pile driving (
• HPMS will drive all piles with a vibratory hammer until achieving a desired depth or refusal prior to using an impact hammer;
• For those marine mammals for which Level B harassment take has not been requested, in-water pile installation/removal will shut down immediately if such species are observed within or on a path towards the Level B harassment zone; and
• If take reaches the authorized limit for an authorized species, pile installation will be shut down as these species approach the Level B harassment zone to avoid additional take.
The following mitigation measures apply to HPMS's in-water construction activities.
Additionally, HPMS is required to implement all mitigation measures described in the biological opinion (issued on April 2, 2020).
The placement of PSOs during all pile driving and removal and drilling activities (described in detail in the
Based on our evaluation of the applicant's measures, as well as other measures considered by NMFS, NMFS has preliminarily determined that these mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, section 101(a)(5)(D) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the action area. Effective reporting is critical both to compliance as well as to ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
Marine mammal monitoring must be conducted in accordance with the Marine Mammal Monitoring Plan, dated March 2020. Marine mammal monitoring during pile driving and removal must be conducted by NMFS-approved PSOs in a manner consistent with the following:
• Independent PSOs (
• Other PSOs may substitute education (degree in biological science or related field) or training for experience;
• Where a team of three or more PSOs are required, a lead observer or monitoring coordinator must be designated. The lead observer must have prior experience working as a marine mammal observer during construction;
• HPMS must submit PSO CVs for approval by NMFS prior to the onset of pile driving.
PSOs must have the following additional qualifications:
• Ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behaviors;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to the number and species of marine mammals observed; dates and times when in-water construction activities were conducted; dates, times, and reason for implementation of mitigation (or why mitigation was not implemented when required); and marine mammal behavior; and
• Ability to communicate orally, by radio or in person, with project personnel to provide real-time information on marine mammals observed in the area as necessary.
Three PSOs will be employed during all pile driving/removal and drilling activities. PSO locations will provide an unobstructed view of all water within the shutdown zone, and as much of the Level A and Level B harassment zones as possible. PSO locations are as follows:
(1) At or near the site of pile driving;
(2) Big Gavanski Island—During vibratory pile driving and down-the-hole drilling, this PSO will be stationed on the north end of the island, and positioned to view north into Olga Straight and southeast toward the project area. For impact pile driving, this PSO will be stationed on the east side of the island, and positioned to be able to view north into Olga Straight and south toward the project area; and
(3) Middle Island—During vibratory pile driving and down-the-hole drilling,
Monitoring will be conducted 30 minutes before, during, and 30 minutes after pile driving/removal and drilling activities. In addition, observers shall record all incidents of marine mammal occurrence, regardless of distance from activity, and shall document any behavioral reactions in concert with distance from piles being driven or removed or anchor shafts being drilled. Pile driving and drilling activities include the time to install, remove, or drill inside a single pile or series of piles, as long as the time elapsed between uses of the pile driving or drilling equipment is no more than thirty minutes.
A draft marine mammal monitoring report will be submitted to NMFS within 90 days after the completion of pile driving and removal activities. The report will include an overall description of work completed, a narrative regarding marine mammal sightings, and associated PSO data sheets. Specifically, the report must include:
• Date and time that monitored activity begins or ends;
• Construction activities occurring during each observation period;
• Weather parameters (
• Water conditions (
• Species, numbers, and, if possible, sex and age class of marine mammals;
• Description of any observable marine mammal behavior patterns, including bearing and direction of travel and distance from pile driving activity;
• Distance from pile driving activities to marine mammals and distance from the marine mammals to the observation point;
• Locations of all marine mammal observations;
• Detailed information about any implementation of any mitigation triggered (
• Description of attempts to distinguish between the number of individual animals taken and the number of incidences of take, such as ability to track groups or individuals.
• An extrapolation of the estimated takes by Level B harassment based on the number of observed exposures within the Level B harassment zone and the percentage of the Level B harassment zone that was not visible; and
• Other human activity in the area.
If no comments are received from NMFS within 30 days, the draft report will constitute the final report. If comments are received, a final report addressing NMFS comments must be submitted within 30 days after receipt of comments.
In the event that personnel involved in the construction activities discover an injured or dead marine mammal, the IHA-holder must immediately cease the specified activities and report the incident to the Office of Protected Resources (OPR) (301-427-8401), NMFS and to Alaska Regional Stranding Coordinator (907-586-7209) as soon as feasible. The report must include the following information:
i. Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
ii. Species identification (if known) or description of the animal(s) involved;
iii. Condition of the animal(s) (including carcass condition if the animal is dead);
iv. Observed behaviors of the animal(s), if alive;
v. If available, photographs or video footage of the animal(s); and
vi. General circumstances under which the animal was discovered.
NMFS will work with HPMS to determine what, if anything, is necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. HPMS must not resume their activities until notified by NMFS.
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
To avoid repetition, the majority of our analyses apply to all of the species listed in Table 7, given that many of the anticipated effects of this project on different marine mammal stocks are expected to be relatively similar in nature. Where there are meaningful differences between species or stocks in anticipated individual responses to activities, impact of expected take on the population due to differences in population status or impacts on habitat, they are described independently in the analysis below.
Pile driving/removal and drilling activities associated with the project, as outlined previously, have the potential to disturb or displace marine mammals. Specifically, the specified activities may result in take, in the form of Level A and Level B harassment, from underwater sounds generated from pile driving/removal and down-the-hole drilling. Potential takes could occur if individuals of these species are present in zones ensonified above the thresholds for Level A or Level B harassment, identified above, when these activities are underway.
The takes from Level A and Level B harassment will be due to potential behavioral disturbance, TTS and PTS. No mortality or serious injury is anticipated given the nature of the activity. Level A harassment is only anticipated for harbor seal and harbor porpoise. The potential for Level A harassment is minimized through the construction method and the implementation of the required mitigation measures (see
Effects on individuals that are taken by Level B harassment, on the basis of reports in the literature as well as monitoring from other similar activities, will likely be limited to reactions such
In addition to the expected effects resulting from authorized Level B harassment, we anticipate that harbor porpoises and harbor seals may sustain some limited Level A harassment in the form of auditory injury. However, animals that experience PTS will likely only receive slight PTS,
The project is also not expected to have significant adverse effects on affected marine mammals' habitats. The project activities will not modify existing marine mammal habitat for a significant amount of time. The activities may cause some fish to leave the area of disturbance, thus temporarily impacting marine mammals' foraging opportunities in a limited portion of the foraging range; but, because of the short duration of the activities and the relatively small area of the habitat that may be affected, the impacts to marine mammal habitat are not expected to cause significant or long-term negative consequences.
Steller sea lion critical habitat has been defined in Southeast Alaska at major haulouts and major rookeries (50 CFR 226.202), however, the action area does not overlap with any Steller sea lion critical habitat. The closest Steller sea lion critical habitat to the project area is Kaiuchali Island, a three-acre rocky islet located slightly less than one mile southwest of Biorka Island. It is listed as “Biorka Island” in the critical habitat descriptions, and is over 25 km (13.5 nmi) southwest of the project area.
Critical habitat was recently proposed for the humpback whale in Southeast Alaska, including Sitka Sound (84 FR 54354, October 9, 2019), but it has not yet been finalized. Additionally, Sitka Sound is within the seasonal southeast Alaska humpback whale feeding BIA from March through November (Ferguson
Sitka Sound is also within a gray whale migratory corridor BIA (Ferguson
As noted previously, since January 1, 2019, elevated gray whale strandings have occurred along the west coast of North America from Mexico through Alaska. The event has been declared an UME, though a cause has not yet been determined. While three Level B harassment takes of gray whale are authorized, this is an extremely small portion of the stock (0.01 percent), and HPMS will be required to implement a shutdown zone that includes the entire Level A harassment zone for low-frequency cetaceans such as gray whales.
In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect the species or stock through effects on annual rates of recruitment or survival:
• No mortality or serious injury is anticipated or authorized;
• The relatively small number of Level A harassment exposures are anticipated to result only in slight PTS within the lower frequencies associated with pile driving;
• The anticipated incidents of Level B harassment will consist of, at worst, temporary modifications in behavior that will not result in fitness impacts to individuals;
• The area impacted by the specified activity is very small relative to the overall habitat ranges of all species, BIAs, and proposed humpback whale critical habitat; and
• The activity is expected to occur over 19 in-water workdays with a maximum of eight hours of work per day, though less on most days.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the monitoring and mitigation measures, NMFS finds that the total marine mammal take from the activity will have a negligible impact on all affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under sections 101(a)(5)(A) and (D) of the MMPA for specified activities other
The number of takes for each species authorized to be taken as a result of this project is included in Table 7. Our analysis shows that less than one-third of the best available population abundance estimate of each stock could be taken by harassment. Furthermore, these percentages conservatively assume that all takes of killer whale will be accrued to a single stock, when multiple stocks are known to occur in the project area. For the Alaska stock of minke whale, a lack of an accepted stock abundance value did not allow for the calculation of an expected percentage of the population that will be affected. The most relevant estimate of partial stock abundance is 1,233 minke whales for a portion of the Gulf of Alaska (Zerbini
Based on the analysis contained herein of the activity (including the mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
In order to issue an IHA, NMFS must find that the specified activity will not have an “unmitigable adverse impact” on the subsistence uses of the affected marine mammal species or stocks by Alaskan Natives. NMFS has defined “unmitigable adverse impact” in 50 CFR 216.103 as an impact resulting from the specified activity: (1) That is likely to reduce the availability of the species to a level insufficient for a harvest to meet subsistence needs by: (i) Causing the marine mammals to abandon or avoid hunting areas; (ii) Directly displacing subsistence users; or (iii) Placing physical barriers between the marine mammals and the subsistence hunters; and (2) That cannot be sufficiently mitigated by other measures to increase the availability of marine mammals to allow subsistence needs to be met.
The project is in an area where subsistence hunting for harbor seals or sea lions could occur (Wolfe
Section 7(a)(2) of the Endangered Species Act of 1973 (ESA: 16 U.S.C. 1531
Two marine mammal species, Mexico DPS humpback whales and Western DPS Steller sea lions, occur in the project area and are listed as threatened and endangered, respectively, under the ESA. The NMFS Alaska Regional Office Protected Resources Division issued a Biological Opinion under section 7 of the ESA, on the issuance of an IHA to HPMS under section 101(a)(5)(D) of the MMPA by the NMFS Permits and Conservation Division. The Biological Opinion concluded that the action is not likely to jeopardize the continued existence of either species, and is not likely to destroy or adversely modify western DPS Steller sea lion critical habitat. As noted above, the proposed humpback whale critical habitat has not yet been finalized.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 (incidental harassment authorizations with no anticipated serious injury or mortality) of the Companion Manual for NOAA Administrative Order 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has determined that the issuance of the IHA qualifies to be categorically excluded from further NEPA review.
NMFS has issued an IHA to Halibut Point Marine Services LLC for the potential harassment of small numbers of seven marine mammal species incidental to the Old Sitka Dock North Dolphins Expansion project in Sitka, Alaska, provided the previously mentioned mitigation, monitoring and reporting requirements are conducted.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application.
Notice is hereby given that Midwest Biodiversity Institute (MBI) has applied in due form for a permit pursuant to the Endangered Species Act
Written comments must be received at the appropriate address or fax number (see
The application is available for download and review at
You may submit comments, identified by NOAA-NMFS-2020-0059, by any of the following methods:
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•
•
Celeste Stout, Phone: (301) 427-8436 or Email:
Section 9 of the ESA and Federal regulations prohibit the `taking' of a species listed as endangered or threatened. The ESA defines “take” to mean harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. NMFS may issue permits, under limited circumstances to take listed species incidental to, and not the purpose of, otherwise lawful activities. Section 10(a)(1)(B) of the ESA provides for authorizing incidental take of listed species. NMFS regulations governing permits for threatened and endangered species are promulgated at 50 CFR 222.307.
NMFS received a permit application from MBI on January 31, 2020. Based on our initial review of the application and conservation plan, we requested further information and clarification. On March 30, 2020, MBI submitted a revised and complete application for the take of ESA-listed shortnose sturgeon, Atlantic sturgeon and Atlantic salmon due to the sampling of non-ESA listed fish in the Lower Kennebec River. MBI proposes to continue an 18 yearlong (2002-19) systematic assessment of the fish assemblages at seven sites in an approximate 17.5 mile (28.2 km) reach of the Lower Kennebec River and three sites in a 6 mile (9.7 km) reach of the Sebasticook River. MBI will conduct boat electrofishing where electric current is generated by a Smith-Root Generator Powered Pulsator and transmitted into the water by an electrode array suspended from the bow of 16-18 foot long (25-29 km) jon boats or a 16 foot long inflatable Wing raft. NMFS determined that the application contained sufficient information for review and consideration under section 10(a)(1)(B) of the ESA. MBI is requesting a total annual incidental take of four Atlantic salmon, four Atlantic sturgeon and five shortnose sturgeon for a permit duration of 10-years.
Section 10 of the ESA specifies that no permit may be issued unless an applicant submits an adequate conservation plan. The conservation plan prepared by MBI describes measures designed to minimize and mitigate the impacts of any incidental take of ESA-listed shortnose sturgeon, Atlantic sturgeon and Atlantic salmon. To avoid and minimize take of ESA listed species, MBI will: (1) Only sample during the late summer and early fall to avoid potential risk to early life stages and juveniles, as these life stages of shortnose and Atlantic sturgeon species are not present in the river during that time period. There is no risk to Atlantic salmon early life stages because spawning and rearing occurs in tributaries well outside of the proposed study area. (2) MBI will notify NOAA, Maine Department of Marine Resources (DMR) and Maine Department of Inland Fisheries & Wildlife (IF&W) at least one week prior to any planned sampling activities. The notification will include a general schedule and inclusive dates of sampling. (3) All MBI and accompanying non-MBI personnel conducting the sampling will have received appropriate training in electrofishing and in the identification of listed species. At the start of each sampling day, each crewmember will receive instruction about the procedures to follow if a listed species is encountered. (4) The conduct of sampling and operation of the electrofishing gear will be done in a manner that minimizes the potential for injury or mortality of listed species. (4a) The electric current and the sampling activity will immediately cease upon an encounter with a listed species. Affected fish will not be netted, touched, or handled. Species identification and estimation of length will be made visually. To minimize effects to Atlantic salmon, sampling will not be conducted when ambient water temperature is >22°C (per Maine DMR specifications). (4b) Sampling activities will cease and the electric current will be shut off for a period of 5 minutes or until the individual fish is observed to have departed the area. The physical condition of the fish will be recorded, including their reaction to the electric field and whether they were able to leave the area under their own power. (5) Any encounter with a listed species will be promptly reported to the Office
MBI considered and rejected other gear alternatives to conduct the sampling because the alternative means of sampling the study area are too resource intensive and cost-ineffective compared to the single gear of boat-mounted pulsed direct current (DC) electrofishing. Other possible alternatives would require the direct handling of listed species and thus increase the risk of injury or mortality to the fish. MBI believes that combination of that risk and the comparative inefficiency and ineffectiveness of alternate fish collecting gear types makes boat-mounted pulsed DC electrofishing the safest and most effective sampling method available.
At present, the project is funded by MBI research and development funds, but MBI continues to seek external funding. This project has been ongoing for 18 years and is one of the longest running biological monitoring projects in New England and the only sustained effort that focuses on large river fish assemblages.
Issuing an ESA section 10(a)(1)(B) permit constitutes a Federal action requiring NMFS to comply with the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
This notice is provided pursuant to section 10(c) of the ESA. NMFS will evaluate the application, associated documents, and comments received during the comment period to determine whether the application meets the requirements of section 10(a) of the ESA. If NMFS determines that the requirements are met, a permit will be issued for incidental takes of ESA-listed shortnose and Atlantic sturgeon and Atlantic salmon. The final NEPA and permit determinations will not be made until after the end of the comment period. NMFS will publish a record of its final action in the
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and Deletions from the Procurement List.
This action adds products to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes products and services from the Procurement List previously furnished by such agencies.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia, 22202-4149.
Michael R. Jurkowski, Telephone: (703) 603-2117, Fax: (703) 603-0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
On 9/6/2019 and 3/6/2020, the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed additions to the Procurement List. This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the products and impact of the additions on the current or most recent contractors, the Committee has determined that the products listed below are suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the products to the Government.
2. The action will result in authorizing small entities to furnish the products to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the products proposed for addition to the Procurement List.
Accordingly, the following products are added to the Procurement List:
On 3/13/2020, the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from the Procurement List.
After consideration of the relevant matter presented, the Committee has determined that the products and services listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to furnish the product(s) and service(s) to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the product(s) and service(s) deleted from the Procurement List.
Accordingly, the following products and services are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed additions to and deletions from the Procurement List.
The Committee is proposing to add products to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes products and a service previously furnished by such agencies.
Comments must be received on or before: May 17, 2020.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia, 22202-4149.
For further information or to submit comments contact: Michael R. Jurkowski, Telephone: (703) 603-2117, Fax: (703) 603-0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
If the Committee approves the proposed additions, the entities of the Federal Government identified in this notice will be required to procure the products listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.
The following products are proposed for addition to the Procurement List for production by the nonprofit agencies listed:
The following products and service are proposed for deletion from the Procurement List:
Defense Security Cooperation Agency, Department of Defense.
Arms sales notice.
The Department of Defense is publishing the unclassified text of an arms sales notification.
Karma Job at
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives, Transmittal 20-15 with attached Policy Justification and Sensitivity of Technology.
(i)
(ii)
(iii)
None
Included are ARC-238 radios; AN/APX-126 Combined Interrogator Transponders; Joint Mission Planning (JMPS) upgrade; KY-58M secure voice module; Simple Key Loader (SKL)
(iv)
(v)
(vi)
(vii)
(viii)
* As defined in Section 47(6) of the Arms Export Control Act.
The Republic of Korea has requested to upgrade its F-16 Block 32 aircraft with Mode 5 Identification Friend or Foe (IFF) and Link 16 Tactical Datalink (TDL). Included are ARC-238 radios; AN/APX-126 Combined Interrogator Transponders; Joint Mission Planning (JMPS) upgrade; KY-58M secure voice module; Simple Key Loader (SKL) crypto fill devices; Precision Measurement Equipment Laboratory (PMEL); aircraft ferry support; training; Computer Program Identification Number System (CPINS); flight manuals; flight tests; integration support and test equipment; U.S. Government and contractor, engineering, technical and logistics support services; sustainment and other support equipment; and other related elements of logistical and program support. The total estimated cost is $194 million.
This proposed sale will support the foreign policy and national security objectives of the United States by meeting legitimate security and defense needs of one of the U.S.'s closest allies in the INDOPACOM Theater. The Republic of Korea is one of the major political and economic powers in East Asia and the Western Pacific and a key partner of the United States in ensuring peace and stability in the region. It is vital to U.S. national interests to assist the Republic of Korea in developing and maintaining a strong and ready self-defense capability.
The proposed sale will improve the Republic of Korea's capability to meet current and future threats by increasing its interoperability with U.S. Air Force and other coalition forces through an improved datalink and Mode 5 IFF, producing a more effective Alliance for its F-16 fleet. The Republic of Korea will have no difficulty absorbing this upgrade into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The prime contractor will be Lockheed Martin Corporation, Bethesda, MD. There are no known offset agreements proposed in connection with this potential sale. Any offset agreement will be defined in negotiations between the Purchaser and the prime contractor.
Implementation of this proposed sale will not require the assignment of additional U.S. Government and/or contractor representatives to Republic of Korea above the current four (4) incountry contractor representatives.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The AN/APX-126 Advanced Identification Friend or Foe (AIFF) is a system capable of transmitting and interrogating Mode 5. It is UNCLASSIFIED unless/until Mode 4 and/or Mode 5 operational evaluator parameters are loaded into the equipment. Classified elements of the IFF system include software object code, operating characteristics, parameters, and technical data. Mode 4 and Mode 5 anti-jam performance specifications/data, software source code, algorithms, and tempest plans or reports will not be offered, released, discussed or demonstrated.
2. The KY-58M is a lightweight terminal for secure voice and data communications. The KY-58M provides wideband/ narrowband half duplex communication. The KY-58M provides flexible interface capability. Operating in tactical ground, marine and airborne applications, the KY-58M enables secure communication with a broad range of radio and satellite equipment.
3. The AN/ARC-238 radio with HAVE QUICK II/SATURN is a voice communications radio system and considered UNCLASSIFIED without HAVE QUICK II/SATURN. HAVE QUICK II/SATURN employs cryptographic technology that is classified SECRET. Classified elements include operating characteristics, parameters, technical data, and keying material.
4. Joint Mission Planning System (JMPS) is a multi-platform PC based mission planning system. JMPS hardware is UNCLASSIFIED but the software is classified up to SECRET.
5. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
6. A determination has been made that the Republic of Korea can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
7. All defense articles and services listed in this transmittal have been authorized for release and export to the Republic of Korea.
Department of the Army, U.S. Army Corps of Engineers, DoD.
Notice of federal advisory committee meeting; cancellation.
On February 6, 2020, the Department of Defense (DoD) published an updated notice that announced the third meeting of the Table Rock Lake Oversight Committee, which was to take place on Wednesday, May 6, 2020 from 8:00 a.m. to 5:00 p.m. DoD is publishing this notice to announce that this federal advisory committee meeting has been cancelled due to COVID-19 concerns (the State of Missouri is under “Stay at Home” orders) and will be re- scheduled at a later date, along with meeting four.
Mr. Kevin McDaniels, Designated Federal Officer (DFO) for the Committee, in writing at U.S. Army Corps of Engineers, Little Rock District, Operations Division, P.O. Box 867 Little
This notice meets the 15-day notification requirement as required by 41 CFR 102-3.150(a) concerning the cancellation of its previously noticed meeting of May 6, 2020.
On February 6, 2020, the Department of Defense (DoD) published an updated notice (85 FR 6937) that announced the third meeting of the Table Rock Lake Oversight Committee, which was to take place on Wednesday, May 6, 2020 from 8:00 a.m. to 5:00 p.m. DoD is publishing this notice to announce that this federal advisory committee meeting has been cancelled due to COVID-19 concerns (the State of Missouri is under “Stay at Home” orders) and will be re-scheduled at a later date, along with meeting four. The rescheduled meetings will be announced 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 June 16, 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.
This information collection is necessary for loan holders in the FFEL, Direct Loan, and Perkins Loan programs to obtain the information that is needed to determine whether a borrower qualifies for a closed school or false certification loan discharge. The loan discharge regulations in all three loan programs require borrowers who seek discharge of their FFEL, Direct Loan, or Perkins Loan program loans to request a loan discharge and provide their loan holders with certain information in writing.
This information collection includes the following five loan discharge applications that are used to obtain the information needed to determine whether a borrower qualifies for a closed school discharge, false certification—ATB, false certification—disqualifying status, false certification—unauthorized signature/unauthorized payment or unpaid refund loan discharges.
Federal Energy Regulatory Commission.
Notice of inquiry.
Following the issuance of
Initial Comments are due June 16, 2020, and Reply Comments are due July 16, 2020.
Comments, identified by docket number, may be filed electronically at
Evan Steiner (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502-8792,
1. In
2. The Commission regulates oil pipeline rates pursuant to the Interstate Commerce Act's just and reasonable standard.
3. In adopting the indexing regime, the Commission established a procedure to allow shippers to challenge index rate increases that, while in compliance with the applicable ceiling, are substantially in excess of the actual cost changes that the pipeline incurred.
4. Under the Commission's current policy, the preliminary screen differs for protests and complaints. When a proposed index rate increase is protested, the Commission applies the Percentage Comparison Test and will investigate the protested increase if the pipeline's page 700 revenues exceed its costs and there is more than a 10 percentage-point differential between: (a) The index rate increase; and (b) the change in the prior two years' total cost-of-service data reported on page 700, line 9.
5. In 2014, two complaints were filed in Docket Nos. OR14-35-000 and OR14-36-000 challenging SFPP, L.P.'s (SFPP) index rate increases for the 2012 and 2013 index years under § 343.2(c)(1) (2014 Complaints). The Commission dismissed the complaints for failing the second prong of the Substantially Exacerbate Test, finding that the complaints failed to show that the challenged rate increases exacerbated any over-recovery because, notwithstanding the rate increases, page 700 data that became available after SFPP implemented the increases and before the 2014 Complaints were filed (post-increase data) showed that the difference between SFPP's costs and revenues declined between 2011 and 2013.
6. Following an appeal by the complainants, the United States Court of Appeals for the District of Columbia Circuit held in
7. In 2019, three additional complaints were filed in Docket Nos. OR19-21-000, OR19-33-000, and OR19-37-000 challenging certain SFPP index rate increases for the 2018 index year (2019 Complaints).
8. In response to the remand in
9. In
10. In light of these concerns regarding use of the Substantially Exacerbate Test to evaluate complaints under § 343.2(c)(1), the Commission in
11. The Commission explained how this proposed change in policy appears to resolve the concerns regarding the current policy of applying the Substantially Exacerbate Test. The Commission explained that the Percentage Comparison Test is free of the apparent methodological defect that causes the Substantially Exacerbate Test to yield irrational results
12. The Commission also proposed in
13. The Commission directed the parties in the
14. As contemplated in
15. After publication of this Notice of Inquiry in the
16. The Commission invites public comment on the proposals discussed in
17. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's website at
18. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, at Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
19. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.
20. In addition to publishing the full text of this document in the
21. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
22. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
Email the Public Reference Room at
By direction of the Commission.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on April 3, 2020, pursuant to Rule 207(a)(2) of the Federal Energy Regulatory Commission's (Commission) Rules of Practice and Procedure, 18 CFR 385.207(a)(2) (2019), Sunoco Pipeline L.P. (“Sunoco”), filed a declaratory order petition: (1) Seeking approval of the right of Sunoco to enter into new transportation services agreements for previously committed capacity on its Mariner West ethane pipeline, and (2) approving the tariff, rate structure and terms of such service, all as more fully explained in the petition.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Petitioner.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
In addition to publishing the full text of this document in the
This is a supplemental notice in the above-referenced RE Mustang Two Whirlaway, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Take notice that the following settlement agreement has been filed with the Commission and is available for public inspection.
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The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at
The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. Chittenden Falls Hydro filed an Offer of Settlement (Settlement Agreement) on behalf of itself, the New York State Department of Environmental Conservation (New York DEC), and the United States Department of the Interior—Fish and Wildlife Service. The Settlement Agreement includes protection, mitigation, and enhancement measures addressing run-of-river operation and allowable impoundment fluctuations, a minimum bypassed reach flow, fish passage and protection for American eel, and by reference, management plans for northern long-eared bat and bald eagles (Appendix A), and invasive species (Appendix B). Chittenden Falls Hydro requests that the measures in the Settlement Agreement be incorporated as license conditions in any new license issued for the project. The signatories to the Settlement Agreement also request a 40-year license term for the project.
l. A copy of the Settlement Agreement is available for review on the Commission's website at
All filings must (1) bear in all capital letters the title “COMMENTS,” “REPLY COMMENTS,” “RECOMMENDATIONS,” “TERMS AND CONDITIONS,” or “PRESCRIPTIONS;” (2) set forth in the heading the name of the applicant and the project number of the application to which the filing responds; (3) furnish the name, address, and telephone number of the person submitting the filing; and (4) otherwise comply with the requirements of 18 CFR 385.2001 through 385.2005. All comments, recommendations, terms and conditions or prescriptions must set forth their evidentiary basis and otherwise comply with the requirements of 18 CFR 4.34(b). Agencies may obtain copies of the application directly from the applicant. Each filing must be accompanied by proof of service on all persons listed on the service list prepared by the Commission in this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
Register online at
m.
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified date(s). Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
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j. The application is not ready for environmental analysis at this time.
k. Kennebunk Light and Power District currently owns and holds a license to operate and maintain the Lower Mousam Project as FERC Project No. 5362. On March 29, 2017, Kennebunk Light and Power District filed a notice stating that it does not intend to file an application for a subsequent license. In response to a solicitation notice issued by the Commission on May 15, 2017, America First Hydro filed a pre-application document and a notice of intent to file an application for a license for the Lower Mousam Project, pursuant to 18 CFR 5.5 and 5.6. Commission staff assigned Project No. 14856 for the licensing proceeding initiated by America First Hydro's filing.
l.
The existing Lower Mousam Project consists of the following three developments:
The Dane Perkins Development consists of: (1) A 12-foot-high, 83-foot-long concrete gravity dam with a 50-foot-long spillway section that has a crest elevation of 81.8 feet mean seal level (msl) plus 2.5-foot-high flashboards; (2) a 25-acre impoundment with a normal maximum elevation of 84.3 feet msl; (3) a powerhouse containing a single turbine-generator unit rated at 150 kilowatts (kW); (4) a generator lead connecting the turbine-generator unit to the regional grid; and (5) appurtenant facilities.
The Twine Mill Development is located approximately 0.5 mile downstream from the Dane Perkins Development and consists of: (1) An 18-foot-high, 223-foot-long concrete gravity dam with an 81-foot-long spillway section that has a crest elevation of 68.8 feet msl plus 3.0-foot-high flashboards; (2) a 12-acre impoundment with a normal maximum elevation of 71.8 feet msl; (3) a powerhouse containing a single turbine-generator unit rated at 300 kW; (4) a generator lead connecting the turbine-generator unit to the
The Kesslen Development is located approximately 2.5 miles downstream from the Twine Mill Development and consists of: (1) An 18-foot-high, 140-foot-long concrete gravity dam with a 114-foot-long spillway section that has a crest elevation of 42.2 feet msl plus 1.5-foot-high flashboards; (2) a 20-acre impoundment with a normal maximum elevation of 43.7 feet msl; (3) a powerhouse containing a single turbine-generator unit rated at 150 kW; (4) a generator lead connecting the turbine-generator unit to the regional grid; and (5) appurtenant facilities.
The current license requires an instantaneous minimum flow of 60 cubic feet per second (cfs) or inflow, whichever is less, downstream of the Kesslen Development from April 1 through June 1 each year; and a minimum flow of 5 cfs or inflow downstream of the Kesslen Development from June 2 through March 31. The licensee operates the project in a run-of-river mode on a voluntary basis.
America First Hydro proposes to increase the installed generation capacity at the Dane Perkins Development by replacing the existing 150-kW turbine-generator unit with two turbine-generator units that have a combined capacity of 270 kW. America First Hydro proposes to disconnect the generating equipment at the Kesslen Development and allow all flow to pass over the dam. America First Hydro also proposes to continue operating the project in a run-of-river mode.
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n. You may also register online at
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p. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the Notice of Ready for Environmental Analysis.
This is a supplemental notice in the above-referenced RE Mustang Two Barbaro LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is May 4, 2020.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the website that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
Environmental Protection Agency (EPA).
Notice.
In accordance with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is issuing a notice of receipt of requests by the registrants to voluntarily cancel certain pesticide product registrations and to amend certain product registrations to terminate uses. EPA intends to grant these requests at the close of the comment period for this announcement unless the Agency receives substantive comments within the comment period that would merit its further review of the requests, or unless the registrants withdraw their requests. If these requests are granted, any sale, distribution, or use of products listed in this notice will be permitted after the registrations have been cancelled and uses terminated only if such sale, distribution, or use is consistent with the terms as described in the final order.
Comments must be received on or before May 18, 2020.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2020-0060, by one of the following methods:
Submit written withdrawal request by mail to: Information Technology and Resources Management Division (7502P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001. ATTN: Christopher Green.
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Christopher Green, Information Technology and Resources Management Division (7502P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (703) 347-0367; email address:
This action is directed to the public in general and may be of interest to a wide range of stakeholders including environmental, human health, and agricultural advocates; the chemical industry; pesticide users; and members of the public interested in the sale, distribution, or use of pesticides. Since
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This notice announces receipt by EPA of requests from registrants to cancel certain pesticide products and amend product registrations to terminate certain uses registered under FIFRA section 3 (7 U.S.C. 136a) or 24(c) (7 U.S.C. 136v(c)). The affected products and the registrants making the requests are identified in Tables 1-3 of this unit.
Unless a request is withdrawn by the registrant or if the Agency determines that there are substantive comments that warrant further review of this request, EPA intends to issue an order in the
The registrant of the product listed in Table 1A, of Unit II, has requested the effective date of December 31, 2020, for the cancellation.
The registrant of the products listed in Table 1B, of Unit II, has requested the effective date of December 31, 2019, for the cancellations.
Table 3 of this unit includes the names and addresses of record for all the registrants of the products listed in Tables 1, 1A, 1B and 2 of this unit, in sequence by EPA company number. This number corresponds to the first part of the EPA registration numbers of the products listed in Table 1, Table 1A, Table 1B and Table 2 of this unit.
Section 6(f)(1) of FIFRA (7 U.S.C. 136d(f)(1)) provides that a registrant of a pesticide product may at any time request that any of its pesticide registrations be canceled or amended to terminate one or more uses. FIFRA further provides that, before acting on the request, EPA must publish a notice of receipt of any such request in the
Section 6(f)(1)(B) of FIFRA (7 U.S.C. 136d(f)(1)(B)) requires that before acting on a request for voluntary cancellation, EPA must provide a 30-day public comment period on the request for voluntary cancellation or use termination. In addition, FIFRA section 6(f)(1)(C) (7 U.S.C. 136d(f)(1)(C)) requires that EPA provide a 180-day comment period on a request for voluntary cancellation or termination of any minor agricultural use before granting the request, unless:
1. The registrants request a waiver of the comment period.
2. The EPA Administrator determines that continued use of the pesticide would pose an unreasonable adverse effect on the environment.
The registrants listed in Table 3 of Unit II have requested that EPA waive the 180-day comment period. Accordingly, EPA will provide a 30-day comment period on the proposed requests.
Registrants who choose to withdraw a request for product cancellation or use termination should submit the withdrawal in writing to the person listed under
Existing stocks are those stocks of registered pesticide products that are currently in the United States and that were packaged, labeled, and released for shipment prior to the effective date of the action. If the requests for voluntary cancellation and amendments to terminate uses are granted, the Agency intends to publish the cancellation order in the
In any order issued in response to these requests for cancellation of product registrations and for amendments to terminate uses, EPA proposes to include the following provisions for the treatment of any existing stocks of the products listed in Table 1, Table 1A and Table 1B of Unit II.
For product 10324-66, listed in Table 1 of Unit II, the registrant has requested 18-months to sell existing stocks. The registrant will be permitted to sell and distribute existing stocks of the product for 18-months after the effective date of the cancellation, which will be the date of publication of the cancellation order in the
For product 432-893, listed in Table 1A of Unit II, the registrant has requested the cancellation date to be December 31, 2020; therefore, the registrant will be permitted to sell and distribute existing stocks of the voluntarily canceled product for 1 year after the effective date of the cancellation, which will be until December 31, 2021. Thereafter, the registrant will be prohibited from selling or distributing the product, except for
For products CA-040026, CA-080009, CA-080010, CA-080011 and CA-080012, listed in Table 1B of Unit II, the registrant has requested the cancellation date to be December 31, 2019; therefore, the registrant will be permitted to sell and distribute existing stocks of voluntarily canceled products for 1 year after the effective date of the cancellation, which will be until December 31, 2020. Thereafter, the registrant will be prohibited from selling or distributing these products, except for export consistent with FIFRA section 17 (7 U.S.C. 136o) or for proper disposal.
For all other voluntary product cancellations, identified in Table 1 of Unit II, registrants will be permitted to sell and distribute existing stocks of voluntarily canceled products for 1 year after the effective date of the cancellation, which will be the date of publication of the cancellation order in the
Once EPA has approved product labels reflecting the requested amendments to terminate uses, identified in Table 2 of Unit II, registrants will be permitted to sell or distribute products under the previously approved labeling for a period of 18-months after the date of
Persons other than the registrant may sell, distribute, or use existing stocks of canceled products and products whose labels include the terminated uses until supplies are exhausted, provided that such sale, distribution, or use is consistent with the terms of the previously approved labeling on, or that accompanied, the canceled products and terminated uses.
7 U.S.C. 136
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before May 18, 2020.
Comments should be sent to
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
The data collected on FCC Form 601 includes the FCC Registration Number (FRN), which serves as a “common link” for all filings an entity has with the FCC. The Debt Collection Improvement Act of 1996 requires entities filing with the Commission to use an FRN.
On August 3, 2017, the Commission released the WRS Reform Second Report and Order in which it consolidated the hodgepodge of service-specific renewal and permanent discontinuance rules into consolidated Part 1 rules, 1.949 and 1.953, respectively (See Amendment of Parts 1, 22, 24, 27, 74, 80, 90, 95, and 101 To Establish Uniform License Renewal, Discontinuance of Operation, and Geographic Partitioning and Spectrum Disaggregation Rules and Policies for Certain Wireless Radio Services, Second Report and Order and Further Notice of Proposed Rulemaking, FCC 17-105, (WRS Reform Second Report and Order)). Of relevance to the information collection at issue here, the Commission established a consistent standard for renewing wireless licenses and set forth safe harbors providing expedited renewal for licensees that meet their initial term construction requirement and remain operating at or above that level. In addition, the Commission adopted consistent service continuity rules, which provide for automatic termination of any license on which a licensee permanently discontinues service or operation.
The Commission now seeks approval for revisions to its currently approved collection of information under OMB Control Number 3060-0798 to permit (1) the collection of renewal-related information for Wireless Radio Service (WRS) licenses, and (2) the filing of requests to extend a permanent discontinuance period for good cause. Regarding renewal of WRS licenses, § 1.949(d) of the Commission's rules requires an applicant for renewal of certain WRS licenses to meet the Renewal Standard,
We do not anticipate that these revisions will have any impact on the burden to complete FCC Form 601. The renewal process remains virtually unchanged for site-based licensees, which will continue to have streamlined processes for renewal under the safe harbors adopted in the WRS Reform Second Report and Order. For licensees which had to make renewal showings under the Commissions' prior, service-specific renewal rules, including 700 MHz Commercial Services, 600 MHz Service, H-Block Service, AWS-3, AWS-4, and 218-219 MHz Service, the rules now provide for streamlined renewal processes under the safe harbor provisions in § 1.949(e), which minimize the burdens on such licensees. The Commission expects that most licensees will be able to avail themselves of the streamlined safe harbor process. Although some licensees will be required to make a renewal showing, on balance, we believe there will be no increase in the overall annual burden to complete the form. Further, the Commission's experience with requests to extend the discontinuance period for licensees in the cellular service leads us to anticipate few, if any, such requests will be filed under our new rules. Specifically, we are unaware of any requests to extend a cellular discontinuance period. Thus, we believe there will be a negligible, if any, impact on the annual burden to complete the form.
The Commission therefore seeks approval for a revision to its currently approved information collection on FCC Form 601 to revise FCC Form 601 accordingly.
In addition, on August 10, 2015, the Commission released a Report and Order in Amendment of Sections 90.20(d) and 90.265 of the Commission's Rules to Facilitate the Use of Vehicular Repeater Units, FCC 15-103, in which it decided to adopt certain changes to the rules governing six remote control and telemetry channels in the VHF band. The Commission decided to allow the licensing and operation of vehicular repeater systems (VRS) and other mobile repeaters on these channels. In addition, the Commission revises and updated the technical rules for these channels to allow greater use of VRS systems while providing protection for incumbent telemetry users who rely on these frequencies for control of critical infrastructure systems. Of significance for this collection, the Commission also decided that the only way to accommodate both telemetry and VRS on these frequencies is through frequency coordination to both ensure geographic separation as well as minimizing the risk of commingling
Sections 90.35, 90.20, and 90.175(b)(4) require third party disclosures by applicants proposing to operate vehicular repeater units on designated frequencies. They are required to obtain written concurrence of a frequency coordinator. This information will be used by Commission personnel in evaluating the applicant's need for such frequencies and to minimize the interference potential to other stations operating on the proposed frequencies.
The data collected on FCC 603 include the FCC Registration Number (FRN), which serves as a “common link” for all filings an entity has with the FCC. The Debt Collection Improvement Act of 1996 required that those filing with the Commission to use an FRN, effective December 3, 2001.
Records may include information about individuals or households,
On August 3, 2017, the Commission released the WRS Reform Second Report and Order in which it consolidated the hodgepodge of service-specific geographic partitioning and spectrum disaggregation rules into a consolidated Part 1 rule, 1.950 (See Amendment of Parts 1, 22, 24, 27, 74, 80, 90, 95, and 101 To Establish Uniform License Renewal, Discontinuance of Operation, and Geographic Partitioning and Spectrum Disaggregation Rules and Policies for Certain Wireless Radio Services, Second Report and Order and Further Notice of Proposed Rulemaking, FCC 17-105, (WRS Reform Second Report and Order)). Of relevance to the information collection at issue here, the Commission required that when portions of geographic licenses are sold, both parties to the transaction have a clear construction obligation and penalty in the event of failure.
Specifically, § 1.950(c) requires parties seeking approval for geographic partitioning, spectrum disaggregation, or a combination of both must apply for a partial assignment of authorization by filing FCC Form 603 pursuant to § 1.948 of the Commission's rules. Each request for geographic partitioning must include an attachment defining the perimeter of the partitioned area by geographic coordinates to the nearest second of latitude and longitude, based upon the 1983 North American Datum (NAD83). Alternatively, applicants may specify an FCC-recognized service area (
In addition, § 1.950(d) requires applicants for geographic partitioning, spectrum disaggregation, or a combination of both, to include, if applicable, a certification with their partial assignment of authorization application stating which party will meet any incumbent relocation requirements, except as otherwise stated in service-specific rules. Further, § 1.950(g) provides parties to geographic partitioning, spectrum disaggregation, or a combination of both, with two options to satisfy service-specific performance requirements (
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before May 18, 2020.
Comments should be sent to
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
FCC Form 301 also accommodates commercial FM applicants applying in a Threshold Qualifications Window (TQ
Similarly, to receive authorization for commencement of Digital Television (DTV) operations, commercial broadcast licensees must file FCC Form 2100, Schedule A for a construction permit. The application may be filed any time after receiving the initial DTV allotment and before mid-point in the applicant's construction period. The Commission will consider the application as a minor change in facilities. Applicants do not have to provide full legal or financial qualifications information.
In the first phase of the “Licensing and Management System” roll-out, Form 2100, Schedule A replaced FCC Form 301 only for the filing of full-service digital television construction permits. Subsequently, the Commission received OMB approval for FM Auxiliary Stations to transition from CDBS to LMS using Form 2100, Schedule 301-FM. FCC Form 301 is still being used through CDBS to apply for authority to construct a new full-service commercial AM or FM commercial broadcast station and to make changes to the existing facilities of such stations.
This collection also includes the third-party disclosure requirement of 47 CFR 73.3580. This rule requires applicants to provide local public notice, in a newspaper of general circulation published in a community in which a station is located, of requests for new or major changes in facilities and for changes of a station's community of license by AM and non-reserved band FM permittees and licensees. The local notice must be completed within 30 days of tendering the application and must be published at least twice a week for two consecutive weeks in a three-week period. A copy of the notice and the application must be placed in the station's public inspection file, pursuant to Section 73.3526.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before June 16, 2020. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
As part of its continuing effort to reduce paperwork burdens, and as required by the PRA of 1995 (44 U.S.C. 3501-3520), the FCC invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The information collection requirements contained in Sections 76.501 Note 2, 76.503 Note 2, and 76.504 Note 1, also provide that officers and directors of an entity are considered to have a cognizable interest in the entity with which they are associated. If any such entity engages in businesses in addition to its primary media business, it may request the Commission to waive attribution for any officer or director whose duties and responsibilities are wholly unrelated to its primary business. The officers and directors of a parent company of a media entity with an attributable interest in any such subsidiary entity shall be deemed to have a cognizable interest in the subsidiary unless the duties and responsibilities of the officer or director involved are wholly unrelated to the media subsidiary and a statement properly documenting this fact is submitted to the Commission. This statement may be included on the Licensee Qualification Report.
The information collection requirements contained in 47 CFR 76.503 Note 2(b)(1) include a requirement for limited partners who are not materially involved, directly or indirectly, in the management or operation of the media-related activities of the partnership to certify that fact or be attributed to a limited partnership interest.
The information collection requirements contained in 47 CFR 76.503(g) state “Prior to acquiring additional multichannel video-programming providers, any cable operator that serves 20% or more of multichannel video-programming subscribers nationwide licenses at issue in the acquisition, that no violation of the national subscriber limits prescribed in this section will occur as a result of such acquisition.”
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)).
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than May 19, 2020.
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In accordance with the Paperwork Reduction Act of 1995, the Agency for Toxic Substances and Disease Registry (ATSDR) has submitted the information collection request titled “APPLETREE Performance Measures” to the Office of Management and Budget (OMB) for review and approval. ATSDR previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on December 23, 2019, to obtain comments from the public and affected agencies. ATSDR did not receive comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
ATSDR will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) 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;
(b) 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;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
APPLETREE Performance Measures (OMB Control No. 0923-0057, Exp. 07/31/2020)—Revision—Agency for Toxic Substances and Disease Registry (ATSDR).
The Agency for Toxic Substances and Disease Registry (ATSDR) seeks to build and sustain the capacity to evaluate exposures to hazardous waste across the country. Releases from hazardous waste sites are a major source of harmful exposures in homes, schools, workplaces, and communities. These exposures are often complex and may be difficult to identify and control. Hazardous waste sites may involve various toxic substances, exposure pathways, and health impacts. ATSDR's primary goal is to keep communities safe from harmful exposures and related diseases. To accomplish this goal, the agency works closely with partnering agencies to evaluate exposures at hazardous waste sites, educate communities, and seek new ways to better protect public health.
ATSDR's Partnership to Promote Local Efforts to Reduce Environmental Exposure (APPLETREE) Program is critical to ATSDR's success in accomplishing its mission in communities nationwide. ATSDR's recipients will use APPLETREE funding to advance ATSDR's primary goal of keeping communities safe from harmful environmental exposures and related diseases. APPLETREE gives recipients the resources to build their capacity to assess and respond to site-specific issues involving human exposure to hazardous substances in the environment. APPLETREE helps recipients identify exposure pathways at specific sites; educate affected communities about site contamination and potential health effects; make recommendations to prevent exposure; review health outcome data to evaluate potential links between site contaminants and community health outcomes. APPLETREE facilitates the implementation of state-level programs to ensure that potential early care and education facilities are in areas free from harmful environmental exposures. It also encourages recipients in the
Under the next three-year APPLETREE cooperative agreement (NOFO No. CDC-RFA-TS20-2001), eligible applicants include federally recognized American Indian/Alaska Native tribal governments; American Indian/Alaska native tribally designated organizations; political subdivisions of states (in consultation with states); and state and local governments or their bona fide agents. ATSDR technical project officers (TPOs) will assist 28 APPLETREE recipients to address site-specific issues involving human exposure to hazardous substances. Key capacities include identification of human exposure pathways at ATSDR sites, education of affected communities and local health professionals about site contamination and potential health effects; making appropriate recommendations to prevent exposure; reviewing health outcome data to evaluate potential links between site contaminants and community health; and documenting the effects of environmental remediation on health.
This is a revision information collection request (ICR) titled “APPLETREE Performance Measures,” previously approved under OMB Control No. 0923-0057 (expiration date 07/31/2020). ATSDR will continue to collect information related to recipient activities, and the process and outcome performance measures outlined by the cooperative agreement program. Information will be used to monitor progress toward program goals and objectives, and for program quality improvement. The first five forms were previously approved by OMB. The first three forms, formerly reported in SharePoint, will be migrated to a new information technology (IT) system called ATSDR's Request Management Service System (ARMSS).
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Recipients will continue to submit the following form to ATSDR via SharePoint:
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Recipients will submit the following five forms to ATSDR via email. As part of the revision request, the last four forms are new.
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In addition to the required annual reporting, at the end of the three-year program, each recipient will report cumulative three-year performance measures for three forms: The APR, the CSPECE Qualitative Narrative Form, and the CSPECE Quantitative Form. This will result in four total responses in a three-year period for each form. The estimated annualized number of required responses is thus rounded to once per year for these three forms, as four hours divided by three years equals 1.33 hours per year.
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ATSDR is seeking a three-year Paperwork Reduction Act (PRA) clearance for this revision information collection request. The total annual time burden requested is 267 hours. This reflects a reduction in requested time burden compared to the 272 hours previously approved in 2017. This revision also requests approval for an increase in the annual number of responses from 1,575 in 2017, to 1,886 in this current request. ATSDR will fund 28 recipients, an increase of three additional awards over the previous program. Recipient reporting is required to receive funding under the APPLETREE cooperative agreement.
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled, National Hospital Ambulatory Medical Care Survey (NHAMCS) to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on January 28, 2020 to obtain comments from the public and affected agencies. CDC did not receive comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) 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;
(b) 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;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
National Hospital Ambulatory Medical Care Survey (NHAMCS) (OMB Control No. 0920-0278, Exp. 06/30/2021)—Revision—National Center for Health Statistics (NCHS), Centers for Disease Control and Prevention (CDC).
Section 306 of the Public Health Service (PHS) Act (42 U.S.C. 242k), as amended, authorizes that the Secretary of Health and Human Services (DHHS), acting through NCHS, shall collect statistics on “utilization of health care” in the United States. The National Hospital Ambulatory Medical Care Survey (NHAMCS) has been conducted annually since 1992. NCHS is seeking OMB approval to extend this survey for an additional three years.
The target universe of the NHAMCS is in-person visits made to emergency departments (EDs) of non-Federal, short-stay hospitals (hospitals with an average length of stay of less than 30 days) that have at least 6 beds for inpatient use, and with a specialty of general (medical or surgical) or children's general. NHAMCS was initiated to complement the National Ambulatory Medical Care Survey (NAMCS, OMB No. 0920-0234, Exp. Date 05/31/2022), which provides similar data concerning patient visits to physicians' offices. NAMCS and NHAMCS are the principal sources of data on ambulatory care provided in the United States.
NHAMCS provides a range of baseline data on the characteristics of the users and providers of hospital ambulatory medical care. Data collected include patients' demographic characteristics, reason(s) for visit, providers' diagnoses, diagnostic services, medications, and disposition. These data, together with trend data, may be used to monitor the effects of change in the health care system, for the planning of health services, improving medical education, determining health care work force needs, and assessing the health status of the population.
Starting 2018, NHAMCS was modified to assess only hospital emergency departments. The survey components that assessed hospital outpatient departments and ambulatory surgery locations were discontinued. Users of NHAMCS data include, but are not limited to, congressional offices, Federal agencies, state and local governments, schools of public health, colleges and universities, private industry, nonprofit foundations, professional associations, clinicians, researchers, administrators, and health planners.
The burden is to complete the 2020 data collection which is currently underway and collect data over the following three years (2021-2023) without change to the current survey activities. However, starting with 2021 data collection, the Assurance of Confidentiality statement will be updated to the new citation for the Confidential Information Protection and Statistical Efficiency Act (CIPSEA) language. There are no costs to the respondents other than their time. The total estimated annualized burden hours are 1,500. The adjusted increase of 712 burden hours is due to the new method of calculating burden to include all sampled hospitals.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Request for comment.
The Centers for Disease Control and Prevention (CDC) in the Department of Health and Human Services (HHS) announces the opening of a docket to obtain comment concerning perspectives on and experiences with pain and pain management, including but not limited to the benefits and harms of opioid use, from patients with acute or chronic pain, patients' family members and/or caregivers, and health care providers who care for patients with pain or conditions that can complicate pain management (
Written comments must be received on or before June 16, 2020.
Submit written comments, identified by Docket No. CDC-2020-0029 by any of the following methods:
•
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Shannon Lee, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop S106-9, Atlanta, Georgia 30329, 404-498-3290,
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data related to perspectives on and experiences with pain and pain management. CDC invites comments specifically on topics focused on using or prescribing opioid pain medications, non-opioid medications, or non-pharmacological treatments (
• Experiences managing pain, which might include the benefits, risks, and/or harms of the pain management options listed above.
• Experiences choosing among the pain management options listed above, including considering factors such as each option's accessibility, cost, benefits, and/or risks.
• Experiences getting information needed to make pain management decisions.
Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
Public comment will help CDC's understanding of stakeholders' values and preferences regarding pain management and will complement CDC's ongoing work assessing the need for updating or expanding the CDC Guideline for Prescribing Opioids for Chronic Pain, published in 2016 (available in the Supporting Materials tab of the docket and at:
More information about CDC's assessment of the need for updating or expanding the Guideline and the establishment of a federal advisory committee workgroup to provide expert input and observations to CDC on the possible Guideline update or expansion is available at
Anyone who would like to receive information related to CDC's ongoing work specific to drug overdose prevention (including the ongoing response to the opioid overdose epidemic) as well as other updates (
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled “The National Violent Death Reporting System (NVDRS)” to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on October 22, 2019 to obtain comments from the public and affected agencies. CDC received two anonymous non-substantive comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) 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;
(b) 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;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The National Violent Death Reporting System (NVDRS) (OMB Control No. 0920-0607, Exp. 11/30/2020)—Revision — National Center for Injury Prevention and Control (NCIPC), Centers for Disease Control and Prevention (CDC).
Violence is a public health problem. The World Health Organization has estimated that 804,000 suicides and 475,000 homicides occurred in the year 2012 worldwide. Violence in the United States is a particular problem for the young; suicide and homicide were among the top four leading causes of death for Americans 10-34 and 1-34 years of age in 2015, respectively. In 2002 Congress approved the first appropriation to start the National Violent Death Reporting System (NVDRS). NVDRS is coordinated and funded at the federal level but is dependent on separate data collection efforts managed by the state health department (or their bona fide agent) in each state.
NVDRS, implemented by the Centers for Disease Control and Prevention (CDC), is a state-based surveillance system developed to monitor the occurrence of violent deaths (
Since 2004 and throughout 2017, CDC has received OMB approval for NVDRS. This is a revision request for an additional three years to (1) implement updates to the web-based system to improve performance, functionality, and accessibility, (2) add new data elements to the system and minimal revisions to the NVDRS coding manual. In 2018, the NVDRS expanded by adding 10 new states and now all 50 states, the District of Columbia, and Puerto Rico participate in the system. Each state, District of Columbia, and U.S. territory (referred to hereinafter as “states”) is funded to abstract standard data elements from three primary data sources: Death certificates, coroner/medical examiner records, and law enforcement records into a web-based data entry system, supplied by CDC. This is an ongoing surveillance system that captures annual violent death counts and circumstances that precipitate each violent incident. CDC aggregates de-identified data from each state into one national database that is analyzed and released in annual reports and other publications. Descriptive analyses such as frequencies and rates will be employed. A restricted access database is available for researchers to request access to NVDRS data for analysis and a web-based query system is open for public use that allows for electronic querying of data. The estimated annual burden hours are 36,540. There are no costs to respondents other than their time.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing effort to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies the opportunity to comment on a proposed and/or continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled National Healthcare Safety Network (NHSN) Patient Module for Coronavirus (COVID-19) Surveillance in Healthcare Facilities. Two modules will be added within NHSN to capture the daily, aggregate impact of COVID-19 on healthcare facilities and monitor medical capacity to respond at local, state, and national levels.
CDC must receive written comments on or before June 16, 2020.
You may submit comments, identified by Docket No. CDC-2020-0038 by any of the following methods:
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To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact Jeffrey M. Zirger, Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE, MS-D74, Atlanta, Georgia 30329; phone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
The OMB is particularly interested in comments that will help:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated,
5. Assess information collection costs.
National Healthcare Safety Network (NHSN) Patient Impact Module for Coronavirus (COVID-19) Surveillance in Healthcare Facilities—New—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
The Division of Healthcare Quality Promotion (DHQP), National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC) collects data from healthcare facilities in the National Healthcare Safety Network (NHSN) under OMB Control Number 0920-0666. NHSN is a public health surveillance system that collects, analyzes, reports, and makes available data for monitoring, measuring, and responding to healthcare associated infections (HAIs), antimicrobial use and resistance, blood transfusion safety events, and the extent to which healthcare facilities adhere to infection prevention practices and antimicrobial stewardship.
On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and the President of the United States (U.S.) proclaimed the outbreak a national emergency on March 13, 2020. As rates of infection continue to rise across the U.S., healthcare facilities and public health departments are facing significant strain on patient care and infection prevention efforts. NHSN plans to introduce a new COVID-19 module in the Patient Safety Component that will enable hospitals to report daily COVID-19 patient counts to NHSN, and NHSN in turn will enable state and local health departments to gain immediate access to the COVID-19 data for hospitals in their jurisdiction.
NHSN's role as a shared platform for HAI surveillance provides a valuable foundation for COVID-19 surveillance. A very large number of the nation's hospitals participate in NHSN, and infection preventionists (IPs) in those hospitals already use NHSN for surveillance and reporting. Hospitals' IPs will voluntarily report COVID-19 patient surveillance data to NHSN by manual entry or by uploading a comma separated values (CSV) file. State and local health departments will be able to gain immediate access to this data reported by facilities in their jurisdictions via existing NHSN groups.
This information will be used to inform the overall real-time COVID-19 response efforts and possible resource allocation, including an understanding of cases that are community-acquired versus healthcare-associated. CDC and health departments alike will use this surveillance data to prioritize the allocation of resources and response efforts. Metrics collected in NHSN will include:
There will be no cost to respondents other than their time to complete the COVID-19 Patient Impact Module Form on a daily basis, for 180 days. The estimated annualized time burden is 292,500 hours.
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled [Management Information System for Comprehensive Cancer Control Programs] to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on November 4, 2019 to obtain comments from the public and affected agencies. CDC did not receive comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) Evaluate whether the proposed collection of information is necessary for the proper performance of the
(b) 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;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Management Information Systems for Comprehensive Cancer Control Programs (OMB Control No. 0920-0841, Exp. 6/30/2019)—Reinstatement with Change—National Center for Chronic Disease and Health Promotion (NCCDPHP), Centers for Disease Control and Prevention (CDC).
In 2017, 66 awardees, representing all 50 states, the District of Columbia, seven United States Association Pacific Islands and territories, and eight tribes and tribal organizations, were selected for funding under NOFO (DP17-1701, “Cancer Prevention and Control Programs for State, Territorial, and Tribal Organizations”). Under this cooperative agreement, awardees implement cancer prevention and control programs to reduce cancer morbidity, mortality, and disparities. To facilitate program monitoring, performance assessment, and evaluation, a web-based management information system (MIS) is needed for collection and abstraction of information about program resources, partnerships, work plan activities, and evaluation efforts. Information collection is organized into eight areas (MIS tabs): (1) FOA & Recipients; (2) Program Information; (3) Resources; (4) Leadership Team; (5) Financial; (6) Planning; (7) Action Plan; and (8) Reports. The Leadership Team tab is new. CDC conducted user acceptability testing of the leadership team tab data elements which allowed for an accurate estimate of burden per response. All information collected by CDC will be analyzed and used in aggregate to describe program efforts.
OMB approval is requested for three years, which coincides with the last three years of the program. All awardees will submit information to CDC annually. Participation is required as a condition of funding under the cooperative agreement. The estimated burden per response is one hour and the total estimated annualized burden is 66 hours.
Food and Drug Administration, HHS.
Notice of public meeting; postponed.
The Food and Drug Administration (FDA) is announcing that the public meeting entitled “Medical Device User Fee Amendments for Fiscal Years 2023 Through 2027; Public Meeting; Request for Comments” that was scheduled in the
The public meeting will be rescheduled for a future date. Information about the rescheduled meeting will be provided when available. Submit either electronic or written comments on the medical device user fee program and suggestions regarding the commitments FDA should propose for the next reauthorized program.
Ellen Olson, Center for Devices and Radiological Health, Food and Drug Administration, Bldg. 66, Rm. 1664, 10903 New Hampshire Ave., Silver Spring, MD 20993, 301-796-4322,
The public meeting entitled “Medical Device User Fee Amendments for Fiscal Years 2023 Through 2027; Public Meeting; Request for Comments” was originally announced in the
Dated: April 14, 2020.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the Paperwork Reduction Act of 1995, HRSA has submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR have been provided to OMB. OMB will accept further comments from the public during the review and approval period. OMB may act on HRSA's ICR only after the 30 day comment period for this Notice has closed.
Comments on this ICR should be received no later than May 18, 2020.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To request a copy of the clearance requests submitted to OMB for review, email Lisa Wright-Solomon, the HRSA Information Collection Clearance Officer at
A 60-day notice published in the
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
Pursuant to its authority under federal regulations for the National Practitioner Data Bank (NPDB), HRSA's Division of Practitioner Data Bank announces a temporary waiver of user fees for NPDB queries from March 1, 2020, through May 31, 2020, to support our eligible entities in making credentialing, hiring, privileging, and licensing decisions in combatting the COVID-19 pandemic. The waiver includes all one-time queries and continuous queries during the waiver time period. Fees for self-queries will not be waived. The NPDB is a confidential information clearinghouse created by Congress and is intended to facilitate a comprehensive review of the professional credentials of health care practitioners, entities, providers, and suppliers. In response to President Trump's declaration of a national emergency and associated emergency declarations by all states, the federal government, state governments, and many health care entities have taken unprecedented steps regarding licensure portability and the deployment of health workforce resources, including the expansion of telemedicine and granting of disaster privileges. HRSA's NPDB is in a unique position to temporarily waive fees, granting NPDB access to the nation's hospitals, health centers, health plans, state licensing boards, federal agencies, and other eligible health care entities in support of their efforts to mobilize and appropriately deploy health workforce professionals.
The NPDB waiver is effective immediately, but will have retroactive effect to March 1, 2020, and will remain in effect through May 31, 2020.
David Loewenstein, Director, Division of Practitioner Data Bank, Bureau of Health Workforce, HRSA, (301) 443-2300,
The NPDB will waive fees retroactively from March 1, 2020, through May 31, 2020, for eligible entity queries (one-time query and continuous query). The NPDB will not refund the cost of queries performed, but can issue query credits to reimburse entities for one-time and continuous queries performed beginning March 1, 2020. Regulations regarding the NPDB are codified at 45 CFR part 60.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice; correction.
The National Advisory Council on Nurse Education and Practice (NACNEP) meeting scheduled for Tuesday, May 12, 2020, and Wednesday, May 13, 2020, has changed its format, date, and time. The meeting will now be a one-day webinar and conference call only on Tuesday, May 12, 2020, from 9:00 a.m.-4:30 p.m. Eastern Standard Time. The decision to adjust the NACNEP meeting has been made after carefully examining the Centers for Disease Control and Prevention's recommendations to restrict all non-essential travel, and the widespread health risks posed by COVID-19 to the American public. The webinar link, conference number, meeting materials, and updates for the May 12, 2020, meeting will be available on the NACNEP website:
Camillus Ezeike, Ph.D., LL.M. J.D., RN, PMP, Designated Federal Official, NACNEP, Bureau of Health Workforce, HRSA, 5600 Fishers Lane, Rockville, Maryland 20857; 301-443-2886; or
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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Fish and Wildlife Service, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Fish and Wildlife Service (Service), are proposing a new information collection in use without an OMB Control Number.
Interested persons are invited to submit comments on or before May 18, 2020.
Send written comments on this information collection request to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
Madonna L. Baucum, Service Information Collection Clearance Officer, by email at
In accordance with the Paperwork Reduction Act of 1995 and 5 CFR 1320.8(d)(1), we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
On August 9, 2019, we published in the
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your that your entire comment—including your personal identifying information—may be publicly available at any time. While you can ask us in your comment to
This policy gives landowners, government agencies, and others incentives to carry out voluntary conservation actions for unlisted species. It allows the use of any benefits to the species from voluntary conservation actions undertaken prior to listing under the Act—by the person who undertook such actions or by third parties—to mitigate or offset the detrimental effects of other actions undertaken after listing. The policy requires participating States to track the voluntary conservation actions and provide this information to us on an annual basis. We require this information in order to provide the entities that have taken the conservation actions with proper credit that can later be used to mitigate for any detrimental actions they take after the species is listed.
We plan to collect the following information:
• Description of the prelisting conservation action being taken.
• Location of the action (does not include a specific address).
• Name of the entity taking the action and their contact information (email address only).
• Frequency of the action (ongoing for X years, or one-time implementation) and an indication if the action is included in a State Wildlife Action Plan.
• Any transfer to a third party of the mitigation or compensatory measure rights.
Each State that chooses to participate will collect this information from landowners, businesses and organizations, and Tribal and local governments that wish to receive credit for voluntary prelisting conservation actions. States may collect this information via an Access database, Excel spreadsheet, or other database of their choosing and submit the information to the Fish and Wildlife Service (via email) annually. States will use this information to calculate the number of credits that the entity taking the conservation action will receive and will keep track of the credits and notify the entity of how much credit they have earned. The States will report the number of credits to the Service, and we will determine how many credits are needed by the entity to mitigate or offset the detrimental effects of other actions they take after the species is listed (assuming it is listed).
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Fish and Wildlife Service, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Fish and Wildlife Service (Service), are proposing a new information collection.
Interested persons are invited to submit comments on or before June 16, 2020.
Send your comments on the information collection request by mail to the Service Information Collection Clearance Officer, U.S. Fish and Wildlife Service, MS: PRB (JAO/3W), 5275 Leesburg Pike, Falls Church, VA 22041-3803 (mail); or by email to
To request additional information about this ICR, contact Madonna L. Baucum, Service Information Collection Clearance Officer, by email at
In accordance with the PRA and 5 CFR 1320.8(d)(1), all information collections require approval under the PRA. We may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number.
As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you 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.
The programmatic clearance applies to social science surveys, interviews, and focus groups designed to provide information to Service managers and practitioners to improve quality and utility of agency programs, services, and planning efforts. To ensure continuous improvement, Service activities and projects require ongoing systematic assessment of their design, implementation, and outcomes. Data from collections undertaken through the proposed programmatic clearance would provide information for planning, monitoring, and evaluating National Wildlife Refuge System efforts as well as efforts of other Service programs. The scope of this programmatic clearance includes individual surveys, focus groups, and interviews of refuge visitors, potential visitors, and residents of communities near Service-managed units, and stakeholders and partners, including tribal interests.
To qualify for the generic programmatic review process, survey questions must show a clear tie to Service management needs. The programmatic review may only be used for noncontroversial information collections that are unlikely to attract or include topics of significant public interest. We must obtain OMB approval of all surveys developed using the pre-approved suite of questions before the survey can be initiated. This suite of questions will be used to develop customer experience and satisfaction surveys to meet requirements of OMB Circular A-11 as well as commitments to respond to the above-named Secretarial Orders.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
U.S. Geological Survey (USGS), Interior.
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the U.S. Geological Survey (USGS) are proposing to renew an Information Collection.
Interested persons are invited to submit comments on or before May 18, 2020.
Send your comments on this Information Collection Request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Elizabeth S. Sangine by email at
In accordance with the Paperwork Reduction Act of 1995, we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
We are again soliciting comments on the proposed ICR that is described below. We are especially interested in public comments addressing the following issues: (1) Is the collection necessary to the proper functions of the USGS; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the USGS enhance the quality, utility, and clarity of the information to be collected; and (5) how might the USGS minimize the burden of this collection on the respondents, including through the use of information technology.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other 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.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authorities for this action are the Paperwork Reduction Act of 1995 (44 U.S.C. 3501,
Bureau of Indian Affairs, Interior.
Notice.
The Assistant Secretary—Indian Affairs has made a final determination to acquire 160.55 acres, more or less, of land in Acme Township, Grand Traverse County, Michigan into trust for the Grand Traverse Band of Ottawa and Chippewa Indians (“Tribe”) for non-gaming purposes.
Ms. Sharlene M. Round Face, Division of Real Estate Services, Office of Trust Services, Bureau of Indian Affairs,
This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by chapter 8, part 209 of the Departmental Manual, and is published to comply with the requirement of 25 CFR 151.12(c)(2)(ii) that notice of the decision to acquire land in trust be promptly published in the
On March 31, 2020, the Assistant Secretary—Indian Affairs issued a decision to accept Parcel 88 in trust for the Tribe under the authority of Section 5 of the Indian Reorganization Act of 1934 (48 Stat. 94).
The Department of Interior will immediately acquire title to Parcel 88 in the name of the United States in trust for the Tribe upon fulfillment of Department requirements.
That part of the Northeast Fractional One-Quarter and part of the East One-Half of the Northwest Fractional One-Quarter of Section 2, Town 27 North, Range 10 West, Acme Township, Grand Traverse County, Michigan, more fully described as:
Bureau of Land Management, Interior.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969, as amended, and the Federal Land Policy and Management Act of 1976, as amended, the Bureau of Land Management (BLM) has prepared a Draft Environmental Impact Statement (EIS) and Draft Resource Management Plan (RMP) Amendment for the proposed Wyoming Pipeline Corridor Initiative (WPCI) within the BLM Cody, Worland, Buffalo, Casper, Lander, Pinedale, Kemmerer, Rawlins and Rock Springs field offices.
To ensure that comments will be considered, the BLM must receive written comments on the Draft RMP Amendment and Draft EIS within 90 days following the date the Environmental Protection Agency publishes its Notice of Availability in the
You may submit comments on the DEIS during comment period on the WPCI ePlanning website at
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Copies of the Draft EIS are available on the project website at:
Heather Schultz, Project Manager, telephone 307-775-6084; address 5353 Yellowstone Road, Cheyenne Wyoming; email
The State of Wyoming is proposing a pipeline corridor network reserved for the use and the transport of carbon dioxide (CO2), enhanced oil recovery (EOR) products and other compatible uses to be designated on BLM-managed lands in Wyoming through the land use planning process. The amendments would designate new corridors reserved for the transport of CO2, EOR products, and other compatible uses, that may support future Carbon Capture Storage and Utilization (CCUS) projects in the State of Wyoming. The State of Wyoming proposes that approximately 2,000 miles and 25 segments of pipeline corridors be designated on BLM-managed lands and in those associated RMPs. The proposed WPCI corridors are divided into segments based on proposed width and the regions they will service. The BLM plans to analyze the State's proposal by preparing an EIS. Based on the findings of the EIS process, the BLM may amend the nine RMPs containing lands proposed for pipeline corridors to designate those corridors. If the BLM were to receive a right-of-way application for CO2 or EOR product pipelines or related facilities in the future, project specific NEPA would be completed separately at that time. The purpose of this public comment process is to determine if relevant issues are addressed in the scope of the environmental analysis, including alternatives, and guide the planning process.
The BLM is analyzing four alternatives:
Please note that public comments and information submitted including names, street addresses, and email addresses of persons who submit comments will be available for public review and disclosure at the above address during regular business hours (8 a.m. to 4 p.m.), Monday through Friday, except holidays.
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.
40 CFR 1506.6, 40 CFR 1506.10, 43 CFR 1610.2
Bureau of Land Management.
Notice of availability.
In accordance with the National Environmental Policy Act of 1969, as amended, the Federal Land Policy and Management Act of 1976, as amended, and the National Forest Management Act of 1976, as amended, the Bureau of Land Management (BLM) Royal Gorge Field Office (RGFO), Cañon City, Colorado, and U.S. Forest Service (USFS), Pike-San Isabel National Forests and Comanche-Cimarron National Grasslands (PSICC), Pueblo, Colorado, have prepared a Proposed Resource Management Plan (RMP) and Forest Plan (FP) amendment, supported by an Environmental Impact Statement (EIS), for the Browns Canyon National Monument, and by this notice are announcing its availability.
BLM planning regulations state that any person who meets the conditions as described in the regulations may protest the BLM's Proposed RMP. The USFS has waived its objection procedures and instead adopted the BLM's administrative review process (36 CFR 219.59). A person who meets the conditions and files a protest must file the protest within 30 days of the date that the Environmental Protection Agency (EPA) publishes its Notice of Availability (NOA) in the
The Proposed RMP-FP amendment and Final EIS is available on the BLM ePlanning project website at
All protests must be in writing and filed with the BLM Director, either as a hard copy or electronically via the BLM's ePlanning project website listed previously. To submit a protest electronically, go to the BLM ePlanning project website and follow the protest instructions highlighted at the top of the home page. If submitting a protest in hard copy, it must be mailed to one of the following addresses:
Joseph Vieira, Project Manager, telephone 719-246-9966; address 5575 Cleora Road, Salida, CO 81201; email
The BCNM was established by Presidential Proclamation 9232. The BLM and USFS have prepared the Proposed RMP-FP amendment and Final EIS for BCNM to evaluate the management strategy for monument resources, objects, and values, including resource uses and special designations within the BCNM. The planning area is located in Chaffee County, Colorado, and encompasses approximately 21,600 acres. The BCNM RMP-FP amendment will determine management for approximately 9,790 acres of BLM-administered surface land and approximately 11,810 acres of USFS-administered national forest. The monument also includes a portion of the Arkansas Headwaters Recreation Area, a cooperatively managed area along the Arkansas River administered by the BLM, the USFS, and Colorado Parks and Wildlife (CPW).
Major planning issues considered in the Proposed RMP-FP amendment and Final EIS are conserving and protecting monument resources, objects or values including bighorn sheep, peregrine falcon, terrestrial and avian wildlife habitat, cultural and historical resources, geological features and riparian values; maintaining monument values and settings; understanding and addressing tribal values including religious and other significant sites; addressing existing uses such as livestock grazing; and managing for sustainable outdoor recreation, visitor growth and visitor enjoyment. The Proposed RMP-FP amendment and Final EIS also considers BLM decisions regarding wild and scenic rivers, areas
The Proposed RMP-FP amendment and Final EIS describe and analyze three action alternatives and the No Action alternative. Each includes goals, objectives, allowable uses and management actions to address management challenges and issues and reflects management direction in Presidential Proclamation 9232.
Alternative A continues existing management, as reflected in decisions from the
The BCNM Draft RMP-FP amendment and Draft EIS public comment period began on October 4, 2019. The BLM and USFS held three open-house public meetings in November 2019 and two webinars in December 2019. The BLM and USFS consulted with cooperating agencies and considered and incorporated public comments, as appropriate, in the Proposed RMP-FP amendment and Final EIS.
Instructions for filing a protest with the Director of the BLM regarding the Proposed RMP-FP amendment may be found online at
Before including your phone number, email address, or other personal identifying information in your protest, you should 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 protest to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
40 CFR 1506.6, 40 CFR 1506.10, 43 CFR 1610.2, 43 CFR 1610.5
Bureau of Ocean Energy Management, Interior.
List of Restricted Joint Bidders.
Pursuant to the Bureau of Ocean Energy Management (BOEM) regulatory restrictions on joint bidding, the Director of BOEM is publishing a List of Restricted Joint Bidders. Each entity within one of the following groups is restricted from bidding with any entity in any of the other following groups at Outer Continental Shelf oil and gas lease sales to be held during the bidding period May 1, 2020, through October 31, 2020.
This List of Restricted Joint Bidders will cover the period May 1, 2020, through October 31, 2020, and replaces the prior list published on November 5, 2019 (84 FR 59644), which covered the period of November 1, 2019, through April 30, 2020.
Even if an entity does not appear on the above list, certain joint or single bids submitted by such entity may be disqualified, and rejected, by BOEM if that entity is chargeable for the prior production period with an average daily production in excess of 1.6 million barrels of crude oil, natural gas, and natural gas liquids.
42 U.S.C. 6213; and 30 CFR 556.511-556.515.
Bureau of Reclamation, California-Great Basin—Interior Region 10.
Notice of availability.
The Bureau of Reclamation has made available to the public the
Submit written comments on the preliminary determinations on or before May 18, 2020.
Send written comments to Mr. David T. White, Bureau of Reclamation, 2800 Cottage Way, CGB-410, Sacramento, CA 95825; or via email at
To be placed on a mailing list for any subsequent information, please contact Mr. White at
Section 3405(e) of the Central Valley Project Improvement Act (Title 34 Pub. L. 102-575) requires the Secretary of the Interior to, among other things, “develop criteria for evaluating the adequacy of all water conservation plans” developed by certain contractors. According to Section 3405(e)(1), these criteria must promote “the highest level of water use efficiency reasonably achievable by project contractors using best available cost-effective technology and best management practices.” In accordance with this legislative mandate, the Bureau of Reclamation developed and published the Refuge Criteria, which is updated every 3 years.
