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Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends the Class E airspace at South Haven, MI. This action is the result of an airspace review conducted due to the decommissioning of the Pullman very high frequency omnidirectional range (VOR) as part of the VOR Minimum Operational Network (MON) Program. The geographic coordinates of the South Haven Regional Airport, South Haven, MI, and the name of Cromwell Health Watervliet Community Hospital Heliport, Watervliet, MI, are also being updated to coincide with the FAA's aeronautical database. This action brings the airspace into compliance with FAA orders and supports instrument flight rule (IFR) procedures and operations.
Effective 0901 UTC, February 20, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
A copy of the Notice of Proposed Rulemaking (NPRM), all comments received, this final rule, and all background material may be viewed online at
FAA Order JO 7400.11J, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Claypool, Federal Aviation Administration, Operations Support Group, Central Service Center, 10101 Hillwood Parkway, Fort Worth, TX 76177; telephone (817) 222-5711.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the Class E airspace extending upward from 700 feet above the surface at South Haven Regional Airport, South Haven, MI, to support IFR operations at this airport.
The FAA published an NPRM for Docket No. FAA-2024-1912 in the
Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11J, dated July 31, 2024, and effective September 15, 2024. FAA Order JO 7400.11J is publicly available as listed in the
FAA Order JO 7400.11J lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
This amendment to 14 CFR part 71 modifies the Class E airspace extending upward from 700 feet above the surface at South Haven Regional Airport, South Haven, MI, by removing the Pullman VORTAC and associated extension from the airspace legal description; updates the geographic coordinates of the airport to coincide with the FAA's aeronautical database; removes the city associated with Cromwell Health Watervliet Community Hospital Heliport, Watervliet, MI, to comply with changes to FAA Order JO 7400.2P, Procedures for Handling Airspace Matters; updates the name of Cromwell Health Watervliet Community Hospital Heliport (previously Watervliet Community Hospital) to coincide with the FAA's aeronautical database; and removes the exclusionary language as it is no longer required.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 6.6-mile radius of South Haven Area Regional Airport; and within a 6-mile radius of the point in space serving the Cromwell Health Watervliet Community Hospital Heliport.
Federal Aviation Administration (FAA), DOT.
Final rule; withdrawal.
A final rule was published in the
The final rule published in the
Marc Ellerbee, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave., College Park, GA 30337; Telephone (404) 305-5589.
The FAA published a final rule in the
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Federal Aviation Administration (FAA), DOT.
Final rule; correction.
A final rule was published in the
Effective 0901 UTC, February 20, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
Robert Scott Stuart, Operations Support Group, Eastern Service Center, Federal Aviation Administration, 1701 Columbia Ave., College Park, GA 30337; Telephone (404) 305-5926.
The FAA published a final rule in the
Pursuant to the authority delegated to me, the amendment of Class E airspace extending upward from 700 feet above the surface for Claremont Municipal Airport, Claremont, NH, in Docket No. FAA-2024-1650, as published in the
Consumer Product Safety Commission.
Final rule.
The Danny Keysar Child Product Safety Notification Act, section 104 of the Consumer Product Safety Improvement Act of 2008 (CPSIA), requires the U.S. Consumer Product Safety Commission (Commission or CPSC) to promulgate consumer product safety standards for durable infant or toddler products. Under this statutory authority, the Commission is issuing a safety standard for infant support cushions. The Commission is also amending CPSC's consumer registration requirements to identify infant support cushions as durable infant or toddler products and amending CPSC's list of notices of requirements (NORs) to include infant support cushions.
The rule is effective on May 5, 2025. The incorporation by reference of the publication listed in this rule is approved by the Director of the Federal Register as of May 5, 2025.
Will Cusey, Small Business Ombudsman, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; telephone (301) 504-7945 or (888) 531-9070; email:
Infant support cushions are filled with or comprised of resilient material such as foam, fibrous batting, or granular material or with a gel, liquid, or gas, and are marketed, designed, or intended to support an infant's weight or any portion of an infant while reclining or in a supine, prone, or recumbent position. CPSC is aware of at least 79 reported fatalities involving infant support cushions from January 1, 2010, through December 31, 2022, as well as 124 nonfatal incidents or reports involving these products within the same time period. There were 17 deaths in 2020, and a minimum of 17 more in 2021.
In 1992, pursuant to authority under the Federal Hazardous Substances Act (FHSA), 15 U.S.C. 1261-1278, the Commission issued a ban on certain infant cushions and pillows filled with foam, plastic beads, or other granular material. 57 FR 27912 (June 23, 1992). That ban prohibits infant cushions, infant pillows, and similar articles that are:
• made with a flexible fabric covering;
• loosely filled with granular material, including, but not limited to, polystyrene beads or pellets;
• easily flattened;
• capable of conforming to the body or face of an infant; and
• intended or promoted for use by children under one year of age.
Section 104(b)(1)(A) of the CPSIA requires the Commission to (1) examine and assess the effectiveness of voluntary consumer product safety standards for durable infant or toddler products, in consultation with representatives of consumer groups, juvenile product manufacturers, and independent child product engineers and experts and (2) promulgate consumer product safety standards for durable infant and toddler products.
Consistent with section 104(b)(1)(A) of the CPSIA, CPSC consulted with manufacturers, retailers, trade organizations, laboratories, consumer advocacy groups, consultants, and the public to develop this rule, including through participation in the juvenile products subcommittee meetings of ASTM.
Infant support cushions are durable infant or toddler products under section 104(f) of the CPSIA. Section 104(f)(1) defines the term durable infant or toddler product as a durable product intended for use, or that may be reasonably expected to be used, by children under the age of 5 years.
Section 104(d) of the CPSIA requires manufacturers of durable infant or toddler products to establish a product registration program and comply with CPSC's rule for product registration cards, 16 CFR part 1130. The final rule amends part 1130 to include infant support cushions in the list of durable infant or toddler products that must comply with these product registration requirements.
Manufacturers of children's products must also comply with the testing and certification requirements for children's products that are codified in 16 CFR parts 1107 and 1109. Section 14(a)(3) of the Consumer Product Safety Act (CPSA) requires the Commission to publish an NOR for the accreditation of third party conformity assessment bodies (test laboratories) to assess conformity with a children's product safety rule to which a children's product is subject. The final rule is a children's product safety rule that requires issuance of an NOR.
On January 16, 2024, the Commission published an NPR under section 104 of the CPSIA that proposed a mandatory consumer product safety standard for infant support cushions to address the risk of death and injury associated with these products. 89 FR 2530. The proposed rule addressed the suffocation, entrapment, and fall hazards associated with infant support cushions by including performance, testing, labeling, and instructional literature requirements. The proposed requirements in the NPR were based on staff's analysis of the hazards presented by infant support cushions as well as incident, injury and fatality data. The proposed requirements also considered the recommendations in the June 30, 2022, Pillows Product Characterization and Testing, Boise State University Report (BSU Final Report).
On April 23, 2024, CPSC published a notice of availability (NOA) in the
Pursuant to section 104 of the CPSIA, 15 U.S.C. 2056a, the Commission is issuing a mandatory standard for infant support cushions based on the proposed requirements in the NPR, with certain modifications in response to public comments, which are discussed in detail in Sections VI and VII of the preamble.
Based on comments received on the NPR, the following changes have been made in the final rule:
• For clarity, the definition of infant lounger in § 1243.2 has been revised to change the term infant product to infant support cushion.
• For clarity, the definition of infant support cushion in § 1243.2. has been revised to add the sentence “This definition includes any removable covers, or slipcovers, sold on or together with an infant support cushion” at the end of the definition.
• To avoid ambiguity, a new definition of the term sidewall has been added in § 1243.2 which is defined as any wall at the edge of the occupant support surface.
• For accuracy and consistency, a reference to infant pillow in § 1243.3(d) has been changed to infant support cushion.
• The final rule removes proposed § 1243.3(e) regarding side height as this requirement is redundant with the maximum incline angle limits in the rule. The final rule renumbers the paragraphs following proposed § 1243.3(e) to reflect this change. The rule also removes the corresponding test in § 1243.5(d)(8) for consistency. To reflect this change, all numbers after § 1243.5(d)(7) have been renumbered in the final rule.
• The performance requirements in § 1243.4(e)(2) and (3) and (f) as well as the corresponding test methods in §§ 1243.5(g) and 1243.4(h) and (i) have been revised to clarify that the performance requirements and test methods apply only to products that contain a sidewall with language stating, for products with a sidewall.
• The test method in § 1243.5(f) has been clarified to explain that products sold with a slipcover on or together with the product are to be tested as assembled, with the slipcover on the product. The test method in § 1243.5(f) has also been clarified to explain that all products, including products one inch or less in thickness, shall be tested.
• Figure 2 (for products without a tummy time feature) to paragraph (d)(7) in § 1243.6 has been revised and a new figure 3 (for products with a tummy time feature) has been added to reflect changes in warning content made in response to public comments. These changes include adding a statement to address prone use during tummy time, removing references to “an awake baby,” separating the sleep and suffocating-relating warning content to provide clarity, adding a warning to address soft bedding both in and outside of the product, and deleting some of the statements to reduce length and increase clarity. Additionally, § 1243.6(d)(7) clarifies that all infant support cushions are required to contain a warning with the content and format depicted in this section as figure 2 (for products without tummy time) or figure 3 (if the product has a tummy time feature) to paragraph (d)(7), as applicable.
• Section 1243.6(e) has been revised to clarify that slipcovers sold on or together with the product shall contain the warning statement shown in figures 2 and 3 to paragraph (d)(7), as applicable.
Infant support cushions are products that support an infant for lounging, meaning reclining in a supine, prone, or recumbent position. Infant products within this category may or may not have perimeter sidewalls. Most infant support cushions currently on the market are filled with cushy foam or soft fibrous batting, covered by flexible fabric. Some infant support cushions are marketed for use in a crib or other infant sleep product, notwithstanding warnings from the Commission and other institutions, including the American Academy of Pediatrics (AAP), that soft objects, such as pillows and excess bedding, should not be placed in an infant's sleep environment.
Illustrative pictures of infant support cushions can be found in Tab C of Staff's NPR Briefing Package.
• head positioner pillows;
• flat baby loungers;
• crib pillows;
• wedge pillows for infants;
• infant sleep positioners, unless regulated as medical devices by the Food and Drug Administration (FDA);
• stuffed toys marketed for use as an infant support cushion;
• infant tummy time or lounging pillows, whether flat or inclined;
• multi-purpose pillows marketed for both nursing and lounging;
• anti-rollover pillows with or without straps that fasten the pillow to the infant;
• infant self-feeding pillows that hold a bottle in front of the face of a reclining or lying infant;
• pads and mats; and
• accessory pillows and other padded accessories, often marketed for use with an infant car seat, stroller, or bouncer, but not sold with that product and therefore not included in the mandatory safety standard for those products.
These in-scope products must meet the requirements of the rule. However, to avoid potentially duplicative or conflicting obligations, the scope of products that would be subject to this rule does not include durable infant products that are already regulated by the Commission and included in the list of products at 16 CFR 1130.2(a).
The following products are NOT infant support cushions within the scope of this rule:
• pillows not marketed, designed, or intended for use by infants, such as adult bed and throw pillows;
• nursing pillows if subject to the Commission's final rule for nursing pillows (89 FR 85388 (October 25, 2024)), unless they are also marketed for lounging;
• crib and play yard mattresses that are regulated under the play yard standard (16 CFR part 1221) and crib mattress standard (16 CFR part 1241);
• purely decorative nursery pillows, such as those personalized with a baby's name and birthdate, that are not marketed, designed, or intended for infant use;
• stuffed toys (unless they meet the definition of an infant support cushion in this rule);
• padded seat liners that are sold with a rocker, stroller, car seat, infant carrier, swing, highchair, or bouncer that are specifically designed to fit that product;
• padded seat liners and inserts for a rocker, stroller, car seat, infant carrier, swing, highchair, or bouncer that are sold separately by the manufacturer as a replacement part and specifically designed to fit that product; and
• sleeping accommodations that are regulated under the Commission's infant sleep product rule at 16 CFR part 1236.
Most types of new infant support cushions are sold online, including from general online retailers, online sites for “big box” stores, online baby products sites, and online marketplaces for hand-crafted items. Some types of infant support cushions, particularly crib pillows and baby loungers, are also available from brick-and-mortar baby specialty stores and general retail stores. Prices for new infant support cushions average roughly $30 and range from less than $15 for a simple head positioner pillow or crib pillow to more than $250 for a lounger with a removable cover or a large stuffed toy marketed for use while an infant sleeps. Several thousand manufacturers and importers, including hundreds of handcrafters and direct foreign shippers, supply infant support cushions to the U.S. market.
Infant support cushions may be re-used for multiple children or resold for use after an infant outgrows the product. For example, in June 2023, staff found listings on Mercari for used changing pads, large stuffed toys marketed for infant sleep, crib wedge pillows, baby neck pillows, baby sleep positioners, baby loungers, baby sleep mats, baby pillow chairs, infant self-feeding pillows, baby/toddler bean bag chairs, and crib pillows. Similar listings were identified on eBay.
Staff searched the Consumer Product Safety Risk Management System (CPSRMS)
The Commission is aware of two British standards that contain performance requirements addressing suffocation and asphyxiation hazards associated with infant pillows: BS 1877-8:1974, Specification for Domestic bedding—Part 8: Pillows and bolsters for domestic use (excluding cellular rubber pillows and bolsters) (BS 1877-8:1974) and BS 4578:1970, Specification for Methods of test for hardness of, and for air flow through, infants' pillows (BS 4578:1970). The scope of BS 1877-8:1974 includes both adult and cot pillows (infant pillows) and recommends that cot pillows be filled firmly enough to prevent infants' heads from sinking into the products and that the pillow covering not be loose enough to be drawn into an infant's mouth. BS 1877-8:1974 has requirements for cot pillow size, filling, and covering. Under that standard, cot pillows must be 58 x 38 cm (23 x 15 inches) and their covering must be of open construction to allow air permeability. Both the filling and covering must meet performance requirements described in BS 4578:1970 for hardness (
The hardness test in BS 4578:1970 requires that a 100 mm diameter probe be placed in the center of the product with 10 newtons (N) of force for one minute. BS 1877-8:1974 requires that displacement of the pillow when the force is applied shall not exceed 25 percent of the thickness. The proportional approach used in this standard allows thicker pillows to have a greater displacement than thinner pillows, which staff assesses does not sufficiently protect against the suffocation and asphyxia hazards associated with infant support cushions because that greater displacement could allow the product to obstruct the infant's airway.
Currently, there are no published U.S. voluntary standards for infant support cushions. ASTM is working on a voluntary standard for infant loungers under the Subcommittee F15.21 on Infant Carriers, Bouncers, and Baby Swings.
In the ASTM draft voluntary standard, infant loungers would be products with a raised perimeter, a recess, or other area that is intended to be placed on the floor and to provide a place for an infant to sit, lie, recline, or rest, while supervised by an adult, but are not intended or marketed for sleep. The draft definition would apply to only a subset of the products covered by this rule, which includes infant positioners, nursing pillows with dual use for lounging, infant cushions, and other infant pillow-like products, as well as the infant loungers being considered by the ASTM draft standard. ASTM's draft voluntary standard for infant loungers includes general requirements typically found in other ASTM juvenile product standards, such as requirements addressing lead content, small parts, hazardous sharp edges or points, resistance to collapse and disassembly, openings, protective components, permanency of labels and warnings, and toy accessories that are attached to, removable from, or sold with the products. The ASTM draft standard also specifies that if the lounger can be converted to another product, it shall comply with the applicable requirements of the converted product's standard. The general requirements of the ASTM draft infant lounger standard also state that the sidewall height of the
As previously noted, the ASTM draft standard for infant loungers primarily differs from the final rule regarding the scope of products subject to the standard. Specifically, the final rule includes all types of infant support cushions such as infant positioners, infant loungers, and other types of infant mats and pads, while the scope of the ASTM draft standard would apply only to infant loungers. Given that the ASTM draft standard for loungers has not been finalized and published and would not cover the same scope of products as the final rule, the Commission finds that no voluntary standard currently exists or will likely exist in the foreseeable future that would adequately address the hazards presented by infant support cushions. This rule is required under section 104 of the CPSIA to address the identified hazards presented by infant support cushions. 15 U.S.C. 2056a.
CPSC received 18 public comments during the NPR comment period, and one comment during the NOA comment period. The comments are available on:
Aftermarket accessory pillows and other padded accessories, often marketed for use with a rocker, stroller, infant car seat, infant carrier, swing, highchair, or bouncer, but not sold with that specific product or as a replacement part, are subject to this rule, and thus must meet the requirements of the rule. This can include products that are used to keep an infant's head positioned in an infant carrier, unless they are sold with that product or as a manufacturer's replacement part. Such portable products can be used for purposes other than their intended use, including as an infant sleep product. Therefore, we disagree with BPQ that products that are used to keep an infant's head positioned in an infant carrier should be outside the scope of this rule. We also disagree with Boppy that accessory pillows and other padded accessories, used with seated products, should be excluded from the scope of the rule. These accessories present a suffocation hazard to infants because they are highly portable, and therefore can be used not only in the product for which they were intended but also in a variety of other products in which infants sleep, such as cribs, bassinets, and play yards. Because infants sleep for a majority of the day and tend to fall asleep in products intended for lounging, it is reasonably
However, education campaigns alone are not enough to address the hazards associated with infant support cushions. Data generally indicate that consumers believe if an infant product is on the market, it must be safe for use with infants—an assumption that is not always true. Therefore, this final rule for infant support cushions, paired with educational campaigns, is needed to better ensure safe uses of these products.
The language a “location likely to fail” is language commonly used in ASTM standards and longstanding CPSC safety standards that incorporate these ASTM standards. While a location most likely to fail cannot be determined by the use of a single test, not all locations on the product need to be evaluated. For example, with respect to the maximum incline angle requirement, any extremity with respect to the overall height of the sidewall or occupant support surface should be considered areas likely to fail. Therefore, we disagree that “feasible location” or “location most likely to fail” needs to be defined in the rule.
In contrast to products with higher side heights, products with side heights of approximately 2 inches or less are less likely to give the false perception to the caregiver that the product will safely contain their infant. Therefore, caregivers are less likely to leave infants unattended in a product with a less than 2-inch side height or to place the product on an elevated surface. When the side height is limited to less than 2 inches it provides a visual cue to caregivers that the product will NOT safely contain their infant which encourages caregivers to place the product on the floor, thus mitigating the fall hazard posed to infants from products placed on elevated surfaces. Furthermore, there is no evidence that a maximum sidewall height of about 2 inches would increase the risk of injury from a fall or lead to different consequences than a higher sidewall because, as reflected in the incident data, infant support cushions with higher side heights do not safely contain infants and infants already roll out of these products. Additionally, products with side heights of more than 2 inches would exceed the maximum incline angle requirement in the final rule and poses a suffocation or positional asphyxiation hazard. Also, the commenter's proposal to require 4-inch-high sidewalls would not allow for products such as flat playmats or other infant support cushion products that do not contain sidewalls. Staff's analysis of incident data did not identify the need for a sidewall requirement and thus the final rule has no requirements for a minimum side height. Therefore, the Commission is not adopting the commenters' recommendations to require higher sidewalls because higher sidewalls encourage unsafe placement of infants on elevated surfaces, while also failing to adequately contain infants or prevent falls. Finally, staff is unaware of a risk assessment analysis specifically comparing the incidence of falls from infant support cushions of different product heights, while also taking into account the age of the infant.
The Commission has previously added to the statutory list of durable infant or toddler products by including other products for young infants, such as changing products and infant bouncers, that also have a market for secondary use. As the Commission explained in 2009, “[b]ecause the statute has a broad definition of a durable infant or toddler product but
As section 104 of the CPSIA requires, to address the risks of death and injury associated with infant suffocations, entrapments, and falls, the Commission is issuing this rule to establish mandatory performance and labeling requirements for infant support cushions. The requirements of the rule are based on an evaluation of incident data and the hazard patterns associated with infant support cushions, and the recommendations of the BSU Final Report. The final rule is summarized below, and the rule is being finalized as proposed in the NPR except as noted.
Section 1243.1 explains that the rule applies to infant support cushions, including infant positioners, nursing pillows with a dual use for lounging, infant loungers, infant props, or cushions used to support an infant for activities such as tummy time, and other infant pillow-like products. It excludes products already regulated by other Commission mandatory standards for durable infant products, which are listed in 16 CFR 1130.2(a). The rule applies to all infant support cushions manufactured after the effective date of the rule. Section 1243.1 is being finalized without changes as proposed in the NPR.
Section 1243.2 provides definitions for the following terms used in the rule: conspicuous, infant lounger, infant positioner, infant support cushion, occupant support surface, seat bight line, and sidewall. The definitions in § 1243.2 are being finalized as proposed in the NPR except as discussed below. In response to a comment from Graco and for clarity, the definition of infant lounger has been revised to change the proposed words “infant product” to “infant support cushion” in the final rule. Also, in response to comments from Safe Infant Sleep and The Joint Consumer Advocate Commenters, the definition of infant support cushion has been revised to add a new sentence at the end of the definition “This definition includes any removable covers, or slipcovers, sold on or together with an infant support cushion”. Finally, in response to a comment from Boppy, a new definition for the term “sidewall,” which is defined as “any wall at the edge of the occupant support surface”, has been added to the final rule to provide clarity regarding the meaning of that term.
Section 1243.3 provides general requirements for infant support cushions, including requirements addressing hazardous sharp edges or points (§ 1243.3(a)), small parts (§ 1243.3(b), lead in paints (§ 1243.3(c)), toys (§ 1243.3(d)), the removal of components (§ 1243.3(e)), the permanency of labels and warnings (§ 1243.3(f)), and convertible products (§ 1243.3(g)). Section 1243.3 is being finalized as proposed in the NPR except that the reference to “infant pillow” in § 1243.3(d) has been changed in the final rule to “infant support cushion” for accuracy and consistency based on a comment from TA. The final rule also removes proposed § 1243.3(e) regarding side height. Measuring the height of the product is unnecessary and thus duplicative because the maximum incline angle test in § 1243.5(d)(7) already accounts for the height of the product remaining under 2 inches. The final rule renumbers the paragraphs following § 1243.3(d) to reflect this change.
Section 1243.4 provides performance requirements for infant support cushions for restraints (§ 1243.4(a)), seam strength (§ 1243.4(b)), bounded openings (§ 1243.4(c)), maximum incline angle (§ 1243.4(d)), firmness (§ 1243.4(e)), and sidewall angle (§ 1243.4(f)). Section 1243.4 is being finalized as proposed in the NPR except as discussed below. In response to a comment from Boppy, two changes have been made in paragraph (e) of § 1243.4 that establishes requirements for firmness. In § 1243.4(e)(2) and (3), “For products with a sidewall” has been added to the beginning of the sentence because the proposed rule did not make clear whether the performance requirements are applicable to products without sidewalls. Additionally, in response to a comment from Boppy, the same change has been made to § 1243.4(f) that establishes requirements for side angles because the proposed rule did not clarify the applicability of performance requirements for products without sidewalls.
Section 1243.5 provides the test methods to be used to test for compliance with the requirements of the rule. Section 1243.5 includes test methods for test conditions (§ 1243.5(a)), test for permanence of labeling and markings (§ 1243.5(b)), head entrapment test (§ 1243.5(c)), maximum incline test (§ 1243.5(d)), firmness test setup (§ 1243.5(e), occupant support surface firmness test method (§ 1243.5(f)), sidewall firmness test method (§ 1243.5(g)), test method for the intersection of sidewall and occupant support surface firmness (§ 1243.5(h)), test method for sidewall angle determination (§ 1243.5(i)), seam strength test method (§ 1243.5(j)), and removal of components test method (§ 1243.5(k)). Section 1243.5 is being finalized as proposed in the NPR except as discussed below.
For the same reason discussed above for the removal of proposed § 1243.3(e) regarding side height, the final rule removes the corresponding test in § 1243.5(d)(8) for consistency. To reflect this change, all numbers after § 1243.5(d)(7) have been renumbered.
In response to a comment from Safe Infant Sleep, the following language has been added after the first sentence of § 1243.5(f): “For products sold with a slipcover on or together with the product, products shall be tested as assembled with the slipcover on the product.” This language has been added
Section 1243.6 provides the marking and labeling requirements for infant support cushions, including general markings (§ 1243.6(a)), permanency (§ 1243.6(b)), upholstery labeling (§ 1243.6(c)), warning design for product (§ 1243.6(d)), and warning statements (§ 1243.6(e)). Section 1243.6 is being finalized as proposed in the NPR except as discussed below.
Several changes have been made to figure 2 in § 1243.6(d)(7) as described below. We also add a new figure 3, Warning for Tummy Time Product, in § 1243.6(d)(7), as described below.
• In response to a comment from Graco, the phrase “use only with an awake baby” has been removed from the warning label in figure 2 and new figure 3 because the safety messaging to not use infant support cushions with sleeping infants or in an infant sleep setting is already strongly communicated through the initial sentence of the warning about the deadly consequences of using the product for sleep or naps, and limiting the amount of text on warning labels makes the material being presented more prominent.
• The rule clarifies that figure 2 in § 1243.6(d)(7) is required for all infant support cushions that do not have a tummy time feature.