We invite the public to comment on our preliminary (
A copy of the draft 2020 Refuge Criteria will be available for review at Reclamation's office in Sacramento, California, located at 2800 Cottage Way, CGB-410, Sacramento, CA 95825. If you wish to review a copy of the draft 2020 Refuge Criteria or receive an electronic copy via email, please contact Mr. White or visit
United States International Trade Commission.
Change in date for transmittal of volume 1 of the Commission's report; clarification of a filing date relating to volume 2 of the report; and waiver of the requirement to file paper copies.
The Commission has changed the date for transmittal of volume 1 of its report to the U.S Trade Representative (USTR) in this investigation from April 30, 2020 to June 30, 2020 due to COVID-19; is clarifying that the due date for written submission for volume 2 of its report is June 5, 2020; and has waived the requirement to file paper copies of those submissions.
(Delivered Monday, November 2, 2020)
All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436. The public record for this investigation may be viewed on the Commission's electronic docket (EDIS) at
Project Leader Sabina Neumann (volumes 1 and 2) (202-205-3000 or
The Commission published notice of institution of the above referenced investigation in the
In his request letter, the USTR stated that his office intends to make the Commission's report available to the public in its entirety and asked that the Commission not include any CBI in the report that it delivers to the USTR.
The Commission will not include any of the CBI submitted in the course of this investigation in the report it sends to the USTR. However, all information, including CBI, submitted in this investigation may be disclosed to and used (i) by the Commission, its employees and Offices, and contract personnel (a) for developing or maintaining the records of this or a related proceeding, or (b) in internal investigations, audits, reviews, and evaluations relating to the programs, personnel, and operations of the Commission, including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract personnel for cybersecurity purposes. The Commission will not otherwise disclose any CBI in a manner that would reveal the operations of the firm supplying the information.
By order of the Commission.
On the basis of the record
The Commission instituted these investigations effective March 6, 2019, following receipt of petitions filed with the Commission and Commerce by the American Kitchen Cabinet Alliance. The final phase of these investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of wooden cabinets and vanities from China were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and sold at LTFV within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission's investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission made these determinations pursuant to sections 705(b) and 735(b) of the Act (19 U.S.C. 1671d(b) and 19 U.S.C. 1673d(b)). It completed and filed its determinations in these investigations on April 13, 2020. The views of the Commission are contained in USITC Publication 5042 (April 2020), entitled
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined not to review a remand initial determination (“RID”) issued by the presiding administrative law judge (“ALJ”) in the above-captioned investigation granting a motion for summary determination regarding whether certain redesigns infringe the asserted patents. The Commission requests briefing from the parties, interested government agencies, and interested persons on the issues of remedy, the public interest, and bonding.
Michael Liberman, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-3115. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436, telephone (202) 205-2000. General
The Commission instituted the investigation on July 23, 2018, based on a complaint filed by SnapRays, LLC d/b/a SnapPower of Vineyard, UT (“SnapPower,” or Complainant). 83 FR 34871 (July 23, 2018). The complaint, as supplemented, alleges a violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (“section 337”), based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain powered cover plates by reason of infringement of certain claims of U.S. Patent Nos. 9,871,324 (“the '324 patent”); 9,882,361 (“the '361 patent”); 9,917,430 (“the '430 patent”); and U.S. Design Patent No. D819,426 (“the Design Patent,” or “the 'D426 patent”) (collectively, “the Asserted Patents”).
The Commission previously terminated the investigation as to, or found in default, all named respondents except Enstant and Vistek. Order No. 5 (Sept. 26, 2018),
On August 12, 2019, the ALJ issued her “Initial Determination on Violation of Section 337 and Recommended Determination on Remedy and Bond,” finding a violation of section 337. The final ID found that a violation of section 337 occurred in the importation into the United States, the sale for importation, or the sale within the United States after importation, of certain powered cover plates that infringe the asserted claims of the '361 patent by Enstant and Vistek (collectively, “Enstant/Vistek,” or “Enstant”).
The final ID noted that “Respondents Enstant and Vistek filed a motion for summary determination of non-infringement (`Redesign SD Motion') of [the '361 patent] by Redesign Models P001 (Smart Wall Plate Charger, Decor Outlet, with USB charger) and P002 (Smart Wall Plate Charger, Duplex Outlet with USB charger).” Final ID at 14. In the Redesign SD Motion, Enstant sought summary determination that powered cover plate model numbers P001 and P002 (“Enstant's Redesigns”) do not infringe claims 1, 3-4, 10, 14, 17, 21, and 23-24 of the '361 patent. Redesign SD Motion at 16. The final ID found, however, that “Enstant's and Vistek's Redesign SD Motion was effectively rendered moot by rulings on Motions in Limine . . . .”
On October 11, 2019, the Commission determined to review in part and to remand the investigation to the ALJ for a remand initial determination (“RID”) to address the final ID's finding that Enstant/Vistek's Redesign SD Motion is moot. 84 FR 55985-86 (October 18, 2019). The Commission issued an “Order: Remand of a Final Initial Determination In Part” directing the ALJ to expeditiously issue an RID as to this finding and to “extend the target date for termination of the investigation by ID pursuant to 19 CFR 210.51(a)(1) to three months after the issuance of the RID.” Commission Order at 5 (October 11, 2019).
On January 30, 2020, the ALJ issued the subject RID granting Enstant's Redesign SD Motion. The ALJ found that Enstant's Redesigns are properly at issue in this investigation because (1) Enstant's Redesigns are within the scope of this investigation and within the Commission's jurisdiction, RID at 10-12; (2) Enstant's Redesigns are fixed in design and not “hypothetical,” RID at 12-13; and (3) the parties exchanged discovery regarding the Redesigns, RID at 13-15. The ALJ also found that there is no dispute that Enstant's Redesigns do not infringe claims 1, 3-4, 10, 14, 17, 21, and 23-24 of the '361 patent—the only patent asserted against Enstant's Redesigns. RID at 15-20. No party petitioned for review of the RID.
The Commission has determined not to review the subject RID.
In connection with the final disposition of this investigation, the statute authorizes issuance of: (1) An exclusion order that could result in the exclusion of the subject articles from entry into the United States, and/or (2) one or more cease and desist orders that could result in the respondents being required to cease and desist from engaging in unfair acts in the importation and sale of such articles. Accordingly, the Commission is interested in receiving written submissions that address the form of remedy, if any, that should be ordered. If a party seeks exclusion of an article from entry into the United States for purposes other than entry for consumption, the party should so indicate and provide information establishing that activities involving other types of entry either are adversely affecting it or are likely to do so. For background,
1. Please identify with citations to the record any information regarding commercially significant inventory in the United States as to each respondent against whom a cease and desist order is sought. If Complainant also relies on other significant domestic operations that could undercut the remedy provided by an exclusion order, please identify with citations to the record such information as to each respondent against whom a cease and desist order is sought.
2. In relation to the infringing products, please identify any information in the record, including allegations in the pleadings, that
3. Please discuss any other basis upon which the Commission could enter a cease and desist order.
The statute requires the Commission to consider the effects of that remedy upon the public interest. The public interest factors the Commission will consider include the effect that an exclusion order and/or cease and desist orders would have on: (1) The public health and welfare, (2) competitive conditions in the U.S. economy, (3) U.S. production of articles that are like or directly competitive with those that are subject to investigation, and (4) U.S. consumers. The Commission is therefore interested in receiving written submissions that address the aforementioned public interest factors in the context of this investigation.
If the Commission orders some form of remedy, the U.S. Trade Representative, as delegated by the President, has 60 days to approve, disapprove, or take no action on the Commission's action.
In its initial written submission, Complainant is also requested to identify the form of the remedy sought and to submit proposed remedial orders for the Commission's consideration. Complainant is also requested to state the expiration date of the '324, '361, '430, and 'D426 patents, the HTSUS subheadings under which the accused articles are imported, and to supply identification information for all known importers of the accused products. Initial written submissions, including proposed remedial orders must be filed no later than the close of business on March 30, 2020. Reply submissions must be filed no later than the close of business on April 6, 2020. No further submissions on these issues will be permitted unless otherwise ordered by the Commission.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the investigation number (“Inv. No. 337-TA-1124”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, and in Part 210 of the Commission's Rules of Practice and Procedure, 19 CFR part 210.
By order of the Commission.
United States International Trade Commission.
Notice of investigation.
Following receipt on April 7, 2020, of a request from the House Committee on Ways and Means and the Senate Committee on Finance (the Committees), under section 332(g) of the Tariff Act of 1930, the U.S. International Trade Commission (Commission) instituted Investigation No. 332-576,
All Commission offices, including the Commission's hearing rooms, are located in the U.S. International Trade Commission Building, 500 E Street SW, Washington, DC. The public record for this investigation may be viewed on the Commission's electronic docket (EDIS) at
Project Leader Mihir Torsekar (202-205-3350 or
1. The 10-digit HTS code for the article;
2. its legal description;
3. general duty rate;
4. any special or additional rates of duty imposed on the article, the dates on which the rates were imposed, and the authorities under which they were imposed;
5. whether any such duties have been suspended and, if so, the date of suspension as well as how long the suspension is scheduled to last;
6. the total rate of duty imposed on such article, including any special or additional rate of duty; and
7. the major countries of origin for each such article, and the import value of each such article from each country for the years 2017-2019.
The Committees asked that the Commission deliver the report as soon as possible, but no later than April 30, 2020. The Committees further requested that the Commission provide any relevant updated data runs on its website through June 30, 2020. The Committees stated that they intend to make the Commission's report available to the public and asked that the report not include any confidential business information.
By order of the Commission.
United States International Trade Commission.
Notice of postponement of public hearing.
Notice is hereby given that the U.S. International Trade Commission has postponed, to dates to be determined, the public hearing and the filing dates for written submissions in Investigation No. 332-574,
The Commission published notice of institution of the above referenced investigation in the
Project Leader Diana Friedman (202-205-3433 or
By order of the Commission.
United States International Trade Commission.
Notice of postponement of public hearing.
Notice is hereby given that the U.S. International Trade Commission has postponed, to dates to be determined, the public hearing and filing dates for written submissions in Investigation No. 332-575,
The Commission published notice of institution of the investigation in the
Project Leader Renee Berry (202-205-3498 or
By order of the Commission.
Notice is hereby given that, on April 1, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Astronautics Corporation of America, Milwaukee, WI has withdrawn a party 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 DMDII intends to file additional written notifications disclosing all changes in membership.
On January 5, 2016, DMDII 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 January 2, 2020. A notice was published in the
Notice is hereby given that, on April 6, 2020, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Polytec GmbH & Co. KG, Waldbronn, GERMANY; Aerotech Inc., Pittsburgh, PA; and Toyo Denki Seizo KK, Tokyo, JAPAN, 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 ODVA intends to file additional written notifications disclosing all changes in membership.
On June 21, 1995, ODVA 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 January 15, 2020. A notice was published in the
Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, a Stipulation, and a Competitive Impact Statement have been filed with the United States District Court for the Southern District of Ohio in
Copies of the Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division's website at
Public comment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division's website, filed with the Court, and, under certain circumstances, published in the
The United States of America, acting under the direction of the Attorney General of the United States, brings this civil antitrust action to obtain equitable monetary relief and recover damages from Jier Shin Korea Co., Ltd. and Sang Joo Lee for conspiring to rig bids and fix prices, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1, on the supply of fuel to the U.S. military for its operations in South Korea.
1. Since the end of the Korean War, the U.S. armed forces have maintained a significant presence in South Korea, protecting American interests in the region and safeguarding peace for the Korean people. To perform this important mission, American service members depend on fuel to power their bases and military vehicles. The U.S. military procures this fuel from oil refiners located in South Korea through a competitive bidding process.
2. For at least a decade, rather than engage in fair and honest competition, Defendants and their co-conspirators defrauded the U.S. military by fixing prices and rigging bids for the contracts to supply this fuel. Defendants met and communicated in secret with large South Korean oil refiners and other logistics companies, and pre-determined which conspirator would win each contract. Defendants or their co-conspirators then fraudulently submitted collusive bids to the U.S. military. Through this scheme, Defendants reaped supracompetitive profit margins on the fuel delivered to the U.S. military.
3. As a result of this conduct, Defendants and their co-conspirators illegally overcharged American taxpayers by well over $100 million. This conspiracy unreasonably restrained trade and commerce, in violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
4. Jier Shin Korea Co., Ltd. (“Jier Shin Korea”) is a small, privately held logistics company located in Seoul, South Korea. Jier Shin Korea provides logistics services related to the transportation of fuel, petroleum by-products, and other goods. During the conspiracy, Jier Shin Korea partnered with a South Korean oil refiner, Hyundai Oilbank Co., Ltd. (“Hyundai Oilbank”), to supply fuel to U.S. military installations in South Korea, with Jier Shin Korea acting as the prime contractor under the relevant contracts.
5. Sang Joo Lee is the president of Jier Shin Korea. Jier Shin Korea is a closely held firm majority owned by Lee and his family.
6. Other persons, not named as defendants in this action, participated as co-conspirators in the offense alleged in this Complaint and performed acts and made statements in furtherance thereof. These co-conspirators include, among others, GS Caltex Corporation (“GS Caltex”), Hanjin Transportation Co., Ltd. (“Hanjin”), SK Energy Co., Ltd. (“SK Energy”), Hyundai Oilbank, and S-Oil Corporation (“S-Oil”).
7. Whenever this Complaint refers to any act, deed, or transaction of any business entity, it means that the business entity engaged in the act, deed, or transaction by or through its officers, directors, employees, agents, or other representatives while they were actively engaged in the management, direction, control, or transaction of its business or affairs. As president of Jier Shin Korea, Lee knowingly, directly, and substantially participated in the acts of Jier Shin Korea described herein.
8. The United States brings this action under Section 4 of the Sherman Act, 15 U.S.C. 4, and Section 4A of the Clayton Act, 15 U.S.C. 15a, seeking equitable relief, including equitable monetary remedies, and damages from Defendants' violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
9. This Court has subject matter jurisdiction over this action under 15 U.S.C. 4 and 15a and 28 U.S.C. 1331 and 1337.
10. Defendants have consented to venue and personal jurisdiction in this district for the purpose of this Complaint.
11. Defendants or their co-conspirators entered into contracts with the U.S. military to supply and deliver fuel to U.S. military installations in South Korea. Under the terms of these
12. Through these contracts with the U.S. military, Defendants' activities had a direct, substantial, and reasonably foreseeable effect on interstate commerce, import trade or commerce, and commerce with foreign nations. Defendants' conspiracy had a substantial and intended effect in the United States. Defendants caused U.S. Department of Defense agencies to pay non-competitive prices for the supply of fuel to U.S. military installations. Defendants or their co-conspirators also caused a U.S. Department of Defense agency located in the Southern District of Ohio to transfer U.S. dollars to their foreign bank accounts.
13. From at least March 2005 and continuing until at least October 2016 (“the Relevant Period”), the U.S. military procured fuel for its installations in South Korea through competitive solicitation processes. Oil companies, either independently or in conjunction with a logistics company, submitted bids in response to these solicitations.
14. The conduct at issue relates to two types of contracts to supply fuel to the U.S. military for use in South Korea: Post, Camps, and Stations (“PC&S”) contracts and Army and Air Force Exchange Services (“AAFES”) contracts.
15. PC&S contracts are issued and administered by the Defense Logistics Agency (“DLA”), a combat support agency in the U.S. Department of Defense. DLA, formerly known as the Defense Energy Support Center, is headquartered in Fort Belvoir, Virginia. The fuel procured under PC&S contracts is used for military vehicles and to heat U.S. military buildings. During the Relevant Period, PC&S contracts ran for a term of three or four years. DLA issued PC&S solicitations listing the fuel requirements for installations across South Korea, with each delivery location identified by a separate line item. Bidders offered a price for each line item on which they chose to bid. DLA awarded contracts to the bidders offering the lowest price for each line item. The Defense Finance and Accounting Service (“DFAS”), a finance and accounting agency of the U.S. Department of Defense, wired payments to the PC&S contract awardees from its office in Columbus, Ohio.
16. AAFES is an agency of the Department of Defense headquartered in Dallas, Texas. AAFES operates official retail stores (known as “exchanges”) on U.S. Army and Air Force installations worldwide, which U.S. military personnel and their families use to purchase everyday goods and services, including gasoline for use in their personal vehicles. AAFES procures fuel for these stores via contracts awarded through a competitive solicitation process. The term of AAFES contracts is typically two years, but may be extended for additional years. In 2008, AAFES issued a solicitation that listed the fuel requirements for installations in South Korea. Unlike DLA, AAFES awarded the entire 2008 contract to the bidder offering the lowest price across all the listed locations.
17. From at least March 2005 and continuing until at least October 2016, Defendants and their co-conspirators engaged in a series of meetings, telephone conversations, emails, and other communications to rig bids and fix prices for the supply of fuel to U.S. military installations in South Korea.
18. GS Caltex, SK Energy, Hyundai Oilbank, and Jier Shin Korea (through Lee and other agents) conspired to rig bids and fix prices on the 2006 PC&S contracts, which were issued in response to solicitation SP0600-05-R-0063, supplemental solicitation SP0600-05-0063-0001, and their amendments. The term of the 2006 PC&S contracts covered the supply of fuel from February 2006 through July 2009.
19. Between early 2005 and mid-2006, GS Caltex, SK Energy, Hyundai Oilbank, and Jier Shin Korea met multiple times and exchanged phone calls and emails to allocate the line items in the solicitations for the 2006 PC&S contracts. For each line item allocated to a different co-conspirator, the other conspirators agreed not to bid or to bid high enough to ensure that they would not win that item. Through these communications, these conspirators agreed to inflate their bids to produce higher profit margins. DLA awarded the 2006 PC&S line items according to the allocations made by the conspiracy.
20. As part of their discussions related to the 2006 PC&S contracts, Jier Shin Korea and other conspirators agreed not to compete with SK Energy in bidding for the 2008 AAFES contract. In 2008, GS Caltex, Hyundai Oilbank, and Jier Shin Korea honored their agreement: GS Caltex bid significantly above the bid submitted by SK Energy for the AAFES contract, while Hyundai Oilbank and Jier Shin Korea declined to bid even after AAFES explicitly requested their participation in the bidding. The initial term of the 2008 AAFES contract ran from July 2008 to July 2010; the contract was later extended through July 2013. As envisioned by the conspiracy, AAFES awarded the 2008 contract to SK Energy.
21. Continuing their conspiracy, Jier Shin Korea and other co-conspirators conspired to rig bids and fix prices for the 2009 PC&S contracts, which were issued in response to solicitation SP0600-08-R-0233. Hanjin and S-Oil joined the conspiracy for the purpose of bidding on the solicitation for the 2009 PC&S contracts. Hanjin and S-Oil partnered to bid jointly on the 2009 PC&S contracts, with S-Oil providing the fuel and Hanjin providing transportation and logistics. The term of the 2009 PC&S contracts covered the supply of fuel from October 2009 through August 2013.
22. Between late 2008 and mid-2009, Jier Shin Korea and other co-conspirators met multiple times and exchanged phone calls and emails to allocate the line items in the solicitation for the 2009 PC&S contracts. As in 2006, these conspirators agreed to bid high so as to not win line items allocated to other co-conspirators. The original conspirators agreed to allocate to Hanjin and S-Oil certain line items that had previously been allocated to the original conspirators.
23. With one exception, DLA awarded the 2009 PC&S contracts in line with the allocations made by Jier Shin Korea and other co-conspirators. Hyundai Oilbank and Jier Shin Korea accidentally won one line item that the conspiracy had allocated to GS Caltex. To remedy this misallocation, Jier Shin Korea, Hyundai Oilbank, and GS Caltex agreed that GS Caltex, rather than Hyundai Oilbank, would supply Jier Shin Korea with the fuel procured under this line item.
24. Similar to 2006 and 2009, Jier Shin Korea and other co-conspirators conspired to rig bids and fix prices for the 2013 PC&S contracts, which were issued in response to solicitation SP0600-12-R-0332. The term of the 2013 PC&S Contract covered the supply of fuel from August 2013 through July 2016.
25. Jier Shin Korea and other co-conspirators communicated via phone calls and emails to allocate and set the price for each line item in the solicitation for the 2013 PC&S contracts. Jier Shin Korea and other co-conspirators believed that they had an agreement as to their bidding strategy and pricing for the 2013 PC&S contracts. As a result of this agreement, they bid higher prices than they would have in a competitive process.
26. However, Hanjin and S-Oil submitted bids for the 2013 PC&S contracts below the prices set by the other co-conspirators. Although lower than the pricing agreed upon by the conspirators, Hanjin and S-Oil still submitted bids above a competitive, non-collusive price, knowing that they would likely win the contracts because the other conspirators would bid even higher prices.
27. As a result of their bidding strategy, Hanjin and S-Oil jointly won nearly all the line items in the 2013 PC&S contracts. As in 2009, S-Oil was to provide the fuel for these line items, and Hanjin was to provide transportation and logistics. Jier Shin Korea and other co-conspirators won a few, small line items; SK Energy won none. DLA made inflated payments under the 2013 PC&S contracts through October 2016.
28. After the award of the 2013 PC&S contracts, Hanjin, S-Oil, and GS Caltex reached an understanding that GS Caltex, rather than S-Oil, would supply Hanjin with fuel for certain line items. Under this side agreement, Hanjin paid a much lower price to GS Caltex for fuel than the price it previously had agreed to pay S-Oil to acquire fuel for those line items. However, the price that Hanjin paid to GS Caltex exceeded a competitive price for fuel.
29. The United States incorporates by reference the allegations in paragraphs 1 through 28.
30. The conduct of Defendants and their co-conspirators unreasonably restrained trade and harmed competition for the supply of fuel to the U.S. military in South Korea in violation of Section 1 of the Sherman Act, 15 U.S.C. 1.
31. The United States was injured as a result of the unlawful conduct because it paid more for the supply of fuel than it would have had Defendants and their co-conspirators engaged in fair competition.
32. The United States requests that this Court:
(a) Adjudge that Defendants' and their co-conspirators' conduct constitutes an unreasonable restraint of interstate commerce, import trade or commerce, and commerce with foreign nations in violation of Section 1 of the Sherman Act, 15 U.S.C. 1;
(b) award the United States damages to which it is entitled for the losses incurred as the result of Defendants' and their co-conspirators' conduct;
(c) award the United States equitable disgorgement of the ill-gotten gains obtained by Defendants;
(d) award the United States its costs of this action; and
(e) award the United States other relief that the Court deems just and proper.
This Court has jurisdiction over the subject matter of this action and each of the parties. The Complaint states a claim upon which relief may be granted to the United States against Jier Shin Korea and Sang Joo Lee under Section 1 of the Sherman Act, 15 U.S.C. 1.
This Final Judgment applies to Jier Shin Korea and Sang Joo Lee, as defined above, and all other persons in active concert or participation with any of them who receive actual notice of this Final Judgment by personal service or otherwise.
Jier Shin Korea and Sang Joo Lee jointly and severally shall pay to the United States the total sum of two million dollars ($2,000,000) over three installments:
(a) Within ten (10) business days of the entry of this Final Judgment, the amount of one million dollars ($1,000,000);
(b) within one (1) calendar year of the entry of this Final Judgment, the amount of five hundred thousand dollars ($500,000); and
(c) within two (2) calendar years of the entry of this Final Judgment, the amount of five hundred thousand dollars ($500,000);
Jier Shin and Sang Joo Lee have provided sworn financial disclosure statements (“Financial Statements”) to the United States and the United States has relied on the accuracy and completeness of those Financial Statements in agreeing to this Final Judgment. Jier Shin and Sang Joo Lee warrant that the Financial Statements are complete, accurate, and current. If the United States learns of any asset(s) in which Jier Shin and Sang Joo Lee had an interest as of April 8, 2020 that were not disclosed in the Financial Statements, or if the United States learns of any misrepresentation by Jier Shin and Sang Joo Lee on, or in connection with, the Financial Statements, and if such nondisclosure or misrepresentation changes the estimated net worth set forth in the Financial Statements by $100,000 or more, the United States may collect the full payments set forth in this section plus one hundred percent (100%) of the value of the net worth of Jier Shin and Sang Joo Lee previously undisclosed. Jier Shin and Sang Joo Lee agree not to contest any collection action undertaken by the United States pursuant to this provision, and immediately to pay the United States all reasonable costs incurred in such an action, including attorney's fees and expenses.
Jier Shin Korea and Sang Joo Lee shall cooperate fully with the United States regarding any matter about which they have knowledge or information relating to any ongoing civil investigation, litigation, or other proceeding arising out of any ongoing federal investigation of the subject matter discussed in the Complaint (hereinafter, any such investigation, litigation, or proceeding shall be referred to as a “Civil Federal Proceeding”).
The United States agrees that any cooperation provided pursuant to the settlement agreement attached hereto as Attachment 1 will be considered cooperation for purposes of this Final Judgment, and the United States will use its reasonable best efforts, where appropriate, to coordinate any requests for cooperation in connection with the Civil Federal Proceeding with requests for cooperation in connection with the settlement agreement attached hereto as Attachment 1, so as to avoid unnecessary duplication and expense.
Jier Shin Korea and Sang Joo Lee's cooperation shall include, but not be limited to, the following:
(a) Upon request, completely and truthfully disclosing and producing, to the offices of the United States and at no expense to the United States, copies of all non-privileged information, documents, materials, and records in their possession (and for any foreign-language information, documents, materials, or records, copies must be produced with an English translation), regardless of their geographic location, about which the United States may inquire in connection with any Civil Federal Proceeding, including but not limited to all information about activities of Jier Shin Korea and present and former officers, directors, employees, and agents of Jier Shin Korea;
(b) Making available in the United States, at no expense to the United States, Jier Shin Korea's present officers, directors, employees, and agents to provide information and/or testimony as requested by the United States in connection with any Civil Federal Proceeding, including the provision of testimony in trial and other judicial proceedings, as well as interviews with law enforcement authorities, consistent with the rights and privileges of those individuals;
(c) Using their best efforts to make available in the United States, at no expense to the United States, Jier Shin Korea's former officers, directors, employees, and agents to provide information and/or testimony as requested by the United States in connection with any Civil Federal Proceeding, including the provision of testimony in trial and other judicial proceedings, as well as interviews with law enforcement authorities, consistent with the rights and privileges of those individuals;
(d) Providing testimony or information necessary to identify or establish the original location, authenticity, or other basis for admission into evidence of documents or physical evidence produced by Jier Shin Korea or Sang Joo Lee in any Civil Federal Proceeding as requested by the United States; and
(e) Completely and truthfully responding to all other inquiries of the United States in connection with any Civil Federal Proceeding.
However, notwithstanding any provision of this Final Judgment, Jier Shin Korea and Sang Joo Lee are not required to: (1) Request of Jier Shin Korea's current or former officers, directors, employees, or agents that they forgo seeking the advice of an attorney nor that they act contrary to that advice; (2) take any action against Jier Shin Korea's officers, directors, employees, or agents for following their attorney's advice; or (3) waive any claim of privilege or work product protection.
The obligations of Jier Shin Korea and Sang Joo Lee to cooperate fully with the United States as described in this Section shall cease upon the conclusion of all Civil Federal Proceedings (which may include Civil Federal Proceedings related to the conduct of third parties), including exhaustion of all appeals or expiration of time for all appeals of any Court ruling in each such Civil Federal Proceeding, at which point the United States will provide written notice to Jier Shin Korea and Sang Joo Lee that their obligations under this Section have expired.
A. Within thirty (30) days after entry of this Final Judgment, Jier Shin Korea shall appoint an Antitrust Compliance Officer and identify to the United States his or her name, business address, telephone number, and email address. Within forty-five (45) days of a vacancy in the Antitrust Compliance Officer position, Jier Shin Korea shall appoint a replacement, and shall identify to the United States the Antitrust Compliance Officer's name, business address, telephone number, and email address. Jier Shin Korea's initial or replacement appointment of an Antitrust Compliance Officer is subject to the approval of the United States, in its sole discretion.
B. The Antitrust Compliance Officer shall institute an antitrust compliance program for Jier Shin Korea's employees and directors. The antitrust compliance program shall provide at least two hours of training annually on the antitrust laws of the United States, such training to be delivered by an attorney with relevant experience in the field of United States antitrust law.
C. Each Antitrust Compliance Officer shall obtain, within six months after entry of this Final Judgment, and on an annual basis thereafter, on or before each anniversary of the entry of this Final Judgment, from each person subject to Paragraph V.B of this Final Judgment, and thereafter maintaining, a certification that each such person has received the required two hours of annual antitrust training.
D. Each Antitrust Compliance Officer shall communicate annually to all Jier Shin Korea employees that they may disclose to the Antitrust Compliance Officer, without reprisal, information concerning any potential violation of the United States antitrust laws.
E. Each Antitrust Compliance Offer shall provide to the United States within six months after entry of this Final Judgment, and on an annual basis thereafter, on or before each anniversary of the entry of this Final Judgment, a written statement as to the fact and manner of Jier Shin Korea's compliance with Section V of this Final Judgment.
This Court retains jurisdiction to enable any of the parties to this Final Judgment to apply to this Court at any time for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify or terminate any of its provisions, to enforce compliance, and to punish violations of its provisions.
A. The United States retains and reserves all rights to enforce the provisions of this Final Judgment, including the right to seek an order of contempt from the Court. Jier Shin Korea and Sang Joo Lee agree that in any civil contempt action, any motion to show cause, or any similar action brought by the United States regarding an alleged violation of this Final Judgment, the United States may establish a violation of the decree and the appropriateness of any remedy therefor by a preponderance of the evidence, and Jier Shin Korea and Sang Joo Lee waive any argument that a different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to the procompetitive purposes of the antitrust laws and to restore all competition the United States alleged was harmed by the challenged conduct. Jier Shin Korea and Sang Joo Lee agree that they may be held in contempt of, and that the Court may enforce, any provision of this Final Judgment that, as interpreted by the Court in light of these procompetitive principles and applying ordinary tools of interpretation, is stated specifically and in reasonable detail, whether or not it is clear and unambiguous on its face. In any such interpretation, the terms of this Final Judgment should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that Jier Shin Korea or Sang Joo Lee has violated this Final Judgment, the United States may apply to the Court for a one-time extension of this Final Judgment, together with such other relief as may be appropriate. In connection with any successful effort by the United States to enforce this Final Judgment against Jier Shin Korea or Sang Joo Lee, whether litigated or resolved prior to litigation, Jier Shin Korea and Sang Joo Lee agree to reimburse the United States for the fees and expenses of its attorneys, as well as any other costs including experts' fees, incurred in connection with that enforcement effort, including in the investigation of the potential violation.
Unless this Court grants an extension, this Final Judgment shall expire seven (7) years from the date of its entry, except that after five (5) years from the date of its entry, this Final Judgment may be terminated upon notice by the United States to the Court, Jier Shin Korea, and Sang Joo Lee that the continuation of the Final Judgment no longer is necessary or in the public interest.
Entry of this Final Judgment is in the public interest. The parties have complied with the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16, including making copies available to the public of this Final Judgment, the Competitive Impact Statement, and any comments thereon and the United States' responses to comments. Based upon the record before the Court, which includes the Competitive Impact Statement and any comments and response to comments filed with the Court, entry of this Final Judgment is in the public interest.
This Settlement Agreement (Agreement) is entered into among the United States of America, acting through the Civil Division of the United States Department of Justice and the United States Attorney's Office for the Southern District of Ohio, on behalf of the Defense Logistics Agency (DLA) and the Army and Air Force Exchange Service (AAFES) (collectively the “United States”), Jier Shin Korea (Jier Shin) and Sang Joo Lee, and Relator [REDACTED] (hereafter collectively referred to as “the Parties”), through their authorized representatives.
A. Jier Shin is a South Korea-based logistics company. Sang Joo Lee is the President of Jier Shin and a shareholder.
B. On February 28, 2018, Relator, a resident and citizen of South Korea, filed a
C. Jier Shin and Sang Joo Lee will execute a Stipulation with the Antitrust Division of the United States Department of Justice in which Jier Shin and Sang Joo Lee will consent to the entry of a Final Judgment to be filed in
D. The United States contends that it has certain civil claims against Jier Shin and Sang Joo Lee arising from a
E. This Settlement Agreement is neither an admission of liability by Jier Shin and Sang Joo Lee nor a concession by the United States or Relator that their claims are not well founded.
F. Relator claims entitlement under 31 U.S.C. 3730(d) to a share of the proceeds of this Settlement Agreement and to Relator's reasonable expenses, attorneys' fees, and costs.
To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims, and in consideration of the mutual promises and obligations of this Settlement Agreement, the Parties agree and covenant as follows:
1. Jier Shin and Sang Joo Lee jointly and severally agree to pay to the United States five hundred thousand dollars ($500,000) by electronic funds transfer no later than ten (10) business days after the Effective Date of this Agreement pursuant to written instructions to be provided by the Civil Division of the United States Department of Justice (Initial Payment). Jier Shin and Sang Joo Lee jointly and severally agree to pay to the United States five-hundred thousand dollars ($500,000) by electronic funds transfer no later than sixty (60) days after the Effective Date of this Agreement (Second Payment). Jier Shin and Sang Joo Lee jointly and severally agree to pay to the United States five-hundred thousand dollars ($500,000) by electronic funds transfer no later than one (1) year after the Effective Date of this Agreement (Third Payment). Jier Shin and Sang Joo Lee jointly and severally agree to pay to the United States five-hundred thousand dollars ($500,000) by electronic funds transfer no later than two (2) years after the Effective Date of this Agreement (Final Payment). The sum of the Initial Payment, Second Payment, Third Payment, and Final Payment shall constitute the FCA Settlement Amount. Relator claims entitlement under 31 U.S.C. 3730(d) to Relator's reasonable expenses, attorneys' fees and costs. The FCA Settlement Amount does not include the Relator's fees and costs, and Jier Shin and Sang Joo Lee acknowledge (without waiving any applicable arguments or defenses) that Relator retains all rights to seek to recover such expenses, attorneys' fees, and costs from Jier Shin pursuant to 31 U.S.C. 3730(d).
2. Subject to the exceptions in Paragraph 4 (concerning excluded claims) below, and conditioned upon Jier Shin and Sang Joo Lee's full payment of the FCA Settlement Amount, the United States releases Sang Joo Lee and Jier Shin together with its current and former parent corporations; direct and indirect subsidiaries; brother or sister corporations; divisions; current or former corporate owners; and the corporate successors and assigns of any of them from any civil or administrative monetary claim the United States has for the Covered Conduct under the False Claims Act, 31 U.S.C. 3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. 3801-3812; Contract Disputes Act, 41 U.S.C. 7101-7109; or the common law theories of breach of contract, payment by mistake, unjust enrichment, and fraud.
3. Except as set forth in Paragraph 1 (concerning Relator's claims under 31 U.S.C. 3730(d)), and subject to the exceptions in Paragraph 4 below, and conditioned upon Sang Joo Lee and Jier Shin's full payment of the FCA Settlement Amount, Relator, on behalf of: (a) His respective heirs, successors, assigns, agents and attorneys; and (b) his companies, [REDACTED], together with their direct and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate owners, and the corporate successors and assigns of any of them); hereby fully and finally releases, waives, and forever discharges Sang Joo Lee and Jier Shin, together with its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate owners, and the corporate successors and assigns of any of them, from: (i) Any civil monetary claim Relator has on behalf of the United States for the Covered Conduct under the False Claims Act, 31 U.S.C. 3729-3733; (ii) any claims or allegations Relator has asserted or could have asserted against Sang Joo Lee and Jier Shin arising from the Covered Conduct; and (iii) all liability, claims, demands, actions or causes of action whatsoever, whether known or unknown, fixed or contingent, in law or in equity, in contract or in tort, under any federal, Korean, or state statute or regulation or otherwise, or in common law, including claims for attorneys' fees, costs, and expenses of every kind and however denominated, that Relator would have standing to bring or which Relator may now have or claim to have against Sang Joo Lee and Jier Shin and/or its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate owners, and the corporate successors and assigns of any of them.
4. Notwithstanding the releases given in paragraphs 2 and 3 of this Agreement, or any other term of this Agreement, the following claims of the United States are specifically reserved and are not released:
a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code);
b. Any criminal liability;
c. Except as explicitly stated in this Agreement, any administrative liability, including the suspension and debarment rights of any federal agency;
d. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct;
e. Any liability based upon obligations created by this Agreement;
f. Any liability of individuals other than Sang Joo Lee;
g. Any liability for express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services;
h. Any liability for failure to deliver goods or services due; and
i. Any liability for personal injury or property damage or for other consequential damages arising from the Covered Conduct.
5. Relator and his heirs, successors, attorneys, agents, and assigns shall not object to this Agreement but agree and confirm that this Agreement is fair, adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C. 3730(c)(2)(B). In connection with this Agreement and this Civil FCA Action, Relator, on behalf of himself and his heirs, successors, attorneys, agents, and assigns, agrees that neither this Agreement, nor any intervention by the United States in the Civil FCA Action in order to dismiss the Civil FCA Action, nor any dismissal of the Civil FCA Action, shall waive or otherwise affect the ability of the United States to contend that provisions in the False Claims Act, including 31 U.S.C. 3730(d)(3), bar Relator from sharing in the proceeds of this Agreement, except that the United States will not contend that Relator is barred from sharing in the proceeds of this agreement under 31 U.S.C. 3730(e)(4). Moreover, the United States and Relator, on behalf of himself and his heirs, successors, attorneys, agents, and assigns agree that they each retain all of their rights pursuant to the False Claims Act on the issue of the share percentage, if any, that Relator
6. Jier Shin and Sang Joo Lee waive and shall not assert any defenses Jier Shin and Sang Joo Lee may have to any criminal prosecution or administrative action relating to the Covered Conduct that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action.
7. Jier Shin and Sang Joo Lee fully and finally release the United States, its agencies, officers, agents, employees, and servants, from any claims (including attorney's fees, costs, and expenses of every kind and however denominated) that Jier Shin and Sang Joo Lee have asserted, could have asserted, or may assert in the future against the United States, its agencies, officers, agents, employees, and servants, related to the Covered Conduct and the United States' investigation and prosecution thereof.
8. Sang Joo Lee and Jier Shin, together with its direct and indirect subsidiaries, brother or sister corporations, divisions, current or former corporate owners, and the corporate successors and assigns of any of them, hereby fully and finally releases, waives, and forever discharges the Relator, together with his respective heirs, successors, assigns, agents and attorneys, and his companies ([REDACTED]) from any claims or allegations Jier Shin or Sang Joo Lee has asserted or could have asserted, arising from the Covered Conduct, and from all liability, claims, demands, actions or causes of action whatsoever arising from or in any manner related to the Covered Conduct, whether known or unknown, fixed or contingent, in law or in equity, in contract or in tort, under any federal, Korean, or state statute or regulation or otherwise, or in common law, including claims for attorneys' fees, costs, and expenses of every kind and however denominated, that it would have standing to bring or which Jier Shin or Sang Joo Lee may now have or claim to have against Relator and his heirs, successors, assigns, agents, and attorneys.
9. a. Unallowable Costs Defined: All costs (as defined in the Federal Acquisition Regulation, 48 CFR 31.205-47) incurred by or on behalf of Sang Joo Lee and Jier Shin, and its present or former officers, directors, employees, shareholders, and agents in connection with:
(1) The matters covered by this Agreement and any related civil antitrust agreement;
(2) the United States' audit(s) and civil and any criminal investigation(s) of the matters covered by this Agreement;
(3) Sang Joo Lee and Jier Shin's investigation, defense, and corrective actions undertaken in response to the United States' audit(s) and civil and any criminal investigation(s) in connection with the matters covered by this Agreement (including attorney's fees);
(4) the negotiation and performance of this Agreement and any related civil antitrust agreement;
(5) the payments that Sang Joo Lee and Jier Shin make to the United States pursuant to this Agreement and any payments that Jier Shin may make to Relator, including costs and attorneys' fees,
b. Future Treatment of Unallowable Costs: Unallowable Costs will be separately determined and accounted for by Sang Joo Lee and Jier Shin, and Sang Joo Lee and Jier Shin shall not charge such Unallowable Costs directly or indirectly to any contract with the United States.
c. Treatment of Unallowable Costs Previously Submitted for Payment: Within 90 days of the Effective Date of this Agreement, Sang Joo Lee and Jier Shin shall identify and repay by adjustment to future claims for payment or otherwise any Unallowable Costs included in payments previously sought by Sang Joo Lee and Jier Shin or any of its subsidiaries or affiliates from the United States. Sang Joo Lee and Jier Shin agree that the United States, at a minimum, shall be entitled to recoup from Jier Shin any overpayment plus applicable interest and penalties as a result of the inclusion of such Unallowable Costs on previously-submitted requests for payment. The United States, including the Department of Justice and/or the affected agencies, reserves its rights to audit, examine, or re-examine Jier Shin's books and records and to disagree with any calculations submitted by Jier Shin or any of its subsidiaries or affiliates regarding any Unallowable Costs included in payments previously sought by Jier Shin, or the effect of any such Unallowable Costs on the amount of such payments.
10. Jier Shin and Sang Joo Lee have provided sworn financial disclosure statements (Financial Statements) to the United States and the United States has relied on the accuracy and completeness of those Financial Statements in reaching this Agreement. Jier Shin and Sang Joo Lee warrant that the Financial Statements are complete, accurate, and current. If the United States learns of asset(s) in which Jier Shin and Sang Joo Lee had an interest at the time of this Agreement that were not disclosed in the Financial Statements, or if the United States learns of any misrepresentation by Jier Shin and Sang Joo Lee on, or in connection with, the Financial Statements, and if such nondisclosure or misrepresentation changes the estimated net worth set forth in the Financial Statements by $100,000 or more, the United States may at its option: (a) Rescind this Agreement and file suit based on the Covered Conduct, or (b) let the Agreement stand and collect the full Settlement Amount plus one hundred percent (100%) of the value of the net worth of Jier Shin and Sang Joo Lee previously undisclosed. Jier Shin and Sang Joo Lee agree not to contest any collection action undertaken by the United States pursuant to this provision, and immediately to pay the United States all reasonable costs incurred in such an action, including attorney's fees and expenses. The United States agrees to notify Relator if the United States invokes either of its options pursuant to this paragraph. Nothing in this agreement shall be interpreted as a waiver of Relator's right to request a share of any proceeds collected by the United States pursuant to this paragraph.
11. In the event that the United States, pursuant to Paragraph 10 (concerning disclosure of assets), above, opts to rescind this Agreement, Jier Shin and Sang Joo Lee agree not to plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or similar theories, to any civil or administrative claims that (a) are filed by the United States within 60 calendar days of written notification to Jier Shin and Sang Joo Lee that this Agreement has been rescinded, and (b) relate to the Covered Conduct, except to the extent these defenses were available on the Effective Date of this Agreement.
12. Sang Joo Lee and Jier Shin agree to cooperate fully and truthfully with the United States in connection with the Civil FCA Action. Sang Joo Lee and Jier Shin's ongoing, full, and truthful cooperation shall include, but not be limited to:
a. Upon request by the United States with reasonable notice, producing at the offices of counsel for the United States in Washington, DC and not at the expense of the United States, complete
b. upon request by the United States with reasonable notice, making Hyun Dae Shin, Sang Joo Lee, and current Jier Shin directors, officers, and employees available for interviews, consistent with the rights and privileges of such individuals, by counsel for the United States and/or their investigative agents, not at the expense of the United States, in the United States or Taiwan, unless another place is mutually agreed upon;
c. upon request by the United States with reasonable notice, (i) using best efforts to assist in locating former Jier Shin directors, officers, and employees identified by attorneys and/or investigative agents of the United States, and (ii) using best efforts to make any such former Jier Shin directors, officers, and employees available for interviews, consistent with the rights and privileges of such individuals, by counsel for the United States and/or their investigative agents, not at the expense of the United States, in the United States or Taiwan, unless another place is mutually agreed upon; and
d. upon request by the United States with reasonable notice, making Hyun Dae Shin, Sang Joo Lee, and current Jier Shin directors, officers, and employees available, and using best efforts to make former Jier Shin directors, officers, employees available, to testify, consistent with the rights and privileges of such individuals, fully, truthfully, and under oath, without falsely implicating any person or withholding any information, (i) at depositions in the United States, Taiwan, or any other mutually agreed upon place, (ii) at trial in the United States, (iii) at any other judicial proceedings wherever located related to the Civil FCA Action, and (iv) by declaration or affidavit executed in compliance with 28 U.S.C. 1746.
13. This Agreement is intended to be for the benefit of the Parties only.
14. Upon receipt of the Initial Payment of the FCA Settlement Amount described in Paragraph 1 above, the United States and Relator shall promptly sign and file a Joint Stipulation of Dismissal, with prejudice, of the claims filed against Jier Shin in the Civil FCA Action, pursuant to Rule 41(a)(1), which dismissal shall be subject to the terms of this Agreement, including full payment of the FCA Settlement Amount, and conditioned on the Court retaining jurisdiction over Relator's claims to a relator's share and recovery of attorneys' fees and costs pursuant to 31 U.S.C. 3730(d).
15. Except with respect to payment (if any) by Jier Shin of Relator's attorneys' fees, expenses, and costs pursuant to 31 U.S.C. 3730(d), each Party shall bear its own legal and other costs incurred in connection with this matter. The Parties agree that Relator, Jier Shin, and Sang Joo Lee will not seek to recover from the United States any costs or fees related to the preparation and performance of this Agreement.
16. Each party and signatory to this Agreement represents that it freely and voluntarily enters in to this Agreement without any degree of duress or compulsion.
17. This Agreement is governed by the laws of the United States. The exclusive jurisdiction and venue for any dispute relating to this Agreement is the United States District Court for the Southern District of Ohio. Jier Shin and Sang Joo Lee agree that the United States District Court for the Southern District of Ohio has jurisdiction over it for purposes of this Agreement. For purposes of construing this Agreement, this Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not, therefore, be construed against any Party for that reason in any subsequent dispute.
18. This Agreement constitutes the complete agreement between the Parties on the subject matters addressed herein. This Agreement may not be amended except by written consent of the Parties.
19. The undersigned counsel represent and warrant that they are fully authorized to execute this Agreement on behalf of the persons and entities indicated below.
20. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Agreement.
21. This Agreement is binding on Sang Joo Lee and Jier Shin's successors, transferees, heirs, and assigns.
22. This Agreement is binding on Relator's successors, transferees, heirs, and assigns.
23. All parties consent to the United States' disclosure of this Agreement, and information about this Agreement, to the public, as permitted by order of the Court. This Agreement shall not be released in un-redacted form until the Court unseals the entire Civil FCA Action.
24. This Agreement is effective on the date of signature of the last signatory to the Agreement (Effective Date of this Agreement). Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Agreement.
The United States of America, under Section 2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (the “APPA” or “Tunney Act”), files this Competitive Impact Statement relating to the proposed Final Judgment submitted for entry in this civil antitrust proceeding.
On April 8, 2020, the United States filed a civil antitrust complaint against
At the same time the Complaint was filed, the United States also filed an agreed-upon proposed Final Judgment that would remedy Defendants' violation by having Jier Shin Korea and Sang Joo Lee jointly and severally pay $2,000,000 to the United States. This payment resolves the civil claims of the United States against Defendants related to the conduct described in the Complaint. The United States and Defendants have stipulated that the proposed Final Judgment may be entered after compliance with the APPA. Entry of the proposed Final Judgment will terminate this action, except that the Court will retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and to punish violations thereof.
Jier Shin Korea is a small, privately held logistics company located in Seoul, South Korea. Sang Joo Lee is the president of Jier Shin Korea. Jier Shin Korea is a closely held firm majority owned by Lee and his family. Jier Shin Korea provides logistics services related to the transportation of fuel, petroleum by-products, and other goods. During the conspiracy, Jier Shin Korea partnered with a South Korean oil refiner, Hyundai Oilbank Co., Ltd. (“Hyundai Oilbank”), to supply fuel to U.S. military installations in South Korea, with Jier Shin Korea acting as the prime contractor under the relevant contracts.
Other persons, not named as defendants in this action, participated as co-conspirators in the violation alleged in the Complaint and performed acts and made statements in furtherance thereof. These co-conspirators included, among others, GS Caltex Corporation (“GS Caltex”), Hanjin Transportation Co., Ltd. (“Hanjin”), SK Energy Co., Ltd. (“SK Energy”), Hyundai Oilbank, and S-Oil Corporation (“S-Oil”).
On December 12, 2018, GS Caltex, Hanjin, and SK Energy pleaded guilty to an information charging a criminal violation of Section 1 of the Sherman Act for this unlawful conduct.
On March 20, 2019, Hyundai Oilbank and S-Oil pleaded guilty to Count One of a Superseding Indictment charging a criminal violation of Section 1 of the Sherman Act for this unlawful conduct.
The United States military procures fuel for its installations in South Korea through competitive solicitation processes. Oil companies, either independently or with a transportation company, submitted bids in response to these solicitations.
The conduct at issue in this action relates to two types of contracts to supply fuel to the U.S. military in South Korea: Post, Camps, and Stations (“PC&S”) contracts and Army and Air Force Exchange Services (“AAFES”) contracts.
PC&S contracts are issued and administered by the Defense Logistics Agency (“DLA”), a combat support agency of the U.S. Department of Defense. The fuel procured under PC&S contracts is used to power military vehicles and heat U.S. military buildings. During the Relevant Period, DLA issued PC&S solicitations listing the fuel requirements for installations across South Korea, with each delivery location identified by a separate line item. Bidders submitted initial bids, offering a price for each line item on which they chose to bid. After DLA reviewed the initial bids, bidders were allowed to submit revised final bids. DLA reviewed the bids and awarded contracts to the bidders offering the lowest price for each line item. Payments under the PC&S contracts were wired to the awardees by a finance and accounting agency of the U.S. Department of Defense from its office in Columbus, Ohio.
AAFES is an agency of the Department of Defense headquartered in Dallas, Texas. AAFES operates official retail stores (known as “exchanges”) on U.S. Army and Air Force installations worldwide, which U.S. military personnel and their families use to purchase everyday goods and services, including gasoline for use in their personal vehicles. AAFES procures fuel for these stores via contracts awarded through a competitive solicitation process.
In 2008, AAFES issued a solicitation that listed the fuel requirements for installations in South Korea. Bidders submitted bids offering a price for each line item in the solicitation. Unlike DLA, AAFES awarded the entire 2008 contract to the bidder offering the lowest price across all the listed locations.
The Complaint alleges that Defendants and their co-conspirators engaged in a series of meetings, telephone conversations, emails, and other communications to rig bids and fix prices for the supply of fuel to U.S. military installations in South Korea under several PC&S and AAFES contracts.
First, the Complaint alleges that GS Caltex, SK Energy, Hyundai Oilbank, and Jier Shin Korea (including by, through, and with the knowledge of, its president Sang Joo Lee) conspired to rig bids and fix prices on the contracts issued in response to DLA solicitations SP0600-05-R-0063 and SP0600-05-R-0063-0001 (“2006 PC&S contracts”). The term of the 2006 PC&S contracts covered the supply of fuel from February 2006 through July 2009.
The Complaint alleges that between early 2005 and mid-2006, GS Caltex, SK Energy, Hyundai Oilbank, and Jier Shin Korea met multiple times and exchanged phone calls and emails to allocate the line items in the solicitations for the 2006 PC&S contracts. Through such communications, these conspirators agreed to inflate their bids to produce larger profit margins. For each line item allocated to a different co-conspirator, the other conspirators agreed not to bid or to bid high enough to ensure that they would not win that item. DLA awarded the 2006 PC&S line items according to the allocations made by the conspiracy.
Second, the Complaint alleges that, as part of their discussions related to the 2006 PC&S contracts, GS Caltex, Hyundai Oilbank, and Jier Shin Korea agreed not to compete with SK Energy in bidding for the June 2008 AAFES solicitation (“2008 AAFES contract”). The initial term of the 2008 AAFES contract ran from July 2008 to July 2010; the contract was later extended through July 2013.
Third, the Complaint alleges that Jier Shin Korea and other co-conspirators conspired to rig bids and fix prices for the contracts issued in response to DLA solicitation SP0600-08-R-0233 (“2009 PC&S contracts”). Hanjin and S-Oil joined the conspiracy for the purpose of bidding on SP0600-08-R-0233. The term of the 2009 PC&S contracts covered the supply of fuel from October 2009 through August 2013.
The Complaint explains that between late 2008 and mid-2009, Jier Shin Korea and other co-conspirators met multiple times and exchanged phone calls and emails to allocate the line items in the solicitation for the 2009 PC&S contracts. As in 2006, these conspirators agreed to bid high so as to not win line items allocated to other co-conspirators. The original conspirators agreed to allocate to Hanjin and S-Oil certain line items that had previously been allocated to the original conspirators.
Finally, the Complaint alleges that Jier Shin Korea and other co-conspirators once again conspired to rig bids and fix prices for the contracts issued in response to DLA solicitation SP0600-12-R-0332 (“2013 PC&S contracts”). The term of the 2013 PC&S contracts covered the supply of fuel from August 2013 through July 2016.
The Complaint explains that Jier Shin Korea and other co-conspirators communicated via phone calls and emails to allocate and set the price for each line item in the solicitation for the 2013 PC&S contracts. Jier Shin Korea and other co-conspirators believed that they had an agreement as to their bidding strategy and pricing for the 2013 PC&S contracts. As a result of this agreement, they submitted bids with pricing above what they would have offered absent collusion.
Hanjin and S-Oil submitted bids for the 2013 PC&S contracts below the prices set by the other co-conspirators, however. Although lower than the pricing agreed upon by the conspirators, Hanjin and S-Oil still submitted bids above a competitive, non-collusive price, knowing that they would likely win the contracts because the other conspirators would bid even higher prices.
For violations of Section 1 of the Sherman Act, the United States may seek damages, 15 U.S.C. 15a, and equitable relief, 15 U.S.C. 4, including equitable monetary remedies.
This action is related to three civil actions based on the same facts alleged in the Complaint and filed in the United States District Court for the Southern District of Ohio: (1)
The proposed Final Judgment requires Jier Shin Korea and Sang Joo Lee jointly and severally to pay $2,000,000 to the United States in three installments: The first installment of $1,000,000 is due within 10 business days of entry of the Final Judgment; the second installment of $500,000 is due within one year of the entry of the Final Judgment; and the third installment of $500,000 is due within two years of the entry of the Final Judgment. These payments will satisfy all civil claims arising from the events described in Section II
As a result of the unlawful agreements in restraint of trade between Defendants and their co-conspirators, the United States paid more for the supply of fuel to U.S. military installations in South Korea than it would have if the companies had engaged in fair and honest competition. Defendants' payments under the proposed Final Judgments compensate the United States for a portion of the losses it suffered as a result of the conspiracy. In addition to the payment of damages, the proposed Final Judgment also requires Defendants to cooperate with the United States regarding any ongoing civil investigation, litigation, or other proceeding arising out of any ongoing federal investigation of the subject matter discussed in the Complaint. To assist with these proceedings, Defendants are required to provide all non-privileged information in their possession, make available Jier Shin Korea's present employees (including Lee), and use best efforts to make available Jier Shin Korea's former employees, for interviews or testimony, as requested by the United States.
Under Section 4A of the Clayton Act, the United States is entitled to treble damages for injuries it has suffered as a result of violations of the Sherman Act. The United States agreed to accept the damages amount from Defendants based on several considerations. First, the United States considered how much Defendants individually profited from the conspiracy. Second, the United States considered the risks of pursuing contested litigation and obtaining recovery from Defendants. Third, the United States considered the cooperation and assistance offered by the Defendants to date. Under an ongoing agreement to cooperate entered into at an early stage of the United States' investigation of the bid rigging activity, Defendants have provided and continue to provide information that has benefited the United States' civil investigations. This information and cooperation assisted the United States in obtaining settlements from Defendants' co-conspirators totaling over $205 million—substantially more than the total damages suffered by the United States as a result of the conspiracy. Finally, the amount reflects the Defendants' demonstration, through the submission of extensive financial information, that they are unable to pay the full amount of damages to which the United States is entitled. The proposed Final Judgment specifies that if the United States discovers any material misrepresentation in these financial statements, the United States may recover the full amount by which the Defendants understated their ability to pay, plus the United States' attorneys fees and costs associated with obtaining such additional recovery.
The proposed Final Judgment also requires Jier Shin Korea to appoint an Antitrust Compliance Officer and to institute an antitrust compliance program. Under the antitrust compliance program, employees and directors of Jier Shin Korea must undergo training and all employees must be informed that there will no reprisal for disclosing to the Antitrust Compliance Officer any potential violations of the United States antitrust laws. The Antitrust Compliance Officer is required annually to certify to the
The proposed Final Judgment contains provisions designed to promote compliance and make the enforcement of the Final Judgment as effective as possible. Paragraph VII(A) provides that the United States retains and reserves all rights to enforce the provisions of the proposed Final Judgment, including its rights to seek an order of contempt from the Court. Defendants have agreed that in any civil contempt action, any motion to show cause, or any similar action brought by the United States regarding an alleged violation of the Final Judgment, the United States may establish the violation and the appropriateness of any remedy by a preponderance of the evidence and that Defendants have waived any argument that a different standard of proof should apply. This provision aligns the standard for compliance obligations with the standard of proof that applies to the underlying offense that the compliance commitments address.
Paragraph VII(B) provides additional clarification regarding the interpretation of the provisions of the proposed Final Judgment. The proposed Final Judgment was drafted to restore competition the United States alleged was harmed by Defendants' challenged conduct. Defendants agree that they will abide by the proposed Final Judgment, and that they may be held in contempt of this Court for failing to comply with any provision of the proposed Final Judgment that is stated specifically and in reasonable detail, as interpreted in light of this procompetitive purpose.
Paragraph VII(C) of the proposed Final Judgment provides that if the Court finds in an enforcement proceeding that a Defendant has violated the Final Judgment, the United States may apply to the Court for a one-time extension of the Final Judgment, together with such other relief as may be appropriate. In addition, to compensate American taxpayers for any costs associated with investigating and enforcing violations of the proposed Final Judgment, Paragraph VII(C) provides that in any successful effort by the United States to enforce the Final Judgment against a Defendant, whether litigated or resolved before litigation, that Defendants will reimburse the United States for attorneys' fees, experts' fees, and other costs incurred in connection with any enforcement effort, including the investigation of the potential violation.
Finally, Section VIII of the proposed Final Judgment provides that the Final Judgment will expire seven years from the date of its entry, except that after five years from the date of its entry, the Final Judgment may be terminated upon notice by the United States to the Court and Defendants that the continuation of the Final Judgment is no longer necessary or in the public interest.
Entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust damages action. Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no prima facie effect in any subsequent private lawsuit that may be brought against Defendants.
The United States and Defendants have stipulated that the proposed Final Judgment may be entered by the Court after compliance with the provisions of the APPA, provided that the United States has not withdrawn its consent. The APPA conditions entry upon the Court's determination that the proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within sixty (60) days of the date of publication of this Competitive Impact Statement in the
Written comments should be submitted by mail to: Robert A. Lepore, Chief, Transportation, Energy & Agriculture Section, Antitrust Division, United States Department of Justice, 450 5th Street NW, Suite 8000, Washington, DC 20530.
The proposed Final Judgment provides that the Court retains jurisdiction over this action, and the parties may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment.
As an alternative to the proposed Final Judgment, the United States considered a full trial on the merits against Defendants. The United States is satisfied, however, that the relief in the proposed Final Judgment remedies the violation of the Sherman Act alleged in the Complaint. The proposed Final Judgment represents substantial monetary relief while avoiding the time, expense, and uncertainty of a full trial on the merits. Further, Defendants' cooperation with the civil investigation and any potential litigation will enhance the ability of the United States to resolve issues related to the civil investigation and any potential litigation.
The Clayton Act, as amended by the APPA, requires that proposed consent judgments in antitrust cases brought by the United States be subject to a 60-day comment period, after which the Court shall determine whether entry of the proposed Final Judgment “is in the public interest.” 15 U.S.C. 16(e)(1). In making that determination, the Court, in accordance with the statute as amended in 2004, is required to consider:
(A) The competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial.
As the U.S. Court of Appeals for the District of Columbia Circuit has held, under the APPA a court considers, among other things, the relationship between the remedy secured and the specific allegations in the government's complaint, whether the proposed Final Judgment is sufficiently clear, whether its enforcement mechanisms are sufficient, and whether it may positively harm third parties.
The United States' predictions about the efficacy of the remedy are to be afforded deference by the Court.
Moreover, the Court's role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its complaint, and does not authorize the Court to “construct [its] own hypothetical case and then evaluate the decree against that case.”
In its 2004 amendments to the APPA, Congress made clear its intent to preserve the practical benefits of using consent judgments proposed by the United States in antitrust enforcement, Public Law 108-237 § 221, and added the unambiguous instruction that “[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.” 15 U.S.C. 16(e)(2);
There are no determinative materials or documents within the meaning of the APPA that were considered by the United States in formulating the proposed Final Judgment.
On April 13, 2020, the Department of Justice lodged a proposed Stipulation of Settlement and Order (“Agreement”) with the United States District Court for the District of Puerto Rico in the lawsuit entitled
In this action, the United States filed a Complaint alleging that TAPI Puerto Rico, Inc. (“TAPI”) violated various provisions of the Clean Air Act (“CAA”), 42 U.S.C. 7401
Pursuant to the proposed Agreement, TAPI will pay a penalty in the amount of $539,784. The proposed Agreement resolves the civil claims of the United States for the violations alleged in the Complaint through the date of lodging of the Stipulation.
The publication of this notice opens a period for public comment on the Agreement. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Agreement may be examined and downloaded at this Justice Department website:
Please enclose a check or money order for $3.25 (25 cents per page reproduction cost) payable to the United States Treasury.
In accordance with Departmental Policy, 28 CFR 50.7, notice is hereby given that a proposed Consent Decree in
This proposed Consent Decree concerns a complaint filed by the United States against William Case, Bill Case Farms, Inc., and Case Family, LLC, pursuant to Clean Water Act Section 309, 33 U.S.C. 1319, to obtain injunctive relief from and impose civil penalties against the Defendants for violating the Clean Water Act by discharging pollutants without a permit into waters of the United States. The proposed Consent Decree resolves these allegations by requiring the Defendants to restore the impacted areas, perform mitigation, and pay a civil penalty.
The Department of Justice will accept written comments relating to this proposed Consent Decree for thirty (30) days from the date of publication of this Notice. Please address comments to Kent E. Hanson, United States Department of Justice, Environment and Natural Resources Division, Environmental Defense Section, Post Office Box 7611, Washington, DC 20044-7611, and refer to
The proposed Consent Decree may be examined electronically at
National Credit Union Administration (NCUA).
Notice and request for comment.
The National Credit Union Administration (NCUA), as part of a continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the following extension of a currently approved collection, as required by the Paperwork Reduction Act of 1995.
Written comments should be received on or before June 16, 2020 to be assured consideration.
Interested persons are invited to submit written comments on the information collection to Mackie Malaka, National Credit Union Administration, 1775 Duke Street, Suite 6060, Alexandria, Virginia 22314; Fax
Address requests for additional information to Mackie Malaka at the address above or telephone 703-548-2704.
By Gerard Poliquin, Secretary of the Board, the National Credit Union Administration, on April 14, 2020.
Nuclear Regulatory Commission.
Proposed information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on this proposed collection of information. The information collection is entitled, “NRC CUI Program Challenge Request Process.”
Submit comments by June 16, 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 on or before this date.
You may submit comments by any of the following methods:
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2019-0239 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:
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Please include Docket ID NRC-2019-0239 in the subject line of your comment submission, in order to ensure that the NRC is able to make your
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. The NRC will post 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 into ADAMS.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
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The NRC CUI Program Challenge Request Process, also referred to as the “CUI Challenge Request Process” in this document, provides the process used for NRC Controlled Unclassified Information (CUI) authorized holders to challenge the designation of information that has been marked as CUI as improperly or incorrectly designated. government purpose to possess the information. Any authorized holder who believes that the designation of specific information as CUI is improper or incorrect, or who believes they have received unmarked CUI, may use this process to formally notify the NRC CUI Senior Agency Official (SAO). The process also allows for the NRC CUI SAO and CUI Program Manager to process such requests and to issue a Final Decision from the CUI SAO.
The CUI Challenge Request Process is not intended to be used to address all disagreements regarding the proper designation of CUI. Authorized holders are encouraged to seek or utilize less formal means when resolving internal good faith disputes over the proper designation of information as CUI, such as discussion with the creator or designator of the information in dispute. Where resolution cannot be achieved through less formal means, the CUI challenge request process is available.
The CUI Challenge Request Process does not supersede any obligations under law or NRC policy to report information spills.
The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Regulatory guide; withdrawal.
The U.S. Nuclear Regulatory Commission (NRC) is withdrawing Regulatory Guide (RG) 5.56, “Standard Format and Content of Safeguards Contingency Plans for Transportation.” RG 5.56 is being withdrawn because it contains regulatory guidance that is out of date and not currently necessary.
The withdrawal of RG 5.56 takes effect on April 17, 2020.
Please refer to Docket ID NRC-2020-0057 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Albert N. Tardiff, telephone: 301-287-3613, email:
RG 5.56 was published for comment in March 1978 to provide guidance on the development of safeguards contingency plans for transportation. This guide supports meeting NRC physical protection requirements for transportation of special nuclear material (SNM). In addition, it supports meeting the NRC licensing requirements to transport formula quantities of strategic SNM (also referred to as Category I quantities of strategic SNM).
The NRC is withdrawing RG 5.56, “Standard Format and Content of Safeguards Contingency Plans for Transportation,” because the guide no
As a matter of agreement, the U.S. Department of Energy (DOE) currently transports Category I quantities of strategic SNM using its own guidance. This is expected to continue into the foreseeable future. The NRC's regulatory requirements for transportation security of this material are still in place. However, these requirements have not been updated for the current threat environment. Moreover, given the lack of any private transport of these materials, no post-9/11 security orders were developed to address contingency plans for transportation. Therefore, the NRC staff considers RG 5.56 to be outdated and is not satisfactory for developing contingency plans for the transportation of Category I strategic SNM in the future.
It may be possible for the staff to update the guidance to make it useful for potential future use; however, the staff concludes that the expenditure of resources to revise the guide is neither necessary nor warranted. If an NRC licensee or applicant proposed to transport Category I quantities of strategic SNM today without DOE, the staff would evaluate the need for additional physical protection, given the current threat environment, and provide approval to the licensee or applicant, as appropriate, on a case-by-case basis. The likelihood of such a proposal is expected to be remote. Other general NRC guidance on the development of contingency plans can be found in NUREG/CR-6667, “Standard Review Plan for Safeguards Contingency Response Plans for Category I Fuel Facilities,” and such guidance could be useful in developing a contingency plan for transportation of Category I quantities of SNM.
The withdrawal of RG 5.56 does not alter any prior or existing NRC licensing approval, or the acceptability of licensee commitments made regarding the withdrawn guidance. Although RG 5.56 is withdrawn, current licensees referencing this RG may continue to do so, and withdrawal does not affect any existing licenses or agreements. However, by withdrawing RG 5.56, the NRC no longer approves use of the guidance in future requests or applications for NRC licensing actions.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Regulatory guide; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing Revision 2 to Regulatory Guide (RG) 1.188, “Standard Format and Content for Applications to Renew Nuclear Power Plant Operating Licenses.” This RG describes the standard format and content that the NRC staff considers acceptable for applications for renewal and subsequent renewal of operating licenses for commercial nuclear power plants.
Revision 2 to RG 1.188 is available on April 17, 2020.
Please refer to Docket ID NRC-2019-0181 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Regulatory guides are not copyrighted, and NRC approval is not required to reproduce them.
Bennett Brady, telephone: 301-415-2981, email:
The NRC is issuing a revision to an existing guide in the NRC's “Regulatory Guide” series. This series was developed to describe and make available to the public information regarding methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, techniques that the NRC staff uses in evaluating specific issues or postulated events, and data that the NRC staff needs in its review of applications for permits and licenses.
Revision 2 of RG 1.188 was issued with a temporary identification of Draft Regulatory Guide, DG-1341. Revision 2 of RG 1.188 broadens the scope of the guide to include subsequent license renewal. Revision 2 of the guide endorses two industry guidance documents that describe methods that the staff of the NRC considers acceptable for use in preparing applications for license renewal and subsequent license renewal.
Specifically, this revision endorses Nuclear Energy Institute (NEI) 17-01, “Industry Guideline for Implementing the Requirements of 10 CFR part 54 for Subsequent License Renewal” (ADAMS Accession No. ML17339A599), which provides an acceptable approach for implementing the requirements of title 10 of the
The RG applies to holders of operating licenses under 10 CFR part 50, “Domestic Licensing of Production and Utilization Facilities.” The RG could also apply to holders of combined licenses under 10 CFR part 52, “Licenses, Certifications, and Approvals for Nuclear Power Plants.” However, because no combined license holder is expected to use this RG for at least two decades, the NRC is not expanding the RG's applicability to combined license holders at this time.
The NRC published a notice of the availability of DG-1341 in the
This RG is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.
Revision 2 of RG 1.188 describes one acceptable method for demonstrating compliance with 10 CFR part 54 for applicants for nuclear power plant license renewal and subsequent license renewal. This RG would not constitute backfitting as defined in 10 CFR 50.109, “Backfitting” and as described in NRC Management Directive 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests” (ADAMS Accession No. ML18093B087); would not affect the issue finality of any approval issued under 10 CFR part 52; and would not constitute forward fitting as that term is defined and described in Management Directive 8.4. Existing licensees and applicants for license renewal or subsequent license renewal will not be required to comply with the positions set forth in this RG. Further information on the staff's use of the RG is contained in the RG under Section D., “Implementation.”
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
This Notice will be published in the
Postal Regulatory Commission.
Notice.
The Commission is acknowledging a recent filing by the Postal Service of specific rates for its Inbound Letter Post Small Packets and Bulky Letters product effective January 1, 2021. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On April 10, 2020, the Postal Service filed a notice of specific rates for its Inbound Letter Post Small Packets and Bulky Letters product effective January 1, 2021.
In its Notice, the Postal Service proposes new prices for the Inbound Letter Post Small Packets and Bulky Letters product. Notice at 1. Under the Universal Postal Convention, by June 1, 2020, the Postal Service may submit self-declared rates for Inbound Letter Post Small Packets and Bulky Letters that would take effect on January 1, 2021.
In addition, the Postal Service filed an unredacted copy of Governors' Decision 19-1, the unredacted new prices, and related financial information under seal.
The Commission establishes Docket No. CP2020-120 for consideration of matters raised by the Notice and appoints Katalin K. Clendenin to serve as Public Representative in this docket. The Commission invites comments on whether the Postal Service's filing is consistent with 39 U.S.C. 3632, 3633, and 39 CFR part 3015. Comments are due no later than April 27, 2020. The public portions of the filing can be accessed via the Commission's website (
1. The Commission establishes Docket No. CP2020-120 for consideration of the matters raised by the Postal Service's Notice.
2. Comments are due no later than April 27, 2020.
3. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin will serve as an officer of the Commission (Public Representative) to represent the interests of the general public in these dockets.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
On November 1, 2019, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
On December 17, 2019, pursuant to Section 19(b)(2) of the Act,
The Commission is publishing this notice to solicit comments on Amendment No. 2 to the proposed rule change from interested persons, and is approving the proposed rule change, as modified by Amendment No. 2, on an accelerated basis.
The Exchange proposes new Rule 5.2-E(j)(8) to establish generic listing standards for Exchange-Traded Fund Shares, which are Derivative Securities Products that are permitted to operate in reliance on Rule 6c-11 under the Investment Company Act of 1940. In addition, the Exchange proposes to discontinue the quarterly reports currently required with respect to Managed Fund Shares listed on the Exchange pursuant to Commentary .01 to NYSE Arca Rule 8.600-E. This Amendment No. 2 to SR-NYSEArca-2019-81 replaces SR-NYSEArca-2019-81 as originally filed and Amendment 1 thereto, and supersedes such filings in their entirety. The proposed 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 new Rule 5.2-E(j)(8) to establish “generic” listing standards for Exchange-Traded Fund Shares, which are Derivative Securities Products
The Exchange currently lists and trades shares of exchange-traded funds (“ETFs”) under the generic listing criteria of NYSE Arca Rule 5.2-E(j)(3) for Investment Company Units or Commentary .01 to NYSE Arca Rule 8.600-E for Managed Fund Shares, or pursuant to a Securities and Exchange Commission (“Commission”) approval order or notice of effectiveness under Section 19(b)(2) or Section 19(b)(3)(A), respectively, of the Act. Issuers of Investment Company Units and Managed Fund Shares have heretofore been required to submit an application for exemptive relief from certain provisions under the 1940 Act and to receive such relief pursuant to an exemptive order by the Commission. The Commission recently adopted Rule 6c-11 to permit ETFs that satisfy certain conditions to operate without obtaining an exemptive order from the Commission under the 1940 Act.
Rule 19b-4(e)(1) provides that the listing and trading of a new derivative securities product by a self-regulatory organization (“SRO”) is not deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4,
The Exchange believes that the proposed generic listing rules for Exchange-Traded Fund Shares, described below, would facilitate efficient procedures for ETFs that are permitted to operate in reliance on Rule 6c-11. The Exchange further believes that the proposed rule is fully consistent with, and will further, the Commission's goals in adopting Rule 6c-11. As with Investment Company Units and Managed Fund Shares listed under the generic listing standards in NYSE Arca
The Exchange is proposing standards that would pertain to Exchange-Traded Fund Shares to qualify for listing and trading pursuant to Rule 19b-4(e), as follows.
Proposed Rule 5.2-E(j)(8)(a) would provide that the Exchange would consider for trading, whether by listing or pursuant to unlisted trading privileges (“UTP”), Exchange-Traded Fund Shares that meet the criteria of proposed Rule 5.2-E(j)(8).
Proposed Rule 5.2-E(j)(8)(b) would specify applicability of proposed Rule 5.2-E(j)(8) and would provide that it is applicable only to Exchange-Traded Fund Shares. Proposed Rule 5.2-E(j)(8) (b) would further provide that, except to the extent inconsistent with proposed Rule 5.2-E(j)(8), or unless the context otherwise requires, Exchange rules would be applicable to the trading on the Exchange of such securities and that Exchange-Traded Fund Shares would be included within the definition of NMS Stock as defined in Rule 1.1.
Proposed Rule 5.2-E(j)(8)(c) would set forth the definitions that would be used for purposes of the proposed rule as follows:
• Proposed Rule 5.2-E(j)(8)(c)(1) would define the term “1940 Act” to mean the Investment Company Act of 1940, as amended.
• Proposed Rule 5.2-E(j)(8)(c)(2) would define the term “Exchange-Traded Fund” as having the same meaning as the term “exchange-traded fund” as defined in Rule 6c-11(a)(1) under the 1940 Act.
• Proposed Rule 5.2-E(j)(8)(c)(3) would define the term “Exchange-Traded Fund Share” to mean a share of stock issued by an Exchange-Traded Fund.
Proposed Rule 5.2-E(j)(8)(c)(4) would define the term “Reporting Authority” to mean, in respect of a particular series of Exchange-Traded Fund Shares, the Exchange, an institution, or a reporting service designated by the Exchange or by the exchange that lists a particular series of Exchange-Traded Fund Shares (if the Exchange is trading such series pursuant to unlisted trading privileges) as the official source for calculating and reporting information relating to such series, including, but not limited to, any current index or portfolio value, the current value of the portfolio of any securities required to be deposited in connection with issuance of Exchange-Traded Fund Shares, the amount of any dividend equivalent payment or cash distribution to holders of Exchange-Traded Fund Shares, net asset value, or other information relating to the issuance, redemption or trading of Exchange-Traded Fund Shares. A series of Exchange-Traded Fund Shares may have more than one Reporting Authority, each having different functions.