• In response to comments from Boppy, AAP, BPQ, the Joint Consumer Advocate Commenters, Safe Infant Sleep, and JPMA, the Commission is adding a new figure 3 in § 1243.6(d)(7) for products with a tummy time feature. The statement bullet point was also moved up within the warning statement to reflect the serious hazard to infants presented by prone positioning. In new figure 3, the statement “Put baby on back after Tummy Time” is added to the warning label after the phrase “Use only on the floor with baby on back, face up,” to accommodate multi-use positions of some infant support cushion products, such as tummy time pillows that may have features that require the infant to be on their stomach while using the product. Figure 3 additionally omits the word “only” from “use only on the floor with baby on back, face up”. Figure 3 is required only for products that have a tummy time feature because only those products that have a tummy time feature should allow for prone positioning.
• In response to a comment from Safe Infant Sleep the warning labels have been revised with more concise wording and clarity to provide instruction for what a caregiver should do if their baby falls asleep by separating “stay near and watch baby during use” from “if a baby falls asleep, move baby to infant sleep product, such as a crib or bassinet”.
• In response to a comment from Heroes Technology, the warning labels for figure 2 and new figure 3 now includes the statement “Do not use on soft surfaces or in sleep products like cribs or bassinets. Keep blankets and other soft items out of and away from product” to discourage soft bedding use in and around the product. This revision also separates these warning statements into a separate bullet point to emphasize the risk to infants from soft bedding placed both in and around the product.
• In response to a comment from Graco, the word “example” was removed from the captions on figure 2 and new figure 3 because it was unclear if the exact content and format for the warning labels in § 1243.6(d)(7) is required as depicted in proposed figure 2 and new figure 3. Additionally, the final rule clarifies in § 1243.6(d)(7) that the content and format as depicted in figure 2 and new figure 3 as applicable, are required.
• Note 4 to proposed § 1243.6(e) has been removed from the rule as unnecessary because the final rule clarifies that the required content and format of the warning labels in figure 2 and new figure 3, as applicable, are to be used as written.
• A new note 4 to § 1243.6(d)(6) has been added below figure 1 for paragraph (d)(6), which was originally the language above figure 1 for paragraph (d)(6), with the new note 4 providing the original text indicating that the depicted warnings are filler text, known as lorem ipsum, commonly used to demonstrate graphic elements.
• In figure 2 and new figure 3, a black line has been inserted between the suffocation warnings and the fall warnings to distinguish between the messages.
The changes described above are depicted below in the revised figure 2, Warning for Product Without Tummy Time, and new figure 3, Warning for Tummy Time Product, from § 1243.6 of the final rule.
Additionally, in response to a comment from the Joint Consumer Advocate Commenters, the final rule adds language at the end of § 1243.6(e) stating that slipcovers, sold on or together with the product, are required to contain a warning with the content and format depicted in figure 2 or 3, as applicable, to paragraph (d)(7). This language is being added because when an infant support cushion is sold with a slipcover, it is expected that slipcover will hide the warning label that should be visible to a caregiver while placing an infant onto or into the product, when the product is in the manufacturer's recommended use position. Therefore, the warning label should be conspicuously located on the slipcover as is required for an infant support cushion that does not come with a slipcover.
Section 1243.7 provides requirements for instructional literature for infant
Section 1243.8 incorporates by reference ANSI Z535.4-2011(R20217),
Products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard, or regulation under any other act enforced by the Commission, must be certified as complying with all applicable CPSC-enforced requirements. 15 U.S.C. 2063(a). Certification of children's products subject to a children's product safety rule must be based on testing conducted by a CPSC-accepted third-party conformity assessment body. 15 U.S.C. 2063(a)(2). The Commission must publish an NOR for the accreditation of testing laboratories as third party conformity assessment bodies to assess conformity with a children's product safety rule. 15 U.S.C. 2063(a)(3). The infant support cushions rule is a children's product safety rule that requires the issuance of an NOR.
The Commission's rules, at 16 CFR part 1112, establish requirements for accreditation of third party conformity assessment bodies to test for conformance with a children's product safety rule in accordance with section 14(a)(2) of the CPSA. Part 1112 also lists the NORs that the CPSC has published. In the NPR the Commission proposed to amend part 1112 to include the Safety Standard for Infant Support Cushions in the list of children's product safety rules for which the CPSC has issued NORs. Section 1112.15(a)(57) is being finalized as proposed in the NPR.
Laboratories applying for acceptance as a CPSC-accepted third party conformity assessment body to test to the new Safety Standard for Infant Support Cushions standard are required to meet the third party conformity assessment body accreditation requirements in part 1112. When a laboratory meets the requirements as a CPSC-accepted third party conformity assessment body, the laboratory can apply to the CPSC to have the Safety Standard for Infant Support Cushions included in its scope of accreditation as reflected on the CPSC website at
Infant support cushions are a category of “durable infant or toddler product” for purposes of CPSIA section 104 because they: are intended for use, and may be reasonably expected to be used, by children under the age of five years; are products similar to other products listed in section 104(f)(2), such as crib mattresses, and sling carriers; and are commonly resold or “handed down” for use by other children over a period of years. In the NPR, the Commission proposed to amend 16 CFR part 1130 to include Infant Support Cushions as durable infant or toddler products. Section 1130.2(a)(20) is being finalized as proposed in the NPR.
The rule incorporates by reference ANSI Z535.4-2011(R2017),
Both standards are reasonably available to interested parties in several ways. Interested persons may purchase a copy of ANSI Z535.4-2011(R2017) from the National Electrical Manufacturers Association (NEMA), 1300 17th St. N, Arlington, VA 22209; phone: (703) 841-3200; website:
The Administrative Procedure Act (APA) generally requires that the effective date of a rule be at least 30 days after publication of the final rule. 5 U.S.C. 553(d). In the NPR the Commission proposed an effective date of 180 days after publication of the final rule in the
When an agency is required to publish a notice of proposed rulemaking, the Regulatory Flexibility Act (5 U.S.C. 601-612) generally requires that the agency prepare an IRFA for the NPR and a final regulatory flexibility analysis (FRFA) for the final rule. 5 U.S.C. 603, 604. These analyses must describe the impact that the rule would have on small businesses and other entities. The FRFA must contain:
(1) a statement of the need for and objectives of the rule;
(2) significant issues raised by commenters on the IRFA, the agency's assessment of those issues, and changes made to the result as a result of the comments;
(3) a response to any comments filed by the Chief Counsel for Advocacy of the U.S. Small Business Administration (Advocacy), and changes made as a result of those comments;
(4) a description and estimate of the number of small entities to which the rule will apply;
(5) a description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
(6) steps the agency has taken to minimize the significant economic impact on small entities, consistent with the objective of the applicable statute, including the factual, policy, and legal reasons for selecting the alternative in the final rule and why other alternatives were rejected.
Staff prepared an IRFA for this rulemaking that was summarized in the NPR and provided in full Tab E of the Staff's NPR Briefing Package. The FRFA is provided below.
Section I of this preamble describes the reasons and legal basis for this final rule. As discussed in sections VI and VII of this preamble, the rule sets mandatory requirements for infant support cushions to address the suffocation, entrapment, and fall hazards associated with these products; adds infant support cushions to the list of products for which a registration card is required; and adds infant support cushions to the list of durable infant products for which an NOR is required.
The Small Business Administration (SBA) did not submit a comment on the proposed rule.
The SBA sets size standards for what constitutes a U.S. small business for the purpose of various Federal Government programs,
Suppliers will be required to comply with the performance requirements of the rule; provide a warning label, a consumer registration card, and user instructions; and conduct third-party testing to demonstrate compliance. Suppliers must demonstrate that they meet the performance requirements of the rule by providing certificates of compliance. As specified in 16 CFR part 1109, suppliers who are not the original manufacturer, such as importers, wholesalers, and retailers may rely on a certificate of conformity provided by their suppliers. Suppliers must also provide product registration cards. Recordkeeping and compliance documentation do not require specialized expertise. CPSC's public website provides instructions and examples for how to develop the certificates of compliance and product registration cards.
The rule will likely have a significant impact on a substantial number of U.S. small entities, based on the estimated costs of modifying the product to achieve compliance, and the ongoing cost of testing to demonstrate compliance. Staff considers one percent of annual revenue to be a “significant”
Most products on the market will require redesign to meet the requirements in the rule and no products on the market currently have the specific labels, customer registration forms, warnings, and third-party testing required by the rule. The effort required for a one-time redesign of a product is estimated to be 200 hours of professional staff time per model, including in-house testing of the prototypes and development of labels, customer registration forms, and instruction materials. Using the Bureau of Labor Statistics Employer Costs of Employee Compensation as of March 2024
Staff considers one percent of annual revenue to be a “significant” economic impact on a small business. Applying the one percent threshold to the estimated redesign and testing costs from this rule, the threshold for a small business that would incur a significant impact are those small firms with less than $1.6 million in revenue ($16,000 costs ÷ 1 percent of revenue), assuming they only sell one product model. This cost estimate will scale with the number of different models each firm manufactures. With an estimated 2,000 models from firms that sell to the U.S. needing to be redesigned, the total cost for the entire industry could be as high as $32 million for redesign in the first year after the rule is published.
As suppliers will need to redesign their products to comply with this rule, both small and large companies may raise prices to cover costs. Given this uniformity, these costs would not necessarily place small businesses at a competitive disadvantage. JPMA, Boppy, and Heroes Technology questioned whether a small retail price increase would be acceptable to consumers, or could cover compliance costs, but these commenters did not provide an alternative quantitative estimate of compliance costs or probable retail price increases.
In summary, given that all U.S. suppliers will have to redesign products to comply with this rule, and that these costs will likely be significant to many small businesses, this FRFA finds that this final rule will have a significant impact on a substantial number of U.S. small businesses.
CPSC has not identified any other Federal rules that duplicate, overlap, or conflict with the final rule.
The Commission considered alternatives to the final rule to reduce the impact on small businesses. The Commission considered using a public education campaign that would result in no regulatory impact on small businesses. However, given the education campaigns on safe sleep practices that CPSC and others have been undertaking for years, this approach would likely result in little to no mitigation of the current rates of deaths and injuries from infant support cushions. The Commission also considered allowing the voluntary standards process additional time to develop a voluntary standard to address the hazards posed by infant support cushions. However, there is no certainty that such a voluntary standard would be adopted, and a potential voluntary standard, if published, may not adequately address the identified hazards to infants. For example, the current ASTM draft voluntary standard for infant loungers would only cover infant loungers whereas the Commission's rule covers all infant support cushions and has more stringent performance requirements and warnings.
This rule contains information collection requirements that are subject to public comment and review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA; 44 U.S.C. 3501-3521). The preamble to the NPR discussed the information collection burden of the proposed rule and specifically requested comments on the accuracy of CPSC's estimates. 89 FR 2530 (January 16, 2024). The NPR described the provisions of the proposed rule and provided an estimate of the annual reporting burden for the rule under the PRA.
Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that when a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a standard or regulation that prescribes requirements for the performance, composition, contents, design, finish, construction, packaging, or labeling of such product dealing with the same risk of injury unless the state requirement is identical to the Federal standard. Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the Commission for an exemption from this preemption under certain circumstances. Section 104(b) of the CPSIA refers to the rules to be issued under that section as consumer product safety rules. Therefore, the preemption provision of section 26(a) of the CPSA apply to this final rule for infant support cushions.
Certain categories of CPSC actions normally have “little or no potential for affecting the human environment” and therefore do not require an environmental assessment or an environmental impact statement. Safety standards providing requirements for consumer products come under this categorical exclusion. 16 CFR 1021.5(c)(1). The final rule for infant support cushions falls within the categorical exclusion.
The Congressional Review Act (CRA; 5 U.S.C. 801-808) states that before a rule may take effect, the agency issuing the rule must submit the rule, and certain related information, to each House of Congress and the Comptroller General. 5 U.S.C. 801(a)(1). The CRA submission must indicate whether the rule is a major rule. The CRA states that the Office of Information and Regulatory Affairs determines whether a rule qualifies as a major rule.
Pursuant to the CRA, OMB's Office of Information and Regulatory Affairs has determined that this rule does not qualify as a major rule, as defined in 5 U.S.C. 804(2). To comply with the CRA, CPSC will submit the required information to each House of Congress and the Comptroller General.
Administrative practice and procedure, Audit, Consumer protection, Reporting and recordkeeping requirements, Third party conformity assessment body.
Administrative practice and procedure, Business and industry, Consumer protection, Reporting and recordkeeping requirements.
Consumer protection, Imports, Incorporation by reference, Infants and children, Labeling, Law enforcement, Pillows, Toys.
For the reasons discussed in the preamble, the Commission amends chapter II of title 16 of the Code of Federal Regulations as follows:
15 U.S.C. 2063.
(b) * * *
(57) 16 CFR part 1243, Safety Standard for Infant Support Cushions.
15 U.S.C. 2056a, 2065(b).
(a) * * *
(20) Infant support cushions.
15 U.S.C. 2056a.
(a)
(b)
(c)
(a)
(b)
(c)
(d)
(e)
(f)
(2) Warning statements applied directly onto the surface of the product by hot stamping, heat transfer, printing, wood burning, or any other method shall be permanent when tested in accordance with § 1243.5(b)(4).
(3) Non-paper labels shall not liberate small parts when tested in accordance with § 1243.5(b)(5).
(4) Warning labels that are attached to the fabric of the product with seams shall remain in contact with the fabric around the entire perimeter of the label when the product is in all manufacturer-recommended use positions and when tested in accordance with § 1243.5(b)(3).
(g)
(a)
(b)
(c)
(d)
(e)
(2)
(3)
(f)
(a)
(b)
(2) A non-paper label (excluding labels attached by a seam) shall be considered permanent if, during an attempt to remove it without the aid of tools or solvents, it cannot be removed or such action damages the surface to which it is attached.
(3) A warning label attached by a seam shall be considered permanent if it does not detach when subjected to a 15-lbs (67-N) pull force applied in any direction using a
(4) Adhesion test for warnings applied directly onto the surface of the product.
(i) Apply the tape test defined in Test Method B, Cross-Cut Tape Test of ASTM D3359 (incorporated by reference, see § 1243.8), eliminating parallel cuts.
(ii) Perform this test once in each different location where warnings are applied.
(iii) The warning statements will be considered permanent if the printing in the area tested is still legible and attached after being subjected to this test.
(5) A non-paper label, during an attempt to remove it without the aid of tools or solvents, shall not be removed or shall not fit entirely within the small parts cylinder defined in 16 CFR part 1501 if it can be removed.
(c)
(d)
(i) Digital protractor with accuracy +/−1 degree;
(ii) Hinged weight gauge—newborn, requirements for part masses and assembly (figure 3 to this paragraph (d)(1)(ii));
(iii) Hinged weight gauge-newborn, requirements for part dimensions (figure 4 to this paragraph (d)(1)(iii)); and
(iv) A test base that is horizontal, flat, firm, and smooth.
(2) If applicable, place the product in the manufacturer's recommended highest seat back angle position intended for lounging.
(3) If applicable, place the hinged weight gauge—newborn in the product and position the gauge with the hinge centered over the seat bight line and the upper plate of the gauge back. Place a digital protractor on the upper torso/head area lengthwise and measure the incline angle.
(4) Place the head/torso portion of the newborn hinged weight gauge on the product according to the manufacturer's recommended use position with the seat portion of the gauge, depending on the product design, allowed to lay freely on the product or on the test base (figure 5 to this paragraph (d)(4)).
(5) Move and rotate the newborn hinged weight gauge the minimum amount necessary such that the head/torso portion rests on an OSS that could foreseeably support an infant's head, and place the head/torso portion of the gauge according to all situations that apply:
(i) In tests on products with an OSS for the infant's body, align the top edge of the head/torso portion of the gauge to coincide with a plumb line to the outermost edge of the OSS-head.
(ii) In all tests, place the seat portion of the gauge on the test base, adjust the newborn gauge to the greatest incline angle in which the top edge of the gauge maintains contact with the top surface of the product.
(6) If a product's seating bight area prevents reasonable positioning of the head/torso portion to the outermost edge, then position the seat portion of the newborn hinged weight gauge as far forward as possible towards the outermost edge and allow the head/torso portion of the gauge to rest on the product.
(7) Place a digital protractor lengthwise on the head/torso portion of the gauge and measure the incline angle.
(8) Measure the incline angle at the manufacturer's recommended use location(s), at feasible locations such as perpendicular to the recommended use location(s), and at least one location likely to fail in which the newborn gauge seat is supported on the test surface.
(9) Determine the maximum incline angle from the incline angle measurements.
(e)
(i) Force gauge with accuracy +/− 0.05 N (0.01 lbs).
(ii) Distance gauge with accuracy +/− 0.01 inches (0.03 cm).
(2) Align the axis of the 3-inch head probe (figure 1 to paragraph (e)(1) of § 1243.4) with a force gauge and parallel to a distance measurement device or gauge.
(3) Use a lead screw or similar device to control movement along a single direction.
(4) Support the firmness fixture to a test base such that the head probe does not deflect more than 0.01 inches (0.025 cm) under a 10.0 N (2.24 lbs) load applied in each orientation required in the test methods.
(f)
(1) Orient the axis of the 3-inch head probe perpendicular to the surface of the product at each test location that is oriented greater than five degrees relative to the test base or align the axis of the probe perpendicular to the test base (vertically) at each test location that is oriented equal to or less than five degrees to the test base.
(2) The first test location shall be at the location of maximum thickness of the surface being tested, perpendicular to the test base.
(3) Lay the product, with the occupant support surface facing up, on a test base that is horizontal, flat, firm, and smooth.
(4) Prevent movement of the product in a manner that does not affect the force or deflection measurement of the product surface under test. Provide no additional support beneath the product.
(5) Advance the probe into the product and set the deflection to 0.0 inches when a force of 0.1 N (0.02 lbs) force is reached.
(6) Continue to advance the head probe into the product at a rate not to exceed 0.1 inch per second and pause when the force exceeds 10.0 N (2.24 lbs), or the deflection is equal to 1.00 inches (2.54 cm).
(7) Wait 30 seconds. If the deflection is less than 1.00 inches and the force is 10.0 N or less, repeat the steps in paragraphs (f)(6) and (7) of this section.
(8) Record the final force and deflection when the deflection has reached 1.00 inches or when the force has exceeded 10.0 N.
(9) If the maximum thickness of the OSS is greater than 1.0 inches (2.54 cm), perform additional tests, space permitting, at the geometric center of the OSS, at four locations along the product's longitudinal and lateral axes
(10) Repeat the occupant support surface firmness tests on any other occupant support surface and in all intended and feasible configurations that could affect an occupant support surface, such as the folding or layering of parts of the product.
(g)
(1) Perform a minimum of four additional tests, located at intervals not to exceed 6 inches along the entire top perimeter of the sidewall, starting from the maximum side height location, and at one additional location most likely to fail.
(2) Repeat the sidewall firmness test in all the intended or feasible configurations that could affect the sidewall firmness, such as the folding or layering of parts of the product.
(h)
(1) Orient the axis of the 3-inch head probe perpendicular to the sidewall perimeter at an angle from horizontal that bisects the angle determined in sidewall angle determination with the axis directed at the intersection of the occupant support surface and the sidewall.
(2) The first test location shall be at the location of maximum product thickness parallel to the test base.
(3) Perform the steps in paragraphs (f)(3) through (8) of this section.
(4) Perform a minimum of four additional tests, located at intervals not to exceed six inches along the entire inside perimeter of the intersection of the sidewall and OSS, and at one additional location most likely to fail.
(5) Repeat the intersection of sidewall and occupant support surface firmness test in all the intended or feasible configurations that could affect the intersection firmness, such as the folding or layering of parts of the product.
(i)
(1) Orient the 3-inch (7.62 cm) diameter hemispherical head probe vertically and place it over the OSS with the cylindrical surface of the probe tangent to the intersection of the sidewall and the OSS. Advance the probe into the product until a downward force of 10 N (2.2 lbs) force is reached.
(2) After 30 seconds, determine whether the sidewall is in contact with the cylindrical side of the 3-inch head probe. If the sidewall contacts the cylindrical part of the probe, the sidewall angle is equal to or less than 90 degrees.
(3) For sidewall angles greater than 90 degrees, calculate the sidewall angle as 90 degrees plus the measured angle between the cylindrical side of the 3-inch head probe and the sidewall.
(4) Determine a minimum of four sidewall angles at locations not to exceed 6-inch (15.2 cm) intervals along the intersection of the sidewall and OSS.
(5) Measure the angle with a protractor or gauge placed to the depth of and in contact with the cylindrical side of the 3-inch probe side and the sidewall.
(j)
(i) Clamps with 0.75 inches (1.9 cm) diameter clamping surfaces capable of holding fabric and with a means to attach a force gauge.
(ii) A force gauge, accuracy +/− 0.5 lbs (1.1 N).
(2) Clamp the fabric of the infant support cushion on each side of the seam under test with the 0.75 inches clamping surfaces placed not less than 0.5 inches (1.2 cm) from the seam.
(3) Apply a tension of 15 lbs (67 N) evenly over 5 seconds and maintain for an additional 10 seconds.
(4) Repeat the test on every distinct seam and every 12 inches (15 cm) along each seam.
(k)
(2)
(3)
(a)
(1) The name, place of business (city, state, and mailing address, including zip code), and telephone number of the manufacturer, distributor, or seller.
(2) A code mark or other means that identifies the date (month and year as a minimum) of manufacture.
(3) The marking or labeling in paragraphs (a)(1) and (2) of this section
(b)
(c)
(d)
(2) Any marking or labeling provided in addition to those required by this section shall not contradict or confuse the meaning of the required information or be otherwise misleading to the consumer.
(3) The warnings shall be conspicuous and permanent.
(4) The warnings shall conform to ANSI Z535.4-2011(R2017) (incorporated by reference, see § 1243.8) sections 6.1-6.4, 7.2-7.6.3, and 8.1, with the following changes.
(i) In sections 6.2.2, 7.3, 7.5, and 8.1.2, replace “should” with “shall.”
(ii) In section 7.6.3, replace “should (when feasible)” with “shall.”
(iii) Strike the word “safety” when used immediately before a color (for example, replace “safety white” with “white”).
For reference, ANSI Z535.1, American National Standard for Safety Colors, provides a system for specifying safety colors. See note 1 to § 1243.8(a) for ANSI contact information.
(5) The safety alert symbol and the signal word “WARNING” shall be at least 0.2 inches (5 mm) high. The remainder of the text shall be in characters whose upper case shall be at least 0.1 inches (2.5 mm), except where otherwise specified.
For improved warning readability, typefaces with large height-to- width ratios, which are commonly identified as “condensed,” “compressed,” “narrow,” or similar, should be avoided.
(6) The message panel shall have the following text layout requirements:
(i) The text shall be left-aligned, ragged-right for all but one-line text messages, which can be left-aligned or centered.
Left-aligned means that the text is aligned along the left margin, and in the case of multiple columns of text, along the left side of each individual column.
(ii) The text in each column should be arranged in list or outline format, with precautionary (hazard avoidance) statements preceded by bullet points. Multiple precautionary statements shall be separated by bullet points if paragraph formatting is used.
The text shown for the warnings in figure 1 to this paragraph (d)(6) is filler text, known as lorem ipsum, commonly used to demonstrate graphic elements.
(7) All infant support cushions are required to contain a warning with the content and format depicted in this section as figure 2 (for products without tummy time) or figure 3 (if the product has a tummy time feature) to this paragraph (d)(7).
(e)
(a) Instructions shall be provided with the product and shall be easy to read and understand and shall be in the English language at a minimum. These instructions shall include information
(b) The instructions shall address the following additional warnings:
(1) Read all instructions before using this product.
(2) Keep instructions for future use.
(3) Do not use this product if it is damaged or broken.
(4) Instructions shall indicate the manufacturer's recommended maximum weight, height, age, developmental level, or combination thereof, of the occupant for which the infant support cushion is intended. If this product is not intended for use by a child for a specific reason, the instructions shall state this limitation.
(c) The cautions and warnings in the instructions shall meet the requirements specified in § 1243.6(d)(4) though (6), except that section 6.4 and sections 7.2-7.6.3 of ANSI Z535.4-2011(R2017) (incorporated by reference, see § 1243.8) need not be applied. However, the signal word and safety alert symbol shall contrast with the background of the signal word panel, and the cautions and warnings shall contrast with the background of the instructional literature.
For example, the signal word, safety alert symbol, and the warnings may be black letters on a white background, white letters on a black background, navy blue letters on an off-white background, or some other high-contrast combination.
(d) Any instructions provided in addition to those required by this section shall not contradict or confuse the meaning of the required information or be otherwise misleading to the consumer.
Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved incorporation by reference (IBR) material is available for inspection at the U.S. Consumer Product Safety Commission and at the National Archives and Records Administration (NARA). Contact the U.S. Consumer Product Safety Commission at: the Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; phone (301) 504-7479; email:
(a) National Electrical Manufacturers Association (NEMA), 1300 17th St. N, Arlington, VA 22209; phone: (703) 841-3200; website:
(1) ANSI Z535.4-2011(R2017),
(2) [Reserved]
NEMA standards are also available from the American National Standards Institute (ANSI), which provides a free, read-only copy of the standard at
(b) ASTM International (ASTM), 100 Barr Harbor Drive, P.O. Box CB700, West Conshohocken, Pennsylvania 19428-2959; phone: (800) 262-1373; website:
(1) ASTM D3359-23,
(2) [Reserved]
Coast Guard, DHS.
Temporary interim rule with request for comments.
The Coast Guard is temporarily modifying the operating schedule that governs the draw of the California Department of Transportation Rio Vista (State Route 12) highway bridge across the Sacramento River, mile 12.8, at Rio Vista, CA. This action is necessary to allow the bridge owner to complete rehabilitation of the bridge.
This temporary interim rule is effective from November 4, 2024 through 5 p.m. on August 29, 2025.
Comments and related material must reach the Coast Guard on or before December 4, 2024.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this temporary interim rule, call or email Carl Hausner, Chief, Bridge Section, Eleventh Coast Guard District; telephone 510-219-4366, email
The Coast Guard is issuing this temporary interim rule without prior notice and opportunity to comment pursuant to authority under the authority in 5 U.S.C. 553(b)(B). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest due to Caltrans Headquarters continuing to add projects to the ongoing rehabilitation project, which will require extending the length of time for advance notice for opening the span. The current NOTD expires November 1, 2024 and the Coast Guard cannot add additional dates to that NOTD because it will extend the NOTD beyond the allowed 180 days. The continuation of the temporary deviation is necessary for the safety of the work crews on the bridge.
Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
On May 1, 2024, the Coast Guard issued a General Deviation pursuant to 33 CFR 117.5, which allowed the bridge owner, Caltrans, to deviate from the current operating schedule to conduct major mechanical, electrical, and structural rehabilitation of the bridge. The General Deviation expires on November 1, 2024. Currently, the bridge will open on signal if at least 4-hours' notice is given to the drawtender. As of this date, new traffic gates have been installed, up-haul and down-haul wire ropes replaced, new primary and secondary drives have been installed, and new vertical clearance gauges mounted. Caltrans' Headquarters continues to allocate more funding for new projects to continue bridge rehabilitation. Projects that will be started in the calendar year 2024 and 2025 include: installing new tower elevators, repairing the east bridge portal, upgrading the traffic barriers hydraulic power units, repairing the span's cable reel and replacing the lift span roadway deck. These projects will require workers to be constantly on the lift span and towers of the bridge. For the safety of the workers on and around the mechanical workings of the bridge, Caltrans has requested the 4-hour advance notice for openings be extended through August 29, 2025. Due to Caltrans' Headquarters continuously allocating additional funds for rehabilitation projects, there is insufficient time to provide a reasonable comment period and then consider those comments before issuing the modification.
The Coast Guard is issuing this temporary interim rule under authority in 33 U.S.C. 499.
The Coast Guard is modifying the operating schedule that governs the draw of the California Department of Transportation Rio Vista (State Route 12) highway bridge across the Sacramento River, mile 12.8, at Rio Vista, CA. The Rio Vista bridge has a vertical clearance of 17 feet at MHW in the closed-to-navigation position and 144 feet at MHW in the fully open-to-navigation position.
The existing drawbridge regulation, 33 CFR 117.5, states “Except as otherwise authorized or required by this part, drawbridges must open promptly and fully for the passage of vessels when a request or signal to open is given in accordance with this subpart”. The bridge is currently operating under a temporary deviation from the operating regulations, allowing the bridge to open on signal if at least 4-hours' notice is given to the drawtender. Caltrans, the bridge owner, has requested to extend the 4-hour advance notification in order to safely complete bridge rehabilitation.
The Coast Guard is issuing this rule, which permits a temporary deviation from the operating schedule that governs the draw of the California Department of Transportation Rio Vista (State Route 12) highway bridge across the Sacramento River, mile 12.8, at Rio Vista, CA. This rule allows the bridge to open on signal if at least 4-hours' notice is given to the drawtender through 5 p.m. on August 29, 2025.
As the bridge rehabilitation continues, Caltrans has the following projects to complete: installing new tower elevators, repairing the east portal, upgrading the barriers hydraulic power units, repairing the span's cable reel and replacing the lift span roadway deck. This work will require workers to be in or around the towers' working machinery and in or around the lift span of the bridge. For the safety of the workers, Caltrans is requesting this temporary change so the workers can safely demobilize before the lift span operates. It is anticipated the rehabilitation work will be completed by August 29, 2025.
We developed this temporary interim rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866 as amended by Executive Order 14094. Accordingly, it has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
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). 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.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have Tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does 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.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or Tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.
Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; DHS Delegation No. 00170.1, Revision No. 01.3.
(e) The draw of the California Department of Transportation Rio Vista (State Route 12) highway bridge, mile 12.8, at Rio Vista, shall open on signal through August 29, 2025 if at least 4 hours' notice is given to the drawtender.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is approving three state implementation plan (SIP) revisions submitted by the State of Delaware through the Delaware Department of Natural Resources and Environmental Control (DNREC) on March 13, 2023. The revisions amend Delaware's emission inspection and maintenance (I/M) program statewide, for the purpose of updating the SIP to include several state rule revisions as amendments to the prior approved SIP. The purpose of these updates is to incorporate regulatory changes that are the result of state law changes, as well as to improve the I/M program and to harmonize the programs operated throughout the state. EPA finds that these revisions to the SIP comply with applicable requirements of the CAA and EPA regulations and that these revisions to the SIP will not interfere with attainment or maintenance of any national ambient air quality standards (NAAQS). EPA is approving these revisions to the Delaware SIP in accordance with the requirements of the Clean Air Act (CAA).
This final rule is effective December 4, 2024.
EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2024-0016. All documents in the docket are listed on the
Brian Rehn, Planning & Implementation Branch (3AD30), Air & Radiation Division, U.S. Environmental Protection Agency, Region III, 1600 John F Kennedy Boulevard, Philadelphia, Pennsylvania 19103. The telephone number is (215) 814-2176. Mr. Rehn can also be reached via electronic mail at
On March 13, 2023, DNREC submitted to EPA three revisions to the Delaware SIP pertaining to Delaware's enhanced I/M program applicable to the Delaware portion of the Philadelphia-Wilmington-Atlantic City nonattainment area for the 2015 ozone NAAQS (
These SIP revisions apply to both the federally mandated enhanced I/M program applicable to Kent and New Castle Counties that comprise Delaware's portion of the Philadelphia-Wilmington-Atlantic City, PA-NJ-MD-DE ozone nonattainment area, and also
Delaware submitted three SIP revisions on March 13, 2023, serving to update the Delaware SIP to harmonize with amendments made to the state I/M program regulations and plan for implementation. These March 2023 SIP revisions pertain to both of Delaware's I/M programs—the enhanced I/M program applicable to Kent and New Castle Counties and the SIP-strengthening (akin to basic) I/M program in Sussex County. The first of these SIP revisions is an amendment to 7 DE Admin. Code 1131, pertaining to the low enhanced I/M program operated in Kent and New Castle Counties (referred to as the “Wilmington I/M program” or as the “Regulation 1131” I/M program).
The second of the March 2023 SIP submittals amends 7 DE Admin. Code 1126 pertaining to the SIP-strengthening I/M program applicable to Sussex County (referred to as the “Sussex County I/M program” or “Regulation 1126” program). DNREC revised Regulations 1126 and 1131 to optimize the I/M programs and to harmonize the requirements of the two programs, as well as to align Delaware's regulations with a change in state law (
Delaware's third March 2023 SIP submittal serves to correct an error made by the state in a 2012 state regulatory action, which inadvertently incorporated
In accordance with requirements of 1 CFR 51.5, EPA is incorporating by reference Delaware's revised Title 7, Regulation 1126 entitled “Motor Vehicle Emissions Inspection Program—Sussex County,” as published as a final rule in the Delaware Register on January 1, 2023 (effective January 11, 2023). This revised 7 DE Admin Code Regulation 1126 takes the place of the prior SIP-approved version of Regulation 1126 in its entirety. The effect is to incorporate by reference amended sections of Regulation 1126, including sections 1.0 (including 1.1 through 1.6), 2.0 (including revised definitions
In accordance with requirements of 1 CFR 51.5, EPA is incorporating by reference Delaware's revised Title 7, Regulation 1131 entitled “Motor Vehicle Emissions Inspection Program—Kent and New Castle Counties,” as published as a final rule in the Delaware Register on January 1, 2023 (effective January 11, 2023). Delaware's January 1, 2023 regulatory updates to 7 DE Admin Code Regulation 1131 serve to update the rules to reflect changes made by Delaware to revise its low-enhanced I/M program as described earlier (
In an August 11, 2010 action, EPA approved into the SIP Delaware's administrative recodification of 7 DE Code 1126.
EPA's rationale for the proposed approval of these three March 2023 SIP revisions was presented in the August 15, 2024 (89 FR 66295), NPRM, referenced above, and will not be restated here. EPA received one public comment on the proposed rulemaking, which was not adverse in nature noting simply that Illinois has a program similar to Delaware's. Given that the comment was not adverse in nature, EPA is not responding to the comment in this final rule.
The proposed action provided a 30-day public comment period. During this period, EPA received one public comment, which was not adverse in nature, with the commenter noting that Illinois has similar control measures. The comment provides no further explanation or context as to its relevancy to this action. Therefore, EPA is not responding to that public comment received, considering it neutral with respect to this action.
EPA is approving three SIP revisions submitted by DNREC in March 2023 as revisions to the Delaware SIP as described in the NPRM titled “Air Plan Approval; Delaware; Motor Vehicle Inspection and Maintenance Program” published in the August 15, 2024 (89 FR 66295)
The SIP revisions to Delaware's I/M program being approved herein include: a change in program coverage to expand exemptions for new vehicles to seven years; the addition of vehicle OBD testing requirements in the Sussex County program; expanded vehicle coverage to include vehicles weighing between 8,501 to 14,000 pounds GVWR, for those vehicles model year 2008-and-newer; harmonization of I/M test requirements applicable to older vehicles to include curb idle exhaust and gas cap pressure tests for vehicles 1995-and-older (replacing existing two-speed idle tests on those vehicles previously performed in Kent and New Castle Counties); the phase-in of increased minimum repair cost thresholds for obtaining a repair waiver in Sussex County; and the addition of a statewide prohibition on tampering-related repairs in qualifying for an emissions repair waiver. EPA finds that these revisions to the SIP comply with applicable requirements of the CAA and EPA regulations and that these revisions to the SIP will not interfere with attainment or maintenance of any NAAQS or result in an adverse impact to air quality. Please refer to the August 15, 2024 (89 FR 66295) NPRM for further detail on the basis for this final approval. EPA's authority to approve Delaware's I/M programs is set forth in sections 110 and 182 of the Clean Air Act.
In this document, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of revisions to portions of Title 7 of the Delaware Administrative Code, Chapters 1126 and 1131. Revisions to Chapter 1126 include revised sections 1.0 through 9.0. Revisions to Chapter 1131 include revised sections 1.0 through 9.0. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the revisions to Delaware Title 7, Chapters 1126 and 1131, as described in section II of this preamble. The specific changes being made by these revisions are described in further detail in section II of this preamble.
EPA has made, and will continue to make, these materials generally available through
Under the CAA, 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 that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not
• 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);
• 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); and
• 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 Clean Air Act;
In addition, this action, approving three March 13, 2023 Delaware SIP revisions related to the vehicle I/M program, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
Delaware DNREC did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
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 January 3, 2025. 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 approving revisions to Delaware's motor vehicle emissions inspection and maintenance program may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as follows:
42 U.S.C. 7401
The additions read as follows:
(c) * * *
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve revisions to the San Diego County Air Pollution Control District (SDCAPCD) and Mojave Desert Air Quality Management District (MDAQMD) portions of the California State Implementation Plan (SIP). These revisions concern negative declarations for the Control Techniques Guidelines (CTG) for the Oil and Natural Gas Industry (Oil and Natural Gas CTG).
This rule is effective December 4, 2024.
The EPA has established a docket for this action under Docket ID No. EPA-R09-OAR-2024-0418. All documents in the docket are listed on the
Eugene Chen, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 947-4304 or by email at
Throughout this document, “we,” “us,” and “our” refer to the EPA.
On September 23, 2024, the EPA proposed to approve the California Air Resources Board's (CARB) submittal of negative declarations for the Oil and Natural Gas CTG adopted by SDCAPCD and MDAQMD.
As discussed in our September 23, 2024 (89 FR 77467) proposal, we only proposed action on the negative declaration for the Oil and Natural Gas CTG in Attachment B of the SDCAPCD submittal and did not propose action on any other elements of the submittal. Similarly, for the MDAQMD submittal, we only proposed action on the negative declaration for the Oil and Natural Gas CTG in table 2 and did not propose action on any other elements of the submittal. In both cases, the negative declarations for the Oil and Natural Gas CTG were submitted for the 2008 and 2015 ozone National Ambient Air Quality Standards (NAAQS).
The EPA's proposed action provided a 30-day public comment period. During this period, we received four comments. We have summarized these comments and included our responses below.
None of the comments submitted change our assessment of the SIP revision as described in the proposed action at issue. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is approving SDCAPCD's and MDAQMD's negative declarations for the Oil and Natural Gas CTG because they fulfill the relevant requirements in CAA sections 110(a), 110(l), and 182(b)(2). In addition, our approval of SDCAPCD's negative declaration terminates the EPA's obligation to promulgate a Federal Implementation Plan (FIP) for SDCAPCD arising from our November 16, 2020 finding of failure to submit for the Oil and Natural Gas CTG.
Under the Clean Air Act, 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 Clean Air Act. 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 14094 (88 FR 21879, April 11, 2023);
• 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 subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• 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 Clean Air Act.
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).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. The EPA defines EJ as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of
The Districts did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goals of Executive Order 12898 of achieving EJ for communities with EJ concerns.
This action is subject to the Congressional Review Act (CRA), and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 3, 2025. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review, nor does it extend the time within which a petition for judicial review may be filed, and it 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, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
For the reasons stated in the preamble, the Environmental Protection Agency amends part 52, chapter I, title 40 of the Code of Federal Regulations as follows:
42 U.S.C. 7401
(a) * * *
(1) * * *
(x) The following negative declaration for the 2008 ozone standard and 2015 ozone standard was adopted by the District on October 28, 2019, and submitted to EPA on December 20, 2019: EPA Control Techniques Guidelines for the Oil and Natural Gas Industry (453/B-16-001).
(5) * * *
(ii) The following negative declarations for the 2008 ozone NAAQS were adopted by the San Diego County Air Pollution Control District.
(iii) The following negative declarations for the 2015 ozone NAAQS were adopted by the San Diego County Air Pollution Control District.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of mefenoxam in or on Palm, oil. Syngenta Crop Protection, LLC requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective November 4, 2024. Objections and requests for hearings must be received on or before January 3, 2025, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2023-0397, is available at
Charles Smith, Registration Division (7505T), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (202) 566-1030; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Office of the Federal Register's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2023-0397 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before January 3, 2025. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2023-0397, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for mefenoxam including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with mefenoxam follows.
In an effort to streamline its publications in the
EPA has previously published a tolerance rulemaking for mefenoxam in which EPA concluded, based on the available information, that there is a reasonable certainty that no harm would result from aggregate exposure to mefenoxam and established tolerances for residues of that chemical. EPA is incorporating previously published sections from that rulemaking as described further in this rule, as they remain unchanged.
EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
Mefenoxam (metalaxyl-m) is a systemic phenylamine fungicide which inhibits protein synthesis in fungi. Mefenoxam is an R-isomer enriched formulation. Metalaxyl is the racemic R/S isomer formulation. The Agency compared the available chemistry and toxicity data for mefenoxam and metalaxyl and concluded that metalaxyl data may be used in support of mefenoxam regulatory actions because the two chemicals have similar toxicity.
Specific information on the studies received and the nature of the adverse effects caused by mefenoxam as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in Unit III.A. of the final rule published in the
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which the NOAEL and the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
A summary of the toxicological endpoints for mefenoxam used for human risk assessment is discussed in Unit III.B. of the final rule published in the
Much of the exposure assessment remains the same although updates have occurred to accommodate exposures from petitioned-for tolerances. These updates are discussed in this section; for a description of the rest of the EPA approach to and assumptions for the exposure assessment, please reference Unit III.C. of the December 2018, rulemaking.
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Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to mefenoxam and metalaxyl with any other substances and mefenoxam and metalaxyl do not appear to produce a toxic metabolite produced by other substances. For the purposes of this action, therefore, EPA has not assumed that mefenoxam and metalaxyl have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at
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EPA continues to conclude that there are reliable data to support the reduction of the (FQPA) (SF) to 1X. See Unit III.D. of the December 2018, rulemaking for a discussion of the Agency's rationale for that determination.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing dietary exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). Short-, intermediate-, and chronic-term aggregate risks are evaluated by comparing the estimated total food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
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Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 270 for children 1 to 2 years old, the most highly exposed group. Because EPA's level of concern for mefenoxam is 100, which means any MOE below 100 may indicate risks of concern, this MOE is not of concern.
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More detailed information on this action can be found in the document titled “Metalaxyl-M (Mefenoxam)”. Human Health Risk Assessment for Establishment of a Tolerance without U.S. Registration for use on Palm Oil.” in docket ID number EPA-HQ-OPP-2023-0397.
For a discussion of the available enforcement analytical methods, see Unit IV.A. of the December 21, 2018, rulemaking.
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level. Tolerances/maximum residue limits (MRLs) to support uses of mefenoxam in Canada are established for residues of metalaxyl, including metabolites that can be converted to the 2,6-DMA moiety, each expressed as metalaxyl equivalents. However, no MRLs are established for palm fruit in Codex and Canada; thus, harmonization is not an issue for this commodity.
Three comments were received in response to the notice of filing. One comment was received from an anonymous commenter applauding the government's process to petition for new uses. The other two comments were criticizing chemicals that are not relevant to this action.
Therefore, tolerances are established for residues of mefenoxam [methyl
This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal governments, on the relationship between the National Government and the States or Tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:
21 U.S.C. 321(q), 346a and 371.
(a) * * *
Environmental Protection Agency (EPA).
Final action.
On June 26, 2023, North Carolina submitted to the
This final authorization will become effective on November 4, 2024.
Leah Davis; RCRA Programs and Cleanup Branch; Land, Chemicals and Redevelopment Division; U.S. Environmental Protection Agency; Atlanta Federal Center, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960; telephone number: (404) 562-8562; fax number: (404) 562-9964; email address:
States that have received final authorization from the EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must change their programs and ask the EPA to authorize the changes. Changes to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change their programs because of changes to the EPA's regulations in title 40 of the Code of Federal Regulations (CFR), parts 124, 260 through 268, 270, 273, and 279.
New Federal requirements and prohibitions imposed by Federal regulations that the EPA promulgates pursuant to the Hazardous and Solid Waste Amendments of 1984 (HSWA) take effect in authorized States at the same time they take effect in unauthorized States. Thus, the EPA will implement those requirements and prohibitions in North Carolina, including the issuance of new permits implementing those requirements, until the State is granted authorization to do so.
On June 26, 2023, North Carolina submitted to the EPA a complete program revision application seeking authorization of changes to North Carolina's hazardous waste program under the Resource Conservation and Recovery Act (RCRA), as amended. On July 15, 2024, the EPA published both a direct final action (89 FR 57364) granting North Carolina final authorization for revisions to its federally authorized hazardous waste program, along with a companion proposed rule (89 FR 57381) announcing the EPA's proposal to grant such final authorization. The EPA announced in both notices that the direct final action and the proposed rule were subject to a thirty-day public comment period. The EPA stated in both documents that if it received adverse public comment, it would withdraw the direct final action, base any further decision on the authorization of the State's program changes on the proposed rule, and address all public comments in a later final action. The public comment period ended on August 14, 2024. The EPA received two comments during the public comment period. On September 11, 2024, the EPA published a withdrawal of the direct final action (89 FR 73592) so it could respond to the comments before the action went into effect.
Today's action responds to the comments the EPA received and publishes the EPA's final determination granting North Carolina authorization of revisions to its hazardous waste program. The issues raised by the commenters are summarized and responded to in section III below. No further opportunity for comment will be provided.
During the public comment period for the direct final action and proposed rule, the EPA received two comments. The comments are provided in the docket for this action.
North Carolina submitted a complete program revision application, dated June 26, 2023, seeking authorization of changes to its hazardous waste program corresponding to certain Federal rules promulgated between October 27, 1987, and October 1, 2021 (including HSWA Cluster
North Carolina has responsibility for permitting treatment, storage, and disposal facilities within its borders (except in Indian country, as defined at 18 U.S.C. 1151) and for carrying out the aspects of the RCRA program described in its program revision application, subject to the limitations of HSWA, as discussed above.
The effect of this decision is that the changes described in North Carolina's program revision application will become part of the authorized State hazardous waste program and will therefore be federally enforceable. North Carolina will continue to have primary enforcement authority and responsibility for its State hazardous waste program. The EPA will maintain its authorities under RCRA sections 3007, 3008, 3013, and 7003, including its authority to:
• Conduct inspections, and require monitoring, tests, analyses, and reports;
• Enforce RCRA requirements, including authorized State program requirements, and suspend or revoke permits; and
• Take enforcement actions regardless of whether the State has taken its own actions.
This action does not impose additional requirements on the regulated community because the regulations for which the EPA is authorizing North Carolina are already effective under State law and are not changed by this action.
The EPA has determined that the North Carolina hazardous waste program revisions included in its June 26, 2023 application are equivalent to, consistent with, and no less stringent than the Federal program, and therefore satisfy all of the requirements necessary to qualify for final authorization. Therefore, the EPA grants final authorization to North Carolina for the following program changes:
When revised State rules differ from the Federal rules in the RCRA State authorization process, the EPA determines whether the State rules are equivalent to, more stringent than, or broader in scope than the Federal program. Pursuant to RCRA section 3009, 42 U.S.C. 6929, State programs may contain requirements that are more stringent than the Federal regulations. Such more stringent requirements can be federally authorized and, once authorized, become federally enforceable. Although the statute does not prevent States from adopting regulations that are broader in scope than the Federal program, States cannot receive Federal authorization for such regulations, and they are not federally enforceable. There are no State requirements in the program revisions listed in the table above that are considered to be broader in scope than the Federal requirements. The EPA has determined that certain regulations included in North Carolina's program revisions listed in the table above are more stringent than the Federal program. These more stringent requirements will become part of the federally enforceable RCRA program in North Carolina when authorized.
North Carolina's program is more stringent at 15A NCAC 13A .0108(c) and (d), insofar as these provisions require transporters to reconcile significant manifest discrepancies with the waste generator.
North Carolina's program is more stringent at 15A NCAC 13A .0111(b), insofar as these provisions require off-site recycling facilities that receive materials described in 40 CFR 266.70(a) to label containers and tanks holding recyclable materials with the words “Recyclable Material.”
It should be noted that States cannot receive authorization for certain Federal regulatory functions involving international shipments (
North Carolina will issue permits for all the provisions for which it is authorized and will administer the permits it issues. The EPA will continue to administer any RCRA hazardous waste permits or portions of permits that the EPA issued prior to the effective date of authorization until they expire or are terminated. The EPA will not issue any new permits or new portions of permits for the provisions listed in the table above after the effective date of the final authorization. The EPA will continue to implement, and issue permits for HSWA requirements for which North Carolina is not yet authorized. The EPA has the authority to enforce State-issued permits after the State is authorized.
North Carolina is not authorized to carry out its hazardous waste program in Indian country within the State, which includes the Indian lands associated with the Eastern Band of Cherokee Indians. Therefore, this action has no effect on Indian country. The EPA retains jurisdiction over Indian country and will continue to implement and administer the RCRA program on these lands.
Codification is the process of placing citations and references to the State's statutes and regulations that comprise the State's authorized hazardous waste program into the Code of Federal Regulations. The EPA does this by adding those citations and references to the authorized State rules in 40 CFR part 272. The EPA is not codifying the authorization of North Carolina's revisions at this time. However, the EPA reserves the ability to amend 40 CFR part 272, subpart II, for the authorization of North Carolina's program changes at a later date.
The Office of Management and Budget (OMB) has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011). This action authorizes State requirements for the purpose of RCRA section 3006 and imposes no additional requirements beyond those imposed by State law. Therefore, this action is not subject to review by OMB. This action is not an Executive Order 14094 (88 FR 21879, April 11, 2023) regulatory action because actions such as the authorization of North Carolina's revised hazardous waste program under RCRA are exempted under Executive Order 12866. Accordingly, I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
Under RCRA section 3006(b), the EPA grants a State's application for authorization as long as the State meets the criteria required by RCRA. It would thus be inconsistent with applicable law for the EPA, when it reviews a State authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this action, the EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988), by examining the takings implications of this action in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Confidential business information, Hazardous waste, Hazardous waste transportation, Indian lands, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements.
This action is issued under the authority of sections 2002(a), 3006, and 7004(b) of the Solid Waste Disposal Act as amended, 42 U.S.C. 6912(a), 6926, and 6974(b).
Federal Communications Commission.
Final rule; correcting amendments.
On December 5, 2023, the Federal Communications Commission (Commission) revised Commission rules. That item showed the Commission's adoption of new rules to implement the Safe Connections Act of 2022. When published in the
Effective on November 4, 2024.
Nicholas Page,
This summary corrects the rules published December 5, 2023, 88 FR 84406 (FR Doc. 2023-25835). Accordingly, paragraph (s), which was added to § 54.400 in the first column on page 84446, is corrected to remove `and' at the end of paragraph (s)(3). Compliance with these rules began upon announcement in the
Communications, Communication common carriers, Privacy, Telecommunications, Reporting and recordkeeping requirements.
Accordingly, 47 CFR part 54 is corrected by making the following correcting amendments:
47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless otherwise noted.