Proposed Rule 5.2-E(j)(8)(d) would specify the limitations on Exchange liability and relates to limitation of the Exchange, the Reporting Authority, or any agent of the Exchange as a result of specified events and conditions. Specifying such limitations of liability is standard in the Exchange's rules governing the listing of Derivative Securities Products and the proposed rule text is substantively identical to Rules 5.2-E(j)(3)(D), 8.100-E(f), 8.201-E(f), 8.200-E(f), 8.202-E(f), 8.203-E(f), 8.204-E(g), 8.300-E(f), 8.400-E(f), 8.500-E(e), 8.600-E(e), and 8.700-E(g).
Proposed Rule 5.2-E(j)(8)(e) would provide that Exchange may approve Exchange-Traded Fund Shares for listing and/or trading (including pursuant to UTP) pursuant to Rule 19b-4(e) under the Exchange Act provided that each series of Exchange-Traded Fund Shares must be eligible to operate in reliance on Rule 6c-11 under the 1940 Act and,) must satisfy the requirements of proposed Rule 5.2-E(j)(8)(as described below) upon initial listing and, except for subparagraph (1)(A) of Rule 5.2-E(j)(8), on a continuing basis. As further proposed, an issuer of such securities must notify the Exchange of any failure to comply with such requirements.
Proposed Rule 5.2-E(j)(8)(e)(1) sets forth the initial and continued listing standards for Exchange-Traded Fund Shares to be listed on the Exchange and would provide that Exchange-Traded Fund Shares will be listed and traded on the Exchange subject to the requirement that the investment company issuing a series of Exchange-Traded Fund Shares is eligible to operate in reliance on the requirements of Rule 6c-11(c) on an initial and continued listing basis.
Proposed Rule 5.2-E(j)(8)(e)(1)(A) provides that, for each series of Exchange-Traded Fund Shares, the Exchange will establish a minimum number of Exchange-Traded Fund Shares required to be outstanding at the time of commencement of trading on the Exchange.
Proposed Rule 5.2-E(j)(8)(e)(2) would set forth the standards for suspension of trading or removal of Exchange-Traded Fund Shares from listing on the Exchange and would provide that the Exchange will consider the suspension of trading in, and will commence delisting proceedings under Rule 5.5-E(m) of, a series of Exchange-Traded Fund Shares under any of the following circumstances:
(i) If the Exchange becomes aware that the investment company is no longer eligible to operate in reliance on Rule 6c-11; (see proposed Rule 5.2-E(j)(8)(e)(2)(A));
(ii) if the investment company no longer complies with the requirements set forth in Rule 5.2-E(j)(8)
(iii) if, following the initial twelve-month period after commencement of trading on the Exchange of a series of Exchange-Traded Fund Shares, there are fewer than 50 beneficial holders of such series of Exchange-Traded Fund Shares (see proposed Rule 5.2-E(j)(8)(e)(2)(C)); or
(iv) if such other event shall occur or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable (see proposed Rule 5.2-E(j)(8)(e)(2)(D)). This proposed rule text is based, for example, on Rules 5.2-E(j)(6)(B)(2)(c)(3)(for Index-Linked Securities); 8.600-E(d)(2)(C)(vi)(for Managed Fund
Proposed Rule 5.2-E(j)(8)(f) would provide that transactions in Exchange-Traded Fund Shares would occur during the trading hours specified in Rule 7.34-E(a). As with other Derivative Securities Products listed on the Exchange, Exchange-Traded Fund Shares would trade during the Early, Core, and Late Trading Sessions, as defined in Rule 7.34-E(a). ETP Holders accepting orders in Exchange-Traded Fund Shares in the Early or Late Trading Session would be subject to the customer disclosure requirements specified in Rule 7.34-E(d).
Proposed Rule 5.2-E(j)(8)(g) would provide that the Exchange would implement and maintain written surveillance procedures for Exchange-Traded Fund Shares. This proposed rule is based, for example, on Commentary .01(f) to Rule 5.2-E(j)(3) (for Investment Company Units); Commentary .03 to Rule 8.600-E (for Managed Fund Shares); and Commentary .04 to Rule 8.700-E (for Managed Trust Securities).
Proposed Rule 5.2-E(j)(8)(h) would provide that, upon termination of an investment company issuing Exchange-Traded Fund Shares, the Exchange requires that Exchange-Traded Fund Shares issued in connection with such entity be removed from Exchange listing.
Proposed Commentary .01 to Rule 5.2-E(j)(8) would provide that a security that has previously been approved for listing on the Exchange pursuant to the generic listing requirements specified in Rule 5.2-E(j)(3) or Commentary .01 to Rule 8.600-E, or pursuant to a proposed rule change approved or subject to a notice of effectiveness by the Commission, may be considered approved for listing solely under Rule 5.2-E(j)(8) if such security is eligible to operate in reliance on Rule 6c-11 under the 1940 Act. Once so approved for listing, the continued listing requirements applicable to such previously-listed security will be those specified in paragraph (e) of Rule 5.2-E(j)(8). Any requirements for listing as specified in Rule 5.2-E(j)(3) or Commentary .01 to Rule 8.600-E, or an approval order or notice of effectiveness of a separate proposed rule change that differ from the requirements of Rule 5.2-E(j)(8) will no longer be applicable to such security.
The Exchange believes that proposed Commentary .01 harmonizes the Exchange's listing standards for all Exchange-Traded Funds that will be listed on the Exchange, even if they were previously listed pursuant to different continued listing requirements. Specifically, as noted in the Rule 6c-11 Release, one year following the effective date of Rule 6c-11, the Commission will be rescinding those portions of its prior ETF exemptive orders under the 1940 Act that grant relief related to the formation and operation of certain ETFs. The Exchange believes that once this occurs, all Exchange-Traded Funds will be subject to the same requirements under Rule 6c-11 and will no longer be subject to any differing requirements that may have been set forth in the exemptive orders issued before the effective date of Rule 6c-11. To maintain consistent standards for all Exchange-Traded Fund Shares on the Exchange, the Exchange further believes that such previously-listed products should no longer be required to comply with the previously-applicable continued listing requirements for such Exchange-Traded Funds.
Proposed Commentary .02 to Rule 5.2-E(j)(8) would provide that the following requirements shall be met by series of Exchange-Traded Fund Shares on an initial and continued listing basis. With respect to series of Exchange-Traded Fund Shares that are based on an index: (1) If the underlying index is maintained by a broker-dealer or fund adviser, the broker-dealer or fund adviser will erect and maintain a “fire wall” around the personnel who have access to information concerning changes and adjustments to the index and the index will be calculated by a third party who is not a broker-dealer or fund adviser, and (2) Any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on the index composition, methodology and related matters, must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the applicable index. See proposed Commentary .02 (a) to Rule 5.2-E(j)(8). Proposed Commentary .02(a) is based on Commentary .01(b)(1) to Rule 5.2-E(j)(3) and Commentary .02(b)(1) and (b)(3) to Rule 5.2-E(j)(3).
In addition, with respect to series of Exchange-Traded Fund Shares that are actively managed, if the investment adviser to the investment company issuing Exchange-Traded Fund Shares is affiliated with a broker-dealer, such investment adviser will erect and maintain a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such Exchange-Traded Fund's portfolio. Personnel who make decisions on the Exchange-Traded Fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding the applicable Exchange-Traded Fund portfolio. The Reporting Authority that provides information relating to the portfolio of a series of Exchange-Traded Fund Shares must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the actual components of such portfolio. (See proposed Commentary .02(b) to Rule 5.2-E(j)(8)). Proposed Commentary .02(b) is based in part on Commentary .06 to Rule 8.600-E.
The Exchange also proposes non-substantive amendments to include Exchange-Traded Fund Shares in other Exchange rules. Specifically, the Exchange proposes to amend Rule 5.3-E, concerning Corporate Governance and Disclosure Policies, and Rule 5.3-E(e), concerning Shareholder/Annual Meetings, to add Exchange-Traded Fund Shares to the enumerated derivative and special purpose securities that are subject to the respective Rules. Thus, Exchange-Traded Fund Shares would be subject to corporate governance, disclosure and shareholder/annual meeting requirements that are consistent
The Exchange notes that Exchange-Traded Fund Shares will be subject to all Exchange rules applicable to equities trading. With respect to Exchange-Traded Fund Shares, all of the Exchange member obligations relating to product description and prospectus delivery requirements will continue to apply in accordance with Exchange rules and federal securities laws, and the Exchange and the Financial Industry Regulatory Authority, Inc. (“FINRA”) will continue to monitor Exchange members for compliance with such requirements, which are not changing as a result of Rule 6c-11 under the 1940 Act.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in a series of Exchange-Traded Fund Shares.
These may include: (1) The extent to which certain information about the Exchange-Traded Fund Shares that is required to be disclosed under Rule 6c-11(c) of the 1940 Act is not being made available; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present.
NYSE Arca Rule 7.18-E(d)(2) provides that, with respect to Derivative Securities Products (which would include Exchange-Traded Fund Shares) listed on the Exchange for which a Net Asset Value (“NAV”) is disseminated, if the Exchange becomes aware that the NAV is not being disseminated to all market participants at the same time, it will halt trading in the affected Derivative Securities Product on the NYSE Arca Marketplace until such time as the NAV is available to all market participants. In addition, the Exchange may halt trading in Exchange Traded Fund Shares if there is an interruption or disruption in the dissemination of an underlying index value, if applicable, if there are major interruptions in securities trading in U.S. or global markets, or in the presence of other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market.
The Exchange will obtain a representation from the issuer of a series of Exchange-Traded Fund Shares that the NAV per share of such series will be calculated daily and will be made available to all market participants at the same time.
As provided in NYSE Arca Rule 7.6-E, the minimum price variation (“MPV”) for quoting and entry of orders in equity securities traded on the NYSE Arca Marketplace is $0.01, with the exception of securities that are priced less than $1.00 for which the MPV for order entry is $0.0001.
The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Exchange-Traded Fund Shares in all trading sessions and to deter and detect violations of Exchange rules. Specifically, the Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which are currently applicable to Investment Company Units and Managed Fund Shares, among other product types, to monitor trading in Exchange-Traded Fund Shares. The Exchange or FINRA, on behalf of the Exchange, will communicate as needed regarding trading in Exchange-Traded Fund Shares and certain of their applicable underlying components with other markets that are members of the Intermarket Surveillance Group (“ISG”) or with which the Exchange has in place a comprehensive surveillance sharing agreement. In addition, the Exchange may obtain information regarding trading in Exchange-Traded Fund Shares and certain of their applicable underlying components from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. Additionally, FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities that may be held by a series of Exchange-Traded Fund Shares reported to FINRA's TRACE. FINRA also can access data obtained from the Municipal Securities Rulemaking Board's Electronic Municipal Market Access (“EMMA”) system relating to municipal bond trading activity for surveillance purposes in connection with trading in a series of Exchange-Traded Fund Shares, to the extent that a series of Exchange-Traded Fund Shares holds municipal securities. As noted above, the issuer of a series of Exchange-Traded Fund Shares will be required to comply with Rule 10A-3 under the Act for the initial and continued listing of Exchange-Traded Fund Shares, as provided under Rule 5.3-E.
Pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. As provided for under proposed Rule 5.2-E(j)(8)(e)(2), if the investment company or series of Exchange-Traded Fund Shares is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Rule 5.5-E(m).
The Exchange will utilize its existing procedures to monitor issuer compliance with the requirements of proposed Rule 5.2-E(j)(8). For example, the Exchange will continue to use intraday alerts that will notify Exchange personnel of trading activity throughout the day that may indicate that certain disclosures are not being made accurately or that other unusual conditions or circumstances are present that could be detrimental to the maintenance of a fair and orderly market. The Exchange will require periodic certification from the issuer of a series of Exchange-Traded Fund Shares that it is in compliance with Rule 6c-11 and the requirements of Rule 5.2-E(j)(8). Proposed Rule 5.2-E(j)(8)(e)(2)(i) provides that the Exchange will consider the suspension of trading in, and will commence delisting proceedings under Rule 5.5-E(m) of, a series of Exchange-Traded Fund Shares if the Exchange becomes aware that the investment company is no longer eligible to operate in reliance on Rule 6c-11. The Exchange's awareness for purposes of determining whether to suspend trading or delist a series of Exchange-Traded Fund Shares may result from notification by the investment company or by the Exchange learning, through its own efforts, of non-compliance with Rule 5.2-E(j)(8).
Commentary .01(b)(1) and Commentary .02(b) to NYSE Arca Rule 5.2-E (j)(3) (applicable to Investment Company Units) and Commentary .06 to NYSE Arca Rule 8.600-E (applicable to Managed Fund Shares) require the establishment and maintenance of a “firewall” around personnel who have access to information concerning changes to an index or the composition and/or changes to a fund's portfolio; and that specified persons or entities be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the applicable index or portfolio.
In the Rule 6c-11 Release, the Commission, in the context of index-based ETFs with affiliated index providers (“self-indexed ETFs”), noted the federal securities law provisions that currently relate to implementation by funds of appropriate measures to deal with misuse of non-public information.
In support of this proposal, the Exchange represents that:
(1) The Exchange-Traded Fund Shares will conform to the initial and continued listing criteria under Rule 5.2-E(j)(8);
(2) the Exchange's surveillance procedures are adequate to properly monitor the trading of the Exchange-Traded Fund Shares in all trading sessions and to deter and detect violations of Exchange rules. Specifically, the Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which will include Exchange-Traded Fund Shares, to monitor trading in the Exchange-Traded Fund Shares;
(3) the issuer of a series of Exchange-Traded Fund Shares will be required to comply with Rule 10A-3 under the Act for the initial and continued listing of Exchange-Traded Fund Shares, as provided under Rule 5.3-E; and
(4) Exchange-Traded Fund Shares will be subject to all Exchange rules applicable to equities trading.
In its order approving the Exchange's proposal to adopt generic listing standards for Managed Fund Shares,
The generic listing criteria in proposed Rule 5.2-E(j)(8) will now apply equally both to Exchange-Traded Fund Shares that are Investment Company Units previously listed under Rule 5.2-E(j)(3) and those that are Managed Fund Shares previously listed under Commentary .01 to Rule 8.600-E. All types of Exchange-Traded Fund Shares, whether index-based or actively managed, must be eligible to operate in reliance on Rule 6c-11.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
By facilitating efficient procedures for listing ETFs that are permitted to operate in reliance on Rule 6c-11, the generic listing rules in proposed Rule 5.2-E(j)(8) described above are consistent with, and will further, the Commission's goals in adopting Rule 6c-11. In addition, by allowing Exchange-Traded Fund Shares to be listed and traded on the Exchange without a prior Commission approval order or notice of effectiveness pursuant to Section 19(b) of the Act, proposed Rule 5.2-E(j)(8) will significantly reduce the time frame and costs associated with bringing these securities to market, thereby promoting market competition among issuers of Exchange-Traded Fund Shares, to the benefit of the investing public.
In addition, the proposed rule change would fulfill the intended objective of Rule 19b-4(e) under the Act by permitting Exchange-Traded Fund Shares that satisfy the proposed listing standards to be listed and traded without separate Commission approval.
Proposed Rule 5.2-E(j)(8)(d) would specify the limitations on Exchange liability and relates to limitation of the Exchange, the Reporting Authority, or any agent of the Exchange as a result of specified events and conditions.
As provided in proposed Rule 5.2-E(j)(8)(e), the Exchange may approve Exchange-Traded Fund Shares for listing and trading on the Exchange subject to the requirement that the investment company issuing a series of Exchange-Traded Fund Shares is eligible to operate in reliance on Rule 6c-11
As provided in proposed Rule 5.2-E(j)(8)(e)(1), Exchange-Traded Fund Shares will be listed and traded on the Exchange subject to the requirement that the investment company issuing a series of Exchange-Traded Fund Shares is eligible to operate in reliance on the requirements of Rule 6c-11(c) under the 1940 Act on an initial and continued listing basis.
As provided in proposed Rule 5.2-E(j)(8)(e)(2) (Suspension of trading or removal), the Exchange will consider the suspension of trading in, and will commence delisting proceedings under Rule 5.5-E(m) of, a series of Exchange-Traded Fund Shares if the Exchange becomes aware that it is no longer eligible to operate in reliance on Rule 6c-11 or does not comply with the requirements set forth in Rule 5.2-E(j)(8); if, following the initial twelve-month period after commencement of trading on the Exchange of a series of Exchange-Traded Fund Shares, there are fewer than 50 beneficial holders of such series of Exchange-Traded Fund Shares; or if such other event shall occur or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable.
As provided in proposed Rule 5.2-E(j)(8)(g), the Exchange will implement and maintain written surveillance procedures for Exchange-Traded Fund Shares. The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Exchange-Traded Fund Shares in all trading sessions and to deter and detect violations of Exchange rules. Specifically, the Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which will include Exchange-Traded Fund Shares, to monitor trading in the Exchange-Traded Fund Shares.
Proposed Rule 5.2-E(j)(8)(h) provides that, upon termination of an investment company issuing Exchange-Traded Fund Shares, the Exchange requires that Exchange-Traded Fund Shares issued in connection with such entity be removed from Exchange listing.
Proposed Commentary .01 to Rule 5.2-E(j)(8) provides that a security that has previously been approved for listing on the Exchange pursuant to the generic listing requirements specified in Rule 5.2-E(j)(3) or Commentary .01 to Rule 8.600-E, or pursuant to a proposed rule change approved or subject to a notice of effectiveness by the Commission, may be considered approved for listing solely under Rule 5.2-E(j)(8) if such security is eligible to operate in reliance on Rule 6c-11 under the 1940 Act. Once so approved for listing, the continued listing requirements applicable to such previously-listed security will be those specified in paragraph (e) of Rule 5.2-E(j)(8). Any requirements for listing as specified in Rule 5.2-E(j)(3) or Commentary .01 to Rule 8.600-E, or an approval order or notice of effectiveness of a separate proposed rule change that differ from the requirements of Rule 5.2-E(j)(8) will no longer be applicable to such security. The Exchange believes proposed Commentary .01 will streamline the listing process for such securities, consistent with the regulatory framework adopted in Rule 6c-11 under the 1940 Act.
Proposed Commentary .02 to Rule 5.2-E(j)(8) would provide requirements to be met on an initial and continued listing basis by series of Exchange-Traded Fund Shares that are based on an index or are actively managed regarding the erection and maintenance of a “fire wall” as well as implementation and maintenance of procedures designed to prevent the use and dissemination of material non-public information regarding the applicable index or portfolio. The Exchange believes the provisions of Commentary .02 will address possible concerns regarding misuse of material non-public information regarding an index underlying a series of Exchange-Traded Fund Shares or the portfolio for a series of Exchange-Traded Fund Shares, as applicable.
The proposed addition of Exchange-Traded Fund Shares to the enumerated derivative and special purpose securities that are subject to the provisions of Rule 5.3-E (Corporate Governance and Disclosure Policies) and Rule 5.3-E (e) (Shareholder/Annual Meetings) would subject Exchange-Traded Fund Shares to the same requirements currently applicable to other 1940 Act-registered investment
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Exchange-Traded Fund Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. FINRA, on behalf of the Exchange, or the regulatory staff of the Exchange, will communicate as needed regarding trading in Exchange-Traded Fund Shares with other markets that are members of ISG, including all U.S. securities exchanges on which the components are traded. In addition, the Exchange may obtain information regarding trading in Exchange-Traded Fund Shares from other markets that are members of the ISG, including all U.S. securities exchanges on which the components are traded, or with which the Exchange has in place a comprehensive surveillance sharing agreement. The Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which are currently applicable to Investment Company Units and Managed Fund Shares, among other product types, to monitor trading in Exchange-Traded Fund Shares. FINRA, on behalf of the Exchange, will communicate as needed regarding trading in Exchange-Traded Fund Shares and certain of their applicable underlying components with other markets that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. In addition, the Exchange may obtain information regarding trading in Exchange-Traded Fund Shares and certain of their applicable underlying components from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. Additionally, FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities that may be held by a series of Exchange-Traded Fund Shares reported to FINRA's TRACE. FINRA also can access data obtained from the Municipal Securities Rulemaking Board's EMMA system relating to municipal bond trading activity for surveillance purposes in connection with trading in a series of Exchange-Traded Fund Shares, to the extent that a series of Exchange-Traded Fund Shares holds municipal securities. As noted above, the issuer of a series of Exchange-Traded Fund Shares will be required to comply with Rule 10A-3 under the Act for the initial and continued listing of Exchange-Traded Fund Shares, as provided under Rule 5.3-E.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in a series of Exchange-Traded Fund Shares.
The Exchange will monitor for compliance with the continued listing requirements. If the Exchange-Traded Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Rule 5.5-E(m).
The Exchange will utilize its existing procedures to monitor issuer compliance with the requirements of proposed Rule 5.2-E(j)(8). For example, the Exchange will continue to use intraday alerts that will notify Exchange personnel of trading activity throughout the day that may indicate that certain disclosures are not being made accurately or that other unusual conditions or circumstances are present that could be detrimental to the maintenance of a fair and orderly market. The Exchange will require periodic certification from the issuer of a series of Exchange-Traded Fund Shares that it is in compliance with Rule 6c-11 and the requirements of Rule 5.2-E(j)(8). In addition, the Exchange, on a periodic basis will review issues of Exchange-Traded Fund Shares listed on the Exchange for compliance with the requirements of Rule 6c-11(c)(1). Proposed Rule 5.2-E(j)(8)(e) would require an issuer of Exchange-Traded Fund Shares to notify the Exchange if it is no longer eligible to operate in reliance on Rule 6c-11 or that it does not comply with the requirements of proposed Rule 5.2-E(j)(8) (except for subparagraph (1)(A) of Rule 5.2-E(j)(8)(e)).
With respect to the proposed discontinuance of quarterly reports currently required for Managed Fund Shares, the Exchange believes such quarterly reports are no longer necessary in view of the requirements of Rule 6c-11(d). The generic listing criteria in proposed Rule 5.2-E(j)(8) will now apply equally both to Exchange-Traded Fund Shares that are Investment Company Units previously listed under Rule 5.2-E(j)(3) and those that are Managed Fund Shares previously listed under Commentary .01 to Rule 8.600-E. All types of Exchange-Traded Fund Shares, whether index-based or actively managed, must be eligible to operate in reliance on Rule 6c-11.
For these 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.
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with the Act and rules and regulations thereunder applicable to a national securities exchange.
As an initial matter, the Commission notes that the Exchange currently has generic listing standards for Investment Company Units, Managed Fund Shares, and Portfolio Depositary Receipts,
The Commission believes that proposed NYSE Arca Rule 5.2-E(j)(8) is reasonably designed to help prevent fraudulent and manipulative acts and practices. A central qualification for listing under the proposed rule is ongoing compliance with Rule 6c-11 under the 1940 Act, which requires, among other things, ETFs to prominently disclose the portfolio holdings that will form the basis for each calculation of net asset value per share.
Proposed NYSE Arca Rule 5.2-E(j)(8)(g) requires that the Exchange implement and maintain written surveillance procedures for Exchange-Traded Fund Shares. The Exchange intends to utilize its existing surveillance procedures applicable to derivative products, which are currently applicable to Investment Company Units and Managed Fund Shares (among other product types), to monitor trading in Exchange-Traded Fund Shares, and represents that its surveillance procedures are adequate to (a) properly monitor the trading of such securities during all trading sessions and (b) deter and detect violations of Exchange rules and the applicable federal securities laws. Consistent with Section 6(b)(1) of the Act, the Exchange represents that, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements, and that, as provided under proposed NYSE Arca Rule 5.2-E(j)(8)(e)(2), if the investment company or series of Exchange-Traded Fund Shares is not in
The Exchange represents that it will utilize its existing procedures to monitor issuer compliance with the requirements of proposed NYSE Arca Rule 5.2-E(j)(8). For example, the Exchange will continue to use intraday alerts that will notify Exchange personnel of trading activity throughout the day that may indicate that certain disclosures are not being made accurately or that other unusual conditions or circumstances are present that could be detrimental to the maintenance of a fair and orderly market.
Consistent with the requirement of Section 6(b)(5) of the Act
In support of its proposal to adopt generic listing standards for Managed Fund Shares, the Exchange proposed to submit quarterly reports to the Commission disclosing certain information. These reports were designed to identify problems associated with generically listed Managed Fund Shares. In adopting Rule 6c-11 under the 1940 Act, the Commission largely eliminated prior distinctions between actively managed and index-based ETFs, and NYSE Arca does not submit quarterly reports regarding the shares of index-based ETFs that it generically lists. In addition, the Commission recognizes that, since the adoption of the Managed Fund Shares generic listing standards, the marketplace for ETFs has matured and developed, an increased number of actively managed ETFs have been listed and are trading on national securities exchanges, and market participants have become more familiar with such securities. Further, proposed NYSE Arca Rule 5.2-E(j)(8)(g) requires that the Exchange implement and maintain written surveillance procedures for Exchange-Traded Fund Shares.
The Exchange also proposes non-substantive amendments to include Exchange-Traded Fund Shares in other Exchange rules. Specifically, the Exchange proposes to amend NYSE Arca Rule 5.3-E, concerning Corporate Governance and Disclosure Policies, and NYSE Arca Rule 5.3-E(e), concerning Shareholder/Annual Meetings, to add Exchange-Traded Fund Shares to the enumerated derivative and special purpose securities that are subject to the respective rules.
In support of this proposal, the Exchange has made the following representations:
(1) Exchange-Traded Fund Shares will conform to the initial and continued listing criteria under proposed NYSE Arca Rule 5.2-E(j)(8) and will be subject to all Exchange rules applicable to equity trading.
(2) NYSE Arca will (a) monitor for compliance with the continued listing standards; (b) review the website of series of Exchange-Traded Fund Shares to ensure that the requirements of Rule 6c-11 are being met; and (c) employ intraday alerts that will notify Exchange personnel of unusual trading activity throughout the day that could be indicative of unusual conditions or circumstances that could be detrimental to the maintenance of a fair and orderly market.
(3) NYSE Arca will obtain a representation from the issuer of a series of Exchange-Traded Fund Shares that the NAV per share of such series will be calculated daily and will be made available to all market participants at the same time.
(4) NYSE Arca's surveillance procedures are adequate to properly monitor the trading of the Exchange-Traded Fund Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws.
(5) The Exchange, or FINRA on behalf of the Exchange, will communicate as needed regarding trading in Exchange-Traded Fund Shares and certain of their applicable underlying components with other markets that are members of the ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. Additionally, FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities that may be held by a series of Exchange-Traded Fund Shares reported to TRACE. FINRA also can access data obtained from the EMMA system relating to municipal bond trading activity for surveillance purposes in connection with trading in a series of Exchange-Traded Fund Shares, to the extent that a series of Exchange-Traded Fund Shares holds municipal securities.
(6) The issuer of a series of Exchange-Traded Fund Shares will be required to comply with Rule 10A-3 under the Act for the initial and continued listing of Exchange-Traded Fund Shares, as provided under NYSE Arca Rule 5.3-E.
This approval order is based on all of the Exchange's representations, including those set forth above and in Amendment No. 2 to the proposed rule change. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with Sections 6(b)(1) and 6(b)(5) of the Act
Interested persons are invited to submit written data, views, and arguments concerning whether Amendment No. 2 to the proposed rule change is consistent with the Exchange 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.
All submissions should refer to File Number SR-NYSEArca-2019-81. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website (
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 2, prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 2 in the
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On February 18, 2020, Cboe Exchange, Inc. (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission is extending the 45-day time period for Commission action on the proposed rule change. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, pursuant to Section 19(b)(2) of the Act,
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Phlx's Pricing Schedule. Specifically, the Exchange proposes to amend rule text within Options 7, Section 8, “Membership Fees.”
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments to become operative on May 1, 2020.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Phlx proposes to amend Options 7, Section 8, “Membership Fees” concerning a May 2020 credit. In addition, Phlx proposes to remove outdated rule text.
In light of the recent closure of open outcry trading on the Phlx Trading Floor as of March 17, 2020,
Additionally, Phlx paid a credit to Trading Floor member organizations of $5,000 per Clerk based on the number of Clerks those member organizations had registered as of April 1, 2020. Phlx also stated it would pay the aforementioned credit for the month of May 2020, in the event that open outcry trading is unavailable as of May 1, 2020 and the Clerk is registered as of May 1, 2020.
At this time, the Exchange proposes to amend Options 7, Section 8 to remove the language regarding the April 2020 waiver and credits, which were already waived and paid, and amend the language regarding May credits to state that Phlx will credit each member organization an amount of $5,000 per associated person that was registered as a Clerk as of April 1, 2020 and remains registered on May 1, 2020, in the event that open outcry trading is unavailable as of May 1, 2020. The credit was not intended to pay any new Clerks that registered within the time period that open outcry was closed, rather it was intended to ensure that Clerks continued to be registered with the Exchange during the closure of open outcry.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Likewise, in
Further, “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers' . . . .”
The Exchange's proposal to pay a credit of $5,000 per associated person that was registered as a Clerk as of April 1, 2020 and remains registered as of May 1, 2020 for the month of May 2020, in the event that open outcry trading is unavailable as of May 1, 2020, is reasonable. The intent of the credit was to provide relief to member organizations that are currently unable to transact options in open outcry on the Phlx Trading Floor by paying a credit
The Exchange's proposal to pay a credit of $5,000 per associated person that was registered as a Clerk as of April 1, 2020 and remains registered as of May 1, 2020 for the month of May 2020, in the event that open outcry trading is unavailable as of May 1, 2020, is equitable and not unfairly discriminatory. The Exchange proposes to pay all member organizations a credit for each Clerk the firm has registered as of April 1, 2020 and remains registered as of May 1, 2020 in a uniform manner, in the event that open outcry trading is unavailable as of May 1, 2020. The Exchange believes that paying a credit to member organizations for each Clerk would alleviate some of the financial burden for each member organization. A Clerk is any registered on-floor person employed by or associated with a member or member organization who is not a member and is not eligible to effect transactions on the Options Floor as a Lead Market Maker, Floor Market Maker, or Floor Broker. As such, Clerks are employees of Phlx Trading Floor member organizations that would not otherwise be able to transact an options business as a Lead Market Maker, Floor Market Maker, or Floor Broker. The Exchange believes the credit to member organizations for each Clerk will assist member organizations in continuing to employee Clerks during the closure of open outcry trading.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The proposal does not impose an undue burden on inter-market competition. The Exchange believes its proposal remains competitive with other options markets and will offer market participants with another choice of where to transact options. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
The proposed amendments do not impose an undue burden on intra-market competition.
The Exchange's proposal to pay a credit of $5,000 per associated person that was registered as a Clerk as of April 1, 2020 and remains registered as of May 1, 2020 for the month of May 2020, in the event that open outcry trading is unavailable as of May 1, 2020, does not impose an undue burden on competition. The Exchange proposes to pay all member organizations a credit for each Clerk the firm has registered as of April 1, 2020 and remains registered as of May 1, 2020 in a uniform manner. The Exchange believes that paying a credit to member organizations for each Clerk would alleviate some of the financial burden for each member organization. A Clerk is any registered on-floor person employed by or associated with a member or member organization who is not a member and is not eligible to effect transactions on the Options Floor as a Lead Market Maker, Floor Market Maker, or Floor Broker. As such, Clerks are employees of Phlx Trading Floor member organizations that would not otherwise be able to transact an options business as a Lead Market Maker, Floor Market Maker, or Floor Broker. The Exchange believes the credit to member organizations for each Clerk will assist member organizations in continuing to employee Clerks during the closure of open outcry trading.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Rule 613 of Regulation NMS (17 CFR part 242) required national securities exchanges and national securities associations (“Participants”) to jointly submit to the Commission a national market system (“NMS”) plan to govern the creation, implementation, and maintenance of a consolidated audit trail (“CAT”) and Central Repository for the collection of information for NMS securities. On February 27, 2015, the Participants submitted the CAT NMS Plan to the Commission.
Since November 15, 2016, the Commission believes that three information collection requirements have been completed, specifically: (1) A document outlining how the Participants could incorporate into the consolidated audit trail information regarding certain products that are not NMS securities;
This Notice addresses the remaining information collection requirements noticed in the CAT NMS Plan Notice and certain additional information collections of the CAT NMS Plan Order, which are: (1) Development of a Central Repository tasked with the receipt, consolidation, and retention of reported order and execution information submitted by Participants and their members;
The Commission believes that the CAT NMS Plan, once fully implemented, will improve the quality of the data available to regulators in four areas that affect the ultimate effectiveness of core regulatory efforts—completeness, accuracy, accessibility and timeliness.
The Commission estimates that 1524 respondents
Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street, NE, Washington, DC 20549, or send an email to:
85 FR 20309, April 10, 2020.
Wednesday, April 15, 2020 at 3:00 p.m.
The Closed Meeting scheduled for Wednesday, April 15, 2020 at 3:00 p.m., has been cancelled.
For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to G. Kevin Saba, Director, Office of Policy and Program Support, Office of Private Sector Exchange, ECA/EC, SA-4E, Floor 5, Department of State, 2200 C Street NW, Washington, DC 20522-0505, who may be reached on 202-634-4710 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Annual reports from designated program sponsors assist the Department in oversight and administration of the J-NONIMMIGRANT visa program. The reports provide qualitative data on the number of exchange participants an organization sponsored annually per category of exchange. The reports also provide a summary of the activities in which exchange visitors were engaged and indicate information about program effectiveness. Program sponsors include government agencies, academic institutions, and private sector not-for-profit and for-profit entities.
Annual reports are completed through the Student and Exchange Visitor Information System (SEVIS) and then printed and signed by a sponsor official, and sent to the Department by email, mail, or fax.
Surface Transportation Board.
Notice and request for comments.
As required by the Paperwork Reduction Act of 1995 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek approval from the Office of Management and Budget (OMB) for an extension of approval for the information collection required from those seeking statutory licensing authority, as described below.
Comments on this information collection should be submitted by June 16, 2020.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW, Washington, DC 20423-0001, or to
Comments are requested concerning: (1) The accuracy of the Board's burden estimates; (2) ways to enhance the quality, utility, and clarity of the information collected; (3) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate; and (4) whether the collection of information is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility. Submitted comments will be summarized and included in the Board's request for OMB approval.
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third parties, or the public. Under 44 U.S.C. 3506(c)(2)(A), federal agencies are required to provide, prior to an agency's submitting a collection to OMB for approval, a 60-day notice and comment period through publication in the
Surface Transportation Board.
Notice and request for comments.
As required by the Paperwork Reduction Act of 1995 (PRA), the Surface Transportation Board (STB or Board) gives notice of its intent to seek approval from the Office of Management and Budget (OMB) for an extension of the collection of the Report of Fuel Cost, Consumption, and Surcharge Revenue, as described below.
Comments on this information collection should be submitted by June 16, 2020.
Direct all comments to Chris Oehrle, Surface Transportation Board, 395 E Street SW, Washington, DC 20423-0001, or to
Comments are requested concerning: (1) The accuracy of the Board's burden estimates; (2) ways to enhance the quality, utility, and clarity of the information collected; (3) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate; and (4) whether the collection of information is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility. Submitted comments will be summarized and included in the Board's request for OMB approval.
Under the PRA, a federal agency that conducts or sponsors a collection of information must display a currently valid OMB control number. A collection of information, which is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c), includes agency requirements that persons submit reports, keep records, or provide information to the agency, third
Office of the United States Trade Representative.
Notice.
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 to 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. On January 27, 2020, the U.S. Trade Representative established procedures to consider whether to maintain, withdraw, or take some other action with respect to the exclusion of bifacial solar panels from the safeguard measure. Based on an evaluation of the comments received, and responses to those comments, and in consultation with the Secretaries of Commerce and Energy, the U.S. Trade Representative has determined that the bifacial solar panel exclusion is undermining the objectives of the safeguard measure. Accordingly, the U.S. Trade Representative will request that the U.S. Court of International Trade lift the order preliminarily enjoining the withdrawal from entering into effect.
Withdrawal of the exclusion for bifacial solar panels from application of the safeguard measure will apply to imported panels if the Court lifts the preliminary injunction but in no case earlier than May 18, 2020.
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 cells and other 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 upon publication of a notice in the
On February 14, 2018, the U.S. Trade Representative established procedures to request a product exclusion and opened a public docket.
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 (Invenergy) 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
On January 27, 2020 (85 FR 4756), the U.S. Trade Representative issued a notice (January 2020 notice) noting concerns 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.
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.
The U.S. Trade Representative established procedures and opened a public docket to seek comment on whether to maintain the exclusion of bifacial solar panels from the safeguard measure, withdraw the exclusion, or take some other action with respect to this exclusion. The January 2020 notice confirmed that the U.S. Trade Representative would request the Court to lift the injunction if he determined that it would be appropriate to
In the January 2020 notice, the U.S. Trade Representative specifically requested 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 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.
USTR received 15 comments regarding the bifacial exclusion and 49 subsequent comments responding to the initial comments. The determination below is based on these comments.
The U.S. International Trade Commission (ITC) issued a report in March 2020 (March Report) in response to a request from the U.S. Trade Representative for advice regarding potential modifications to the safeguard measure, which provided certain information with regard to the bifacial exclusion. In the March report, the ITC found that bifacial panels are projected to gain a large share of total demand in the coming years due to their power-generation advantages and relative cost competitiveness with monofacial panels—particularly the price advantage that the bifacial exclusion conferred upon them.
Section 201(a) provides that, when the ITC finds that increased imports are causing or threatening serious injury to a domestic industry, the President “shall take all appropriate and feasible action within his power which the President determines will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs.” Proclamation 9693 provided that “[i]f the USTR determines, after consultation with the Secretaries of Commerce and Energy, that a particular product should be excluded, the USTR is authorized, upon publishing a notice of such determination in the
Specifically, the information and comments support the following findings:
1. Global capacity to produce bifacial solar panels is likely to increase significantly over the next three years.
2. As bifacial solar panel production currently is low in the United States, and the vast majority of bifacial solar panel capacity is foreign, allowing import of bifacial solar panels free of safeguard tariffs disincentivizes U.S. producers from converting existing monofacial production to bifacial production or opening new bifacial production.
3. Imports of bifacial solar panels were rising even before the bifacial exclusion and continued to increase after the exclusion.
4. Demand both globally and domestically for bifacial solar panels is likely to increase significantly for at least the next three years.
5. The cost of producing bifacial solar panels is not more than 10 percent higher than the cost of producing monofacial panels.
6. Bifacial solar panels and monofacial solar panels are substitutes from the perspective of utilities planning solar generating facilities in locations where both are cost-competitive with conventional forms of energy.
7. Bifacial solar panels are expected to offer a 5 to 10 percent improvement in energy output over a same-size monofacial panel, and removing the safeguard tariff will enable their sale for prices below those of monofacial panels, which will depress prices for monofacial panels.
8. The proposed TRQ for bifacial solar panels would allow importation of massive quantities of bifacial solar panels and therefore would duplicate the negative effects of the bifacial exclusion.
9. Competition from low-priced imports prevented domestic producers from selling significant quantities of solar panels in the utility segment during the ITC's original investigation period, and low-priced imports of bifacial solar panels due to the exclusion are likely to have a similar effect under current market conditions.
Moreover, bifacial solar panels are an innovative technology that represents a major area of growth for all producers of solar products. Utilities are the largest and most rapidly growing purchasers of solar panels in the United States. By disincentivizing domestic producers' production of bifacial solar panels, interfering with their ability to increase sales of monofacial and bifacial products into the utility segment, and having a depressive effect on prices for monofacial solar panels, the bifacial exclusion is hindering the domestic
Therefore, the U.S. Trade Representative has determined that the bifacial exclusion is undermining the objective of the safeguard measure on solar products, does not meet the criteria for a legitimate exclusion, and should be withdrawn. The U.S. Trade Representative has found further and additionally that the findings in the ITC March Report support the conclusion that the bifacial exclusion is undermining the objectives of the safeguard measure.
As with the initial determination to exclude bifacial solar panels from the safeguard measure, the U.S. Trade Representative consulted with the Secretaries of Commerce and Energy regarding the comments, responses, and supporting evidence received with respect to the January 2020 notice to reach this determination.
Federal Aviation Administration, (FAA), DOT.
Solicitation of applications.
The Federal Aviation Administration (FAA) and the National Park Service (NPS) invite interested persons to apply to fill three current and three upcoming vacancies on the National Parks Overflights Advisory Group (NPOAG). This notice invites interested persons to apply to fill the openings. The current openings include two representatives of commercial air tour operators and one representative of Native American tribes. The three upcoming openings represent environmental concerns.
Persons interested in these membership openings will need to apply by May 15, 2020.
Keith Lusk, Special Programs Staff, Federal Aviation Administration, Western-Pacific Region Headquarters, 777 S. Aviation Boulevard, Suite 150, El Segundo, CA 90245, telephone: (424) 405-7017, email:
The National Parks Air Tour Management Act of 2000 (the Act) was enacted on April 5, 2000, as Public Law 106-181, and subsequently amended in the FAA Modernization and Reform Act of 2012. The Act required the establishment of the advisory group within one year after its enactment. The NPOAG was established in March 2001. The advisory group is comprised of representatives of general aviation, commercial air tour operators, environmental concerns, and Native American tribes. The Administrator of the FAA and the Director of NPS (or their designees) serve as ex officio members of the group. Representatives of the Administrator and Director serve alternating 1-year terms as chairman of the advisory group.
In accordance with the Act, the advisory group provides “advice, information, and recommendations to the Administrator and the Director—
(1) On the implementation of this title [the Act] and the amendments made by this title;
(2) On commonly accepted quiet aircraft technology for use in commercial air tour operations over a national park or tribal lands, which will receive preferential treatment in a given air tour management plan;
(3) On other measures that might be taken to accommodate the interests of visitors to national parks; and
(4) At the request of the Administrator and the Director, safety, environmental, and other issues related to commercial air tour operations over a national park or tribal lands.”
The current NPOAG is made up of one member representing general aviation, three members representing the commercial air tour industry, four members representing environmental concerns, and two members representing Native American tribes. Members serve three year terms. Current members of the NPOAG are as follows:
Melissa Rudinger representing general aviation; Eric Lincoln representing commercial air tour operators, with two current openings; Robert Randall, Dick Hingson, Les Blomberg, and John Eastman representing environmental interests; and Carl Slater representing Native American tribes, with one current opening. The three-year terms of Mr. Hingson, Mr. Blomberg, and Mr. Eastman expire on September 2, 2020.
In order to retain balance within the NPOAG, the FAA and NPS are seeking candidates interested in filling the two vacant seats representing commercial air tour operators and the vacant seat representing Native American tribes as well as the three upcoming vacancies representing environmental concerns. The FAA and NPS invite persons interested in these openings on the NPOAG to contact Mr. Keith Lusk (contact information is written above in
On August 13, 2014, the Office of Management and Budget issued revised guidance regarding the prohibition against appointing or not reappointing federally registered lobbyists to serve on advisory committees (79
Therefore, before appointing an applicant to serve on the NPOAG, the FAA and NPS will require the prospective candidate to certify that they are not a federally registered lobbyist.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, the Federal Aviation Administration (FAA) invites public comments about its intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The information to be collected will be used to and/or is necessary for the purpose of selecting, evaluating, and determining eligibility of applicants for potential grant award under the FAA Aviation Research Grants Program. Grants awarded under this program are for the potential benefit of the long-term growth of civil aviation and Commercial Space Transportation.
Written comments should be submitted by June 16, 2020.
Please send written comments:
Trina M. Bellamy by email at
Department of Transportation, Federal Aviation Administration (FAA).
Notice of extension of limited waiver of the minimum slot usage requirement.
The FAA has determined to extend through October 24, 2020, the coronavirus (COVID-19)-related limited waiver of the minimum slot usage requirement at John F. Kennedy International Airport (JFK), New York LaGuardia Airport (LGA), and Ronald Reagan Washington National Airport (DCA) that the FAA has already made available through May 31, 2020. Similarly, the FAA has determined to extend through October 24, 2020, its coronavirus-related policy for prioritizing flights canceled or otherwise not operated as originally intended at designated International Air Transport Association (IATA) Level 2 airports in the United States, for purposes of establishing a carrier's operational baseline in the next corresponding season. These IATA Level 2 airports include Chicago O'Hare International Airport (ORD), Newark Liberty International Airport (EWR), Los Angeles International Airport (LAX), and San Francisco International Airport (SFO). These extensions through October 24, 2020, are available on the same terms as the relief that the FAA already has announced through May 31, 2020.
Effective upon publication.
Bonnie Dragotto, Office of the Chief Counsel, Regulations Division, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-3808; email:
In a notice that the FAA issued on March 11, 2020, and published in the
In granting this relief, the FAA asserted its expectation that foreign airport slot coordinators would accommodate U.S. carriers with reciprocal relief. The FAA further stated that it would continue to monitor the situation and might augment the waiver as circumstances warrant.
On March 22, 2020, the FAA issued a notice inviting stakeholders to show cause why the FAA should or should not extend the relief provided in the March 11, 2020, notice through the Summer 2020 scheduling season, which
Since the March 22, 2020 show cause notice, the disruption from the coronavirus public health emergency has continued to grow in the United States and worldwide. On March 27, 2020, the Centers for Disease Control and Prevention (CDC) issued a worldwide Level 3 Warning to avoid nonessential international travel due to widespread ongoing transmission of COVID-19. On March 29, 2020, the President announced an extension through April 30, 2020, of the “Slow the Spread” campaign that includes social distancing guidelines and a recommendation to avoid discretionary travel. “Stay-at-home” orders have been introduced or extended across much of the United States, including for all locations of U.S. slot-controlled and designated IATA Level 2 airports, to varying degrees and durations. Many other countries are also implementing travel restrictions and mandatory quarantines, closing borders, and prohibiting non-citizens from entry.
Consistent with the FAA's tentative determination, on March 31, 2020, the Council of the European Union (EU) enacted a measure to extend relief from the minimum slot usage requirements applicable at slot-controlled airports in the EU through the Summer 2020 scheduling season. In addition, several other foreign coordinators have likewise extended, or announced the intent to extend, relief from minimum slot usage rules through the end of the Summer 2020 season.
The FAA continues to receive cancelation notices at slot-controlled airports in the United States, which include JFK, LGA, and DCA, as well as U.S. airports designated as IATA Level 2, for flights to and from areas with significant coronavirus outbreaks. Nearly every carrier at the U.S. slot-controlled and IATA level 2 airports has experienced significant COVID-19 related schedule impacts, with many carriers indicating that they expect to operate 20% or less of their previously planned and published schedules over the coming months.
The FAA received comments from 31 stakeholders, including IATA, Airlines for America (A4A), the Cargo Airline Association (CAA), SkyTeam Airline Alliance, numerous U.S. and foreign carriers,
All of the airlines and airline industry advocates expressed support for an extension through the end of the Summer 2020 scheduling season. IATA submits that it forecasts negative impacts from coronavirus on airline revenue amounting to a 259 billion USD loss in passenger revenues worldwide and a 50 billion USD loss in the North American market due to a -27% change in passenger demand. IATA asserts that “[t]he ability for the airline industry to survive depends on government support and accommodation” as “airlines are being forced to ground entire fleets and halt international flying entirely in an effort to survive the devastating impact of this crisis.” IATA notes that the minimum usage rule is “well suited to normal operations, but its implementation under such exceptional circumstances is unnecessary and only forces flying that is neither economically or environmentally responsible or sustainable.” Analysis provided by IATA in support of its position demonstrates that a deep economic recession would be expected to further delay recovery of the airline industry beyond the Summer 2020 season.
Several airlines provided data demonstrating the dramatic decrease in passenger demand for travel through 2020 compared to the same periods in 2019, the details of which they have deemed proprietary.
In addition, the CAA and others specifically note that in this time of emergency it would be in the public interest for the FAA to temporarily reallocate to cargo airlines the slots not used for passenger operations during this time period. CAA elaborates that “[a]s the nation copes with the pandemic and implements `shelter-in-place' policies, supply chain continuity (including consumer staples, medical and health-related supplies) has become a key element of the private sector's response to the pandemic, and many of these goods travel by air.”
While mindful of industry impacts, the airport authorities and their advocates, including ACI-NA, CDA, MWAA, and PANYNJ, collectively oppose an extension for the full duration of the Summer 2020 season at this time. The PANYNJ and MWAA expressed support for an extension through June 30, 2020, with the
The PANYNJ commented that it seeks to ensure that valuable infrastructure is put to use as soon as demand warrants. In support of its position, PANYNJ asserts that based on published schedule data, a majority of carriers have made “sweeping near-term schedule adjustments, though none extending beyond May or June.” Thus, according to PANYNJ, a waiver of slot requirements extending through October 24, 2020 is not justified by current scheduling behavior.
The FAA agrees with the position of the airport authorities that waiver decisions should be tailored to address the unusual and unpredictable condition at issue, with a goal of facilitating the swift restoration of the connectivity and economic benefits of air travel as soon as practicable. The FAA finds that this threshold has been met under the exceptional circumstances surrounding the coronavirus public health emergency, including with respect to the situation domestically. Ample evidence supports a conclusion that the airline industry is likely to need flexible relief for the duration of the Summer 2020 scheduling season.
The FAA is unpersuaded by comments opposing an extension through the end of the Summer 2020 season based on the uncertainty of the recovery timeline. The FAA finds that the proposed alternative extension of one additional month of relief through June 30, with ongoing review for further relief, would unduly burden airlines with added uncertainty. The FAA recognizes that demand is unlikely to immediately return to historic levels as soon as travel restrictions and stay at home orders are lifted. Therefore, the FAA concludes that, beyond the pendency of the coronavirus public health emergency, further accommodating a reasonable buffer period thereafter is appropriate to allow airlines the ability to recall employees, inspect aircraft, market flights, and take other actions necessary to resume normal operations.
Indeed, as noted by the PANYNJ, global air carriers have collectively grounded thousands of aircraft and laid-off or furloughed up to 90% of their workforce. The FAA notes that some airports have also experienced operational changes to adjust to temporary flight reductions such as closing terminals or gates to manage remaining flights more efficiently. These factors will have a significant impact on the speed with which air service can be re-mobilized. Airlines will need flexibility in the recovery period expected to follow this unprecedented disruption. As commenters noted, extending relief through the Summer 2020 season is prudent, with the information presently available and under the circumstances that are reasonably foreseeable at this time, to allow carriers to continue to provide service at a level that reflects depressed demand trends until it is feasible to return to previous levels of flying. Further, providing prospective relief through the end of the Summer 2020 season is expected to incentivize the continued advance return of slots, making them available for temporary reallocation to carriers that are in a position to offer critical public services until slot holders are able to resume normal pre-coronavirus operating levels.
Finally, the FAA notes that published schedule data is preliminary and subject to change; it is therefore not a reliable marker of future airline behavior as the industry awaits the FAA's final decision following the March 22 show cause notice. FAA weekly Cirium schedule information confirms considerable volatility as airlines change and update schedules frequently. Absent an extended grant of relief, airlines would not have the certainty necessary to adjust their schedules beyond May 31, 2020, especially for domestic flights.
The FAA finds that the benefits to the airline industry of providing relief through the end of the Summer 2020 scheduling season significantly outweigh the risks identified in comments opposing that relief. Therefore, the FAA will not penalize airlines for flights canceled or otherwise not operated as originally intended at slot-controlled airports or designated IATA Level 2 airports, stemming from drastically reduced passenger demand caused by the extraordinary and unforeseen coronavirus public health emergency.
The FAA agrees with comments from CAA and others that, consistent with established rules in effect at slot-controlled airports in the United States and the FAA's usual practices, it is in the public interest to make unused slots available on a temporary basis to carriers that are providing important public services during this public health emergency. The FAA has already approved additional flights on a non-historic basis at JFK given the number of flight cancelations. The FAA therefore encourages carriers to return any slots that may not be used during the Summer 2020 scheduling season to the FAA as soon as possible for temporary reallocation.
In consideration of the foregoing information, the comments that the FAA has received, and absent a showing of good cause to take alternative action, the FAA has determined to extend through October 24, 2020, the coronavirus-related limited waiver of the minimum slot usage requirement at JFK, LGA, and DCA that the FAA has already made available through May 31, 2020, on the same terms as the FAA announced in granting that relief.
The coronavirus continues to present a highly unusual and unpredictable condition that is beyond the control of carriers. Passenger demand continues to decrease dramatically as a result of the coronavirus. The ultimate duration and severity of coronavirus impacts on passenger demand in the United States and internationally remain unclear. Even after the outbreak is contained, impacts on passenger demand are likely to continue for some time. The FAA has therefore concluded that an extension of relief through October 24, 2020, is appropriate to provide carriers with maximum flexibility during this unprecedented situation and to support the long-term viability of carrier operations at slot-controlled and IATA Level 2 airports in the United States.
The FAA reiterates its expectation that foreign slot coordinators will provide reciprocal relief to U.S. carriers. To the extent that U.S. carriers fly to a foreign carrier's home jurisdiction and that home jurisdiction does not offer reciprocal relief to U.S. carriers, the FAA may determine not to grant a waiver to that foreign carrier. A foreign carrier seeking a waiver may wish to ensure that the responsible authority of the foreign carrier's home jurisdiction submits a statement by email to
Carriers should advise the FAA Slot Administration Office of coronavirus-related cancelations as soon as possible and return the slots to the FAA by email to
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. The collection involves extracting flight data such as aircraft, routing speed, etc. from domestic and international flights. FAA Form 7233-1, Flight Plan: Domestic flight plan information is used to govern the flight of aircraft for the protection and identification of aircraft and property and persons on the ground. The information is used by air traffic controllers, search and rescue (SAR) personnel, flight standards inspectors, accident investigators, military, law enforcement, and the Department of Homeland Security.
Written comments should be submitted by June 16, 2020.
Please send written comments:
Jeff Black by email at:
Almost 100 percent of flight plans are filed electronically. However, as a courtesy to the aviation public, flight
• Air carrier and air taxi operations, and certain corporate aviation departments, have been granted authority to electronically file flight plans directly with the FAA. The majority of air carrier and air taxi flights are processed in this manner.
• Air carrier and air taxi operators may submit pre-stored flight plan information on scheduled flights to Air Route Traffic Control Centers (ARTCC) to be entered electronically at the appropriate times.
• Pilots may call 1-800-WX-BRIEF (992-7433) and file flight plans with a flight service station specialist who enters the information directly into a computer system that automatically transmits the information to the appropriate air traffic facility. Pilots calling certain flight service stations have the option of using a voice recorder to store the information that will later be entered by a specialist.
• Using internet access, pilots may file flight plans electronically through Direct User Access Terminal System (DUATS) vendors, at no cost to the users. The two vendors allow pilots to store flight data so that minimal additional information is required when filing a flight plan.
• Private and corporate pilots who fly the same aircraft and routes at regular times may prestore flight plans with flight service stations. The flight plans will then be entered automatically into the air traffic system at the appropriate time.
• Pilots who visit a flight service station in person may choose to a file flight plan by using a paper form. The data will then be entered into a computer and filed electronically. The pilot will often keep the paper copy for his/her record.
Federal Transit Administration (FTA), Department of Transportation (DOT).
Notice of Safety Advisory.
During the COVID-19 public health emergency, transit agencies across the country are continuing to provide millions of trips a day to lifeline services and to carry healthcare and other essential workers to critical jobs. FTA has published Safety Advisory 20-1 recommending that transit agencies develop and implement procedures and practices consistent with all applicable guidance and information provided by the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration (OSHA) to ensure the continued safety of transit passengers and employees. A copy of Safety Advisory 20-1 can be found on the FTA website at
Henrika Buchanan, Associate Administrator for Transit Safety and Oversight and Chief Safety Officer, FTA, 1200 New Jersey Avenue SE, Washington, DC 20590, telephone (202) 366-1783 or
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Receipt of petition.
Hankook Tire America Corporation (Hankook) has determined that certain Hankook Ventus V2 Concept 2 tires manufactured by Hankook's indirect subsidiary, Hankook Tire Manufacturing Tennessee, LP, do not fully comply with Federal motor vehicle safety standard (FMVSS) No. 139,
Send comments on or before May 18, 2020.
Interested persons are invited to submit written data, views, and arguments on this petition. Comments must refer to the docket and notice number cited in the title of this notice and may be submitted by any of the following methods:
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•
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• Comments may also be faxed to (202) 493-2251.
Comments must be written in the English language, and be no greater than 15 pages in length, although there is no limit to the length of necessary attachments to the comments. If comments are submitted in hard copy form, please ensure that two copies are provided. If you wish to receive confirmation that comments you have submitted by mail were received, please enclose a stamped, self-addressed postcard with the comments. Note that all comments received will be posted without change to
All comments and supporting materials received before the close of business on the closing date indicated above will be filed in the docket and will be considered. All comments and supporting materials received after the closing date will also be filed and will be considered to the fullest extent possible.
When the petitions are granted or denied, notice of the decisions will also be published in the
All comments, background documentation, and supporting materials submitted to the docket may be viewed by anyone at the address and times given above. The documents may also be viewed on the internet at
DOT's complete Privacy Act Statement is available for review in a
Hankook filed a noncompliance report dated November 19, 2019, pursuant to 49 CFR part 573,
This notice of receipt of the Hankook's petition is published under 49 U.S.C. 30118 and 30120 and does not represent any agency decision or other exercise of judgment concerning the merits of the petition.
In support of its petition, Hankook submitted the following reasoning:
1. Under the Safety Act, each FMVSS promulgated by the National Highway Traffic Safety Administration (NHTSA) must be “practicable, meet the need for motor vehicle safety, and be stated in objective terms.” 49 U.S.C. 3011l(a). The Safety Act defines “motor vehicle safety” as: the performance of a motor vehicle or motor vehicle equipment in a way that protects the public against unreasonable risk of accidents occurring because of the design, construction, or performance of a motor vehicle, and against unreasonable risk of death or injury in an accident, and includes nonoperational safety of a motor vehicle.
2. 49 U.S.C. 30102(a)(9).
The Safety Act exempts manufacturers from the Safety Act's notice and remedy requirements when NHTSA determines that noncompliance is inconsequential as it relates to motor vehicle safety.
Neither the Safety Act nor Part 556 defines the term “inconsequential.” Rather, the agency determines whether particular noncompliance is inconsequential to motor vehicle safety based upon the specific facts before it in a particular petition. In some instances, NHTSA has determined that a manufacturer met its burden of demonstrating that a noncompliance is inconsequential to safety. For example, a label intended to provide safety advice to an owner or occupant may have a misspelled word, or it may be printed in the wrong format or the wrong type size. Where a manufacturer has shown that the discrepancy with the safety requirement is unlikely to lead to any misunderstanding, NHTSA has granted an inconsequentiality exemption, especially where other sources of correct information are available.
3. The noncompliance involves new pneumatic radial tires used on passenger vehicles. Such tires must comply with the labeling and performance requirements of FMVSS 139, which specifies that “each tire must be labeled with the tire identification number required by 49 CFR part 573.4 on the intended outboard sidewall of the tire.” FMVSS 139 S5.5.1(b). Part 574(a) states that “[e]ach new tire manufacturer must conspicuously label on one sidewall of each tire it manufactures . . . a TIN [tire identification number] consisting of 13 symbols and containing the information set forth in paragraphs (b)(1) through (b)(3) of this section.” Subparagraph (b)(3) requires a date code “consisting of four numerical symbols. . . [that] must identify the week and year of manufacture.” 574.5(b)(3.)
4. The purpose of the labeling requirements in Part 574 is to “facilitate notification to purchasers of defective or nonconforming tires.” Part 574.2. The date code portion of the TIN is required so that purchasers can identify the week and year of the tire's manufacture in the event the tire is subject to a safety recall.
5. The date-code characters reflect the correct week and year of the tires' manufacture, but the date code is technically out of compliance because the characters are inverted. Despite the inversion, the date code meets the character height requirements of Part 574 and is readily identifiable, permitting tire owners to easily determine the week and year of manufacture.
6. NHTSA has previously granted a petition for inconsequential noncompliance for a similar issue. In granting a petition from Cooper Tire & Rubber Company, 81 FR 43708 (July 5, 2016) the Agency explained:
The Agency believes that in the case of a tire labeling noncompliance, one measure of its inconsequentiality to motor vehicle safety is whether the mislabeling would affect the manufacturer's or consumer's ability to identify the mislabeled tires properly, should the tires be recalled for performance related noncompliance. In this case, the nature of the labeling error does not prevent the correct identification of the affected tires. 49
As with the Cooper tires, the date code on the subject tires is located on the sidewall, is not likely to be misidentified, and a reader will be able to read and understand the date code. The subject tires otherwise meet the marking and performance requirements of FMVSS No. 139.
7. The labeling noncompliance at issue here is inconsequential to motor vehicle safety: the relevant information remains readily identifiable, the Agency has granted a similar petition in the past, the subject tires otherwise meet the marking and performance requirements of FMVSS No. 139, and Hankook is not aware of any complaints, claims or incidents related to the subject noncompliance.
Hankook concluded by expressing its belief that the subject noncompliance is inconsequential as it relates to motor vehicle safety, and that its petition to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, should be granted.
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, any decision on this petition only applies to the subject tires that Hankook no longer controlled at the time it determined that the noncompliance existed. However, any decision on this petition does not relieve equipment distributors and dealers of the prohibitions on the sale, offer for sale, or introduction or delivery for introduction into interstate commerce of the noncompliant tires under their control after Hankook notified them that the subject noncompliance existed.
49 U.S.C. 30118, 30120: delegations of authority at 49 CFR 1.95 and 501.8
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Grant of petition.
This document announces a decision by the National Highway Traffic Safety Administration that certain Model Year (MY) 2014 Ferrari LaFerrari passenger cars (PCs) that were not originally manufactured to comply with all applicable Federal Motor Vehicle Safety Standards (FMVSS) are eligible for importation into the United States because the 2014 model year vehicles are substantially similar to vehicles that were originally manufactured for importation into and offered for sale in the United States and certified to all applicable FMVSS (the U.S-certified version of the 2014 Ferrari LaFerrari PCs) or are capable of being altered to comply with all applicable FMVSS.
This decision became effective on December 10, 2019.
Robert Mazurowski, Office of Vehicle Safety Compliance, NHTSA (202-366-1012).
Under 49 U.S.C. § 30141(a)(l)(A), a motor vehicle that was not originally manufactured to conform to all applicable FMVSS shall be refused admission into the United States unless NHTSA has decided that the motor vehicle is substantially similar to a motor vehicle originally manufactured for importation into and sale in the United States, certified under 49 U.S.C. § 30115, and of the same model year as the model of the motor vehicle to be compared, and is capable of being readily altered to conform to all applicable FMVSS.
Under 49 U.S.C. 30141(a)(l)(B), a motor vehicle that was not originally manufactured to conform to all applicable FMVSS shall be refused admission into the United States unless NHTSA has decided its safety features comply with, or are capable of being altered to comply with, all applicable FMVSS based on destructive test data or such other evidence that NHTSA decides to be adequate.
Petitions for eligibility decisions may be submitted by either manufacturers or importers who have registered with NHTSA pursuant to 49 CFR part 592. As specified in 49 CFR 593.7, NHTSA publishes notice in the
J.K. Technologies, LLC, (Registered Importer R-90-006), of Baltimore, Maryland, petitioned NHTSA to decide whether MY 2014 Ferrari LaFerrari PCs are eligible for importation into the United States. NHTSA published a notice of the petition on October 10, 2019 (84 FR 54727) to afford an opportunity for public comment. The reader is referred to the notice for a thorough description of the petition.
Two comments were submitted to this docket The first comment stated “Luxury cars should not be afforded any other exceptions or privileges that non-luxury cars are”. This statement is considered non-substantive as all vehicles are held to the same safety standards regardless of value. The second comment is a detailed analysis in support of granting the petition and echoing the petitioners reasonings.
In its petition, J.K. Technologies noted that the original manufacturer, Ferrari, certified the MY 2014 Ferrari LaFerrari PCs to all applicable FMVSS and offered those vehicles for sale in the United States.
NHTSA has reviewed the petition and has concluded that the nonconforming versions of the MY 2014 Ferrari LaFerrari PCs described in the petition are substantially similar to the U.S.-certified versions of the MY 2014 Ferrari LaFerrari PCs and are capable of being readily altered to comply with all applicable FMVSS.
NHTSA has also determined that any RI who imports or modifies one of these vehicles must include in the statement of conformity and associated documents (referred to as a “conformity package”) it submits to NHTSA under 49 CFR 592.6(d) additional specific proof to confirm that the vehicle was manufactured to conform to, or was successfully altered to conform to, FMVSS No. 138,
In addition to the information specified above, each conformity package must also include evidence showing how the RI verified that any changes it made in loading or reprograming vehicle software to achieve conformity with each separate FMVSS did not cause the vehicle to fall out of compliance with any other applicable FMVSS.
Accordingly, on the basis of the foregoing, NHTSA hereby decides that MY 2014 Ferrari LaFerrari PCs that were not originally manufactured to comply with all applicable FMVSS are substantially similar to 2014 Ferrari LaFerrari PCs manufactured for importation into and/or sale in the United States, and certified under 49 U.S.C. 30115, are capable of being altered to conform to all applicable FMVSS.
The importer of a vehicle admissible under any final decision must indicate on the form HS-7 accompanying entry the appropriate vehicle eligibility number indicating that the vehicle is eligible for entry. VSP-609 is the vehicle eligibility number assigned to MY 2014 Ferrari LaFerrari PCs admissible under this notice of final decision.
(49 U.S.C. 30141(a)(l)(A), (a)(l)(B), and (b)(l); 49 CFR 593.7; delegation of authority at 49 CFR 1.95 and 501.8)
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning probable or prospective reserves safe harbor.
Written comments should be received on or before June 16, 2020 to be assured of consideration.
Direct all written comments to Ronald J. Durbala, Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington, DC 20224.
Requests for additional information or copies of the form should be directed to Kerry Dennis, at (202) 317-5751 or Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet, at
The following paragraph applies to all the collections of information covered by this notice.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained if their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning depreciation and amortization (including information on listed property).
Written comments should be received on or before June 16, 2020 to be assured of consideration.
Direct all written comments to Ronald J. Durbala, Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington, DC 20224.
Requests for additional information or copies of the form should be directed to Kerry Dennis, at (202) 317-5751 or Internal Revenue Service, Room 6529, 1111 Constitution Avenue NW, Washington DC 20224, or through the internet, at
The following paragraph applies to all the collections of information covered by this notice.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained if their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Department of the Treasury.
Notification.
This notification announces that information about the Coronavirus Relief Fund for States, Tribal governments, and certain eligible local governments is available on the U.S. Department of the Treasury (Treasury) website,
Jackson Miles, Special Assistant, Office of the Chief of Staff, at (202) 875-4703.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136. Section 601(a)(1) of the Social Security Act as added by section 5001 of the CARES Act provides $150 billion for Treasury to make payments to States (defined to include the District of Columbia, Puerto Rico, the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa), Tribal governments, and certain eligible local governments with more than 500,000 residents. Section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act, requires that States, Tribal governments, or units of local government use the funds received to cover only those costs that (1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19); (2) were not accounted for in the budget most recently approved as of March 27, 2020, for the State or government; and (3) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. More information is available on
United States Mint, Department of the Treasury.
Notice.
The United States Mint is announcing pricing for United States Mint numismatic products in accordance with the table below:
Katrina McDow, Marketing Specialist, Sales and Marketing; United States Mint; 801 9th Street NW; Washington, DC 20220; or call 202-354-8495.
April 23, 2020, from Noon to 3:00 p.m., Eastern time.
This meeting will be accessible via conference call and screen sharing. Any interested person may call 877-853-5247 (U.S. toll free), 888-788-0099 (U.S. toll free), +1 669-900-6833 (U.S. toll), or +1 929-205-6099 (U.S. toll), Conference ID 360 608 3231, to participate in the meeting.
Parts of this meeting will be open to the public. Parts of this meeting will be closed to the public pursuant to Government in the Sunshine Act Exemptions (4), (9)(B) and (10) (see agenda below for further information).
The Unified Carrier Registration Plan Board of Directors (the “Board”) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement. The subject matter of the meeting will include:
The UCR Board Chair will welcome attendees, call the meeting to order, call roll for the Board, and facilitate self-introductions.
The UCR Executive Director will verify the publication of the meeting notice on the UCR website and in the
Agenda will be reviewed and the Board will consider adoption.
Minutes of the March 12, 2020 Board meeting will be reviewed. The Board will consider action to approve.
The UCR Board Chair will lead a discussion on the impact of the COVID-19 pandemic on industry, state operations, and UCR collections.
The UCR Executive Director will update the Board on planning for the June 8 and 9, 2020 UCR Training and Board Meeting in light of the COVID-19 pandemic.
FMCSA will provide a report on any relevant activity.
The UCR Board Chair will call for any updates regarding UCR legislation since the last Board meeting.
The UCR Executive Director will ask the Board to consider and possibly act to adopt a recommendation to the Secretary of the USDOT designating one member of the Board to serve as chairperson of the Boa
The UCR Chief Legal Officer will provide an update to the Board on the status of a cease and desist letter sent to a possible trademark infringer on March 4, 2020.
Based on the economic fall-out from the COVID-19 pandemic, Board Member Monte Wiederhold will present a proposal to suspend collection of UCR fees for the 2020 registration year and either refund or provide a credit for the 2021 registration year for registrants that have already registered and paid for the 2020 registration year.
Depending on the Board decision regarding the previous agenda item, the UCR Chief Legal Officer will lead a discussion on the proposed ratification of the decision by the UCR Board Chair and the UCR Executive Director to further extend the recommended 2020 enforcement date to July 1, 2020. The Board may act to ratify the action of the UCR Board Chair and the UCR Executive Director to extend the recommended enforcement date.
The UCR Depository Manager will provide an update on the plans for the 2020 state compliance reviews, including contingency plans related to the COVID-19 pandemic.
Seikosoft will provide an updated report on new entrant motor carrier campaigns managed by the National Registration System (NRS), new entrant motor carrier campaigns managed by the states, unregistered motor carrier campaigns managed by the NRS, and unregistered motor carrier campaigns managed by the states.
Seikosoft will provide an updated report on the solicitation campaign targeting motor carriers identified through roadside inspections to be operating in interstate commerce but identified in MCMIS as either intrastate or inactive.
The UCR Audit Subcommittee Chair will report on state audit activity to date and emphasize the strategy of using Focused Anomalies Review (FARs) and MCS-150 retreats. The UCR Chief Legal Officer will recommend that the Board ratify the UCR Audit Subcommittee Chair's action to provide states a deadline extension on their annual carrier audits to June 1, 2020.
The UCR Depository Manager will provide an update on the status of collections for the 2020 registration year and compare to 2019 registrations for the equivalent time-period one year ago, to provide perspective on impact from the COVID-19 crisis.
The UCR Depository Manager will provide an update on the reduction of the interest rate to the DLA held at Truist Bank (formerly SunTrust).
The UCR Depository Manager will provide an update on the year-to-date costs of operating the UCR Plan and provide insights into how costs compare with the operating budget.
The UCR Education and Training Subcommittee Chair will provide an update on plans to launch an initial wave of training modules by June 2020.
The UCR Executive Director will provide a report covering recent activity for the UCR Plan.
DSL will report on the latest data on state collections based on reporting from the FARs program.
Seikosoft will provide an update on recent/new activity related to the NRS.
The UCR Administrator will provide its management report covering recent activity for the Depository, Operations, and Communications.
Pursuant to the Government in the Sunshine Act at 5 U.S.C. 552b(d)(1), the Board must now vote to approve closing the portions of the meeting dealing with items XV, XVI, XVII and XVIII on the agenda.
The UCR Chief Legal Officer has advised that the Board may, if it votes to do so, close these portions of this meeting pursuant to Government in the Sunshine Act Exemptions (4), (9)(B) and (10). By approving this action, the Board determines that public participation would likely disclose (i) confidential trade secrets, commercial and financial information of one or more UCR contractors, (ii) information for which premature disclosure would likely frustrate implementation of a proposed agency action, and/or (iii) specifically concern the discussion of information, the premature disclosure of which would likely negatively impact the agency's participation in an ongoing civil action or proceeding. Therefore, by approving this action, the Board is invoking Exemptions (4), (9)(B) and (10) to close these portions of the meeting (5 U.S.C. 552b(c)(4), (9)(B) and (10)).
A copy of each of the votes on the closure of each of these four portions of this meeting shall be made publicly available on the UCR Plan website within one day of the votes taken herein (
The UCR Executive Director will review a proposed contract addendum for providing website and email services for the UCR Plan. The Board may take action to adopt the proposal.
The UCR Executive Director will review a proposed contract renewal with the UCR Administrator (Kellen). The Board may take action to adopt.
The UCR Chief Legal Officer will provide an update to the Board on the status of certain aspects of the March 2019 data event.
The UCR Chief Legal Officer will provide an update to the Board on the status of the litigation.
The UCR Board Chair will report on actions, if any, taken during closed portions of the meeting.
The UCR Board Chair will call for any business, old or new, from the floor.
The UCR Board Chair will adjourn the meeting.
Elizabeth Leaman, Chair, Unified Carrier Registration Plan Board of Directors, (617) 305-3783,
Debt Management Center, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Debt Management Center, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Submit written comments on the collection of information through
John W. Scott, Debt Management Center, Department of Veterans Affairs, 1 Federal Drive, St. Paul, MN 55111, (612) 970-5740 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Debt Management Center, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Debt Management Center, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Submit written comments on the collection of information through
John W. Scott, Debt Management Center, Department of Veterans Affairs, 1 Federal Drive, St. Paul, MN 55111, (612) 970-5740 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Submit written comments on the collection of information through
Danny S. Green, (202) 421-1354 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VBA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before June 16, 2020.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Danny S. Green at (202) 421-1354.
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VBA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before June 16, 2020.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Danny S. Green at (202) 421-1354.
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing revisions to its regulations setting forth the real-time public reporting and dissemination requirements for swap data repositories (“SDRs”), derivatives clearing organizations (“DCOs”), swap execution facilities (“SEFs”), designated contract markets (“DCMs”), swap dealers (“SDs”), major swap participants (“MSPs”), and swap counterparties that are neither SDs nor MSPs. The Commission is also proposing revisions that, among other things, change the “block trade” definition, change the block swap categories, update the block thresholds and cap sizes, and adjust the delay for the public dissemination of block transactions.
Comments must be received on or before May 20, 2020.
You may submit comments, identified by RIN number 3038-AE60, by any of the following methods:
•
•
•
Please submit your comments using only one method.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
David E. Aron, Special Counsel, (202) 418-6621,
The Commission's real-time public reporting regulations were adopted in 2012 and are located in part 43 of the Commission's regulations. The 2012 rulemaking set forth regulations that require swap counterparties, SEFs, and DCMs to report publicly reportable swap transactions (“PRST”) to SDRs.
Several years ago, the Division of Market Oversight (“DMO”) conducted a review of the Commission's swap reporting rules. After completing that review, on July 10, 2017, DMO announced
In April 2019, the Commission adopted its first notice of proposed rulemaking (“NPRM”) as part of the
The Commission has received extensive feedback that addressed many swap reporting topics.
After reviewing the Roadmap feedback, the Commission is proposing revisions to the following aspects of the part 43 real-time public reporting regulations: The method and timing of real-time reporting and public dissemination, generally and for specific types of swaps; the delay and anonymization of the public dissemination of block trades or large notional trades; the standardization and validation of real-time reporting fields; the delegation of specific authority to Commission staff; and the clarification of specific real-time reporting questions and common issues.
Section 2(a)(13)(B) of the CEA authorizes the Commission to make STAPD available to the public in such form and at such times as the Commission determines appropriate to enhance price discovery. Section 2(a)(13)(C) requires that the Commission publish rules for the public availability of STAPD. Section 2(a)(13)(D) permits the Commission to require registered entities to publicly disseminate STAPD.
In 2012, the Commission adopted part 43 to implement rules providing for the public availability of STAPD as directed by section 2(a)(13).
Part 43 currently requires reporting parties to report PRSTs to SDRs as soon as technologically practicable (“ASATP”) after execution.