(s) * * *
(3) At least one member of the household has received a Federal Pell Grant under section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) in the current award year, if such award is verifiable through the National Verifier or National Lifeline Accountability Database or the participating provider verifies eligibility under § 54.1806(a)(2);
Office of the Assistant Secretary for Public and Indian Housing, HUD.
Proposed rule.
The Public Housing Assessment System (PHAS) governs the assessments, evaluation, and oversight of public housing agencies (PHAs) administering public housing. This proposed rule would revise the weight of PHAS performance indicators to emphasize the importance of occupancy, financial condition, and physical assessments. To the greatest extent possible, scoring indicators would be based on measurable program outcomes and data that is already available to HUD. Additionally, the proposed revisions would allow HUD to respond more quickly and effectively to performance deficiencies when they are first identified, to intervene based on trending performance data, and to delay scoring or assessments when appropriate.
There are two methods for submitting public comments. All submissions must refer to the above docket number and title.
To receive consideration as a public comment, comments must be submitted through one of the two methods specified above.
Daniel Threet, Policy Advisor, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410-0500, telephone (202) 402-7513 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit
In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed rule may be found at
Last updated in February 2011, 24 CFR part 902 describes how HUD assesses and scores the performance of PHAs in essential public housing operations, on a program-wide and individual-project basis. PHAS assesses PHA performance based on indicators and subindicators described in part 902, which HUD then uses to determine a score or designation for each PHA. The four key indicators, described in 24 CFR 902 subparts B through E, are the physical condition indicator, the financial condition indicator, the management operations indicator, and the Capital Fund program indicator.
The current regulations define the purpose and applicability of the system, the general types of indicators used in assessment, the frequency of assessments, incentives for high performers, and how HUD will respond to PHAs with deficiencies or that are identified as Troubled performers.
In current regulations, the physical condition indicator measures the extent to which a PHA is ensuring that projects meet acceptable basic housing conditions. It draws on independent physical inspections of a PHA's projects provided by HUD and aims to ensure that all residents live in safe, habitable dwellings. The financial condition indicator measures a PHA's ability to maintain sufficient financial resources to support the operation of its Public Housing program. It draws on financial information reported to HUD by PHAs. The management operations indicator measures the PHA's ability to operate its Public Housing program in a way that assists as many households as possible and meets obligations to participants. It draws on unit-status data as well as financial information reported to HUD by PHAs. The Capital Fund program indicator measures the PHA's ability to meet requirements to obligate Capital Fund program grants in a timely fashion. It also measures occupancy rates on the assumption that high occupancy rates reflect success in addressing capital needs. It draws on PHA reporting of the obligation of Capital Fund program grants and unit-status data. Based on these four
A full PHAS assessment relies on components that are not simultaneously assessed, so HUD can receive information about poor performance months before a full performance designation status is determined. Under the current regulations, HUD is not able to require a PHA to take corrective action of any deficiency until the full PHAS assessment is complete. For example, problems may be identified during a physical inspection in December, but the PHA may not be identified as a Troubled performer until after audited financials are submitted nine months later. Greater flexibility is needed so that HUD can require, and PHAs can complete, corrective action more promptly.
Beginning in fall 2022, HUD held a series of in-person and virtual listening sessions with PHAs across the country, to solicit feedback from PHAs on what they felt were viable and informative metrics for the evaluation of PHA performance in managing Public Housing. In developing the new proposed subindicators, HUD considered this feedback, striking a balance between what it was important to measure, what is reasonably possible to measure, and what is a fair assessment of PHA performance. In considering various alternative indicators or subindicators, HUD examined whether alternative metrics would require additional information-collection burdens on PHAs, as well as whether alternative metrics could be collected reliably and objectively.
This proposed rule would revise and restructure the PHAS indicators as well as adjust the weighting of indicators. It would also make several changes not directly related to scoring. For example, to correct the lag in timing and achieve the desired flexibility, this proposed rule would allow HUD to have broad, flexible authority to require interventions or corrective actions based on component scores as soon as those scores are issued; in advance of a full assessment; considering trending data; or in conjunction with a decision to withhold, deny, or rescind a score or designation, as HUD determines necessary. This proposed rule would also revise the performance indicators and subindicators on which scores are based, in order to better measure performance and align incentives with the long-term viability of the program. Throughout this proposed rule, HUD has made several technical changes that do not substantively affect requirements.
The proposed rule would expand the scope of assessment tools HUD will use in § 902.1(d), adding other reviews or audits conducted on the PHA to the tools HUD will use to assess management operations. It would also allow HUD to advise PHAs of their performance designations in addition to their scores.
The proposed rule would make several changes to definitions in § 902.3. First, it would remove the existing definition of “Assessed fiscal year” and add a definition for “Assessment year,” which is defined as the period of time for a single PHAS assessment including a schedule setting forth when component scores will be determined. For example, any property required to undergo a physical inspection once every three (3) years will retain the same PHAS physical condition indicator score it received in the first year of inspection for the second and third years for assessing the PHAS physical condition. In the fourth year, the physical condition score will be based on a new inspection. The financial condition, management operations, and Capital Fund program indicators will still be based on the PHA's fiscal year for each assessment.
The proposed rule would revise the definition of “Capital Fund troubled” to refer to a PHA that does not satisfy the requirements to pass the Capital Fund indicator evaluation rather than one that does not meet a minimum passing score. This revision would align the definition with HUD's proposal to determine Capital Fund troubled status based on a pass/fail rather than a numeric score. It would also revise the definition of “Corrective Action Plan” to note that such plan is developed in concert with HUD or by HUD, to introduce the concept that such plan may be based on an individual component score determined prior to the issuance of the overall PHAS score and designation, and that for small rural PHAs the equivalent term is “Corrective Action Agreement” as noted in § 902.105(c). The proposed rule would revise the definition of “Deficiency,” by changing the score for the Capital Fund indicator to a failing evaluation rather than below 50 percent. At § 902.73, the proposed rule specifies that a deficiency may be a finding or determination that requires corrective action in advance of the issuance of an overall PHAS score or performance designation. HUD would also remove the definition of “Dictionary of Deficiency Definitions.” The NSPIRE final rule (88 FR 30442) replaced this dictionary with the NSPIRE Standards and Scoring notices (see 24 CFR 5.709). The NSPIRE final rule revised and retained this definition to instead refer to the NSPIRE Standards and Scoring notices, but after further consideration, HUD has determined that term is no longer used and can be removed. HUD is therefore proposing to remove this definition.
The proposed rule would add a definition for “Designation” to mean a label given to a PHA—“High performer,” “Standard performer,” “Substandard performer,” or “Troubled performer”—based on its overall PHAS score. The definition would include the notion that a PHA that receives a failing evaluation under the Capital Fund program indicator would be designated as a “Capital Fund troubled performer.” Finally, the proposed rule would add a definition for “Score” to distinguish between an overall PHAS score and a component score (an indicator or subindicator score). The definition would specify that the overall PHAS score is a number between 0 to 100 and is calculated by adding together the physical condition, financial condition, and management operations indicator scores. Small rural PHAs (as defined by § 902.101) would continue to be scored per § 902.103.
The proposed rule would amend § 902.5(a)(3) to update the applicability of this part to Moving-to-Work (MTW) agencies. The proposed rule would eliminate language that PHAS scores do not apply to MTW agencies and would instead state that MTW agencies operating under the Standard MTW Agreement will not be scored in PHAS unless the PHA elects to be scored. The proposed rule would also state that MTW agencies operating under the MTW Operations Notice will be subject to scoring in PHAS.
At the final rule stage, HUD does not plan to have an immediate effective date. Instead, HUD plans to set an effective date one full assessment cycle after the publication of the final rule so that PHAs have time to learn about revised criteria prior to being assessed under them. For example, if the final rule is published in September 2025, the regulations in this part will be
In § 902.9, the proposed rule would provide that each PHA will receive an overall PHAS score determined by adding the physical condition indicator (accounts for 40 points), the financial condition indicator (accounts for 30 points), and the management operations indicator (accounts for 30 points). The financial condition and management operations indicators each contain subindicators. The Capital Fund program indicator will no longer be awarded points in the overall PHAS score and will only be evaluated on a pass/fail basis. If a PHA fails the Capital Fund program indicator, its overall performance designation will be Capital Fund troubled. The proposed rule adds a clarification that a PHA will not receive an overall PHAS score nor a performance designation if all of its projects are mixed-finance projects. Part 902 already provides that mixed-finance projects are subject to the physical condition inspections (§ 902.22) but are excluded from the financial condition indicator (§ 902.30) and management operations indicator (§ 902.40).
The proposed rule would amend § 902.11 to allow HUD to withhold a designation altogether if HUD exercises its authority at § 902.66 to do so (as described further in the changes to Subpart F). To receive a High performer or Standard performer designation, a PHA would need to receive a passing evaluation under the Capital Fund program indicator along with the existing percentage of available points available in its overall PHAS score. This change is required to accommodate the move to evaluating the Capital Fund program indicator on a pass/fail basis, which is discussed in Subpart E below. The current regulation requires that High performers and Standard performers receive at least 50 percent of the points available under the Capital Fund indicator. For Standard performers, HUD may elect to craft Corrective Action Plans rather than have a PHA submit a Corrective Action Plan. Further assistance from HUD in crafting Corrective Action Plans will benefit smaller PHAs or those with capacity-related challenges, allowing for the collective development of plans quickly. Except for small rural PHAs subject to § 902.105, a PHA designated as a Troubled performer would be subject to the remedies provided in 42 U.S.C. 1437d(j)(4). The proposed rule would remove paragraph (d)(2) of this section and replace it with a new paragraph (e) to § 902.11—Capital Fund troubled performer—explaining that if a PHA receives a failing evaluation under the Capital Fund program indicator, it will be designated as a Capital Fund troubled performer and be subject to corrective actions separate from or in addition to the requirements of a memorandum of agreement.
This proposed rule would amend § 902.13 to allow HUD to suspend or skip assessments and allow PHAs to request that HUD extend the time between PHAS assessments in accordance with requirements HUD may issue by Notice. HUD may grant such extension requests for good cause when it deems it appropriate. HUD specifically seeks comment on what should constitute good cause for HUD to approve a PHA delay request (
This proposed rule would revise paragraph (b)(2) of § 902.13 to indicate that if projects are not inspected in accordance with the cycle laid out in § 5.705, the assessment year will be extended just for the physical condition indicator, to ensure that old inspection scores are not rolled forward inappropriately. For example, if a new inspection is required within 3 months of an anniversary date of March 1 and the inspection is not performed until July 1, HUD will not issue the overall PHAS score until those inspections are completed and will use the July inspections, along with inspections of other PHA properties completed on time, to determine the PASS score and the overall PHAS score for that assessment year. HUD further proposes to revise 902.13(b)(2) to note that HUD may exercise discretion to skip the PHA's assessment year, should a delayed physical condition inspection occur 6 months after the end of the assessment year. This means that the PHA would not receive an overall PHAS score for that assessment year, and the late physical inspection would be used for the subsequent PHAS assessment instead. In the example above, should the inspection that was due within 3 months of March 1 not be performed until the following January, HUD would choose to not issue an overall PHAS score for the PHA for that assessment year. The inspection performed in January would be used for the overall PHAS score for the next assessment year. This would ensure that HUD does not inappropriately reuse inspection scores for the purpose of determining overall PHAS scores. Other indicator scores will continue to be issued as they are determined in either situation.
This proposed rule would revise paragraph (b)(4) of § 902.13 to specify that in years subsequent to the baseline year, the physical inspection schedule in § 5.705(c) will determine whether a property's physical condition score is based upon a new inspection or the previous inspection. The baseline year refers to the year in which a physical inspection takes place and in which HUD determines whether a property needs to be inspected again in one, two, or three years as outlined in § 5.705(c). The baseline year will also be used to determine the next PHAS assessment for PHAs subject to small PHA deregulation.
This proposed rule would add language to paragraph (b) of § 902.25 to clarify that indicator scores will be issued in advance of an overall PHAS score and that, as with the financial condition and management operations indicator scores, a PHA may be subject to appropriate oversight and action as soon as project scores or the overall physical condition indicator score is issued. The proposed language would also note that indicator scores issued in advance of an overall PHAS score are subject to revision by HUD.
This proposed rule would add language to paragraph (b) of § 902.35 describing the subindicators that will be used to determine the financial condition indicator score. The language notes that the formulas for these subindicators will be provided by Notice and that MTW agencies will have variant formulas to account for the flexibilities of the MTW Demonstration.
The proposed rule would amend the description of the Quick Ratio (QR) subindicator, which compares quick assets—cash and assets that are easily convertible to cash—to current liabilities. Specifically, the proposed rule clarifies that neither quick assets nor current liabilities include inter-
The proposed rule would add language to paragraph (c) of § 902.35 noting that, as with the physical condition and management operations indicator scores, the financial condition indicator score will be issued in advance of an overall PHAS score, will be subject to revision by HUD, and may subject a PHA to appropriate oversight and action as soon as it is issued.
Paragraph (d) of § 902.35 specifies how many points make up the financial condition indicator score. The proposed rule would change the maximum number of points on which this score is based from 25 to 30. The proposed rule would provide that a score of at least 18 points is needed for a PHA to receive a passing score under the financial condition indicator.
The proposed rule would replace paragraphs (a)(2) and (3) of § 902.43, which describe management operations subindicators. The Tenant Accounts Receivable subindicator and Accounts Payable subindicator would be removed, as a PHA's performance on these issues is already indirectly reflected in the financial condition indicator. Paragraph (a)(2) would assess a PHA's “timely reexaminations” of tenants based on the PHA's approved reexamination schedule. This subindicator would rely on tenant data already provided to HUD by PHAs. Paragraph (a)(3) would measure “audit compliance” by using findings in independent audits or HUD audits or reviews. The audit compliance subindicator would measure the extent to which the PHA is meeting program compliance requirements. In paragraph (b) of § 902.43, the proposed rule would allow HUD to assess the management operations indicator through other information available to HUD, in addition to information electronically submitted to HUD through FDS.
As noted above, HUD considered a wide range of alternative subindicators (
The proposed rule would remove and reserve § 902.44, which would mean that the management operations indicator would no longer be adjusted for physical condition and neighborhood environment (PCNE). Analysis of the pattern of adjustments between 2015 and 2019 indicates that nearly all properties received points for physical condition (which reflects only the age of the housing stock), so the adjustment does not highlight exceptional challenges for select PHAs. Likewise, a diminishing minority of PHAs received points for neighborhood environment, which is an adjustment made if the project is in a census tract in which at least 40% of families have an income below the poverty rate, suggesting it is no longer an issue that requires adjustment.
This proposed rule would add language to paragraph (b) of § 902.45 to clarify that, as with the financial and physical condition indicators, the management operations indicator score will be issued in advance of an overall PHAS score, will be subject to revision by HUD and may subject a PHA to appropriate oversight and action as soon it is issued. The proposed rule would change the maximum number of points for the management operations indicator from 25 points to 30 points. A PHA must achieve at least 18 points to receive a passing score under the management operations indicator.
The proposed rule would make several changes to the Capital Fund program indicator meant to improve the performance indicator system and remove duplication. The current Capital Fund program indicator measures occupancy according to different standards from the management operations indicator. The proposed rule would revise paragraph (a) of § 902.50 to remove the occupancy subindicator from the Capital Fund program indicator and limit what the indicator examines to the time taken by a PHA to obligate funds in relation to statutory deadlines. It would also restructure PHA evaluation under the paragraph (c) of § 902.50 to remove subindicators. Instead, PHAs would be evaluated on a pass/fail basis based on whether they satisfied the timeliness of fund obligation required by statute. Because assessments would now be pass/fail rather than scored, the proposed rule would revise references to “scores” throughout this subpart. It would also change the language in paragraph (b) of § 902.53 to reflect that in order to achieve a passing evaluation under the Capital Fund program indicator, a PHA must obligate at least 90 percent of Capital Fund program grants or receive HUD approved extensions as documented by the system of record within the time required by statute.
The proposed rule would also remove an unnecessary mention of HOPE VI and Choice Neighborhoods program funds in paragraph (a) of § 902.50.
The proposed rule would revise paragraph (a) of § 902.60, to require a PHA to wait three full fiscal years after the effective date of the final rule before it is allowed to change its fiscal year-end, unless such change is approved by HUD for good cause. For example, PHAs may need to request a change due to a merger with another PHA or another significant organizational change. PHAs or the public may recommend other circumstances that provide good cause.
The proposed rule would require that PHAs submit their written request for a waiver of their audited financial information submission due date to HUD rather than specifying it must be submitted to their local field office in paragraph (c)(1) of § 902.60. HUD
The proposed rule would also remove existing paragraph (e) from § 902.60 and make several revisions to § 902.62. These changes would be prompted by the revision of the management operations indicator to include a subindicator for audit compliance. Because the findings in audit compliance will inform the management operations score, HUD proposes revisions to allow HUD to reduce the management operations score for failure to submit financial statements timely. Paragraphs (a)(2), (a)(3), and (b)(1) of § 902.62 would be revised so that the responsive actions may apply to the management operations indicator, just as they currently apply to the financial condition indicator.
Currently, HUD may only withhold, deny, or rescind a High Performer or Standard designation and does not have flexibility to require corrective action when withholding a score or designation. This proposed rule would give HUD the authority to withhold any score or designation if it determines the circumstances necessitate HUD not issuing that score or designation. In exceptional circumstances (
The proposed rule would also permit HUD to require corrective action while a score or designation is being withheld if performance deficiencies are identified. Paragraph (b) of § 902.64 would be revised to describe the new notification timeline: HUD will issue component scores for indicators and subindicators after they are determined and in advance of the overall PHAS score. Such scores would be provisional and subject to revision by HUD, and PHAs would be subject to oversight and action as soon as a component score is issued. The overall PHAS score would be issued one month after the indicator scores for the assessment year have been finalized unless HUD withholds a component score or overall score. Paragraph (a)(3) of § 902.66 would allow HUD to substitute corrective requirements when deemed necessary, and under paragraph (a)(4) of § 902.66 HUD could require a PHA to exercise appropriate oversight and take corrective actions as specified in § 902.73, requiring a PHA to correct deficiencies within a specified time period.
Paragraph (b) of § 902.66 would give HUD discretion to re-designate a PHA where that PHA's designation has been denied or rescinded. HUD may also decide not to assign the PHA a new designation.
The proposed rule would revise 902.69 to remove potentially confusing language that there are multiple distinct processes—one to appeal a designation and another to petition to remove a designation. These revisions to 902.66, 902.69, and 902.73 would not limit a PHA's ability to appeal HUD decisions or to make second order appeals when compared to the current regulatory language.
The proposed rule would revise § 902.73 to expand HUD's authority to subject a PHA to appropriate oversight and corrective action as soon as a component score is issued or considering trending data, in advance of issuance of a PHAS designation category. Paragraph (a) would provide HUD the authority to require corrective actions when scores or designations are withheld, denied, or rescinded, as HUD determines appropriate and would also provide HUD greater authority to determine the appropriate time for corrective action and progress reports. It would allow required corrective actions to be incorporated into a Memorandum of Agreement (MOA) or Corrective Action Plan (CAP) if the PHA is later designated as a troubled or substandard performer. Paragraphs (b) and (d) would be amended to allow HUD to relay deadlines by means other than through a CAP because there may not always be a CAP depending on when HUD requires corrective action under paragraph (a).
The proposed rule would revise paragraph (b) of § 902.75 to clarify that an executed MOA for a troubled performer is an enforceable contract, the material breach of which by a PHA, is the basis, among other remedies available under law, for determination of substantial default.
The proposed rule would amend the example in paragraph (g)(3) of § 902.75 to align with the proposed changes to part 902. The example provides a scenario in which a troubled performer PHA fails to execute a MOA with HUD or fails to show a substantial improvement.
The proposed rule would add a new § 902.76 to distinguish Capital Fund troubled as its own designation rather than as one dependent on a designation of “Troubled.” The new section would describe remedies with respect to the Capital Fund troubled performer designation and provide HUD authority to require a PHA to correct deficiencies within a time period specified by HUD. The requirements to correct deficiencies, and consequences for failure to correct deficiencies so identified, will otherwise be the same as for substandard performers as described in § 902.73. Separating the Capital Fund troubled performer designation from the troubled performer designation will allow the PHA to avoid entering into a MOA when the only performance deficiency is with respect to the Capital Fund, and the underlying deficiency can be resolved upon the next timely obligation. The Capital Fund troubled performer designation would also allow HUD to combine such designation with the substandard performer designation or the troubled performer designation.
The proposed rule would add a sentence to the end of § 902.81 making clear that a resident is not restricted from communicating any complaint or concern about a PHA to HUD in writing at any time. This addition is not a change to the current regulations and is being added only for clarification.
The proposed rule would revise sections of 24 CFR 902 subpart H—Assessment of small rural Public Housing Authorities to conform with the revisions in the rest of part 902. The proposed rule would delete references to PCNE from paragraph (a) of 902.103 to parallel the removal of that concept in § 902.44. Paragraphs (c), (c)(5) and (d) of § 902.105 would be revised to align with § 902.75. Changes would be made throughout §§ 902.107 and 902.109 to conform with §§ 902.66 and 902.69, with variations where necessary to reflect the differences between the PHAS assessment and the Small and Rural assessment. Section 902.111 would be renamed “Remedies for troubled small rural PHAs” to align with § 902.83.
Additionally, among the changes this proposed rule would make to small PHAs, it would remove paragraph (c)(4) from § 5.705 applying a triennial inspection cycle for small PHAs per 24 CFR 902.13(a).
HUD welcomes comments on all aspects of this proposed rule. In addition, HUD specifically requests comments on the following topics:
The proposed rule would also make minor modifications to the relative weight of the indicators in the overall PHAS score. Are the proposed weights of the Physical Condition, Financial Condition, and Management Operations indicators appropriate?
Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. Executive Order 14094 entitled “Modernizing Regulatory Review” (hereinafter referred to as the “Modernizing E.O.”) amends section 3(f) of Executive Order 12866 (Regulatory Planning and Review), among other things.
This rule has been determined to be a “significant regulatory action” as defined in Section 3(f) of Executive Order 12866, but not significant under section 3(f)(1) of the Order. HUD has prepared an initial regulatory impact analysis and has assessed the potential costs and benefits, both quantitative and qualitative, of this proposed regulatory action and has determined that the benefits would justify the costs. The analysis is available at
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
Notwithstanding HUD's view that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.
A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is available through the Federal eRulemaking Portal at
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either: (i) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This proposed rule does not have federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive Order.
The information collection requirements contained in this rule are currently approved by OMB and have been given OMB Control Numbers 2502-0369, 2535-0107, 2577-0083, and 2577-0157. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This proposed rule will not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of the UMRA.
Administrative practice and procedure; Aged; Claims; Crime; Government contracts; Grant programs—housing and community development; Individuals with disabilities; Intergovernmental relations; Loan programs—housing and community development; Low and moderate income housing; Mortgage insurance; Penalties; Pets; Public housing; Rent subsidies; Reporting and recordkeeping requirements; Social security; Unemployment compensation; Wages.
Administrative practice and procedure; Public housing; Reporting and recordkeeping requirements.
For the reasons stated above, HUD proposes to amend 24 CFR parts 5 and 902 as follows:
12 U.S.C. 1701x; 42 U.S.C. 1437a, 1437c, 1437f, 1437n, 3535(d); 42 U.S.C. 2000bb
42 U.S.C. 1437d(j), 42 U.S.C. 3535(d), 1437z-10.
(b)
(d)
(f)
The revisions and additions read as follows:
(a) * * *
(2)
(3) Moving to Work (MTW) PHAs operating under the MTW Standard Agreement shall not be scored in PHAS unless the PHA elects to be scored. If the PHA elects to be scored, the agency shall continue to be scored for the duration of the demonstration. MTW PHAs operating under the MTW Operations Notice shall be subject to this rule.
(b) [Reserved]
(a)
(b)
(1) The physical condition indicator accounts for 40 percent (40 points) of the overall PHAS score. The score for this indicator is obtained as indicated in subpart B of this part.
(2) The financial condition indicator accounts for 30 percent (30 points) of the overall PHAS score. The score for this indicator is obtained as indicated in subpart C of this part.
(3) The management operations indicator accounts for 30 percent (30 points) of the overall PHAS score. The score for this indicator is obtained as indicated in subpart D of this part.
(4) The Capital Fund program indicator is not awarded points in the overall PHAS score, though when a PHA fails the Capital Fund program indicator, they will be designated as a Capital Fund troubled performer. The evaluation for this indicator is obtained as indicated in subpart E of this part.
All PHAs that receive a PHAS assessment shall receive a performance designation, unless HUD exercises authority at § 902.66 to withhold a designation. The performance designation is based on the overall PHAS score and the four indicators, as set forth below.
(a) * * *
(1) A PHA that achieves a score of at least 60 percent of the points available under the financial condition, physical condition, and management operations indicators, receives a passing evaluation under the Capital Fund program indicator, and achieves an overall PHAS score of 90 percent or greater of the total available points under PHAS shall be designated a high performer. A PHA shall not be designated a high performer if it scores below the threshold established for any indicator.
(b)
(2) At HUD's discretion, a standard performer may be required to submit and operate under a Corrective Action Plan. At HUD's discretion, HUD may elect to craft Corrective Action Plans rather than to have the PHA submit a Corrective Action Plan.