Part 43 currently defines execution as an agreement by the parties (whether orally, in writing, electronically, or otherwise) to the terms of a swap that legally binds the parties to such terms under applicable law.
For a PRST executed on or pursuant to the rules of a SEF or DCM, a party to such transaction satisfies its requirement to report the transaction to an SDR by executing it on the SEF or DCM.
SDRs are required to ensure that STAPD is publicly disseminated ASATP after receiving it from a SEF, DCM, or reporting party, unless it is subject to a time delay described in § 43.5, in which case the PRST must be publicly disseminated in the manner described in § 43.5.
The STAPD to be disseminated in real-time consists of the data elements listed in appendix A to part 43.
With respect to the delay for block trades, the Commission assigned swap contracts to “swap categories” in the Block Trade Rule for the purpose of applying a common appropriate minimum block size (“AMBS”) to different swap transactions. To create these swap categories, the Commission divided swaps into five asset classes: Interest rates; equity; credit; foreign exchange; and other commodities. The Commission then split these asset classes into the various swap categories.
The Commission phased-in the time delays for the public dissemination of block trades based on four factors: (1) Whether the swap is executed on or pursuant to the rules of a SEF or DCM; (2) the swap's asset class; (3) whether the swap is mandatorily cleared; and (4) whether at least one counterparty is an SD or MSP.
The initial time delays were: 30 minutes for blocks executed on a SEF or DCM;
The Commission is proposing several non-substantive changes to § 43.1. The Commission is proposing to remove § 43.1(b). Regulation 43.1(b)(1), titled “Scope,” states that part 43 applies to all swaps, as defined in CEA § 1a(47),
The Commission also proposes to redesignate current § 43.1(c), entitled “Rules of construction,” as § 43.1(b). The first sentence of § 43.1(c) currently reads as follows: The examples in this part and in appendix A to this part are not exclusive. The Commission proposes to delete the reference to “appendix A” to reflect that the Commission proposes to replace appendix A with new appendix C.
The Commission also proposes to delete § 43.1(d), entitled “Severability.” Regulation 43.1(d) currently provides that if any provision of this part, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or application of such provision to other persons or circumstances which can be given effect without the invalid provision or application. The Commission believes that a severability provision is not appropriate because, without knowing which provision a future court might hold invalid, it is unclear that the Commission would interpret all related remaining provisions of part 43 as continuing to be effective without the invalid provision(s), and the Commission wishes to maintain the flexibility to make that determination at the time of any such holding.
The Commission is proposing several changes to § 43.2. The Commission is proposing to add a number of new definitions, amend certain existing definitions, and remove certain definitions. Within each of those categories, because § 43.2 is arranged alphabetically, the Commission discusses its proposed changes to § 43.2 in that order as well, except as otherwise noted.
Currently, § 43.2 does not have lettered paragraphs. The Commission is proposing to add new paragraphs (a) and (b) to § 43.2. Proposed new paragraph (a) would contain all of the definitions in current § 43.2, as the Commission proposes to modify them. Proposed new paragraph (b) would provide that terms not defined in part 43 have the meanings assigned to those terms in § 1.3 of the Commission's regulations.
The Commission is proposing to add a definition of “execution date” to § 43.2. As proposed, “execution date” would mean the date, determined by reference to eastern time, on which swap execution has occurred. This proposed new definition is used in a discussion of proposed changes to the reporting deadline for post-priced swaps (“PPSs”) in section II.C.2. below.
The Commission is proposing to add a definition of “post-priced swap” to § 43.2. As proposed, a “post-priced swap” would mean an off-facility swap for which the price has not been determined at the time of execution. This proposed new definition is used in a discussion of proposed changes to reporting deadlines for PPSs in section II.C.2. below.
The Commission is proposing to add a definition of “reporting counterparty.” The Commission notes that the definition itself would be the same as the current definition of “reporting party” in § 43.2. This proposed new definition is used in a discussion of proposed changes to the § 43.3 regulations for the method and timing of real-time public reporting in section II.C.1. below.
The term “swap execution facility” is used throughout parts 43 and 45. While part 45 provides a definition of “swap execution facility,” no such definition exists in part 43. Therefore, in order to harmonize parts 43 and 45, the Commission is proposing to add a definition of “swap execution facility” in part 43. As proposed, “swap execution facility” means a trading system or platform that is a swap execution facility as defined in CEA section 1a(50) and in § 1.3 of this chapter and that is registered with the Commission pursuant to CEA section 5h and § 37 of this chapter. The proposed definition reflects the proposed non-substantive minor technical changes that are proposed to the definition of “swap execution facility” in the concurrent part 45 proposal.
The Commission is proposing to add a definition of “swap transaction and pricing data” to § 43.2. As proposed, “swap transaction and pricing data” means all data for a swap in appendix C to part 43 required to be reported or publicly disseminated pursuant to part 43. The Commission believes that providing a definition for the type of data addressed in part 43 should help distinguish between the different types of data reported pursuant to the different reporting regulations.
The Commission is also proposing to add the following six definitions to § 43.2: “Mirror swap;” “pricing event;” “prime broker;” “prime brokerage agency arrangement;” “prime brokerage agent;” and “trigger swap.” These proposed definitions are all related to swaps entered into by prime brokers. Because all of these six proposed definitions are used in the text of proposed § 43.3(a)(6) or are used in one or more of the proposed definitions that are in turn used in proposed § 43.3(a)(6), all of the six proposed definitions are set forth and discussed in section II.C.4. below.
The Commission is proposing non-substantive ministerial changes to the
The Commission is also proposing to amend the definition of “appropriate minimum block size” in § 43.2. Currently, § 43.2 defines “appropriate minimum block size” to mean the minimum notional or principal amount for a category of swaps that qualifies a swap within such category as a block trade or large notional off-facility swap. This proposed amended definition is used in a discussion of proposed changes to the § 43.5(a) regulations for the time delays for the public dissemination of STAPD in section II.E.1. below.
The Commission is proposing to amend the definition of “block trade” in § 43.2. Currently, § 43.2 defines “block trade” to mean a PRST that: (1) Involves a swap that is listed on a registered SEF or DCM; (2) occurs away from the registered SEF's or DCM's trading system or platform and is executed pursuant to the registered SEF's or DCM's rules and procedures; (3) has a notional or principal amount at or above the AMBS applicable to such swap; and (4) is reported subject to the rules and procedures of the registered SEF or DCM and the rules described in part 43, including the appropriate time delay requirements set forth in § 43.5.
In November 2018, the Commission issued a comprehensive proposal to amend the SEF regulatory framework.
In the interim, in order to provide regulatory and legal certainty to SEFs and market participants, the Commission recently proposed to address certain outstanding no-action relief, including relief related to block trades that SEFs and market participants have operated under for several years.
The Commission is proposing to create a two part definition of “block trade” in § 43.2. Paragraph (3) of the current definition of “block trade”
The Commission is proposing to amend the definition of “embedded option” in § 43.2 by removing the reference to “confirmation” at the end of the current definition.
The Commission is proposing to amend the definition of “execution” in § 43.2 by replacing the reference to execution occurring “orally, in writing, electronically, or otherwise” with “by any method” to shorten the definition without substantively altering it.
The Commission is proposing to amend the definition of “off-facility swap” in § 43.2 by removing the reference to “publicly reportable” and “registered.”
The Commission is proposing to amend the definition of “public dissemination and publicly disseminate” in § 43.2. Currently, § 43.2 defines “public dissemination and publicly disseminate” as to publish and make available STAPD in a non-discriminatory manner, through the internet or other electronic data feed that is widely published and in machine-readable electronic format. Separately, current § 43.3(d)(1) requires that SDRs “publicly disseminate” STAPD in a consistent, usable, and machine-readable electronic format that allows the data to be downloaded, saved, and analyzed.
The Commission is concerned that the definition of “public dissemination and publicly disseminate” currently varies enough from § 43.3(d)(1) to create ambiguity for SDRs as to the format they must use in publicly disseminating STAPD. For instance, the definition of “publicly disseminate” requires that access be non-discriminatory, but the requirement for SDRs to “publicly disseminate” STAPD in § 43.3(d)(1) does not explicitly require that access be non-discriminatory.
Therefore, the Commission is proposing to re-locate the qualification in current § 43.3(d)(1) that SDRs publicly disseminate STAPD in a consistent, usable, and machine-readable electronic format that allows the data to be downloaded, saved, and analyzed to the definition of “public dissemination and publicly disseminate” in § 43.2.
The Commission is proposing to amend the definition of “trimmed data set” in § 43.2 by changing the standard deviation used in the calculation of the trimmed data set from four to two for the “other commodity” asset class, and from four to three for all other asset classes.
The Commission is proposing to remove the definition of “Act” from § 43.2 because the Commission preliminarily believes the definition of “Act” is unnecessary in part 43 because the term is defined in § 1.3.
The Commission is proposing to remove the definition of “business day” from § 43.2 because the Commission preliminarily believes that the definition of “business day” is unnecessary in part 43 because it is defined in § 1.3. Further, the Commission is proposing to remove the definition of “business hours” because it believes the definition of “business hours” would no longer be necessary as a result of the Commission's proposal to remove references to “business hours” in the § 43.5 regulations for the timing delays for block trades. Those proposed changes are discussed below in section II.E.
The Commission is proposing to remove from § 43.2 the “confirmation” definition and the following related definitions: “Affirmation” and “confirmation by affirmation.” The Commission believes these definitions are unnecessary in part 43, and have created confusion as the terms are not used in any of the regulations in part 43.
The Commission is proposing to remove from § 43.2 the definition of “executed.” The Commission believes the current definition is vague. In addition, the Commission believes the proposed definition for “execution date,” discussed above in section II.B.1. would provide the specificity that the current “executed” definition lacks.
The Commission is proposing to remove from § 43.2 the definition of “real-time public reporting.” Currently, § 43.2 defines “real-time public reporting” as the reporting of data relating to a swap transaction, including price and volume, ASATP after the time at which the swap transaction has been executed. The CEA currently already defines “real-time public reporting” as to report data relating to a swap transaction, including price and volume, ASATP after the time at which the swap transaction has been executed.”
The Commission is proposing to remove the definition of “reporting party” because it is proposing to add a definition of “reporting counterparty” to § 43.2 that would be the same as the current definition of “reporting party” in § 43.2, as discussed above in section II.B.1.
The Commission is proposing to remove the following definitions from § 43.2 as a result of proposed changes to §§ 43.5 and 43.6 for block trades and large notional off-facility swaps: “Futures related swap,” “large notional off-facility swap,” “major currencies,” “non-major currencies,” and “super-major currencies.” Those proposed changes are discussed below in sections II.E. and II.F.
The Commission is proposing to remove the following definitions from § 43.2 as a result of proposed changes to simplify the definition of “novation:” “Remaining party,” “transferee,” and “transferor.”
The Commission is proposing to remove the “unique product identifier” (“UPI”) definition from § 43.2. “Unique product identifier” is currently only used in § 43.4(e). The Commission is proposing to delete current § 43.4(e), which is discussed below in section II.D.1. Therefore, the Commission believes the definition of UPI in § 43.2 is no longer necessary.
The Commission is proposing to remove the definition of “widely published” from § 43.2. “Widely published” means to publish and make available through electronic means in a manner that is freely available and readily accessible to the public. “Widely published” is currently referenced in the definition for “public dissemination and publicly disseminate” as the standard by which SDRs must publish data.
The Commission requests comment on all aspects of the proposed changes to § 43.2. The Commission requests specific comment on the following:
(1) Does the Commission's proposed definition of “execution date” present problems for SEFs, DCMs, SDRs, or reporting counterparties? Should the Commission instead adopt a definition that aligns with other regulations, including, for instance, the definition of “day of execution” in § 23.501(a)(5)(i)?
The Commission is proposing a number of clarifying and substantive changes to § 43.3(a)(1). As background, § 43.3(a)(1) currently: (i) Requires reporting parties to report PRSTs to SDRs ASATP after execution; and (ii) states that for purposes of part 43, a registered SDR includes any SDR provisionally registered with the Commission pursuant to part 49 of this chapter.
The Commission proposes to make a non-substantive amendment to § 43.3(a)(1) by changing the reference to the person required to report a PRST to an SDR ASATP after execution. The current term “reporting party” is defined in § 43.2 as the party to a swap with the duty to report a PRST in accordance with this part and section 2(a)(13)(F) of the Act. The Commission proposes to replace the reference to the catchall term “reporting party” with more specific references to the persons that, depending on the circumstances, have the reporting obligation for a PRST, namely: A reporting counterparty; a SEF; or a DCM.
The Commission also is proposing to add a requirement that the PRST reporting required pursuant to proposed §§ 43.3(a)(1)-(6) be done in the manner set forth in proposed § 43.3(d), discussed below in section II.C.8.
Finally, the Commission proposes to delete the sentence in § 43.3(a)(1) stating that for purposes of this part, a registered SDR includes any SDR provisionally registered with the Commission pursuant to part 49 of this chapter and proposes to replace references to registered SDRs with references to SDRs in proposed § 43.3(a) specifically and throughout part 43.
Therefore, revised § 43.3(a)(1) would require reporting counterparties, SEFs, or DCMs to report any PRST to an SDR ASATP after execution subject to § 43.3(a)(2)-(6) and in the manner set forth in § 43.3(d).
The Commission is proposing several amendments to § 43.3(a)(2). As background, current § 43.3(a)(2) states that a party to a PRST can satisfy its part 43 real-time public reporting obligations by executing PRSTs on or pursuant to the rules of a SEF or DCM.
The Commission is proposing to replace the language in § 43.3(a)(2) with the current requirement in § 43.3(b)(1). Current § 43.3(b)(1) states that SEFs and DCMs satisfy their real-time public reporting obligations by transmitting STAPD to SDRs ASATP after the PRST was executed on or pursuant to the rules of the trading platform or facility. Revised § 43.3(a)(2) would therefore state that that SEFs or DCMs must report PRSTs executed on or pursuant to the rules of a SEF or DCM ASATP after execution. As a result, § 43.3(a)(2) would contain SEFs' and DCMs' part 43 reporting obligations instead of § 43.3(b)(1). In revising § 43.3(a)(2), the Commission would also replace the reference to a “registered [SEF]” with a reference to SEFs because, similar to the reasoning discussed above in section II.C.1.a. with respect to “registered” SDRs, the term “registered” is unnecessary and could create confusion.
The Commission proposes to amend § 43.3(a)(3) in two respects. As background, current § 43.3(a)(3) requires reporting parties to report all off-facility swaps to an SDR for the appropriate
The Commission proposes to clarify in §§ 43.3(a)(3)(iii)-(v) that, in situations where the parties to an off-facility PRST must designate which of them is the reporting counterparty, they must make such designation prior to the execution of the off-facility PRST so that there is no delay in reporting the off-facility PRST pursuant to part 43, as there could be if the parties do not make such designation until after the off-facility PRST is executed or cannot agree on such designation.
Because the Commission is proposing to add part 43 reporting requirements specific to PPSs, clearing swaps, and mirror swaps, respectively, in proposed new §§ 43.3(a)(4)-(6), the Commission proposes to introduce proposed § 43.3(a)(3) with except as otherwise provided in paragraphs (a)(4)-(6) of this section. The proposed part 43 reporting requirements applicable to PPSs, clearing swaps and mirror swaps are discussed below in sections II.C.2.-4., respectively.
The Commission is proposing new § 43.3(a)(4) to address issues market participants face in reporting PPSs. As background, the purpose of CEA § 2(a)(13), the primary source of the Commission's authority to promulgate real-time public reporting rules, is to authorize the Commission to make [STAPD] available to the public in such form and
Regulation 43.3(a) generally requires the reporting party for each PRST to report it to an SDR ASATP after execution of the transaction. Market participants have raised concerns with complying with the ASATP requirement for a category of swaps with respect to which one or more terms are unknown at the time the swap is executed. One Roadmap commenter suggested that such swaps should only be reported when all of the final primary economic terms of the transaction are determined, rather than at execution.
The Commission understands that these swaps are generally characterized by the price, size and/or other terms of the transaction being contingent upon the outcome of SD hedging, market results during an observation period (a point in time or a longer period), or the occurrence of certain events—such as the price for a swap underlier being determined at the close of trading on a trading platform—that occur after an SD accepts a client request (collectively, “Variable Terms”). Although the parties may know the non-Variable Terms at the time of execution,
The Commission understands that some market participants do not report swaps with Variable Terms to SDRs until hours, or even days, after the execution thereof.
Currently, PPSs and other swaps with Variable Terms not determined at execution (“Variable Terms Swaps”) account for a significant but unknown percentage of swaps that are not reported to SDRs in a timely manner.
The Commission also preliminarily believes that the reporting of PPSs ASATP after execution but before the price is determined does not serve a significant price discovery function and that the omission of a price, or the use of a placeholder price, by reporting parties who report PPSs before the price is determined may confuse market participants or constitute unhelpful “noise” on the public tape. The Commission understands that requiring public reporting of PPSs before their prices are determined could allow market participants to transact in swaps ahead of any necessary hedging by SDs, potentially disadvantaging the SDs' counterparties driving the PPS transactions by increasing the cost of the hedges. This could, in turn, lead such counterparties to forego the use of swaps to achieve their investment or other goals, thereby reducing swap market liquidity.
However, the Commission seeks to balance permitting the delayed reporting of swaps that appear to lack a significant price discovery benefit with encouraging or permitting indefinitely delayed reporting of PPSs. The latter possibility could encourage swap counterparties to structure some of their swaps as PPSs to take advantage of the longer proposed reporting deadline for PPSs.
In light of the foregoing, the Commission is proposing a longer deadline for reporting STAPD for certain PPSs than for PRSTs generally. To effectuate such longer deadline, the
The Commission proposes to amend § 43.3(a) to add DCOs to the reporting counterparty hierarchy for clearing swaps that are PRSTs. As background, in 2016, the Commission adopted rules that, among other things, added DCOs to the hierarchy for determining the reporting counterparty for clearing swaps in § 45.8.
Most clearing swaps are the result of an original swap being accepted for clearing by a DCO. In these cases, there is no part 43 real-time public reporting for the clearing swaps. For most clearing swaps, there is no conflict between the part 43 and part 45 reporting hierarchies.
However, there are limited circumstances in which DCOs create clearing swaps for which there is no original swap, and the clearing swaps may meet the definition of a PRST in part 43, while also being required to be reported pursuant to part 45. In these circumstances, the part 43 and part 45 reporting hierarchies may conflict. For example, if a DCO enters into PRSTs to manage the default of a clearing member, the DCO would be the reporting counterparty under § 45.8(i) but not under current § 43.3(a)(3).
To avoid this conflict, the Commission proposes to add DCOs to the hierarchy in § 43.3 for clearing swaps. Proposed § 43.3(a)(5) would state that notwithstanding the provisions of paragraphs (a)(1)-(3) of this section, if a clearing swap, as defined in § 45.1 of this chapter, is a PRST, the DCO that is a party to such swap shall be the reporting counterparty and shall fulfill all reporting counterparty obligations for such swap as soon as technologically practicable after execution.
As explained above, the CEA authorizes the Commission to make STAPD available to the public in such form and
The Commission understands that prime brokerage swaps begin with a counterparty opening an account with a prime broker (“PB”) that grants limited agency powers to the counterparty. These limited powers enable the counterparty, as an agent for the PB, to enter into swaps with approved executing dealers (“ED”), subject to specific limits and parameters, such as credit limits and collateral requirements. The PB also enters into “give-up” arrangements with approved EDs in which the EDs agree to negotiate swaps with the counterparty, acting as an agent for the PB, within the specified parameters and to face the PB as counterparty for the resulting ED-PB swap (“ED-PB Swap”).
The Commission understands that in a prime brokerage swap, the counterparty seeks bids for the desired swap from one or more of the approved EDs, within the parameters established by the PB. Once the counterparty and ED agree on the terms, the Commission believes that both the counterparty and ED provide a notice of the terms to the PB, and those terms constitute the ED-PB Swap, which the PB must accept if: The swap is with an approved ED; the counterparty and ED have committed to the material terms; and the terms are within the parameters established by the PB. Once the ED-PB Swap is accepted by the PB, the PB enters into a mirror swap (“Mirror Swap”) with the counterparty with identical economic terms and pricing, subject to adjustment, as a result of the prime brokerage servicing fee.
In 2012, DMO granted no-action relief, subject to conditions described below, where: (i) An ED reports an ED-
CFTC Letter No. 12-53 expired on June 30, 2013, but the Commission believes that concerns about the impact on price discovery of mirror swap STAPD on the public tape are still concerns today. To address these concerns, the Commission is proposing new § 43.3(a)(6), and related definitions in § 43.2(a). The Commission believes the proposed regulations would address issues raised by swaps executed pursuant to prime brokerage arrangements and related mirror swaps.
The Commission is proposing to add the term “prime brokerage agency arrangement” to § 43.2(a). “Prime brokerage agency arrangement” would mean an arrangement pursuant to which a prime broker authorizes one of its clients, acting as agent for such prime broker, to cause the execution of a trigger swap. The Commission proposes to use the term “prime brokerage agency arrangement” in the new proposed definitions of “prime brokerage agent” and “trigger swap” in § 43.2(a) to establish the parameters of the proposed new definition of a “mirror swap,” also in § 43.2(a), which would not be reportable under part 43 if it satisfied the terms of proposed § 43.3(a)(6)(i). The Commission's goal in proposing the “prime brokerage agency arrangement” definition and using it in other definitions in § 43.2(a) is to help ensure that the scope of unreported mirror swaps is limited to swaps that are, among other things, integrally related to trigger swaps and their related pricing events.
The Commission is proposing to add the term “prime brokerage agent” to § 43.2(a) as a new definition that would mean a client of a prime broker who causes the execution of a trigger swap acting pursuant to a prime brokerage agency arrangement.
The Commission is also proposing to add the term “prime broker” to § 43.2(a). “Prime broker” would mean with respect to a mirror swap and its related trigger swap, a swap dealer acting in the capacity of a prime broker with respect to such swaps. The Commission proposes to use the term “prime broker” in the proposed definitions of “prime brokerage agency arrangement,” “prime brokerage agent,” and “trigger swap” in § 43.2(a), and in proposed § 43.3(a)(6), to establish the parameters of when a “mirror swap” would not be reportable under part 43 if it satisfied the terms of proposed § 43.3(a)(6)(i).
The Commission is proposing to add the term “trigger swap” to § 43.2(a) as a new definition that would mean a swap: (1) That is executed pursuant to one or more prime brokerage agency arrangements;
The Commission is proposing to add the term “pricing event” to § 43.2(a) as a new definition that would mean the completion of the negotiation of the material economic terms and pricing of a trigger swap. The Commission is proposing to use the term “pricing event” in proposed § 43.3(a)(6)(i) to make it clear when execution of a trigger swap, which would be required to be reported under proposed § 43.3(a)(6)(iv) (discussed below in section II.C.4.b.), occurs.
The Commission is proposing to add the term “mirror swap” to § 43.2(a) to mean a swap: (1) To which a prime broker is a counterparty or both counterparties are prime brokers; (2) that is executed contemporaneously with a corresponding trigger swap; (3) that has identical terms and pricing as the contemporaneously executed trigger swap (except that a mirror swap, but not the corresponding trigger swap, may include any associated prime brokerage service fees agreed to by the parties and except as provided in the final sentence of this “mirror swap” definition); (4) with respect to which the sole price forming event is the occurrence of the contemporaneously executed trigger swap; and (5) the execution of which is contingent on, or is triggered by, the execution of the contemporaneously executed trigger swap. The notional amount of a mirror swap may differ from the notional amount of the corresponding trigger swap, including, but not limited to, in the case of a mirror swap that is part of a partial reverse give-up;
The Commission is proposing to define the term “mirror swap” to delineate a group of swaps that do not have to be reported under part 43 if the related conditions set forth in proposed § 43.3(a)(6) are satisfied. The Commission preliminarily believes that because the terms and pricing of a trigger swap and its related mirror swaps are the same, part 43 reporting of both a trigger swap and the related
The Commission preliminarily believes the STAPD of trigger swaps should be reported pursuant to part 43 ASATP after the occurrence of the related pricing event for the following reasons: (1) All the terms of a trigger swap are determined at the time of its related pricing event, so execution of the trigger swap occurs at that time (as stated expressly in proposed § 43.3(a)(6)(i)), so the ASATP clock should “start ticking” at that time; (2) any delay in the mirror swap counterparties learning of the related trigger swap terms should not delay part 43 reporting of the trigger swap given that the mirror swaps would not be reported under proposed § 43.3(a)(6);
The Commission is proposing to use the word “contemporaneously” in clause (2) of the “mirror swap” definition (
The Commission is proposing the language regarding associated prime brokerage service fees in clause (3) of the proposed “mirror swap” definition (
Proposed new § 43.3(a)(6)(i) would provide that a mirror swap, which the Commission is proposing to define in § 43.2(a), as discussed above in section II.B.1., is not a PRST. Proposed new § 43.3(a)(6)(i) would also state that, for purposes of determining when execution occurs under §§ 43.3(a)(1)-(3), execution of a trigger swap shall be deemed to occur at the time of the pricing event for such trigger swap.
Proposed new § 43.3(a)(6)(ii) would provide parameters for determining which counterparty is the reporting counterparty for a given trigger swap in situations where it is unclear, with respect to a given set of swaps, which are mirror swaps and which is the related trigger swap. More specifically, proposed new § 43.3(a)(6)(ii) would state that if, with respect to a given set of swaps, it is unclear which are mirror swaps and which is the related trigger swap (including, but not limited to, situations where there is more than one prime broker counterparty within such set of swaps and situations where the pricing event for each set of swaps occurs between prime brokerage agents of a common prime broker), the PBs would be required to determine which swap is the trigger swap and which are mirror swaps. Proposed new § 43.3(a)(6)(ii) would also specify that, with respect to the trigger swap to which a PB is a party, the counterparty that falls within the highest level of the reporting counterparty determination hierarchy set forth in § 43.3(a)(3) is the reporting counterparty; proposed new § 43.3(a)(6)(ii) would further specify that, if both counterparties fall within the same level of that hierarchy, they must determine who is the reporting counterparty for such trigger swap pursuant to §§ 43.3(a)(3)(iii), (iv), or (v), as applicable. Proposed new § 43.3(a)(6)(ii) would add that, notwithstanding the foregoing, if the counterparty to a trigger swap that is not a PB is an SD, then that counterparty will be the reporting counterparty for the trigger swap.
Proposed new § 43.3(a)(6)(iii) would provide that, if, with respect to a given set of swaps, it is clear which are mirror swaps and which is the related trigger swap, the reporting counterparty for the trigger swap shall be determined pursuant to § 43.3(a)(3).
Proposed new § 43.3(a)(6)(iv) would provide that trigger swaps described in proposed § 43.3(a)(6)(ii) (situations in which it is unclear which of a set of swaps are mirror swaps and which is the related trigger swap) and (iii) (situations in which it is clear which of a set of swaps are mirror swaps and which is the related trigger swap) shall be reported pursuant to the requirements set out in §§ 43.3(a)(2) or (a)(3), as applicable, except that the provisions of proposed § 43.3(a)(6)(ii), rather than of proposed § 43.3(a)(3), shall govern the determination of the reporting counterparty for purposes of the trigger swaps described in proposed § 43.3(a)(6)(ii).
CFTC Letter No. 12-53 provided relief for what it termed a “Typical Prime Brokerage Transaction” in which an ED that is an SD agrees with its counterparty to the terms of matching swaps entered into between the ED and the counterparty's PB and between the PB and the counterparty. The Commission understands that the scope of proposed § 43.3(a)(6) would expand the scope of CFTC Letter No. 12-53 in that it would encompass both the “typical prime brokerage transactions” covered by CFTC Letter No. 12-53 and at least three other forms of PB transactions: reverse give-up PB swaps; partial reverse give-up PB swaps; and double give-up PB swaps. The Commission understands that other forms of prime brokerage swap transactions also may be covered by proposed § 43.3(a)(6) and does not intend, by describing herein reverse give-up PB swaps, partial reverse give-up PB swaps, and double give-up PB swaps, to limit the scope of proposed § 43.3(a)(6) to such forms of prime brokerage swap transactions.
In a reverse give-up PB swap structure, the executing broker (“EB”)
CFTC Letter No. 12-53 permitted the ED to be the reporting party for the ED-PB Swap, subject to the conditions that the ED and PB allocated reporting responsibility between them and both parties were SDs. Proposed § 43.3(a)(6)(ii) would differ from the reporting structure in CFTC Letter No. 12-53 in that proposed § 43.3(a)(6)(ii) would instead incorporate the reporting counterparty hierarchy of § 43.3(a)(3). The goal of proposed § 43.3(a)(6)(ii) is to have each trigger swap be reported ASATP after its pricing event. The Commission understands that one counterparty to a trigger swap often will have participated in negotiating the related pricing event, so should be well-placed to report the trigger swap pursuant to part 43 in such circumstances, particularly if that counterparty is an SD, given that SDs are experienced with part 43 reporting. If the PB is an SD, but its counterparty is not, the PB would be the reporting counterparty for the trigger swap even though the PB may not learn of the pricing event for some time, although, pursuant to proposed § 43.3(a)(7), discussed below in section II.C.5., it could contract with a third-party service provider (which could include a party to the pricing event (
The Commission proposes to add § 43.3(a)(7) to provide for the third-party facilitation of data reporting. As background, in the 2012 RTR NPRM, Real-Time Public Reporting of Swap Transaction Data, 75 FR 76140 (Dec. 7, 2010), the Commission noted that SEFs, DCMs, and SDRs may enter into contractual relationships with third party service providers to facilitate reporting, while remaining responsible for the reporting requirement under part 43.
The Commission is proposing several revisions to the rules for SEFs, DCMs, SDs, MSPs, and SDRs in disseminating STAPD. First, as discussed above in section II.C.1.b., the Commission is proposing to move the substance of current § 43.3(b)(1) to revised § 43.3(a)(2).
Second, the Commission is proposing to relocate current § 43.3(b)(2) to § 43.3(b)(1) and revise the regulation. As background, current § 43.3(b)(2) states that registered SDRs shall ensure that STAPD is publicly disseminated ASATP after such data is received from a SEF, DCM, or reporting party, unless such PRST is subject to a time delay described in § 43.5, in which case the PRST shall be publicly disseminated in the manner described in § 43.5.
The Commission is also proposing to replace the language in current § 43.3(b)(2) stating that SDRs shall “ensure” STAPD is publicly disseminated with an SDR shall publicly disseminate STAPD ASATP to clarify that SDRs must disseminate the data, rather than ensure it is done. The Commission believes that this revision should not result in any changes in current practice for SDRs. Finally, the Commission is proposing to replace the two references to “publicly reportable swap transaction” with references to “swap transaction and pricing data” for consistency both within proposed § 43.3(b)(1) and with § 43.5, which is cross-referenced by current § 43.3(b)(2) and would continue to be cross-referenced by proposed § 43.3(b)(1). Therefore, proposed § 43.3(b)(1) would state that an SDR shall publicly disseminate STAPD ASATP after receiving it from a SEF, DCM, or reporting counterparty, unless the STAPD is subject to a time delay described in § 43.5, in which case the SDR must publicly disseminate the STAPD pursuant to § 43.5.
Third, the Commission is proposing to relocate § 43.3(c)(1) to § 43.3(b)(2) in conjunction with the above relocation of § 43.3(b)(2) to § 43.3(b)(1). As background, current § 43.3(c)(1) states that any SDR that accepts and publicly disseminates STAPD in real-time shall comply with part 49 and shall publicly disseminate STAPD in accordance with part 43 ASATP upon receipt of such data, except as otherwise provided in part 43.
The Commission is proposing to locate the regulations for SDRs to follow in disseminating STAPD in § 43.3(b). Because current § 43.3(c)(1) is an SDR obligation regarding the public dissemination of STAPD, the Commission believes it should be located in revised § 43.3(b). The Commission is also proposing to remove the last phrase of § 43.3(c)(1), which states that SDRs must publicly disseminate STAPD in accordance with part 43 ASATP upon receipt of such data, except as otherwise provided in part 43. The Commission believes this language unnecessary given the similar, but more precise, reference to § 43.5 in current § 43.3(b)(2) and in proposed § 43.3(b)(1), discussed above in this section II.C.6.
The Commission is proposing to redesignate current §§ 43.3(c)(2) and (3) as §§ 43.3(b)(4) and (5), respectively.
The Commission is proposing to relocate the requirements to make STAPD available to the public from § 43.3(d)(2) to §§ 43.3(c)(1) and (2).
The requirement in § 43.3(d)(2) supports the fairness and efficiency of markets and increases transparency, which in turn improves price discovery and decreases risk (
Therefore, the Commission is proposing to move the requirement in current § 43.3(d)(2) to new §§ 43.3(c)(1) and (2), along with revising the definition of “publicly disseminate” in § 43.2,
Therefore, proposed § 43.3(c) would state that SDRs shall make: STAPD available on their websites for a period of time that is at least one year after the initial public dissemination thereof; instructions freely available on their websites on how to download, save, and search such STAPD; and STAPD that is publicly disseminated pursuant to part 43 available free of charge.
As discussed above in section II.B.2., the Commission is proposing to relocate the current requirement for SDRs to use a specific format in making STAPD available to the public from § 43.3(d)(1) to the definition of “public dissemination and publicly disseminate” in § 43.2.
Currently, § 45.13(b) requires reporting entities or counterparties to use the facilities, methods, or data standards provided or required by the SDR to which the entity or counterparty reports the data. An SDR may permit reporting entities and counterparties to use various facilities, methods, or data standards, provided that its requirements in this regard enable it to
As explained in section III. below, the Commission had intended that part 43 data would be a subset of part 45 data reported to SDRs. As a result, § 45.13(b) indirectly required reporting entities or counterparties to use the data standards of their SDRs, as long as the standards enabled the SDR to report the data to the Commission in the format acceptable to the Commission. The Commission believes reporting counterparties would benefit from having a distinct regulatory requirement in part 43 for real-time public reporting. Therefore, the Commission is proposing § 43.3(d)(1), which would require reporting counterparties, SEFs, and DCMs to report the STAPD elements in appendix C in the form and manner provided in the technical specifications published by the Commission. The Commission is proposing a parallel requirement in § 45.13(a) in a separate part 45 NPRM.
As discussed above in section II.C.7., the Commission is proposing to relocate the current requirement for SDRs to make STAPD available to the public from § 43.3(d)(2) to §§ 43.3(c)(1) and (2).
Proposed § 43.3(d)(2) would require reporting counterparties, SEFs, and DCMs to satisfy SDR validation procedures when reporting STAPD to SDRs. Currently, the Commission's regulations do not require that SDRs validate STAPD. In a related NPRM, the Commission is proposing to require that SDRs implement validations, including on STAPD reported to SDRs.
The Commission believes that the SDR validation procedures in proposed § 43.3(f) would help improve the timeliness and accuracy of STAPD SDRs disseminate to the public. However, the Commission also believes that a companion requirement for reporting counterparties, SEFs, and DCMs to satisfy SDR validation procedures is necessary. Without such a requirement, the Commission is concerned about ambiguity as to the responsibilities of reporting counterparties, SEFs, and DCMs to respond to and satisfy the validation requirements specified in proposed § 43.3(f).
The Commission is proposing to delete current § 43.3(d)(3). Currently, § 43.3(d)(3) requires SDRs to provide to the Commission a hyperlink to the internet website where publicly disseminated STAPD can be accessed by the public. This requirement is unnecessary, as SDRs have this information on their websites in a manner that is simple for the Commission and market participants to locate.
Proposed § 43.3(d)(3) would require reporting counterparties, SEFs, and DCMs to use the facilities, methods, or data standards provided or required by the SDR to which the reporting counterparty, SEF, or DCM, reports the data. The Commission understands that reporting counterparties, SEFs, and DCMs are currently using the facilities, methods, or data standards provided or required by the SDRs to which they are reporting data. Otherwise, reporting counterparties, SEFs, and DCMs would be unable to send STAPD to SDRs. However, as discussed throughout this section II.C.8., specifying this requirement for market participants would provide regulatory certainty.
The Commission is proposing new regulations for SDRs in validating STAPD in § 43.3(f). The Commission's regulations do not currently require that SDRs validate STAPD. The Commission understands, however, that SDRs have implemented validations as a best practice. As a result, each SDR runs a number of checks, or validations, on each STAPD message prior to publicly disseminating it. A failed validation can cause an SDR to reject the message without disseminating it to the public.
The Commission is concerned that the lack of validation requirements has resulted in reporting counterparties, SEFs, and DCMs being unaware of, or unfamiliar with, the existence of such validations. The Commission is concerned that the lack of awareness may be resulting in reporting counterparties, SEFs, and DCMs being unclear about their responsibilities to monitor their submissions to SDRs for errors that may result in validation failures that ultimately result in non-dissemination. As a result, the Commission is proposing in § 43.3(d)(2) to require reporting counterparties, SEFs, and DCMs to satisfy SDR validation procedures when reporting STAPD to SDRs. The Commission is also proposing § 43.3(f) to make clear the requirement for each SDR to notify submitting parties of their failure to meet the SDR's validation procedures and that an entity's reporting obligation is not satisfied until the SDR's validation procedures have been satisfied.
Therefore, proposed § 43.3(f)(1) would require that for an SDR to validate each STAPD report submitted it, the SDR shall notify the reporting counterparty, SEF, or DCM submitting the report whether the report satisfied the data validation procedures of the SDR. The SDR would have to provide such notice ASATP after accepting the STAPD report. Proposed § 43.3(f)(1) would provide that an SDR may satisfy the validation requirements by transmitting data validation acceptance messages as required by proposed § 49.10.
Proposed § 43.3(f)(2) would provide that if a STAPD report submitted to an SDR does not satisfy the data validation procedures of the SDR, the reporting counterparty, SEF, or DCM required to submit the report has not satisfied its obligation to report STAPD in the manner provided by § 43.3(d). The reporting counterparty, SEF, or DCM would not have satisfied its obligation until it submits the STAPD report in the manner provided by § 43.3(d), which includes the requirement to satisfy the data validation procedures of the SDR.
The Commission is proposing to delete the current timestamp requirements in § 43.3(h).
As discussed in section III. below, the Commission is proposing an updated list of STAPD elements in appendix C where the timestamps described in § 43.3(h) would be covered. Therefore, the Commission proposes to remove the requirements in §§ 43.3(h)(1)-(3) for SEFs, DCMs, SDs, MSPs, and SDRs to timestamp STAPD.
In addition, the Commission believes that the separate recordkeeping requirement for timestamps is duplicative of other recordkeeping requirements for SEFs, DCMs, SDs, MSPs, and SDRs. For instance, SDRs must already keep swap data for five years following the final termination of the swap and for an additional ten years in archival storage.
The Commission requests comment on all aspects of the proposed changes to § 43.3. In addition, the Commission requests specific comment on the following:
(2) Instead of permitting a delay for PPS, should reporting counterparties be required to submit PPSs ASATP after execution using the Post-priced swap indicator (59), leaving the price empty and then be required to update that entry after the price is determined?
(3) Should the Commission permit an indefinite delay for reporting STAPD for PPSs? In other words, should reporting such data be required only once the price and/or other Variable Terms is/are known regardless of how long that takes? The Commission notes that such swaps could be flagged on the public tape as PPSs once reported. Alternatively, should the Commission set a shorter deadline for reporting STAPD for PPS?
(4) Should the Commission exclude from the PPS definition and/or from the reporting delay in proposed § 43.3(a)(4) swaps for which a price is not known at execution because it is contingent upon the outcome of SD hedging? Would permitting such swaps to receive the reporting delay in proposed § 43.3(a)(4) cause market participants to intentionally delay reporting in reliance on the need to hedge a swap where such market participants do not delay their reporting under current Commission reporting regulations?
(5) Should market participants be required to rely on the Commission's block trade reporting delays and capping and rounding rules, rather than proposed § 43.3(a)(4), to avoid the front-running concerns discussed above in section II.C.2.? Conversely, are the CEA's provisions and the Commission's regulations sufficient to deter market participants from intentionally altering their behavior to delay their reporting of swaps for which a price is not known at execution because it is contingent upon the outcome of SD hedging?
(6) Should the Commission modify its PPS indicator in appendix C, or add another indicator, to require market participants to indicate whether a swap is a PPS because it is contingent upon the outcome of SD hedging?
(7) Should the Commission modify its PPS indicator, or add another indicator, to require market participants to indicate whether a swap is a PPS based on other common reasons, such as the price being determined based on the volume-weighted average price (also known as “VWAP”) of an index level at market close?
(8) The Commission understands that trade at settlement (“TAS”) futures orders
(9) Did the Commission accurately describe the prime brokerage swap transaction structures discussed above? Should the real-time public tape reflect the number of mirror swaps related to a given trigger swap to provide information to the public on the number of prime brokerage swap transaction structures with multiple mirror swaps? Would such an indicator provide useful information to market participants?
(10) Should the Commission scale back the scope of the exclusion of mirror swaps from the PRST definition in proposed § 43.3(a)(6)(i) such that each of the following swaps would be PRSTs: (a) Swaps executed as part of partial reverse give-up arrangements and/or (b) swaps executed as part of other prime brokerage transaction structures in which the notional amount of a mirror swap may differ from the notional amount of the corresponding trigger swap? Should the Commission scale back the scope of the exclusion of mirror swaps from the PRST definition in proposed § 43.3(a)(6)(i) such that the exclusion would be limited to “plain vanilla” mirror swaps?
(11) If a SD executed one or more swaps to hedge a swap that the SD had executed with a counterparty, and the hedging swap(s) was/were executed at the same price as the swap being hedged, the hedging swap(s) generally would be a PRST or PRSTs and, thus, subject to part 43 reporting.
(12) Should the Commission modify proposed § 43.2(a) to include a carve out for prime brokerage service fees to reflect that such fees might not be included in all such mirror swaps?
(13) Is the proposed definition of “prime broker” sufficient and clear enough to accurately describe the term as understood in common industry practice? Is it sufficiently narrow to limit the non-reporting of mirror swaps to transactions involving “prime brokers,” as that term is understood in the market? If the Commission should propose a different definition of “prime broker,” what should that definition be?
(14) In order to ensure data quality, should the Commission mandate a certain standard for reporting to the SDRs? If so, what standard should the Commission mandate and what would be the benefits of mandating this standard? If not, why should the Commission not mandate a standard?
The Commission proposes to make several primarily non-substantive changes to current §§ 43.4(a)-(e), (g) and (h). As background, § 43.4(a) generally requires that STAPD must be reported to an SDR so that the SDR can publicly disseminate it in real-time, including according to the manner described in § 43.4 and appendix A. The Commission proposes to delete current § 43.4(a). The Commission believes that current § 43.4(a) is overly general. As a result of removing current § 43.4(a), the Commission proposes to re-designate §§ 43.4(b)-(d) as §§ 43.4(a)-(c).
Current § 43.4(b) requires that any SDR that accepts and publicly disseminates STAPD in real-time shall publicly disseminate the information described in appendix A, as applicable, for any PRST. The Commission proposes to re-designate § 43.4(b) as § 43.4(a), and make conforming changes. As proposed, § 43.4(a) would require that any SDR that accepts and publicly disseminates STAPD in real-time shall publicly disseminate the information for the STAPD elements in appendix C to part 43 in the form and manner provided in the technical specifications published by the Commission.
Current § 43.4(c) states that SDRs that accept and publicly disseminate STAPD in real-time may require reporting parties, SEFs, and DCMs to report to the SDR information necessary to compare the STAPD that was publicly disseminated in real-time to the data reported to an SDR pursuant to section 2(a)(13)(G) of the CEA or to confirm that parties to a swap have reported in a timely manner pursuant to § 43.3. The Commission proposes to re-designate § 43.4(c) as § 43.4(b) and make minor non-substantive changes.
Current § 43.4(d) contains regulations for maintaining the anonymity of the parties to a PRST. The Commission is proposing to re-designate § 43.4(d) as § 43.4(c) and make minor non-substantive changes. Among these changes, the Commission is proposing to remove current § 43.4(d)(4)(i)-(iii); re-designate § 43.4(d)(4) as § 43.4(c)(4); and consolidate the substance of §§ 43.4(d)(4)(i) and (iii) in proposed § 43.4(c)(4). These actions would remove the requirement in current § 43.4(d)(4)(ii) that registered SDRs publicly disseminate the actual assets underlying other commodity swaps that either reference one of the contracts described in appendix B to part 43
Currently, depending on the assets underlying other commodity swaps, such assets are either disseminated as reported or are disseminated as described in § 43.4(d)(4)(iii). Current § 43.4(d)(4)(iii) states that the underlying assets of swaps in the “other commodity” asset class that are not described in § 43.4(d)(4)(ii) shall be publicly disseminated by limiting the detail of the underlying assets. Current § 43.4(d)(4)(iii) also states that the identification of any specific delivery point or pricing point associated with the underlying asset of such “other commodity” swap shall be publicly disseminated pursuant to appendix E to part 43.
As proposed to be amended, § 43.4(c)(4) would provide the same geographic masking treatment for all assets underlying “other commodity” swaps, namely the geographic masking described in current § 43.4(d)(4)(iii). The Commission believed when adopting part 43 that other commodity swaps referencing or economically related to one of the contracts described in appendix B to part 43 were sufficiently liquid that publicly disseminating such information would not identify the swap counterparties
Finally, current § 43.4(e) permits SDRs to disseminate UPIs for certain data fields once a UPI is available. The Commission proposes to delete current § 43.4(e), which gives SDRs discretion regarding what fields to publicly disseminate after a UPI exists.
Current § 43.4(f) requires that reporting parties, SEFs, and DCMs report the actual notional or principal amount of any swap, including block
As discussed above, the Commission is proposing to remove §§ 43.4(a) and (e), and re-designate § 43.4(b)-(d) as § 43.4(a)-(c). As a result of these changes, the Commission proposes to re-designate § 43.4(f) as § 43.4(d) and make minor non-substantive changes.
As discussed above, the Commission is proposing to redesignate current § 43.4(f) as § 43.4(d). As a result of these changes, the Commission is proposing to re-designate current § 43.4(g) as § 43.4(e) and make minor non-substantive edits.
One of these non-substantive edits is a structural change in the regulations. Current § 43.4(g), titled “Public dissemination of rounded notional or principal amounts,” states that the notional or principal amount of a PRST, as described in appendix A to this part, shall be rounded and publicly disseminated by a registered SDR, and then sets out the rules for rounding.
The Commission is proposing to rephrase § 43.4(g), which would be re-designated as § 43.4(e), to state that the notional or principal amount of a PRST shall be publicly disseminated by an SDR subject to rounding as set forth in § 43.4(f) and a cap size as set forth in § 43.4(g).
Then, the rounding rules in current § 43.4(g) would be in a new section § 43.4(f) titled “Process to determine appropriate rounded notional or principal amounts.” Section § 43.4(f) would then contain the rounding rules for SDRs, subject to two substantive changes explained below, among other non-substantive changes.
The Commission proposes amending §§ 43.4(g)(8) and (9), which would be re-designated as §§ 43.4(f)(8) and (9). Current § 43.4(g)(8) requires a registered SDR to round the notional or principal amount of a PRST to the nearest one billion if it is less than 100 billion but equal to or greater than one billion. The Commission proposes to amend proposed § 43.4(f)(8) to require rounding to the nearest 100 million instead of one billion. Current § 43.4(g)(9) requires a registered SDR to round the notional or principal amount of a PRST to the nearest 50 billion if it is greater than 100 billion. The Commission proposes to amend § 43.4(f)(9) to require rounding to the nearest 10 billion and to add the words “equal to or” before “greater than 100 billion” to include swaps with notional or principal amounts that are exactly 100 billion, the omission of which from the 2012 RTR Final Rule appears to have been an oversight.
The Commission is concerned that broadly rounded notional or principal amounts could undermine the price discovery purpose of real time reporting.
As a result of the above proposal to re-designate current § 43.4(g) as § 43.4(e) and create a separate section for rounding in § 43.4(f), the Commission is proposing to re-designate current § 43.4(h) as § 43.4(g). Current § 43.4(h) contains, and proposed § 43.4(g) would contain, the cap size rules for SDRs.
As background, the initial cap sizes were to be equal to the greater of the initial AMBS for the respective swap category in appendix F or the respective cap sizes in § 43.4(h)(1)(i)-(v).
Since the Commission has not yet moved to the post-initial period, the Commission now proposes to move to the post-initial cap sizes based on the 75% notional calculation, as the Commission directed itself to do in current § 43.4(h)(2). In addition, the Commission is proposing several amendments to the substance of the cap size regulations that the Commission will discuss in this section.
Structurally, the Commission proposes to remove the “initial cap sizes” and relabel the “post-initial cap sizes” as the “cap sizes.” Because the initial cap sizes will be superseded by the post-initial cap sizes once adopted, there is no longer any need to distinguish between initial cap sizes and post-initial cap sizes. Specifically, the Commission proposes to remove the initial cap sizes in § 43.4(h)(1) and establish cap sizes, which would not be referred to as post-initial cap sizes, in proposed § 43.4(g) that align with the
The initial cap sizes for the asset classes other than equities are currently equal to the greater of the initial AMBS set forth in appendix F to part 43 or the applicable cap size set forth in §§ 43.4(h)(1)(i)-(v). Appendix F sets forth initial AMBS by asset class and, within asset class, by various other categories. Current §§ 43.4(h)(1)(i)-(v) contain cap sizes for swaps, categorized by asset class,
The proposed cap sizes would be based on a 75-percent notional amount calculation for a select set of swap categories in the interest rate, credit, foreign exchange (“FX”) (consisting of U.S. currency and specified non-U.S. currency pairs), and other commodity asset classes,
Additionally, the proposed cap sizes for those swap categories containing swaps with limited trading activity in the interest rate, credit, equity, FX, and other commodity asset classes would be set at USD 100 million, USD 400 million, USD 250 million, USD 150 million, and USD 100 million, respectively, in § 43.4(g)(4)-(8).
Furthermore, as discussed below in II.F.2., the Commission also proposes to revise the current 75-percent notional amount calculation currently used for setting post-initial cap sizes and, as discussed below in II.F.1, to revise the swap categories used to calculate cap sizes.
The Commission preliminarily believes that requiring itself to recalculate the cap size no less than once each calendar year, as required by current § 43.4(h)(2)(i), could lead to frequent updates to systems for SDRs without a clear benefit to the real-time public tape. Instead, the Commission is proposing a flexible approach to determine if recalculating those cap sizes, based on the 75-percent notional amount calculation, is merited. The Commission expects to evaluate the swap markets and trading in the proposed swap categories on an ongoing basis. The Commission believes this approach would strike the right balance between updating the cap sizes when doing so would benefit the public tape and not wanting to require SDRs to make unnecessary system changes.
For those cap sizes for which the Commission has established fixed USD amounts, there is no calculation or calculation method to update. Instead, the Commission expects to propose new cap sizes for these swap categories in the future if the Commission believes it warranted.
The Commission requests comment on all aspects of the proposed changes to § 43.4. In addition, the Commission specifically requests comment on the following:
(15) Each of § 43.4(f)(1)-(9) directs an SDR to “round” to the nearest specified amount, rather than to round up or down to the nearest specified amount. Should the Commission specify in proposed §§ 43.4(f)(1)-(9) that an SDR must round up, or down, to the nearest specified amount and in which circumstances an SDR must round up or down to the nearest specified amount? If so, what rounding convention should the Commission specify?
(16) Should the Commission require the removal of any caps that were applied pursuant to § 43.4(h) after six months and thereby reveal the actual notional amount of any capped amounts once six months has passed? Would six months be long enough to mitigate any anonymity concerns?
The Commission proposes several changes to § 43.5(a). Current § 43.5(a) states that the time delay for the real-time public reporting of a block trade or LNOF begins upon execution, as defined in § 43.2. Current § 43.5(a) goes on to state that it is the responsibility of the registered SDR that accepts and publicly disseminates STAPD in real-time to ensure that the block trade or LNOF STAPD is publicly disseminated pursuant to part 43 upon the expiration of the appropriate time delay described in §§ 43.5(d) through (h).
The Commission proposes to change the reference to “public reporting” of a block trade or LNOF to “dissemination” thereof to reflect that reporting counterparties report STAPD to an SDR pursuant to part 43 but SDRs “disseminate” it by making such STAPD public. The Commission also proposes to remove references to LNOF transactions in § 43.5(a), and throughout part 43, to reflect that the Commission is proposing to establish, in § 43.5(c), discussed below in section II.E.3., a single time delay for public dissemination of STAPD of a swap with a notional or principal amount at or above the AMBS. The other proposed changes to § 43.5(a) are ministerial, conform to the proposed removal of §§ 43.5(c)-(h), or are discussed elsewhere in this NPRM.
As revised, proposed § 43.5(a) would state that the time delay for the real-time public dissemination of a block trade begins upon execution, as defined in § 43.2(a). Proposed § 43.5(a) would go on to state that it is the responsibility of the SDR that accepts and publicly disseminates STAPD in real-time to ensure that the STAPD for block trades is publicly disseminated pursuant to part 43 upon the expiration of the appropriate time delay described in § 43.5(c).
The Commission proposes to remove unnecessary text from § 43.5(b). Currently, § 43.5(b) uses a three-part description of the timing for a registered SDR to publicly disseminate STAPD that is subject to a time delay. Specifically, § 43.5(b) states that a registered SDR shall publicly disseminate STAPD that is subject to a time delay pursuant to this paragraph, as follows: (1)
As revised, proposed § 43.5(b) would state that an SDR shall publicly disseminate STAPD that is subject to a time delay precisely upon the expiration of the time delay period described in § 43.5(c).
The Commission proposes to remove current §§ 43.5(c)-(h) and add a new § 43.5(c) that requires SDRs to implement a time delay of 48 hours for disseminating STAPD for each applicable swap transaction with a notional or principal amount above the corresponding AMBS, if the parties to the swap have elected block treatment. Because the time delays in proposed § 43.5(c) would replace the time delays in current appendix C, the Commission also proposes to remove appendix C.
Current § 43.5(c) provides interim time delays for each PRST, not just block trades and LNOFs, until an AMBS is established for such PRST. The Commission adopted § 43.5(c) in case compliance with part 43 was required before the establishment of AMBSs.
Current §§ 43.5(d)-(h) phased in the various time delays for the dissemination of swap block trades and LNOFs over a one to two year period. The Commission believed when it adopted those regulations that “providing longer time delays for public dissemination during the first year or years of real-time reporting [would] enable market participants to perfect and develop technology and to adjust hedging and trading strategies in connection with the introduction of post-trade transparency.”
Current §§ 43.5(d)-(h) provide specific time delays for the public dissemination of STAPD by an SDR.
If a liquidity provider agrees to execute an outsize swap transaction, it likely will charge the counterparty the additional cost associated with hedging this transaction. In consideration of these potential outcomes, the Commission established the time delays for block trades and LNOFs to balance public transparency and the concerns that post-trade reporting would reduce market liquidity.
When the Commission adopted the block delays in 2012, it noted that commenters to the proposal recommended a range of time delays for public dissemination of block trades and LNOFs, including end-of-day, 24 hours, T+1, T+2, a minimum of four hours, and 180 days.
One commenter generally supported DMO's efforts to review public dissemination requirements in light of product liquidity, and asserted that DMO should consider whether there should be increased time delays for public reporting of block trades.
In response to a later-announced Commission review of its rules, a commenter expressed concern that, with respect to block trades, fifteen minutes is too short a window within which to execute large hedging programs, which typically take several days or even weeks to execute, and current block trade reporting delays do not give end-users sufficient flexibility for creating
DMO and the Commission did receive comments supporting the current, shorter, block delay. One commenter stated that the “delay periods governing block trades should be minimized to what is truly essential and the size thresholds should be similarly high to minimize opacity in the market.”
In particular, the Commission is receptive to concerns that market participants may generally seek to hedge their portfolios before the close of business on the day a swap is executed, which would seem to support an either 24-hour or end-of-day reporting delay. The Commission understands that there are many variables that influence the time a market participant may take to put on a hedge, including risk tolerance to a price change, the risk of information leakage, the asset class involved and perceived demand for the hedge from other market participants, as well as consideration of the deadlines imposed by other authorities.
A 48 hour time delay would extend, in each case, the time delay applicable to block trades or LNOFs pursuant to current §§ 43.5(d)-(g).
The Commission requests comment on all aspects of the proposed changes to § 43.5. In particular, the Commission requests comment on the following:
(17) The Commission understands that for many trades that meet the definition of a block trade, the hedging process is often completed as quickly as possible and typically by the end of the trading day in which the block trade is executed so that the liquidity provider can establish its profit or loss on the transaction. On the other hand, some block trades that are very large in size or have unique characteristics could take longer than a single trading period to hedge. To balance the competing interest of price discovery and allowing hedging to occur, should the Commission consider two delay periods? For example, would a 15 minute, one hour, end of day, or 24 hour time delay be appropriate for swaps that fall within a 67 percent to 90 or 95 percent of the total notional amount of transactions range, while block trades that exceed the higher level would have a 48 hour time delay? If so, what would be the appropriate ranges for the total notional amounts and time delay periods? The Commission invites comments on all aspects of the block delay, including how the Commission should analyze swaps in each asset class for the purpose of analyzing the block delay with respect to data sets and methodologies, among other factors.
In the Block Trade Rule, the Commission assigned swap contracts to “swap categories” for the purpose of applying a common AMBS to different swap transactions.
To create the swap categories, the Commission divided swap contracts into five asset classes: Interest rates; equity; credit; FX; and other commodity. The Commission then subdivided these asset classes into the various swap categories in § 43.6(b). The swap category criteria used by the Commission were intended to address the following two policy objectives: (1) Categorizing together swaps with similar quantitative or qualitative characteristics that warrant being subject to the same AMBS; and (2) minimizing the number of swap categories within an asset class in order to avoid unnecessary complexity in the determination process.
The Commission is concerned that some of the current swap categories include multiple swap transaction types that have different average notional amounts resulting in an AMBS for the swap category that has a disparate impact on swap transaction types that currently fall within the same swap category. For instance, current swap categories group together economically distinct swaps, such as interest rate swaps (“IRSs”) denominated in U.S. dollars (“USD IRSs”) and IRSs denominated in Japanese yen (“JPY
In publishing the Block Trade Rule, the Commission had to rely on a small, private data set limited to IRSs and credit swaps.
Although maintaining a limited set of swap categories is necessary, as a practical matter, to implement the block protocol and avoid excess complications and costs for market participants, the Commission believes that the AMBS for a swap category should be suited to the specific swap products in the swap category. Consequently, in some cases, the Commission is recommending increasing the number of swap categories to encompass smaller sets of swap transactions. The Commission preliminarily believes that the amendments to the categories proposed below would allow better tailoring of the block size to the profile of the swap transactions within the applicable swap category.
For the below analysis, Commission staff reviewed swap data from SDRs for a one-year period from May 2018 to May 2019 to develop swap categories that would generate block sizes suitable for the individual swap products in the category. The Commission then identified the proposed criteria discussed below as the most relevant for purposes of its analysis, for the reasons explained below. The Commission anticipates that these criteria would provide an appropriate way to group swaps with economic similarities while reducing unnecessary complexity for market participants in determining whether their swaps are classified within a particular swap category.
Current § 43.6(b)(1) sets forth the IRS categories. The current IRS categories are based on a unique combination of three currency groups and nine tenor ranges, for a total of 27 categories. The three currency groups are super-major currencies,
At the time the categories were adopted, the Commission recognized that using individual currencies would have correlated better with the underlying curves.
In reviewing the 2018-2019 STAPD, the Commission found that 15 currencies made up 96% of the total population of IRS trades. These 15 currencies are the currencies of Australia, Brazil, Canada, Chile, Czech Republic, the European Union, Great Britain, India, Japan, Mexico, New Zealand, South Africa, South Korea, Sweden, or the United States.
In light of the foregoing, for IRSs, the Commission proposes to establish separate swap categories for each combination of the 15 different currencies above
The Commission does not believe that the number of trades in currencies outside of the top 15 currencies in proposed § 43.6.(b)(1)(i)(A) is high enough to compute a reliable and robust AMBS. Therefore, the Commission is also proposing to create a 136th swap category, in § 43.6(b)(1)(ii), for IRSs that the Commission has preliminarily determined are relatively illiquid. This “other” category would include IRS transactions in currencies other than those of the 15 countries specified in proposed § 43.6(b)(1)(i)(A)(I)-(XV) and the nine tenors specified in § 43.6(b)(i)(B). The Commission is proposing to group these low liquidity swaps together and set their block size to zero, which would make each transaction in this swap category eligible for delayed dissemination.
Current § 43.6(b)(2) sets forth the credit swap categories. The current credit swap categories in § 43.6(b)(2) are based on combinations of three conventional spread levels and six tenor ranges, for a total of 18 swap categories. The current spread levels are: (1) CDSs with spread values under 175 bps; (2) CDSs with spread values between 175 and 350 bps; and (3) CDSs with spread values above 350 bps.
In the Block Trade Rule, the Commission noted that it believed the tenor and conventional spread categories sufficiently captured the variation in notional size that is necessary for setting AMBS.
At the time, the Commission noted that the tenor buckets generally resulted in separate categorization for on-the-run and off-the-run indexes for swaps in its CDS data set, but declined to use these designations for grouping CDSs into categories because: (i) The underlying components of swaps with differing versions or series based on the same method or index are broadly similar, if not the same, and indicate economic substitutability across versions or series; (ii) differences in the average notional amount across differing versions or series were explained by differences in tenor; and (iii) using versions or series as the criterion for CDS categories could result in an unnecessary level of complexity.
However, in analyzing 2018-2019 swap data from SDRs, the Commission now believes that CDS spreads may not be a consistent measure on which to base swap categories. Specifically, the Commission is concerned that products with similar spreads are not necessarily economically similar because all market participants may not calculate the same spread for a given product. In addition, a product's spread range can change, making it difficult for parties to be certain that they are eligible for block treatment.
Instead, the Commission has observed that most market participants trade specific credit products within specific tenor ranges. Based on its review of the swap data from SDRs, the Commission believes the most-traded CDS products are: (i) The CDXHY; (ii) iTraxx Europe, Crossover, and Senior Financials indexes; (iii) CDXIG; (iv) CDXEmergingMarkets; and (v) CMBX.
In light of the foregoing, the Commission is proposing to replace the current spreads and tenor ranges in §§ 43.6(b)(2)(i) and (ii) with the seven product types above and four to six year tenor ranges in setting the parameters of the various credit swap categories. The Commission is proposing to set the new credit asset class categories in § 43.6(b)(2) as: (i) Based on the CDXHY product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; (ii) based on the iTraxx Europe product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; (iii) based on the iTraxx Crossover product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; (iv) based on the iTraxx Senior Financials product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; (v) based on the CDXIG product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; (vi) based on the CDXEmergingMarkets product type and a tenor greater than 1,477 days and less than or equal to 2,207 days; and (vii) based on the CMBX product type.
The Commission does not believe the trade count outside of the products and/or tenor ranges proposed in § 43.6(b)(2)(i)-(vii) is high enough to compute a robust and reliable AMBS. Therefore, the Commission is proposing to add a swap category in § 43.6(b)(2)(viii) for credit swaps that trade at relatively low liquidity and set the block size for these illiquid credit swaps at zero, which would make each transaction in this swap category eligible for delayed dissemination.
Current § 43.6(b)(3) specifies that there shall be one swap category consisting of all swaps in the equity asset class. Unlike the other four asset class categories, the equity asset class contains no subcategories. The Commission adopted this approach in the Block Trade Rule based on: (i) The existence of a highly liquid underlying cash market for equities; (ii) the absence of time delays for reporting block trades in the underlying equity cash market; (iii) the small relative size of the equity index swaps market relative to futures, options, and cash equity index markets; and (iv) the Commission's goal of protecting the price discovery function of the underlying equity cash market and futures market.
The Commission has not learned of anything since the Block Trade Rule that would suggest there is not a highly liquid underlying cash market for equities and that the equity index swaps market is not still small relative to the futures, options, and cash equity index markets. Based on the foregoing, the Commission is not proposing to amend the equity asset class in § 43.6(b)(3).
Current § 43.6(b)(4) sets forth the FX swap categories. The current FX swap categories are grouped by: (i) The unique currency combinations of one super-major currency
In establishing the FX swap categories in § 43.6(b)(4)(i), the Commission believed that the categories would cover the most liquid currency combinations while minimizing complexity by using a small number of swap categories.
In reviewing the 2018-2019 swap data from SDRs, the Commission observed that almost 94% of the over 7 million FX swaps included USD as one currency in each swap's currency pair. Of these swaps, the top-20 currencies paired with USD were currencies from Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the European Union, Great Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Russia, South Korea, or Taiwan.
In light of the foregoing, the Commission proposes to replace the swap categories in § 43.6(b)(4) for FX swaps with new swap categories by currency pair. The Commission believes new swap categories would allow the Commission to generate AMBSs that address the needs of market participants trading these various swap products. Proposed § 43.6(b)(4)(i) would be comprised of FX swaps with one currency of the currency pair being USD, paired with another currency from one of the following: Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the European Union, Great Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Russia, South Korea, or Taiwan.
The Commission proposes to create a new category for FX swaps where neither currency in the currency pair is USD in proposed § 43.6(b)(4)(ii). Proposed § 43.6(b)(4)(ii) would be comprised of swaps with currencies from Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the European Union, Great Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Russia, South Korea, or Taiwan. As discussed further below in the discussion about amendments to the process to determine AMBS in section II.F.1.d., the Commission is proposing that parties to these FX swaps could elect to receive block treatment if the notional amount of either currency in the currency exchange is greater than the minimum block size for a FX swap between the respective currencies, in the same amount, and USD described in § 43.6(b)(4)(i).
The Commission does not believe there is sufficient trade count in FX swaps outside of the currency pairs proposed in § 43.6(b)(4)(i)-(ii) to compute a reliable and robust AMBS. Therefore, the Commission is proposing to add a swap category in § 43.6(b)(4)(iii) for FX swaps that trade at relatively low liquidity, and set the block size for these illiquid FX swaps at zero, which would make each transaction in this swap category eligible for delayed dissemination.
Current § 43.6(b)(5) sets forth the other commodity swap categories. The current other commodity swap categories are grouped by either (1) the relevant contract referenced in appendix B of part 43
The swap categories in § 43.6(b)(5)(i) differ from those in § 43.6(b)(5)(ii) in that the former may be economically related to futures or swaps that
The Commission noted in the Block Trade Rule that it was relying on DCMs' knowledge of, and experience with, liquidity in related futures markets until additional data became available.
The Commission proposes to establish swap categories for the other commodity swaps asset class based on the list of underliers in current appendix D to part 43. The Commission proposes to modify the list of underliers in current appendix D and to redesignate the appendix as appendix A as a result of the proposed removal of current appendices A through C. For swaps that have a physical commodity underlier listed in proposed appendix A to part 43, proposed § 43.6(b)(5)(i) would group swaps in the other commodity asset class by the relevant physical commodity underlier. The proposed list of underliers in appendix A would be based on broad commodity categories the Commission has identified from its review of the swap data from SDRs, rather than references to specific futures contracts.
For other commodity swaps outside of those based on the underliers in proposed appendix A, the Commission does not believe trade count is high enough to compute a robust and reliable AMBS. Therefore, the Commission is proposing to add a swap category in § 43.6(b)(5)(ii) for relatively illiquid other commodity swaps and set the block size for these swaps at zero.
The Commission adopted §§ 43.6(c)-(f) and (h) to establish a phased-in approach for determining AMBSs, with an initial period and a post-initial period for determining AMBSs and cap sizes for each swap category.
Regulation 43.6(c) sets forth the methodologies for the Commission to determine AMBSs and cap sizes using the PRSTs in the swap categories
In general, the instructions for each of the 50-percent, 67-percent, and 75-percent levels to calculate AMBSs and cap sizes require the Commission to select all PRSTs within a swap category using one year's worth of data, converting them to the same currency and using a trimmed data set, determine the sum of the notional amounts of swaps in the trimmed data set, multiply the sum of the notional amounts by 50, 67, or 75 percent, rank the results from least to greatest, calculate the cumulative sum of the observations until it is equal to or greater than the 50, 67, or 75-percent notional amount, select and round the notional amount, and set the AMBS equal to that amount.
For the initial period, the Commission applied the 50-percent notional amount calculation in § 43.6(c)(1) to determine the AMBS.
The Commission set the initial cap sizes as the greater of the interim cap sizes (the period of time before the initial period) in all five asset classes set forth in the 2012 RTR Final Rule and the AMBS for the respective swap category calculated pursuant to the 50-percent notional amount calculation.
The Commission is proposing several changes to the AMBS and cap size methodologies in § 43.6(c). First, the Commission is proposing to remove the 50-percent notional amount calculation in § 43.6(c)(1) because the 50-percent notional amount calculation was only intended to be used for calculating the AMBS for the interest rate and credit swap categories in the initial period,
The Commission is also proposing minor amendments to the calculations in current §§ 43.6(c)(2)-(3) (the 67-percent and 75-percent notional amount calculations, respectively). The Commission is proposing to update certain steps of the statistical calculations set forth in current §§ 43.6(c)(2)(i)-(ix), proposed to be re-designated as § 43.6(c)(1)(i)-(ix). Current § 43.6(c)(2)(i) requires the Commission to select all PRSTs within a specific swap category using a one-year window of data. As re-designated, proposed § 43.6(c)(1)(i) would require the Commission to select all reliable SDR data for at least a one-year period for each relevant swap category. The Commission believes this revision will simplify the language and clarify that the Commission will be using SDR data in its calculations.
Current § 43.6(c)(2)(ii) requires the Commission to convert to the same currency or units and use a trimmed data set but does not specify what is being converted. As redesignated, proposed § 43.6(c)(1)(ii) would clarify that the Commission will convert the notional amount to the same currency or units and use a trimmed data set. The Commission considers this to be a non-substantive amendment to improve the readability of step (ii) in the methodology.
As mentioned above in the discussion of the proposed amendments to the definition of “trimmed data set,” the Commission is also proposing to change the number of standard deviations used for excluding outliers in the data set. The current definition of “trimmed data set” has the Commission remove extraordinarily large notional transactions by transforming the data into a logarithm with a base of 10, computing the mean, and excluding transactions that are beyond four standard deviations above the mean.
As explained in the Block Trade Rule, trimming the data set is necessary to avoid the skewing of these measures, which could lead to the establishment of inappropriately high minimum block sizes.
Commission staff found a similar issue with four standard deviations for the other asset classes, but to a lesser extent than commodities, that the Commission preliminarily believes could be addressed by moving from four standard deviations to three. In each case, the Commission invites comment on staff's approach and findings with respect to the methodologies and accounting for outliers. Until then, the Commission is proposing updating the definition of “trimmed data set” to mean a data set that has had extraordinarily large notional transactions removed by transforming the data into a logarithm with a base of 10, computing the mean, and excluding transactions that are beyond two standard deviations above the mean for the other commodity asset class and three standard deviations above the mean for all other asset classes.
In the Block Trade Rule proposal, the Commission provided the following example to explain the rounding instructions in § 43.6(c)(2)(viii): “if the observed notional amount is $1,250,000, the amount should be increased to $1,300,000. This adjustment is made to assure that at least 67 percent of the total notional amount of transactions in a trimmed data set are publicly disseminated in real time.”
Current § 43.6(c)(2)(viii) directs the Commission to round the notional amount of the observation discussed in § 43.6(c)(2)(vii) “to” two significant
Finally, the Commission is proposing to replace the individual instructions for the 75-percent notional amount calculation contained in current § 43.6(c)(3) with a cross-reference in proposed § 43.6(c)(2) to the procedures set out in proposed § 43.6(c)(1). Since the steps for the calculations are the same, the Commission believes simply cross-referencing in proposed § 43.6(c)(2) the procedures in proposed § 43.6(c)(1) will help ensure that market participants do not believe the calculation procedures are different.
The Commission is proposing several amendments to the § 43.6 processes for determining AMBS. Current §§ 43.6(e) and (f) set forth the processes for the Commission to set the AMBS in the initial and post-initial periods by applying the methodologies in § 43.6(c) and using the PRSTs within the swap categories established pursuant to § 43.6(b).
For the initial period, § 43.6(e) established that the AMBS for PRSTs in the IRS category, credit swap category, FX swap category in § 43.6(b)(4)(i), and the other commodity category in § 43.6(b)(5)(i) or (ii) was the AMBS in appendix F to part 43.
Regulation 43.6(e)(3) provided an exception from treatment as block trades or LNOFs (as applicable) for PRSTs in the other commodity swap category in § 43.6(b)(5)(i) that were economically related to a futures contract in appendix B of part 43, if such futures contract is not subject to a DCM's block trading rules.
For the post-initial period, § 43.6(f) directed the Commission to establish, after an SDR collected at least one year of reliable data for a particular asset class, the post-initial AMBS, by swap categories.
Regulation 43.6(f)(4) directed the Commission to publish the post-initial AMBSs on its website and stated that the AMBSs would be effective on the first day of the second month following the date of publication.
Since the initial period has passed, the Commission is proposing to remove the regulations for the initial AMBS in current § 43.6(e) and appendix F, which, as described above, specifies the initial AMBSs for PRSTs in the swap categories specified in current § 43.6(e)(1). To avoid retaining § 43.6(e) in its regulations with no text other than “Reserved,” the Commission is proposing to re-designate § 43.6(f) as § 43.6(e) and rename it “Process to determine appropriate minimum block sizes.”
In new § 43.6(e), the Commission would be required to apply the 67-percent notional amount calculation to calculate new AMBS, as current § 43.6(f) specified for the post-initial period. Proposed § 43.6(e)(1) would state that the Commission shall establish AMBS, by swap categories, as described in § 43.6(e)(2)-(5). Proposed § 43.6(e)(2) would state that the Commission shall determine the AMBS for the swap categories described in §§ 43.6(b)(1)(i), (b)(2)(i)-(vii), (b)(4)(i), and (b)(5)(i) by applying the 67-percent notional amount methodology in proposed § 43.6(c)(1).
Proposed § 43.6(e)(3) would set forth a method for determining which block sizes are applicable to FX swaps. Proposed § 43.6(e)(3) would specify that the parties to a FX swap described in § 43.6(b)(4)(ii) may elect to receive block treatment if the notional amount of either currency would receive block treatment if the currency were paired with USD. In other words, for each currency underlying the FX swap, the counterparties would determine whether the notional amount of either currency would be above the block threshold if paired with USD, as described in § 43.6(b)(4)(i). If either notional amount paired with USD was greater than the block threshold, the swap described in § 43.6(b)(4)(ii) would qualify for block treatment.
As discussed above in section II.F.1., the Commission is proposing to set the block size of all swaps in the swap categories described in §§ 43.6(b)(1)(ii), (b)(2)(viii), (b)(4)(iii), and (b)(5)(ii) at zero and make all such swaps eligible to be treated as block trades in proposed § 43.6(e)(4). Finally, the Commission is proposing to remove current appendix F and specify in proposed § 43.6(e)(5) that the Commission would publish the AMBSs determined pursuant to § 43.6(e)(1) on its website at
The Commission is proposing to re-designate current § 43.6(g) as § 43.6(f) to reflect the consolidation of §§ 43.6(e) and (f) discussed above in section II.F.3. and avoid designating § 43.6(f) as reserved in the Code of Federal Regulations. Current § 43.6(g) sets forth the requirements for parties to notify their execution venue (
The Commission is proposing to revise the content of current § 43.6(g)(1)(i) (redesignated as § 43.6(f)(1)(i)) to clarify that parties to a PRST with a notional at or above the AMBS can elect to have the PRST treated as a block trade. As background, current § 43.6(g)(1)(i) requires the parties to a PRST that has a notional amount at or above the AMBS to notify the relevant SEF or DCM, as applicable, pursuant to the rules of such SEF or DCM, of their election to have the PRST treated as a block trade. As background, current § 43.6(g)(1)(i) requires the parties to a PRST that has a notional amount at or above the AMBS to notify the relevant SEF or DCM, as applicable, pursuant to the rules of such SEF or DCM, of its election to have the PRST treated as a block trade. The Commission intended for § 43.6(g)(1)(i)
As a result, to remove any ambiguity, proposed § 43.6(f)(1)(i) would state that if the parties make such an election, the reporting counterparty must notify the SEF or DCM.
Current § 43.6(g)(1)(ii) requires the execution venue (
The Commission is proposing to add new § 43.6(f)(1)(iii) to clarify that SEFs and DCMs may not disclose block trades prior to the expiration of the applicable dissemination delay. The Commission has previously explained that the dissemination delays in part 43 are intended to protect end users and liquidity providers from the expected price impact of the disclosure of block trades.
Current § 43.6(g)(2) states that reporting parties who execute an off-facility swap that has a notional amount at or above the AMBS shall notify the applicable registered SDR that such swap transaction qualifies as an LNOF concurrently with the transmission of STAPD in accordance with part 43. The Commission is proposing to revise § 43.6(g)(2), which would be re-designated as § 43.6(f)(2). The proposed amendments to § 43.6(g)(2) are similar to the proposed amendments to § 43.6(f)(1)(i). Specifically, the Commission is proposing to clarify that parties to a PRST that is an off-facility swap with a notional at or above the AMBS can elect to have the PRST treated as a block trade. Revised § 43.6(f)(2) would state that if the parties make such an election, the reporting counterparty must notify the SDR.
The Commission is proposing to re-designate current § 43.6(h) as § 43.6(g) in response to the consolidation of §§ 43.6(e) and (f) and to avoid designating § 43.6(f) as reserved in the Code of Federal Regulations, as discussed above in section II.F.3.
As a result of the proposed removal of § 43.6(h)(5), the Commission proposes to re-designate the current § 43.6(h)(6) aggregation provision as § 43.6(g)(5) rather than § 43.6(g)(6) and to make certain substantive changes to re-designated § 43.6(g)(5).
Current § 43.6(h)(6) generally prohibits the aggregation of orders for different accounts to satisfy minimum block trade size or cap size requirements but contains an exception for orders on SEFs and DCMs by certain commodity trading advisors (“CTAs”), investment advisers, and foreign persons performing a similar role or function. The Commission believed such a prohibition was necessary to ensure the integrity of block trade principles and preserve the basis for the anonymity associated with establishing cap sizes.
While the aggregation prohibition in current § 43.6(h)(6) is intended to incentivize trading on SEFs and DCMs, the Commission recognizes this incentive does not exist for swaps that are not listed or offered for trading on SEFs and DCMs.
Current § 43.6(h)(6)(ii) conditions the exception from the aggregation prohibition on a CTA, investment adviser, or foreign person having more than $25 million in assets under management. In adopting this condition, the Commission explained that the $25 million threshold would help ensure that persons allowed to aggregate orders were appropriately sophisticated, while at the same time not excluding an unreasonable number of CTAs, investment advisers, and similar foreign persons.
However, since the Block Trade Rule was adopted, the Commission has come to believe that the $25 million threshold may be excluding more participants from taking advantage of the exception than DMO staff initially expected. Therefore, the Commission is proposing to remove the $25 million threshold in current § 43.6(h)(6)(ii) and, therefore, to not incorporate that into proposed § 43.6(g)(5) as a condition, even though it was a condition of the relief in NAL 13-48.
Finally, the Commission is proposing several non-substantive changes throughout proposed § 43.6(g)(5). These changes include rephrasing the introductory text for clarity, updating cross-references, and specifying in proposed §§ 43.6(g)(5)(ii) and (iii) that the aggregated transaction is reported as a block trade, and the aggregated orders are executed as one swap transaction, respectively.
The Commission is proposing to re-designate § 43.6(i) as § 43.6(h) in response to the consolidation of §§ 43.6(e) and (f) to avoid designating § 43.6(f) as reserved in the Code of Federal Regulations, as discussed above in section II.F.3. In addition, to conform to the proposed revisions to § 43.6(h)—specifically the removal of the $25
The Commission requests comment on all aspects of the proposed changes to § 43.6. In addition, the Commission requests specific comment on the following:
(18) Would the proposed new other commodity categories be useful to SDRs and counterparties? Please explain why or why not.
(19) Are there other categories the Commission should add or remove for other commodities? Please explain any recommendations to add or remove a category.
(20) The Commission is proposing minor updates to the methodologies for calculating AMBS and cap sizes. Should the Commission consider other changes to the methodologies? Please provide examples and data, where possible.
The Commission is proposing several changes to § 43.7, which is a rule governing Commission delegation of certain authority to the DMO Director or such other employee or employees as the DMO Director may designate from time to time (“DMO staff”). The Commission is proposing to add a new paragraph (a)(1) that would delegate to DMO the authority to publish the technical specifications providing the form and manner for reporting and publicly disseminating the STAPD elements in appendix C as described in §§ 43.3(d)(1) and 43.4(a). If it chooses to, the Commission may, pursuant to § 43.7(c), which the Commission is not proposing to amend, exercise any authority delegated pursuant to proposed § 43.7(a)(1) (or any other authority delegated pursuant to § 43.7(a)) rather than permit DMO staff to exercise such authority.
Because there currently is a § 43.7(a)(1) (delegation of authority to determine whether swaps fall within specific swap categories as described in § 43.6(b)), the Commission is proposing to renumber existing § 43.7(a)(1) as § 43.7(a)(3).
The Commission is further proposing to renumber existing § 43.7(a)(2) (authority to determine and publish post-initial, AMBSs as described in § 43.6(f)) as § 43.7(a)(4) and to replace the reference to § 43.6(f) (the rule pursuant to which post-initial, AMBSs are determined) with a reference to § 43.6(e) to conform to the Commission's proposed movement of the cap size determination process itself from § 43.6(f) § 43.6(e). The proposed changes to post-initial AMBSs are discussed above in section II.F.3.
Additionally, the Commission is proposing to renumber existing § 43.7(a)(3) (authority to determine post-initial cap sizes as described in § 43.4(h)) as § 43.7(a)(2). Related to this, the Commission is proposing to delete the term “post-initial,” given that the Commission already determined initial cap sizes, and is proposing to replace the reference to § 43.4(h) (the rule pursuant to which post-initial cap sizes are determined) with a reference to § 43.4(g) to conform to the Commission's proposed movement of the cap size determination process itself from § 43.4(h) to proposed § 43.4(g). The proposed changes to post-initial cap sizes are discussed above in section II.D.4.
The Commission requests comment on all aspects of the proposed changes to § 43.7. The Commission also requests specific comment on the following:
(21) Do the Commission's proposed amendments to the current § 43.6(h) aggregation prohibition create any problems for market participants?
(22) Should the Commission retain the $25 million assets under management eligibility requirement? Please explain in detail why the Commission should or should not retain the eligibility requirement.
The Commission is proposing to remove the list of STAPD elements in appendix A to part 43 and revise the list to update it
Appendix A includes a description of each field, in most cases phrased in terms of “an indication” of the data that must be reported and disseminated and an example illustrating how the field could be populated. For example, the description of the “Asset class” field in table A1 of appendix A calls for an indication of one of the broad categories as described in § 43.2(e), and the example provided states IR (
In adopting appendix A to part 43, the Commission believed consistency could be achieved in the data, but intentionally avoided prescriptive requirements in favor of flexibility in reporting the various types of swaps.
As part of the Roadmap review, DMO announced its intention to propose a detailed technical specification for data fields.
In response, the Commission reviewed the data fields in appendix A
After completing this assessment, the Commission is proposing to list the STAPD elements required to be publicly disseminated by SDRs pursuant to part 43 in appendix C. In a separate NPRM, the Commission is proposing to list the swap data elements required to be reported to SDRs pursuant to part 45 in appendix 1 to part 45. The STAPD elements in appendix C would be a harmonized subset of the swap data elements in appendix 1 to part 45.
As appendix C would contain the list of STAPD elements required to be publicly disseminated by SDRs, the Commission notes that SDRs would need additional swap data elements reported along with these STAPD elements. These swap data elements include identifying information like the reporting counterparty, unique swap identifier (“USI”) or UTI, and the submitter. However, DMO will note these swap data elements separately in the technical specifications published on
At the same time as the Commission is proposing to update the STAPD elements in appendix C, DMO is publishing draft technical specifications for reporting the swap data elements in appendix 1 to part 45 to SDRs and for reporting and publicly disseminating the STAPD elements in appendix C to part 43. DMO is publishing the draft technical standards on
A discussion of the STAPD elements in appendix C required to be publicly disseminated by SDRs according to the technical standards follows below. In general, SDRs are already publicly disseminating most of this information. As the Commission is proposing that the part 43 STAPD would be a subset of the swap data elements, most of these data elements are discussed in more depth in the 2020 Part 45 NPRM.
As a preliminary matter, the Commission notes that the STAPD elements in appendix C do not include STAPD elements specific to swap product terms. The Commission is currently heavily involved in separate international efforts to introduce UPIs.
In addition, the Commission notes that it has endeavored to propose adopting the CDE Technical Guidance data elements as closely as possible. Where the Commission proposes adopting a CDE Technical Guidance data element, the Commission has proposed adopting the terms used in the CDE Technical Guidance. This means that some terms may be different for certain concepts. For instance, “derivatives clearing organization” is the Commission's term for registered entities that clear swap transactions, but the CDE Technical Guidance uses the term central counterparty.
To help clarify, DMO has proposed footnotes in the technical standards to explain these differences in at least four terms as well as provide examples and jurisdiction-specific requirements. However, the Commission has not included these footnotes in appendix C. In addition, the definitions from CDE Technical Guidance data elements included in appendix C sometimes include references to allowable values in the CDE Technical Guidance, which may not be included in appendix C but can be found in DMO's technical standards.
Finally, the CDE Technical Guidance did not harmonize many fields that would be particularly relevant for commodity and equity swap asset classes (
The Commission invites comment on any of the swap data elements proposed in appendix C. The Commission briefly discusses the STAPD elements below by category to simplify the topics for comment. To the extent any comment involves data elements adopted according to the CDE Technical Guidance, however, the Commission anticipates raising issues according to the CDE Governance Arrangements procedures to help ensure that authorities follow the established processes for doing so. In addition, the Commission anticipates updating its rules to adopt any new or updated CDE Technical Guidance.
The Commission is proposing to require SDRs to publicly disseminate one field related to clearing: Cleared (1). This data element is currently being publicly disseminated by SDRs according to the field in current appendix A “Cleared or uncleared.” The Commission requests specific comment on the following related to clearing data elements for public dissemination:
(23) Should the Commission publicly disseminate any additional data elements related to clearing, including the DCO where the swap is intended to be cleared? Please provide comment on any challenges market participants would face in reporting this information for PRSTs.
The Commission is proposing to require SDRs to publicly disseminate a custom basket indicator.
The Commission is proposing to require SDRs to publicly disseminate four data elements related to events.
The Commission is proposing to require SDRs to publicly disseminate eleven data elements related to notional amounts and quantities.
The Commission is proposing to require SDRs to publicly disseminate four data elements related to package transactions.
(24) The 2019 Part 45 NPRM requests specific comment on whether the Commission should adopt additional data elements related to package transactions according to the CDE Technical Guidance.
The Commission is proposing to require SDRs to publicly disseminate eight data elements related to payments.
The Commission is proposing to require reporting counterparties to report seventeen data elements related to swap prices for SDRs to publicly disseminate.
In the price category, the Commission is also proposing Post-priced swap indicator (59), in connection with the proposed rules permitting a delay for reporting PPS discussed above in section II.C.2.
The Commission is proposing to require SDRs publicly disseminate two data elements relating to products, and has included a placeholder data element for the UPI.
The Commission is proposing to require SDRs to publicly disseminate one field related to settlement: Settlement currency (80). Current appendix A contains a field for settlement currency.
The Commission is proposing to require SDRs to publicly disseminate seven transaction-related fields.
In connection with the data element for Execution timestamp (86), the Commission reminds reporting counterparties that execution timestamp is the date and time that the swap was executed,
The Commission requests comment on all aspects of the proposed STAPD elements in appendix C and DMO's proposed technical standards and validation conditions. The Commission also requests specific comment on the following:
(25) In the 2012 RTR Final Rule, the Commission stated that public dissemination was not “presently required” for among other types, swaps generated by portfolio compression exercises that would not provide price discovery benefits to the public. Since 2012, market participants have engaged in more complex activities, with some similarities to compression exercises, which are generally referred to as “risk reduction services.” The Commission understands that parties that facilitate risk reduction services, including SEFs, have reported under part 43 any new swaps that are created as the result of their risk-reduction services. Should the Commission require swaps resulting from risk reduction services be indicated using a unique identifier or flag on the real-time public tape to indicate the price may not reflect current market prices?
Market participants raised questions about the compliance schedules for the Commission's proposed reporting rule amendments in response to the Roadmap solicitations for public comment. Commenters raised various concerns about the compliance schedule. For instance, the SDRs requested that system updates that would result from any rule changes happen all at once.
One commenter noted the dependencies between different actors in changing systems and suggested that compliance dates take that into account.
The Commission understands that market participants will need a sufficient implementation period to accommodate the changes proposed in the three NPRMs. The Commission therefore expects that the compliance date for the rules that the Commission adopts as a result of each of the Roadmap NPRMs would be at least one year from the date that the last one of such final rulemakings is published in the
The Commission requests comment on all aspects of a one year compliance date.
The Regulatory Flexibility Act (“RFA”) requires federal agencies, in promulgating rules, to consider the impact of those rules on small entities.
Various proposed amendments to part 43 would have a direct impact on all reporting counterparties. These reporting counterparties may include SDs, MSPs, DCOs, and non-SD/MSP/DCO counterparties. Regarding whether non-SD/MSP/DCO reporting counterparties are small entities for RFA purposes, the Commission notes that section 2(e) of the CEA prohibits a person from entering into a swap unless the person is an eligible contract participant (“ECP”), except for swaps executed on or pursuant to the rules of
The Commission has analyzed swap data reported to each SDR
Based on the above analysis, the Commission does not believe that this proposal will have a significant economic impact on a substantial number of small entities. Therefore, the Chairman, on behalf of the Commission, pursuant to 5 U.S.C. 605(b), hereby certifies that the proposed rules will not have a significant economic impact on a substantial number of small entities.
The PRA of 1995
The Commission is proposing to amend information collection 3038-0070 to accommodate newly proposed and revised information collection requirements for swap market participants and SDRs that require approval from OMB under the PRA. The amendments described herein are expected to modify the existing annual burden for complying with certain requirements of part 43.
The Commission therefore is submitting this proposal to the OMB for its review in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. Responses to this collection of information would be mandatory. The Commission will protect proprietary information according to the FOIA and 17 CFR 145, “Commission Records and Information.” In addition, section 8(a)(1) of the CEA strictly prohibits the Commission, unless specifically authorized by the CEA, from making public “data and information that would separately disclose the business transactions or market positions of any person and trade secrets or names of customers.”
The Commission is proposing to amend § 43.3, which requires SEFs, DCMs, and reporting counterparties to report data to SDRs when entering into new swaps, or making certain changes to swaps, for SDRs to publicly disseminate. Existing § 43.3 requires reporting counterparties to send swap reports to SDRs as soon as technologically practicable after execution. The Commission is proposing to amend § 43.3(a)(4) to allow reporting counterparties more time to report PPS to SDRs. Currently, some entities report PPS using a placeholder price, and then send a swap report later amending the price. Those entities would experience a reduction in the number of swap reports they are required to send pursuant to § 43.3 under the proposal. The Commission estimates 50 SD/MSP reporting counterparties would reduce the number of PPS reports they report to SDRs by 100 reports per respondent annually, or 5,000 reports in the aggregate for an aggregate cost burden reduction of $24,197.
The Commission is also proposing to amend § 43.3 to establish new requirements for reporting prime brokerage swaps in § 43.3(a)(6). The proposed rules would establish that “mirror swaps” would not need to be publicly disseminated by SDRs. Reporting counterparties would continue to report mirror swaps to SDRs pursuant to part 45, but the amendment to § 43.3 would reduce the number of reports SDRs would be required to publicly disseminate according to § 43.4. The amendment to the requirement for SDRs in § 43.4 is discussed in the next section below.
The Commission is also proposing to create a new requirement in § 43.3(a)(5) for DCOs to report STAPD for clearing swaps that are PRSTs. The proposed change would increase the burden for no more than 14 DCOs that would need to report PRSTs, but would not affect the burden for the majority of 1,732 reporting counterparties required to report data ASATP after execution. As a result, the Commission is not proposing to amend the estimate for § 43.3 based on this change.
Existing § 43.3(h) requires timestamping by multiple entities. Existing § 43.4(h)(1) requires registered entities, SDs, and MSPs to timestamp real-time swap reports with the time they receive the data from counterparties, as applicable, and the time at which they transmit the report to an SDR. Registered entities, SDs, and MSPs then send these timestamps to the SDR. Existing § 43.3(h)(2) requires SDRs to timestamp the swap reports they receive from SEFs, DCMs, and reporting parties, and then timestamp the report with the time they publicly disseminate it. SDRs then place these timestamps on the reports they publicly disseminate. Existing § 43.3(h)(3) requires SDs and MSPs have to timestamp all off-facility swaps they report to SDRs. SDs and MSPs then report these timestamps to SDRs.
Removing § 43.3(h)(1) would reduce the amount of time SDs, MSPs, and registered entities spend reporting swap reports to SDRs, but would not amend the number of reports they send. Removing § 43.3(h)(2) would reduce the
As discussed above, existing § 43.3 requires reporting counterparties to send swap reports to SDRs as soon as technologically practicable after execution. The Commission is proposing to amend § 43.3 to establish new requirements for reporting prime brokerage swaps in § 43.3(a)(6). The proposed rules would establish that “mirror swaps” would not need to be publicly disseminated by SDRs. Reporting counterparties would continue to report mirror swaps to SDRs pursuant to part 45, but the amendment to § 43.3 would reduce the number of reports SDRs would be required to publicly disseminate according to § 43.4. The Commission estimates that the amendments would reduce the number of mirror swaps SDRs would need to publicly disseminate by 100 reports per each SDR, or 300 reports in the aggregate, which would reduce the cost burden by $1,451 in the aggregate.
The estimated updated reporting burden total for real-time public reporting would be as follows:
Estimated number of respondents: 1,732.
Estimated number of reports per respondent: 20,747.
Average number of hours per report: .07.
Estimated gross annual reporting burden: 1,206,508.
The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. The Commission will consider public comments on this proposed collection of information in:
1. Evaluating whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
2. evaluating the accuracy of the estimated burden of the proposed collection of information, including the degree to which the methodology and the assumptions that the Commission employed were valid;
3. enhancing the quality, utility, and clarity of the information proposed to be collected; and
4. reducing the burden of the proposed information collection requirements on registered entities, including through the use of appropriate automated, electronic, mechanical, or other technological information collection techniques,
Copies of the submission from the Commission to OMB are available from the CFTC Clearance Officer, 1155 21st Street NW, Washington, DC 20581, (202) 418-5160 or from
• The Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Desk Officer of the Commodity Futures Trading Commission;
• (202) 395-6566 (fax); or
•
Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rulemaking, and please refer to the
Section 15(a)
In this release, the Commission is proposing both substantive and non-substantive revisions and additions to existing regulations in part 43. Together, these proposed revisions and additions are intended to improve real-time public reporting for reporting counterparties, SEFs, DCMs, SDRs, and market participants that use real-time public data. The non-substantive amendments discussed above in this release do not have cost-benefit impact and are not discussed in this section.
Many of the proposed rule changes will likely affect a wide variety of proprietary reporting systems developed by SDRs and reporting entities. In many cases, SDRs and other industry participants are in the best position to estimate computer programming costs of changing the reporting requirements. Hence, while the Commission can provide broad ranges of estimates of the programming costs associated with the proposed rule changes, the Commission looks forward to receiving comments that will help refine those numbers. Regarding changes which require technical updates to reporting systems, where significant, CFTC staff estimated the hourly wages market participants will likely pay software developers to implement each change to be between $47 and $100 per hour.
Quantifying other costs and benefits, such as those resulting from changes in price transparency from a rule change, are inherently harder to measure. Such effects will be discussed qualitatively when quantitative measures are difficult to obtain. In addition, quantification of effects relative to current market practice may not be fully representative of future activity if participants adjust their trading behavior in response to rule updates. The Commission therefore specifically requests comment on the costs associated with this proposed rulemaking to help the Commission quantify such costs in the final rulemaking.
The Commission notes that the discussion in this section is based on the understanding that swap markets often extend across geographical regions. Many swap transactions involving U.S. firms occur across international borders; some Commission registrants are even headquartered outside of the United States, with the most active participants often conducting operations both within and outside the United States. Where the Commission does not specifically refer to matters of location, the discussion of costs and benefits refers to the proposed rules' effects on all swaps activity, 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 CEA section 2(i).
The Commission is proposing § 43.3(a)(4) to establish requirements for reporting PPSs, which the Commission proposes to define as off-facility swaps for which the price has not been determined at the time of execution. The Commission understands that PPSs can arise in a variety of settings. One possibility is for the price of the swap to be tied to a reference price that is not yet determined at the time of the trade; examples of this could include the daily settlement price of a stock index or crude oil futures or a benchmark such as the Argus WTI Midland price assessment.
The Commission is not able to clearly identify which swaps would be classified as PPSs under the new rules.
As discussed above in section II.C.2., proposed § 43.3(a)(4)(i) would permit reporting counterparties to delay reporting that are identified as PPSs to SDRs until the earlier of: (i) The price being determined; and (ii) 11:59:59 p.m. eastern time on the execution date. For Variable Terms Swaps for which the price is known at execution but some other term is left for future determination (
Another benefit of allowing delayed reporting of PPSs is that it would permit parties to hedge the positions they acquire in a more cost-effective way. For example, if a client asks an SD to take the long side of a large swap, the SD may be able to hedge that position with less price impact if other traders are unaware of the SD's hedging need. This ability to hedge while mitigating price impact can often translate to better pricing for the client. Thus, the Commission anticipates proposed § 43.3(a)(4) would decrease SDs' hedging costs, especially for large or non-standardized trades, improve customer pricing, and increase those clients' willingness to take positions.
The Commission is proposing regulation § 43.3(a)(4) to specify the requirements for how PPSs are to be reported. Notwithstanding the potential incremental costs identified above, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(a)(4), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(26) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(27) Are there alternatives that would generate greater benefits and/or lower costs?
(28) What percentage of PPSs have their prices determined by midnight on the date of execution (by asset class and overall)? What percentage of Variable Terms Swaps have their prices determined by midnight on the date of execution (by asset class and overall)? Do market participants have trouble reporting, and do SDRs have difficulty disseminating, PPS trades, because the placeholder terms of the swaps (including, but not limited to, placeholder values such as zero or blank fields) are inconsistent with SDRs' allowable values?
(29) Do market participants have an estimate for the number of swaps that may shift to PPS if the Commission grants PPS a reporting delay?
The Commission is proposing § 43.3(a)(5) to add DCOs to the reporting counterparty hierarchy for clearing swaps that are publicly reportable. DCOs are not typically the entities that are required to report information under part 43, since swaps associated with the clearing process (
The Commission is proposing § 43.3(a)(5) to add DCOs to the required reporting hierarchy for clearing swaps. Notwithstanding the anticipated incremental costs identified above, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(a)(5), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(30) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(31) Are there alternatives that would generate greater benefits and/or lower costs?
(32) Are there additional situations in which a DCO would be the reporting counterparty to a PRST that the Commission has not considered? Please specify any scenarios, along with the frequency with which they occur. Would these scenarios result in additional costs for DCOs if the Commission were to require DCOs to be the reporting counterparties?
(33) What are the costs of requiring DCOs to report clearing swaps that are PRSTs? Please specify all expected one-time and ongoing compliance costs. What are the reporting costs faced by the parties that are reporting these trades under the current regulations?
The Commission is proposing § 43.3(a)(6) to establish requirements for reporting a certain subset of prime brokerage swaps. These prime brokerage swaps result from an agency agreement between a prime broker and a customer, pursuant to which a prime broker agrees to serve as a swap counterparty to the customer on terms negotiated by the customer with third parties, often referred to as executing brokers (or executing dealers). This arrangement is possible, provided that the terms of the swap fall within acceptable parameters set forth in the agency agreement.
To illustrate proposed § 43.3(a)(6) and consider its costs and benefits, the Commission will focus on what it understands to be the simplest type of prime brokerage swap.
Because the prime broker is a counterparty to both a trigger swap and a mirror swap, it has two offsetting exposures that should leave it market risk neutral. The prime broker does, however, take on counterparty credit risk from both the client and the executing broker.
The current part 43 rules and, in particular, the definition in § 43.2 of PRST, do not expressly address mirror swaps or trigger swaps. As a result, the Commission is concerned that this reporting is inconsistent today. In particular, the Commission is concerned that mirror swaps are currently under-reported because market participants—acting on the belief that reporting mirror swap terms duplicative of those already reported for the corresponding trigger swap would distort price discovery,
Pursuant to proposed § 43.3(a)(6)(i), an SDR would not need to publicly disseminate a mirror swap, but the swap would still be reported to an SDR pursuant to part 45; in contrast, the trigger swap would both publicly disseminated by an SDR pursuant to part 43 and reported to an SDR pursuant to part 45. This would result in different reporting regimes for mirror swaps than for other swaps used to hedge exposure.
The Commission preliminarily believes that proposed § 43.3(a)(6) also would benefit market participants who monitor the public tape (likely some of the most active participants) by preventing duplicative mirror swaps that reflect the same economic terms as trigger swaps.
While the Commission's analysis has focused on plain vanilla mirror swaps in this section, it notes that some mirror swaps do not contain the same economic terms as the trigger swap. There may be mirror swaps in which there are multiple trades that comprise the mirror side for a single trigger swap. In these cases, the public will not learn about the multiple mirror swaps which have an aggregate notional amount that is equal to the trigger swap. This, as with other examples, has the potential to reduce the level of transparency for a specific subset of trade activity, though the trade activity is in part duplicative of other swaps visible to the market.
Furthermore, eliminating reporting for mirror swaps could incentivize the use of more complex mirror swaps to avoid public reporting, increasing the possibility of more complicated, risky swaps being created. The Commission expects such risk to be minimal, however, given that all swaps associated with prime brokerage transactions will still be reported to SDRs pursuant to part 45.
The Commission is proposing § 43.3(a)(6) to establish requirements for reporting prime brokerage swaps. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(a)(6), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(34) Are there additional costs or benefits that the Commission should
(35) Are there alternatives that would generate greater benefits and/or lower costs?
(36) Can the double-reporting concerns be addressed by the alternative of adding an additional reporting field to indicate if a swap is a trigger or a mirror? If so, what are costs and benefits of this alternative approach relative to what is being proposed?
(37) How common are mirror swaps? What percentage are “plain vanilla” as characterized above as compared to more complex scenarios? What would the cost-benefit differences be between plain vanilla and non-plain vanilla mirror swaps?
Current § 43.3(d)(1) and (2) (which would be relocated to § 43.3(c)(1) and (2)) specify the format in which SDRs must make STAPD available to the public; in addition, current rules require that the disseminated data must be made “freely available and readily accessible” to the public. Substantively, the Commission is proposing to amend these requirements by specifying that SDRs shall make such data available for at least one year after dissemination, and provide instructions on how to download, save, and search the data. While current § 43.3(d) is silent on how long SDRs must maintain and provide the public access to swap data and does not require SDRs to provide instructions on how to download, save, and search the data, for baseline purposes of this cost-benefit consideration the Commission, as noted above in section II.C.7., understands a one-year time frame is current practice for at least a majority of SDRs. To the extent the baseline might be less than one year by an SDR, proposed § 43.3(c)(1) would increase the transparency of swap data to the public. Finally, in practice, the cost of the change is expected to be negligible, because SDRs are already making the public reports available for more than one year.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(c). Please provide data, statistics, or other supporting information for positions asserted.
The Commission is proposing § 43.3(d), which would require reporting counterparties, SEFs, and DCMs, when reporting STAPD to an SDR, to: (i) Use the technical standards as instructed by the Commission; (ii) satisfy SDR validation procedures; and (iii) use the facilities, methods, or data standards provided or required by the SDR.
The standardization of STAPD reported to and publicly disseminated by SDRs has improved over recent years at each SDR. However, the Commission believes market participants would now benefit from having publicly disseminated STAPD standardized across SDRs. To do so, the Commission is proposing to further specify the STAPD elements to be reported to and publicly disseminated at SDRs. While SDRs are already accepting and publicly disseminating most of the information in appendix C, the Commission believes standardization could be improved by updated, more specific definitions.
The Commission proposed SDR data validation requirements in the 2019 part 49 NPRM. Proposed § 43.3(d) would require reporting entities to satisfy the SDR data validation procedures. Since proposed § 43.3(d)(2) is closely related to proposed § 43.3(f), discussed below, the Commission views its discussion of the cost and benefits of § 43.3(f) equally applicable here and incorporates it by reference.
Most significantly, market participants are likely to benefit from the increased standardization of information, because of the added assurance that information publicly reported by one SDR is fully consistent with swap information published by another. This increased consistency will afford market participants a more easily-accessible, accurate view of activity across all Commission regulated swap markets. The Commission expects the general public would also benefit when the information is combined across SDRs to produce reports related to general swaps market activity.
Along with the expected benefits that will arise from the standardization and uniformity of existing information reported in real-time, the Commission expects additional benefits related to the new STAPD elements proposed in appendix C. For example, there is a new data element allowing users to identify PPSs or if the swap transaction is considered a bespoke swap. This additional information will allow for additional options in processing and studying the market information.
Because many of the changes SDRs would make to comply with part 43 will likely also allow it to comply with part 45, the Commission anticipates significantly lower aggregate costs relative to the costs for parts 43 and 45 separately. For this reason, the costs
Based on conversations with CFTC staff experienced in designing data reporting, ingestion, and validation systems, Commission staff estimates the cost per SDR to be in a range of $141,000 to $500,000.
For reporting entities, the Commission estimates the cost per reporting entity to be in a range of $23,500 to $72,500.
The Commission is proposing § 43.3(d) to address how data is reported to SDRs. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(d), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(38) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(39) Are there alternatives that would generate greater benefits and/or lower costs?
The Commission is proposing § 43.3(f) to establish requirements for SDRs to validate real-time public data and send SEFs, DCMs, and reporting counterparties data validation acceptance or rejection messages.
The proposed validation requirements are designed to ensure collected information is accurate. The data validation process would require close communication between the reporting entity and the SDR and would cover data reported pursuant to both parts 43 and 45. To date, the Commission has not required the use of validations by the SDR and therefore has not provided any guidance on either the content or format of the messages associated with these validations.
While this change would require SDRs and reporting entities to update their systems, the Commission expects that, for the majority of swaps, validations would greatly increase the standardization of reporting requirements, so reporting entities could ensure that the updated systems would consistently pass the validation tests.
Furthermore, the Commission expects benefits to result from improved communication between SDRs and reporting entities due to this data validation requirement. Finally, since the Commission is also proposing similar data validation requirements for part 45 swap data, along with the currently proposed changes to part 49, the Commission expects reporting parties will benefit from having harmonized regulatory requirements.
Costs may differ between SDRs and reporting parties. With respect to SDRs, the Commission expects the costs of this rule change to be higher for SDRs with a larger share of uncleared swaps. These swaps tend to be less standardized and therefore have a higher degree of reporting complexity. The Commission also expects costs to increase with the number of distinct reporting entities as the SDR will be required to set up lines of communication with each entity. For SEFs, DCMs, and reporting counterparties, the Commission expects costs to be higher for reporting parties not able or willing to build automated systems, as they would need to manually determine why a rejection message exists and then manually resubmit the corrected information. However, the Commission expects that these costs, for both the SDR and reporting entities, would be mitigated by the introduction of technical standards, as standardized reporting by all reporting entities should reduce the frequency of errors in reporting.
The Commission is proposing § 43.3(f) to establish requirements for SDRs to validate real-time public data. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.3(f), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(40) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(41) Are there alternatives that would generate greater benefits and/or lower costs?
(42) What would the costs be (both initial and on-going) for establishing and maintaining automated validation systems? What percentage of reporting entities would establish and maintain automated systems to manage validations? Please provide information on the basis for those estimates.
The Commission is proposing to revise § 43.4(f) to amend the rules for rounding actual notional or principal amounts of a swap before disseminating such swap data. Amended § 43.4(f)(8) would require SDRs to round such that the revealed amount is more precise. For example, trades with notional principal amount less than 100 billion but equal to or greater than one billion, we currently require rounding to nearest billion, and the new requirement is for rounding to the nearest 100 million. Similarly, amended § 43.4(f)(9) would require SDRs to round to the nearest 10 billion (the current requirement is to the nearest 50 billion) notional for principal amounts greater than 100 billion before disseminating such swap data.
The reason the Commission requires SDRs to disseminate rounded notional or principal amounts of swaps is to conceal the exact notional of swap transactions to preserve the anonymity of specific large trades. Such concealment may be beneficial, since disseminating the exact notional of a swap could allow the public to discern the identity of the parties. For example, a very specific notional amount may be attributable to a specific counterparty, as may a very large trade, given that large trades are rare for most instruments.
The Commission is proposing § 43.4(f) to amend the rules for rounding actual notional or principal amounts of a swap. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits following from increased transparency and the minimal increase in cost to market participant.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.4(f), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(43) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(44) Are there alternatives that would generate greater benefits and/or lower costs?
(45) Would benefits be greater or costs reduced if the ranges covered by rounding and the round-off amounts were currency-specific (
(46) What are the costs and benefits to alternative mechanisms to choose the currency-specific rounding amounts? For example, should all amounts be in USD equivalents, and then apply the same rounding as USD?
The Commission is proposing to amend § 43.4(g) to change the process for determining cap sizes. Proposed § 43.4(g)(2) would link the cap determination to a subset of newly defined swap categories in proposed § 43.6 and establish the use of the 75-percent calculation described in proposed § 43.6(c)(2). Proposed §§ 43.4(g)(3)-(8) would define new cap sizes for any swap not falling into a swap category defined in proposed § 43.4(g)(2). Proposed §§ 43.4(g)(9)-(10) would focus on how the Commission would publish any cap size revision and determine when it becomes effective.
Cap sizes effectively results in a permanent truncation of notional values released to the public and are meant to apply to the largest trades within a defined swap category. This truncation necessarily results in a less transparent market, but is meant to protect sensitive information and mitigate the potential negative impact of real-time public reporting on market liquidity.
Due to their permanence, caps could have a more significant effect on information dissemination compared to blocks, which allow for only a delay in reporting. Current § 43.4(h) defines current cap sizes by asset class and delineates them in USD notional amounts. For example, there currently are three fixed cap sizes for IRSs in § 43.4(h)(1)(i) based on tenor: Caps of 250 million USD for swaps with a tenor of zero to two years; 100 million USD for swaps with a tenor of two to ten years; and 75 million USD for swaps with a tenor greater than ten years. The remaining asset classes currently have a single fixed cap size: 100 Million USD for CDSs; 250 million USD for equity swaps and foreign exchange; and 25 million USD for other commodity swaps.
As discussed, the Commission is proposing new swap categories and the use of a higher percentage to calculate AMBSs.
The Commission reviewed the current cap sizes and found significant differences in the percentage of trades that are eligible for cap treatment, both within and across the main asset classes. This reflects the fact that within asset classes, the vast majority of swaps have the same cap size across all trade tenor groups.
Determining the effect of the change in cap determination methodology requires some assumptions. For example, an assumption that the determination change does not affect the distribution of trade sizes is critical to quantifying that effect. Under the assumption that the distribution of trade sizes is invariant to defined limits, the Commission calculated some rough estimates of the effect of the limit changes, based on trading from late 2019.
Overall, the Commission finds the effect to be a modest decrease in the number of trades eligible for cap treatment. Nearly 90% of trades were smaller than minimum cap size under the old methodology, and will remain so under the new methodology. Commission staff found approximately 2% of trades were larger than minimum cap size under the old methodology, and would be larger than minimum cap (and hence minimum block) size under the new methodology. Roughly 7% are cap eligible under the current methodology, but will no longer be under the new methodology. A little more than 1% of trades were large than minimum cap size under the old methodology, and will be larger than minimum block (but not cap) size under the new methodology.
The Commission expects somewhat larger effects in the index CDS class. For example, for CDS indices based on investment grade indexes, 22% of trades are eligible for cap treatment under the current methodology, while under the new cap determination methodology this would be reduced to 3% of trades.
Both the costs and benefits of increasing or decreasing cap sizes result from the increased or decreased, respectively, anonymity they afford. To
The Commission is proposing § 43.4(g) to change the process for determining cap sizes. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.4(g), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(47) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(48) Are there alternatives that would generate greater benefits and/or lower costs?
(49) Would benefits be greater or costs reduced if the 75-percent notional amount calculation method was replaced with an alternative method to identifying the cap threshold? Should there be a different method applied to caps and blocks since they are designed to accomplish different objectives? If so, please explain and provide supporting data or other information.
(50) For the other commodity swap category (for which swaps are often measured in physical units), swaps have a block size equal to zero, and there is a fixed cap size denominated in USD notional. For such swaps, what are the costs to SDRs to convert the notional amount into USD to determine whether the trade meets the cap threshold?
The Commission is proposing § 43.5(c) to increase the delay for the public dissemination of block trades to 48 hours for all block transactions. This time delay would be a significant change from the current rules, which set the length of the delay based on transaction and counterparty characteristics.
The Commission is proposing § 43.5(c) to increase the delay for public dissemination of block trade information. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.5(c), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(51) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(52) Are there alternatives that would generate greater benefits and/or lower costs?
(53) Should the Commission expect the distribution of costs and/or benefits to significantly vary across swap categories? If so, please provide specific examples and a discussion of the differences.
(54) What is the hedging cost savings from delaying the revelation of large trades? Could similar savings be realized in any swap category if the delay was less than 48 hours?
(55) What factors make it more or less likely that intermediaries will pass hedging cost savings resulting from delaying the revelation of large trades to their clients?
(56) What costs (
The Commission is proposing a number of revisions to § 43.6. The most economically significant revisions of these relate to block trades; revising the set of swap categories in § 43.6(b) and amending to the process for determining the AMBS in § 43.6(e). The remaining changes proposed in § 43.6 are not substantive and are clarifying changes, so the Commission has not described the costs and benefits of such proposed changes.
In general, changes in minimum block sizes, cap sizes, and reporting delays have broadly similar effects. Lower minimum block and cap sizes and longer reporting delays reduce transparency, and may increase liquidity.
As detailed below, the revisions would lead to changes that would result in assigned block sizes that better reflect trading patterns in individual swap categories. Specifically, the categories of swaps used in the minimum block size determination have been revised to better ensure that each category is more homogenous in terms of typical trade sizes. For example, under the current rule, rate swaps are placed into three groups based on currency (super-major, major, and non-major), and each group is divided into nine subgroups based on tenor (with the shortest tenor bucket representing swaps of less than 46 days and the longest tenor bucket representing swaps of greater than 30 years).
The proposed rule, in contrast, would define 15 currency-specific groups, each with the same nine tenor subgroups. This more granular bucketing allows for more targeted block levels; for instance, this allows block levels for the most active USD IRS products to differ from levels for the still active, but slightly less common JPY or GBP IRS products, where trade sizes are lower. All currencies not within the list of 15 would have a block size of zero—essentially allowing this small subset of IRS to receive full block treatment.
For CDSs, the new swap categories would no longer be based on observed spreads with multiple tenor groups, but would be based on well-defined products (
Swap categories in the FX asset class would include a list of 22 currencies exchanged for USD along with the set of 180 swap categories comprised of each unique combination of exchanges of these 22 currencies.
Revised § 43.6(e) contains amendments to the process for determining the AMBS for each new swap category defined in § 43.6(c). For each swap category, the 67-percent notional amount calculation based on one year of transactions would be performed for a subset of swap categories. The minimum size for a subset of swaps in the FX asset class that have no reference to USD would be based on a method to identify the AMBS based on two swap categories, with each side paired with USD. Finally, a subset of swap categories would have a block size of zero.
The swap category changes combined with the new 67-percent notional amount calculation would significantly change the number of trades eligible for block status; we discuss the costs and benefits to these changes below. The Commission reviewed the current block sizes and found significant differences in the percentage of trades that are eligible for block treatment, both within and across the main asset classes. This reflects the fact that within asset classes, the vast majority of swaps have the same block size across all trade tenor groups.
One further implication of the proposed amendments to the process for determining the AMBS in § 43.6(e) relates to trading rules for made available for trading (“MAT”) instruments. The Commission requires that instruments that have been MAT be traded on SEFs or DCMs using specific trading protocols (
The proposed amendments to § 43.6(e) would result in a block size of zero for many of the swaps not in the most liquid swap categories. This would result in 100% of many types of swaps (
The Commission expects that the change in swap categories would define block sizes with respect to categories that are more granular than the current swap categories, which would then better reflect current trading patterns for each type of swap. For example, USD
The Commission expects that the proposed 67-percent notional amount calculations would enhance transparency in the market by decreasing the number of trades eligible for block treatment and therefore result in delayed reporting. The increased percentile (from 50 to 67) would result in a smaller set of swaps eligible for block treatment and therefore would increase real-time market reporting, leading to increased accuracy in the real-time tape. However, because the average size of block trades would generally increase under the proposed rules, the Commission proposes to pair this change with an extension to the reporting delay (in some cases from 15 minutes to 48 hours). The Commission believes this longer delay is more appropriate given the larger notional size; because the primary reason for the delay is to ensure that the dealing counterparty is able to hedge out the risk taken in the trade, a larger average trade size would imply a greater needed time for trade hedging.
The Commission expects these costs to vary by asset class and the activity level of the reporting entity, though the more granular bucketing of block categories is aimed to ensure that cost variations across asset classes are mitigated. Costs may also differ by reporting entity depending on the type of cost. For instance, the Commission expects SDs and end-users specializing in a single swap category to face smaller operational costs relative to dealers who operate across multiple swap categories, given they would only have to adjust their operational systems (where necessary) for specific swap categories. However, if transaction/hedging costs are affected by the changes in the block threshold, hedging may be easier (and thus costs lower) for dealers active in a number of markets, who therefore have a wider set of potential hedging instruments. Finally, depending on how trade prices are determined, the costs attributed to the dealer above may actually be passed on to the end-user/client in the form of increased spreads.
The Commission is proposing § 43.6(e) to adjust the process for determining the AMBS. Notwithstanding the anticipated incremental costs, the Commission preliminarily believes this change is warranted in light of the anticipated benefits.
The Commission requests comment on its consideration of the costs and benefits of proposed § 43.6(e), including regarding issues and questions specifically identified below. Please provide data, statistics, or other supporting information for positions asserted.
(57) Are there additional costs or benefits that the Commission should consider? If so, please identify and, where quantifiable, provide data or other information to assist the Commission in quantifying them.
(58) Are there alternatives that would generate greater benefits and/or lower costs?
(59) What is the increased cost due to earlier revelation of trades that will no longer be subject to block treatment?
(60) From an economic perspective, are there additional swap categories that should be considered that would significantly change the cost and benefits?
(61) Would benefits increase or costs decrease if the sample used to calculate AMBS excluded some parts of the year that might have uncharacteristic trading patterns (
(62) Would benefits increase or costs decrease if the Commission adopted a flexible method to evaluate AMBS and adjust accordingly to reflect changes in trading patterns? Please provide information regarding the basis of those estimates.
Section 15(a) of the CEA requires the Commission to consider the costs and benefits of the proposed amendments to part 43 with respect to the following factors: Protection of market participants and the public; efficiency, competitiveness, and financial integrity of markets; price discovery; sound risk management practices; and other public interest considerations.
As discussed above, the proposed amendments to part 43 include changes that reflect what the Commission has learned about the technical aspects of reporting, as well as changes that permit longer delays or more opacity in reporting under some circumstances. The Commission expects that this, along with the data validation requirements in proposed § 43.3(f), would increase the reliability of part 43 data.
A discussion of these proposed amendments in light of section 15(a) factors reflecting all of the proposed changes is set out immediately below.
The Commission preliminarily believes that reporting requirements designed to enhance transparency empower market participants by informing them, in real-time, about the price of a broad set of swap products. This real-time information helps protect these participants from transacting at prices significantly different than the prevailing market. In addition, the Commission preliminarily believes that enhanced transparency allows for better monitoring of the quantity, and size, of market transactions leading to improved protection of market participants and the public. As discussed above, some of the changes increase transparency, such as general increases in block sizes and improvements in reported data, while other changes reduce transparency, such as delayed block reporting. However, the changes proposed herein which potentially reduce transparency may
Real-time reporting of transactions affects the efficiency of markets by quickly providing new information to all market participants in a standardized manner. This real-time information, which is publicly accessible, allows prices to rapidly and efficiently adjust to the prevailing trading conditions. To the extent that these proposed rules reduce the cost of information gathering and processing, market efficiency should be improved. Increasing the threshold size of block trades may have an ambiguous effect on market efficiency. It may improve market efficiency by countering potential front-running may lead to larger bid/ask spreads. However, it may harm market efficiency in that market participants will learn about some trades later because of this proposed rule. In the aggregate, the Commission preliminarily believes the proposed rule will weigh in favor of market efficiency.
Improvements to real-time reporting may also enhance competition as parties may learn about the prices and venues where potential counterparties are executing their transactions. As such, swaps markets may become more competitive since parties will have access to the prices that most participants are transacting at and will be able to use this information during their negotiations.
The rule changes, through their effects on transparency, can affect the financial integrity of markets because market participants can verify that they are transacting at or near prevailing market prices. In addition to transparency, the proposed changes to part 43 might affect financial integrity in other ways. In particular, the Commission preliminarily believes that more accurate STAPD would lead to greater understanding of liquidity and market depth for market participants executing swap transactions. Amendments that result in improved part 43 STAPD being made available to the public would expand the ability of market participants to monitor real-time activity by other participants and to respond appropriately.
Section 2(a)(13) of the CEA requires that STAPD be made publicly available. The CEA and the Commission's existing regulations in part 43 implementing CEA section 2(a)(13) also require STAPD to be made available to the public in real-time. As with the swap data reported for use by regulators pursuant to section 4r of the CEA and the Commission's part 45 regulations implementing CEA section 4r, the Commission believes that inaccurate and incomplete STAPD hinders the use of the STAPD, which harms transparency and price discovery. At least two publicly available studies discuss past problems with the current part 43 data. The Commission preliminarily expects that market participants would be better able to analyze STAPD as a result of the proposed amendments, because the proposed amendments would make STAPD more accurate and complete. The Commission expects price discovery to be improved with proposed changes to clearing swaps and avoiding duplicative reporting of mirror swaps.
On the other hand, some aspects of the proposed rules may dampen price discovery relative to the status quo baseline. Specifically, if proposed § 43.4(a)(4) encouraged more PPSs, then the proposal may also reduce price discovery because fewer trades would have prices that are known at the time of execution.
The Commission does not know exactly how market participants will adapt and evolve due to the proposed rule changes. However, the Commission preliminarily believes that the proposed rule will improve price discovery in aggregate.
The Commission preliminarily expects that allowing reporting parties a greater ability to delay reporting would, in some circumstances, enable more effective hedging. In particular, SDs may have greater ability to manage the risk they take on when accommodating customer trades. This in turn may allow such customers access to better terms for hedging their risk, especially if they want to hedge a large amount of risk.
More accurate part 43 data would be helpful to researchers who might use it to improve the public's understanding of how swap markets function with respect to market participants, other financial markets, and the overall economy. Further, better and more accurate data would likely improve the Commission's regulatory oversight and enforcement capabilities. The Commission requests comment on all aspects of the analysis of these five factors. In addition, the Commission requests specific comment on the following:
(63) Are there other effects on these five factors that are likely to result from the proposed rule changes? Please provide quantification if possible, along with information regarding the basis of that quantification.
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 objectives of the CEA, in issuing any order or adopting any Commission rule or regulation.
The Commission does not anticipate that the proposed amendments to part 43 would result in anti-competitive behavior. However, the Commission encourages comments from the public on any aspect of the proposal that may have the potential to be inconsistent with the anti-trust laws or anti-competitive in nature.
Real-time public swap reporting.
For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 43 as set forth below:
7 U.S.C. 2(a), 12a(5), and 24a, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (Jul. 21, 2010), unless otherwise noted.
The revision reads as follows:
(b)
(a)
(1) With respect to an off-facility swap, a publicly reportable swap that has a notional or principal amount at or above the appropriate minimum block size applicable to such swap; and
(2) With respect to a swap that is not an off-facility swap, a publicly reportable swap that:
(i) Involves a swap that is listed on a swap execution facility or designated contract market;
(ii) Is executed on the trading system or platform, that is not an order book as defined in § 37.3(a)(3) of this chapter, of a swap execution facility or occurs away from a swap execution facility's or designated contract market's trading system or platform and is executed pursuant to the swap execution facility's or designated contract market's rules and procedures;
(iii) Has a notional or principal amount at or above the appropriate minimum block size applicable to such swap; and
(iv) Is reported subject to the rules and procedures of the swap execution facility or designated contract market and the rules described in this part, including the appropriate time delay requirements set forth in § 43.5.
(1) To which a prime broker is a counterparty or both counterparties are prime brokers;
(2) That is executed contemporaneously with a corresponding trigger swap;
(3) That has identical terms and pricing as the contemporaneously executed trigger swap (except that a mirror swap, but not the corresponding trigger swap, may include any associated prime brokerage service fees agreed to by the parties and except as provided in the final sentence of this “mirror swap” definition);
(4) With respect to which the sole price forming event is the occurrence of the contemporaneously executed trigger swap; and
(5) The execution of which is contingent on, or is triggered by, the execution of the contemporaneously executed trigger swap. The notional amount of a mirror swap may differ from the notional amount of the corresponding trigger swap, including, but not limited to, in the case of a mirror swap that is part of a partial reverse give-up;
(i) The aggregate notional amount of all such mirror swaps to which the prime broker that is a counterparty to the trigger swap is also a counterparty shall be equal to the notional amount of the corresponding trigger swap and
(ii) The market risk and contractual cash flows of all such mirror swaps to which a prime broker that is not a counterparty to the corresponding trigger swap is a party will offset each other (and the aggregate notional amount of all such mirror swaps on one side of the market and with cash flows in one direction shall be equal to the aggregate notional amount of all such mirror swaps on the other side of the market and with cash flows in the opposite direction), resulting in such prime broker having a flat market risk position.
(1) Unless otherwise provided in this part—
(i) Any executed swap that is an arm's-length transaction between two parties that results in a corresponding change in the market risk position between the two parties; or
(ii) Any termination, assignment, novation, exchange, transfer, amendment, conveyance, or extinguishing of rights or obligations of
(2) Examples of executed swaps that do not fall within the definition of publicly reportable swap may include:
(i) Internal swaps between one-hundred percent owned subsidiaries of the same parent entity; and
(ii) Portfolio compression exercises.
(3) These examples represent swaps that are not at arm's length and thus are not publicly reportable swap transactions, notwithstanding that they do result in a corresponding change in the market risk position between two parties.
(1) That is executed pursuant to one or more prime brokerage agency arrangements;
(2) To which a prime broker is a counterparty or both counterparties are prime brokers;
(3) That serves as the contingency for, or triggers, the execution of one or more corresponding mirror swaps; and
(4) That is a publicly reportable swap transaction that is required to be reported to a swap data repository pursuant to this part and part 45 of this chapter.
(b)
The revisions read as follows:
(a)
(2)
(3)
(i) If only one party is a swap dealer or major swap participant, then the swap dealer or major swap participant shall be the reporting counterparty;
(ii) If one party is a swap dealer and the other party is a major swap participant, then the swap dealer shall be the reporting counterparty;
(iii) If both parties are swap dealers, then prior to execution of a publicly reportable swap transaction that is an off-facility swap, the swap dealers shall designate which party shall be the reporting counterparty;
(iv) If both parties are major swap participants, then prior to execution of a publicly reportable swap transaction that is an off-facility swap, the major swap participants shall designate which party shall be the reporting counterparty; and
(v) If neither party is a swap dealer or a major swap participant, then prior to execution of a publicly reportable swap transaction that is an off-facility swap, the parties shall designate which party shall be the reporting counterparty.
(4)
(ii)
(5)
(6)
(ii) If, with respect to a given set of swaps, it is unclear which are mirror swaps and which is the related trigger
(iii) If, with respect to a given set of swaps, it is clear which are mirror swaps and which is the related trigger swap, the reporting counterparty for the trigger swap shall be determined pursuant to paragraph (a)(3) of this section.
(iv) Trigger swaps described in paragraphs (a)(6)(ii) and (iii) of this section shall be reported pursuant to the requirements set out in paragraphs (a)(2) or (3) of this section, as applicable, except that the provisions of paragraph (a)(6)(ii) of this section, rather than the provisions of paragraph (a)(3) of this section, shall govern the determination of the reporting counterparty for purposes of the trigger swaps described in paragraph (a)(6)(ii) of this section.
(7)
(b)
(2)
(3)
(A) Such disclosure is made no earlier than the transmittal of such data to a swap data repository for public dissemination;
(B) Such disclosure is only made to market participants on such swap execution facility or designated contract market;
(C) Market participants are provided advance notice of such disclosure; and
(D) Any such disclosure by the swap execution facility or designated contract market is non-discriminatory.
(ii) If there is a swap data repository for an asset class, a swap dealer or major swap participant shall not disclose swap transaction and pricing data relating to publicly reportable swap transactions in such asset class, prior to the public dissemination of such data by a swap data repository unless:
(A) Such disclosure is made no earlier than the transmittal of such data to a swap data repository for public dissemination;
(B) Such disclosure is only made to the customer base of such swap dealer or major swap participant, including parties who maintain accounts with or have been swap counterparties with such swap dealer or major swap participant;
(C) Swap counterparties are provided advance notice of such disclosure; and
(D) Any such disclosure by the swap dealer or major swap participant is non-discriminatory.
(4)
(5)
(c)
(2) Swap transaction and pricing data that is publicly disseminated pursuant to this part shall be made available free of charge.
(d)
(2) In reporting swap transaction and pricing data to a swap data repository, each reporting counterparty, swap execution facility, or designated contract market making such report shall satisfy the data validation procedures of the swap data repository.
(3) In reporting swap transaction and pricing data to a swap data repository, each reporting counterparty, swap execution facility, or designated contract market shall use the facilities, methods, or data standards provided or required by the swap data repository to which the entity or reporting counterparty reports the data.
(f)
(2) If a swap transaction and pricing data report submitted to a swap data repository does not satisfy the data validation procedures of the swap data repository, the reporting counterparty, swap execution facility, or designated contract market required to submit the report has not satisfied its obligation to report swap transaction and pricing data in the manner provided by paragraph (d) of this section. The reporting counterparty, swap execution facility, or designated contract market has not satisfied its obligation until it submits the swap transaction and pricing data report in the manner provided by paragraph (d) of this section, which includes the requirement to satisfy the data validation procedures of the swap data repository.
(g)
(a)
(b)
(c)
(2)
(3)
(4)
(d)
(2)
(ii) The actual notional or principal amount for any block trade executed on or pursuant to the rules of a designated contract market shall be reported to the designated contract market pursuant to the rules of the designated contract market.
(e)
(f)
(2) If the notional or principal amount is less than 10 thousand but equal to or greater than one thousand, round to nearest one hundred;
(3) If the notional or principal amount is less than 100 thousand but equal to or greater than 10 thousand, round to nearest one thousand;
(4) If the notional or principal amount is less than one million but equal to or greater than 100 thousand, round to nearest 10 thousand;
(5) If the notional or principal amount is less than 100 million but equal to or greater than one million, round to the nearest one million;
(6) If the notional or principal amount is less than 500 million but equal to or greater than 100 million, round to the nearest 10 million;
(7) If the notional or principal amount is less than one billion but equal to or greater than 500 million, round to the nearest 50 million;
(8) If the notional or principal amount is less than 100 billion but equal to or greater than one billion, round to the nearest 100 million;
(9) If the notional or principal amount is equal to or greater than 100 billion, round to the nearest 10 billion.
(g)
(2) The Commission shall determine the cap sizes for the swap categories described in § 43.6(b)(1)(i), (b)(2)(i) through (vii), (b)(4)(i), and (b)(5)(i) by utilizing reliable data, as determined by the Commission, from at least a one-year window of swap data corresponding to each relevant swap category, and by applying the methodology described in § 43.6(c)(2).
(3) The Commission shall determine the cap size for a swap category in the foreign exchange asset class described in § 43.6(b)(4)(ii) as the lower of the notional amount of either currency's cap size for the swap category described in § 43.6(b)(4)(i).
(4) All swaps or instruments in the swap category described in § 43.6(b)(1)(ii) shall have a cap size of USD 100 million.
(5) All swaps or instruments in the swap category described in § 43.6(b)(2)(viii) shall have a cap size of USD 400 million.
(6) All swaps or instruments in the swap category described in § 43.6(b)(3) shall have a cap size of USD 250 million.
(7) All swaps or instruments in the swap category described in § 43.6(b)(4)(iii) shall have a cap size of USD 150 million.
(8) All swaps or instruments in the swap category described in § 43.6(b)(5)(ii) shall have a cap size of USD 100 million.
(9) Commission publication of cap sizes: The Commission shall publish any cap sizes determined pursuant to paragraph (g) of this section from time to time on its website at
(10) Compliance date of cap sizes: Any cap sizes adopted by the Commission in a final rule amending this part shall require compliance as of the effective date of any such amendments to this part. Thereafter, unless otherwise indicated on the Commission's website, any revised cap size published by the Commission shall require compliance as of the first day of the second month following the date of publication of the revised cap size.
(a)
(b)
(c)
(a)
(b)
(1)
(i) Based on a unique combination of:
(A) A currency of one of the following countries or union:
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(B) One of the following tenors:
(
(
(
(
(
(
(
(
(
(ii) Other interest rate swaps not covered in the paragraph (b)(1)(i) of this section.
(2)
(i) Based on the CDXHY product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(ii) Based on the iTraxx Europe product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(iii) Based on the iTraxx Crossover product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(iv) Based on the iTraxx Senior Financials product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(v) Based on the CDXIG product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(vi) Based on the CDXEmergingMarkets product type and a tenor greater than 1,477 days and less than or equal to 2,207 days;
(vii) Based on the CDMBX product type; and
(viii) Other credit swaps not covered in paragraphs (b)(2)(i)-(vii) of this section.
(3)
(4)
(i) By the unique currency combinations of the United States currency paired with a currency of one of the following countries or union: Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the European Union, Great Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Russia, South Korea, or Taiwan.
(ii) By the unique currency pair consisting of two separate currencies from the following countries or union: Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the European Union, Great Britain, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Peru, Philippines, Russia, South Korea, and Taiwan.
(iii) Other swap categories in the foreign exchange asset class not covered in paragraph (b)(4)(i) or (ii) of this section.
(5)
(i) For swaps that have a physical commodity underlier listed in appendix A of this part, by the relevant physical commodity underlier; or
(ii) Other commodity swaps that are not covered in paragraph (b)(5)(i) of this section.
(c)
(1)
(i) For each relevant swap category, select all reliable SDR data for at least a one-year period;
(ii) Convert the notional amount to the same currency or units and use a trimmed data set;
(iii) Determine the sum of the notional amounts of swaps in the trimmed data set;
(iv) Multiply the sum of the notional amount by 67 percent;
(v) Rank order the observations by notional amount from least to greatest;
(vi) Calculate the cumulative sum of the observations until the cumulative sum is equal to or greater than the 67-percent notional amount calculated in paragraph (c)(1)(iv) of this section;
(vii) Select the notional amount associated with that observation;
(viii) Round the notional amount of that observation up to two significant digits, or if the notional amount associated with that observation is already significant to only two digits, increase that notional amount to the next highest rounding point of two significant digits; and
(ix) Set the appropriate minimum block size at the amount calculated in paragraph (c)(1)(viii) of this section.
(2)
(d)
(e)
(2) The Commission shall determine the appropriate minimum block sizes for the swap categories described in paragraphs (b)(1)(i), (b)(2)(i) through (vii), (b)(4)(i), and (b)(5)(i) of this section by applying the methodology described in paragraph (c)(1) of this section.
(3) The parties to a swap in the foreign exchange asset class described in paragraph (b)(4)(ii) of this section may elect to receive block treatment if the notional amount of either currency in the exchange is greater than the minimum block size for a swap in the foreign exchange asset class between the respective currency, in the same amount, and U.S. dollars described in paragraph (b)(4)(i) of this section.
(4) All swaps or instruments in the swap category described in paragraphs (b)(1)(ii), (b)(2)(viii), (b)(4)(iii), and (b)(5)(ii) of this section shall have a block size of zero and be eligible to be treated as a block trade.
(5)
(f)
(ii) The swap execution facility or designated contract market, as applicable, shall notify the swap data repository of such a block trade election when reporting the swap transaction and pricing data to such swap data repository in accordance with this part.
(iii) The swap execution facility or designated contract market, as applicable, shall not disclose swap transaction and pricing data relating to a block trade subject to the block trade election prior to the expiration of the applicable delay set forth in § 43.5(c).
(2)
(g)
(1)
(2)
(3)
(4)
(5)
(i) The aggregation of orders is done by a person who:
(A) Is a commodity trading advisor registered pursuant to section 4n of the Act, or exempt from such registration
(B) Is an investment adviser who has discretionary trading authority or directs client accounts and satisfies the criteria of § 4.7(a)(2)(v) of this chapter; or
(C) Is a foreign person who performs a similar role or function as the persons described in paragraph (g)(5)(i)(A) or (B) of this section and is subject as such to foreign regulation;
(ii) The aggregated transaction is reported pursuant to this part and part 45 of this chapter as a block trade, subject to the cap size thresholds; and
(iii) The aggregated orders are executed as one swap transaction.
(h)
(i) A commodity trading advisor registered pursuant to section 4n of the Act, or exempt from registration under the Act, or a principal thereof, and who has discretionary trading authority or directs client accounts,
(ii) An investment adviser who has discretionary trading authority or directs client accounts and satisfies the criteria of § 4.7(a)(2)(v) of this chapter, or
(iii) A foreign person who performs a similar role or function as the persons described in paragraph (h)(1)(i) or (ii) of this section and is subject as such to foreign regulation, to transact block trades for customers who are not eligible contract participants.
(2) A person transacting a block trade on behalf of a customer shall receive prior written instruction or consent from the customer to do so. Such instruction or consent may be provided in the power of attorney or similar document by which the customer provides the person with discretionary trading authority or the authority to direct the trading in its account.
(a) * * *
(1) To publish the technical specifications providing the form and manner for reporting and publicly disseminating the swap transaction and pricing data elements in appendix C of this part as described in §§ 43.3(d)(1) and 43.4(a);
(2) To determine cap sizes as described in § 43.4(g);
(3) To determine whether swaps fall within specific swap categories as described in § 43.6(b); and
(4) To determine and publish appropriate minimum block sizes as described in § 43.6(e).
Swap data repositories are required by § 43.4(d)(4) to publicly disseminate any specific delivery point or pricing point associated with publicly reportable swap transactions in the “other commodity” asset class pursuant to Tables B1 and B2 in this appendix. If the underlying asset of a publicly reportable swap transaction described in § 43.4(d)(4) has a delivery or pricing point that is located in the United States, such information shall be publicly disseminated pursuant to the regions described in Table B1 in this appendix. If the underlying asset of a publicly reportable swap transaction described in § 43.4(d)(4) has a delivery or pricing point that is not located in the United States, such information shall be publicly disseminated pursuant to the countries or sub-regions, or if no country or sub-region, by the other commodity region, described in Table B2 in this appendix.
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.
Data is the lifeblood of our markets. Yet for too long, market participants have been burdened with confusing and costly swap data reporting rules that do little to advance the Commission's regulatory functions. In the decade-long effort to refine our swap data rules, we have at times lost sight of Sir Isaac Newton's wisdom: “Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things.”
Simplicity should be a central goal of our swap data reporting rules. After all, making rules simple and clear facilitates compliance, price discovery, and risk monitoring. While principles-based regulation can offer numerous advantages, there are areas where a rules-based approach is preferable because of the level of clarity, standardization, and harmonization it provides. Swap data reporting is one such area.
As it stands, swap data repositories (SDRs) and market participants have been left to wade through parts 43 and 45 of our rules on their own. We have essentially asked them to decide what to report to the CFTC, instead of being clear about what we want. The result is a proliferation of reportable data fields designed to ensure compliance with our rules—but which exceed what market participants can readily provide and what the agency can realistically use. These fields can run hundreds deep, imposing costly burdens on market participants. Yet for all its sprawling complexity, the current data reporting system omits, of all things, uncleared margin information—thereby
And that just describes CFTC reporting. As it stands today, a market participant with a swap reportable to the CFTC might also have to report the same swap to the SEC, the European Securities and Markets Authority (ESMA), and perhaps other regulators as well. The global nature of our derivatives markets has led to the preparation and submission of multiple swap data reports, creating a byzantine maze of disparate data fields and reporting timetables. Market participants should not incur the costs and burdens of reporting a grab-bag of dissimilar data for the very same swap. That approach helps neither the market nor the CFTC: Conflicting data reporting requirements make regulatory coordination more difficult, preventing a panoramic view of risk.
Today we take the first step toward changing this. I am pleased to support the proposed amendments to parts 43 and 45 of the CFTC's rules governing swap data reporting.
In fact, the part 45 proposal includes a technical specification that identifies 116 standardized data fields that will help replace the many hundreds of fields now in use by SDRs. We are also proposing to harmonize our swap data reporting requirements with those of the SEC and ESMA. Harmonization would remove the burdens of duplicative reporting while painting a more complete picture of market risk. At the same time, the proposed changes to Part 43 would enhance public transparency as well as provide relief for end users who rely on our markets to hedge their risks. Our swaps markets are integrated and global; it is time for our reporting regime to catch up.
Today's proposals advance my first strategic goal for our agency: Strengthening the resilience and integrity of our derivatives markets while fostering their vibrancy.
A related problem we address today involves inconsistent data. SDRs currently validate swap transaction data in conflicting ways, causing market participants to report disparate data elements to different SDRs. Today's proposals include guidance to help SDRs standardize their validation of swap data reports, shoring up the resilience and integrity of our markets.
Simplifying the reporting process will also enhance the regulatory experience for market participants at home and abroad, which is another strategic goal for the agency.
Our proposals today reflect a hard look at the data we are requesting and the data we really need. The proposals provide the guidance needed to collapse hundreds of reportable data fields into a standardized set of 116 that truly advance our regulatory objectives. If adopted, this would reduce burdens on market participants and provide technical guidance to ensure they are no longer guessing at what we require. Clear rules are easier to follow, and market participants will no longer be subject to reporting obligations that raise the costs of compliance without improving the resilience and integrity of our derivatives markets. Just as we are reducing requirements where they are not needed, we are also enhancing them where they are. This is the balanced approach sound regulation demands.
Today's proposals also improve the regulatory experience by harmonizing swap data reporting where it is sensible to do so.
While we should not harmonize for the sake of harmonizing,
Harmonization also helps the CFTC realize our vision of being the global standard for sound derivatives regulation.
The proposals also would harmonize swap data reporting in several other important respects. First, we propose adopting a Unique Transaction Identifier (UTI) requirement in place of the existing Unique Swap Identifier (USI) system, as provided for in the CPMI-IOSCO Technical Guidance.
I am also pleased to support our proposals today because they enhance
Part 43 embodies our public reporting system for swap data, which provides high-quality information in real time. Providing transparent, timely swap data to the public is critically important to the price discovery process necessary for our markets to thrive and grow. Enhanced public transparency also ensures that market participants and end users can make informed trading and hedging decisions.
The CFTC's current system for public reporting is considered the global standard. Even so, it can be improved. Although post-priced swaps are subject to unique pricing factors that affect the “public tape,”
The current reporting system for prime broker swaps has led to data that distorts the picture of what is actually happening in the market. Currently, part 43 requires that offsetting swaps executed with prime brokers—in addition to the initial swap reflecting the actual terms of the trade between counterparties—be reported on the public tape. Reporting these duplicative swaps can hinder price discovery by displaying pricing data that includes fees and other costs unrelated to the actual terms of the parties' swap. Cluttering the public tape with duplicative swaps is at best unhelpful, and at worst confusing. To the public, it could appear as though there are twice as many negotiated, arms-length swaps as there actually are. Today's proposals would solve this problem by requiring that only the initial “trigger” swaps be publicly reported.
Finally, the proposals would help make our derivatives markets work for all Americans, another of the CFTC's strategic goals.
If finalized, today's proposals will no longer require end users to report swap valuation data. It would also give them a “T+2” timeframe for reporting the data we do require. The proposals would therefore remove unnecessary reporting burdens from end users relying on our swaps markets to hedge their risks. In addition, by providing sufficient time for end users to ensure their reporting is accurate, the proposals would also improve the quality of data we receive.
It is time for the Commission to reform our swap data reporting rules. Sir Isaac Newton realized long ago that simplicity can often lead to truth. It does not take an apple striking us on the head to realize that simplifying our swap data reporting rules to achieve clarity, standardization, and harmonization will inevitably make for sounder regulation.
I respectfully concur in the Commission's proposal to amend certain real-time public reporting requirements. I support the Commission's ongoing review of its swap reporting rules; however, I think it is very important that we not lose sight of why we have these rules in the first place. Prior to the 2008 financial crisis, swaps were largely exempt from regulation and traded exclusively over-the-counter.
Among many critically important statutory changes, which have shed light on the over-the-counter derivatives markets, Title VII of the Dodd-Frank Act amended the Commodity Exchange Act and added a new term to the Act: “real-time public reporting.”
As we consider amending these rules, I think it is important that we keep in mind the Dodd-Frank Act's emphasis on transparency, and what transpired to necessitate that emphasis. While most of today's proposal encourages and supports the transparency required by the Act, I am concerned about the proposed amendments that would significantly extend the time delays for public dissemination of block trades. Currently, the time delay for public dissemination of block trades executed pursuant to the rules of a SEF or DCM is 15 minutes.
I am voting to issue for public comment the proposed rulemaking that would amend certain rules requiring real-time public reporting of swap trades. The proposal is intended to enhance the existing real-time public reporting framework adopted in 2012. Although I am voting to issue the proposal for public comment, I do not support the provision in the proposal that would permit a 48-hour delay in the reporting of block trades. A 48-hour delay for all block trades is too long.
One of the primary goals of the Dodd-Frank Act is to bring transparency to opaque swap markets. In Commodity Exchange Act section 2(a)(13), Congress required the Commission to adopt real-time public reporting regulations. Congress stated that “[t]he purpose of this section is to authorize the Commission to make swap transaction and pricing data available to the public in such form and at such times as the Commission determines appropriate
The provisions permitting a delay of 48 hours in the reporting of block trades, however, could impede rather than foster price discovery. It also could undermine market integrity by providing counterparties to large swaps with an unfair information advantage. While an appropriate block trade reporting delay is mandated by statute to allow effective hedging of the position, the delay should be appropriately limited. I address this concern in greater detail below.
To effectively use real-time data for price discovery, market participants need to be able to compare data reported by the different swap data repositories and assess the validity of the data. Significantly, the proposal would require standardized data reporting using technical specifications and instructions that establish the form and manner in which the data must be reported. This approach promotes uniformity in the data across swap data repositories and reporting parties and thereby facilitates aggregation and validation.
Similarly, the proposal addresses several technical questions that arose during implementation of the 2012 rules that obscured effective price discovery. The issue of whether to report so-called “mirror swaps” executed under prime broker arrangements is addressed by eliminating duplicate reporting of the mirror swap after the “trigger” swap is reported. Duplicate reporting can create a false signal of swap trading volume and potentially obscure price discovery by giving the price reported for a single prime brokerage swap twice as much weight relative to other non-prime brokerage swaps. Similarly, issues involving pricing of certain types of swaps which, by their terms, are priced at a time after the swaps are executed would allow for more accurate price discovery—
The proposal also addresses the issue of block trade reporting. In this area, while the proposal would make a number of improvements, it also raises issues for which public input would be helpful. Congress directed the Commission to establish “the appropriate time delay for reporting large notional swap transactions (block trades) to the public.”
Some of these changes are practical, data driven modifications. The proposal would change the categories of swaps for which different block trade sizes are established so that the block sizing applies to swap products that are comparable in how notional amounts and prices are set. This change was based on both comments received during implementation and on swap data analysis. This change would, if effective, enhance price discovery by eliminating the underreporting of categories of swap products that typically trade at notional levels in excess of the block size simply because they are, for example, in a different currency or trade in different quantities than is typical for the rest of the category to which they are compared. As I have said before, when available, data should be used by the Commission to establish regulations that serve the public policy goals set by Congress.
The proposal also would eliminate several block trade delay periods in the existing rule as short as 15 minutes and replace them with a single 48-hour delay period. This simplified approach to block trade reporting delays could harm price discovery and do so in a manner that is not supported by the need for a delay in block trade reporting. Under the proposal, fully one-third of all trades within a category could be block trades subject to reporting delays. Such a large carve-out from real-time reporting would harm price discovery and provide an unfair information advantage to swap dealers and other large counterparties.
The need for a 48-hour delay is not apparent. It is my understanding that for many block trades, the dealer seeking to hedge the block position will do so as soon as possible after the trade (if not before) and in most cases within the same trading session. The logic of this is obvious—waiting overnight to establish a hedge could destroy the profit and loss calculated when the block was executed as market prices move further away from the prices at the time the trade was executed. On the other hand, some small number of block trades, those of very large size or with complex features, may take 48 hours or more to hedge. The Commission should calibrate the delay periods accordingly.
I thank the CFTC staff for working with my office to add questions addressing this issue. The questions relating to proposed section 43.5 ask commenters to address whether these issues are of concern and whether the rule would benefit from having two delay periods, one shorter for “smaller” block trades and another for the largest block trades. I look forward to reviewing comments on this and other issues.
I commend all of the staff at the CFTC who worked on the reporting rules over the years. Getting swap reporting right is a difficult, but important function for the Commission. Improving price discovery through real-time public reporting serves a core CFTC mission. This proposal offers a number of pragmatic solutions to known issues with the current rule. These improvements, however, should not—and need not—come at the expense of market transparency and a level playing field.
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing revisions to the Commission regulations that set forth the swap data recordkeeping and reporting requirements for swap data repositories (“SDRs”), derivatives clearing organizations (“DCOs”), swap execution facilities (“SEFs”), designated contract markets (“DCMs”), swap dealers (“SDs”), major swap participants (“MSPs”), and swap counterparties that are neither SDs nor MSPs. The Commission is proposing revisions that, among other things, streamline the requirements for reporting new swaps, define and adopt swap data elements that harmonize with international technical guidance, and reduce reporting burdens for reporting counterparties that are not SDs or MSPs.
Comments must be received on or before May 20, 2020.
You may submit comments, identified by RIN 3038-AE31, by any of the following methods:
•
•
•
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse, or remove any or all of your submission from
Meghan Tente, Acting Associate Director, (202) 418-5785,
The Commission's swap data reporting regulations were first adopted in 2012 and are located in part 45 of the Commission's regulations.
The Division of Market Oversight (“Division” or “DMO”) is currently completing an update of the swap reporting rules. On July 10, 2017, the Division announced its Roadmap to Achieve High Quality Swaps Data (“Roadmap”), consisting of a comprehensive review to: (i) Ensure that
The Commission received extensive feedback that addressed many swap reporting topics in response to DMO's Roadmap.
Now, in this release, the Commission is proposing revisions to the part 45 reporting regulations related to the following topics: Simplifying the requirements for reporting swaps; requiring SDRs to validate swap reports; permitting the transfer of swap data between SDRs; alleviating reporting burdens for non-SD/MSP reporting counterparties; and harmonizing the swap data elements counterparties report to SDRs with international technical guidance. The Commission will discuss each of these proposed changes in this release.
In addition, the Commission is proposing amendments to certain part 46 regulations for reporting pre-enactment swaps and transition swaps, primarily to conform to changes the Commission is proposing to part 45.