(d)
(e)
The frequency of a PHA's PHAS assessment is determined by the size of the PHA's Low-Rent program and its PHAS designation. HUD may, due to unforeseen circumstances or other cause as determined by HUD, extend the time between assessments or suspend or skip assessments by direct notice to the PHA and relevant resident organization or resident management entity, and any other general notice that HUD deems appropriate. PHAs may request that HUD extend the time between PHAS assessments in accordance with such requirements as HUD may issue by Notice, and HUD may grant requests for good cause when HUD deems it appropriate.
(a) * * *
(3) All other small PHAs may receive a PHAS assessment every year, including a PHA that is designated as troubled in accordance with § 902.75.
(4) Properties of small PHAs will be inspected as described in § 5.705(c).
(b) * * *
(2) The physical condition score for each project will determine the frequency of inspections of each project in accordance with the inspection cycle laid out in § 5.705(c). The PHAS physical condition indicator score for an assessment year shall be calculated by taking the unit-weighted average of the most recent physical condition score for each project, except that, starting July 1, 2023, no new physical condition indicator will be issued for a PHA until every project under the PHA has been inspected on or after July 1, 2023. If projects are not inspected in accordance with the cycle laid out in § 5.705(c), the assessment year will be extended only for the physical inspection indicator until such time as the relevant inspections are performed to ensure that the last physical condition score of record will not be reused for future assessments. HUD may exercise discretion to skip the assessment should a delayed physical condition inspection occur 6 months after the assessment year ends. A PHA will not receive an overall PHAS assessment score until all inspections are completed.
(4) In the first, baseline year, each PHA will receive an evaluation on all four PHAS indicators (physical condition, financial condition, management operations, and Capital Fund program), which will be used to generate their overall PHAS score. In subsequent years, if the physical inspection schedule requires a new inspection for a PHA property, the physical condition score for that property will be based upon the new inspection. If a new physical inspection is not required that year, the physical condition score for that property will be based upon the most recent physical inspection. This baseline year will also be used to determine the next PHAS assessment for PHAs subject to small PHA deregulation.
(b)
(b)
(1)
(2)
(3)
(c)
(d)
(2) In order for a PHA to receive a passing score under the financial condition indicator, the PHA must achieve a score of at least 18 points, or 60 percent of the available points under this indicator.
(3) A PHA that receives fewer than 18 points available under this indicator will be categorized as a substandard financial condition agency.
(a) * * *
(2)
(3)
(b)
(b)
(c)
(2) In order to receive a passing score under the management operations indicator, a PHA must achieve a score of at least 18 points or 60 percent.
(3) A PHA that receives fewer than 18 points will be categorized as a substandard management operations agency.
(a)
(c)
(d)
(1) PHAs are responsible to ensure that their Capital Fund program information is submitted to eLOCCS by the submission due date.
(2) A PHA may not appeal its PHAS score, Capital Fund program indicator failure, or both, based on the fact that it did not submit its Capital Fund program information to eLOCCS and/or the PIC systems by the submission due date.
(a)
(b)
(2) In order to receive a passing evaluation under the Capital Fund program indicator, a PHA must obligate at least 90 percent of Capital Fund program grants as documented in eLOCCS (or its successor) within the time required by statute or have HUD approved extensions under section 9(j)(2) of the Act (42 U.S.C. 1437g(j)(2)).
The revision to read as follows:
(a)
The revision to read as follows:
(b)
(2) An overall PHAS score will be issued for each PHA one month after all indicator scores for the assessment year have been finalized, unless HUD uses the authority in § 902.66 to withhold a component score or overall PHAS score. The overall PHAS score becomes the PHA's final PHAS score after any adjustments requested by the PHA and determined necessary under the processes provided in §§ 902.25(d), 902.35(a), and 902.68; any adjustments resulting from the appeal process provided in § 902.69; and any adjustments determined necessary as a result of the independent public accountant (IPA) audit.
(3) Each PHA (or RMC) shall post a notice of its final PHAS score and designation in appropriate conspicuous and accessible locations in its offices within 2 weeks of receipt of its final PHAS score and designation. In addition, HUD will post every PHA's PHAS score and designation on HUD's internet site.
(a)
(2) HUD may withhold, deny or rescind incentives or high performer designation or standard performer designation, including in but not limited to circumstances in which a PHA:
(i) Is operating under a special agreement with HUD (
(ii) Is involved in litigation that bears directly upon the physical, financial, or management performance of a PHA;
(iii) Is operating under a court order;
(iv) Demonstrates substantial evidence of fraud or misconduct, including evidence that the PHA's certifications, submitted in accordance with this part, are not supported by the facts, as evidenced by such sources as a HUD review, routine reports, an Office of Inspector General investigation/audit, an independent auditor's audit, or an investigation by any appropriate legal authority;
(v) Demonstrates substantial noncompliance in one or more areas of a PHA's required compliance with applicable laws and regulations, including areas not assessed under PHAS. Areas of substantial noncompliance include, but are not limited to, noncompliance with civil rights, nondiscrimination and fair housing laws and regulations, or the ACC. Substantial noncompliance casts doubt on the capacity of a PHA to preserve and protect its public housing projects and operate them consistent with federal laws and regulations; or
(vi) Demonstrates other egregious performance issues not reflected in
(3) HUD may withhold, deny, or rescind substandard performer or troubled performer designation and accompanying requirements at its discretion. HUD may substitute other corrective requirements when HUD determines it is necessary.
(4) HUD may withhold, deny, or rescind component scores or an overall PHAS score at its discretion. HUD must notify the PHA when scores are withheld, denied, or rescinded, provide the basis for the decision, and allow for appeal as described in § 902.69. At the time of withholding, denying, or rescinding scores, HUD may also require the PHA to undertake corrective actions as specified in § 902.73.
(b)
(c)
(a)
(1) Appeal its troubled performer designation;
(2) Appeal its final overall PHAS score; and
(3) Appeal actions under § 902.66.
(b)
(2) A PHA may not appeal its PHAS score, Capital Fund program score, or both, based on the fact that it did not submit its Capital Fund program information to eLOCCS or updated profile information in PIC or subsequent PIC replacement system by the submission due date.
(c)
(2) An appeal of a troubled performer designation must include the PHA's supporting documentation and reasons for the appeal. An appeal of a PHAS score must be accompanied by the PHA's evidence that a material error occurred. An appeal submitted to HUD without supporting documentation will not be considered and will be returned to the PHA.
(d)
(e)
(f)
(2) HUD will issue a written decision on all appeals made under this section.
(a) * * *
(2)
(b) * * * Relief from any procedural requirement that may be provided under this section does not mean that a PHA is relieved from compliance with the provisions of federal law and regulatory requirements. * * *
(a)
(1) HUD may require a PHA to correct deficiencies in performance within a time period as specified by HUD when HUD determines it is necessary to do so on the basis of a component score, overall PHAS score or performance designation, or performance trend. HUD may require such action as a result of performance at the Asset Management Project (AMP) or PHA level (
(2) When HUD exercises authority at § 902.66 to withhold, deny, or rescind a score or designation, HUD may also require a PHA to correct deficiencies in performance or undertake other corrective action, in a time period as specified by HUD. If the PHA is subsequently identified as a troubled or substandard performer after being required to undertake corrective actions, such corrective actions may be later incorporated into a Memorandum of Agreement or Corrective Action Plan, as appropriate.
(b)
(2)
(c)
(2) The PHA (or DF-RMC or RMC) will provide the field office with its reasons for lack of progress in negotiating, executing, or carrying out the Corrective Action Plan or making the corrective actions otherwise required by HUD, within 30 days of the PHA's receipt of the noncompliance notification. HUD will advise the PHA as to the acceptability of its reasons for lack of progress.
(3) If HUD determines that the reasons the PHA (or DF-RMC or RMC) has provided for lack of progress are unacceptable, HUD will notify the PHA (or DF-RMC or RMC) that it will take such actions as it may determine appropriate in accordance with the provisions of the Act and other statutes, the ACC, this part, and other HUD regulations, including, but not limited to, the remedies available for substantial default.
The revisions read as follows:
(b)
(5) The PHA's commitment to take all prescribed actions to achieve the targets;
(d) * * *
(1)
(2)
(g) * * *
(2) For purposes of paragraph (g) of this section, substantial improvement is defined as the improvement required by paragraph (d) of this section. The maximum period of time for remaining in troubled performer status before being referred to the Assistant Secretary is 2 years after the initial notification of the troubled performer designation. Therefore, the PHA must make substantial improvement in each assessment year of this 2-year period.
(3) The following example illustrates the provisions of paragraph (g)(1) of this section:
A PHA receives an overall PHAS score of 50 points; 60 points is a passing score. The PHA must achieve at least 55 points overall (50 percent of the 10 points necessary to achieve a passing score of 60 points) on the next PHAS assessment that is at least 12 months after the initial notice of the troubled performer designation to continue recovery efforts. In the second year, the PHA must achieve a minimum score of 60 points overall (a passing score) on the PHAS assessment that is at least 24 months after the initial notice of the troubled performer designation. If the PHA fails to achieve the 5-point increase on the year-one assessment, or if the PHA achieves the 5 point increase on the year-one assessment, but fails to achieve the minimum passing score of 60 points on the year-two assessment, HUD will notify the PHA that it will take such actions as it may determine appropriate in accordance with the provisions of the ACC and other HUD regulations, including, but not limited to, the remedies available for substantial default.
Upon a PHA's designation as a Capital Fund troubled performer, the PHA will be subject to appropriate oversight and actions by HUD. HUD may require a PHA to correct deficiencies in performance within a time period as specified by HUD. The requirements to correct deficiencies, and consequences for failure to correct deficiencies so identified, will otherwise be the same as
(a)
The revisions read as follows:
(c)
(5) The PHA's commitment to take all prescribed actions to achieve the targets;
(a)
(2) HUD may withhold, deny, or rescind incentives or high performer designation or non-troubled performer designation, including in but not limited to circumstances in which a PHA:
(i) Is operating under a special agreement with HUD (
(ii) Is involved in litigation that bears directly upon the physical performance of a PHA;
(iii) Is operating under a court order;
(iv) Demonstrates substantial evidence of fraud or misconduct, including evidence that the PHA's certifications, submitted in accordance with this part, are not supported by the facts, as evidenced by such sources as a HUD review, routine reports, an Office of Inspector General investigation/audit, an independent auditor's audit, or an investigation by any appropriate legal authority;
(v) Demonstrates substantial noncompliance in one or more areas of a PHA's required compliance with applicable laws and regulations, including areas not assessed under the small rural assessment. Areas of substantial noncompliance include, but are not limited to, noncompliance with civil rights, nondiscrimination and fair housing laws and regulations, or the ACC. Substantial noncompliance casts doubt on the capacity of a PHA to preserve and protect its public housing projects and operate them consistent with federal laws and regulations; or
(vi) Demonstrates other egregious performance issues not reflected in PHAS component score that require significant corrective action, as HUD determines necessary.
(3) HUD may withhold, deny, or rescind non-troubled or troubled performer designation and accompanying requirements at its discretion. HUD may substitute other corrective requirements when HUD determines it is necessary.
(4) HUD may withhold, deny, or rescind an overall PHAS score at its discretion. HUD must notify the PHA when scores are withheld, denied, or rescinded, provide the basis for the decision, and allow for appeal as described in § 902.109.
(a)
(1) Appeal its troubled performer designation; and
(2) Appeal any actions taken under § 902.107.
(c)
(2) An appeal of a troubled performer designation must include the PHA's supporting documentation and reasons for the appeal. An appeal of an assessment score must be accompanied by the PHA's evidence that a material error occurred.
(d)
(e)
(f)
(2) HUD will issue a written decision on all appeals made under this section.
The remedies for small rural PHAs with troubled public housing programs that remain troubled under § 902.108 will be the same as those remedies for PHAs assessed under PHAS as described in § 902.83.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of proposed rulemaking (NPRM).
FMCSA proposes to amend its November 16, 2023, final rule, “Broker and Freight Forwarder Financial Responsibility,” by extending the compliance date for certain provisions from January 16, 2025, to January 16, 2026. This action is being proposed because FMCSA has determined that only its forthcoming online registration system will be used to accept filings and track notifications, and this functionality will not be added to its legacy systems. As the new system is not expected to be available before January 16, 2025, FMCSA proposes to extend the compliance date to provide regulated entities time to begin using and familiarizing themselves with the system before compliance is required.
Comments must be received on or before November 19, 2024. Comments should be limited to the proposed change in the compliance date.
You may submit comments identified by Docket Number FMCSA-2024-0280 using any one of the following methods:
•
•
•
•
Ana Alvarez, Financial Analyst, Office of Registration, Financial Responsibility Filings Division, FMCSA, 1200 New Jersey Avenue SE, West Building, 6th Floor, Washington, DC 20590; (202) 366-0401;
FMCSA organizes this NPRM as follows:
If you submit a comment, please include the docket number for this NPRM (FMCSA-2024-0280), indicate the specific section of this document to which your comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period.
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to the 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 the NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission that constitutes CBI as “PROPIN” to indicate it contains proprietary information. FMCSA will treat such marked submissions as confidential under the Freedom of Information Act, and they will not be placed in the public docket of the NPRM.
Submissions containing CBI should be sent to Mr. Brian Dahlin, Chief, Regulatory Evaluation Division, Office of Policy, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 or via email at
To view any documents mentioned as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its regulatory process. DOT posts these comments, including any personal information the commenter provides, to
FMCSA proposes to extend certain compliance dates in the 2023 final rule, “Broker and Freight Forwarder Financial Responsibility” (88 FR 78656, Nov. 16, 2023), from January 16, 2025, to January 16, 2026, creating a single compliance date for all provisions in the rule. This extension will ensure that parties required to comply with the regulations have sufficient opportunity to register in the new system and begin using it, and that FMCSA is able to properly process and respond to such filings. The provisions affected by this extension are:
1. Immediate suspension of broker/freight forwarder operating authority. When a broker or freight forwarder's available financial security falls below $75,000, FMCSA shall suspend its operating authority registration.
2. Surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency. If a surety/trustee becomes aware that a broker or freight forwarder is experiencing financial failure or insolvency, it must notify FMCSA and initiate cancelation of the financial responsibility.
3. Enforcement authority and penalties for financial responsibility providers who do not comply with the regulations. FMCSA is incorporating the statutorily mandated penalties into its regulations. After notice and an opportunity for a hearing, surety companies or financial institutions who violate 49 CFR 387.307 will be ineligible to provide financial responsibility for 3 years and may also be subject to a civil penalty.
This extension is necessary so that FMCSA can implement its new online registration system and make it available to entities required to register and make filings in the system. This extension is also intended to provide users with an opportunity to begin using, and become familiar with, the new online registration system before compliance with the system becomes mandatory. The planned release for the new modernized registration system is 2025.
The 2023 Broker and Freight Forwarder Financial Responsibility final regulatory impact analysis (RIA) estimated costs for compliance and implementation among brokers, freight forwarders, surety bond and trust fund providers, and the Federal government. This proposed rule would delay certain provisions requiring filings in the online registration system until January 16, 2026, resulting in all provisions of the rule becoming effective at the same time.
Despite the delayed compliance for certain provisions, FMCSA finds that the benefits stipulated in the 2023 final rule remain unchanged by this proposed rule. The provision mandating that brokers and freight forwarders maintain assets readily available in trust funds, will still take effect as originally scheduled, on January 16, 2026. Brokers and freight forwarders, surety bond and trust fund providers would incur cost savings by not being required to file documentation relating to certain other provisions until January 16, 2026. FMCSA would also incur cost savings in delaying the enforcement of several provisions of the 2023 final rule. In conclusion, the Agency finds that this proposed rule would maintain all benefits and reduce costs by a de minimis amount for all parties subject to the 2023 final rule.
The legal basis of the Broker and Freight Forwarder Financial Responsibility final rule, set forth at 88 FR 78658, also serves as the legal basis for this NPRM. The statutory authority identified in that discussion is 49 U.S.C. 13906, which contains requirements for the financial security of brokers and freight forwarders and directs the Secretary to issue regulations to implement and enforce these requirements. Authority to carry out and enforce these provisions has been delegated to the Administrator of FMCSA (49 CFR 1.87(a)(5)).
As discussed in the final rule, 49 CFR 387.403T(c) makes any requirements applicable to broker of property surety bonds and trust funds in § 387.307 applicable to the surety bond or trust fund required of freight forwarders as well.
On November 16, 2023, FMCSA published a final rule adopting regulations to implement 49 U.S.C. 13906(b) and (c) (88 FR 78656). The final rule became effective 60 days later, on January 16, 2024. However, compliance with the provisions relating to immediate suspension, financial failure or insolvency, and penalties for trust or surety providers who fail to comply with the regulations is not required until January 16, 2025, and full compliance with all of the final rule's provisions is not required until 2 years after the effective date, beginning on January 16, 2026.
FMCSA proposes to extend the compliance date for the provisions of the Broker and Freight Forwarder Financial Responsibility rule relating to immediate suspension, financial failure or insolvency, and penalties for trust or surety providers who fail to comply with the regulations from January 16, 2025, to January 16, 2026, by amending the expiration date of the temporary rule governing current practices, § 387.307T, and the compliance dates in § 387.307. This extension will create a single compliance date for all provisions in the rule, allow FMCSA to implement the new online registration system, and ensure that filers are familiar with the online registration system and able to perform all duties mandated by the rule prior to the compliance date.
The final rule discusses and requires online filing of documents. FMCSA always intended to build this functionality into its forthcoming online registration system.
In addition, FMCSA finds that without certain automated processes currently under development in the new system, effective compliance management would be compromised. Specifically, the Agency believes that tracking and processing drawdown notifications manually would be inefficient, leading to delays, higher administrative costs, and potential compliance risks for both FMCSA and the industry. The ability to efficiently suspend the operating authority of brokers and freight forwarders who fail to maintain the required financial security within the 7-day regulatory time frame depends upon both the regulated entities and the Agency being able to utilize a fully functional online filing system. For more detailed information regarding the launching of the new online registration system, stakeholders are encouraged to visit
For the reasons mentioned above, as well as to provide the public with the notice and opportunity for comment required by the Administrative Procedure Act (5 U.S.C. 553) FMCSA proposes to extend the compliance date for the provisions relating to immediate suspension, financial failure or insolvency, and penalties for trust or surety providers who fail to comply with the regulations. The new compliance date, January 16, 2026, would align with the date already set for the other provisions in the rule.
FMCSA has considered the impact of this NPRM under E.O. 12866 (58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory Review, and amended by E.O. 14094 (88 FR 21879, Apr. 11, 2023), Modernizing Regulatory Review, as well as the impact under DOT regulatory policies and procedures (DOT Order 2100.6A, dated June 7, 2021). This NPRM is not a significant regulatory action under section 3(f) of E.O. 12866, as amended. Accordingly, OMB has not reviewed it under that E.O.
The Regulatory Flexibility Act (5 U.S.C. 601
This proposed rule would extend the compliance date for specific provisions of the 2023 final rule, “Broker and Freight Forwarder Financial Responsibility,” to January 16, 2026. The provisions already scheduled for compliance on January 16, 2026, would not be affected. The rule would impact small entities such as surety bond and trust fund providers, brokers, and freight forwarders. The extension would provide small entities with additional time to register in the new online registration system and understand its operations and functionalities. By delaying the submission of documentation for certain provisions until January 16, 2026, these entities would also realize de minimis cost savings.
Consequently, I certify that this action would not have a significant economic impact on a substantial number of small entities.
In accordance with section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), FMCSA wants to assist small entities in understanding this proposed rule so they can better evaluate its potential effects on themselves and participate in the rulemaking initiative. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the person listed under
Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to the Small Business Administration's Small Business and Agriculture Regulatory Enforcement Ombudsman (Office of the National Ombudsman, see
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) requires Federal agencies to assess the effects of their discretionary regulatory actions. The Act addresses actions that may result in the expenditure by State, local, or Tribal government, in the aggregate, or by the private sector of $200 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2023 levels) or more in any 1 year. This proposed rule would not result in such an expenditure, so the analytical requirements of UMRA do not apply.
Due to the proposed change of compliance date, the existing Information Collection Requirements pertaining to broker and freight forwarder financial responsibilities would be updated at a later date.
A rule has implications for federalism under section 1(a) of E.O. 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
FMCSA has determined that this proposal would not have substantial direct costs on or for States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this proposal would not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.
The Consolidated Appropriations Act, 2005,
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency that receives records contained in a system of records from a Federal agency for use in a matching program.
The E-Government Act of 2002,
In addition, the Agency submitted a Privacy Threshold Assessment (PTA) to evaluate the risks and effects the proposed rulemaking might have on collecting, storing, and sharing personally identifiable information. The PTA has been submitted to FMCSA's Privacy Officer for review and preliminary adjudication and will be submitted to DOT's Privacy Officer for review and final adjudication.
This rulemaking does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
FMCSA analyzed this proposed rule pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321
As required by 5 U.S.C. 553(b)(4), a summary of this proposed rule can be found on the FMCSA website at
Administrative practice and procedure, Brokers, Freight forwarders, Hazardous materials transportation, Highway safety, Highway and roads, Motor carriers, Motor vehicle safety, Penalties.
Buses, Freight, Freight forwarders, Hazardous materials transportation, Highway safety, Insurance, Intergovernmental relations, Motor carriers, Motor vehicle safety, Moving of household goods, Penalties, Reporting and recordkeeping requirements, Surety bonds.
For the reasons set forth in the preamble, FMCSA proposes to amend 49 CFR parts 386 and 387 as follows:
28 U.S.C. 2461 note; 49 U.S.C. 113, 1301 note, 31306a; 49 U.S.C. chapters 5, 51, 131-141, 145-149, 311, 313, and 315; and 49 CFR 1.81, 1.87.
(g) * * *
(24) Beginning on January 16, 2026, a surety company or financial institution for a broker or freight forwarder pursuant to § 387.307 of this subchapter that violates 49 U.S.C. 13906(b) or (c) or § 387.307:
(i) Is liable to the United States for a penalty of $12,882 for each violation; and
(ii) Will be ineligible to provide broker financial security for 3 years.
49 U.S.C. 13101, 13301, 13906, 13908, 14701, 31138, 31139; sec. 204(a), Pub. L. 104-88, 109 Stat. 803, 941; and 49 CFR 1.87.
The revisions read as follows:
This section is effective January 16, 2026.
(b)
(c) * * *
(6) An insurance company; or
This section will remain in effect until January 16, 2026.
Issued under the authority of delegation in 49 CFR 1.87.
Forest Service, Agriculture (USDA).
Notice of meeting.
The Virginia Resource Advisory Committee (RAC) will hold a public meeting according to the details shown below. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act (FACA). The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act, as well as make recommendations on recreation fee proposals for sites on the George Washington and Jefferson National Forests, consistent with the Federal Lands Recreation Enhancement Act.
A virtual meeting will be held on Tuesday, November 19, 2024, 1 p.m. to 4 p.m. Eastern Standard Time.
All committee meetings are subject to cancellation. For status of the meeting prior to attendance, please contact the person listed under
This meeting will be held virtually. The public may join via TEAMS virtual meeting at: meeting ID 225 975 140 125 and passcode: RqCG7H. Dial in by phone: +1 202-650-0123, 642630862#. Committee information and meeting details can be found at the following website:
Gwen Mason, Designated Federal Officer, by phone at (540) 265-5173 or email at
The purpose of the meeting is to:
The agenda will include time for individuals to make oral statements of three minutes or less. Individuals wishing to make an oral statement should make a request in writing at least three days prior to the meeting date to be scheduled on the agenda. Written comments may be submitted to the Forest Service up to 14 days after the meeting date listed under
Please contact the person listed under
USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Equal opportunity practices in accordance with USDA's policies will be followed in all appointments to the committee. To ensure that the recommendations of the committee have taken into account the needs of the diverse groups served by the USDA, membership shall include, to the extent practicable, individuals with demonstrated ability to represent the many communities, identities, races, ethnicities, backgrounds, abilities, cultures, and beliefs of the American people, including underserved communities. USDA is an equal opportunity provider, employer, and lender.
Natural Resources Conservation Service, USDA.
Notice of availability; record of decision.
Natural Resources Conservation Service (NRCS), an agency in the U.S. Department of Agriculture, has prepared a Notice of Availability for Record of Decisions (ROD) for Environmental Impact Statements (EIS) for Etowah River Watershed Dam No.13-A (Russel Creek Reservoir Multipurpose Project) in Dawson County, Georgia; Pocasset River, Rhode Island; Odessa Subarea Special Study Project in Adams, Franklin, Grant, and Lincoln counties, Washington; and Cart Creek Site 1 of the North Branch Park River Watershed in North Dakota.
• You may request a copy of the Etowah River ROD from: Sharon Swagger, Assistant State Conservationist—Easements and Water Resources, 355 E Hancock Ave., Athens, GA 30601;
• You may also download a copy of the Etowah River ROD from:
• You may request a copy of the Pocasset River ROD from: Darrell Moore, NRCS Rhode Island State Conservation Engineer, 60 Quaker Lane, Suite 40, Warwick, RI 02886;
• You may also download a copy of the Pocasset River ROD from:
• You may request a copy of the Odessa Subarea Special Study Project ROD: Jules Riley, USDA/NRCS, 11707 E Sprague Ave., Suite 301, Spokane Valley, WA 99206;
• You may also download complete text of the Odessa Subarea Special Study Project ROD and the FEIS from the project website at
• You may request a copy of the Cart Creek Site 1 of the North Branch Park River Watershed in North Dakota ROD from: Dan Hovland, USDA-ND NRCS, 220 E Rosser Avenue, Bismarck, ND 59502-1458;
• You may also view a copy of the Cart Creek Site 1 of the North Branch Park River Watershed in North Dakota ROD from:
For Etowah River, Georgia, contact Sharon Swagger; Assistant State Conservationist, at telephone 706-546-2272; or email:
Through this document, NRCS announces the availability of EIS RODs for:
• Etowah River Watershed Dam No.13-A (Russel Creek Reservoir Multipurpose Project) in Dawson County, Georgia;
• Pocasset River Flood Damage Reduction Project in Rhode Island;
• Odessa Subarea Special Study Project in Adams, Franklin, Grant, and Lincoln counties, Washington; and
• Cart Creek Site 1 of the North Branch Park River Watershed in North Dakota.
NRCS completed the EIS titled “Etowah River Watershed Dam No.13-A (formerly known as Russell Creek Reservoir Multipurpose Project)” in partnership with Etowah Water & Sewer Authority, in Dawson County, Georgia. The NRCS NOI EIS was published in the
The Final EIS (FEIS #20230100) was made available for review through Environmental Protection Agency (EPA) Central Data Exchange (CDE) system as announced in the
NRCS published the notice of intent to prepare the EIS titled “Pocasset River Flood Damage Reduction Project” in the
The Revised Final EIS (FEIS #20240084) was made available for review through EPA CDE system as announced in the
NRCS completed the EIS titled “Odessa Subarea Special Study” in partnership with U.S. Bureau of Reclamation and the Washington State Department of Ecology, Adams, Franklin, Grant, and Lincoln Counties, Washington.
The Final EIS (FEIS #20230153) was made available for review through EPA CDE system as announced in the
NRCS has prepared a ROD for the EIS titled “Cart Creek Site 1 of the North Branch Park River Watershed” in Pembina County, North Dakota. NRCS published the notice of intent to prepare the EIS in the
The Final EIS (FEIS #20240125) was made available for review through EPA CDE system as announced in the
NRCS involvement is through the Watershed Protection and Flood Prevention Act (Pub. L. 83-566, 16 U.S.C. 1001-1008).
The title and number of the Federal Assistance Program as found in the Assistance Listing
Executive Order 12372, “Intergovernmental Review of Federal Programs,” requires consultation with State and local officials that would be directly affected by proposed Federal financial assistance. The objectives of the Executive order are to foster an intergovernmental partnership and a strengthened federalism, by relying on State and local processes for State and local government coordination and review of proposed Federal financial assistance and direct Federal development. This project is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials.
Each of the RODs summarizes the findings of the Plan-EIS; these are not programmatic. Each ROD provides the basis for the NRCS decision. NRCS is the lead Federal agency responsible for the content and quality of the Plan-EIS for the purposes of National Environmental Policy Act (NEPA), Principles, Requirements, and Guidelines (PR&G) for Federal Investments in Water Resources and National Historic Preservation Act (NHPA) compliance.
Each ROD is issued as specified by the NEPA process (42 U.S.C. 4321-4347) which follows the NRCS NEPA regulations in 7 CFR part 650, subpart A, and 7 CFR part 622. The NRCS NEPA regulations adopt the Council of Environmental Quality (CEQ) NEPA regulations (40 CFR parts 1500-1508) in total.
In accordance with Federal civil rights law and USDA civil rights regulations and policies, USDA, its agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family or parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Individuals who require alternative means of communication for program information (for example, braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA TARGET Center at (202) 720-2600 (voice and telephone) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any phone). Additionally, program information may be made available in languages other than English.
To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at:
USDA is an equal opportunity provider, employer, and lender.
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 Missouri Advisory Committee (Committee) will hold a meeting on Thursday, November 14, 2024, at 2 p.m. central time. The purpose of the meeting is for the Committee to review, edit, and approve the report on Curriculum Censorship.
The meeting will take place on Thursday, November 14, 2024, at 2 p.m. central time.
David Barreras, DFO, at
Members of the public may listen to this discussion through the above call in number. An open comment period will be provided to allow members of the public to make a statement as time allows. 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. Individual who is deaf, deafblind and hard of hear hearing 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 confirmation code.
Members of the public are 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, U.S. Commission on Civil Rights, 230 S Dearborn, Suite 2120, Chicago, IL 60604. They may also be faxed to the Commission at (312) 353-8324, or emailed to Corrine Sanders 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 via
U.S. Commission on Civil Rights.
Announcement of briefing.
Notice is hereby given, pursuant to the provisions of the rules
The meeting will take place on Friday November 15, 2024, at 12:00 p.m. Central Time.
David Barreras, DFO, at
Members of the public may listen to this discussion through the above call-in number. An open comment period will be provided to allow members of the public to make a statement as time allows. 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. Individuals who are deaf, deafblind and hard of hear hearing 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 confirmation code.
Members of the public are 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, U.S. Commission on Civil Rights, 230 S. Dearborn, Suite 2120, Chicago, IL 60604. They may also be faxed to the Commission at (312) 353-8324 or emailed to Corrine Sanders 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 via
Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed new information collection, for the 2026 Census Test—Group Quarters Advance Contact (GQAC) prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, comments regarding this proposed information collection must be received on or before January 3, 2025.
Interested persons are invited to submit written comments by email to
Requests for additional information or specific questions related to collection activities should be directed to Michael Snow, Supervisory Program Analyst, Decennial Program Management Office, Decennial Census Management Division, 301-763-9912,
During the years preceding the 2030 Census, the Census Bureau will pursue its commitment to developing a well-managed, cost-effective, and high-quality decennial census. The Census Bureau will streamline data collection processes and implement new and improved methods to count the U.S. population for the 2030 Census. This includes new and improved methods for counting individuals residing in Group Quarters (GQs), such as college/university student housing, residential treatment centers, nursing/skilled-nursing facilities, group homes, correctional facilities, hospitals, and military barracks. GQ Administrators play a vital role in GQ data collection during Group Quarters Advance Contact. They provide critical updates about the facility and residents. One of the new data collection methods is to test the capability to allow GQ Administrators to electronically review, verify and update address and other frame information associated with their GQs, as well as to select a method of enumeration for their residents. The 2026 Census Test will enable the Census Bureau to test revisions to the capability to receive and extract verified and updated GQ address information electronically into a useful format prior to the subsequent Group Quarters Enumeration (GQE) operation. The specific data items that GQ Administrators will review include GQ type code, primary and secondary GQ contact name, title, telephone number and email address, name of the GQ, address of GQ, maximum number of people who could live/stay in the GQ
The Census Bureau will examine the efficiencies provided by receiving this information using a secure portal.
After the 2020 Census, the Census Bureau conducted lessons learned sessions which showed that some GQ Administrators desired to have the ability to provide GQAC operational responses electronically. During the GQAC operation, data will be collected to confirm information about the GQ that will help prepare the GQ Administrator and the field staff for the upcoming GQE operation. Specific data items include, collecting an enumeration method and depending on the method selected, scheduling an enumeration appointment.
During the 2026 Census Test, the research questions for GQAC include:
1. Can a web-based GQAC operation provide opportunities to receive GQAC data directly from GQ Administrators?
2. Can a web-based data collection instrument that receives GQ-level data directly from GQ Administrators improve efficiency and reduce cost for the GQAC operation?
3. Can a web-based data collection instrument improve completeness and quality (
The 2026 Census Test will inform the Census Bureau's technological and operational planning and design for the GQAC operation. This test provides the opportunity to evaluate the enhanced procedures and technologies for conducting GQAC.
The 2026 Census Test GQAC operation is designed to use web-based, in-office, and in-field methodologies to contact GQ Administrators prior to the enumeration. During the GQAC operation, data will be collected to confirm information about the GQ. Specific data items include collecting an enumeration method, the expected population for the GQ on Census Day, April 1, 2026, and depending on the method selected, scheduling an enumeration appointment.
The 2026 Census Test GQAC will be fielded to 434 GQ facilities across two regional census areas that encompasses six test sites in Western Texas; Tribal Lands within Arizona; Colorado Springs, CO; Western North Carolina; Spartanburg, SC; and Huntsville, AL. The data collection period is February 2026 through March 2026. The Census Bureau will study the potential for using a Web-Based GQAC for frame building and enumeration for the 2030 Census. Thresholds will be used as input to determine completeness and quality of GQ facility level data provided by the GQ Administrators.
• During Web-Based GQAC, GQ Administrators will log into a secure GQAC instrument to review, verify, and if needed, update the GQ information in preparation for conducting the upcoming enumeration operations.
• During In-Office GQAC, office clerks will telephone GQ Administrators (using the phone number on file for the case or researching it using the internet) to conduct interviews while capturing responses and making entries into the In-Office GQAC instrument.
• During the In-Field GQAC, census workers will follow-up with GQs that did not include pre-enumeration information such as contact information. Census workers will visit each identified GQ and conduct an in-person interview with the GQ Administrator using an automatic hand-held device to capture the same information as a Web-Based GQAC and an In-Office GQAC.
• The information below will be asked of GQ Administrators across all three methods of data collection, web-based, in-office and in-field GQAC:
○ Verify or update the GQ name, address, GQ contact person's information, GQ type code, and maximum population.
○ Collect the following information to assist enumerators in conducting the upcoming enumeration operations:
Preferred method of enumeration.
Date and time for the Census Bureau to meet with the contact person to conduct the enumeration based on the enumeration method collected.
Maximum population for the GQ.
Expected population for the GQ on Census Day, April 1, 2026.
Whether the GQ serves females only, males only, or both.
Whether the GQ residents speak languages other than English. If the GQ resident speaks another language, an interpreter or the GQ administrator will assist.
Whether there are security, privacy, or confidentiality concerns.
Whether there are logistics concerns while conducting enumeration such as facility access requirements and procedures.
Whether the contact person was responsible for other GQs.
•
• Test the use of automated instruments to conduct Web-based, In-Office, and In-Field GQAC.
• Optimize the use of electronic response records to support the creation of the initial GQ universe for the GQAC Frame prior to enumeration.
• Utilize the GQ Contact Frame Maintenance system that will include GQ contact information, such as GQ facility name (linked to the possible GQs, name of GQ Administrator/primary contact person and secondary point of contact, phone number of contact person, and email address of GQ contact persons).
• Implement a process to virtually complete the Special Sworn Status form for GQ Administrators who select the Web-Based GQAC.
• Implement a system to track/maintain completed Special Sworn Status forms (BC-1759) collected during the American Community Survey and other Census Bureau web-based surveys. This will help minimize the number of GQ Administrators who will be required to virtually complete a Special Sworn Status form during GQAC.
During the 2026 Census Test GQAC operation, data will be collected electronically using three modes: A web-based data collection application, in-office conducting a phone interview collecting data in the GQAC automated instrument, and in-field conducting an in-person interview collecting data on a hand-held device.
The U. S. Census Bureau will mail letters to all 434 GQs in the test area, utilizing mail delivery service such as FedEx, to inform the GQ Administrator about the upcoming GQAC operation.
During the Web GQAC, GQ Administrators will log into a secure GQAC data collection instrument to review, verify, and, if needed, update the GQ information in preparation for conducting the upcoming enumeration operations.
At the start of the operation, the system will be programmed to automatically send Web GQAC Introductory Emails to GQ Administrators who meet the following conditions:
• Valid email address.
• Sworn-in point of contact.
• College/university student housing (Type code 501) or federal and state correctional facility (Type codes 101, 102, 103), Military Barracks/and Dormitories (Type code 601) (Residents living or staying in these type codes will be allowed to submit their enumeration over the internet using GQ internet Self-Response (ISR)).
• GQ(s) linked to their respective facility.
The email for the GQ Administrators will contain the following information: Login information (GQ user ID), link to the Web GQAC questionnaire, instructions and overview, and pertinent dates such as the start and end dates of the Web-Based GQAC.
The contact strategy for the Web GQAC is as follow:
• Initial email will be sent to the GQ Administrator on February 2, 2026, the start date of the operation.
• First reminder email for nonresponding GQs will be sent five (5) business days after the initial email.
• Second reminder email for nonresponding GQs will be sent three (3) business days after the first reminder emails.
• Third and final reminder email for nonresponding GQs will be sent three (3) business days after the second reminder emails.
During In-Office GQAC, office clerks will call the GQ Administrator (using the phone number on file for the case or researching it using the internet) and conduct interviews while collecting responses and making entries into the clerk mode of the same secure GQAC data collection instrument used by GQ Administrators to verify and/or update the GQ information in preparation for conducting the upcoming enumeration operations.
The In-Office GQAC phone operation will include the following:
• Cases that did not meet the Web GQAC criteria stated above
• Nonresponding cases from the Web GQAC
• Email bounce backs from Web GQAC or non-responding contacts from the Web GQAC mailout.
The contact strategy for the In-Office GQAC is as follow:
• Three phone attempts: attempt 1, attempt 2, attempt 3 (final).
• After the 3rd (final) attempt, case(s) will be assigned to the Census Field Supervisor to conduct an In-Field GQAC.
The In-Field GQAC visit operation will include all unresolved cases from the Web GQAC and In-Office GQAC.
• Census workers will follow-up in the field with GQs for which pre-enumeration information such as contact information was not obtained.
• Census workers will visit each identified GQ and conduct an in-person interview with the GQ contact person using an automated hand-held device to capture the same information collected during Web GQAC and In-Office GQAC.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include, or summarize, each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Merck, Sharp & Dohme LLC submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Rahway, New Jersey, within Subzone 49Y. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on October 18, 2024.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished products for research and development include MK-2828 and MK-3214 cardiovascular disease drug products, MK-2420 autoimmune disease drug product, MK-4646 HIV drug product, and MK-0472 oncology drug product (duty free).
The proposed foreign-status materials/components include MK-2828 and MK-3214 cardiovascular disease active pharmaceutical ingredients (API), MK-2420 autoimmune disease API, MK-4646 HIV API, and MK-0472 oncology API (duty rate, 6.5%). The request indicates that certain materials/components are subject to duties under section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Diane Finver at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction.
The U.S. Department of Commerce (Commerce) published notice in the
Samuel Brummitt, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-7851.
On October 3, 2024, Commerce published in the
In the
This notice is issued and published in accordance with sections 735(d) and 777(i) of the Tariff Act of 1930, as amended, and 19 CFR 351.210(c).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
In accordance with the Tariff Act of 1930, as amended (the Act), the U.S. Department of Commerce (Commerce) is automatically initiating the five-year reviews (Sunset Reviews) of the antidumping and countervailing duty (AD/CVD) order(s) and suspended investigation(s) listed below. The U.S. International Trade Commission (ITC) will publish notice of
Applicable November 4, 2024.
Commerce official identified in the
Commerce's procedures for the conduct of Sunset Reviews are set forth in its
In accordance with section 751(c) of the Act and 19 CFR 351.218(c), we are initiating the Sunset Reviews of the following antidumping and countervailing duty order(s) and suspended investigation(s):
As a courtesy, we are making information related to sunset proceedings, including copies of the pertinent statute and Commerce's regulations, Commerce's schedule for Sunset Reviews, a listing of past revocations and continuations, and current service lists, available to the public on Commerce's website at the following address:
In accordance with section 782(b) of the Act, any party submitting factual information in an AD/CVD proceeding must certify to the accuracy and completeness of that information. Parties must use the certification formats provided in 19 CFR 351.303(g). Commerce intends to reject factual submissions if the submitting party does not comply with applicable revised certification requirements.
Pursuant to 19 CFR 351.103(d), Commerce will maintain and make available a public service list for these proceedings. Parties wishing to participate in any of these five-year reviews must file letters of appearance as discussed at 19 CFR 351.103(d). To facilitate the timely preparation of the public service list, it is requested that those seeking recognition as interested parties to a proceeding submit an entry of appearance within 10 days of the publication of the Notice of Initiation. Because deadlines in Sunset Reviews can be very short, we urge interested parties who want access to proprietary information under administrative protective order (APO) to file an APO application immediately following publication in the
Domestic interested parties, as defined in section 771(9)(C), (D), (E), (F), and (G) of the Act and 19 CFR 351.102(b), wishing to participate in a Sunset Review must respond not later than 15 days after the date of publication in the
If we receive an order-specific notice of intent to participate from a domestic interested party, Commerce's regulations provide that
Note that Commerce has amended certain of its requirements pertaining to
In prior proceedings we have encouraged interested parties to provide an executive summary of their comments, including footnotes. In these sunset reviews, we request that interested parties provide at the beginning of their comments, an executive summary for each issue raised in their comments. Further, we request that interested parties limit their public executive summary of each issue to no more than 450 words, not including citations. We intend to use the public executive summaries as the basis of the comment summaries included in the decision memorandum that will accompany the notice to be published in the
This notice of initiation is being published in accordance with section 751(c) of the Act and 19 CFR 351.218(c).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 21, 2024.
Thomas Cloyd at 202-482-1246 (the People's Republic of China (China)), Ajay Menon at 202-482-0208 (Germany), Dakota Potts at 202-482-0223 (India), and Andrew Hat at 202-482-1058 (Saudi Arabia), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On September 30, 2024, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) petitions concerning imports of hexamethylenetetramine (hexamine) from China, Germany, India, and Saudi Arabia filed in proper form on behalf of Bakelite LLC (the petitioner).
Between October 2 and 11, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petitions in supplemental questionnaires.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of hexamine from China, Germany, India, and Saudi Arabia are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the meaning of section 731 of the Act, and that imports of such products are materially injuring, or threatening material injury to, the hexamine industry in the United States. Consistent with section 732(b)(1) of the Act, the Petitions were accompanied by information reasonably available to the petitioner supporting its allegations.
Commerce finds that the petitioner filed the Petitions on behalf of the domestic industry, because the petitioner is an interested party, as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support for the initiation of the requested LTFV investigations.
Because the Petitions were filed on September 30, 2024, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) for the Germany, India, and Saudi Arabia LTFV investigations is July 1, 2023, through June 30, 2024. Because China is a non-market economy (NME) country, pursuant to 19 CFR 351.204(b)(1), the POI for the China LTFV investigation is January 1, 2024, through June 30, 2024.
The product covered by these investigations is hexamine from China, Germany, India, and Saudi Arabia. For a full description of the scope of these investigations,
On October 2 and 11, 2024, Commerce requested information and clarification from the petitioner regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information that parties consider relevant to the scope of these investigations be submitted during that period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent LTFV and CVD investigations.
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of hexamine to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors of production (FOP) or cost of production (COP) accurately, as well as to develop appropriate product comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) general product characteristics; and (2) product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe hexamine, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on November 12, 2024, which is the next business day after 20 calendar days from the signature date of this notice.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product
In determining whether the petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioner provided its own production of the domestic like product in 2023.
Our review of the data provided in the Petitions, the First General Issues Supplement, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petitions.
The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioner contends that the industry's injured condition is illustrated by the significant volume and market share of subject imports; underselling and price depression and/or suppression; lost sales and revenues; and adverse impact on the domestic industry's production, capacity utilization, U.S. shipments, employment variables, capital expenditures, and sales and profitability.
The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate LTFV investigations of imports of hexamine from China, Germany, India, and Saudi Arabia. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the Country-Specific AD Initiation Checklists.
For China, Germany, and Saudi Arabia, the petitioner based export price (EP) on the POI average unit values (AUVs) derived from official U.S. import statistics for imports of hexamine produced in and exported from each country.
For Germany and India, the petitioner based NV on home market pricing information obtained for hexamine produced in and sold, or offered for sale, in the respective countries during the applicable time period.
Commerce considers China to be an NME country.
The petitioner claims that the Republic of Türkiye (Türkiye) is an appropriate surrogate country for China because it is a market economy that is at a level of economic development comparable to that of China and is a significant producer of comparable merchandise.
Interested parties will have the opportunity to submit comments regarding surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determination.
Because information regarding the volume of inputs consumed by Chinese producers/exporters was not reasonably available, the petitioner used its own production experience and product-specific consumption rates as a surrogate to value Chinese manufacturers' FOPs.
As noted above for India, the petitioner provided information indicating that the prices for hexamine sold or offered for sale in India were below the COP. Also as noted above, for Saudi Arabia, the petitioner stated that it was unable to obtain home market or third-country prices for hexamine to use as a basis for NV. Therefore, for India and Saudi Arabia, the petitioner calculated NV based on CV.
Pursuant to section 773(e) of the Act, the petitioner calculated CV as the sum of the cost of manufacturing, SG&A expenses, financial expenses, and profit.
Based on the data provided by the petitioner, there is reason to believe that imports of hexamine from China, Germany, India, and Saudi Arabia are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for hexamine for each of the countries covered by this initiation are as follows: (1) China—405.19 percent; (2) Germany—104.72 to 111.24 percent; (3) India—105.76 percent; (4) Saudi Arabia—292.32 percent.
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 732 of the Act. Therefore, we are initiating LTFV investigations to determine whether imports of hexamine from China, Germany, India, and Saudi Arabia are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of these initiations.
In the Petitions, the petitioner identified two companies in Germany (Prefere Paraform GmbH & Co Kg and Fiberpipe GFK Vertriebsgesellschaft), and two companies in Saudi Arabia (Methanol Chemicals Company and The Factory of Methanol Chemicals) as producers/exporters of hexamine.
In the Petitions, the petitioner identified four companies in India.
Commerce will post the Q&V questionnaire along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at
In the Petitions, the petitioner identified 10 companies in China as producers and/or exporters of hexamine.
Commerce will post the Q&V questionnaires along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). As stated above, instructions for filing such applications may be found on Commerce's website at
In order to obtain separate rate status in an NME investigation, exporters and producers must submit a separate rate application. The specific requirements for submitting a separate rate application in an NME investigation are outlined in detail in the application itself, which is available on Commerce's website at
Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of China, Germany, India, and Saudi Arabia via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
Commerce will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of hexamine from China, Germany, India, and/or Saudi Arabia are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the
Section 773(e) of the Act addresses the concept of particular market situation (PMS) for purposes of CV, stating that “if a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, the administering authority may use another calculation methodology under this subtitle or any other calculation methodology.” When an interested party submits a PMS allegation pursuant to section 773(e) of the Act (
Neither section 773(e) of the Act, nor 19 CFR 351.301(c)(2)(v), sets a deadline for the submission of cost-based PMS allegations and supporting factual information. However, in order to administer section 773(e) of the Act, Commerce must receive PMS allegations and supporting factual information with enough time to consider the submission. Thus, should an interested party wish to submit a cost-based PMS allegation and supporting new factual information pursuant to section 773(e) of the Act, it must do so no later than 20 days after submission of a respondent's initial section D questionnaire response.
We note that a PMS allegation filed pursuant to sections 773(a)(1)(B)(ii)(III) or 773(a)(1)(C)(iii) of the Act (
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) (
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
The scope of the investigations covers hexamine in granular form, with a particle size of 5 millimeters or less, whether stabilized or unstabilized, whether or not blended, mixed, pulverized, or grounded with other products, containing 50 percent or more hexamine by weight.
Hexamine is the common name for hexamethylene tetramine (Chemical Abstract Service #100-97-0), and is also referred to as 1,3,5,7-tetraazaadamantanemethenamine; HMT; HMTA; 1,3,5,7-tetraazatricyclo {3.3.1.13,7} decane; 1,3,5,7-tetraaza adamantane; hexamethylenamine. Hexamine has the chemical formula C
Granular hexamine that has been blended with other product(s) is included in this scope when the resulting mix contains 50 percent or more of hexamine by weight, regardless of whether it is blended with inert additives, co-reactants, or any additives that undergo self-condensation.
Subject merchandise includes merchandise matching the above description that has been processed in a third country, including by commingling, diluting, adding or removing additives, or performing any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the subject country.
Merchandise covered by the scope of the investigations can be classified in the Harmonized Tariff Schedule (HTSUS) of the United States under the subheading 2933.69.5000. The HTSUS subheading and Chemical Abstracts Service registry number are provided for convenience and customs purposes only; however, the written description of the scope is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 28, 2024.
Rebecca Trainor or Dennis McClure at (202) 482-4007 or (202) 482-5973, respectively (the People's Republic of China (China)) and Thomas Martin at (202) 482-3936 (the Socialist Republic of Vietnam (Vietnam)), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On October 8, 2024, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) petitions concerning imports of thermoformed molded fiber products (molded fiber products) from China and Vietnam filed in proper form on behalf of Genera, Tellus Products, LLC, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO (the USW), collectively, the American Molded Fiber Products Coalition (the petitioners), domestic producers of molded fiber products and a certified union, which represents workers engaged in the production of molded fiber products in the United States.
Between October 11 and 22, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petitions in supplemental questionnaires.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of molded fiber products from China and Vietnam are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the meaning of section 731 of the Act, and that imports of such products are materially injuring, or threatening material injury to, the molded fiber products industry in the United States. Consistent with section 732(b)(1) of the Act, the Petitions were accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry, because the petitioners are interested parties, as defined in sections 771(9)(C) and (D) of the Act.
Because the Petitions were filed on October 8, 2024, and because China and Vietnam are non-market economy (NME) countries, pursuant to 19 CFR 351.204(b)(1), the periods of investigation (POI) for the China and Vietnam LTFV investigations are April 1, 2024, through September 30, 2024.