The Commission appreciates the time commenters have taken to explain aspects of the reporting requirements that they believe the Commission could make more efficient. As discussed throughout this release, the Commission believes that the revisions proposed herein address many of these recommendations, as well as several major domestic and international swap reporting developments that have occurred since the Commission originally adopted part 45.
Pursuant to section 2(a)(13)(G) of the Commodity Exchange Act (“CEA”), all swaps, whether cleared or uncleared, must be reported to SDRs.
In 2011, the Commission adopted the part 49 regulations setting forth the specific duties that SDRs are required to comply with to register as an SDR.
The Commission will discuss relevant sections of the current parts 45, 46, and 49 regulations throughout this release.
In response to the financial crisis in 2009, the G20 leaders agreed that all over-the-counter (“OTC”) derivatives should be reported to trade repositories (“TRs”)
The Harmonisation Group published
The Commission currently requires that each swap subject to its jurisdiction be identified by a USI.
In April 2018, the Harmonisation Group published
The Commission has played an active role in the development and publication of the CDE Technical Guidance as part of the CPMI-IOSCO working group, alongside representatives from Canada, France, Germany, Hong Kong, Japan, Singapore, and the United Kingdom, among others. Commission staff provided feedback about the data elements, taking into account the Commission's experience with swap data reporting and its use of such data in fulfilling its regulatory responsibilities. Commission staff also participated in the solicitation of responses to three public consultations on the CDE Technical Guidance, along with related industry workshops and conference calls.
Since each authority is responsible for issuing requirements for market participants on OTC derivatives data reporting, the CDE Technical Guidance does not determine which critical data elements are required to be reported in a given jurisdiction. Instead, if CDE Technical Guidance data elements are required to be reported in a given jurisdiction, the CDE Technical Guidance provides the relevant authorities in that jurisdiction guidance on the definition, format, and allowable values for these data elements that would facilitate consistent aggregation at a global level.
Section 45.1 contains the definitions for terms used throughout the regulations in part 45. Section 45.1 does not contain any lower paragraph levels. The Commission is proposing to separate § 45.1 into two paragraphs: § 45.1(a) for definitions, and § 45.1(b), which would state that terms not defined in part 45 have the meanings assigned to the terms in Commission regulation § 1.3.
The Commission is also proposing to revise the definitions in proposed § 45.1(a). As part of these revisions, the Commission is proposing to add new definitions, and amend or remove certain definitions. As § 45.1 is arranged alphabetically, the Commission has grouped the discussion of its proposed changes to § 45.1 into corresponding categories (
The Commission is proposing to add a definition of “allocation” to § 45.1(a). As proposed, “allocation” would mean the process by which an agent, having facilitated a single swap transaction on behalf of clients, allocates a portion of the executed swap to the clients. Section 45.3(f) currently contains regulations for reporting allocations without defining the term. Defining “allocation” should help market participants comply with the regulations for reporting allocations in § 45.3.
The Commission is also proposing to add a definition of “as soon as technologically practicable” (“ASATP”) to § 45.1(a). As proposed, “as soon as technologically practicable” would mean as soon as possible, taking into consideration the prevalence, implementation, and use of technology by comparable market participants. The phrase “as soon as technologically practicable” is currently used throughout part 45, but is not defined. The Commission is proposing to adopt the same definition of “as soon as technologically practicable” as is defined in § 43.2 of the Commission's regulations for the swap transaction and pricing data.
The Commission is also proposing to add a definition of “collateral data” to § 45.1(a). As proposed, “collateral data” would mean the data elements necessary to report information about the money, securities, or other property posted or received by a swap counterparty to margin, guarantee, or secure a swap, as specified in appendix 1 to part 45. This proposed new definition is explained in a discussion of proposed requirements for reporting counterparties to report collateral data in section II.D.4 below.
The Commission is proposing to add definitions for “execution” and “execution date” to § 45.1(a). As proposed, “execution” would mean an agreement by the parties, by any method, to the terms of a swap that legally binds the parties to such swap terms under applicable law.
The Commission is proposing to add the following three definitions to § 45.1(a): “Global Legal Entity Identifier
The Commission is proposing to add a definition of “non-SD/MSP/DCO reporting counterparty” to § 45.1(a). As proposed, “non-SD/MSP/DCO reporting counterparty” would mean a reporting counterparty that is not an SD, MSP, or DCO. Currently, DCOs are not included in the term “non-SD/MSP reporting counterparty.” This creates problems when, for instance, the Commission did not intend for DCOs to follow the required swap creation data reporting regulations in § 45.3(d) for off-facility swaps not subject to the clearing requirement with a non-SD/MSP reporting counterparty, even though DCOs are technically reporting counterparties that are neither SDs or MSPs. Instead, DCOs follow the required swap creation data reporting regulations in § 45.3(e) for clearing swaps. The definition of “non-SD/MSP/DCO reporting counterparty” should address this unintended regulatory overlap.
The Commission is proposing to add a definition of “novation” to § 45.1(a). As proposed, “novation” would mean the process by which a party to a swap legally transfers all or part of its rights, liabilities, duties, and obligations under the swap to a new legal party other than the counterparty to the swap under applicable law. This proposed term is currently referenced in the definition of “life cycle event,” as well as the § 45.8(g) regulations for determining which counterparty must report, but is not currently defined.
The Commission is proposing to add a definition of “swap” to § 45.1(a). As proposed, “swap” would mean any swap, as defined by § 1.3, as well as any foreign exchange forward, as defined by CEA section 1a(24), or foreign exchange swap, as defined by CEA section 1a(25).
The Commission is proposing to add definitions of “swap data” and “swap transaction and pricing data” to § 45.1(a). As proposed, “swap data” would mean the specific data elements and information in appendix 1 to part 45 required to be reported to an SDR pursuant to part 45 or made available to the Commission pursuant to part 49, as applicable; “swap transaction and pricing data” would mean all data for a swap in appendix C to part 43 required to be reported or publicly disseminated pursuant to part 43. The term “swap data” is currently used throughout part 45. The Commission believes that having the term “swap data” apply to part 45 data, and “swap transaction and pricing data” apply to part 43 data would provide clarity across the reporting regulations.
The Commission is proposing to add a definition of “swap data validation procedures” to § 45.1(a). As proposed, “swap data validation procedures” would mean procedures established by an SDR pursuant to proposed § 49.10 to accept, validate, and process swap data reported to an SDR pursuant to part 45. This proposed new definition is explained in a discussion of the proposed regulations for the validation of swap data reported to SDRs in section IV.C.3 below.
The Commission is proposing to add a definition of “unique transaction identifier” to § 45.1(a). As proposed, “unique transaction identifier” would mean a unique alphanumeric identifier with a maximum of 52 characters constructed solely from the upper-case alphabetic characters A to Z or the digits 0 to 9, inclusive in both cases, generated for each swap pursuant to § 45.5. This proposed new definition is used in the discussion of the regulations to transition from using USIs to UTIs. Those proposed changes are explained in section II.E below.
The Commission is proposing non-substantive minor technical changes to the existing definitions of “asset class,” “derivatives clearing organization,” and “swap execution facility.” The remaining discussion in this section addresses substantive amendments.
The Commission is proposing to amend the definition of “business day” in proposed § 45.1(a). Currently, § 45.1 defines “business day” to mean “the twenty-four hour day, on all days except Saturdays, Sundays, and legal holidays, in the location of the reporting counterparty or registered entity reporting data for the swap.”
The Commission is proposing to amend the definition of “life cycle event” in proposed § 45.1(a). Currently, § 45.1 defines “life cycle event” to mean any event that would result in either a change to a primary economic term of a swap or to any primary economic terms data (“PET data”) previously reported to an SDR in connection with a swap. Examples of such events include, without limitation, a counterparty change resulting from an assignment or novation; a partial or full termination of the swap; a change to the end date for the swap; a change in the cash flows or rates originally reported; availability of an LEI for a swap counterparty previously identified by name or by some other identifier; or a corporate action affecting a security or
The Commission is proposing to amend the definition of “non-SD/MSP counterparty” in proposed § 45.1(a). Currently, § 45.1 defines “non-SD/MSP counterparty” to mean a swap counterparty that is neither an SD nor an MSP. The Commission is proposing to change the defined term to “non-SD/MSP/DCO counterparty.”
The Commission is proposing to amend the definition of “required swap continuation data” in proposed § 45.1(a). Currently, § 45.1 defines “required swap continuation data” to mean all of the data elements that must be reported during the existence of a swap to ensure that all data concerning the swap in the SDR remains current and accurate, and includes all changes to the PET terms of the swap occurring during the existence of the swap. The definition further specifies that for this purpose, required swap continuation data includes: (i) All life cycle event data for the swap if the swap is reported using the life cycle reporting method, or all state data for the swap if the swap is reported using the snapshot reporting method; and (ii) all valuation data for the swap.
First, the Commission is proposing to remove the reference to “primary economic terms of the swap.”
The Commission is proposing to amend the definition of “required swap creation data” in § 45.1(a). Currently, § 45.1 defines “required swap creation data” to mean all PET data for a swap in the swap asset class in question, and all confirmation data for the swap. The Commission is proposing to replace the reference to PET data and confirmation data with a reference to the swap data elements in appendix 1 to part 45. This proposed amended definition is explained in a discussion of the proposal to eliminate the requirement to report confirmation data in section II.C below.
The Commission is proposing to amend the definition of “valuation data” in § 45.1(a). Currently, § 45.1 defines “valuation data” to mean all of the data elements necessary to fully describe the daily mark of the transaction, pursuant to CEA section 4s(h)(3)(B)(iii),
The Commission is proposing to remove the following definitions from § 45.1: “credit swap;” “designated contract market;” “foreign exchange forward;” “foreign exchange instrument;” “foreign exchange swap;” “interest rate swap;” “major swap participant;” “other commodity swap;” “state data;” “swap data repository;” and “swap dealer.” The Commission is proposing to remove these definitions to eliminate redundancy because the terms are already generally defined in § 1.3 of the Commission's regulations or in CEA section 1a.
The Commission is also proposing to remove the following definitions from § 45.1: “confirmation;” “confirmation data;” “electronic confirmation;” “non-electronic confirmation;” “primary economic terms;” and “primary economic terms data.” These definitions are being removed as part of the proposed amendments to combine PET data and confirmation data into a single required swap creation data report. These proposed amendments are explained in section II.C below.
The Commission is proposing to remove the definition of “quarterly reporting” from § 45.1. Currently, § 45.4(d)(2)(ii) requires non-SD/MSP reporting counterparties to provide quarterly reports of valuation data. The Commission is proposing to remove this requirement for non-SD/MSP reporting counterparties, as explained in section II.D.4 below. As a result, the definition of “quarterly reporting” in § 45.1 is no longer necessary.
The Commission is also proposing to remove the definitions of “electronic verification,” “non-electronic verification,” and “verification” from § 45.1. Currently, certain deadlines for reporting required swap creation data for off-facility swaps in § 45.3 depend on whether verification occurs electronically.
The Commission is proposing to remove the definition of “international swap” from § 45.1. Currently, § 45.1 defines “international swap” to mean a swap required by U.S. law and the law of another jurisdiction to be reported both to an SDR and to a different TR registered with the other jurisdiction. The proposal to remove this definition is explained in a discussion of the Commission's proposal to remove the requirements for international swaps in § 45.3(i). Those proposed changes are explained in section II.C.6 below.
The Commission requests comments on all aspects of the proposed changes to § 45.1. The Commission also invites specific comment on the following:
(1) Does the Commission's proposed definition of “execution date” present problems for SEFs, DCMs, SDRs, or reporting counterparties? Should the Commission instead adopt a definition that aligns with other regulations, including, for instance, the definition of “day of execution” in § 23.501(a)(5)(i)?
The Commission is proposing amendments to the § 45.2 swap recordkeeping regulations. The proposed amendments are technical and do not impact the existing requirements or applicability of § 45.2.
For instance, in this release, the Commission is proposing a technical amendment to remove the phrase “subject to the jurisdiction of the Commission” from § 45.2. The Commission is proposing to remove this phrase from all of part 45.
The Commission is proposing to remove the introductory text to § 45.3. As background, the introductory text to § 45.3 provides a broad overview of the swap data reporting regulations for registered entities and swap counterparties. In providing this overview, the introductory text to § 45.3 cross-references reporting regulations in parts 17, 18, 43, 45, 46, and 50.
The Commission believes that the introductory text is superfluous because the scope of § 45.3 is clear from the operative provisions of § 45.3.
The Commission is proposing several changes to the § 45.3(a) required swap creation data reporting regulations for swaps executed on or pursuant to the rules of a SEF or DCM. Current § 45.3(a) requires that SEFs and DCMs report all PET data for swaps ASATP after execution. If the swap is not intended to be cleared at a DCO, § 45.3(a) requires that the SEF or DCM also report confirmation data for the swap ASATP after execution.
The Commission is first proposing to revise the § 45.3(a) requirement for SEFs and DCMs to submit both PET data and confirmation data for swaps that are not intended to be cleared at a DCO. As background, PET data reporting includes the reporting of approximately sixty swap data elements, varying by asset class, enumerated in appendix 1 to part 45.
By the terms of the two definitions, PET data, which is a set number of data elements for each asset class, appears to be a subset of confirmation data, which is defined as, “all terms of a swap . . . .” In defining two separate data sets, the Commission intended that that the initial PET data report would ensure that an SDR would have sufficient data on each swap for the Commission to perform its regulatory functions while the more complete confirmation data may not yet be available.
However, the current § 45.3 PET data and confirmation data requirements may be encouraging the reporting of duplicative information to SDRs. One of the PET data elements in current appendix 1 to part 45 is “[a]ny other term(s) . . . matched or affirmed by the counterparties in verifying the swap.” The comments to this “catch-all” data element in appendix 1 to part 45 instruct reporting counterparties, SEFs, DCMs, and DCOs to use “as many data elements as required to report each such term.”
DMO requested comment on whether to combine PET data and confirmation data into a single, clearly defined, and electronically reportable set of data elements as part of the Roadmap review.
Other regulators have taken different approaches to required swap creation data reporting. The Securities and Exchange Commission (“SEC”), for instance, does not have rules for reporting separate confirmation data reports.
The Commission believes eliminating the confirmation data reporting requirement would help streamline swap data reporting under part 45. Therefore, the Commission is proposing to revise § 45.3(a) to require SEFs and DCMs to report a single required swap creation data report, regardless of whether the swap is intended to be cleared.
Second, the Commission is proposing to revise the § 45.3(a) requirement for SEFs and DCMs to report required swap creation data ASATP following execution. As background, the CEA requires that all swaps be reported to SDRs, but does not specify the timeframes for reporting swap data to SDRs for regulatory purposes under sections 2(a)(13)(G) and 4r(a).
When part 45 was adopted in 2012, the Commission believed that reporting swap data immediately following execution was important to further the objectives of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
The Commission is concerned that the ASATP deadline for regulatory reporting may be causing reporting counterparties to hastily report required swap creation data that has contributed to data quality issues. As a result, the Commission is considering extending the deadline for required swap creation data in a way that will continue to permit it to fulfill the systemic risk mitigation, market transparency, position limit monitoring, and market surveillance objectives of the Dodd-Frank Act.
DMO requested comment on whether to move to a new “T+1” reporting timeline for part 45 in the Roadmap to understand whether additional reporting time would be beneficial.
The Commission believes this extended reporting timeline could help improve data quality while encouraging alignment with reporting deadlines set by other regulators. The Commission is therefore proposing to revise § 45.3(a) to extend the deadline for SEFs and DCMs to report required swap creation data to T+1 following the execution date. Revised § 45.3(a) would therefore require that for each swap executed on or pursuant to the rules of a SEF or DCM, the SEF or DCM shall report swap creation data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the execution date.
The Commission is proposing several changes to the current § 45.3(b) through (d) required swap creation data reporting regulations for off-facility swaps. Many of the proposed changes to requirements in § 45.3(b) through (d) would conform to the revisions proposed in the previous sections to the requirements for swaps executed on SEFs and DCMs.
The current required swap creation data reporting obligations for off-facility swaps are based on the type of swap and type of reporting counterparty. In general, for off-facility swaps subject to the Commission's clearing requirement, § 45.3(b) requires that SD/MSP reporting counterparties report PET data ASATP after execution, with a 15-minute deadline, while non-SD/MSP reporting counterparties report PET data ASATP after execution with a one business hour deadline.
For off-facility swaps that are not subject to the clearing requirement but have an SD/MSP reporting counterparty, § 45.3(c)(1) now generally requires that SD/MSP reporting counterparties report PET data ASATP after execution with a 30-minute deadline, and confirmation data for swaps that are not intended to be cleared ASATP with a 30 minute deadline if confirmation is electronic, or ASATP with a 24 business hour
Section 45.3(c)(2) currently requires that for swaps in the other commodity asset class, SD/MSP reporting counterparties report PET data ASATP after execution, with a two-hour deadline, and confirmation data for swaps that are not intended to be cleared ASATP after confirmation with a 30-minute deadline if confirmation is electronic, or a 24 business hour deadline if confirmation is not electronic.
For off-facility swaps that are not subject to the clearing requirement but have a non-SD/MSP reporting counterparty, § 45.3(d) requires reporting counterparties report PET data ASATP after execution with a 24 business hour deadline, and confirmation data ASATP with a 24 business hour deadline if the swap is not intended to be cleared.
The Commission's proposed changes to § 45.3(b) through (d) fall into three categories, discussed below.
First, as part of a restructuring of regulations in § 45.3(a) through (d), the Commission is proposing to replace § 45.3(b) through (d) with new § 45.3(b), titled “Off-facility swaps.” This proposed new § 45.3(b) would contain the swap creation data reporting requirements for off-facility swaps. The new timing requirements for reporting off-facility swaps would depend on whether the reporting counterparty is an SD/MSP/DCO or a non-SD/MSP/DCO reporting counterparty. This means the timing requirements in § 45.3(b) would include the required swap creation data reporting requirements for clearing swaps, as they are created at DCOs.
Second, the Commission is proposing to revise the requirement in § 45.3(b) through (d) for reporting counterparties to submit separate PET data and confirmation data for all off-facility swaps that are not intended to be cleared at a DCO. The background to this change is discussed in section II.C.2.a above. As with swaps executed on SEFs and DCMs, the Commission believes a single report would align with the approach taken by other regulators, improve data quality, and be responsive to Roadmap comments.
Third, the Commission is proposing to revise the § 45.3(b) through (d) requirements for reporting counterparties to report required swap creation data ASATP after execution with different deadlines for off-facility swaps.
With respect to off-facility swaps, one Roadmap commenter explained that the current requirement for SD/MSP reporting counterparties to report uncleared swaps in § 45.3(c)(1) within 30 minutes means that reporting counterparties are inputting data before the trade is confirmed, resulting in modifications as terms are finalized.
The Commission is proposing to revise the required swap creation data reporting deadlines in § 45.3(a) through (d) for off-facility swaps in two new regulations: § 45.3(b)(1) and § 45.3(b)(2). New § 45.3(b)(1) would require that SD/MSP/DCO reporting counterparties report swap creation data to an SDR by T+1 following the execution date. This standard would be consistent with the standard proposed for SEFs and DCMs in § 45.3(a). The Commission believes this standard would also address commenters' concerns about needing more time to report to avoid modifications to the data, and would allow for errors identified during the confirmation process to be corrected prior to reporting.
New § 45.3(b)(2) would require that non-SD/MSP/DCO reporting counterparties report swap creation data to an SDR not later than T+2 following the execution date. The Commission anticipates that proposed § 45.3(b)(2) would provide non-SD/MSP/DCO reporting counterparties relief in reporting swap creation data for the minority of off-facility swaps in which both counterparties are non-SD/MSP/DCO counterparties. This extended deadline reflects the Commission's interest in relieving some of the swap data reporting burdens previously imposed on end users in a way that should also help improve data quality.
Therefore the Commission is proposing revised § 45.3(b) to require that for each off-facility swap, the reporting counterparty shall report electronically to an SDR as provided by § 45.3(b)(1) or (b)(2), as applicable.
Proposed § 45.3(b)(1) would require that if the reporting counterparty is an SD, MSP, or DCO, the reporting counterparty shall report swap creation data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the execution date.
Proposed § 45.3(b)(2) would require that if the reporting counterparty is a non-SD/MSP/DCO counterparty, the reporting counterparty shall report required swap creation data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the second business day following the execution date.
As noted above, the Commission is proposing to move the required swap creation data reporting requirements for clearing swaps from § 45.3(e) to revised § 45.3(b)(1). The required swap creation data reporting requirements would be covered under the “off-facility swaps” regulations, as clearing swaps are created at DCOs. As background, § 45.3(e) currently requires that DCOs report required swap creation data for clearing swaps ASATP after clearing or execution, depending on whether the swap is replacing an original swap. Current § 45.3(e) specifies that required swap creation data for clearing swaps includes all confirmation data and PET data.
Consolidating the requirements for DCOs to report swap creation data in § 45.3(b) with those of SD/MSP reporting counterparties would simplify the reporting requirements. Revised § 45.3(b)(1) would require that SD/MSP/DCO reporting counterparties report required swap creation data to an SDR not later than T+1 following the execution date.
While the Commission is proposing to extend the time DCOs have to report required swap creation data, the Commission recognizes that DCOs are required to clear swaps ASATP after execution as if fully automated systems were used.
The Commission is proposing several amendments to the § 45.3(f) regulations for reporting allocations, including re-designating it as § 45.3(c).
The Commission is proposing to specify that required swap creation data for allocations must be reported “electronically” to SDRs in § 45.3(c), (c)(1), and (c)(2)(ii). This should be current practice for reporting allocations to SDRs.
The Commission is also proposing to replace the reference in § 45.3(f)(1) (re-designated as § 45.3(c)(1)) to “§ 45.3(a) through (d)” with a reference to paragraphs (a) or (b) of § 45.3, to reflect the structural revisions to § 45.3(a) through (d) discussed above. Because the Commission is proposing to extend the time to report required swap creation data in § 45.3(a) and (b), reporting counterparties would have additional time to report required swap creation data for the initial swaps as well.
The Commission is proposing to amend current § 45.3(f)(2)(ii) (re-designated as § 45.3(c)(2)(ii))
Finally,
The Commission preliminarily believes this would simplify the current process involving SDRs mapping data elements. The Commission believes these data elements would also provide clarity to reporting counterparties, who are the parties with the information needed to map the data elements even though the rule placed the obligation on SDRs. As a result, the Commission believes removing § 45.3(f)(2)(iii) without re-designation will result in a better process for reporting counterparties and SDRs that should also help improve data quality.
Therefore, in light of the above proposed amendments, revised § 45.3(c)(1) would require that the initial swap transaction between the reporting counterparty and the agent shall be reported as required by § 45.3(a) or (b), as applicable. Section 45.3(c)(1) would also require that a UTI for the initial swap transaction be created as provided in § 45.5.
Section 45.3(c)(2)(i) would continue to provide that the agent shall inform the reporting counterparty of the identities of the reporting counterparty's actual counterparties resulting from allocation, ASATP after execution, but not later than eight business hours after execution. Section 45.3(c)(2)(ii) would require that the reporting counterparty report required swap creation data, as required by § 45.3(b), for each swap resulting from allocation to the same SDR to which the initial swap transaction is reported. Section 45.3(c)(2)(ii) would also provide that the reporting counterparty shall create a UTI for each such swap as required in § 45.5.
The Commission is proposing several amendments to the current § 45.3(g) regulations for reporting multi-asset swaps, proposed to be re-designated as § 45.3(d). Section 45.3(g) now provides that for each multi-asset swap, required swap creation data and required swap continuation data must be reported to a single SDR that accepts swaps in the asset class treated as the primary asset class involved in the swap by the SEF, DCM, or reporting counterparty making the first report of required swap creation data pursuant to § 45.3. Current § 45.3(g) also provides that the registered entity or reporting counterparty making the first report of required swap creation data report all PET data for each asset class involved in the swap.
The Commission is proposing to amend § 45.3(g) (re-designated as § 45.3(d)) to replace the reference to “making the first report” of required swap creation data with “reporting” required swap creation data. This would reflect the Commission's proposal to require a single report for required swap creation data, instead of separate PET data and confirmation data reports.
The Commission is also proposing to remove the last sentence of the regulation concerning all PET data for each asset class involved in the swap. This sentence is unnecessary, and would no longer be relevant with the Commission's proposal to remove PET data from its regulations.
Therefore, new § 45.3(d) would require that required swap creation data and required swap continuation data be reported to a single SDR that accepts swaps in the asset class treated as the primary asset class involved in the swap by the SEF, DCM, or reporting counterparty reporting required swap creation data pursuant to § 45.3.
The Commission is proposing several conforming or otherwise non-substantive amendments to § 45.3(h) for
For instance, as with proposed § 45.3(d) for multi-asset swaps and for the same reason, the Commission is proposing to replace “making the first report” of required swap creation data with “reporting” required swap creation data in re-designated § 45.3(e)(2) to improve readability.
Therefore, § 45.3(e)(1) would require that for each mixed swap, required swap creation data and required swap continuation data shall be reported to an SDR and to a SBSDR registered with the SEC.
The Commission is proposing to remove the § 45.3(i) regulations for international swaps. Section 45.3(i) requires that for each international swap, the reporting counterparty must report to an SDR the identity of the non-U.S. TR to which the swap is also reported and the swap identifier used by the non-U.S. TR. “International swaps” are defined in § 45.1 as swaps required to be reported by U.S. law and the law of another jurisdiction to be reported to both an SDR and to a different TR registered with the other jurisdiction.
When § 45.3(i) was adopted, the Commission believed that the regulations for international swaps were necessary to provide an accurate picture of the swaps market to regulators to further the purposes of the Dodd-Frank Act.
As a result, the Commission believes that § 45.3(i) is no longer necessary and is proposing to remove § 45.3(i) from its regulations.
The Commission is proposing non-substantive amendments to § 45.3(j) for reporting counterparties in choosing their SDR, including re-designating it as § 45.3(f). As background, § 45.3(j) now requires that the entity with the obligation to choose the SDR to which all required swap creation data for the swap is reported shall be the entity that is required to make the first report of all data pursuant to § 45.3, as follows: (i) For swaps executed on or pursuant to the rules of a SEF or DCM, the SEF or DCM shall choose the SDR; (ii) for all other swaps, the reporting counterparty, as determined in § 45.8, shall choose the SDR.
For instance, the Commission is proposing to change the heading of newly re-designated § 45.3(f) from “Choice of SDR” to “Choice of swap data repository” to be consistent with other headings throughout part 45.
Therefore, with the proposed amendments, § 45.3(f) would require that for swaps executed on or pursuant to the rules of a SEF or DCM, the SEF or DCM shall choose the SDR, and for all other swaps, the reporting counterparty, as determined in § 45.8, shall choose the SDR.
The Commission requests comment on all aspects of the proposed changes to § 45.3. The Commission also invites specific comment on the following:
(2) Is the Commission's proposed T+1 deadline for reporting required swap creation data appropriately harmonized with the deadlines set by other regulators and jurisdictions?
(3) Does the Commission's proposed T+1 deadline create any problems for SEFs, DCMs, SDRs, or reporting counterparties by referencing eastern time? Should the Commission instead adopt a definition that aligns with other regulations, including, for instance, the definition of “day of execution” in § 23.501(a)(5)(i)?
(4) Do any of the Commission's proposed changes to the timing deadlines for reporting required swap creation data in § 45.3 raise issues with the sequencing of messages for SDRs that could compromise data quality? For instance, could a T+1 deadline for reporting original swaps and clearing swaps create problems for SDRs in processing swap terminations? Could the 8-hour delay for the allocation agent notifying the reporting counterparty of the actual counterparty's identity create timing message sequencing issues for allocation reporting?
The Commission is proposing to remove the introductory text to § 45.4 for the same reasons it is proposing to remove the introductory text to § 45.3.
The Commission is proposing several changes to § 45.4(a), which concerns required swap continuation data reporting. Section 45.4(a) requires that reporting counterparties and DCOs
First, the Commission is proposing to revise the first two sentences. The first two sentences state that “for each swap, regardless of asset class, reporting counterparties and [DCOs] required to report swap continuation data must do so in a manner sufficient to ensure that all data in the [SDR] concerning the swap remains current and accurate, and includes all changes to the [PET data] of the swap occurring during the existence of the swap. Reporting entities and counterparties fulfill this obligation by reporting either . . . .” The Commission is proposing to replace the text with “for each swap, regardless of asset class, reporting counterparties and [DCOs] required to report required swap continuation data shall report . . . .” to improve readability without changing the regulatory requirement substantively.
Second, the Commission is proposing to remove state data reporting as an option for reporting changes to swaps from § 45.4. As background, state data reporting involves reporting counterparties re-reporting the PET terms of a swap every day, regardless of whether any changes have occurred to the terms of the swap since the last state data report.
The Commission is proposing to eliminate state data reporting because it would improve data quality without impeding the Commission's ability to fulfill the systemic risk mitigation, market transparency, position limit monitoring, and market surveillance objectives of the Dodd-Frank Act. In adopting part 45, the Commission gave reporting counterparties the option of reporting changes to swaps by either the state data reporting method or life cycle event method to provide flexibility.
The Commission estimates that state data reporting messages represent the vast majority of swap reports maintained by SDRs and the Commission.
Other regulators have taken approaches that are less receptive to state data reporting. The SEC, for instance, stated that “Regulation SBSR would not prevent a registered SDR from developing for its members a mechanism or other service that automates or facilitates the production of life cycle events from state data.”
In light of the foregoing, the Commission is proposing to remove the option for state data reporting in § 45.4. The Commission preliminarily believes that this would simplify swap reporting by significantly reducing swap message traffic to only those messages corresponding with a change in the terms of a swap. All terms would continue to be reported with each change, but the event and action type swap data elements would indicate the changes that have been made to the swap transaction.
Therefore, proposed § 45.4(a) would require that for each swap, regardless of asset class, reporting counterparties and DCOs required to report required swap continuation data shall report life cycle event data for the swap electronically to an SDR in the manner provided in § 45.13(a) within the applicable deadlines set forth in § 45.4.
The Commission is proposing several revisions to the § 45.4(b) required swap continuation data reporting requirements for clearing swaps. First, the Commission is proposing to move the § 45.4(b) required swap continuation data reporting regulations for clearing swaps to revised § 45.4(c). The Commission is then proposing to redesignate current § 45.4(c) as § 45.4(b). Current § 45.4(c) contains the continuation data reporting regulations for original swaps. As revised, newly re-designated § 45.4(b) would be titled
Revised § 45.4(c) would contain the continuation data reporting requirements for all swaps other than original swaps, which would include clearing swaps. The revisions to the continuation data requirements for clearing swaps and uncleared swaps are discussed in section II.D.4 below. The revisions to the continuation data requirements for original swaps in revised § 45.4(b) will be discussed in this section.
Second, the Commission is proposing several amendments to the continuation data reporting regulations for original swaps in § 45.4(c), proposed to be redesignated as § 45.4(b). Current § 45.4(c) requires that required swap continuation data, including terminations, must be reported to the SDR to which the original swap that was accepted for clearing was reported pursuant to § 45.3(a) through (d).
The Commission is proposing to extend the deadline for reporting swap continuation data for original swaps in § 45.4(c)(1). As explained in sections II.C.2.a and II.C.2.b above, the Commission is proposing to extend the deadlines for reporting required swap creation data in § 45.3 for swaps executed on SEFs and DCMs and those executed off-facility to either T+1 or T+2, depending on the reporting counterparty.
In reviewing the continuation data reporting deadlines, the Commission also considered those set by other regulators. For instance, the SEC requires that any events that would result in a change in the information reported to a SBSDR be reported within 24 hours of the event taking place.
Original swaps are swaps that are accepted for clearing by a DCO. Because they are cleared, the original swap reporting counterparties do not report continuation data for original swaps to SDRs. However, the Commission believes aligning the required swap creation data deadlines with the required swap continuation data deadlines would be consistent with the approach taken by other regulators. In light of the foregoing, the Commission is proposing to extend the deadline for reporting continuation data for original swaps to T+1 following any life cycle event.
The Commission is also proposing to remove the references to state data reporting
Therefore, proposed § 45.4(b) would require that for each original swap, the DCO shall report required swap continuation data, including terminations, electronically to the SDR to which the swap that was accepted for clearing was reported pursuant to § 45.3 in the manner provided in § 45.13(a) and in § 45.4, and such required swap continuation data shall be accepted and recorded by such SDR as provided in § 49.10. Revised § 45.4(b)(1) would require that the DCO that accepted the swap for clearing shall report all life cycle event data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the day, as determined according to eastern time, that any life cycle event occurs with respect to the swap.
Revised § 45.4(b)(2) would continue to require that in addition to all other required swap continuation data, life cycle event data shall include: (i) The LEI of the SDR to which all required swap creation data for each clearing swap was reported by the DCO pursuant to § 45.3(b); (ii) the UTI of the original swap that was replaced by the clearing swaps; and (iii) the UTI of each clearing swap that replaces a particular original swap.
The Commission is proposing several amendments to the § 45.4(c) regulations for reporting required swap continuation data for original swaps. First, the Commission is proposing to move the required swap continuation data reporting requirements for original swaps from § 45.4(c) to § 45.4(b). The Commission is proposing to move the continuation data reporting requirements for clearing swaps from § 45.4(b) to § 45.4(c), and combine them with the continuation data reporting requirements for uncleared swaps currently located in § 45.4(d). The Commission is proposing to retitle § 45.4(c) “Continuation data reporting for swaps other than original swaps” to reflect the combination.
The Commission is proposing several revisions to the continuation data reporting regulations for clearing swaps and uncleared swaps in § 45.4(b) and (d), respectively, which are proposed to be redesignated as § 45.4(c). The revisions to the continuation data requirements for original swaps are discussed in section II.D.3 above. The revisions to the continuation data requirements for clearing swaps and uncleared swaps to be combined in revised § 45.4(c) will be discussed below in this section.
Current § 45.4(b) requires that for all clearing swaps, DCOs must report: (i) Life cycle event data or state data reporting either on the same day that any life cycle event occurs with respect to the swap, or daily for state data reporting; and (ii) daily valuation data. Current § 45.4(d) requires that for all uncleared swaps, including swaps executed on a SEF or DCM, the reporting counterparty must report: (i) All life cycle event data on the same day for SD/MSP reporting counterparties, or the second business day if it relates to a corporate event of the non-reporting counterparty, or state data daily; (ii) all
The Commission is proposing to revise the life cycle event reporting deadlines for these swaps to reflect the revisions proposed to the § 45.3(b) required swap creation data reporting deadlines and the § 45.4(b) original swap continuation data reporting deadlines.
For non-SD/MSP/DCO reporting counterparties, the Commission is proposing to change the life cycle event reporting deadline to T+2 following the life cycle event.
The Commission is also proposing to remove the references to state data reporting in revised § 45.4(c).
The Commission is also proposing revisions to the requirements for reporting swap valuation data for all reporting counterparties. As background, DCOs, SDs, and MSPs report valuation data daily, while non-SD/MSP reporting counterparties report the daily mark of transactions quarterly.
As background, the Commission decided not to require collateral data reporting when it adopted part 45 in 2012. At the time, both the Commission and industry understood that collateral information was important for systemic risk management, but was not yet possible to include in transaction-based reporting since it was calculated at the portfolio level.
The Commission is concerned that not having margin and collateral data impedes its ability to fulfill the systemic risk mitigation objectives of the Dodd-Frank Act. As a result, the Commission is revisiting this issue as the Commission noted in 2012 to determine whether it is now feasible.
DMO raised the issue of and received comments on new margin and collateral reporting as part of the Roadmap review. Some commenters opposed such reporting,
Other regulators have taken different approaches to margin and collateral data reporting. The SEC does not require reporting of any valuation data or margin and collateral data, for security-based swaps.
The Commission believes margin and collateral data is necessary to monitor risk in the swaps market. Given that ESMA is already requiring collateral reporting, and that the Commission is proposing to require many of the swap data elements that ESMA requires, the Commission believes industry is ready to report this data to SDRs.
However, the Commission is concerned that valuation, margin, and collateral data reporting could create a significant burden for non-SD/MSP/DCO reporting counterparties. The Commission is aware that these entities may be smaller and less active in the swaps market, with fewer resources to devote to reporting this complex data. The Commission also recognizes that the quarterly valuation data these counterparties report is not integral to the Commission's ability to monitor systemic risk in the swaps market and may not justify the cost to these entities to report it. The Commission is therefore proposing to remove the current requirement for non-SD/MSP/DCO
In light of the foregoing, the Commission is proposing to require margin and collateral reporting for reporting counterparties that are SDs, MSPs, and DCOs in § 45.4(c)(2). Proposed § 45.4(c) would require that for each swap that is not an original swap, including clearing swaps and swaps not cleared by a DCO, the reporting counterparty report all required swap continuation data electronically to an SDR in the manner provided in § 45.13(a) as provided in § 45.4(c). Proposed § 45.4(c)(1)(i) would require that SD/MSP/DCO reporting counterparties report life cycle event data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the day, as determined according to eastern time, that any life cycle event occurred, with the sole exception that life cycle event data relating to a corporate event of the non-reporting counterparty shall be reported in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the second business day following the day, as determined according to eastern time, that such corporate event occurred.
Proposed § 45.4(c)(1)(ii) would require that non-SD/MSP/DCO reporting counterparties report life cycle event data electronically to an SDR in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the second business day following the day, as determined according to eastern time, that any life cycle event occurred.
Proposed § 45.4(c)(2) would require that SD/MSP/DCO reporting counterparties report swap valuation data and collateral data electronically to an SDR in the manner provided in § 45.13(b) each business day.
The Commission requests comment on all aspects of the proposed changes to § 45.4. The Commission also invites specific comment on the following:
(5) Are the Commission's proposed T+1 and T+2 deadlines for reporting required swap continuation data appropriately harmonized with the deadlines set by other regulators and jurisdictions to benefit market participants? Do the Commission's proposed T+1 and T+2 deadlines for reporting required swap continuation data create any operational issues for reporting counterparties that the Commission has not considered?
(6) Is the requirement to report margin and collateral data without distinction for whether a swap is cleared or uncleared redundant with existing part 39 reporting requirements for cleared swaps? Are there efficiencies for reporting counterparties to submit both cleared and uncleared margin and collateral data together to SDRs?
(7) Does the Commission's proposal to no longer require non-SD/MSP/DCO reporting counterparties to report valuation data raise any concerns about the Commission's ability to monitor systemic risk in the U.S. swaps market?
The Commission is proposing amendments to § 45.5 for USIs. In general, the Commission is proposing to amend § 45.5(a) through (f) to require each swap to be identified with a UTI in all recordkeeping and all swap data reporting, and to require that the UTI be comprised of the LEI of the generating entity and a unique alphanumeric code. The proposed amendments to § 45.5(a) through (f) are discussed in sections II.E.1 to II.E.7 below.
In general, § 45.5 requires each swap to be identified with a USI in all recordkeeping and all swap data reporting, and requires that the USI be comprised of the identifier assigned by the Commission to the generating entity and a unique alphanumeric code. In response to the Roadmap, the Commission received comment letters supporting adoption of the UTI and UPI standards as part of the review.
Because the current USI requirement was implemented prior to global consensus on the structure and format for a common swap identifier, the Commission preliminarily believes that amending § 45.5 to require each swap to be identified with a UTI in all recordkeeping and all swap data reporting and to require that the UTI be comprised of the LEI of the generating entity and a unique alphanumeric code will result in the structure and format for the swap identifier being consistent with the UTI Technical Guidance, reduce cross-border reporting complexity and encourage global swap data aggregation.
The Commission is proposing several conforming amendments to the § 45.5 title and the introductory text. Current § 45.5 is titled “Unique swap identifiers.” The current introductory text states that each swap subject to the jurisdiction of the Commission shall be identified in all recordkeeping and all swap data reporting pursuant to part 45 by the use of a USI, which shall be created, transmitted, and used for each swap as provided in § 45.5(a) through (f).
The Commission is proposing to replace “swap” in the title with “transaction” to reflect the Commission's proposed adoption of the UTI. Accordingly, the Commission is also proposing to update the reference to USI with UTI in the introductory text.
The Commission is also proposing to update the reference to paragraphs (a) through (f) of § 45.5 to (a) through (h) of § 45.5. This amendment would reflect the Commission's proposed addition of § 45.5(g) and (h), discussed in sections II.E.8 and II.E.9 below.
Therefore, in light of the above proposed amendments, the introductory text would state that each swap shall be identified in all recordkeeping and all swap data reporting pursuant to part 45 by the use of a UTI, which shall be created, transmitted, and used for each swap as provided in paragraphs (a) through (h) of § 45.5.
The Commission is proposing several conforming amendments to § 45.5(a) for the creation and transmission of USIs for swaps executed on or pursuant to the rules of SEFs and DCMs. Current § 45.5(a)(1) requires that for swaps executed on or pursuant to the rules of SEFs and DCMs, SEFs and DCMs generate and assign USIs at or ASATP following execution, but prior to the reporting of required swap creation data, that consist of a single data field containing: (i) The unique alphanumeric code assigned to the SEF or DCM by the Commission for the purpose of identifying the SEF or DCM with respect to the USI creation; and (ii) an alphanumeric code generated and assigned to that swap by the automated systems of the SEF or DCM, which shall be unique with respect to all such codes
Current § 45.5(a)(2) requires that the SEF or DCM transmit the USI electronically: (i) To the SDR to which the SEF or DCM reports required swap creation data for the swap, as part of that report; (ii) to each counterparty to the swap ASATP after execution of the swap; and (iii) to the DCO, if any, to which the swap is submitted for clearing, as part of the required swap creation data transmitted to the DCO for clearing purposes.
First, the Commission is proposing amendments to conform to the Commission's proposed adoption of the UTI. The Commission is proposing to replace all references to USIs with UTIs in § 45.5(a)(1) through (2). In addition, the Commission is proposing to update the phrase in § 45.5(a)(1) that the USI shall consist of a single data “field” that contains two components to a single data “element with a maximum length of 52 characters” so that the length of the UTI is consistent with the UTI Technical Guidance.
The Commission is also proposing to amend § 45.5(a)(1)(i) describing the first component of the UTI's single data element to replace “unique alphanumeric code assigned to” the SEF or DCM with “legal entity identifier of” the SEF or DCM so that the identifier used to identify the UTI generating entity is consistent with the UTI Technical Guidance.
Therefore, in light of the above proposed changes, § 45.5(a)(1)
The Commission is proposing several amendments to § 45.5(b) for the creation and transmission of USIs for off-facility swaps by SD/MSP reporting counterparties. Current § 45.5(b)(1) requires that for off-facility swaps with SD/MSP reporting counterparties, the reporting counterparty generate and assign a USI ASATP consisting of a single data field. The single data field is to contain: (i) The unique alphanumeric code assigned to the SD or MSP by the Commission at the time of its registration for the purpose of identifying them with respect to USI creation; and (ii) an alphanumeric code generated and assigned to that swap by the automated systems of the SD or MSP, which shall be unique with respect to all such codes generated and assigned by that SD or MSP. The required USI is to be generated and assigned after execution of the swap and prior to the reporting of required swap creation data and the transmission of data to a DCO if the swap is to be cleared.
Current § 45.5(b)(2) requires that the reporting counterparty transmit the USI electronically: (i) To the SDR to which the reporting counterparty reports required swap creation data for the swap, as part of that report; and (ii) to the non-reporting counterparty to the swap, ASATP after execution of the swap; and (iii) to the DCO, if any, to which the swap is submitted for clearing, as part of the required swap creation data transmitted to the DCO for clearing purposes.
First, the Commission is proposing to expand the UTI creation and transmission requirements for SD/MSP reporting counterparties to include reporting counterparties that are financial entities.
The Commission also believes this would more closely align the UTI generation hierarchy with the reporting counterparty determination hierarchy in § 45.8, which incorporates financial entities for purposes of determining the reporting counterparty.
The Commission is also proposing conforming changes. These are to replace “swap dealer or major swap participant reporting counterparty” in the title to § 45.5(b) with “financial entity reporting counterparty” and to replace “swap dealer or major swap participant” in the first sentence of § 45.5(b) with “financial entity.” As proposed, the new title of § 45.5(b) would be “Off-facility swaps with a financial entity reporting counterparty” and the first sentence of § 45.5(b) would begin with “For each off-facility swap where the reporting counterparty is a financial entity . . . .”
Second, the Commission is proposing amendments to conform to the Commission's proposed adoption of the UTI. The Commission is proposing to replace all references to USIs with UTIs in § 45.5(b)(1) through (2). In addition, the Commission is proposing to update the phrase in § 45.5(b)(1) that the USI shall consist of a single data “field” that contains two components to a single data “element with a maximum length of 52 characters” so that the length of the UTI is consistent with the UTI Technical Guidance.
The Commission is also proposing to amend § 45.5(b)(1)(i) describing the first component of the UTI's single data element to replace “unique alphanumeric code assigned to” the SD or MSP with “legal entity identifier of” the reporting counterparty so that the identifier used to identify the UTI generating entity is consistent with the UTI Technical Guidance.
Therefore, in light of the above proposed changes, § 45.5(b)(1)
The Commission is proposing several amendments to § 45.5(c) for the creation and transmission of USIs for off-facility swaps by non-SD/MSP reporting counterparties. Current § 45.5(c)(1) requires that for off-facility swaps with non-SD/MSP reporting counterparties, the SDR generates and assigns a USI ASATP after receiving the first report of PET data consisting of a single data field containing: (i) The unique alphanumeric code assigned to the SDR by the Commission at the time of its registration for the purpose of identifying them with respect to USI creation; and (ii) an alphanumeric code generated and assigned to that swap by the automated systems of the SDR, which shall be unique with respect to all such codes generated and assigned by that SDR.
Current § 45.5(c)(2) requires that the SDR transmit the USI electronically: (i) To the counterparties to the swap ASATP after creation of the USI, and (ii) to the DCO, if any, to which the swap is submitted for clearing ASATP after creation of the USI.
First, the Commission is proposing to replace “non-SD/MSP reporting counterparty” in the title to § 45.5(c) with “non-SD/MSP/DCO reporting counterparty that is not a financial entity” and to replace “reporting counterparty is a non-SD/MSP counterparty” in the first sentence of § 45.5(c) with “reporting counterparty is a non-SD/MSP/DCO counterparty that is not a financial entity.” As proposed, the new title of § 45.5(c) would be “Off-facility swaps with a non-SD/MSP/DCO reporting counterparty that is not a financial entity” and the first sentence of § 45.5(c) would begin with “For each off-facility swap for which the reporting counterparty is a non-SD/MSP/DCO counterparty that is not a financial entity . . . .” As explained in section II.E.3 above, the Commission is proposing to expand UTI generation responsibilities to financial entities,
Second, the Commission is proposing to amend § 45.5(c) to provide non-SD/MSP/DCO reporting counterparties that are not financial entities with the option to generate the UTI for an off-facility swap or to request that the SDR to which required swap creation data will be reported to generate the UTI. If the non-SD/MSP/DCO reporting counterparty that is not a financial entity chooses to generate the UTI for an off-facility swap, the reporting counterparty would follow the creation and transmission requirements for financial entity reporting counterparties in § 45.5(b)(1) and (2). If the non-SD/MSP/DCO reporting counterparty that is not a financial entity chooses to request the SDR to generate the UTI, the SDR would follow the creation and transmission requirements for SDRs in § 45.5(c)(1) and (2). The Commission is proposing amendments to the requirements for SDRs in § 45.5(c)(1), as discussed below.
In the Joint SDR Letter, three SDRs expressed the view that the Commission should adopt the UTI Technical Guidance without modification, after which anyone with an LEI would be able to create a USI, and SDRs would no longer need to generate and transmit UTIs.
Because the UTI Technical Guidance was produced with the need to accommodate the different trading patterns and reporting rules in jurisdictions around the world, certain factors included in the UTI Technical Guidance generation flowchart are not applicable for the Commission (
The Commission preliminarily believes that amending § 45.5(c) to provide the reporting counterparty with the option to generate the UTI for an off-facility swap where the reporting counterparty is neither a DCO nor financial entity or, if the reporting counterparty elects not to generate the UTI, to request that the SDR to which required swap creation data will be reported to generate the UTI will simultaneously: (i) Provide a reporting counterparty that is neither a DCO nor financial entity with the flexibility to generate the UTI should it choose to do so; and (ii) reduce the number of swaps where an SDR is assigned with UTI generation responsibilities, while also maintaining the existing SDR role as a guarantee that every off-facility swap will be identified with a UTI.
Third, the Commission is proposing amendments to conform to the Commission's proposed adoption of the
The Commission is also proposing to amend § 45.5(c)(1)(i) describing the first component of the UTI's single data element to replace “unique alphanumeric code assigned to” the SDR with “legal entity identifier of” the SDR so that the identifier used to identify the UTI generating entity is consistent with the UTI Technical Guidance.
Therefore, in light of the above proposed amendments, § 45.5(c)(1)
Proposed § 45.5(c)(1) would provide that the SDR generate and assign UTIs at or ASATP following receipt of a request from the reporting counterparty, that consist of a single data element with a maximum length of 52 characters containing: (i) The LEI of the SDR; and (ii) an alphanumeric code generated and assigned to that swap by the automated systems of the SDR, which shall be unique with respect to all such codes generated and assigned by that SDR.
The Commission is proposing several amendments to the § 45.5(d) regulations for the creation and transmission of USIs for clearing swaps. Current § 45.5(d) requires that for each clearing swap, the DCO that is a counterparty to such swap shall create and transmit a USI upon, or ASATP after, acceptance of an original swap for clearing, or execution of a clearing swap that does not replace an original swap, and prior to the reporting of required swap creation data for the clearing swap. Current § 45.5(d)(1) requires that the USI shall consist of a single data field that contains: (i) The unique alphanumeric code assigned to the DCO by the Commission for the purpose of identifying it with respect to USI creation; and (ii) an alphanumeric code generated and assigned to that clearing swap by the automated systems of the DCO, which shall be unique with respect to all such codes generated and assigned by that DCO.
Current § 45.5(d)(2) requires that the DCO transmit the USI electronically to: (i) The SDR to which the DCO reports required swap creation data for the clearing swap; and (ii) to the counterparty to the clearing swap, ASATP after accepting the swap for clearing or executing the swap, if it does not replace an original swap.
First, the Commission is proposing to retitle the section “Off-facility swaps with a [DCO] reporting counterparty.” The Commission is proposing to rephrase the introductory text in § 45.5(d) to reflect this shift in terminology.
Second, the Commission is proposing amendments to conform to the Commission's proposed adoption of the UTI. The Commission is proposing to replace all references to USIs with UTIs in § 45.5(d)(1) through (2). In addition, the Commission is proposing to update the phrase in § 45.5(d)(1) that the USI shall consist of a single data “field” that contains two components to a single data “element with a maximum length of 52 characters” so that the length of the UTI is consistent with the UTI Technical Guidance.
The Commission is also proposing to amend § 45.5(d)(1)(i) describing the first component of the UTI's single data element to replace “unique alphanumeric code assigned to the “DCO reporting counterparty with “legal entity identifier of” the DCO so that the identifier used to identify the UTI generating entity is consistent with the UTI Technical Guidance.
Therefore, in light of the above proposed amendments, § 45.5(d)(1)
The Commission is proposing several amendments to the § 45.5(e) regulations for the creation and transmission of USIs for allocations. The Commission is proposing to replace references to USIs with UTI throughout § 45.5(e) to conform to the Commission's proposed adoption of the UTI. The Commission is also proposing non-substantive technical and language edits to update cross-references and improve readability.
The Commission is proposing several amendments to the § 45.5(f) regulations for the use of UTIs by registered entities and swap counterparties. Current § 45.5(f) requires that registered entities and swap counterparties subject to the jurisdiction of the Commission include the USI for a swap in all of its records and all of its swap data reporting concerning that swap, from the time it creates or receives the USI, throughout the existence of the swap and for as long as any records are required by the CEA or Commission regulations to be kept concerning the swap, regardless of any life cycle events or any changes to state data concerning the swap, including, without limitation, any changes with respect to the counterparties to or the ownership of the swap.
Section 45.5(f) also specifies that this requirement shall not prohibit the use by a registered entity or swap counterparty in its own records of any additional identifier or identifiers internally generated by the automated systems of the registered entity or swap counterparty, or the reporting to an
First, the Commission is proposing amendments to conform to the Commission's proposed adoption of the UTI. The Commission is proposing to replace all references to USIs with UTIs in § 45.5(f). The Commission is also proposing to remove the reference to state data in the regulation,
Second, the Commission is proposing to remove the provision permitting the reporting of any additional identifier or identifiers internally generated by the automated systems of the registered entity or swap counterparty to an SDR, the Commission, or another regulator. The Commission believes this amendment would improve consistency in the swap data reported to SDRs, and further the goal of harmonization of SDR data across Financial Stability Board (“FSB”) member jurisdictions.
Therefore, in light of the above proposed amendments, § 45.5(f) would require that registered entities and swap counterparties include the UTI for a swap in all of their records and all of their swap data reporting concerning that swap, from the time they create or receive the UTI, throughout the existence of the swap and for as long as any records are required by the CEA or Commission regulations to be kept concerning the swap, regardless of any life cycle events concerning the swap, including, without limitation, any changes with respect to the counterparties to the swap.
The Commission is proposing to add new § 45.5(g) to its regulations, titled “Third-party service provider.” Proposed § 45.5(g) would create requirements for registered entities and reporting counterparties to, when contracting with third-party service providers to facilitate reporting pursuant to § 45.9, ensure that the third-party service providers create and transmit UTIs.
As background, the Commission has encountered inconsistencies in the format and standard of USIs for swaps reported using third-party service providers. The Commission preliminarily believes that proposed § 45.5(g) will help ensure consistency with the UTI Technical Guidance in the format and standard of UTIs for swaps reported by third-party service providers. The Commission further believes that proposed § 45.5(g) will reinforce the existing responsibility of a registered entity or reporting counterparty under § 45.9 for the data reported on its behalf by a third-party service provider.
Therefore, proposed § 45.5(g) would provide that if a registered entity or reporting counterparty required by part 45 to report required swap creation data or required swap continuation data contracts with a third-party service provider to facilitate reporting pursuant to § 45.9, the registered entity or reporting counterparty ensures that such third-party service provider creates and transmits the UTI as otherwise required for such category of swap by § 45.5(a) through (e). It would further provide that the UTI shall consist of a single data element with a maximum length of 52 characters that contains: (i) The LEI of the third-party service provider; and (ii) an alphanumeric code generated and assigned to that swap by the automated systems of the third-party service provider, which shall be unique with respect to all such codes generated and assigned by that third-party service provider.
The Commission is proposing to add new § 45.5(h) to its regulations, titled “Cross-jurisdictional swaps.” Proposed § 45.5(h) would clarify that if a swap is also reportable to one or more other jurisdictions with a regulatory reporting deadline earlier than the deadline set forth in § 45.3, the swap is to be identified in all reporting pursuant to part 45 with the same UTI that has been generated according to the rules of the jurisdiction with the earliest regulatory reporting deadline.
The Commission believes that the benefits resulting from global swap data aggregation and harmonization are realizable only if each swap is identified in all regulatory reporting worldwide with a single UTI so as to avoid double- or triple-counting of the swap. While the current requirement in part 45 for swap creation data to be reported ASATP after execution results in the Commission having the earliest regulatory reporting deadline, changes to the reporting deadline in proposed amendments to § 45.3 may result in a cross-jurisdictional swap being required to be reported to another jurisdiction earlier than to the Commission. Because the Commission considers it critical that only one unique UTI is used to identify each swap, whether reportable only to the Commission or to multiple jurisdictions, the Commission proposes that, if a cross-jurisdictional swap is reportable to another jurisdiction earlier than required under part 45, the UTI for such swap reported pursuant to part 45 be generated according to the rules of the jurisdiction with the earliest regulatory reporting deadline.
The Commission preliminarily believes that the new proposed provision would: (i) Ensure consistency with the UTI Technical Guidance;
Therefore, proposed § 45.5(h) would require that notwithstanding the provisions of § 45.5(a) through (g), if a swap is also reportable to one or more other jurisdictions with a regulatory reporting deadline earlier than the deadline set forth in § 45.3, the same UTI generated according to the rules of the jurisdiction with the earliest regulatory reporting deadline shall be transmitted pursuant to § 45.5(a)-(g) and used in all recordkeeping and all swap data reporting pursuant to part 45.
The Commission requests comment on all aspects of the proposed changes to § 45.5.
The Commission is proposing amendments to the introductory text of the § 45.6 regulations for LEIs. The current introductory text states that each counterparty to any swap subject to the jurisdiction of the Commission shall be identified in all recordkeeping and all swap data reporting pursuant to part 45 by means of a single LEI as specified in § 45.6.
First, the Commission is proposing to replace “each counterparty” with each SEF, DCM, DCO, SDR, entity reporting pursuant to § 45.9, and counterparty to any swap. The Commission believes a list of entities would be more precise and help market participants referring to the introductory text.
Second, the Commission is proposing to revise the introductory text to require
The Commission also preliminarily believes that extending the requirement for each counterparty to any swap to be identified in all recordkeeping and swap data reporting by a single LEI to all SEFs, DCMs, DCOs, entities reporting pursuant to § 45.9, and SDRs will ensure consistency with the CDE Technical Guidance, allow for standardization in the identification in recordkeeping and swap data reporting, and encourage global swap data aggregation.
Therefore, in light of the above proposed amendments, the introductory text to § 45.6 would state that each SEF, DCM, DCO, SDR, entity reporting pursuant to § 45.9, and counterparty to any swap eligible to receive an LEI shall obtain and be identified in all recordkeeping and all swap data reporting pursuant to part 45 by a single LEI as specified in § 45.6.
The Commission is proposing several changes to the definitions for the LEI regulations in § 45.6(a). As background, current § 45.6(a) provides definitions for “control,” “legal identifier system,” “level one reference data,” “level two reference data,” “parent,” “self-registration,” “third-party registration,” and “ultimate parent.”
The Commission is proposing to move certain definitions pertaining to LEIs to § 45.1(a). The Commission believes these definitions should be in § 45.1(a) because they are used in regulations outside of § 45.6. These definitions are: “Global Legal Entity Identifier System,”
The Commission is also proposing to remove certain definitions pertaining to LEIs from § 45.6(a). These definitions would no longer be necessary in light of the proposed amendments to the LEI regulations, discussed in sections II.F.3 to II.F.8 below. These definitions are: “control,” “level one reference data,” “level two reference data,” “parent,” and “ultimate parent.”
The Commission is proposing to amend certain definitions pertaining to LEIs in § 45.6(a). The Commission is proposing to amend the definition of “self-registration” in several respects. First, the Commission is proposing to remove the specific reference to “level one or level two” reference data, and the accompanying specifier “as applicable.” This amendment would reflect the Commission's proposal to remove the definitions of “level one reference data” and “level two reference data.”
Second, the Commission is proposing to add a reference to “individuals,” to reflect the fact that swap counterparties may be individuals who need to obtain LEIs. As amended, “self-registration” would mean submission by a legal entity or individual of its own reference data.
The Commission is also proposing to amend the definition of “third-party registration.” First, the Commission is proposing to remove the specific references to “level one or level two” reference data, and the accompanying specifier “as applicable.” This amendment would reflect the Commission's proposal to remove the definitions of “level one reference data” and “level two reference data.”
Second, the Commission is proposing to add references to “individuals,” to reflect that swap counterparties may be individuals who need to obtain LEIs. As amended, “third-party registration” would mean submission of reference data for a legal entity or individual that is or may become a swap counterparty, made by an entity or organization other than the legal entity or individual identified by the submitted reference data. Examples of third-party registration include, without limitation, submission by an SD or MSP of reference data for its swap counterparties, and submission by a national numbering agency, national registration agency, or data service provider of reference data concerning legal entities or individuals with respect to which the agency or service provider maintains information.
Finally, the Commission is proposing to add two definitions pertaining to LEIs to § 45.6(a). First, the Commission is proposing to add a definition of “local operating unit.” As proposed, “local operating unit” would mean an entity authorized under the standards of the Global Legal Entity Identifier System to issue legal entity identifiers. Second, the Commission is proposing to add a definition of “reference data.” As proposed, “reference data” would mean all identification and relationship information, as set forth in the standards of the Global Legal Entity Identifier System, of the legal entity or individual to which an LEI is assigned. The terms “local operating unit” and “reference data” are explained in a discussion of the proposed amendments to § 45.6(e) in section II.F.7 below.
The Commission is proposing several changes to § 45.6(b) regulations for the international standards for LEIs. The proposed amendments to § 45.6(b) would reflect changes that have taken place since the current LEI regulations in § 45.6 were adopted in 2012. As background, § 45.6(b) now states that the LEI used in all recordkeeping and all swap data reporting required by part 45, following designation of the legal entity identifier system as provided in § 45.6(c)(2), shall be issued under, and shall conform to, International Organization for Standardization (“ISO”) Standard 17442, Legal Entity Identifier (LEI), issued by the ISO.
The Commission is proposing to remove the phrase “following designation of the [LEI] system as provided in [§ 45.6(c)(2)].” The governance of the Global Legal Entity Identifier System designed by the FSB with the contribution of private sector participants is now fully in place: While at the beginning of the Global Legal Entity Identifier System, LEI issuers were operating under a temporary endorsement of the LEI ROC, all active LEI issuers have now been accredited.
Therefore, in light of the above proposed amendments, § 45.6(b) would state that the LEI used in all recordkeeping and all swap data reporting required by part 45 shall be issued under, and shall conform to, ISO Standard 17442, Legal Entity Identifier (LEI), issued by the ISO.
The Commission is proposing to remove this redundantly-numbered § 45.6(b) for the technical principles for the LEI.
Currently, this § 45.6(b) regulation enumerates the six technical principles for the legal entity identifier to be used in all recordkeeping and all swap data reporting. The principles in § 45.6(b) are: (i) Uniqueness; (ii) neutrality; (iii) reliability; (iv) open source; (v) extensibility; and (vi) persistence.
The Commission is proposing to remove the above technical principles from § 45.6(b). The Commission adopted § 45.6(b) before global technical principles for the LEI were developed. The Commission has participated in the Global Legal Entity Identifier System and the LEI ROC since their establishment in 2013, through which global technical principles have been developed and a functioning LEI system introduced. The Commission preliminarily believes that deleting this current § 45.6(b) to remove the technical principles for the legal entity identifier to be used in all recordkeeping and all swap data reporting is now warranted because the global technical principles that have been developed conform to the technical principles in § 45.6(b).
The Commission is proposing to remove the current § 45.6(c) regulations for the governance principles for the LEI.
Current § 45.6(c) enumerates the five governance principles for the legal entity identifier to be used in all recordkeeping and all swap data reporting. The governance principles are: International governance; reference data access; non-profit operation and funding; unbundling and non-restricted use; and commercial advantage prohibition.
The Commission is proposing to remove the above governance principles from § 45.6(c). The Commission adopted § 45.6(c) before global governance principles for the LEI were developed. The Commission has participated in the Global Legal Entity Identifier System and the LEI ROC since their establishment in 2013, through which global governance principles have been developed and a functioning LEI system introduced. The Commission preliminarily believes that deleting current § 45.6(c) to remove the governance principles for the legal entity identifier to be used in all recordkeeping and all swap data reporting is now warranted because the global governance principles that have been developed conform to the governance principles in § 45.6(c).
The Commission is proposing to remove the § 45.6(e) regulations for the designation of the legal entity identifier system. Current § 45.6(e) enumerates the procedures for determining whether a legal entity identifier system meets the Commission's requirements and the procedures for designating the legal entity identifier system as the provider of legal entity identifiers to be used in all recordkeeping and all swap data reporting.
The Commission adopted § 45.6(e) before a global legal entity identifier system was developed. The Commission has participated in the Global Legal Entity Identifier System and the LEI ROC since their establishment in 2013, through which a functioning LEI system has been introduced, overseeing the issuance of LEIs by local operating units. The Commission preliminarily believes that deleting this current § 45.6(e) to remove the procedures for determining whether a legal entity identifier system meets the Commission's requirements and the procedures for designating the legal entity identifier system as the provider of legal entity identifiers to be used in all recordkeeping and all swap data reporting is now warranted because such determination and designation procedures are no longer needed due to the establishment of Global Legal Entity Identifier System.
The Commission is proposing changes to the § 45.6(e) regulations for LEI reference data reporting.
Second, the Commission is proposing amendments to the requirements for reporting LEI reference data in current § 45.6(e), proposed to be moved to § 45.6(c). Current § 45.6(e)(1) requires level one reference data for each counterparty to be reported via self-registration, third-party registration, or both, and details the procedures for doing so, including the requirement to update level one reference data in the event of a change or discovery of the need for a correction. Current § 45.6(e)(2) contains the requirement, once the Commission has determined the location of the level two reference database, for level two reference data for each counterparty to be reported via self-registration, third-party registration, or both, and the procedures for doing so, including the requirement to update level two reference data in the event of a change or discovery of the need for a correction.
The Commission is proposing to remove the distinction between level one and level two reference data now found in § 45.6(e). Instead, proposed new § 45.6(c) would require that all reference data for each SEF, DCM, DCO, SDR, entity reporting pursuant to § 45.9, and counterparty to any swap be reported via self-registration, third-party registration, or both, to a local operating unit in accordance with the standards set by the Global Legal Entity Identifier System. Proposed new § 45.6(c) would retain the requirement in current § 45.6(e) to update the reference data in the event of a change or discovery of the need for a correction.
The Commission adopted § 45.6(e) before a global legal entity identifier system was developed. The Commission
While current § 45.6(e) requires that reference data for only the counterparties to a swap be reported, the extension of the requirement to be identified in all recordkeeping and swap data reporting by a single LEI to all SEFs, DCMs, DCOs, entities reporting pursuant to § 45.9, and SDRs described in section II.F.1 above also necessarily requires that all SEFs, DCMs, DCOs, entities reporting pursuant to § 45.9, and SDRs report their LEI reference data.
Therefore, in light of the above proposed amendments, § 45.6(c) would require that LEI reference data regarding each SEF, DCM, DCO, SDR, entity reporting pursuant to § 45.9, and counterparty to any swap shall be reported, by means of self-registration, third-party registration, or both, to a local operating unit in accordance with the standards set by the Global Legal Entity Identifier System. All subsequent changes and corrections to reference data previously reported would be reported, by means of self-registration, third-party registration, or both, to a local operating unit ASATP following occurrence of any such change or discovery of the need for a correction.
The Commission is proposing changes to the § 45.6(f) regulations for the use of LEIs by registered entities and swap counterparties. Current § 45.6(f)(1) requires that when a legal entity identifier system has been designated by the Commission pursuant to § 45.6(e), each registered entity and swap counterparty shall use the LEI provided by that system in all recordkeeping and swap data reporting pursuant to part 45. Current § 45.6(f)(2) requires that before a legal entity identifier system has been designated by the Commission, each registered entity and swap counterparty shall use a substitute counterparty identifier created and assigned by an SDR in all recordkeeping and swap data reporting pursuant to part 45.
Current § 45.6(f)(3) requires that for swaps reported pursuant to part 45 prior to Commission designation of a legal entity identifier system, after such designation each SDR shall map the LEIs for the counterparties to the substitute counterparty identifiers in the record for each such swap. Current § 45.6(f)(4) requires that prior to October 15, 2012, if an LEI has been designated by the Commission as provided in § 45.6, but a reporting counterparty's automated systems are not yet prepared to include LEIs in recordkeeping and swap data reporting pursuant to part 45, the counterparty shall be excused from complying with § 45.6(f)(1), and shall instead comply with § 45.6(f)(2), until its automated systems are prepared with respect to LEIs, at which time it must commence compliance with § 45.6(f)(1).
The Commission is proposing to retitle the section “Use of the legal entity identifier,” because, as discussed below, the LEI will no longer be used only by registered entities and swap counterparties. The Commission is also proposing to move the requirements for the use of LEIs from current § 45.6(f) to correctly renumbered § 45.6(d),
The Commission is proposing to remove the sections of § 45.6(f) that are no longer operative, either because the Commission has designated a legal entity identifier system, or the provisions have expired. For these reasons, the Commission is proposing to remove § 45.6(f)(2) and (4). As a result, the substantive requirements of § 45.6(f)(2) and (4) will not be moved to § 45.6(d).
While the provisions of § 45.6(f)(3) relating to substitute counterparty identifiers are no longer applicable for new swaps, the substantive requirements in § 45.6(f)(3), which are still applicable for swaps previously reported pursuant to part 45 using substitute counterparty identifiers assigned by an SDR prior to Commission designation of a legal entity identifier system, will be moved to new § 45.6(d)(4). Since this provision is applicable only to old swaps and does not alter existing SDRs obligations, the Commission considers this change to be non-substantive.
The Commission is also proposing the following substantive changes to the regulations requiring the use of LEIs. First, the Commission is proposing revisions to the § 45.6(f)(1) regulations for the use of LEIs. The revised regulations will be moved to § 45.6(d)(1), but discussed below.
The Commission proposes to delete the introductory clause “[w]hen a legal entity identifier system has been designated by the Commission pursuant to paragraph (e) of this section” in § 45.6(f)(1) because it is no longer relevant due to the establishment of the Global Legal Entity Identifier System and the LEI ROC in 2013. In addition, while § 45.6(f)(1) currently requires “each registered entity and swap counterparty” to use LEIs in all recordkeeping and swap data reporting pursuant to part 45, the Commission proposes to replace “each registered entity and swap counterparty” with “[e]ach [SEF], [DCM], [DCO], [SDR], entity reporting pursuant to § 45.9, and swap counterparty” in order to, as described in section II.F.1 above, ensure consistency with the CDE Technical Guidance, allow for standardization in the identification in recordkeeping and swap data reporting, and encourage global swap data aggregation. The Commission also proposes to add “to identify itself and swap counterparties” immediately after “use [LEIs]” in this section to clarify the intended use of LEIs. Finally, the Commission proposes to add a new sentence in this section to clarify that if a swap counterparty is not eligible to receive an LEI, such counterparty should be identified in with an alternate identifier pursuant to § 45.13(a). Because some counterparties, including many individuals, are currently ineligible to receive an LEI based on the standards of the Global Legal Entity Identifier System, the Commission believes that this sentence will provide clarity as to how LEI-ineligible counterparties should be identified.
Second, the Commission is proposing new § 45.6(d)(2) to require each SD, MSP, SEF, DCM, DCO, and SDR to maintain and renew its LEI in accordance with the standards set by the Global Legal Entity Identifier System.
Pursuant to the Global Legal Entity Identifier System, established in 2013, a person or entity is issued an LEI after: (1) Providing its identification and relationship reference data to a local operating unit and (2) paying a fee, currently as low as approximately $65, to the local operating unit to validate the provided reference data. After initial issuance, an LEI holder is asked to certify the continuing accuracy of, or provide updates to, its reference data annually, and pay a fee, currently as low as approximately $50, to the local operating unit. LEIs that are not renewed annually are marked as lapsed. Section 45.6 does not currently require annual LEI renewal because part 45 was drafted and implemented prior to the establishment of the Global Legal Entity Identifier System. Since the implementation of § 45.6, the Commission has received consistent feedback from certain market participants and industry groups that the Commission should require at least some LEI holders to annually renew their LEIs.
The Commission is aware that some LEI holders have not complied with the continuing requirement to update reference data as currently required by § 45.6(e), and imposing an annual renewal requirement may increase the accuracy of their reference data. The Commission also recognizes that other LEI holders are in compliance with the continuing requirement to update reference data, and imposing an annual renewal requirement may impose costs on those LEI holders without necessarily increasing the accuracy of their reference data. The Commission has participated in the Global Legal Entity Identifier System since its inception, and values the functionality of the LEI reference data collected, including the introduction of level two reference data.
The Commission considers the activities of SDs, MSPs, SEFs, DCMs, DCOs, and SDRs to have the most systemic impact affecting the Commission's ability to fulfill its regulatory mandates and, in light of the introduction of LEI level two reference data, the Commission preliminarily believes that requiring each SD, MSP, SEF, DCM, DCO, and SDR to maintain and renew its LEI in accordance with the standards set by the Global Legal Entity Identifier System in new § 45.6(d)(2) strikes the appropriate balance between the Commission's interest in accurate LEI reference data and cost to LEI holders.
Third, the Commission proposes a new § 45.6(d)(3) that would obligate each DCO and each financial entity reporting counterparty executing a swap with a counterparty that does not have an LEI but is eligible for one to cause, prior to reporting any required swap creation data for such swap, an LEI to be assigned to the counterparty, including if necessary, through third-party registration.
The Commission is aware that some counterparties currently have not obtained an LEI. While proposed amendments to § 45.6 discussed above clarify that a counterparty required to be identified with an LEI in swap data reporting also has an associated affirmative requirement to obtain an LEI, the Commission anticipates that a small percentage of counterparties nonetheless will not have obtained an LEI before executing a swap. Swap data that does not identify eligible counterparties with an LEI hinders the Commission's fulfillment of its regulatory mandates, including monitoring systemic risk, market monitoring, and market abuse prevention. The Commission preliminarily believes that proposing new § 45.6(d)(3) to require each DCO and each financial entity reporting counterparty executing a swap with a counterparty that does not have an LEI to cause an LEI to be assigned to the non-reporting counterparty will further the objective of identifying each counterparty to a swap with an LEI.
New § 45.6(d)(3) would not prescribe the initial manner in which a DCO or financial entity reporting counterparty causes an LEI to be assigned to the non-reporting counterparty, though if initial efforts are unsuccessful, new § 45.6(d)(3) requires the DCO or financial entity reporting counterparty to obtain an LEI for the non-reporting counterparty. The Commission preliminarily believes that having a DCO or financial entity reporting counterparty serving as a backstop under new § 45.6(d)(3) to ensure the identification of the non-reporting counterparty with an LEI is appropriate because: (i) Each DCO and financial entity reporting counterparty already has obtained, via its “know your customer” and anti-money laundering compliance processes, all identification and relationship reference data of the non-reporting counterparty required by a local operating unit to issue an LEI for the non-reporting counterparty; (ii) multiple local operating units offer expedited issuance of LEI in sufficient time to allow reporting counterparties to meet their new extended deadline in § 45.3(a) through (b) for reporting required swap creation data; and (iii) the Commission anticipates that third-party registration in these instances will be infrequent, as the Commission expects most non-reporting counterparties to be mindful of their direct obligation to obtain their own LEIs pursuant to § 45.6.
Therefore, in light of the above proposed amendments, § 45.6(d)(1) would require that each SEF, DCM, DCO, SDR, entity reporting pursuant to § 45.9, and swap counterparty use an LEI to identify itself and swap counterparties in all recordkeeping and all swap data reporting pursuant to part 45. If a swap counterparty is not eligible to receive an LEI as determined by the Global Legal Entity Identifier System, such counterparty would be identified in all recordkeeping and all swap data reporting pursuant to part 45 with an alternate identifier as prescribed by the Commission pursuant to § 45.13(a).
Proposed § 45.6(d)(2) would provide that each SD, MSP, SEF, DCM, DCO, and SDR shall maintain and renew its LEI in accordance with the standards set by the Global Legal Entity Identifier System. Proposed § 45.6(d)(3) would require that each DCO and each financial entity reporting counterparty executing a swap with a counterparty that is eligible to receive an LEI, but has not been assigned an LEI, prior to reporting any required swap creation data for such swap, cause an LEI to be assigned to the counterparty, including if necessary, through third-party registration.
Proposed § 45.6(d)(4) would require that for swaps previously reported pursuant to part 45 using substitute counterparty identifiers assigned by an SDR prior to Commission designation of an LEI system, each SDR map the LEIs for the counterparties to the substitute counterparty identifiers in the record for each such swap.