The products covered by these investigations are molded fiber products from China and Vietnam. For a full description of the scope of these investigations,
On October 11 and 22, 2024, Commerce requested information and clarification from the petitioners regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information that parties consider relevant to the scope of these investigations be submitted during that period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.
Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of molded fiber products to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors of production (FOP) accurately, as well as to develop appropriate product comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on November 18, 2024, which is the next business day after 20 calendar days from the signature date of this notice.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.
In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioners provided the 2023 total production of the domestic like product for the U.S. producers and workers that support the Petitions and compared this to the estimated total U.S. production of the domestic like product for the entire U.S. molded fiber products industry.
On October 21, 2024, we received timely filed comments on industry support from Eco-Products, PBC, a U.S. importer of molded fiber products.
Our review of the data provided in the Petitions, the First General Issues Supplement, Petitioners' Rebuttal, the Second General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.
The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by the significant and increasing volume and market share of subject imports; underselling and price depression and/or suppression; lost sales and revenues; and adverse impact on the domestic industry's production, capacity utilization, employment variables, and financial performance.
The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate LTFV investigations of imports of molded fiber products from China and Vietnam. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the Country-Specific AD Initiation Checklists.
For China, the petitioners based export price (EP) on a price quote for molded fiber products produced in and exported from China and sold or offered for sale in the U.S. market during the POI.
Commerce considers China and Vietnam to be NME countries.
The petitioners claim that Malaysia is an appropriate surrogate country for China because it is a market economy that is at a level of economic development comparable to that of China and is a significant producer of comparable merchandise.
The petitioners claim that Indonesia is an appropriate surrogate country for Vietnam because it is a market economy that is at a level of economic development comparable to that of Vietnam and is a significant producer of comparable merchandise.
Interested parties will have the opportunity to submit comments regarding surrogate country selection and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determinations.
Because information regarding the volume of inputs consumed by Chinese and Vietnamese producers/exporters was not reasonably available, the petitioners used the production experience and product-specific consumption rates of a U.S. producer of molded fiber products as a surrogate to value Chinese and Vietnamese manufacturers' FOPs.
Based on the data provided by the petitioners, there is reason to believe that imports of molded fiber products from China and Vietnam are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for molded fiber products for each of the countries covered by this initiation are as follows: (1) China—477.97 percent; and (2) Vietnam—231.73 to 260.56 percent.
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 732 of the Act. Therefore, we are initiating LTFV investigations to determine whether imports of molded fiber products from China and Vietnam are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of these initiations.
In the Petitions, the petitioners identified 63 companies in China and eight companies in Vietnam as producers and/or exporters of molded fiber products.
Commerce will post the Q&V questionnaires along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under administrative protective order (APO) in accordance with 19 CFR 351.305(b). As stated above, instructions for filing such applications may be found on Commerce's website at
In order to obtain separate rate status in an NME investigation, exporters and producers must submit a separate rate application. The specific requirements for submitting a separate rate application in an NME investigation are outlined in detail in the application itself, which is available on Commerce's website at
Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of China and Vietnam via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
Commerce will notify the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of molded fiber products from China and/or Vietnam are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) (
This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).
The merchandise subject to these investigations consists of thermoformed molded fiber products regardless of shape, form, function, fiber source, or finish. Thermoformed molded fiber products are formed with cellulose fibers, thermoformed using one or more heated molds, and dried/cured in the mold.
Thermoformed molded fiber products include, but are not limited to, plates, bowls, clamshells, trays, lids, food or foodservice contact packaging, and consumer or other product packaging.
Thermoformed molded fiber products are relatively dense, with a typical fiber density above 0.5 grams per cubic centimeter, and are generally characterized by relatively smooth surfaces. They may be derived from any virgin or recycled cellulose fiber source (including, but not limited to, those sourced from wood, woody crops, agricultural crops/byproducts/residue, and agricultural/industrial/other waste). They may have any weight, shape, dimensionality, design, or size, and may be bleached, unbleached, dyed, colored, or printed. They may include ingredients, additives, or chemistries to enhance functionality including, but not limited to, anti-microbial, anti-fungal, anti-bacterial, heat/flame resistant, hydrophobic, oleophobic, absorbent, or adsorbent.
Thermoformed molded fiber products remain covered by the scope of these investigations whether the subject product is encased by exterior packaging or whether the subject product forms the outer packaging for non-subject products. They also remain covered by the scope of these investigations whether imported alone, or in any combination of subject and non-subject merchandise (
Excluded from the scope of these investigations are thermoformed molded fiber products imported as packaging material that enclose and/or surround non-subject merchandise prepackaged for final sale upon importation into the United States (
Thermoformed molded fiber products include thermoformed molded fiber products matching the above description that have been finished, packaged, or otherwise processed in a third country by performing finishing, packaging, or processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the thermoformed molded fiber products. Examples of finishing, packaging, or other processing in a third country that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the thermoformed molded fiber products include, but are not limited to, hot or after pressing, die-cutting, punching, trimming, padding, perforating, printing, labeling, dying, coloring, coating, laminating, embossing, debossing, repacking, or denesting.
Thermoformed molded fiber products are classified under subheadings 7823.70.0020 and 4823.70.0040, Harmonized Tariff Schedule of the United States (HTSUS). Imports may also be classified under subheadings 4823.61.0020, 4823.61.0040, 4823.69.0020, 4823.69.0040, 4823.90.1000, HTSUS. References to the HTSUS classification are provided for convenience and customs purposes, and the written description of the merchandise under investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 28, 2024.
Ashley Cossaart at (202) 482-0462 (the People's Republic of China (China)) and Zachary Shaykin at (202) 482-2638 (the Socialist Republic of Vietnam (Vietnam)), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On October 8, 2024, the U.S. Department of Commerce (Commerce) received countervailing duty (CVD) petitions concerning imports of thermoformed molded fiber products (molded fiber products) from China and Vietnam filed in proper form on behalf of Genera, Tellus Products, LLC, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO (the USW), collectively, the American Molded Fiber Products Coalition (the petitioners), domestic producers of molded fiber products and a certified union, which represents workers engaged in the production of molded fiber products in the United States.
Between October 11 and 22, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petitions.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that the Government of China (GOC) and the Government of Vietnam (GOV) (collectively, Governments) are providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of molded fiber products from China and Vietnam, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing molded fiber products in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating CVD investigations, the Petitions were accompanied by information reasonably available to the petitioners supporting their allegations.
Commerce finds that the petitioners filed the Petitions on behalf of the domestic industry, because the petitioners are interested parties, as defined in sections 771(9)(C) and (D) of the Act.
Because the Petitions were filed on October 8, 2024, the periods of investigation for the China and Vietnam CVD investigations are January 1, 2023, through December 31, 2023.
The products covered by these investigations are molded fiber products from China and Vietnam. For a full description of the scope of these investigations,
On October 11 and 22, 2024, Commerce requested information and
As discussed in the
Commerce requests that any factual information that parties consider relevant to the scope of the investigations be submitted during that time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified the Governments of the receipt of the Petitions and provided an opportunity for consultations with respect to the Petitions.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations.
In determining whether the petitioners have standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioners provided the 2023 total production of the domestic like product for the U.S. producers and workers that support the Petitions and compared this to the estimated total U.S. production of the domestic like product for the entire U.S. molded fiber products industry.
On October 21, 2024, we received timely filed comments on industry support from Eco-Products, PBC, a U.S. importer of molded fiber products.
Our review of the data provided in the Petitions, the First General Issues Supplement, Petitioners' Rebuttal, the Second General Issues Supplement, and other information readily available to Commerce indicates that the petitioners have established industry support for the Petitions.
Because China and Vietnam are “Subsidies Agreement Countries” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to these investigations. Accordingly, the ITC must determine whether imports of the subject merchandise from China and/or Vietnam materially injure, or threaten material injury to, a U.S. industry.
The petitioners allege that imports of the subject merchandise are benefiting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioners allege that subject imports from China and Vietnam individually exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by the significant and increasing volume and market share of subject imports; underselling and price depression and/or suppression; lost sales and revenues; and adverse impact on the domestic industry's production, capacity utilization, employment variables, and financial performance.
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 702 of the Act. Therefore, we are initiating CVD investigations to determine whether imports of molded fiber products from China and Vietnam benefit from countervailable subsidies conferred by the GOC and GOV, respectively. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the date of these initiations.
Based on our review of the Petitions, we find that there is sufficient information to initiate a CVD investigation on 29 of the 30 programs alleged by the petitioners. For a full discussion of the basis for our decision to initiate on each program,
Based on our review of the Petitions, we find that there is sufficient information to initiate a CVD investigation on all 26 programs alleged by the petitioners. For a full discussion of the basis for our decision to initiate on each program,
In the Petitions, the petitioners identified 63 companies in China and eight companies in Vietnam as producers and/or exporters of molded fiber products.
Commerce will also post the Q&V questionnaire along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under administrative protective order (APO) in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at
In accordance with section 702(b)(4)(A) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petitions has been provided to the Governments via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
Commerce will notify the ITC of its initiation, as required by section 702(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of molded fiber products from China and/or Vietnam are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors of production under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce.
Any party submitting factual information in an AD or CVD
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) (
This notice is issued and published pursuant to sections 702 and 777(i) of the Act, and 19 CFR 351.203(c).
The merchandise subject to these investigations consists of thermoformed molded fiber products regardless of shape, form, function, fiber source, or finish. Thermoformed molded fiber products are formed with cellulose fibers, thermoformed using one or more heated molds, and dried/cured in the mold.
Thermoformed molded fiber products include, but are not limited to, plates, bowls, clamshells, trays, lids, food or foodservice contact packaging, and consumer or other product packaging.
Thermoformed molded fiber products are relatively dense, with a typical fiber density above 0.5 grams per cubic centimeter, and are generally characterized by relatively smooth surfaces. They may be derived from any virgin or recycled cellulose fiber source (including, but not limited to, those sourced from wood, woody crops, agricultural crops/byproducts/residue, and agricultural/industrial/other waste). They may have any weight, shape, dimensionality, design, or size, and may be bleached, unbleached, dyed, colored, or printed. They may include ingredients, additives, or chemistries to enhance functionality including, but not limited to, anti-microbial, anti-fungal, anti-bacterial, heat/flame resistant, hydrophobic, oleophobic, absorbent, or adsorbent. Thermoformed molded fiber products may also be subject to other processing or treatments, including, but not limited to, hot or after pressing, die-cutting, punching, trimming, padding, perforating, printing, labeling, dying, coloring, coating, laminating, embossing, debossing, repacking, or denesting. Thermoformed molded fiber products subject to these investigations may also have additional design features, including, but not limited to, tab closures, venting, channeling, or stiffening.
Thermoformed molded fiber products remain covered by the scope of these investigations whether the subject product is encased by exterior packaging or whether the subject product forms the outer packaging for non-subject products. They also remain covered by the scope of these investigations whether imported alone, or in any combination of subject and non-subject merchandise (
Excluded from the scope of these investigations are thermoformed molded fiber products imported as packaging material that enclose and/or surround non-subject merchandise prepackaged for final sale upon importation into the United States (
Thermoformed molded fiber products include thermoformed molded fiber products matching the above description that have been finished, packaged, or otherwise processed in a third country by performing finishing, packaging, or processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the thermoformed molded fiber products. Examples of finishing, packaging, or other processing in a third country that would not otherwise remove the merchandise from the scope of the investigations if performed in the country of manufacture of the thermoformed molded fiber products include, but are not limited to, hot or after pressing, die-cutting, punching, trimming, padding, perforating, printing, labeling, dying, coloring, coating, laminating, embossing, debossing, repacking, or denesting.
Thermoformed molded fiber products are classified under subheadings 7823.70.0020 and 4823.70.0040, Harmonized Tariff Schedule of the United States (HTSUS). Imports may also be classified under subheadings 4823.61.0020, 4823.61.0040, 4823.69.0020, 4823.69.0040, 4823.90.1000, HTSUS. References to the HTSUS classification are provided for convenience and customs purposes, and the written description of the merchandise under investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable October 21, 2024.
Eliza Delong at 202-482-3878 (the People's Republic of China (China)), and Nicholas Czajkowski at 202-482-1395 (India), AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
On September 30, 2024, the U.S. Department of Commerce (Commerce) received countervailing duty (CVD) petitions concerning imports of hexamethylenetetramine (hexamine) from China and India filed in proper form on behalf of Bakelite LLC (the petitioner).
Between October 2 and 11, Commerce requested supplemental information pertaining to certain aspects of the Petitions.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that the Government of China (GOC), and the Government of India (GOI) (collectively, Governments) are providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of hexamine from China and India, and that such imports are materially injuring, or threatening material injury to, the domestic industry producing hexamine in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating CVD investigations, the Petitions were accompanied by information reasonably available to the petitioner supporting its allegations.
Commerce finds that the petitioner filed the Petitions on behalf of the domestic industry because the petitioner is an interested party, as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support with respect to the initiation of the requested CVD investigations.
Because the Petitions were filed on September 30, 2024, the periods of investigation for the China and India CVD investigations are January 1, 2023, through December 31, 2023.
The merchandise covered by these investigations is hexamine from China and India. For a full description of the scope of these investigations,
On October 2 and 11, 2024, Commerce requested information and clarification from the petitioner regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the
Commerce requests that any factual information that parties consider relevant to the scope of the investigations be submitted during that time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent AD and CVD investigations.
All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.
Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified the Governments of the receipt of the Petitions and provided an opportunity for consultations with respect to the Petitions.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) at least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The U.S. International
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigations.
In determining whether the petitioner has standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioner provided its own production of the domestic like product in 2023.
Our review of the data provided in the Petitions, the First General Issues Supplement, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petitions.
Because China and India are “Subsidies Agreement Countries” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to these investigations. Accordingly, the ITC must determine whether imports of the subject merchandise from China and/or India materially injure, or threaten material injury to, a U.S. industry.
The petitioner alleges that imports of the subject merchandise are benefiting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. In addition, the petitioner alleges that subject imports from China and India individually exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioner contends that the industry's injured condition is illustrated by the significant volume and market share of subject imports; underselling and price depression and/or suppression; lost sales and revenues; and adverse impact on the domestic industry's production, capacity utilization, U.S. shipments, employment variables, capital expenditures, and sales and profitability.
Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 702 of the Act. Therefore, we are initiating CVD investigations to determine whether imports of hexamine from China and India benefit from countervailable subsidies conferred by the GOC and GOI, respectively. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the date of these initiations.
Based on our review of the Petitions, we find that there is sufficient information to initiate a CVD investigation on 27 of the 28 programs alleged by the petitioner. For a full discussion of the basis for our decision
Based on our review of the Petitions, we find that there is sufficient information to initiate a CVD investigation on 18 of the 18 programs alleged by the petitioner. For a full discussion of the basis for our decision to initiate on each program,
In the Petitions, the petitioner identified 10 companies in China and four companies in India as producers and/or exporters of hexamine.
Commerce will post the Q&V questionnaire along with filing instructions on Commerce's website at
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on Commerce's website at
In accordance with section 702(b)(4)(A) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petitions has been provided to the GOC and GOI via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
Commerce will notify the ITC of its initiation, as required by section 702(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of hexamine from China and/or India are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors of production under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)-(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) (
This notice is issued and published pursuant to sections 702 and 777(i) of the Act, and 19 CFR 351.203(c).
The scope of the investigations covers hexamine in granular form, with a particle size of 5 millimeters or less, whether stabilized or unstabilized, whether or not blended, mixed, pulverized, or grounded with other products, containing 50 percent or more hexamine by weight.
Hexamine is the common name for hexamethylene tetramine (Chemical Abstract Service #100-97-0), and is also referred to as 1,3,5,7-tetraazaadamantanemethenamine; HMT; HMTA; 1,3,5,7-tetraazatricyclo {3.3.1.13,7} decane; 1,3,5,7-tetraaza adamantane; hexamethylenamine. Hexamine has the chemical formula C
Granular hexamine that has been blended with other product(s) is included in this scope when the resulting mix contains 50 percent or more of hexamine by weight, regardless of whether it is blended with inert additives, co-reactants, or any additives that undergo self-condensation.
Subject merchandise includes merchandise matching the above description that has been processed in a third country, including by commingling, diluting, adding or removing additives, or performing any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the subject country.
Merchandise covered by the scope of the investigations can be classified in the Harmonized Tariff Schedule (HTSUS) of the United States under the subheading 2933.69.5000. The HTSUS subheading and Chemical Abstracts Service registry number are provided for convenience and customs purposes only; however, the written description of the scope is dispositive.
National Institute of Standards and Technology, Department of Commerce.
Notice of open meeting.
The National Institute of Standards and Technology (NIST) announces that the National Artificial Intelligence Advisory Committee (NAIAC or Committee) will hold a virtual briefing session. This session will be held via web conference on Thursday, November 21, 2024, from 2 p.m.-4:30 p.m. eastern time. The primary purpose of this informational briefing is to have invited guests brief the full Committee on topics of interest related to AI in Hardware and AI and Energy. The briefings are from outside subject matter experts to the full Committee. The final agenda will be posted on the NIST website at
The NAIAC will meet on Thursday, November 21, 2024 from 2 p.m.-4:30 p.m. eastern time.
The meeting will be held via webinar. Please note participation instructions under the
Cheryl L. Gendron, Designated Federal Officer, Information Technology Laboratory, National Institute of Standards and Technology, Telephone: (301) 975-2785, Email address:
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. 1001
The NAIAC is authorized by section 5104 of the National Artificial Intelligence Initiative Act of 2020 (Pub. L. 116-283), in accordance with the provisions of the Federal Advisory Committee Act, as amended (FACA), 5 U.S.C. 1001
The primary purpose of this meeting is to have invited guests brief the full Committee on topics of interest related to AI in Hardware and AI and Energy. The briefings, organized by the NAIAC's AI Futures-Preparedness, Opportunities, and Competitiveness Working Group, and follow-up discussion will address the following: As advancements in AI hardware fuel unprecedented growth in applications, they also raise critical questions about energy use and sustainability. These two briefings will delve into the trajectory of AI hardware development for both pre-training and inference, examining the driving forces behind these innovations and the evolving energy supply and demand landscape in response to the burgeoning AI sector. Through these briefings, we aim to identify valid sustainability concerns and explore policy recommendations that can foster AI innovation while promoting a more sustainable energy future. Additional information, including the speaker names, will be available on the agenda, which will be posted online. Members of the public interested in reviewing the agenda in advance and viewing the sessions are encouraged to visit
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council's Highly Migratory Species (HMS) Committee will hold a public meeting.
The meeting will be held on Thursday, November 21, 2024, from 3 p.m. to 5 p.m. For agenda details, see
The meeting will be held via webinar. Webinar connection, agenda items, and any additional information will be available at
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526-5255.
The Mid-Atlantic Fishery Management Council's HMS Committee will meet to review and provide comments on the NOAA HMS Proposed Rule for Electronic Reporting Requirements for Atlantic HMS. This action proposes to modify and/or expand reporting requirements for Atlantic HMS, including reporting by commercial, for-hire, and private recreational vessel owners and dealers. The proposed rule includes: (1) Requiring vessel owners, who currently report in existing paper commercial logbooks (
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shelley Spedden at the Council Office, (302) 526-5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council) is scheduling a hybrid meeting of its Scallop Advisory Panel to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Wednesday, November 20, 2024 at 9 a.m.
Cate O'Keefe, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Scallop Advisory Panel will meet to discuss: Framework 39 (FW39): Review specifications alternatives in FW39 and select final preferred alternatives. FW39 will set specifications including the overfishing limit (OFL), acceptable biological catch/annual catch limit (ABC/ACLs), days-at-sea (DAS), access area allocations for Limited Access (LA) vessels, quota and access area trip allocation to the Limited Access General Category (LAGC) Individual Fishing Quota (IFQ) component, Total Allowable Landings (TAL) for the Northern Gulf of Maine (NGOM) management area, a target-Total Allowable Catch (TAC) for LAGC incidental catch and set-asides for the observer and research programs for fishing year 2025, and default specifications for fishing year 2026. This
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Cate O'Keefe, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification of annual determination of fisheries.
NMFS is providing notification that the agency will not identify additional fisheries to observe on the 2025 Annual Determination (AD), pursuant to its authority under the Endangered Species Act (ESA). Through the AD, NMFS identifies U.S. fisheries operating in the Atlantic Ocean, Gulf of Mexico, and Pacific Ocean that will be required to take observers upon NMFS' request. The purpose of observing identified fisheries is to learn more about sea turtle bycatch in a given fishery, evaluate measures to prevent or reduce sea turtle bycatch, and implement the prohibition against sea turtle takes. Fisheries identified on the 2020 and 2023 ADs (see table 1) remain on the AD for a 5-year period and are required to carry observers upon NMFS' request until September 29, 2025, and December 31, 2027, respectively.
Published on November 4, 2024.
Chief, Marine Mammal and Sea Turtle Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.
Wendy Piniak, Office of Protected Resources, 301-427-8402; Ellen Keane, Greater Atlantic Region, 978-282-8476; Dennis Klemm, Southeast Region, 727-824-5312; Dan Lawson, West Coast Region, 206-526-4740; Irene Kelly, Pacific Islands Region, 808-725-5141. Individuals who use a telecommunications device for the hearing impaired may call the Federal Information Relay Service at 800-877-8339 between 8 a.m. and 4 p.m. Eastern time, Monday through Friday, excluding Federal holidays.
Under the ESA, 16 U.S.C. 1531
Bycatch in fishing gear is the primary anthropogenic source of sea turtle injury and mortality in U.S. waters. Section 9 of the ESA prohibits the take (defined to include harassing, harming, pursuing, hunting, shooting, wounding, killing, trapping, capturing, or collecting or attempting to engage in any such conduct), including incidental take, of endangered sea turtles. Pursuant to section 4(d) of the ESA, NMFS has issued regulations extending the prohibition of take, with exceptions, to threatened sea turtles (50 CFR 223.205 and 223.206). Section 11 of the ESA provides for civil and criminal penalties for anyone who violates the ESA or a regulation issued to implement the ESA. NMFS may grant exceptions to the take prohibitions with an incidental take statement or an incidental take permit issued pursuant to ESA section 7 or 10, respectively. To do so, NMFS must determine that the activity that will result in incidental take is not likely to jeopardize the continued existence of the affected listed species. For some Federal fisheries and most state fisheries, NMFS has not granted an exception for incidental takes of sea turtles primarily because we lack information about fishery-sea turtle interactions.
For most fisheries, the most effective way for NMFS to learn more about bycatch in order to implement the take prohibitions and prevent or minimize take is to place observers aboard fishing vessels. In 2007, NMFS issued a regulation (50 CFR 222.402) establishing procedures to annually identify, pursuant to specified criteria and after notice and opportunity for comment, those fisheries in which the agency intends to place observers (72 FR 43176, August 3, 2007). These regulations specify that NMFS may place observers on U.S. fishing vessels, commercial or recreational, operating in U.S. territorial waters, the U.S. exclusive economic zone, or on the high seas, or on vessels that are otherwise subject to the jurisdiction of the U.S. Failure to comply with the requirements under this regulation may result in civil or criminal penalties under the ESA.
NMFS will pay the direct costs for vessels to carry the required observers. These include observer salary and insurance costs. NMFS may also evaluate other potential direct costs, should they arise. Once selected, a fishery will be required to carry
Pursuant to 50 CFR 222.402(a), NOAA's Assistant Administrator for Fisheries, in consultation with Regional Administrators and Fisheries Science Center Directors, annually identifies fisheries for inclusion on the AD based on the extent to which:
(1) The fishery operates in the same waters and at the same time as sea turtles are present;
(2) The fishery operates at the same time or prior to elevated sea turtle strandings; or
(3) The fishery uses a gear or technique that is known or likely to result in incidental take of sea turtles based on documented or reported takes in the same or similar fisheries; and
(4) NMFS intends to monitor the fishery and anticipates that it will have the funds to do so.
NMFS is providing notification that the agency is not identifying additional fisheries to observe on the 2025 AD, pursuant to its authority under the ESA. NMFS is not identifying additional fisheries at this time given lack of dedicated resources to implement new observer programs or expand existing observer programs to focus on sea turtles. The four fisheries identified on the 2020 AD (see table 1) will remain on the AD for a 5-year period and are required to carry observers upon NMFS' request until September 29, 2025. The two fisheries identified on the 2023 AD (see table 1) will remain on the AD for a 5-year period and are required to carry observers upon NMFS' request until December 31, 2027.
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The National Oceanic and Atmospheric Administration (NOAA) products and services “support economic vitality and affect more than one-third of America's gross domestic product.” The National Weather Service (NWS) is a critical component of this service and operates under the mission to “provide weather, water and climate data, forecasts, warnings, and impact-based decision support services for the protection of life and property and enhancement of the national economy.” Leveraging and integrating Social, Behavioral, and Economic Sciences (SBES) methodologies and knowledge is crucial to meeting our mission.
If we are to effectively support public and partner decision making, build actionable tools and information, and evaluate our performance, then it's imperative that the NOAA/NWS collect key SBES data and fully engage with our audiences. Additionally, the NOAA/NWS has articulated a priority to enhance services for historically underinvested and underserved communities and improve service equity across the board. These communities typically experience higher rates of poverty, homelessness, disabilities, and language barriers, which increase their vulnerability to hazard impacts.
The generic clearance is an important planning and engagement tool for NOAA/NWS. The procedures expected to be used include but are not limited to social network analysis, open, semi-structured and structured interviews, focus groups, surveys, and participant observation.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council's (Council) Scientific and Statistical Committee (SSC) will hold a meeting.