The Commission requests comment on all aspects of the proposed changes to § 45.6. The Commission also invites specific comment on the following:
(8) Should the Commission expand requiring LEIs to be renewed annually beyond SDs, MSPs, SEFs, DCMs, DCOs, and SDRs? Please explain why or why
(9) Are there other ways to ensure that an LEI is obtained and reported for a counterparty without an LEI, but is eligible for an LEI, other than each DCO and each financial entity reporting counterparty potentially being required to obtain an LEI on behalf of the counterparty through third-party registration?
The Commission is proposing to amend the introductory text to the § 45.8 reporting counterparty determination regulations. The current introductory text states that determination of which counterparty is the reporting counterparty for all swaps, except clearing swaps, shall be made as provided in § 45.8(a) through (h), and that the determination of which counterparty is the reporting counterparty for all clearing swaps shall be made as provided in § 45.8(i).
The Commission believes that much of the introductory text is superfluous, given that the scope of what § 45.8 covers is clear from the operative provisions of § 45.8. The Commission is proposing to amend the introductory text to § 45.8 to state that the determination of which counterparty is the reporting counterparty for each swap shall be made as provided in § 45.8.
The Commission is proposing to revise the § 45.10 regulations for reporting swap data to a single SDR. As part of these revisions, the Commission is proposing to amend and remove current regulations, and add new regulations to § 45.10. In particular, new § 45.10(d) would permit reporting counterparties to change the SDR to which they report swap data and swap transaction and pricing data.
The Commission is proposing to amend the introductory text to the § 45.10 regulations for reporting to a single SDR. The current introductory text states that all swap data for a given swap, which shall include all swap data required to be reported pursuant to parts 43 and 45, must be reported to a single SDR, which shall be the SDR to which the first report of required swap creation data is made pursuant to part 45.
First, the Commission is proposing to remove the reference to parts 43 and 45. In its place, the Commission is proposing to clarify in the beginning of the introductory text that all “swap transaction and pricing data and swap data” (both terms that the Commission proposes to newly define and add to § 45.1(a))
Second, the Commission is proposing to add a qualifier to the end of the introductory text. The qualifier would specify that all swap data and swap transaction and pricing data for a swap must be reported to a single SDR “unless the reporting counterparty changes the [SDR] to which such data is reported” pursuant to the new regulations proposed in § 45.10(d). New § 45.10(d) would permit reporting counterparties to change the SDR to which they report swap data and swap transaction and pricing data.
Finally, the Commission is proposing ministerial language amendments in the introductory text to improve readability.
Therefore, the introductory text to § 45.10 would state that all swap transaction and pricing data and swap data for a given swap shall be reported to a single SDR, which shall be the SDR to which the first report of such data is made, unless the reporting counterparty changes the SDR to which such data is reported pursuant to § 45.10(d).
The Commission is proposing to amend the § 45.10(a) regulations for reporting swaps executed on or pursuant to the rules of a SEF or DCM to a single SDR. Current § 45.10(a) requires that to ensure that all swap data, including all swap data required to be reported pursuant to parts 43 and 45, for a swap executed on or pursuant to the rules of a SEF or DCM is reported to a single SDR: (i) The SEF or DCM that reports required swap creation data as required by § 45.3 shall report all such data to a single SDR, and ASATP after execution shall transmit to both counterparties to the swap, and to any DCO, the identity of the SDR and the USI for the swap; and (ii) thereafter, all required swap creation data and all required swap continuation data reported for the swap reported by any registered entity or counterparty shall be reported to that same SDR (or to its successor in the event that it ceases to operate, as provided in part 49).
First, the Commission is proposing to remove the phrase “(or to its successor in the event that it ceases to operate, as provided in part 49)” in § 45.10(a)(2). This phrase would no longer be necessary with the proposed regulations in § 49.10(d) that would permit reporting counterparties to change SDRs.
Second, the Commission is proposing to update all references to swap data throughout § 45.10(a). The Commission is proposing to replace all references to “swap data” with all “swap transaction and pricing data and swap data.”
Third, the Commission is proposing to remove § 45.10(a)(1)(ii). As discussed above, § 45.10(a)(1)(ii) requires SEFs and DCMs to transmit the USI to both counterparties to the swap, and to any DCO. This requirement is already located in § 45.5(a)(2). Since the Commission is proposing to remove § 45.10(a)(1)(ii), the Commission is also proposing to combine the text of § 45.10(a) and (a)(i) into a single provision in § 45.10(a).
Finally, the Commission is proposing to add the qualifier to the end of § 45.10(a)(2) that all swap data and swap transaction and pricing data for a swap must be reported to a single SDR “unless the reporting counterparty changes the [SDR] to which such data is reported” pursuant to the new regulations proposed in § 45.10(d). New § 45.10(d) would permit reporting counterparties to change the SDR to which they report swap data and swap transaction and pricing data.
Therefore, § 45.10(a) would require that to ensure that all swap transaction and pricing data and swap data for a swap executed on or pursuant to the rules of a SEF or DCM is reported to a single SDR: (i) The SEF or DCM shall report all swap transaction and pricing data and required swap creation data for a swap to a single SDR, and ASATP after execution of the swap shall transmit to both counterparties to the swap, and to any DCO, the identity of the SDR to which such data is reported; and (ii) thereafter, all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to that same SDR, unless the reporting counterparty changes the SDR to which
The Commission is proposing to amend the § 45.10(b) regulations for reporting swaps executed off-facility with an SD/MSP reporting counterparty to a single SDR. Section 45.10(b)(1) requires that to ensure that all swap data, including all swap data required to be reported pursuant to parts 43 and 45, for off-facility swaps with an SD or MSP reporting counterparty is reported to a single SDR: (i) If the reporting counterparty reports PET data to an SDR as required by § 45.3, the reporting counterparty shall report PET data to a single SDR and ASATP after execution, but no later than as required pursuant to § 45.3, shall transmit to the other counterparty to the swap both the identity of the SDR to which PET data is reported by the reporting counterparty, and the USI for the swap created pursuant to § 45.5; and (ii) if the swap will be cleared, the reporting counterparty shall transmit to the DCO at the time the swap is submitted for clearing both the identity of the SDR to which PET data is reported by the reporting counterparty, and the USI for the swap created pursuant to § 45.5.
Thereafter, § 45.10(b)(2) requires that all required swap creation data and all required swap continuation data reported for the swap, by any registered entity or counterparty, shall be reported to the SDR to which swap data has been reported pursuant to § 45.10(b)(1) or (2) (or to its successor in the event that it ceases to operate, as provided in part 49).
First, the Commission is proposing to combine the requirements for SD/MSP reporting counterparties in § 45.10(b) for off-facility swaps with the requirements for non-SD/MSP reporting counterparties in § 45.10(c) for off-facility swaps. Revised § 45.10(b) would be retitled “Off-facility swaps that are not clearing swaps.” The Commission believes that the requirements for SD/MSP reporting counterparties and non-SD/MSP reporting counterparties could be combined to simplify the regulations in § 45.10. The requirements of current § 45.10(c) are discussed in section II.H.4 below.
Second, the Commission is proposing to remove the phrase “(or to its successor in the event that it ceases to operate, as provided in part 49)” from § 45.10(b)(2). This phrase would no longer be necessary with the proposed regulations in § 49.10(d) that would permit reporting counterparties to change SDRs.
Third, the Commission is proposing to update all references to swap data throughout § 45.10(b). The Commission is proposing to replace all references to “swap data” with all “swap transaction and pricing data and swap data.”
Fourth, the Commission is proposing to remove § 45.10(b)(1). Current § 45.10(b) contains the condition that § 45.10(b)(1)(i) through (iii) apply “[i]f the reporting counterparty reports [PET data] to a [SDR] as required by § 45.3.” This condition is unnecessary, as all reporting counterparties must report required swap creation data to an SDR pursuant to § 45.3 for off-facility swaps. As a result, the Commission is proposing to remove § 45.10(b)(1) and combine and move the regulations in § 45.10(b)(1)(i) through (iii) into § 45.10(b)(1).
Fifth, the Commission is proposing to remove the requirement in current § 45.10(b)(1)(ii) for the reporting counterparty to transmit the USI to the non-reporting counterparty to the swap. This requirement is already located in § 45.5(b)(2) and (c)(2), depending on the type of counterparty.
Finally, the Commission is proposing to add the qualifier to the end of § 45.10(b)(2) that all swap data and swap transaction and pricing data for a swap must be reported to a single SDR “unless the reporting counterparty changes the [SDR] to which such data is reported” pursuant to the new regulations proposed in § 45.10(d). New § 45.10(d) would permit reporting counterparties to change the SDR to which they report swap data and swap transaction and pricing data.
Therefore, proposed § 45.10(b)(1) would require that to ensure that all swap transaction and pricing data and swap data for an off-facility swap that is not a clearing swap is reported to a single SDR: (i) The reporting counterparty shall report all swap transaction and pricing data and required swap creation data to an SDR, and ASATP after execution, shall transmit to the other counterparty to the swap, and to any DCO that will clear the swap, the identity of the SDR to which such data is reported. Thereafter, proposed § 45.10(b)(2) would require that all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to the same SDR, unless the reporting counterparty changes the SDR to which such data is reported pursuant to § 45.10(d).
As discussed in section II.H.3 above, the Commission is proposing to move the § 45.10(c) requirements for non-SD/MSP reporting counterparties to report off-facility swaps to a single SDR to revised § 45.10(b). The requirements in current § 45.10(b) and (c) would be combined to create revised § 45.10(b), which would contain the requirements for reporting counterparties to report off-facility swaps that are not clearing swaps. As a result, the Commission is proposing to move the requirements in current § 45.10(d) to § 45.10(c). The requirements of current § 45.10(d) are discussed in the following section II.H.5.
Current § 45.10(c)(1) requires that to ensure that all swap data, including all swap data required to be reported pursuant to parts 43 and 45, for such swaps is reported to a single SDR: (i) If the reporting counterparty reports PET data to an SDR as required by § 45.3, the reporting counterparty reports PET data to a single SDR, and ASATP after execution, but no later than as required pursuant to § 45.3, the reporting counterparty shall transmit to the other counterparty to the swap the identity of the SDR to which PET data was reported by the reporting counterparty; and (ii) if the swap will be cleared, the reporting counterparty shall transmit to the DCO at the time the swap is submitted for clearing the identity of the SDR to which PET data was reported by the reporting counterparty.
Current § 45.10(c)(2) requires that the SDR to which the swap is reported as provided in § 45.10(c) shall transmit the USI created pursuant to § 45.5 to both counterparties and to any DCO, ASATP after creation of the USI. Thereafter, § 45.10(c)(3) requires that all required swap creation data and all required swap continuation data reported for the swap, by any registered entity or counterparty, shall be reported to the SDR to which swap data has been reported pursuant to § 45.10(c)(1) (or to its successor in the event that it ceases to operate, as provided in part 49 of the Commission's regulations).
As discussed above, the Commission preliminarily believes that the requirements for SD/MSP reporting counterparties and non-SD/MSP reporting counterparties are nearly identical. Therefore, the Commission is proposing to move the requirements for non-SD/MSP reporting counterparties to revised § 45.10(b). The discussion of § 45.10(b), including the Commission's proposed revisions to the new combined
As discussed above, the Commission is proposing to move the requirements for reporting clearing swaps to a single SDR from § 45.10(d) to § 45.10(c). As proposed, newly re-designated § 45.10(c) also would amend the current requirements for reporting clearing swaps to a single SDR now located in § 45.10(d). The Commission is proposing to replace current § 45.10(d) with new requirements for reporting counterparties to change SDRs. Below is a discussion of the proposed amendments to the regulatory requirements for reporting clearing swaps to a single SDR in newly re-designated § 45.10(c) (currently § 45.10(d)), followed by a discussion of the new regulations permitting reporting counterparties to change SDRs.
Current § 45.10(d)(1) requires that to ensure that all swap data for a given clearing swap, and for clearing swaps that replace a particular original swap or that are created upon execution of the same transaction and that do not replace an original swap, is reported to a single SDR: The DCO that is a counterparty to such clearing swap shall report all required swap creation data for that clearing swap to a single SDR, and ASATP after acceptance of an original swap by a DCO for clearing or execution of a clearing swap that does not replace an original swap, the DCO shall transmit to the counterparty to each clearing swap the LEI of the SDR to which the DCO reported the required swap creation data for that clearing swap.
Thereafter, § 45.10(d)(2) requires that all required swap creation data and all required swap continuation data reported for that clearing swap shall be reported by the DCO to the SDR to which swap data has been reported pursuant to § 45.10(d)(1) (or to its successor in the event that it ceases to operate, as provided in part 49). Current § 45.10(d)(3) requires that for clearing swaps that replace a particular original swap, and for equal and opposite clearing swaps that are created upon execution of the same transaction and that do not replace an original swap, the DCO shall report all required swap creation data and all required swap continuation data for such clearing swaps to a single SDR.
As proposed, newly re-designated § 45.10(c) would include several amendments to the requirements now found in § 45.10(d). First, the Commission is proposing to remove the phrase “(or to its successor in the event that it ceases to operate, as provided in part 49)” as now used in § 45.10(d)(2) from re-designated § 49.10(c)(2). This phrase would no longer be necessary with the proposed regulations in new § 49.10(d) that would permit reporting counterparties to change SDRs.
Second, the Commission is proposing in re-designated § 45.10(c) to update all references to swap data now found throughout § 45.10(d). The Commission is proposing to replace all references to “swap data” with all “swap transaction and pricing data and swap data.”
Third, the Commission is proposing in re-designated § 45.10(c)(2) to add the following qualifier to the requirement now found in § 45.10(d)(2) for reporting all swap data and swap transaction and pricing data for a swap to a single SDR: “unless the reporting counterparty changes the [SDR] to which such data is reported” pursuant to the new regulations proposed in § 45.10(d). Finally, the Commission is also proposing numerous language edits to improve readability, and to update certain cross-references.
Therefore, § 45.10(c)(1) would require that to ensure that all swap transaction and pricing data and swap data for a given clearing swap, including clearing swaps that replace a particular original swap or that are created upon execution of the same transaction and that do not replace an original swap, is reported to a single SDR: (i) The DCO that is a counterparty to such clearing swap report all swap transaction and pricing data and required swap creation data for that clearing swap to a single SDR; and (ii) ASATP after acceptance of an original swap for clearing, or execution of a clearing swap that does not replace an original swap, the DCO transmit to the counterparty to each clearing swap the identity of the SDR to which such data is reported.
Thereafter, § 45.10(c)(2) would require that all swap transaction and pricing data, required swap creation data and required swap continuation data for that clearing swap shall be reported by the DCO to the same SDR to which swap data has been reported pursuant to § 45.10(c)(1), unless the reporting counterparty changes the SDR to which such data is reported pursuant to § 45.10(d).
Proposed § 45.10(c)(3) would require that for clearing swaps that replace a particular original swap, and for equal and opposite clearing swaps that are created upon execution of the same transaction and that do not replace an original swap, the DCO report all swap transaction and pricing data, required swap creation data, and required swap continuation data for such clearing swaps to a single SDR.
The Commission is proposing new regulations in § 45.10(d) to permit reporting counterparties to change the SDR to which they report swap data and swap transaction and pricing data. Current § 45.10 provides that all swaps must be reported to a “single [SDR].”
As background, when the Commission adopted § 45.10 in 2012, it believed that regulators' ability to see necessary information concerning swaps could be impeded if data concerning a swap was spread over multiple SDRs.
However, the ability to change SDRs cannot frustrate the Commission's ability to use swap data due to duplicative swap reports housed at multiple SDRs. Therefore, the Commission is proposing to permit reporting to change SDRs, subject to certain procedures described below to ensure swaps are properly transferred between SDRs.
The Commission is proposing new regulations in § 45.10(d), titled “Change of [SDR] for swap transaction and pricing data and swap data reporting.” The introductory text to § 45.10(d) would state that a reporting counterparty may change the SDR to which swap transaction and pricing data and swap data is reported as set forth in this § 45.10(d).
Proposed § 45.10(d)(1) would require that at least five business days prior to changing the SDR to which the reporting counterparty reports swap transaction and pricing data and swap data for a swap, the reporting counterparty shall provide notice of such change to the other counterparty to the swap, the SDR to which swap transaction and pricing data and swap data is currently reported, and the SDR to which swap transaction and pricing data and swap data will be reported going forward. Such notification would include the UTI of the swap and the date on which the reporting counterparty will begin reporting such
Proposed § 45.10(d)(2) would require that after providing notification, the reporting counterparty shall: (i) Report the change of SDR to the SDR to which the reporting counterparty is currently reporting swap transaction and pricing data and swap data as a life cycle event for such swap pursuant to § 45.4; (ii) on the same day that the reporting counterparty reports required swap continuation data as required by § 45.10(d)(2)(i), the reporting counterparty shall also report the change of SDR to the SDR to which swap transaction and pricing data and swap data will be reported going forward, as a life cycle event for such swap pursuant to § 45.4, and the report shall identify the swap using the same UTI used to identify the swap at the previous SDR; (iii) thereafter, all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to the same SDR, unless the reporting counterparty for the swap makes another change to the SDR to which such data is reported pursuant to § 45.10(d).
The Commission requests comment on all aspects of the proposed changes to § 45.10. The Commission also invites specific comment on the following:
(10) Would the Commission's proposal to permit reporting counterparties to change SDRs raise any operational issues for reporting counterparties, SDRs, or non-reporting counterparties?
(11) Should the Commission adopt additional requirements to ensure that a reporting counterparty's choice to change SDRs does not result in the loss of any data or information?
The Commission is proposing non-substantive amendments to the § 45.11 regulations for reporting swaps in an asset class not accepted by any SDR. Current § 45.11(a) requires that should there be a swap asset class for which no SDR registered with the Commission currently accepts swap data, each registered entity or counterparty required by part 45 to report any required swap creation data or required swap continuation data with respect to a swap in that asset class must report that same data to the Commission.
For instance, the Commission is proposing to remove the phrase “registered with the Commission” following the term SDR. The Commission believes this phrase could create confusion, as the three SDRs are provisionally registered with the Commission pursuant to § 49.4(b). The Commission also believes this phrase is unnecessary, as provisionally registered SDRs and fully registered SDRs are subject to the same requirements in the CEA and the Commission's regulations. The Commission is also proposing to replace “each registered entity or counterparty” with SEFs, DCMs, and DCOs, and the term “reporting counterparty.” The list of entities would be more precise.
Therefore, proposed § 45.11(a) would require that should there be a swap asset class for which no SDR registered currently accepts swap data, each SEF, DCM, DCO, or reporting counterparty required by part 45 to report any required swap creation data or required swap continuation data with respect to a swap in that asset class shall report that same data to the Commission.
Current § 45.11(c) and (d) contain a delegation of authority to the Chief Information Officer of the Commission concerning the requirements in § 45.11(a) and (b). The Commission is proposing to move this delegation to a new section, § 45.15, specifically for delegations of authority. This delegation of authority, including the Commission's proposed amendments to it, is discussed in section II.L below.
The Commission requests comment on all aspects of the proposed changes to § 45.11.
The Commission is proposing to remove the § 45.12 regulations for voluntary supplemental reporting from part 45. Current § 45.12 permits the submission of voluntary supplemental swap data reports by swap counterparties.
As background, when the Commission adopted § 45.12 in 2012, it believed that voluntary supplemental reporting could have benefits for data accuracy and counterparty business processes, especially for counterparties that were not the reporting counterparty to a swap.
In practice, the Commission is concerned that these reports compromise data quality and provide no clear regulatory benefit. In analyzing reports that have been marked as “voluntary reports,” it is not immediately apparent to the Commission why reporting parties mark them as being voluntary. In some cases, it appears these reports can be related to products outside the Commission's jurisdiction. The Commission believes it should not accept duplicative or non-jurisdictional reports at the expense of the CFTC's technical and staffing resources with no clear regulatory benefit.
The Commission adopted § 45.12 in 2012 without the benefit of having swap data available to consider the practical implications of § 45.12. However, after years of use by Commission staff, the Commission now believes that § 45.12 has led to swap data reporting that inhibits the Commission's use of the swap data. Therefore, the Commission is proposing to eliminate the § 45.12 regulations for voluntary supplemental reporting.
The Commission requests comment on all aspects of the proposed changes to § 45.12.
The Commission is proposing to revise the § 45.13(a) regulations for data maintained and furnished to the Commission by SDRs. As part of these revisions, the Commission is proposing to remove and replace § 45.13(a)'s current language, including by moving current § 45.13(b) to amended § 45.13(a)(3). Current § 45.13(a) requires that each SDR maintain all swap data
The 2019 Part 49 NPRM proposed moving the requirements of § 45.13(a) to § 49.17(c).
Proposed § 45.13(a)(1) would require that in reporting required swap creation data and required swap continuation data to an SDR, each reporting counterparty, SEF, DCM, and DCO, shall report the swap data elements in appendix 1 in the form and manner provided in the technical specifications published by the Commission.
Proposed § 45.13(a)(2) would require that in reporting required swap creation data and required swap continuation data to an SDR, each reporting counterparty, SEF, DCM, and DCO making such report satisfy the swap data validation procedures of the SDR receiving the swap data. The Commission is proposing companion requirements for SDRs to validate swap data in § 49.10. The proposed validation requirements for SDRs in § 49.10 are discussed in section IV.C below. Proposed § 45.13(a)(2) would establish the regulatory requirement for reporting counterparties, SEFs, DCMs, and DCOs to satisfy the data validation procedures established by SDRs pursuant to § 49.10. The Commission is also proposing to specify the requirements for the validation messages in § 45.13(b). These requirements are discussed in the following discussion.
The Commission is proposing to re-designate the regulations for data reported to SDRs currently located in § 45.13(b). Current § 45.13(b) requires that in reporting swap data to an SDR as required by part 45, each reporting entity or counterparty shall use the facilities, methods, or data standards provided or required by the SDR to which the entity or counterparty reports the data. Current § 45.13(b) further provides that an SDR may permit reporting entities and counterparties to use various facilities, methods, or data standards, provided that its requirements in this regard enable it to meet the requirements of § 45.13(a) with respect to maintenance and transmission of swap data.
The Commission is also proposing to amend the requirements of current § 45.13(b), as re-designated in new § 45.13(a)(3). First, the Commission is proposing to replace “each reporting entity or counterparty” with “each reporting counterparty [SEF, DCM, and DCO].” The Commission believes a list of entities would be more precise.
Second, the Commission is proposing to remove the second sentence in current § 45.13(b). The second sentence in § 45.13(b) pertains to the requirements of § 45.13(a), which the Commission has proposed to move to part 49. Therefore, the Commission is proposing to remove the outdated reference.
As a result, new § 45.13(a)(3) would require that in reporting swap data to an SDR as required by part 45, each reporting counterparty, SEF, DCM, and DCO use the facilities, methods, or data standards provided or required by the SDR to which the entity or counterparty reports the swap data.
The Commission is proposing to specify the requirements for data validation acceptance messages for SDRs, SEFs, DCMs, DCOs, and reporting counterparties. As proposed § 45.13(b)(1) would require that for each required swap creation data or required swap continuation data report submitted to an SDR, an SDR notify the reporting counterparty, SEF, DCM, DCO or third-party service provider submitting the report whether the report satisfied the swap data validation procedures of the SDR. The SDR would be required to provide such notification ASATP after accepting the required swap creation data or required swap continuation data report. An SDR would satisfy these requirements by transmitting data validation acceptance messages as required by proposed § 49.10.
Proposed § 45.13(b)(2) would require that if a required swap creation data or required swap continuation data report to an SDR does not satisfy the data validation procedures of the SDR, the reporting counterparty, SEF, DCM, or DCO required to submit the report has not yet satisfied its obligation to report required swap creation or continuation data in the manner provided by paragraph (a) within the timelines set forth in §§ 45.3 and 45.4. The reporting counterparty, SEF, DCM, or DCO has not satisfied its obligation until it submits the required swap data report in the manner provided by paragraph (a), which includes the requirement to satisfy the data validation procedures of the SDR, within the applicable time deadline set forth in §§ 45.3 and 45.4.
Current § 45.13(c) and (d) contain a delegation of authority to the Chief Information Officer of the Commission concerning the requirements in § 45.13(a). The Commission is proposing to remove the delegation, delegate authority to the Director of the Division of Market Oversight, and move the delegation to new § 45.15. New § 45.15 is discussed in the next section.
The Commission requests comment on all aspects of the proposed changes to § 45.13. The Commission also invites specific comment on the following:
(12) Should the Commission provide a limited exception to the validation requirements for swaps that, for instance, may be a new type of swaps that may fall within one of the five asset classes, but for which swap data reporting standards have not yet been adopted?
(13) Even with technical standards published by the Commission, there is a risk of inconsistent data across SDRs if the Commission allows the SDRs to specify the facilities, methods or data standards for reporting. In order to ensure data quality, should the Commission mandate a certain standard for reporting to the SDRs? If so, what standard would you propose and what would be the benefits? If not, why not?
(14) The CPMI-IOSCO Governance Arrangements for critical OTC derivatives data elements (other than UTI and UPI) (“CDE Governance Arrangements”),
The Commission is proposing to add a new section to its regulations for delegations of authority. As proposed, § 45.15 would be titled “Delegation of authority,” and would contain the delegation of authority currently in § 45.11 and add a new delegation of authority to the Director of the Division of Market Oversight regarding the reporting under § 45.13.
Current § 45.11(c) delegates to the Chief Information Officer of the Commission, or other such employee he or she designates, with respect to swaps in an asset class not accepted by any SDR, the authority to determine: The manner, format, coding structure, and electronic data transmission standards and procedures acceptable to the Commission; whether the Commission may permit or require use by reporting entities or counterparties in reporting pursuant to § 45.11 of one or more particular data standards (such as FIX, FpML, ISO 20022, or some other standard), in order to accommodate the needs of different communities of users; and the dates and times at which required swap creation data or required swap continuation data shall be reported to the Commission.
Current § 45.11(d) requires the Chief Information Officer to publish from time to time in the
Separately, current § 45.13 delegates to the Chief Information Officer, until the Commission orders otherwise, the authority to establish the format by which SDRs maintain swap data reported to it, and the format by which SDRs transmit the data to the Commission. The authority includes the authority to determine the manner, format, coding structure, and electronic data transmission standards and procedures acceptable to the Commission for the purposes of § 45.13(a); and the authority to determine whether the Commission may permit or require use by reporting entities or counterparties, or by SDRs, of one or more particular data standards (such as FIX, FpML, ISO 20022, or some other standard), in order to accommodate the needs of different communities of users, or to enable SDRs to comply with § 45.13(a).
Current § 45.13(d) requires the Chief Information Officer to publish from time to time in the
The Commission is proposing to move the delegations in §§ 45.11(c) through (d) and 45.13(c) through (d) to § 45.15(a) and (b). The Commission is also proposing to update the delegations to reflect the changes to the cross-references resulting from the Commission's amendments to part 45. Proposed § 45.15(b) would therefore delegate to the Director of DMO, until the Commission orders otherwise, the authority set forth in § 45.13(a)(1), to be exercised by the Director of DMO or by such other employee or employees of the Commission as may be designated from time to time by the Director of DMO. The DMO Director would be able to submit to the Commission for its consideration any matter which has been delegated pursuant to § 45.13(b). Nothing in § 45.15(b) would prohibit the Commission, at its election, from exercising the authority delegated in § 45.15(b).
The authority delegated to the Director of DMO would continue to include, subject to the above-mentioned updates: (1) The authority to publish the technical specifications providing the form and manner for reporting the swap data elements in appendix 1 to SDRs as provided in § 45.13(a)(1); (2) the authority to determine whether the Commission may permit or require use by SEFs, DCMs, DCOs, or reporting counterparties in reporting pursuant to § 45.13(a)(1) of one or more particular data standards (such as FIX, FpML, ISO 20022, or some other standard), in order to accommodate the needs of different communities of users; and (3) the dates and times at which required swap creation data or required swap continuation data shall be reported pursuant to § 45.13(a)(1). Section 45.15(b)(4) would continue to provide, with updates, that (4) the DMO director publish from time to time in the
The Commission requests comment on all aspects of the proposed changes to § 45.15.
Part 46 of the Commission's regulations establishes the requirements for reporting pre-enactment and transition swaps to SDRs. In some instances, the proposed revisions to part 45 described in section II above would necessitate corresponding revisions and amendments to the regulations in part 46. The Commission describes any substantive revisions and amendments in this section.
Current § 46.1 contains the definitions for terms used throughout the regulations in part 46. Current § 46.1 does not contain any subordinate paragraphs. The Commission is proposing to separate § 46.1 into two paragraphs: § 46.1(a) for definitions and § 46.1(b), which would state that terms not defined in part 46 have the meanings assigned to the terms in § 1.3.
The Commission is proposing to add a definition of “historical swaps” to § 46.1(a). As proposed, “historical swaps” would mean pre-enactment swaps or transition swaps. This term is already used in part 46.
The Commission is proposing to add a definition of “substitute counterparty identifier” to § 46.1(a). As proposed, “substitute counterparty identifier” would mean a unique alphanumeric code assigned by an SDR to a swap counterparty prior to the Commission designation of an LEI identifier system on July 23, 2012. The term “substitute counterparty identifier” is already used throughout § 46.4.
The Commission is proposing non-substantive minor technical changes to “asset class” and “required swap continuation data.”
The Commission is proposing to amend the definition of “non-SD/MSP counterparty” in § 46.1(a) to conform to the amendments proposed to the corresponding term in § 45.1(a).
The Commission is proposing to amend the definition of “reporting counterparty” to update the reference to
The Commission is proposing to remove the following definitions from § 46.1. The Commission has determined that the following definitions are redundant because the terms are already defined in either § 1.3 or CEA section 1a: “Credit swap;” “foreign exchange forward;” “foreign exchange instrument;” “foreign exchange swap;” “interest rate swap;” “major swap participant;” “other commodity swap;” “swap data repository;” and “swap dealer.”
The Commission is proposing to remove the definition of “international swap,” as there are no regulations for international swaps in part 46.
The Commission requests comment on all aspects of the proposed changes to § 46.1.
Current § 46.3(a)(2)(i)
The Commission is proposing to amend § 46.3(a)(2)(i) to remove the exception from PET data reporting for pre-enactment and transition swaps to specify that reporting counterparties would report updates to pre-enactment and transition swaps according to part 45. The Commission believes this is current practice and would not result in any significant change for the entities reporting updates to historical swaps.
Therefore, proposed § 46.3(a)(2)(i) would require that for each uncleared pre-enactment swap or transition swap in existence on or after April 25, 2011, throughout the existence of the swap following the compliance date, the reporting counterparty shall report all required swap continuation data as required by part 45.
The Commission requests comment on all aspects of the proposed changes to § 46.3.
Current § 46.10 requires that in reporting swap data to an SDR as required by part 46, each reporting counterparty use the facilities, methods, or data standards provided or required by the SDR to which counterparty reports the data.
The Commission is proposing to add a provision that “[i]n reporting required swap continuation data as required by this part, each reporting counterparty shall comply with the required data standards set forth in part 45 of this chapter, including those set forth in § 45.13(a) of this chapter.” As discussed above in the previous section, the Commission believes this is current practice for reporting counterparties and should not result in any significant change for reporting counterparties.
The Commission requests comment on all aspects of the proposed changes to § 46.10.
Consistent with the Commission's proposal to remove the option to report required swap continuation data by the state data reporting method, discussed in section II.D.2 above, the Commission proposes to remove the option in § 46.11(b) for pre-enactment/transition swaps reporting. Specifically, § 46.11(b) currently provides that for pre-enactment or transition swaps for which part 46 requires reporting of continuation data, reporting counterparties reporting state data as provided in part 45 may fulfill the requirement to report errors or omissions by making appropriate corrections in their next daily report of state data pursuant to part 45. Further to the proposed removal of current § 46.11(b), the Commission is also proposing to re-designate current § 46.11(c) and (d) as new § 46.11(b) and (c), respectively.
The Commission requests comment on all aspects of the proposed changes to § 46.11.
The Commission is proposing to add four definitions to § 49.2(a): “Data validation acceptance message,” “Data validation error,” “Data validation error message,” and “Data validation procedures.”
The Commission is proposing to amend the § 49.4 regulations for SDR withdrawals from registration. Current § 49.4(a)(1)(iv) requires that a request to withdraw filed pursuant to § 49.4(a)(1) shall specify, among other items, a statement that the custodial SDR is authorized to make such data and records available in accordance with § 1.44.
Current § 49.4(a)(2) requires that prior to filing a request to withdraw, a registered SDR shall file an amended Form SDR to update any inaccurate information. A withdrawal of registration shall not affect any action taken or to be taken by the Commission based upon actions, activities or events occurring during the time that the facility was designated by the Commission.
First, the Commission is proposing to remove the § 49.4(a)(1)(iv) requirement for SDRs to submit a statement to the Commission that the custodial SDR is authorized to make the withdrawing SDR's data and records available in accordance with § 1.44. The reference to § 1.44 is erroneous. Section 1.44 requires “depositories” to maintain all books, records, papers, and memoranda relating to the storage and warehousing of commodities in such warehouse, depository or other similar entity for a period of 5 years from the date thereof.
Second, the Commission is proposing to remove the § 49.4(a)(2) requirement that prior to filing a request to withdraw, a registered SDR file an amended Form SDR to update any inaccurate information.
The Commission is proposing to instead create a new requirement in § 49.4(a)(2) for SDRs to execute an agreement with the custodial SDR governing the custody of the withdrawing SDR's data and records prior to filing a request to withdraw with the Commission. Proposed § 49.4(a)(2) would also specify that the custodial SDR retain such records for at least as long as the remaining period of time the SDR withdrawing from registration would have been required to retain such records pursuant to part 49. The Commission believes that proposed § 49.4(a)(2) would better address the Commission's primary concerns in an SDR withdrawal from registration.
Therefore, § 49.4(a)(2) would require that prior to filing a request to withdraw, an SDR shall execute an agreement with the custodial SDR governing the custody of the withdrawing SDR's data and records. The custodial SDR shall retain such records for at least as long as the remaining period of time the SDR withdrawing from registration would have been required to retain such records pursuant to part 49.
The Commission requests comment on all aspects of the proposed changes to § 49.4.
The Commission is proposing to revise the § 49.10(a) through (d)
The Commission is proposing to amend the general requirements in § 49.10(a) for SDRs to have policies and procedures to accept swap data and swap transaction and pricing data. Section 49.10(a) requires that registered SDRs establish, maintain, and enforce policies and procedures for the reporting of swap data to the registered SDR and shall accept and promptly record all swap data in its selected asset class and other regulatory information that is required to be reported pursuant to parts 43 and 45 by DCMs, DCOs, SEFs, SDs, MSPs, or non-SD/MSP counterparties.
First, the Commission is proposing to title § 49.10(a) “General requirements” to distinguish it from the rest of the requirements in § 49.10. Second, the Commission is proposing to number the requirement in § 49.10(a) as § 49.10(a)(1), and renumber § 49.10(a)(1) as § 49.10(a)(2).
Third, the Commission is proposing to revise the first sentence to specify that SDRs shall maintain and enforce policies and procedures reasonably designed to facilitate the complete and accurate reporting of SDR data.
Fourth, the Commission is proposing to remove the last phrase of § 49.10(a) beginning with “all swap data in its selected asset class” and create a second sentence requiring SDRs to promptly accept, validate, and record SDR data.
Finally, the Commission is proposing non-substantive edits to § 49.10(a)(1), renumbered as § 49.10(a)(2), to correct references to defined terms and improve consistency in use of terminology. Together, the amendments to § 49.10(a)(1) through (2) would improve the readability of § 49.10(a) while updating the terminology to use the proposed “SDR data” term for the data SDRs are required to accept, validate, and record pursuant to § 49.10.
Therefore, § 49.10(a)(1) would require that an SDR shall establish, maintain, and enforce policies and procedures reasonably designed to facilitate the complete and accurate reporting of SDR data. Proposed § 49.10(a)(1) would further provide that an SDR shall promptly accept, validate, and record SDR data.
Proposed § 49.10(a)(2) would require that for the purpose of accepting SDR data, the SDR shall adopt policies and procedures, including technological protocols, which provide for electronic connectivity between the SDR and DCMs, DCOs, SEFs, SDs, MSPs, and non-SD/MSP/DCO reporting counterparties who report such data. Proposed § 49.10(a)(2) would further provide that the technological protocols established by an SDR shall provide for the receipt of SDR data. The SDR shall ensure that its mechanisms for SDR data acceptance are reliable and secure.
The Commission is proposing to amend the § 49.10(b) requirements for SDRs to accept SDR data. Current § 49.10(b) requires that a registered SDR shall set forth in its application for registration as described in § 49.3 the specific asset class or classes for which it will accept swaps data. If an SDR accepts swap data of a particular asset class, then it shall accept data from all swaps of that asset class, unless otherwise prescribed by the Commission.
First, the Commission is proposing to title § 49.10(b) “Duty to accept SDR data” to distinguish it from the other requirements of § 49.10. Second, the Commission is proposing to update references to data in § 49.10(b) to “SDR data” to use the correct defined term. These amendments would not change the substantive requirements of § 49.10(b).
Therefore, § 49.10(b) would require that an SDR shall set forth in its application for registration as described in § 49.3 the specific asset class or classes for which it will accept SDR data. If an SDR accepts SDR data of a particular asset class, then it shall
As part of the revisions to § 49.10, the Commission is proposing to add new regulations for the SDR validation of SDR data in § 49.10(c). The Commission is proposing to move the requirements in current § 49.10(c) to § 49.10(d).
SDRs currently check each swap report for compliance with a list of rules specific to each SDR. However, the Commission is concerned that SDRs apply different validation rules that could be making it difficult for SDR data to either be reported to the SDR or the SDRs' real-time public data feeds. The SDRs applying different validations to swap reports creates numerous challenges for the Commission and market participants. While one SDR may reject a report based on an incorrect value in a particular swap data element, another SDR may accept reports containing the same erroneous value in the same data element. Further, the Commission is concerned that responses to SDR validation messages vary across reporting counterparties, given the lack of current standards.
The Commission received several comments on data validations in response to the Roadmap. Commenters were broadly supportive
Commenters diverged in some instances in regards to continuing the SDRs' current validation practices. The SDRs advocated for leveraging existing SDR validation processes in order to minimize the costs associated with system changes.
Commenters also raised other specific validation-related issues. The SDRs suggested that data should be required to be validated against public sources, to the extent possible, such as the GLEIF database for LEIs.
ESMA has published specific validations for TRs to perform to ensure that derivatives data meets the requirements set out in the technical standards pursuant to EMIR.
The Commission believes that similarly consistent SDR validations would help improve data quality. Therefore, the Commission is proposing to require SDRs to apply validations and inform the entity submitting the swap report of any associated rejections. SDRs would be required to apply the validations approved in writing by the Commission. The Commission is also proposing regulations for SDRs to send validation messages to SEFs, DCMs, and reporting counterparties.
Proposed § 49.10(c)(1) would provide that SDRs shall validate each SDR data report submitted and notify the reporting counterparty, SEF, DCM, or third party service provider submitting the report whether the report satisfied
Proposed § 49.10(c)(2) would provide that if SDR data contains one or more data validation errors,
Proposed § 49.10(c)(3) would require that if an SDR allows for the joint submission of swap transaction and pricing data and swap data, the SDR validate the swap transaction and pricing data and swap data separately. Swap transaction and pricing data that satisfies the data validation procedures applied by an SDR shall not be deemed to contain a data validation error because it was submitted to the SDR jointly with swap data that contained a data validation error.
As described above, the Commission is proposing to move the requirement currently in § 49.10(c) for SDRs to have policies and procedures to prevent invalidations or modifications of swaps to an amended § 49.10(d). As a result, the Commission is also proposing to redesignate § 49.10(d) as new § 49.10(f).
The Commission is also proposing non-substantive amendments to the current language of § 49.10(c), proposed to be moved to § 49.10(d). For instance, the Commission is proposing to title § 49.10(c) “Policies and procedures to prevent invalidation or modification” to distinguish it from the other requirements in § 49.10.
In light of the above proposed amendments, § 49.10(d) would require SDRs to establish policies and procedures reasonably designed to prevent provision in a valid swap from being invalidated or modified through the verification or recording process of the SDR. The policies and procedures shall ensure that the SDR's user agreements are designed to prevent any such invalidation or modification.
As described above, the Commission is proposing to redesignate § 49.10(d) as § 49.10(f).
First, the Commission is proposing to title § 49.10(f) “Policies and procedures for resolving disputes regarding data accuracy” to distinguish it from the other requirements of § 49.10. Second, the Commission is proposing to update terminology in the regulation. These updates include replacing “swap” with the correct term “SDR data, and removing the term “registered” before references to SDRs.
Therefore, in light of the above proposed amendments, § 49.10(f) would require SDRs to establish procedures and provide facilities for effectively resolving disputes over the accuracy of the SDR data and positions that are recorded in the SDR.
The Commission requests comment on all aspects of the proposed changes to § 49.10.
The Commission is proposing to revise appendix 1 to part 45 to update and further standardize the swap data being reported to SDRs and the swap data SDRs make available to the Commission. The Commission's current minimum primary economic terms for swaps in each swap asset class are found in appendix 1 to part 45. The current primary economic terms for swaps contain a set of “data categories and fields” followed by “comments” instead of specifications such as allowable values, formats, and conditions.
In adopting part 45, the Commission intended that the primary economic terms would ensure uniformity in “essential data” concerning swaps across all of the asset classes and across SDRs to ensure the Commission had the necessary information to characterize and understand the nature of reported swaps.
In the Roadmap, DMO announced an intention to propose detailed technical specifications once the CPMI-IOSCO harmonization efforts had sufficiently progressed.
In response to the Roadmap, DMO received many comments on swap data elements. Commenters broadly supported efforts to reduce the number of reportable data elements and to remove the requirement to report “any other term(s) of the swap matched or affirmed” by the counterparties (commonly known as the “catchall” provision).
Several commenters asked for precise definitions for required data elements.
Several commenters indicated potential opposition to individual CDE Technical Guidance data elements.
In the course of revisiting which swap data elements should be reported to SDRs, the Commission reviewed the swap data elements currently in appendix 1 to part 45 to determine if any currently required data elements should be eliminated and if any additional data elements should be added. The Commission then reviewed the CDE Technical Guidance to determine which data elements the Commission could adopt according to the CDE Technical Guidance.
As a general matter, the Commission believes that the implementation of the CDE Technical Guidance will further improve the harmonization of SDR data across FSB member jurisdictions. This international harmonization, when widely implemented, would allow market participants to report swap data to several jurisdictions in the same format, allowing for potential cost-savings. This harmonization, when widely implemented, would also allow the Commission to potentially receive more standardized information regarding swaps reported to TRs regulated by other authorities. For instance, such standardization across SDRs and TRs could support data aggregation for the analysis of global systemic risk in swaps markets.
As part of this process, the Commission also reviewed the part 43 swap transaction and pricing data and part 45 swap data elements to determine whether any differences could be reconciled.
At the same time as the Commission is proposing to update the swap data elements in appendix 1, DMO is publishing draft technical specifications for reporting the swap data elements in appendix 1 to part 45 to SDRs, as specified in proposed § 45.13(a)(1), and for reporting and publicly disseminating the swap transaction and pricing data elements in appendix C to part 43 described in a separate NPRM. DMO would then publish the technical specifications in the
DMO is proposing to establish technical standards for certain swap data elements according to the CDE Technical Guidance, where possible. Commenters are invited to comment on both the technical standards and the swap data elements proposed in appendix 1.
The swap data elements proposed to be reported to SDRs would therefore consist of: (i) The data elements implementing the CDE Technical Guidance; and (ii) additional CFTC-specific data elements that support the Commission's regulatory responsibilities.
DMO's proposed technical standards contains an extensive introduction to help reviewers. As a preliminary matter, the Commission notes that the swap data elements in appendix 1 do not include swap data elements specific to swap product terms. The Commission is currently heavily involved in separate international efforts to introduce UPIs.
In addition, the Commission notes that it has endeavored to propose adopting the CDE Technical Guidance data elements as closely as possible. Where the Commission proposes adopting a CDE Technical Guidance data element, the Commission has proposed adopting the terms used in the CDE Technical Guidance. This means that some terms may be different for certain concepts. For instance, “derivatives clearing organization” is the Commission's term for registered entities that clear swap transactions, but the CDE Technical Guidance uses the term “central counterparty.”
To help clarify, DMO has proposed footnotes in the technical standards to explain these differences as well as provide examples and jurisdiction-specific requirements. However, the Commission has not included these footnotes in appendix 1. In addition, the definitions from CDE Technical Guidance data elements included in appendix 1 sometimes include references to allowable values in the CDE Technical Guidance, which may
Finally, the CDE Technical Guidance did not harmonize many fields that would be particularly relevant for commodity and equity swap asset classes (
The Commission invites comment on any of the swap data elements proposed in appendix 1. The Commission briefly discusses the swap data elements below by category to simplify the topics for market participants to comment on. To the extent any comment involves data elements adopted according to the CDE Technical Guidance, however, the Commission anticipates raising issues according to the CDE Governance Arrangements procedures to help ensure that authorities follow the established processes for doing so. In addition, the Commission anticipates updating its rules to adopt any new or updated CDE Technical Guidance, as necessary.
The Commission is proposing to require reporting counterparties report twelve clearing data elements.
The Commission requests specific comment on the following related to the clearing data elements:
(15) The Commission is considering including a data element called “Mandatory clearing indicator” to indicate whether a swap is subject to the clearing requirement in part 50 of the Commission's regulations. The Commission requests specific comment on whether commenters believe this data element could be reported to SDRs.
The Commission is proposing to require reporting counterparties report ten counterparty data elements.
The Commission requests specific comment on the following related to the counterparty data elements:
(16) The CFTC needs the ability to link swap counterparties to their parent entities to aggregate swap data to be able to monitor risk. Given the complicated nature of how some entities are structured within a larger legal entity, the CFTC also needs information related to the ultimate parent entity. The Commission believes this information is necessary to collect for both swap counterparties. The Commission requests specific comment on whether commenters believe this data could be reported as part of swap data reporting.
The Commission is proposing to require reporting counterparties report four event data elements.
The Commission requests specific comment on the following related to the event data elements:
(17) Are there ways in which the Commission could harmonize the event model with ESMA's? Would harmonization in this area reduce burdens for SDRs and reporting counterparties? The Commission proposes to require reporting transactions for simultaneous clearing and allocation at a DCO using a new event type of “Clearing and Allocation” in the events model. Is there a more efficient method to report related transactions when a DCO simultaneously clears and allocates transactions?
The Commission is proposing to require reporting counterparties report twelve notional data elements.
The Commission requests specific comment on the following related to the notional data elements:
(18) The Commission is considering including the notional schedule data elements from the CDE Technical Guidance.
(19) The Commission requests specific comment on how SDRs would implement these CDE data elements for reporting counterparties to report notional schedule-related data. Should the Commission mandate a specific reporting structure for reporting notional schedule-related data elements to the SDRs? If so, what standard would you propose and what would be the benefits? If not, why not?
(20) The Commission is considering requiring reporting counterparties to provide a USD equivalent notional amount that represents the entire overall transaction for tracking notional volume (in addition to leg-by-leg notional data reported pursuant to other proposed data elements). The Commission believes that this additional data element could allow staff to more effectively assess compliance with CFTC regulations, including but not limited to SD registration and uncleared margin requirements, and help staff more efficiently monitor swap market risk. The Commission specifically requests comment on the frequency with which reporting counterparties should report USD equivalent notional.
The Commission is proposing to require reporting counterparties to report four package transaction data elements.
The Commission requests specific comment on the following related to the package data elements in appendix 1:
(21) The Commission is considering including the additional package transaction data elements from the CDE Technical Guidance.
The Commission is proposing to require reporting counterparties report twelve data elements related to payments.
The Commission is proposing to require reporting counterparties report eighteen data elements related to swap prices.
The Commission requests specific comment on the following related to the price data elements:
(22) The Commission is considering including the price schedule data elements from the CDE Technical Guidance.
The Commission is proposing to require reporting counterparties report five product-related data elements.
The Commission requests specific comment on the following related to the other product data elements:
(23) The CFTC intends to collect sufficient granular detail on the economic terms of swaps to conduct independent valuation and stress testing analysis. The CFTC will rely on UPI for many product related data elements, but forthcoming UPI standards may not describe some swaps with enough detail to allow the CFTC to independently value the transaction. Are there additional product data elements the CFTC should collect outside of UPI to ensure the CFTC may independently value swaps with sufficient accuracy?
The Commission is proposing to require reporting counterparties report two settlement data elements.
The Commission requests specific comment on the following related to the settlement data elements:
(24) Should the Commission include the additional swap data element related to settlement included in the
The Commission is proposing to require reporting counterparties report fifteen data elements that provide information about each swap transaction.
The Commission requests specific comment on the following transaction-related data elements:
(25) Should the Commission include the additional swap data elements related to transaction included in the CDE Technical Guidance? Are there additional transaction-related data elements the Commission should include beyond the CDE Technical Guidance?
(26) Should the Commission expand the Non-standardized term indicator (82) data element to apply to any non-standard term, regardless of impact on price? Should the Commission instead create a part 45-specific data element for non-standard terms that would not be publicly disseminated, and still have Non-standardized term indicator (82) for real-time public reporting?
(27) The Commission is considering including a data element called “Trade execution requirement indicator” to indicate whether a swap is subject to the Commission's trade execution mandate. The Commission requests specific comment on whether commenters believe this data element could be reported.
The Commission is proposing to require reporting counterparties to report one data element related to changing SDRs.
The Commission is proposing to require reporting counterparties report six valuation data elements.
The Commission requests specific comment on the following related to the valuation data elements:
(28) The Commission is considering including the following valuation data elements that were not included in the CDE Technical Guidance: Discount index; discount index tenor period; discount index tenor period multiplier; next floating reference reset date; underlying spot or reference rate. Would reporting counterparties be able to report this information to SDRs each day? Could the Commission obtain this information from different source? Could the Commission require this information less frequently? Is reporting reset dates more efficient than reporting the full calendar generation logic (including business day calendars and reset lookback terms) of swaps?
(29) The CFTC intends to collect information to independently validate individual swap values (also known as “mark-to-market” or “fair value”), portfolio aggregated values, and the value of collateral posted to meet initial and variation margin requirements. One method is to require parties to report the aggregate valuations of all financial instruments (including swaps and other cross margined products) associated with a Collateral Portfolio Code. What other validation and cross referencing information should the Commission collect in addition to the proposed data elements? Is there a more efficient way to collect data on the value of individual swaps, portfolios, and the margin posted and collected against these positions?
The Commission is proposing to require reporting counterparties report fourteen collateral and margins data elements.
The Commission requests specific comment on the following related to the collateral and margin data elements:
(30) The Commission is interested in determining the quality of collateral posted. Comparing pre- and post-haircut values is one way to gain this information. Should the Commission consider other ways, such as collecting specific information on the contents of the collateral portfolio?
(31) The proposed swap data elements allow for single collateral portfolio ID for both initial margin and variation margin. Should the Commission consider other approaches to collecting this information to account for when variation margin cash flows are separated between swaps that may not all be subject to initial margin?
(32) The Commission is proposing to collect new margin and collateral information from reporting counterparties that are SDs, MSPs, and DCOs. Some of this information could be reported at the portfolio level, rather than the transaction level. Do reporting counterparties or SDRs have feedback for the Commission on how portfolio level, as opposed to transaction level, reporting would work in practice? Are
The Commission additionally requests comment on all aspects of the proposed swap data elements in appendix 1. The Commission requests specific comment on the following:
(33) Are there any data elements not included in appendix 1 that commenters feel should be prioritized for standardization? Please explain why and provide relevant information that would assist with standardizing any suggested data elements.
(34) The Commission is not proposing data elements by leg for multi-leg products where some data elements are reported more than once per leg. The Commission thinks that it is best to leave the implementation details to market conventions and SDR requirements. Should the Commission consider another approach for leg-level reporting? If so, please provide details on the suggested approach.
(35) The Commission has not proposed any specific implementation requirement to report multiple values for the same data element when applicable. The Commission thinks that it is best to leave the implementation details to market conventions and SDR requirements. Should the Commission consider a set approach to report multiple values? If so, please provide details on the suggested approach.
(36) The Commission is considering requiring reporting counterparties to indicate whether a specific swap: (1) Was entered into for dealing purposes (as opposed to hedging, investing, or proprietary trading); and/or (2) need not be considered in determining whether a person is a swap dealer or need not be counted towards a person's de minimis threshold, as described in paragraph (4) of the “swap dealer” definition in § 1.3 of the Commission's regulations, pursuant to one of the exclusions or exceptions in the swap dealer definition (
Market participants raised questions in the Roadmap comment letters about the compliance schedules for the Commission's proposed reporting rules amendments. Commenters raised various concerns about the compliance schedule. For instance, the SDRs requested that system updates that would result from any rule changes happen all at once.
The Commission understands that market participants will need a sufficient implementation period to accommodate any of the changes proposed in the three NPRMs that are adopted by the Commission. The Commission expects to finalize all rules at the same time, even though the proposals were approved separately. The Commission also expects that the compliance date for the Roadmap rules that the Commission adopts other than the rules on UTIs in § 45.5 would be one year from the date the final rulemakings are published in the
The Commission expects that the compliance date for the rules on UTIs in § 45.5 would be December 31, 2020, in accordance with the UTI implementation deadline recommended by the FSB.
The Commission requests comment on all aspects of the proposed compliance data. The Commission requests specific comment on the following:
(37) Part 20 of the Commission's regulations (“Large Trader Reporting for Physical Commodity Swaps”) contains a “sunset provision” in § 20.9 that would take effect upon “a Commission finding that, through the issuance of an order, operating [SDRs] are processing positional data and that such processing will enable the Commission to effectively surveil trading in paired swaps and swaptions and paired swap and swaption markets.”
The Regulatory Flexibility Act (“RFA”) requires federal agencies, in promulgating rules, to consider the impact of those rules on small entities.
Various proposed amendments to parts 45, 46, and 49 would have a direct impact on all reporting counterparties. These reporting counterparties may include SDs, MSPs, DCOs, and non-SD/MSP/DCO counterparties. Regarding whether non-SD/MSP/DCO reporting counterparties are small entities for RFA purposes, the Commission notes that CEA section 2(e) prohibits a person from entering into a swap unless the person is an eligible contract participant (“ECP”), except for swaps executed on or pursuant to the rules of a DCM.
The Commission has analyzed swap data reported to each SDR
Based on the above analysis, the Commission does not believe that this proposal will have a significant economic impact on a substantial number of small entities. Therefore, the Chairman, on behalf of the Commission, pursuant to 5 U.S.C. 605(b), hereby certifies that the proposed rules will not have a significant economic impact on a substantial number of small entities.
The Paperwork Reduction Act (“PRA”)
The Commission is proposing to amend the above information collections to accommodate newly proposed and revised information collection requirements for swap market participants and SDRs that require approval from OMB under the PRA. The amendments described herein are expected to modify the existing annual burden for complying with certain requirements of parts 45 and 46. The Commission proposed amendments to the annual burden for complying with certain requirements of part 49 in the 2019 Part 49 NPRM. As discussed below, the Commission believes the estimates for the regulations in part 49 proposed to be amended in this NPRM accurately estimate the burdens and do not require updates based on what is proposed in this NPRM.
The Commission therefore is submitting this proposal to the OMB for its review in accordance with 44 U.S.C. 3507(d) and 5 CFR 1320.11. Responses to this collection of information would be mandatory. The Commission will protect proprietary information according to the FOIA and 17 CFR 145, “Commission Records and Information.” In addition, CEA section 8(a)(1) strictly prohibits the Commission, unless specifically authorized by the CEA, from making public “data and information that would separately disclose the business transactions or market positions of any person and trade secrets or names of customers.”
The Commission proposes to revise collection 3038-0096 to account for changes proposed to the requirements in part 45 for reporting swap data to SDRs. Most of the estimated hours burdens and costs provided below would be in addition to or subtracted from the existing hours burdens and costs in collection 3038-0096, with the exception that the proposed § 45.10(d) notification requirements for changing SDRs would be a new burden within collection 3038-0096. As discussed in this section as well, the Commission is also proposing to update and correct some estimates in collection 3038-0096.
The Commission is proposing to amend § 45.3, which requires SEFs, DCMs, and reporting counterparties to report swap data to SDRs when entering into new swaps. Some of these amendments will result in changes to the burden calculations. As an initial matter, the Commission is proposing to correct the “total annual burden hour cost of all responses” in the supporting
The Commission estimates that SDRs, SEFs, DCMs, and reporting counterparties would incur a one-time initial burden of 10 hours per entity to modify their systems to adopt the changes described below, for a total estimated hours burden of 17,320 hours. This burden should be mitigated by the fact that these entities currently have systems in place to provide this information to the Commission. The Commission additionally estimates 5 hours per entity annually to perform any needed maintenance or adjustments to reporting systems.
Currently, § 45.3 requires SEFs, DCMs, and reporting counterparties to report confirmation data reports and PET data reports when entering into new swaps. The Commission is proposing to remove the requirement for SEFs, DCMs, and reporting counterparties to report confirmation data reports. These entities would report a single swap creation data report instead of separate PET data reports and confirmation data reports. As described above in section II.C.a, the Commission anticipates removing this requirement will reduce the number of swap creation data reports being sent to SDRs. Commission staff estimates that across the range of entities, the change could result in a 30% reduction in the number of swap creation data reports being sent to SDRs.
This change would not decrease the hourly burden, but would decrease the number of reports from 10,000 reports per 1,732 respondents to 7,000 reports per respondent, or a reduction of 5,196,000 reports in the aggregate.
The Commission is also proposing to remove the requirement for SEFs, DCMs, and reporting counterparties to report TR identifiers and swap identifiers for international swaps. This proposed amendment would remove the requirement to report two pieces of information within a required swap creation data report, without impacting the number of reports themselves. The requirement to report swap identifiers is duplicative, and would not change the burden estimate, as SEFs, DCMs, and reporting counterparties are required to report swap identifiers for all swap pursuant to § 45.5. However, the removal of the requirement to report TR identifiers would slightly reduce the amount of time required to make each report, as SEFs, DCMs, and reporting counterparties would not need to report this information anymore. Therefore, the Commission estimates the removal of this requirement would lower the burden hours by .01 hour per report.
However, at the same time, the Commission is proposing to require the reporting of UTIs instead of USIs, which are currently being reported in every required swap creation data report. As described below in the section discussing amendments to § 45.5, as this information is reported in required swap creation data reports, the Commission estimates the new rules requiring SEFs, DCMs, SDRs, and reporting counterparties to change from reporting USIs to UTIs would impact the burden calculations for § 45.3 by increasing the burden hours by .01 hour per report. As a result, the Commission estimates there will be no change to the burden hours for § 45.3 required swap creation data reporting.
The new aggregate proposed estimate for § 45.3, as amended by the proposal is as follows:
The Commission is proposing to amend § 45.4, which requires reporting counterparties to report data to SDRs when swap terms change and daily swap valuation data. As an initial matter, the Commission is proposing to correct the estimated number of respondents in the supporting statement from 1,732 to 1,705, to reflect the fact that SEFs and DCMs do not report required swap continuation data under § 45.4.
The Commission estimates that SDRs and reporting counterparties would incur a one-time initial burden of 10 hours per entity to modify their systems to adopt the changes described below, for a total estimated hours burden of 17,050 hours. This burden should be mitigated by the fact that these entities currently have systems in place to provide this information to the Commission. The Commission additionally estimates 5 hours per entity annually to perform any needed maintenance or adjustments to reporting systems.
Currently, § 45.4 permits reporting counterparties to report changes to swap terms when they occur (life cycle reporting), or to provide a daily report of all of the swap terms (state data reporting). The Commission is proposing to remove the option for state data reporting. Reporting counterparties would report data to SDRs only when swap terms change. As discussed above in section II.D, the Commission believes this would significantly reduce the number of required swap continuation data reports being sent to SDRs. Commission staff estimates that across asset class for each respondent, the number of reports would decrease by approximately 50%, reducing the number of reports from 207,543 reports per respondent to 103,772 reports per respondent, and a decrease of 176,930,408 reports in the aggregate.
Currently, § 45.4 requires SD/MSP/DCO reporting counterparties to report valuation data for swaps daily, and non-SD/MSP/DCO reporting counterparties to report valuation data quarterly. The Commission is proposing to remove the requirement for non-SD/MSP/DCO reporting counterparties to report quarterly valuation data. For the 1,585 non-SD/MSP/DCO reporting counterparties, the Commission believes this change would further reduce the number of required swap continuation data reports being sent by 4 quarterly reports per 1,585 non-SD/MSP/DCO reporting counterparties, from 107,772 reports per respondent to 97,431 reports per respondent, and a decrease of 6,340 reports in the aggregate.
Separately, the Commission is proposing to expand the daily valuation data reporting requirement for SD/MSP/DCO reporting counterparties to report margin and collateral data in addition to valuation data. The frequency of the report would not change, but the Commission expects SD/MSP/DCO reporting counterparties would require more time to prepare each report. However, since all of this information is reported electronically, the Commission expects the increase per report to be small. The burden associated with these changes is anticipated to result in an increase from .003 to .004 hours per report, or 166,119 hours in the aggregate.
The estimated aggregate burden for swap continuation data, as amended by the proposal is as follows:
The Commission is proposing to amend § 45.5, which requires SEFs, DCMs, reporting counterparties, and SDRs to generate and transmit USIs. As
The Commission estimates that SDRs and reporting counterparties required to generate UTIs would incur a one-time initial burden of 1 hour per entity to modify their systems to adopt the changes described below, for a total estimated hours burden of 940 hours. This burden should be mitigated by the fact that these entities currently have systems in place to provide this information to the Commission, and UTIs are, in most cases, less burdensome to generate than USIs. The Commission additionally estimates 1 hour per entity annually to perform any needed maintenance or adjustments to reporting systems.
Currently, § 45.5 requires SDRs to generate and transmit USIs for off-facility swaps with a non-SD/MSP reporting counterparty. The Commission is proposing to amend § 45.5 to require non-SD/MSP/DCO reporting counterparties that are financial entities to generate and transmit UTIs for off-facility swaps. The Commission estimates that approximately half of non-SD/MSP/DCO reporting counterparties are financial entities. Therefore, the Commission estimates that the number of respondents would increase from 147 SDs, MSPs, SEFs, DCMs, DCOs, and SDRs to 940 with the addition of financial entities.
At the same time, however, this would lower the number of UTIs generated per respondent to account for the increase in the number of respondents generating UTIs. The Commission estimates the estimated number of reports per respondent would decrease from 115,646 reports from 147 respondents to 18,085 reports from 940 respondents.
The estimated aggregate burden for unique transaction identifiers, as amended by the proposal is as follows:
The Commission is proposing to amend § 45.6, which requires reporting entities to have LEIs. As an initial matter, the Commission is proposing to revise the burden estimate for § 45.6. LEIs are reported in required swap creation data and required swap continuation data reports, which are separately accounted for in the estimates for §§ 45.3 and 45.4. The current estimate for § 45.6 double-counts the estimates for §§ 45.3 and 45.4 by calculating the burden per data report. Instead, the burden for § 45.6 should be based on the requirement for each counterparty to obtain an LEI. The Commission is proposing to revise the estimate to state that there are 1,732 entities required to have one LEI per respondent, and revise the burden hours based on this change.
Currently, § 45.6 requires all entities to have LEIs. The Commission is proposing to amend § 45.6 to require SDs, MSPs, SEFs, DCMs, DCOs, and SDRs to renew their LEIs annually. The proposed change would increase the hour burden for these entities, but would not affect the burden for the majority of entities required to have LEIs. Nonetheless, the Commission expects the burden associated with these changes is anticipated to result in an increase from .01 to .02 hours per report, and 17 hours in the aggregate.
The estimated aggregate burden for LEIs, as amended by the proposal is as follows:
The Commission is proposing amendments to § 49.10(d) to require reporting counterparties to notify SDRs and non-reporting counterparties if they change the SDR to which they report swap data and swap transaction and pricing data. This is a new burden that is not covered in the collection. Reporting counterparties would be required to send notifications to non-reporting counterparties and SDRs if they elect to change the SDR to which they report data pursuant to parts 43 and 45.
The Commission believes this would not require reporting counterparties or SDRs to build any new systems or update technology. Reporting counterparties would continue to report, and SDRs would continue to accept, swap data according to current processes and infrastructures. The Commission estimates that no more than 15 reporting counterparties would choose to change the SDR to which they report data.
The burden applicable to reporting counterparties is estimated as follows:
The Commission is proposing to amend § 49.4, which requires SDRs to follow certain requirements when withdrawing from registration with the Commission. These requirements involve filing paperwork with the Commission. The Commission does not believe these changes would require any one-time or ongoing system updates for SDRs.
Currently, § 49.4 requires that a request to withdraw specify, among other items, a statement that the custodial SDR is authorized to make such data and records available in accordance with § 1.44 of the Commission's regulations. The Commission is proposing to remove this requirement from § 49.4 because § 1.44 does not apply to SDRs or swap data. Currently, § 49.4(a)(2) requires that prior to filing a request to withdraw, a registered SDR shall file an amended Form SDR to update any inaccurate information. The proposal would eliminate the requirement for SDRs to file an amended Form SDR prior to filing a request to withdraw. The burden associated with these changes to the
However, separately, the Commission is proposing amendments to § 49.4(a)(2) to require SDRs to execute an agreement with the custodial SDR governing the custody of the withdrawing SDR's data and records prior to filing a request to withdraw with the Commission. The Commission believes this is current practice for SDRs, yet it would nonetheless be a new requirement. As a result, the Commission believes this would result in an increase of 5 hours per report for a withdrawing SDR.
Overall, the proposed amendments to § 49.4 result in no change to the estimated burdens for § 49.4.
The estimated aggregate burden for requirements for withdrawing from SDR registration, remains as follows:
The Commission is proposing to amend § 49.10, which provides the requirements for SDRs in accepting SDR Data. As an initial matter, the Commission notes that the burden estimate for § 49.10 already accounts for the messages SDRs send and receive in accepting swap data.
The Commission estimates that SDRs would incur a one-time initial burden of 100 hours per entity to modify their systems to adopt the changes described below, for a total estimated hours burden of 300 hours. This burden should be mitigated by the fact that these entities currently have systems in place to validate data that each SDR takes in. The Commission additionally estimates 100 hours per entity annually to perform any needed maintenance or adjustments to reporting systems.
Currently, § 49.10(a) requires SDRs to accept and promptly record all swap data. In the 2019 Part 49 NPRM, the Commission proposed amending the requirements in § 49.10 by detailing separate § 49.10(e) requirements for correcting swap errors. In this release, the Commission is proposing separate § 49.10(c) requirements for validating swap messages. This proposal would further specify that SDRs must send validation acceptance and rejection messages after validating SDR data. The Commission believes this would increase the number of reports SDRs would need to send reporting entities. The current burden estimate for § 49.10, which right now includes § 49.10(a), estimates each SDR sends 5,652,000 messages, for a total of almost 17,000,000. This estimate includes the 2,626,000 messages the Commission estimates SDRs would be required to send to process swap corrections. The Commission believes this burden was estimated correctly in the 2019 Part 49 NPRM and already accurately accounts for the validation messages proposed in § 49.10(c).
The estimated aggregate burden for requirements for validating SDR Data, remains as follows:
Current § 46.11 provides that for pre-enactment or transition swaps for which part 46 requires reporting of continuation data, reporting counterparties reporting state data as provided in part 45 may fulfill the requirement to report errors or omissions by making appropriate corrections in their next daily report of state data pursuant to part 45. Since the Commission is proposing to remove this requirement from § 45.4, the Commission is also proposing to remove the option for state data reporting from § 46.11.
The Commission does not believe this proposed amendment would require any system updates by SDRs or reporting counterparties. To the extent they did, these updates would be covered under the estimates above for entities making updates to comply with the change proposed in § 45.4.
The Commission believes the proposed change would reduce the number of continuation data reports reporting counterparties send SDRs for historical swaps by 50%. The Commission has not previously calculated the burden estimates for part 46 by regulatory requirement. As such, the Commission now estimates that to comply with proposed amended § 46.11, the 500 SD, MSP, and non-SD/MSP reporting counterparties that the Commission estimates are reporting historical swaps would each report 200 reports with an average burden of .01 hours per report, for a burden of 2 hours per respondent or 1,000 burden hours in the aggregate.
The estimated aggregate burden for requirements for reporting continuation data for historical swaps would be as follows:
The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. The Commission will consider public comments on this proposed collection of information in:
1. Evaluating whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
2. Evaluating the accuracy of the estimated burden of the proposed collection of information, including the degree to which the methodology and the assumptions that the Commission employed were valid;
3. Enhancing the quality, utility, and clarity of the information proposed to be collected; and
4. Minimizing the burden of the proposed information collection requirements on registered entities, including through the use of appropriate automated, electronic, mechanical, or other technological information collection techniques,
Copies of the submission from the Commission to OMB are available from the CFTC Clearance Officer, 1155 21st Street NW, Washington, DC 20581, (202) 418-5160 or from
• The Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Desk Officer of the Commodity Futures Trading Commission;
• (202) 395-6566 (fax); or
•
Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rulemaking, and please refer to the
Since issuing the first swap reporting rules in 2012, the Commission has gained a significant amount of experience with swaps markets and products based on studying and monitoring data reported to SDRs.
While the Commission believes the proposed amendments would create meaningful benefits for market participants, SDRs, and the public, these changes could also result in costs. 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 this release, the Commission is proposing revisions to existing regulations in parts 45, 46, and 49. The Commission also is proposing new requirements in parts 45, 46, and 49. Together, these proposed revisions and additions are intended to further specify and streamline swap data reporting workflows and to improve the quality of data reporting generally. It is important to note that most of these regulatory changes are being made to existing systems and processes, therefore nearly all costs considered are incremental additions or updates to systems already in place. Some of the proposed amendments are substantive. A number of amendments, however, are non-substantive or technical, and therefore are not expected to have material cost-benefits implications.
The changes proposed in this release that would result in costs to implement are in many cases intended to harmonize the Commission's reporting regulations with those of other regulators where doing so will not impact the Commission's ability to fulfill its regulatory mandates. As the FSB and CPMI-IOSCO harmonization efforts have incorporated many rounds of industry feedback and the Commission has been vocal about its support and participation,
The Commission notes that many jurisdictions have committed to these harmonization efforts for which the Commission is proposing adopting standards in this NPRM. If the Commission did not adopt these standards, but other jurisdictions do according to the implementation deadlines recommended by the FSB, unnecessary costs could be created by SDRs and reporting entities having to maintain unharmonized reporting infrastructures for CFTC reporting while other jurisdictions harmonize and recognize efficiencies from harmonization.
To the extent costs and benefits are reasonably quantifiable, they are discussed below in this section; where they are not, they are discussed qualitatively. Throughout this release, the Commission has used the swap data currently available to estimate the expected quantifiable cost-benefit impact of proposed changes on certain types of registrants, such as the extent of state data reporting and duplicative creation data reports. Most of the changes proposed in this release alter reporting requirements for reporting counterparties, SDRs, SEFs, and DCMs. As a result, there will likely be some quantifiable costs related to either: (a) Creating new data reporting systems; (b) re-programming data reporting systems to meet the new reporting requirements; or (c) cancelling data streams, which might lead to archiving data and maintaining legacy systems.
These costs are quantifiable to the extent reporting entities covered by the proposed regulations are able to price-out the changes to the IT architecture to meet the reporting requirement changes. These quantifiable costs, however, will likely vary because reporting entities vary in terms of the sophistication of their data reporting systems. For example, some reporting entities operate their own data reporting systems where they employ in-house developers and analysts to plan, design, code, test, establish, and monitor systems. Other reporting entities pay fees to third-party vendors who handle reporting obligations. Because reporting systems differ, the Commission recognizes that the quantitative costs associated with these proposed reporting rules in this release will vary depending on the reporting entities' operations and number of swaps that they execute.
Given this understanding, the Commission has tried to provide a monetary range for quantifiable costs as they relate to each proposed reporting change discussed below. The Commission also specifically requests comments to help quantify the costs of changes to reporting systems and infrastructures that would be required to comply with the regulatory changes proposed in this rulemaking.
This consideration of costs and benefits is based on the understanding that the swaps market functions internationally. Many swaps transactions involving U.S. firms occur across international borders, and some Commission registrants are organized
The Commission has issued several rulemakings related to swaps reporting and, in those, considered the benefits and costs.
Since establishing swap data reporting requirements, the Commission gained experience with swap data reported to, and held by, SDRs. Based on this experience, along with extensive feedback received from market participants, the Commission believes that improving data quality would significantly enhance the data's usefulness, allow the Commission to realize the objectives of the original rule (
Prior to discussing the proposed rule changes, the Commission describes below the current environment that would be impacted by these changes. Three SDRs are currently provisionally registered with the Commission: CME, DDR, and ICE. The changes proposed should apply equally to all three SDRs.
The current reporting environment also involves third-party service providers. These entities assist market participants with fulfilling the applicable data reporting requirements, though the reporting requirements do not apply to third-party service providers directly. From looking at current data, the Commission estimates that third-party service providers do not account for a large portion of the overall record submissions to SDRs, but provide an important service for firms that choose to outsource their reporting needs.
Finally, the current reporting environment depends on reporting counterparties that report swap data to SDRs. The Commission currently estimates reporting counterparties include 107 provisionally-registered SDs, 24 SEFs, 3 DCMs, 14 DCOs, and 1,585 non-SD/MSP/DCO reporting counterparties. There is considerable variation within each of these reporting counterparty types as to size and swaps market activity. The Commission understands that most SDs and nearly all SEFs, DCMs, DCOs, and SDRs have sophisticated technology dedicated to data reporting because of the frequency with which they either enter into or facilitate the execution of swaps, or accept swap data from reporting entities. The Commission also believes that these entities have greater access to resources to update these systems as regulatory requirements change. Further, the Commission's data analysis implies that much of the cost and benefit of the proposed changes will be incurred by SDs—the most sophisticated participants in the market with the most experience reporting under the E.U. and U.S. reporting regimes—that accounted for over 70% of records submitted to SDRs in December 2019.
As to non-SD/MSP/DCO reporting counterparties—a category accounting for a small fraction of SDR reports—the Commission believes there is wide variation in the reporting systems maintained by and resources available to them. Many of these reporting counterparties are large, sophisticated financial entities, including banks, hedge funds, and asset management firms that the Commission believes have devoted resources and systems similar to those available to SDs, SEFs, DCMs, DCOs, and SDRs. However, the Commission recognizes that a significant number of these reporting counterparties are smaller, less-sophisticated swap end-users entering into swaps less frequently to hedge commercial risk.
For these entities, for which the Commission has a significant interest in ensuring access to the U.S. swaps market without unnecessary costs or burdens, the Commission has difficulty accurately estimating the cost impact of the changes to its regulations proposed in this NPRM. The challenge stems from the wide range of complexity firms in this group face in their reporting burdens—a large asset manager with billions of dollars in assets under management and a large swaps portfolio could have a reporting system as complex and sophisticated as an SD while a small hedge fund with a limited swaps portfolio might rely on third-party providers to handle its reporting obligations.
As discussed in the Roadmap, the Commission is in the process of improving data reporting requirements, including modifying the requirements to be more specific and more consistent with other regulators' requirements. The amendments proposed in this rulemaking are one part of this larger effort to ensure that better-quality data is available to market participants and the Commission.
Current regulations have led to swap data reports that do not fully meet the Commission's needs for data quality. For example, the current appendix to part 45 provides no standards, formats, or allowable values for the swap data
It is not uncommon for Commission staff to find discrepancies between open swaps information available to the Commission and swap transaction data reported for the same swaps. In the processing of swap data to generate the CFTC's Weekly Swaps Report,
In addition to the lack of standardization across SDRs, the Commission is concerned that the current timeframes for reporting swap data may have contributed to the prevalence of errors. Common examples of errors include incorrect references to underlying currencies, such as a notional value incorrectly linked to U.S. dollars instead of Japanese Yen. Among others, these examples strongly suggest a need for standardized, validated swap data as well as additional time to review the accuracy of the data report.
Based on its experience with data reporting, the Commission believes that certain regulations, particularly in parts 45, 46, and 49, should be amended to improve swap data accuracy and completeness. This release also includes one amendment to part 49 to improve the process for an SDR's withdrawal from registration. Many of the proposed regulations have costs and benefits that must be considered. These will be discussed individually below.
For each proposed amendment discussed below, the Commission summarizes the changes,
There are multiple baselines for the costs and benefits that might arise from the proposed regulations in this release. The Commission believes that the baseline for the proposed amendments to §§ 45.3, 45.4, 45.5, 45.6, 45.10, 45.12, 45.13, 46.3, 46.10, 46.11, and 49.4 are the current regulations, as discussed above in sections II, III, and IV. The baseline for proposed § 49.10 is current practice, which is that SDRs may be performing validations according to their own specifications, as discussed above in section IV.C.
The Commission is proposing to amend § 45.3 to: (i) Remove the requirement for SEFs, DCMs, and reporting counterparties to report separate PET and confirmation data reports; (ii) extend the deadline for reporting required swap creation data and allocations to T+1 or T+2, depending on the reporting counterparty; (iii) remove the requirement for SDRs to map allocations; and (iv) remove the international swap reporting requirements.
The Commission believes: (i) Reporting a single required creation data report would reduce complexity for reporting counterparties, as well as for the Commission; (ii) extending the deadline to report required swap creation data and allocations would improve data quality without impacting the Commission's ability to perform its regulatory responsibilities; (iii) the requirements for SDRs to map allocations and the international swap requirements are unnecessary.
Requiring a single confirmation data report for SEFs, DCMs, and reporting counterparties would benefit SDRs, SEFs, DCMs, and reporting counterparties by reducing the number of swap data reports being sent to and stored by SDRs. Extending the deadline to report required swap creation data would benefit SDRs, SEFs, DCMs, and reporting counterparties by giving SEFs, DCMs, and reporting counterparties more time to report swap data to SDRs, likely reducing the number of errors SDRs would need to follow-up on with reporting entities. Since reporting data ASATP requires reporting systems to monitor activity and report in real-time, the proposed time will also benefit SDRs, SEFs, DCMs, and reporting counterparties by allowing them to implement a simpler data reporting workflow that assembles and submits data once per day.
Removing the requirements to map allocations and international swaps would benefit SDRs by removing the need to manage separate processes to maintain this information. In addition, SEFs, DCMs, and reporting counterparties would benefit from reporting allocations directly via swap data reporting, and would no longer have to report information about international swaps that would be
The initial cost of updating systems to adopt the changes proposed in § 45.3, as well as reporting-related changes that will be discussed below, are expected to be small. The Commission expects that many SEFs, DCMs, and reporting counterparties have systems designed to report swap data to SDRs ASATP after execution, as well as systems that report separate PET and confirmation swap reports as well as information about international swaps. SDRs likewise have systems to accept both PET and confirmation swap data reports, possibly separate or combined, as well as systems to map allocations and intake information about international swaps.
In both cases, this is a reduction in complexity and software functionality. Reporting counterparties no longer have to generate and submit multiple messages, which will require limited cost and effort to implement. SDRs will also require few, if any, updates to ingest fewer messages.
The Commission expects costs associated with the changes proposed in this release would be further mitigated by the fact that they involve updates to current systems, rather than having to create new reporting systems as most firms had to do when ESMA and the CFTC first required swaps reporting. CFTC SMEs estimate the cost of these changes to be small, but not zero for large reporting entities and SDRs due to the reduction in complexity and system features. However, over time, after these one-time system updates are implemented, the Commission expects SDRs, SEFs, DCMs, and reporting counterparties would recognize significant benefits through reduced costs and complexity associated with reporting streamlined data to SDRs over an extended time frame.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.3. Are there additional costs or benefits that the Commission should consider that have not yet been highlighted? Commenters are encouraged to include both qualitative and quantitative assessments of these benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments? Specific areas of interest include the following:
(38) The Commission has noted benefits of providing extended timeframes for regulatory reporting, including improved data quality and reduced number of reports for SDRs to maintain. Are there additional benefits the Commission has not identified given the revised structure? Are these benefits likely to be especially notable for certain types of reporting entities?
(39) The Commission has noted that the revised reporting framework should, over time and after initial outlays, reduce costs for all reporting entities, given the ability of an entity to retain but update their current reporting systems. Are there costs the Commission has not anticipated in these revisions? Are there specific types of reporters that are more likely to adjust their current reporting systems? What would be the reason for these adjustments, and the costs/benefits associated with these adjustments?
(40) The Commission has outlined two revised reporting frameworks, depending on the type of the reporting entity (
(41) The Commission requests comment on the range of costs SDRs, SEFs, DCMs, DCOs, SDs, MSPs, and non-SD/MSP/DCO reporting counterparties would have to spend to comply with the amendments proposed in § 45.3.
The Commission is proposing to amend § 45.4 to: (i) Remove the option for reporting counterparties to report state data as required swap continuation data; (ii) extend the deadline for reporting required swap continuation data to T+1 or T+2, depending on the reporting counterparty; (iii) remove the requirement for non-SD/MSP/DCO reporting counterparties to report valuation data quarterly; and (iv) require SD/MSP/DCO reporting counterparties to report margin and collateral data daily.
The Commission believes: (i) Removing the option for state data reporting would reduce the number of messages being sent to and stored by SDRs; (ii) extending the deadline to report required swap continuation data would improve data quality without impacting the Commission's ability to perform its regulatory responsibilities; (iii) removing the valuation requirement for non-SD/MSP/DCO reporting counterparties would reduce burdens for these counterparties, which tend to be smaller and less-active in the swaps market, without sacrificing any important information; and (iv) requiring SD/MSP/DCO reporting counterparties to report margin and collateral daily is essential for the Commission to monitor risk in the swaps market.
Removing state data reporting would benefit reporting counterparties by significantly reducing the number of messages they report to SDRs. Relatedly, this would benefit SDRs by significantly reducing the number of messages they need to ingest, validate, process, and store In 2019, CFTC staff estimates that the Commission received over 557,000,000 swap messages from CME, DDR, and ICE. Staff analysis from December 2019 showed over 50% of all records submitted were state data messages.
Extending the deadline to report required swap continuation data would benefit SDRs and reporting counterparties by likely reducing the number of errors SDRs would need to notify reporting counterparties about. Removing the requirement for non-SD/MSP/DCO reporting counterparties to report quarterly valuation data would reduce reporting costs for these estimated 1,585 counterparties, which tend to be smaller and less-active in the swaps market. Because these entities are small relative to the swaps market as a whole, the lack of quarterly valuation data is not anticipated to greatly inhibit the market oversight responsibilities of the Commission. Requiring SD/MSP/DCO reporting counterparties to report margin and collateral daily would benefit the swaps market by improving the Commission's ability to monitor risk in the swaps market, particularly for uncleared swaps. Because current part 45 reports do not include collateral information, the Commission is often able to identify the level of risk inherent to a swap (or set of swaps), but not fully understand the amount of collateral protection a counterparty holds to mitigate this risk.
The initial costs of updating systems to adopt the changes proposed in § 45.4 are expected to range from low for many impacted parties to moderate for others, and would be offset by the lessened reporting burden. For instance, the Commission understands that many reporting counterparties already have systems designed to report swap data, including snapshot data, to SDRs
Non-SD/MSP/DCO reporting counterparties would need to update their systems to stop sending valuation data to SDRs. In contrast, SD/MSP/DCO reporting counterparties would need to program systems to begin reporting margin and collateral data in addition to current valuation data. The T+1 reporting timeline greatly mitigates this cost by allowing end-of-day data integration and validation processes, which according to CFTC SMEs and staff conversations with industry participants provides flexibility in exactly how and when system resources are used to produce the reports and better aligns trade and collateral and margin data reporting streams.
Additionally, over time, after these one-time system updates, the Commission expects SDRs, SEFs, DCMs, and reporting counterparties would recognize the full benefits of the reduced costs associated with reporting streamlined data to SDRs in a more reasonable time frame. While the Commission understands reporting margin and collateral data to SDRs could involve considerable expense for the estimated 121 SD/MSP/DCO reporting counterparties, the Commission notes that ESMA currently requires the reporting of much of the same information to E.U.-registered TRs. The Commission expects this to mitigate the costs for SDRs that serve multiple jurisdictions.
The Commission expects this could also mitigate the costs for most of the 121 SD/MSP/DCO reporting counterparties given that they are likely active in the European swap markets and thus already fall under similar requirements. The Commission also expects that, for the other relevant reporting entities, collateral and margin information is already known by the entity. The primary cost would be in integrating existing collateral data streams into SDR reporting workflows. CFTC SMEs estimate the cost of these changes to be small to moderate for large reporting entities and SDRs due to the reduction in complexity and system features, as well as the extended timeline to integrate potentially disparate data streams.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.4, given that there might be different transaction reporting and risk reporting systems. Are there additional costs or benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments? Specific areas of interest include the following:
(42) The Commission requests comment on the range of costs SDRs, SEFs, DCMs, DCOs, SDs, MSPs, and non-SD/MSP/DCO reporting counterparties would have to spend to comply with the amendments proposed in § 45.4.
The Commission is proposing to amend § 45.5 to: (i) Require reporting counterparties use UTIs instead of USIs for new swaps; (ii) require SD/MSP entities that are financial entities to generate UTIs for off-facility swaps; and (iii) permit non-SD/MSP/DCO reporting counterparties that are not financial entities to ask their SDR to generate UTIs for swaps.
In general, as described in section II.E, the Commission believes transitioning to the globally-standardized UTI system will benefit SDRs, SEFs, DCMs, and reporting counterparties by reducing the complexity associated with reporting swaps to or in multiple jurisdictions.
The Commission believes that proposed § 45.5 would benefit SDRs by providing one standard that multiple regulators should adopt to reduce the burdens associated with multiple jurisdictions with different, and possibly conflicting, standards. The Commission believes that requiring SD/MSP and financial entity reporting counterparties to generate UTIs for off-facility swaps would benefit non-financial entities by reducing the frequency with which they would be responsible for UTI generation, as compared to the current frequency with which they generate USIs.
The Commission believes permitting non-SD/MSP/DCO reporting counterparties that are not financial entities to ask their SDR to generate UTIs for swaps would benefit smaller, less-active swaps market participants by relieving them of the burden to create UTIs. While non-financial entities account for a small portion of total swaps traded as noted above, this group is mostly comprised of end-users that often don't maintain systems that automatically generate UTIs. Therefore, this group will benefit proportionally more from this change.
Permitting these reporting counterparties to ask the SDRs to generate UTIs would maintain, but lower, an ancillary cost for the three SDRs that are currently required to generate USIs for non-SD/MSP/DCO reporting counterparties. The Commission believes that giving these reporting counterparties, which should be a minority of the 1,585 non-SD/MSP reporting counterparties, the option, rather than a mandate, strikes the appropriate balance between avoiding undue costs for SDRs and significant burdens for the least-sophisticated market participants.
In general, the Commission expects the initial costs of updating systems to adopt UTIs could be significant. For instance, the Commission expects that reporting counterparties and SDRs have systems that create, report, accept, validate, process, and store USIs. CFTC SMEs estimate the cost of these changes to be small for large reporting entities and small to moderate for SDRs. However, over time, after these one-time system updates, the Commission expects market participants would recognize the full benefits of the reduced costs associated with reporting a globally-standardized UTI.
In addition, the Commission understands that ESMA already mandates UTIs. The Commission expects that this should mitigate burdens for SDRs serving multiple jurisdictions as well as reporting counterparties active in the European markets since they have likely already updated their systems to meet the European standards.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.5. Are there additional costs or benefits that the Commission should consider? Commenters are encouraged to include both qualitative and
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to amend § 45.6 to: (i) Require SDs, MSPs, DCOs, SEFs, DCMs, and SDRs to maintain and renew LEIs; (ii) required registered entities and financial entities to obtain LEIs for swap counterparties that do not have one; and (iii) update unnecessary and outdated regulatory text. The Commission believes accurate LEIs are essential for the Commission to use swap data to fulfill its regulatory responsibilities.
Mandating LEI renewal will benefit the swaps market by improving the Commission's ability to analyze activity in the swaps market. Reference data provides valuable identification and relationship information about swap counterparties. Accurate reference data allows for robust analysis of swaps risk concentration within and across entities, as well as a way to identify the distribution or transfer of risk across different legal entities under the same parent. The Commission also believes accurate reference data is essential for it to satisfy its regulatory responsibilities because it clearly identifies entities involved in the swaps market, as well as how these entities relate to one another—both key requirements for monitoring systemic risk and promoting fair and efficient markets. In addition, LEIs have already been broadly adopted in swaps markets and their widespread use has shown promise by reducing ambiguity engendered by market participants previously using a variety of non-standard reporting identifiers.
However, the Commission recognizes LEI renewals impose some costs. Currently, the Commission understands that LEI renewals cost each holder $50 per year. To limit burdens for counterparties that are smaller or less-active in the swaps market, the Commission has proposed limiting the renewal requirement to the estimated 151 SDs, MSPs, SEFs, DCMs, DCOs, and SDRs, resulting in an aggregate cost of approximately $7,550 for this requirement. The Commission believes the activities of these entities have the most systemic impact on the Commission's ability to fulfill its regulatory mandates and thus warrant this small additional cost.
Requiring each DCO and financial entity reporting counterparty to obtain an LEI for their counterparties that do not have LEIs would both further the Commission's objective of monitoring risk in the swaps market and incentivize LEI registration for counterparties that have not yet obtained LEIs. However, the Commission recognizes this requirement imposes some costs either on the entity obtaining an LEI for its counterparty, or the entity incentivized to register on its own.
The number of current swap counterparties without LEIs is difficult to estimate because of the lack of standardization of non-LEI identifiers. The Commission cannot therefore determine whether non-LEI identifiers represent an entity that has already been assigned an LEI or whether two non-LEI identifiers are two different representations of the same entity. However, the Commission expects the number of counterparties currently without LEIs to be small, given the results of an analysis of swap data from December 2019 that showed 90% of all records reported had LEIs for both counterparties. More generally, any swap data that does not identify eligible counterparties with an LEI hinders the Commission's fulfillment of its regulatory mandates, including systemic risk monitoring.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.6. Are there additional costs or benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments? Specific areas of interest include the following:
(43) The Commission requests comment on the range of costs for DCO and financial entity reporting counterparties to obtain LEIs via third-party registration for counterparties that have not obtained LEIs to comply with proposed § 45.6(d)(3).
The Commission is proposing to amend § 45.10 to permit reporting counterparties to transfer swap data and swap transaction and pricing data between SDRs in revised § 45.10(d). To do so, reporting counterparties would need to notify the current SDR, new SDR, and non-reporting counterparty of the UTIs for the swaps being transferred and the date of transfer at least five business days before the transfer. Reporting counterparties would then need to report the change of SDR to the current SDR and the new SDR, and then begin reporting to the new SDR.
The Commission believes the ability to change SDRs will benefit reporting counterparties by permitting them to choose the SDR that best fits their business needs.
Proposed § 45.10(d) would benefit reporting counterparties by giving them the freedom to select the SDR that provides the best services, pricing, and functionality to serve their business needs instead of having to use the same SDR for the entire life of the swap. The Commission believes reporting counterparties could benefit through reduced costs if they had the ability to change to an SDR that provided services better calibrated to their business needs.
The Commission recognizes the proposal would impose costs on the three SDRs. SDRs would need to update their systems to permit reporting counterparties to transfer swap data and swap transaction pricing data in the middle of a swap's lifecycle, rather than at the point of swap initiation. However, the Commission believes that after the initial system updates, SDRs should be able to accommodate these changes since they are only slightly more burdensome than most of the current on-boarding practices for new clients in place at each SDR. In addition, SDRs would benefit from attracting new clients that choose to move their reporting to their SDR.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 49.10. Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to remove the § 45.12 regulations that permit voluntary supplemental reporting. Current § 45.12 permits voluntary supplemental reporting to SDRs and specifies counterparties must report USIs, LEIs, and an indication of jurisdiction as part of the supplementary report. Section 45.12 also requires counterparties correct errors in voluntary supplemental reports.
The Commission believes removing voluntary supplemental swap reports will reduce unnecessary messages in the SDR that do not provide a clear regulatory benefit to the Commission.
Removing the option for voluntary supplemental reporting would benefit SDRs to the extent that they would no longer need to take in, process, validate, and store the reports. This should reduce costs and any unnecessary complexities for SDRs with respect to these reports that provide little benefit to the Commission.
The Commission recognizes the proposal would impose initial costs on SDRs. The three SDRs would need to update their systems to stop accepting these reports. However, the Commission expects these costs would be minimal and after the initial system updates, SDRs should see reduced costs by not having to accommodate these reports. CFTC SMEs estimate the cost of these changes to be small for large reporting entities and SDRs.
The Commission preliminarily believes that on balance the expected benefits justify the proposed rule amendments notwithstanding their expected mitigated costs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.12. Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to amend § 45.13 to (i) require reporting counterparties, SEFs, DCMs, and DCOs to report required swap creation and continuation data to SDRs using the technical standards, as instructed by the Commission, for each swap data element required to be reported; (ii) require reporting counterparties, SEFs, DCMs, and DCOs to satisfy SDR validation rules; and (iii) require SDRs to send reporting counterparties, SEFs, DCMs, DCOs, and third party service providers validation messages.
Through updating and further specifying the swap data elements required to be reported to SDRs, the Commission would benefit from having swap data that is more standardized, accurate, and complete across SDRs. As discussed in section V above, the Commission's use of the data to fulfill its regulatory responsibilities has been complicated by varying compliance with swap data standards both within and across SDRs.
The Commission recognizes that the changes proposed in § 45.13 would require SDRs, SEFs, DCMs, and reporting counterparties to update their reporting systems. The three SDRs would need to update their systems to accept swap data according to new technical standards and validation conditions. SEFs, DCMs, and reporting counterparties would need to update their systems as well to report swap data to SDRs according to the technical standards. These entities would also need to update systems to validate swap data. The costs of these updates are likely to differ from entity to entity but, depending on current systems, could be high.
However, if the Commission believes some factors would mitigate the costs to these entities. First, most of the swap data the Commission is proposing to further standardize with the updates in appendix 1 is currently being reported to SDRs. Commission staff recognize that data quality has improved over the past years as SDRs adopted more technical standards on their own. However, for certain assets classes, the Commission expects the changes could be more pronounced. Costs to standardize data elements that had not been standardized, in certain asset classes like commodities, or adding new data elements would be more costly but could be mitigated if the reporting entity already saves this information but does not currently then send it to the SDR.
Second, to the extent SDRs operate in multiple jurisdictions, ESMA already requires many of the swap data elements and many of the technical standards and validation conditions the Commission is proposing. An SDR may have to spend fewer resources updating its systems for the proposed changes in § 45.13 if it has already made these changes for European market participants. Similarly, SEFs, DCMs, and reporting counterparties reporting to European TRs may have to spend fewer resources.
Additionally, after the updates would be made, the Commission expects SDRs, SEFs, DCMs, and reporting counterparties would see a reduction in costs through reporting a more streamlined data set than what is currently being reported to SDRs. In addition, entities reporting in multiple jurisdictions would be able to report more efficiently as jurisdictions adopt the CDE Technical Guidance data elements.
Finally, this NPRM is proposed to have the part 43 swap transaction and pricing data be a subset of the part 45 swap data. This means proposed changes to parts 43 and 45 would largely require technological changes that could merge two different data streams into one. For example, SDRs will have to make adjustments to their extraction, transformation, and loading (ETL) process in order to accept feeds that comply with new technical standards and validation conditions.
Because many of the changes SDRs would make to comply with part 45 will likely also allow it to comply with part 43, the Commission anticipates significantly lower aggregate costs relative to the costs for parts 43 and 45 separately. For this reason, the costs described below may most accurately represent the full technological cost of satisfying the requirements for both proposed rules.
Based on conversations with CFTC staff experienced in designing data reporting, ingestion, and validation systems, Commission staff estimates the cost per SDR to be in a range of $141,000 to $500,000.
For reporting entities, the Commission estimates the cost per reporting entity to be in a range of $23,500 to $72,500.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 45.13. Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to amend § 46.3 to remove an exception for required swap continuation data reporting for pre-enactment and transition swaps. Currently, § 46.3(a)(2) provides that reporting counterparties need to report only a subset of part 45 swap data fields when reporting updates to pre-enactment and transition swaps. The Commission is removing that exception to specify that reporting counterparties would report updates to pre-enactment and transition swaps according to part 45.
The Commission believes that this should be current practice for SDRs and reporting counterparties, and should therefore not impact costs or benefits to SDRs and reporting counterparties.
Is the Commission's understanding correct that the proposed change to § 46.3(a)(2) would have no practical impact on reporting counterparties and SDRs for pre-enactment and transition swap continuation data reporting? Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to update § 46.10 to require reporting counterparties to use the required data standards set forth in § 45.13(a) for reporting historical swaps to SDRs. The Commission believes reporting counterparties currently use the same data standards for both parts 45 and 46 reporting. This change would ensure that reporting counterparties continue to do so under the proposed updated list of swap data elements in appendix 1 and the new technical standards.
SDRs and reporting counterparties would both incur costs in updating their part 46 reporting systems to report according to any of the proposed changes to part 45 reporting. However, given the diminishing number of historical swaps that have not yet matured or been terminated, the Commission expects that these costs would be negligible compared to the costs associated with complying with new § 45.13.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 46.10. Are there additional costs and benefits that the Commission should consider? Are there factors that would raise costs for reporting historical swaps according to the standards in § 45.13? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to remove § 46.11(b) to remove the option for state data reporting. This would be consistent with the Commission's proposal to eliminate state data reporting in § 45.4.
SDRs and reporting counterparties would both incur costs in updating their part 46 reporting systems to eliminate state data reporting. However, given the dwindling number of historical swaps that have not yet matured or been terminated, the Commission expects that these costs would be negligible.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 46.11. Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Commission is proposing to amend § 49.4 to: (i) Remove the erroneous requirement for SDRs to submit a statement to the Commission that the custodial SDR is authorized to make the withdrawing SDR's data and records available in accordance with § 1.44; and (ii) remove the § 49.4(a)(2) requirement that prior to filing a request to withdraw, a registered SDR file an amended Form SDR to update any inaccurate information and replace it with a new requirement for SDRs to execute an agreement with the custodial SDR governing the custody of the withdrawing SDR's data and records prior to filing a request to withdraw with the Commission.
The Commission believes the amendments would simplify the regulations and help ensure that swap data is properly transferred to a different SDR when one SDR withdraws from registration.
The Commission believes SDRs would benefit from the removal of the unnecessary requirement to update Form SDR prior to withdrawing from registration. The Commission would benefit from having a clear regulatory requirement for an SDR withdrawing from registration to have an agreement with the custodial SDR regarding the withdrawing SDR's data and records.
The Commission believes SDRs would not incur any material costs associated with the proposed changes. SDRs would execute a custodial agreement to transfer the data as a matter of due course. The changes concerning timing and removing the erroneous reference would not result in costs for the SDRs.
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 46.11. Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
Most of the amendments the Commission is proposing to § 49.10 are non-substantive minor technical amendments. However, the Commission is proposing to add a new requirement in § 49.10(c) to require SDRs to validate SDR data. Proposed § 49.10(c) would require that SDRs establish data validations. SDRs would also be required to send SEFs, DCMs, and reporting counterparties data validation acceptance and error messages that identify the validation errors. The Commission is also proposing to require that SDRs cannot reject a swap transaction and pricing data message if it was submitted jointly with a swap data message that contained a validation error.
SDRs, SEFs, DCMs, and reporting counterparties would benefit by having a single set of validation rules in the technical standards instead of each SDR applying different validations.
SDRs, SEFs, DCMs, and reporting counterparties would incur costs in updating their reporting systems apply these validation rules. To the extent SDRs operate in multiple jurisdictions, ESMA is already requiring many of the data validations that DMO is proposing in the technical standards to be published on
The Commission requests comment on its considerations of the costs and benefits of the proposed amendments to § 49.10(c). Are there additional costs and benefits that the Commission should consider? Commenters are encouraged to include both qualitative and quantitative assessments of these costs and benefits.
Are there any other alternatives that may provide preferable costs or benefits than the costs and benefits related to the proposed amendments?
The Dodd-Frank Act sought to promote the financial stability of the U.S., in part, by improving financial system accountability and transparency. More specifically, Title VII of the Dodd-Frank Act directs the Commission to promulgate regulations to increase swaps markets' transparency and thereby reduce the potential for counterparty and systemic risk.
CEA section 15(a) requires the Commission to consider the costs and benefits of the proposed amendments to parts 23, 43, 45, and 49 with respect to the following factors:
• Protection of market participants and the public;
• Efficiency, competitiveness, and financial integrity of markets;
• Price discovery;
• Sound risk management practices; and
• Other public interest considerations.
A discussion of these proposed amendments in light of CEA section 15(a) factors is set out immediately below.
The Commission believes that the reporting changes under parts 45, 46, and 49 would enhance protections already in place for market participants and the public. By lengthening reporting timeframes and standardizing data formats, the Commission believes that it would be provided a more cohesive, more standardized, and, ultimately, more accurate data without sacrificing
The Commission believes the proposed rules would streamline reporting and improve efficiencies given the improved data standardization. By identifying reporting entities and by making DCO reporting duties clearer, the proposed rules strive to improve reliability and consistency of swap data. This reliability might further lead to bolstering the financial integrity of swaps markets. Finally, the validation of swap data would improve the accuracy and completeness of swap data available to the Commission and would assist the Commission with, among other things, improved monitoring of risk exposures of individual counterparties, monitoring concentrations of risk exposure, and evaluating systemic risk.
The Commission does not believe the proposed rules would have a significant impact on price discovery.
The Commission believes that the proposed rules would improve the quality of swap data reported to SDRs and, hence, improve the Commission's ability to monitor the swaps market, react to changes in market conditions, and fulfill its regulatory responsibilities generally. The Commission believes that regulator access to high-quality swap data is essential for regulators' to monitor the swaps market for systemic risk, or unusually large concentrations of risk in individual swaps markets or asset classes.
The Commission believes that the increased accuracy resulting from improvements to data entry by market participants and validation efforts by SDRs via the proposed rules has other public interest considerations including:
• Increased understanding for the public, market participants, and the Commission of the interaction between the swaps market, other financial markets, and the overall economy;
• Improved regulatory oversight and enforcement capabilities; and
• Enhanced information for the Commission and other regulators so that they may establish more effective public policies to monitor and, where necessary, reduce overall systemic risk.
The Commission requests comment on all aspects of the proposed rules. Beyond specific questions interspersed throughout this discussion, the Commission generally requests comment on all aspects of its consideration of costs and benefits, including: Identification and assessment of any costs and benefits not discussed therein; the potential costs and benefits of alternatives; data and any other information (including proposed methodology) to assist or otherwise inform the Commission's ability to quantify or qualitatively describe the benefits and costs of the proposed rules; and substantiating data, statistics, and any other information to support statements by commenters with respect to the Commission's consideration of costs and benefits. Commenters also may suggest other alternatives to the proposed approach where the commenters believe that the alternatives would be appropriate under the CEA and provide a superior cost-benefit profile. Commenters are encouraged to include both qualitative and quantitative assessments of these benefits and costs.
CEA section 15(b) 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 objectives of the CEA, in issuing any order or adopting any Commission rule or regulation.
The Commission does not anticipate that the proposed amendments to part 45 would result in anti-competitive behavior. The Commission expects the proposed amendments to § 45.10(d) that would permit reporting counterparties to change SDRs would promote competition by encouraging SDRs to offer competitive pricing and services to encourage reporting counterparties to either stay customers or come to their SDR. The Commission encourages comments from the public on any aspect of the proposal that may have the potential to be inconsistent with the antitrust laws or anti-competitive in nature.
Data recordkeeping requirements, Data reporting requirements, Swaps.
Data recordkeeping requirements, Data reporting requirements, Swaps.
Registration and regulatory requirements, Swap data repositories.
For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR chapter I as follows:
7 U.S.C. 6r, 7, 7a-1, 7b-3, 12a, and 24a, as amended by Title VII of the Wall Street Reform and Consumer Protection Act of 2010, Pub. L. 111-203, 124 Stat. 1376 (Jul. 21, 2010), unless otherwise noted.
(a) As used in this part:
(i) All life cycle event data for the swap; and
(ii) All swap valuation, margin, and collateral data for the swap.
(b)
(a)
(b)
(1) If the reporting counterparty is a swap dealer, major swap participant, or derivatives clearing organization, the reporting counterparty shall report required swap creation data electronically to a swap data repository in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the execution date.
(2) If the reporting counterparty is a non-SD/MSP/DCO counterparty, the reporting counterparty shall report required swap creation data electronically to a swap data repository in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the second business day following the execution date.
(c)
(1)
(2)
(ii)
(d)
(e)
(2) The registered entity or reporting counterparty reporting required swap creation data pursuant to this section shall ensure that the same unique transaction identifier is recorded for the swap in both the swap data repository and the security-based swap data repository.
(f)
(1) For swaps executed on or pursuant to the rules of a swap execution facility
(2) For all other swaps, the reporting counterparty, as determined in § 45.8, shall choose the swap data repository.
(a)
(b)
(1) The derivatives clearing organization that accepted the swap for clearing shall report all life cycle event data electronically to a swap data repository in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the next business day following the day, as determined according to eastern time, that any life cycle event occurs with respect to the swap.
(2) In addition to all other required swap continuation data, life cycle event data shall include all of the following:
(i) The legal entity identifier of the swap data repository to which all required swap creation data for each clearing swap was reported by the derivatives clearing organization pursuant to § 45.3(b);
(ii) The unique transaction identifier of the original swap that was replaced by the clearing swaps; and
(iii) The unique transaction identifier of each clearing swap that replaces a particular original swap.
(c)
(1)
(ii) If the reporting counterparty is a non-SD/MSP/DCO counterparty, the reporting counterparty shall report life cycle event data electronically to a swap data repository in the manner provided in § 45.13(a) not later than 11:59 p.m. eastern time on the second business day following the day, as determined according to eastern time, that any life cycle event occurred.
(2)
(a) * * *
(1) * * *
(i) The legal entity identifier of the swap execution facility or designated contract market; and
(b) * * *
(1) * * *
(i) The legal entity identifier of the reporting counterparty; and
(c)
(1)
(i) The legal entity identifier of the swap data repository; and
(d)
(1) * * *
(i) The legal entity identifier of the derivatives clearing organization; and
(f)
(g)
(1) The legal entity identifier of the third-party service provider; and
(2) An alphanumeric code generated and assigned to that swap by the automated systems of the third-party service provider, which shall be unique with respect to all such codes generated and assigned by that third-party service provider.
(h)
Each swap execution facility, designated contract market, derivatives clearing organization, swap data repository, entity reporting pursuant to § 45.9, and counterparty to any swap that is eligible to receive a legal entity identifier shall obtain and be identified in all recordkeeping and all swap data reporting pursuant to this part by a single legal entity identifier as specified in this section.
(a)
(b)
(c)
(d)
(2) Each swap dealer, major swap participant, swap execution facility, designated contract market, derivatives clearing organization, and swap data repository shall maintain and renew its legal identity identifier in accordance with the standards set by the Global Legal Entity Identifier System.
(3) Each derivatives clearing organization and each financial entity reporting counterparty executing a swap with a counterparty that is eligible to receive a legal entity identifier, but has not been assigned a legal entity identifier, shall, prior to reporting any required swap creation data for such swap, cause a legal entity identifier to be assigned to the counterparty, including if necessary, through third-party registration.
(4) For swaps previously reported pursuant to this part using substitute counterparty identifiers assigned by a swap data repository prior to Commission designation of a legal entity identifier system, each swap data repository shall map the legal entity identifiers for the counterparties to the substitute counterparty identifiers in the record for each such swap.
The determination of which counterparty is the reporting counterparty for each swap shall be made as provided in this section.
All swap transaction and pricing data and swap data for a given swap shall be reported to a single swap data repository, which shall be the swap data repository to which the first report of such data is made, unless the reporting counterparty changes the swap data repository to which such data is reported pursuant to paragraph (d) of this section.
(a)
(1) The swap execution facility or designated contract market shall report all swap transaction and pricing data and required swap creation data for a swap to a single swap data repository. As soon as technologically practicable after execution of the swap, the swap execution facility or designated contract market shall transmit to both counterparties to the swap, and to the derivatives clearing organization, if any, that will clear the swap, the identity of the swap data repository to which such data is reported.
(2) Thereafter, all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to that same swap data repository, unless the reporting counterparty changes the swap data repository to which such data
(b)
(1) The reporting counterparty shall report all swap transaction and pricing data and required swap creation data to a single swap data repository. As soon as technologically practicable after execution, the reporting counterparty shall transmit to the other counterparty to the swap, and to the derivatives clearing organization, if any, that will clear the swap, the identity of the swap data repository to which such data is reported.
(2) Thereafter, all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to the same swap data repository, unless the reporting counterparty changes the swap data repository to which such data is reported pursuant to paragraph (d) of this section.
(c)
(1) The derivatives clearing organization that is a counterparty to such clearing swap shall report all swap transaction and pricing data and required swap creation data for that clearing swap to a single swap data repository. As soon as technologically practicable after acceptance of an original swap for clearing, or execution of a clearing swap that does not replace an original swap, the derivatives clearing organization shall transmit to the counterparty to each clearing swap the identity of the swap data repository to which such data is reported.
(2) Thereafter, all swap transaction and pricing data, required swap creation data and required swap continuation data for that clearing swap shall be reported by the derivatives clearing organization to the same swap data repository to which swap data has been reported pursuant to paragraph (c)(1) of this section, unless the reporting counterparty changes the swap data repository to which such data is reported pursuant to paragraph (d) of this section.
(3) For clearing swaps that replace a particular original swap, and for equal and opposite clearing swaps that are created upon execution of the same transaction and that do not replace an original swap, the derivatives clearing organization shall report all swap transaction and pricing data, required swap creation data, and required swap continuation data for such clearing swaps to a single swap data repository.
(d)
(1)
(2)
(i) The reporting counterparty shall report the change of swap data repository to the swap data repository to which the reporting counterparty is currently reporting swap transaction and pricing data and swap data as a life cycle event for such swap pursuant to § 45.4.
(ii) On the same day that the reporting counterparty reports required swap continuation data as required by paragraph (d)(2)(i) of this section, the reporting counterparty shall also report the change of swap data repository to the swap data repository to which swap transaction and pricing data and swap data will be reported going forward, as a life cycle event for such swap pursuant to § 45.4. The required swap continuation data report shall identify the swap using the same unique transaction identifier used to identify the swap at the previous swap data repository.
(iii) Thereafter, all swap transaction and pricing data, required swap creation data, and required swap continuation data for the swap shall be reported to the same swap data repository, unless the reporting counterparty for the swap makes another change to the swap data repository to which such data is reported pursuant to paragraph (d) of this section.
(a) Should there be a swap asset class for which no swap data repository currently accepts swap data, each swap execution facility, designated contract market, derivatives clearing organization, or reporting counterparty required by this part to report any required swap creation data or required swap continuation data with respect to a swap in that asset class must report that same data to the Commission.
(b) Data reported to the Commission pursuant to this section shall be reported at times announced by the Commission and in an electronic file in a format acceptable to the Commission.
(a)
(2) In reporting required swap creation data and required swap continuation data to a swap data repository, each reporting counterparty, swap execution facility, designated contract market, and derivatives clearing organization making such report shall satisfy the swap data validation procedures of the swap data repository.
(3) In reporting swap data to a swap data repository as required by this part, each reporting counterparty, swap execution facility, designated contract market, and derivatives clearing organization shall use the facilities, methods, or data standards provided or required by the swap data repository to which the entity or counterparty reports the data.
(b)
(2) If a required swap creation data or required swap continuation data report to a swap data repository does not satisfy the data validation procedures of the swap data repository, the reporting counterparty, swap execution facility, designated contract market, or derivatives clearing organization, required to submit the report has not yet satisfied its obligation to report required swap creation or continuation data in the manner provided by paragraph (a) of this section within the timelines set forth in §§ 45.3 and 45.4. The reporting counterparty, swap execution facility, designated contract market, or derivatives clearing organization has not satisfied its obligation until it submits the required swap data report in the manner provided by paragraph (a) of this section, which includes the requirement to satisfy the data validation procedures of the swap data repository, within the applicable time deadline set forth in §§ 45.3 and 45.4.
(a)
(1) The authority to determine the manner, format, coding structure, and electronic data transmission standards and procedures acceptable to the Commission for the purposes of § 45.11;
(2) The authority to determine whether the Commission may permit or require use by swap execution facilities, designated contract markets, derivatives clearing organizations, or reporting counterparties in reporting pursuant to § 45.11 of one or more particular data standards (such as FIX, FpML, ISO 20022, or some other standard), in order to accommodate the needs of different communities of users;
(3) The dates and times at which required swap creation data or required swap continuation data shall be reported pursuant to § 45.11; and
(4) The chief information officer shall publish from time to time in the
(b)
(1) The authority to publish the technical specifications providing the form and manner for reporting the swap data elements in appendix 1 to this part to swap data repositories as provided in § 45.13(a)(1);
(2) The authority to determine whether the Commission may permit or require use by swap execution facilities, designated contract markets, derivatives clearing organizations, or reporting counterparties in reporting pursuant to § 45.13(a)(1) of one or more particular data standards (such as FIX, FpML, ISO 20022, or some other standard), in order to accommodate the needs of different communities of users;
(3) The dates and times at which required swap creation data or required swap continuation data shall be reported pursuant to § 45.13(a)(1); and
(4) The Director of the Division of Market Oversight shall publish from time to time in the
Title VII, sections 723 and 729, Pub. L. 111-203, 124 Stat. 1738.
The revisions and additions read as follows:
(a) As used in this part:
(b)
(a) * * *
(2) * * *
(i) For each uncleared pre-enactment or transition swap in existence on or after April 25, 2011, throughout the existence of the swap following the compliance date, the reporting counterparty must report all required swap continuation data as required by part 45 of this chapter.
* * * In reporting required swap continuation data as required by this part, each reporting counterparty shall
The revision reads as follows:
(b) Each counterparty to a pre-enactment or transition swap that is not the reporting counterparty as determined pursuant to § 46.5, and that discovers any error or omission with respect to any data for a pre-enactment or transition swap reported to a swap data repository for that swap, shall promptly notify the reporting counterparty of each such error or omission. As soon as technologically practicable after receiving such notice, the reporting counterparty shall report a correction of each such error or omission to the swap data repository.
7 U.S.C. 1a, 2(a), 6r, 12a, and 24a, as amended by Title VII of the Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (Jul. 21, 2010), unless otherwise noted.
(a) * * *
The revision reads as follows:
(a) * * *
(2) Prior to filing a request to withdraw, a swap data repository shall execute an agreement with the custodial swap data repository governing the custody of the withdrawing swap data repository's data and records. The custodial swap data repository shall retain such records for at least as long as the remaining period of time the swap data repository withdrawing from registration would have been required to retain such records pursuant to this part.
(a)
(2)
(b)
(c)
(1)
(2)
(3)
(d)
(e) [Reserved].
(f)
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.
Data is the lifeblood of our markets. Yet for too long, market participants have been burdened with confusing and costly swap data reporting rules that do little to advance the Commission's regulatory functions. In the decade-long effort to refine our swap data rules, we have at times lost sight of Sir Isaac Newton's wisdom: “Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things.”
Simplicity should be a central goal of our swap data reporting rules. After all, making rules simple and clear facilitates compliance, price discovery, and risk monitoring. While principles-based regulation can offer numerous advantages, there are areas where a rules-based approach is preferable because of the level of clarity, standardization, and harmonization it provides. Swap data reporting is one such area.
As it stands, swap data repositories (SDRs) and market participants have been left to wade through Parts 43 and 45 of our rules on their own. We have essentially asked them to decide what to report to the CFTC, instead of being clear about what we want. The result is a proliferation of reportable data fields designed to ensure compliance with our rules—but which exceed what market participants can readily provide and what the agency can realistically use. These fields can run hundreds deep, imposing costly burdens on market participants. Yet for all its sprawling complexity, the current data reporting system omits, of all things, uncleared margin information—thereby creating a black box of potential systemic risk.
And that just describes CFTC reporting. As it stands today, a market participant with a swap reportable to the CFTC might also have to report the same swap to the SEC, the European Securities and Markets Authority (ESMA), and perhaps other regulators as well. The global nature of our derivatives markets has led to the preparation and submission of multiple swap data reports, creating a byzantine maze of disparate data fields and reporting timetables. Market participants should not incur the costs and burdens of reporting a grab-bag of dissimilar data for the very same swap. That approach helps neither the market nor the CFTC: Conflicting data reporting requirements make regulatory coordination more difficult, preventing a panoramic view of risk.
Today we take the first step toward changing this. I am pleased to support the proposed amendments to Parts 43 and 45 of the CFTC's rules governing swap data reporting.
In fact, the Part 45 proposal includes a technical specification that identifies 116 standardized data fields that will help replace the many hundreds of fields now in use by SDRs. We are also proposing to harmonize our swap data reporting requirements with those of the SEC and ESMA. Harmonization would remove the burdens of duplicative reporting while painting a more complete picture of market risk. At the same time, the proposed changes to Part 43 would enhance public transparency as well as provide relief for end users who rely on our markets to hedge their risks. Our swaps markets are integrated and global; it is time for our reporting regime to catch up.
Today's proposals advance my first strategic goal for our agency: Strengthening the resilience and integrity of our derivatives markets while fostering their vibrancy.
A related problem we address today involves inconsistent data. SDRs currently validate swap transaction data in conflicting ways, causing market participants to report disparate data elements to different SDRs. Today's proposals include guidance to help SDRs standardize their validation of swap
Simplifying the reporting process will also enhance the regulatory experience for market participants at home and abroad, which is another strategic goal for the agency.
Our proposals today reflect a hard look at the data we are requesting and the data we really need. The proposals provide the guidance needed to collapse hundreds of reportable data fields into a standardized set of 116 that truly advance our regulatory objectives. If adopted, this would reduce burdens on market participants and provide technical guidance to ensure they are no longer guessing at what we require. Clear rules are easier to follow, and market participants will no longer be subject to reporting obligations that raise the costs of compliance without improving the resilience and integrity of our derivatives markets. Just as we are reducing requirements where they are not needed, we are also enhancing them where they are. This is the balanced approach sound regulation demands.
Today's proposals also improve the regulatory experience by harmonizing swap data reporting where it is sensible to do so.
While we should not harmonize for the sake of harmonizing,
Harmonization also helps the CFTC realize our vision of being the global standard for sound derivatives regulation.
The proposals also would harmonize swap data reporting in several other important respects. First, we propose adopting a Unique Transaction Identifier (UTI) requirement in place of the existing Unique Swap Identifier (USI) system, as provided for in the CPMI-IOSCO Technical Guidance.
I am also pleased to support our proposals today because they enhance
Part 43 embodies our public reporting system for swap data, which provides high-quality information in real time. Providing transparent, timely swap data to the public is critically important to the price discovery process necessary for our markets to thrive and grow. Enhanced public transparency also ensures that market participants and end users can make informed trading and hedging decisions.
The CFTC's current system for public reporting is considered the global standard. Even so, it can be improved. Although post-priced swaps are subject to unique pricing factors that affect the “public tape,”
The current reporting system for prime broker swaps has led to data that distorts the picture of what is actually happening in the market. Currently, Part 43 requires that offsetting swaps executed with prime brokers—in addition to the initial swap reflecting the actual terms of the trade between counterparties—be reported on the public tape. Reporting these duplicative swaps can hinder price discovery by displaying pricing data that includes fees and other costs unrelated to the actual terms of the parties' swap. Cluttering the public tape with duplicative swaps is at best unhelpful, and at worst confusing. To the public, it could appear as though there are twice as many negotiated, arms-length swaps as there actually are. Today's proposals would solve this problem by requiring that only the initial “trigger” swaps be publicly reported.
Finally, the proposals would help make our derivatives markets work for all Americans, another of the CFTC's strategic goals.
If finalized, today's proposals will no longer require end users to report swap valuation data. It would also give them a “T+2” timeframe for reporting the data we do require. The proposals would therefore remove unnecessary reporting burdens from end users relying on our swaps markets to hedge their risks. In addition, by providing sufficient time for end users to ensure their
It is time for the Commission to reform our swap data reporting rules. Sir Isaac Newton realized long ago that simplicity can often lead to truth. It does not take an apple striking us on the head to realize that simplifying our swap data reporting rules to achieve clarity, standardization, and harmonization will inevitably make for sounder regulation.
I am pleased to support the data proposals before the Commission today. These proposed amendments to part 45 regulatory reporting and part 43 real-time reporting hopefully represent the beginning of the end of this agency's longstanding efforts to collect and utilize accurate, reliable swap data to further its regulatory mandates.
There is frequently a trade-off between being first and being right. That is especially true when it comes to regulation and specifically true when it comes to the CFTC's historical approach to uncleared swap data reporting. Although the CFTC was the first regulator in the world to implement swap data reporting requirements, it did so only in a partial, non-descriptive, and non-technical fashion, which has led to the fact that, even today, the Commission has great difficulty aggregating and analyzing data for uncleared swaps across swap data repositories (SDRs).
However, I'm very pleased that over the past few years, the CFTC continued to lead global efforts to reach international consensus on reporting requirements so that derivatives regulators can finally get a clear picture of the uncleared landscape.
I wish we could have arrived at this stage sooner. Nevertheless, I would like to recognize the diligent efforts of DMO staff to finally get us over the finish line. The proposals before us today seek to provide the Commission with the homogeneous data it needs to readily analyze swap data for both cleared and uncleared swaps, across jurisdictions. The proposals would eliminate unnecessary reporting fields, implement internationally agreed to “critical data elements,” or CDE fields, and revisit aspects of our current reporting regimes that can be further perfected.
It is important to note the differentiation between the poor usability of current uncleared swaps data and the significant usability of swaps data produced by clearinghouses for cleared swaps trades. In fact, the swap data for cleared swap transactions is regularly used by the Commission to monitor risk in real time at the client portfolio level.
The proposal would provide reporting counterparties with a longer time to report trades accurately to an SDR by moving to a “T+1” reporting timeframe for swap dealer (SD) and derivatives clearing organization (DCO) reporting parties, and a “T+2” reporting timeframe for non-SD/DCO reporting counterparties. I support providing additional time for market participants to meet their regulatory reporting obligations. A later regulatory reporting deadline should help counterparties report the trade correctly the first time, instead of reporting an erroneous trade that then needs to be corrected later. This proposed change would also more closely harmonize the CFTC's and ESMA's reporting deadlines.
The proposal would also implement a number of CDE fields consistently with the detailed technical standards put forth by CPMI-IOSCO.
The technical specification describing each of these data elements is being put out for public comment and I urge market participants to comment on all of the proposed elements. To the extent the CFTC can adopt basic data elements that are identical to other jurisdictions' elements, global aggregation and measurement of risk, including counterparty credit risk, can become a reality. However, the goal of global data harmonization, in my opinion, should also be balanced against the burdens and practical realities facing reporting counterparties. This proposal tries to strike an appropriate balance and I look forward to hearing from commenters on this point.
The real-time reporting proposal generally maintains the “as soon as technologically practicable” reporting standard for most trades, but would adjust the delay for public dissemination of block transactions. The proposal also updates the block size thresholds and cap sizes and makes adjustments to the block swap categories.
With respect to the timing requirement for reporting block trades, the proposal would establish a time delay of 48 hours after execution of the trade. The Commodity Exchange Act (CEA) specifically directs the Commission to ensure that real-time public reporting requirements for swap transactions (i) do not identify the participants; (ii) specify the criteria for what constitutes a block trade and the appropriate time delay for reporting such block trades, and (iii) take into account whether public disclosure will materially reduce market liquidity.
In the past, the leadership of the CFTC has likened the construction of a swap data reporting system to the building of a transcontinental railroad—a monumental infrastructure project, requiring considerable time and resources. However, in my opinion the best way to build a functioning intercontinental railroad is not to let every state decide how wide they want to make the tracks—the approach the agency tried when it rushed out its uncleared swap reporting framework almost eight years ago. Subsequent progress on this issue has always been stymied by transitioning away from that view—away from the lack of specificity and consistency in how reporting counterparties should report basic data elements. Today, as a result of the decisive leadership and hard work of this agency, I am optimistic that we have finally turned the corner towards complete visibility into the global swaps market landscape. I look forward to hearing feedback from market participants and SDRs about how our proposals can be further improved.
I respectfully concur in the Commission's proposal to amend certain swap data and recordkeeping and reporting requirements. The proposed amendments reflect a multi-year effort to streamline, simplify, and internationally harmonize the requirements associated with reporting swaps. As a whole, the proposed amendments should improve data quality by eliminating duplication, removing alternative or adjunct reporting options, and utilizing universal data elements and identifiers. Along those lines, I am especially pleased that the Commission is proposing to require consistent application of rules across SDRs for the validation of both part 43 and part 45 data submitted by
I am also pleased that the Commission is considering requiring reporting counterparties to indicate whether a specific swap: (1) Was entered into for dealing purposes (as opposed to hedging, investing, or proprietary trading); and/or (2) needs not be considered in determining whether a person is a swap dealer or need not be counted towards a person's
Collecting swap data is crucial to fulfilling the purposes of the Commodity Exchange Act (“CEA”), including “insur[ing] the financial integrity of all transactions subject to this Act and the avoidance of systemic risk.”
The Commission must collect appropriate swap data to fulfill its statutory mandate. The data must be accurate and sufficiently standardized so that the Commission can easily aggregate and analyze the data reported to different swap data repositories (“SDRs”). The Commission must be able to determine how different derivatives categories and products are being traded, as well as the positions and risks that different market participants are taking across the entire swaps market. I support today's Proposal to amend the Part 45, 46, and 49
In addition to obtaining accurate data, the Commission must also develop the tools and resources to analyze that data. The Proposal, which focuses on the quality and reporting of data, does not address in any detail the actual use cases for the data that would be collected or the analytical needs for swap risk management oversight. Regrettably, the Commission has yet to set forth with any specificity how it intends to use this swap data to evaluate or address systemic risk. More generally, the Commission has not devoted enough attention to the important task of building a risk monitoring system for swaps. In my view, this effort should be a high priority. I encourage market participants and members of the public to comment on the Proposal and on the particular questions noted below.
In 2010, Congress enacted the Dodd-Frank Act and codified swap reporting reforms consistent with international goals of ensuring that swap reporting and review is “sufficient to improve transparency in the derivatives markets, mitigate systemic risk, and protect against market abuse.”
The Proposal would amend those existing rules to simplify reporting obligations, increase data quality, and partially harmonize specific data elements and taxonomies with new international standards. It would reduce the number of potentially duplicative reports sent to SDRs by condensing basic reporting obligations into “creation” and “continuation” reports for all swaps and eliminate repetitive daily “state” data reporting of the same data for most existing transactions. SDRs would also be required to validate the data they receive. I support these efforts to improve swap data reporting.
The Proposal would also extend swap data reporting deadlines to T+1 (reporting required one day after the day the trade is executed) for swap dealers, major swap participants, swap execution facilities, designated contract markets, and derivatives clearing organizations (“DCOs”). Other reporting counterparties would be required to report no later than T+2. This change is expected to increase data accuracy, as it would allow time for reporting parties to verify their data before submission to an SDR. The tradeoff is that the Commission will not receive data nearly instantaneously, which could constrain the Commission's ability to undertake real time monitoring of risks in times of market stress. It is my understanding, however, that to date such monitoring has not been possible. I encourage public comments on these proposed reporting deadlines, including whether the full amount of T+1 or T+2 is necessary to achieve accurate reporting and is compatible with the Commission's market and systemic risk oversight responsibilities.
The Proposal also would impose a new requirement for swap dealers, major swap participants, and DCOs to report margin and collateral data each business day.
However, it is not clear whether the collateral data to be collected would be sufficient for the Commission's purposes. Without exposure data, the Commission may not be able to assess whether the amount of collateral collected offsets the risks posed by swaps or verify compliance with the uncleared swap margin rules. For these reasons, I ask that commenters address whether reporting of exposures or other data elements related to margin should be included in this rule or in other reporting requirements, or alternatively, whether the CFTC should be able to undertake the appropriate analysis with other data it already collects.
As a CFTC Commissioner, I am often asked how we use SDR data, and whether the
Systemic risk monitoring, market integrity, and the protection of market participants are fundamental purposes of the CEA. Comprehensive data sets and sophisticated data analysis are indispensable to the Commission and indeed to any modern financial regulatory agency. For decades the CFTC has been analyzing futures and options data on a daily basis to monitor risk and margin sufficiency in those markets.
The Commission needs to identify and articulate how it will use swap data to meet its mandates. While general goals are often stated, the Commission needs to identify the specific risks it is measuring and monitoring and the information that should be made available to the public to improve market transparency. The Commission should be able to identify which data elements allow the Commission to specifically monitor for
I urge the Commission to focus more resources on swap data analysis so that we can maximize our use of the reported data to help mitigate risks before they become a full blown crisis. While data is the necessary foundation of any good risk monitoring program, more must be done. The Commission must also develop a more comprehensive capacity to measure and monitor risk. It must identify how it will achieve specific swap analysis objectives, the data needed for such objectives, and the information technology and human resources needed to execute its vision.
Part 45 and the proposal's swap data elements are generally focused on the reporting of individual swap transactions, as specified in CEA section 2a(13)(G). I support the Proposal because it will standardize and improve the reporting of quality swap data. This is both necessary and appropriate; high quality data is the foundation upon which needed data analysis for risk monitoring and greater transparency are built. I encourage public comment on whether the 116 data elements in the proposal are sufficient to understand the market, counterparty, and systemic risks associated with individual swaps and with each market participant's swap book and aggregate exposures.
I thank the staff of the Commission, and particularly the Division of Market Oversight, for their work on the Proposal and for their constructive engagement with my office. I look forward to public comments, and to a more complete articulation by the Commission of how it will use the swap data that would be collected to fulfill its congressionally mandated mission.
Coast Guard, DHS.
Final rule.
The Coast Guard is finalizing its 2013 proposal to update the Liquid Chemical Categorization tables, aligning them with the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk and the International Maritime Organization's Marine Environment Protection Committee circulars from December 2012 and 2013. This final rule corrects errors in our interim rule of August 16, 2013, and follows our supplemental notice of proposed rulemaking of October 22, 2015. The updated tables provide a list of liquid hazardous materials and liquefied and compressed gases approved for international and domestic maritime transportation, and indicate how each substance is categorized by its pollution potential, safe carriage requirements, chemical flammability, combustibility, and compatibility with other substances. This rule imposes no cost to chemical shippers and vessel owners.
This final rule is effective May 18, 2020.
You may view comments identified by docket number USCG-2013-0423 using the Federal eRulemaking Portal at
For information about this document call or email LT Jake Lobb, Coast Guard; telephone (202) 372-1428, email
The legal basis for this final rule is Title 46 of the United States Code (U.S.C.) Section (§ ) 3703, which requires the Secretary of the Department of Homeland Security (DHS) to prescribe regulations relating to the operation of vessels that carry oil or hazardous material in bulk as cargo or cargo residue, and to the types and grades of cargo those vessels carry. Additional regulatory authority is provided by 33 U.S.C. 1903 (regulations to implement the International Convention for the Prevention of Pollution from Ships, 1973, or “MARPOL”), 46 U.S.C. 2103 (general merchant marine regulatory authority), and 46 U.S.C. 3306 (regulations for the safety of individuals and property on inspected vessels). The Secretary delegated the authority to carry out the provisions of this section to the Coast Guard, in accordance with DHS Delegation No. 0170.1(II)(77) and (92).
The purpose of this final rule is to revise and update the Liquid Chemical Categorization (LCC) tables that list the liquid hazardous materials and liquefied and compressed gases that have been approved for international and domestic maritime transportation in bulk. The tables also indicate how each substance is categorized by its pollution potential, safe carriage requirements, chemical flammability, combustibility, and chemical compatibility with other substances.
This final rule applies to the carriage of cargos from vessel populations described in 46 CFR 30.01-5, 150.110 (with exceptions described in 46 U.S.C. 3702), 153.1, and 154.5. All U.S. and foreign-flagged tank vessels are included, unless exempted by 46 CFR 30.01-5. Also included are self-propelled bulk cargo carrying oceangoing/non-oceangoing U.S.-flag and oceangoing foreign-flag vessels when in U.S. waters. Foreign tank vessels are exempt from this regulation when on innocent passage through U.S. waters.
The Coast Guard published an interim rule on this topic in 2013.
Coast Guard regulations in title 46 Code of Federal Regulations (CFR), chapter I, subchapter D (Tank Vessels, parts 30 through 39) and subchapter O (Certain Bulk Dangerous Cargoes, parts 150 through 155) contain requirements for ensuring safe international and domestic maritime carriage of certain bulk liquid cargoes. The tables in subchapters D and O (collectively referred to as “LCC tables”) list the cargoes for maritime carriage that have
As we described in detail in our interim rule and the SNPRM, the LCC tables contain categorization information based on assessments by the Coast Guard and IMO, and on international tripartite agreements that categorize the pollution-hazard risk, flammability, and combustibility of each cargo in accordance with the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code).
Each December, the IMO's MEPC releases an annual circular that lists cargoes for which it has completed a multi-year review. A cargo is listed in the circular if a tripartite agreement approves it for international bulk maritime transportation and the MEPC validates the approval. The IBC Code is periodically revised by state parties to the Code to include the cargoes listed in the MEPC annual circulars as of the last edition of the Code. The IBC Code was last comprehensively revised in 2007. In that revision, the pollution categories used to indicate a cargo's relative pollution-hazard risk—A, B, C, and D—were replaced by categories X, Y, Z, and OS (for “other substance,” considered to pose no risk).
• X = Major hazard justifying prohibition of the discharge;
• Y = Hazard justifying a limitation on the quality and quantity of the discharge;
• Z = Minor hazard justifying less stringent restrictions on the quality and quantity of the discharge; and
• OS = No harm that justifies special discharge requirements.
In March 2012, the IMO published an annex to the 2007 IBC Code, which listed additional cargoes and their pollution categorizations. This additional information is also reflected in the LCC tables in this final rule.
Until we published the 2013 interim rule, the LCC tables in subchapter D and subchapter O had gone unamended for several years and contained pre-2007 IBC Code provisions. They also did not reflect carriage allowed by individual approvals. The interim rule updated the following tables:
• Table 30.25-1 in subchapter D;
• Table I to part 150 in subchapter O;
• Table II to part 150 in subchapter O;
• Appendix I to part 150; and
• Table 2 to part 153 in subchapter O.
The 2015 SNPRM proposed updating these tables to be current with the December 2013 MEPC circular. This final rule adopts the interim rule with the changes proposed in the SNPRM, including corrections to the tables published in the interim rule. Minor modifications were also made in response to comments received on the SNPRM, as discussed below, and to harmonize chemical names and categories within the tables. We also reinstated chemicals that had been listed in previous editions of the CFR but were inadvertently omitted from the tables in the SNPRM. Vessels continue to carry these substances in the manner described in this rule, and reinstating these substances creates no change to current practice. The tables in their entirety are available in the docket where indicated under the
Our 2013 interim rule prompted comments from two individuals and four industry representatives, one of whom made multiple submissions. Those comments were fully discussed in the 2015 SNPRM.
The SNPRM prompted comments from the American Chemistry Council (a trade group) and two chemical companies. One of the companies asked us to add a substance to the tables, Alkanes (C10-C26), linear and branched (flash point ≤60 °C), and we have added this substance to our tables. This company also corrected our “group” assignments for 11 substances and corrected two misspellings, and we have accepted those corrections. In addition, that company pointed to the need to spell out an abbreviation used in one of the LCC tables and asked us to delete five trade names for substances, which we have done. The other company asked us to accept variant spellings for the same substance, (for example “aluminium” for “aluminum”) and to correct the spelling of one of the substances. We have done so in this final rule.
Both companies asked us to list substances that had been approved by the IMO after 2013. We did not list these substances in this final rule because the scope of the rule is limited to IMO actions through its 2013 MEPC annual circular. For the same reason, we cannot act on the American Chemistry Council's request to list 1-dodecene as a unique substance. These substances will be considered for inclusion in a future update to the LCC tables.
In addition to the comments discussed above, the Coast Guard received one late comment from an individual expressing general support for the rule.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on these statutes or Executive orders.
Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) 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 (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”
The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. Because this rule is not a significant regulatory action, this rule is exempt
This final rule updates and revises the LCC tables that list the name, pollution potential, safe carriage requirements, chemical flammability, combustibility, and compatibility with other substances of each liquid chemical cargo that has been categorized and approved for maritime transportation in bulk by IMO and the Coast Guard. This final rule provides updated information about cargoes that are currently approved for maritime transportation in bulk, the cargo's pollution categorization, and minimum transportation safety requirements. This rule applies to the carriage of the subject cargoes from vessel populations described in 46 CFR 30.01-5, 150.110 (with exceptions described in 46 U.S.C 3702), 153.1, and 154.5. All U.S. and foreign flagged tank vessels are included, unless exempted by 46 CFR 30.01-5. Also included are self-propelled bulk cargo carrying oceangoing/non-oceangoing U.S.-flag and oceangoing foreign-flag vessels when in U.S. waters. Foreign tank vessels are exempt from this regulation when on innocent passage through U.S. waters.
This final rule updates the LCC tables that list the name, pollution potential, safe carriage requirements, chemical flammability, combustibility, and compatibility with other substances of each liquid chemical cargo that has already been categorized and approved by the Coast Guard and the IMO for maritime transportation in bulk, either permanently, or on a provisional basis. This final rule updates and revises the LCC tables to reflect existing international agreements regarding liquid chemical cargoes approved for bulk maritime transportation and their categorizations. As such, the rule does not change the established shipping requirements, and imposes no private-sector costs to chemical shippers and vessel owners. No additional labor nor equipment will be required because of this rule. No commenter challenged the “no cost to industry” assessment by the Coast Guard in the SNPRM's regulatory analysis.
There is no cost to Coast Guard, as the updates are included in this rulemaking.
This final rule also corrects errors and omissions in the tables that were included in the interim rule, and updates the LCC tables to be current through the IMO MEPC Circular of December 2013. The rule incorporates the Coast Guard's compatibility categorizations, as well as chemical cargoes and categorizations listed in the 2013 MEPC circular.
The primary benefit of this final rule is that it conforms regulatory language to practices currently allowed by the Coast Guard, either through individual letters of approval or the IBC Code. We expect the rule to result in improved service to the public through improved clarity and transparency. Public comments reflect that this rulemaking will provide benefits for the public and private sector by bringing more clarity and transparency to the maritime transportation of hazardous materials. Thus, this final rule is codifying existing practices which will decrease confusion as to what are the regulatory requirements in the LCC tables.
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have considered whether this rule will have a significant economic impact on a substantial number of small entities. 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. There are no small shippers engaged in the transport of the LCC chemicals. Further, there are no private industry costs incurred. Consequently, the rule is estimated to have no incremental impact on on the regulated public.
The Coast Guard certified in the SNPRM under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we offer to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
This rule calls for no new or modified collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520. It simply updates and revises the LCC tables that list cargoes that have been approved and categorized for bulk maritime transportation, and does not collect any information from the public.
A rule has implications for federalism under Executive Order 13132 (Federalism) if it has a substantial direct effect on 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 rule under Executive Order 13132 and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132. Our analysis follows.
It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration, repair, maintenance, operation, equipping, personnel qualification, and manning of vessels), as well as the reporting of casualties and any other category in which Congress intended the Coast Guard to be the sole source of a vessel's obligations, are within the field foreclosed from regulation by the States.
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. Although this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630 (Governmental Actions and Interference with Constitutionally Protected Property Rights).
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988 (Civil Justice Reform) to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045 (Protection of Children from Environmental Health Risks and Safety Risks). This rule is not an economically significant rule and will not create an environmental risk to health or risk to safety that might disproportionately affect children.
This final rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments), because it will 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.
We have analyzed this rule under Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use). We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
The National Technology Transfer and Advancement Act, codified as a note to 15 U.S.C. 272, directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards will be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
This rule does not use technical standards. It is based on international standards that were developed using consensus standards development processes.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev. I, 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 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. A final Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
Cargo vessels, Foreign relations, Hazardous materials transportation, Penalties, Reporting and recordkeeping requirements, Seamen.
Hazardous materials transportation, Marine safety, Occupational safety and health, Reporting and recordkeeping requirements.
Administrative practice and procedure, Cargo vessels, Hazardous materials transportation, Marine safety, Reporting and recordkeeping requirements, Water pollution control.
For the reasons discussed in the preamble, the Coast Guard adopts the interim rule published at 78 FR 50152 on August 16, 2013, amending 46 CFR parts 30, 150, and 153, as final with the following changes:
46 U.S.C. 2103, 3306, 3703, Department of Homeland Security Delegation No. 0170.1 (II)(92)(a), (92)(b).
The revisions and additions read as follows:
(d) Any mixture containing one or more cargoes categorized by the International Maritime Organization (IMO) and listed in Table 30.25-1 as a category X, Y, or Z noxious liquid substance (NLS) may be carried in bulk—
(2) Under part 153 if the vessel is regulated under that part; or alternatively under 33 CFR part 151 if the cargo is listed in 33 CFR 151.49; or
(3) Under 33 CFR part 151 if the cargo is listed in 33 CFR 151.47.
46 U.S.C. 3306, 3703; Department of Homeland Security Delegation No. 0170.1. Section 150.105 issued under 44 U.S.C. 3507; Department of Homeland Security Delegation No. 0170.1.
The revisions and addtitions read as follows:
The revisions and additons read as follows:
(a) * * *
(b) The binary combinations listed below have been determined to be dangerously reactive, based either on data obtained in the literature or on laboratory testing that has been carried out in accordance with procedures prescribed in Appendix III. These combinations are exceptions to Figure 1 of part 150 (Compatibility Chart) and may not be stowed in adjacent tanks.
Acetone cyanohydrin (0) is not compatible with Groups 1-12, 16, 17 or 22.
Acrolein (19) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Acrylic acid (4) is not compatible with Group 9, Aromatic Amines.
Acrylonitrile (15) is not compatible with Group 5, Caustics.
Alkyl (C7-C9) nitrates (34) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Alkylbenzene sulfonic (alternately sulphonic) acid (less than 4%) (0) is not compatible with Groups 1-3, 5-9, 15, 16, 18, 19, 30, 34, 37, or strong oxidizers.
Allyl alcohol (15) is not compatible with Group 12, Isocyanates.
Aluminum sulfate (alternately Aluminium sulphate) solution (43) is not compatible with Groups 5-11.
Ammonium bisulfite (alternately bisulphite) solution (70% or less) (43) is not compatible with Groups 1 or 3-5.
Benzenesulfonyl (alternately Benzenesulphonyl) chloride (0) is not compatible with Groups 5-7, or 43.
Butylene glycol (20) is not compatible with Caustic soda solution (5).
gamma-Butyrolactone (0) is not compatible with Groups 1-9.
C9 Resinfeed (DSM) (32) is not compatible with Group 2, Sulfuric (alternately Sulphuric) Acids.
Carbon tetrachloride (36) is not compatible with Tetraethylenepentamine or Triethylenetetramine, both Group 7, Aliphatic Amines.
Catoxid feedstock (36) is not compatible with Groups 1-5, or 12.
Caustic soda solution (5) is not compatible with Butylene glycol (20).
1-(4-Chlorophenyl)-4,4-dimethyl pentan-3-one (18) is not compatible with Group 5, Caustics, or Group 10, Amides.
Crotonaldehyde (19) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Cyclohexanone/Cyclohexanol mixture (18) is not compatible with Group 12, Isocyanates.
2,4-Dichlorophenoxyacetic acid, Dimethylamine salt solution (70% or less) (0) is not compatible with Groups 1-5, 11, 12, or 16.
2,4-Dichlorophenoxyacetic acid, Triisopropanolamine salt solution (43) is not compatible with Group 3, Nitric Acids.
Diethylenetriamine (7) is not compatible with 1,2,3-Trichloropropane, Group 36, Halogenated Hydrocarbons.
Dimethyl hydrogen phosphite (34) is not compatible with Groups 1 or 4.
Dimethyl naphthalene sulfonic (alternately sulphonic) acid, sodium salt solution (34) is not compatible with Group 12, or Formaldehyde, or with strong oxidizing agents.
Dodecylbenzenesulfonic (alternately Dodecylbenzenesulphonic) acid (0) is not compatible with oxidizing agents or Groups 1-3, 5-9, 15, 16, 18, 19, 30, 34, or 37.
Ethyl tert-butyl ether (41) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Ethylenediamine (7) and Ethyleneamine EA 1302 (7) are not compatible with either Ethylene dichloride (36) or 1,2,3-Trichloropropane (36).
Ethylene dichloride (36) is not compatible with Ethylenediamine (7) or Ethyleneamine EA 1302 (7).
Ethylidene norbornene (30) is not compatible with Groups 1-3 or 5-8.
2-Ethyl-3-propylacrolein (19) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Fatty acids, essentially linear (C6-C18) 2-ethylhexyl ester (34) is not compatible with Group 3, Nitric Acids.
Ferric hydroxyethylethylenediamine triacetic acid, Triodium salt solution (43) is not compatible with Group 3, Nitric Acids.
Fish oil (34) is not compatible with Sulfuric (alternately Sulphuric) acid (2).
Formaldehyde (50% or more) in Methyl alcohol (over 30%) (19) is not compatible with Group 12, Isocyanates.
Formic acid (4) is not compatible with Furfuryl alcohol (20).
Furfuryl alcohol (20) is not compatible with Group 1, Non-Oxidizing Mineral Acids, or with Formic acid (4).
1,6-Hexanediol distillation overheads (4) is not compatible with Group 3, Nitric Acids, or Group 9, Aromatic Amines.
2-Hydroxyethyl acrylate (14) is not compatible with Groups 5, 6, or 12.
Isophorone (18) is not compatible with Group 8, Alkanolamines.
Lactic acid (0) is not compatible with Caustic soda solution (5).
Magnesium chloride solution (0) is not compatible with Groups 2, 3, 5, 6, or 12.
Mesityl oxide (18) is not compatible with Group 8, Alkanolamines.
Methacrylonitrile (15) is not compatible with Group 5, Caustics.
Methyl tert-butyl ether (41) is not compatible with Group 1, Non-Oxidizing Mineral Acids.
Nitroethane/1-Nitropropane (each 15% or more) mixture (42) is not compatible with Group 7, Aliphatic Amines; Group 8, Alkanolamines; or Group 9, Aromatic Amines.
o-Nitrophenol (0) is not compatible with Groups 2, 3, or 5-10.
Nitropropane (60%)/Nitroethane (40%) mixture (42) is not compatible with Group 7, Aliphatic Amines; Group 8, Alkanolamines; or Group 9, Aromatic Amines.
Oleum (0) is not compatible with Sulfuric (alternately Sulphuric) acid (2) or 1,1,1-Trichloroethane (36).
Phthalate-based polyester polyol (0) is not compatible with Groups 2, 3, 5, 7, or 12.
Polyglycerine, Sodium salts solution (containing less than 3% sodium hydroxide) (20) is not compatible with Groups 1, 4, 11, 16, 17, 19, 21, or 22.
Propylene, Propane, MAPP gas mixture (containing 12% or less MAPP gas) (30) is not compatible with Group 1, Non-Oxidizing Mineral Acids, Group 36, Halogenated Hydrocarbons, or with nitrogen dioxide, oxidizing agents, or molten sulfur (alternately sulphur) (0).
Sodium acetate, Glycol, Water mixture (containing 1% or less Sodium hydroxide) (5) is not compatible with Group 12, Isocyanates.
Sodium chlorate solution (50% or less) (0) is not compatible with Groups 1-3, 5, 7, 8, 10, 12, 13, 17, or 20.
Sodium dichromate solution (70% or less) (0) is not compatible with Groups 1-3, 5, 7, 8, 10, 12, 13, 17, or 20.
Sodium dimethyl naphthalene sulfonate solution (34) is not compatible with Group 12, or Formaldehyde, or strong oxidizing agents.
Sodium hydrogen sulfide (alternately sulphide) (6% or less)/Sodium carbonate solution (3% or less) (0) is not compatible with Group 6, Ammonia, or Group 7, Aliphatic Amines.
Sodium hydrosulfide (alternately hydrosulphide) solution (45% or less) (5) is not compatible with Group 6, Ammonia, or Group 7, Aliphatic Amines.
Sodium hydrosulfide (alternately hydrosulphide), Ammonium sulfide (alternately sulphide) solution (5) is not compatible with Group 6, Ammonia, or Group 7, Aliphatic Amines.
Sodium polyacrylate solution (43) is not compatible with Group 3, Nitric Acids.
Sodium silicate solution (43) is not compatible with Group 3, Nitric Acids.
Sodium sulfide, hydrosulfide (alternately sulphide, hydrosulphide) solution (0) is not compatible with Group 6, Ammonia, or Group 7, Aliphatic Amines.
Sodium thiocyanate (56% or less) (0) is not compatible with Groups 1-4.
Sulfonated (alternately Sulphonated) polyacrylate solution (43) is not compatible with Group 5, Caustics.
Sulfuric (alternately Sulphuric) acid (2) is not compatible with Fish oil (34), or Oleum (0).
Tall oil fatty acid (Resin acids less than 20%) (34) is not compatible with Group 5, Caustics.
Tallow fatty acid (34) is not compatible with Group 5, Caustics.
Tetraethylenepentamine (7) is not compatible with Carbon tetrachloride, Group 36, Halogenated Hydrocarbons.
1,1,1-Trichloroethane (36) is not compatible with Oleum (0).
Trichloroethylene (36) is not compatible with Group 5, Caustics.
1,2,3-Trichloropropane (36) is not compatible with Diethylenetriamine, Ethylenediamine, Ethyleaneamine EA 1302, or Triethylenetetramine, all Group 7, Aliphatic Amines.
Triethylenetetramine (7) is not compatible with Carbon tetrachloride, or 1,2,3-Trichloropropane, both Group 36, Halogenated Hydrocarbons.
Triethyl phosphite (34) is not compatible with Group 1, Non-Oxidizing Mineral Acids, or Group 4, Organic Acids.
Trimethyl phosphite (34) is not compatible with Group 1, Non-Oxidizing Mineral Acids, or Group 4, Organic Acids.
1,3,5-Trioxane (41) is not compatible with Group 1, Non-Oxidizing Mineral Acids, or Group 4, Organic Acids.
Vinyl neodecanoate (13) is not compatible with Group 5, Caustics.
46 U.S.C. 3703; Department of Homeland Security Delegation No. 0170.1. Section 153.40 issued under 49 U.S.C. 5103. Sections 153.470 through 153.491, 153.1100 through 153.1132, and 153.1600 through 153.1608 also issued under 33 U.S.C. 1903(b).
The cargoes listed in this table are not regulated under subchapter D or O of this title when carried in bulk on non-oceangoing barges. Category X, Y, or Z noxious liquid substance (NLS) cargo, as defined in Annex II of MARPOL 73/78, listed in this table, or any mixture containing one or more of these cargoes, must be carried under this subchapter if carried in bulk on an oceangoing ship.
This document was received at the Office of the Federal Register on December 18, 2019.
(b) Assistant Secretary of the Interior in charge of Policy, Management, and Budget;
(c) Assistant Secretary of the Interior in charge of Land and Minerals Management;
(d) Assistant Secretary of the Interior in charge of Water and Science;
(e) Assistant Secretary of the Interior for Fish and Wildlife;
(f) Assistant Secretary of the Interior in charge of Indian Affairs; and
(g) Assistant Secretary of the Interior in charge of Insular and International Affairs.
(b) Notwithstanding the provisions of this order, the President retains discretion, to the extent permitted by the Federal Vacancies Reform Act of 1998, to depart from this order in designating an acting Secretary.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(d) The Secretary of Defense is authorized and directed to publish this memorandum in the