The meeting will be held on Wednesday, November 20, 2024, from 10 a.m. to 12 p.m. See
The meeting will take place over webinar using the Webex platform with a telephone-only connection option. Details on how to connect to the webinar by computer and by telephone will be available at:
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526-5255.
During this meeting, the SSC will provide revised Acceptable Biological Catch (ABC) recommendations for the 2025 Spiny Dogfish fishing year. At their October 2024 meeting, the Council reviewed the stock status and performance of the Spiny Dogfish fishery and deferred action on modifying 2025 Spiny Dogfish specifications until their December meeting. The Council requested the SSC calculate a revised ABC equal to the catch associated with a 50% probability of overfishing under a suspension of the Council's risk policy. The SSC may take up any other business as necessary.
A detailed agenda and background documents will be made available on the Council's website (
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to Shelley Spedden, (302) 526-5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council) is scheduling a hybrid meeting of its Scallop Committee to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Thursday, November 21, 2024 at 9 a.m.
This meeting will be held at Hilton Garden Inn, Boston Logan, 100 Boardman St., Boston, MA 02110; telephone: (617) 567-5678.
Cate O'Keefe, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Scallop Committee will meet to discuss: Framework 39 (FW39): Review specifications alternatives in FW39 and select final preferred alternatives. FW39 will set specifications including the overfishing limit (OFL), acceptable biological catch/annual catch limit (ABC/ACLs), days-at-sea (DAS), access area allocations for Limited Access (LA) vessels, quota and access area trip allocation to the Limited Access General Category (LAGC) Individual Fishing Quota (IFQ) component, Total Allowable Landings (TAL) for the Northern Gulf of Maine (NGOM) management area, a target-Total Allowable Catch (TAC) for LAGC incidental catch and set-asides for the observer and research programs for fishing year 2025, and default specifications for fishing year 2026. This action also considers modifying the seasonal bycatch closure of Area II to improve yield and reduce impacts to northern windowpane flounder and modifying the possession prohibition for NGOM-permitted scallop vessels on a declared NGOM trip to possess scallops outside of the NGOM management area. Other business will be discussed, if necessary.
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Cate O'Keefe, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and deletions from the Procurement List.
This action adds service(s) to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities and deletes product(s) and service(s) from the Procurement List previously furnished by such agencies.
Committee for Purchase From People Who Are Blind or Severely Disabled, 355 E Street SW, Suite 325, Washington, DC 20024.
Michael R. Jurkowski, Telephone: (703) 489-1322, or email
On January 26, 2024, the Committee for Purchase From People Who Are Blind or Severely Disabled (operating as the U.S. AbilityOne Commission) published an initial notice of proposed additions to the Procurement List. (89 FR 5214). The Committee determined that the service listed below is suitable for procurement by the Federal Government and has added this service to the Procurement List as a mandatory purchase for the contracting activity listed. In accordance with 41 CFR 51-5.3(b), the mandatory purchase requirement is limited to the contracting activity at the location listed, and in accordance with 41 CFR 51-5.2, the Committee has authorized the nonprofit agency listed as the authorized source of supply.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the service(s) and impact of the additions on the current or most recent contractors, the Committee has determined that the service(s) 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 service(s) to the Government.
2. The action will result in authorizing small entities to furnish the 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 service(s) proposed for addition to the Procurement List.
Accordingly, the following product(s) and service(s) are added to the Procurement List:
The Committee finds good cause to dispense with the 30-day delay in the effective date normally required by the Administrative Procedure Act. See 5 U.S.C. 553(d). This addition to the Committee's Procurement List is effectuated because of the expiration of the Department of the Navy, Logistics Support Service, US Navy, SWRMC, San Diego, CA contract. The Federal customer contacted and has worked diligently with the AbilityOne Program to fulfill this service need under the AbilityOne Program. To avoid performance disruption, and the possibility that the Department of the Navy will refer its business elsewhere, this addition must be effective on November 20, 2024, ensuring timely execution for a November 22, 2024 start date. The Committee published an initial notice of proposed Procurement List addition in the
On September 27, 2024 (89 FR 79259), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from 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 relevant matter presented, the Committee has determined that the product(s) and service(s) 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 product(s) and service(s) are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed deletions from the Procurement List.
The Committee is proposing to delete product(s) from the Procurement List that were furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Comments must be received on or before: December 1, 2024.
Committee for Purchase From People Who Are Blind or Severely Disabled, 355 E Street SW, Suite 325, Washington, DC 20024.
For further information or to submit comments contact: Michael R. Jurkowski, telephone: (703) 489-1322, 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.
The following product(s) are proposed for deletion from the Procurement List:
Wednesday, November 6, 2024—11 a.m.
Meeting will take place remotely and in person at 4330 East West Highway, Bethesda, Maryland, Room 420.
Commission Meeting—Closed to the Public.
Alberta E. Mills, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, 301-504-7479 (Office) or 240-863-8938 (Cell).
Department of the Air Force.
Meeting notice.
The Department of Defense (DoD) is publishing this notice to announce the following Federal Advisory Committee meeting of the Air University Board of Visitor's (AU BoV) AFIT Subcommittee.
Tuesday, November 5, 2024, from 8 a.m. to 5 p.m. and Wednesday, November 6, 2024, from 8 a.m. to 3 p.m. (eastern time).
Air University Commander's Conference Room, Building 800, Maxwell Air Force Base, AL 36112.
Dr. Shawn P. O'Mailia, Designated Federal Officer, Air University Headquarters, 55 LeMay Plaza South, Maxwell Air Force Base, Alabama 36112- 6335, telephone (334) 953-4547, email
This meeting is held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102-3.50(d).
Department of the Navy (DoN), Department of Defense (DoD).
Notice.
The Department of the Navy (DoN) announces the appointment of members to the DON Senior Executive Service (SES), Senior Level (SL), and Scientific and Professional (ST) Fiscal Year 2024 Performance Review Board (PRB). The purpose of the PRB is to provide fair and impartial review of the annual SES performance appraisal prepared by the senior executive's immediate and second level supervisor; to make recommendations to appointing officials regarding acceptance or modification of the performance rating; and to make recommendations for performance-based bonuses and performance-based pay increases.
Kim Hanson, Director, Executive Management Program Office, Manpower and Reserve Affairs at 703-693-8896 or
Composition of the specific PRB is provided below:
On Wednesday, October 16, 2024, the Federal Energy Regulatory Commission (Commission) convened its annual Commissioner-led Reliability Technical Conference to discuss policy issues related to the reliability and security of the Bulk-Power System.
All interested persons are invited to file post-technical conference comments to address issues raised during the technical conference or identified in the Second Supplemental Notice for this Technical Conference issued on October 7, 2024. Commenters are invited to reference material previously filed in this docket but are encouraged to avoid repetition or replication of their previous comments. Comments must be submitted on or before 30 days from the date of this Notice.
Comments, identified by docket number, may be filed electronically or paper-filed. Electronic filing through
Although the Commission strongly encourages electronic filing, documents may also be paper-filed. To paper-file, submissions sent via the U.S. Postal Service must be addressed to: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street NE, Washington, DC 20426. Submissions sent via any other carrier must be addressed to:
For more information about this Notice, please contact:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380, the Office of Energy Projects has reviewed the application for a subsequent license to continue to operate and maintain the M.S.C. Hydroelectric Project No. 5679 (project). The project is located on the Quinebaug River in in Windham County, Connecticut. Commission staff has prepared an Environmental Assessment (EA) for the project.
The EA contains staff's analysis of the potential environmental impacts of the project and concludes that licensing the project, with appropriate environmental protective measures, would not constitute a major federal action that would significantly affect the quality of the human environment.
The Commission provides all interested persons with an opportunity to view and/or print the EA via the internet through the Commission's Home Page (
You may also register online at
Any comments should be filed within 30 days from the date of this notice.
The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
If you have process questions, contact John Baummer at (202) 502-6837 or by email at
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission or FERC) regulations, 18 CFR part 380, Commission staff reviewed PacifiCorp's proposal to amend the project's license for surrender of license for the Weber Hydroelectric Project No. 1744 and have prepared an Environmental Assessment (EA) for the proposed amendment. The licensee proposes to amend its license to construct three new auxiliary spillways north of Weber Dam, between the dam and the new fish ladder, and make additional repairs to modernize the intake facility to ensure safe and reliable operations through the term of its license. The project is located on the Weber River near the city of Ogden in Weber, Morgan, and Davis counties, Utah, and occupies Federal lands within the Uinta-Wasatch-Cache National Forest managed by the U.S. Department of Agriculture's Forest Service (Forest Service).
The EA contains Commission staff's analysis of the potential environmental effects of the proposed amendment and concludes that the proposed amendment, with appropriate environmental protective measures, would not constitute a major Federal action that would significantly affect the quality of the human environment.
The EA may be viewed on the Commission's website at
You may also register online at
All comments must be filed by November 27, 2024.
The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
For further information, contact Jennifer Polardino at (202) 502-6437 or
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes.
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Environmental Protection Agency (EPA).
Notice of proposed settlement; request for public comment.
Notice is hereby given by the U.S. Environmental Protection Agency (EPA), Region 8, of a prospective purchaser and ability to pay agreement entered into voluntarily by the United States of America (“United States”) on behalf of the United States Environmental Protection Agency (“EPA”), America West Investments, LLC (“Settling Party”) and Tooele City Corporation (“Purchaser”) in connection with the Broadway Hotel Superfund Site in Tooele, Tooele County, Utah (“Site”). It is now subject to public comment, after which EPA may modify or withdraw its consent if comments received disclose facts or considerations that indicate that the proposed agreement is inappropriate, improper, or inadequate.
Comments must be submitted on or before December 4, 2024.
The proposed agreement and additional background information relating to the agreement will be available upon request. Any comments or requests or for a copy of the proposed agreement should be addressed to Crystal Kotowski-Edmunds, Enforcement Specialist, Superfund and Emergency Management Division, Environmental Protection Agency, Region 8, Mail Code 8SEM-PAC, 1595 Wynkoop Street, Denver, Colorado 80202, telephone number: (303) 312-6124, email address:
Paige Lambert-Wright, Attorney, Office of Regional Counsel, Environmental Protection Agency, Region 8, Mail Code 8ORC-LEC, 1595 Wynkoop, Denver, Colorado 80202, telephone number: (303) 312-6762, email address:
The proposed settlement will resolve the liability of America West Investments, LLC (“Settling Party”), the potentially responsible party (“PRP”) at the Site, and facilitate the transfer of Settling Party's property to prospective purchaser Tooele City Corporation (Purchaser) for redevelopment.
Settling Party will sell its property (seven parcels, totaling approximately 1.3 acres) (Property) to Purchaser for $300,000. This amount was determined to be the fair market value of the Property in an appraisal dated June 5, 2024, conducted by a qualified appraiser certified to meet the Uniform Standards of Professional Appraisal Practice. Settling Party will pay the EPA 100% of the Net Sales Proceeds of the sale. Net Sales Proceeds is defined in the proposed settlement agreement to exclude reasonable closing costs, broker's fees, and State or local taxes paid regarding the sale. Additionally, the definition of Net Sales Proceeds incorporates an exclusion for a sum certain value of $20,000, as part of the resolution of
Purchaser will acquire the Property and comply with property requirements including release reporting, providing cooperation and access, exercising appropriate care with respect to hazardous substances, and providing notice to successors-in-title. Purchaser will make a one-time payment to the EPA in the amount of $30,000 and has also agreed to redevelop the Property for the public interest.
This proposed settlement will resolve Settling Party's liability under sections 106 and 107(a) of CERCLA, 42 U.S.C. 9606 and 9607(a), for the Site. The EPA will provide covenants not to sue or take administrative action against Settling Party, contingent on compliance with the agreement and subject to the standard reservations. The EPA will also provide Settling Party contribution protection pursuant to CERCLA section 113(f)(2) and 122(h)(4).
The EPA will provide covenants not to sue or take administrative action under CERCLA sections 106 and 107(a) against Purchaser for Existing Contamination, contingent on compliance with the agreement and subject to the standard reservations. The EPA will also provide Purchaser contribution protection pursuant to CERCLA sections 113(f)(2) and 122(h)(4).
For thirty (30) days following the date of publication of this document, EPA will receive electronic comments relating to the proposed agreement. EPA's response to any comments received will be available for public inspection by request. Please see the
10 a.m., Thursday, November 14, 2024.
You may observe this meeting in person at 1501 Farm Credit Drive, McLean, Virginia 22102-5090, or virtually. If you would like to observe, at least 24 hours in advance, visit
This meeting will be open to the public.
The following matters will be considered:
If you need more information or assistance for accessibility reasons, or have questions, contact Ashley Waldron, Secretary to the Board. Telephone: 703-883-4009. TTY: 703-883-4056.
The notificants listed below have applied under the Change in Bank Control Act (Act) (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the applications are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure.
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 November 19, 2024.
1.
Board of Governors of the Federal Reserve System.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure.
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 December 4, 2024.
1.
Board of Governors of the Federal Reserve System.
November 14, 2024 at 10 a.m.
Telephonic. Dial-in (listen only) information: Number: 1-202-599-1426, Code: 504 721 370#; or via web:
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
Federal Trade Commission.
Notice.
In accordance with the Paperwork Reduction Act of 1995 (“PRA”), the Federal Trade Commission (“FTC” or “Commission”) is seeking public comment on its proposal to
Comments must be filed by January 3, 2025.
Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the
P. Connell McNulty, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, (202) 326-2061,
As required by section 3506(c)(2)(A) of the PRA, 44 U.S.C. 3506(c)(2)(A), the FTC is providing this opportunity for public comment before requesting that OMB extend the existing clearance for the information collection requirements contained in the Commission's Pay-Per-Call Rule.
The existing reporting and disclosure requirements are mandated by the TDDRA to help prevent unfair and deceptive acts and practices in the advertising and operation of pay-per-call services and in the collection of charges for telephone-billed purchases. The information obtained by the Commission pursuant to the reporting requirement is used for law enforcement purposes. The disclosure requirements ensure that consumers are told about the costs of using a pay-per-call service, that they will not be liable for unauthorized non-toll charges on their telephone bills, and how to deal with disputes about telephone-billed purchases.
Respondents are telecommunications common carriers (subject to the reporting requirement only, unless acting as a billing entity), information providers (vendors) offering one or more pay-per-call services or programs, and billing entities. Staff estimates that there are 8 common carriers, approximately 5,400 vendors, and approximately 2,600 possible billing entities. The FTC seeks public comment or data on these estimates and those stated below.
The burden hour estimate for each reporting and disclosure requirement has been multiplied by a “blended” mean wage rate (expressed in dollars per hour), based on the particular skill mix needed to carry out that requirement, to determine its total annual cost. The blended rate calculations are based on the following skill categories and average wage rates and/or labor costs: $131/hour for professional (attorney) services; $23/hour for skilled clerical workers; $52/hour for computer programmers; and $62/hour for management time. These figures are averages, based on the most currently available Bureau of Labor Statistics (“BLS”) cost figures posted online. The attorney figure is based in part on BLS estimates and on other sources. FTC staff calculated labor costs by applying appropriate hourly cost figures to the burden hours discussed further below.
The Rule provides that common carriers must make available to the Commission, upon written request, any records and financial information maintained by such carrier relating to the arrangements between the carrier and any vendor or service bureau (other than for the provision of local exchange service). See 16 CFR 308.6. Staff believes that the resulting burden on this segment of the industry will be minimal, since OMB's definition of “burden” for PRA purposes excludes any business effort that would be expended regardless of a regulatory requirement. 5 CFR 1320.3(b)(2). Because this reporting requirement permits staff to seek information limited to that which is already maintained by the carriers, the only burden would be the time an entity expends to compile and provide the information to the Commission. Because the Commission has seldom needed to rely on this requirement, staff estimates the annual time for reporting at 3 hours per entity.
In obtaining OMB clearance for this reporting requirement in 2021, staff estimated a total reporting burden of 18 hours. For 2024, staff is increasing the
Staff believes that the industry has had at least an 8 percent reduction in size since 2021 (when there were an estimated 18,110 pay-per-call services). Accordingly, staff now estimates that there are no more than 16,660 advertised pay-per-call services.
As with advertising disclosures, preambles for certain pay-per-call services require additional preamble disclosures. Consistent with the estimates of advertised pay-per-call services discussed above, staff estimates that 20 percent of all such pay-per-call services (3,332) relating to certain types of pay-per-call services would require such additional disclosures. Staff estimates that it would require no more than one hour to draft each type of disclosure because the disclosures applicable to the preamble closely approximate in content and volume the advertising disclosures discussed above. Accordingly, staff estimates a total of 19,992 burden hours (16,660 + 3,332) to comply with these requirements. At one hour each, cumulative labor cost associated with these disclosures is $1,039,584, using a blended wage rate of $52/hour (
As it had in the 2021 PRA submission, FTC staff estimates that only 10 percent of vendors would monitor billing statements in this manner and that it would take 12 hours per year to conduct such checks. Using the total estimated number of vendors (5,400), this results in a total of 6,480 burden hours. The total annual cost would be at most $349,920, using a blended rate of $54/hour.
As in the 2021 PRA submission for this Rule, FTC staff estimates that the incremental disclosure obligations related to consumers reporting a billing error under section 308.7(d) requires, on average, about one hour per each billing error. In 2021, staff projected that approximately 5 percent of an estimated 19,360,880 calls made to pay-per-call services each year involves such a billing error. The staff is now reducing its prior estimate of the number of those calls by approximately 8 percent (to 17,812,010 calls) to reflect recent changes in the amount of pay-per-call services and their billing. Assuming the same apportionment (5 percent) of overall calls to pay-per-call services, this amounts to 890,600 hours, cumulatively. Applying the $52/hour blended wage rate, the estimated annual cost is $46,311,200.
Pursuant to Section 3506(c)(2)(A) of the PRA, the FTC invites comments on: (1) whether the disclosure and recordkeeping requirements are necessary, including whether the information will be practically useful; (2) the accuracy of our burden estimates, including whether the methodology and assumptions used are valid; (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.
For the FTC to consider a comment, we must receive it on or before January 3, 2025. Your comment, including your name and your state, will be placed on the public record of this proceeding, including the
You can file a comment online or on paper. Due to heightened security screening, postal mail addressed to the Commission will be subject to delay. We encourage you to submit your comments online through the
If you file your comment on paper, write “Pay-Per-Call Rule, PRA Comment, P085405,” on your comment and on the envelope, and mail it to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex J), Washington, DC 20580.
Because your comment will become publicly available at
Comments containing material for which confidential treatment is requested must (1) be filed in paper form, (2) be clearly labeled “Confidential,” and (3) comply with FTC Rule 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record.
The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before January 3, 2025. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see
Office of Information Technology (GSA-IT), General Services Administration (GSA).
Notice of a new system of records.
Pursuant to the provisions of the Privacy Act of 1974, notice is given that the GSA proposes to establish a new system of records, entitled GSA/PBS-11, GSA Real Estate Sales (G-RES). This system of records is for the GSA Real Estate Sales (G-RES) site, a public real estate bidding web application, hosted by GSA Public Buildings Service (PBS).
Submit comments on or before December 4, 2024.
Comments may be submitted to the Federal eRulemaking Portal,
Call or email Richard Speidel, Chief Privacy Officer at 202-969-5830, or
GSA proposes to establish a system of records subject to the Privacy Act of 1974, 5 U.S.C. 552a. The system of records is being created to support the new GSA Real Estate Sales system, the records of which currently fall under the SORN GSA/FSS-13. The present system of records (GSA/PBS-11) will not include records previously covered by GSA/FSS-13. All records under GSA/PBS-11 will be newly-created for use in this system.
GSA Real Estate Sales (G-RES), GSA/PBS-11.
Unclassified.
This cloud system is managed by GSA and Amazon. GSA is located at 1800 F Street NW, Washington, DC 20405. The headquarters for Amazon is located at 410 Terry Avenue North, Seattle, WA 98109.
Dr. Jacqueline Rodriguez, IT Project Manager, GSA, 1800 F Street NW, Washington, DC 20405.
Federal Property and Administrative Services Act Of 1949, as amended; Public Law 107-217, ch. 288, 63 Stat. 377 (40 U.S.C. 121(c) and 40 U.S.C. 541,
To establish and maintain a system of records for conducting public sales of Federal real property by GSA.
The system includes individuals who request to be added to GSA bidders mailing lists, register to bid on GSA sales, and/or enter into contracts to buy Federal real property at sales conducted by GSA. Such individuals may be members of the public or represent public or private interests. In addition, GSA employees who administer the system and process are also included.
The system contains information needed to identify potential and actual bidders and awardees, and transaction information involving real property sales. System records include:
Personal information provided by bidders, including, but not limited to, names, phone numbers, addresses, email addresses, birth dates, and financial information. Additionally, real estate agent profiles containing first and last names, email, phone number, and address. Finally, information about GSA employees who administer the system, including name and business contact information.
Information is provided by individuals who wish to participate in the GSA real property sales program, and system transactions designed to gather and maintain data and to manage and evaluate the Federal real property disposal program.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed to authorized entities, as is determined to be relevant and necessary, outside GSA as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
a. In any legal proceeding, where pertinent, to which GSA, a GSA employee, or the United States is a party before a court or administrative body.
b. To a Federal, State, local, or foreign agency responsible for investigating,
c. To an appeal, grievance, hearing, or complaints examiner; an equal employment opportunity investigator, arbitrator, or mediator; and an exclusive representative or other person authorized to investigate or settle a grievance, complaint, or appeal filed by an individual who is the subject of the record.
d. To the Office of Personnel Management (OPM), the Office of Management and Budget (OMB), and the Government Accountability Office (GAO) in accordance with their responsibilities for evaluating Federal programs.
e. To a Member of Congress or his or her staff on behalf of and at the request of the individual who is the subject of the record.
f. To an expert, consultant, or contractor of GSA in the performance of a Federal duty to which the information is relevant.
g. To the National Archives and Records Administration (NARA) for records management purposes.
h. In connection with any litigation or settlement discussions regarding claims by or against the GSA, including public filing with a court, to the extent that GSA determines the disclosure of the information is relevant and necessary to the litigation or discussions.
i. To appropriate agencies, entities, and persons when (1) GSA suspects or has confirmed that there has been a breach of the system of records, (2) GSA has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, GSA (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with GSA's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
j. To another Federal agency or Federal entity, when GSA determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
k. To compare such records to other agencies' systems of records or to non-Federal records, in coordination with an OIG in conducting an audit, investigation, inspection, evaluation, or some other review as authorized by the IG Act.
Electronic records are stored on a secure server with access limited to staff who may access the records only by means of a lawful government purpose. Information is encrypted in transit and at rest.
Records are retrievable by a personal identifier or by other appropriate type of designation approved by GSA.
Content in this system will be disposed according to the following GSA schedule:
121.1/050 Property Disposal Case Records. This series contains records related to the process of appraising federally-owned real property (both developed and undeveloped), and the disposal activities associated with closing, selling, destroying, transferring, or otherwise removing from the Federal Government's real property inventory. Such records include those used in the determination of excess real property, disposal of excess and surplus real property case files, correspondence, and related records.
Permanent. Cut off at the end of the fiscal year following case completion and fulfillment of all restrictions on the disposed property. Transfer to NARA 15 years after cutoff.
Records in the system are protected from unauthorized access and misuse through a combination of administrative and technical measures. Administrative measures include but are not limited to policies that limit system access to individuals within an agency with a legitimate business need, and regular review of security procedures and best practices to enhance security. Technical measures include but are not limited to system design that allows authorized system users access only to data for which they are responsible; AWS security tools; required use of
If an individual wishes to access any data or record pertaining to him or her in the system after it has been submitted, that individual should consult the GSA's Privacy Act implementation rules available at 41 CFR part 105-64.2.
If an individual wishes to contest the content of any record pertaining to him or her in the system after it has been submitted, that individual should consult the GSA's Privacy Act implementation rules available at 41 CFR part 105-64.4.
If an individual wishes to be notified at his or her request if the system contains a record pertaining to him or her after it has been submitted, that individual should consult the GSA's Privacy Act implementation rules available at 41 CFR part 105-64.4.
None.
None.
Agency for Toxic Substances and Disease Registry (ATSDR), Department of Health and Human Services (HHS).
Notice with comment period.
The Agency for Toxic Substances and Disease Registry
ATSDR must receive written comments on or before January 3, 2025.
You may submit comments, identified by Docket No. ATSDR-2024-0005 by either of the following methods:
•
•
Submit all comments through the Federal eRulemaking portal (
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 H21-8, Atlanta, Georgia 30329; Telephone: 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;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
ATSDR Exposure Investigations (EIs) (OMB Control No. 0923-0048, Exp. 6/30/2025)—Extension—Agency for Toxic Substances and Disease Registry (ATSDR).
The Agency for Toxic Substances and Disease Registry (ATSDR) is requesting a three-year Extension of this Generic Clearance to allow the agency to conduct Exposure Investigations (EIs), through methods developed by ATSDR. After a chemical release or suspected release into the environment, EIs are usually requested by officials of a state health agency, county health departments, the Environmental Protection Agency (EPA), the general public, and ATSDR staff.
EI results are used by public health professionals, environmental risk managers, and other decision makers to determine if current conditions warrant intervention strategies to minimize or eliminate human exposure. For example, an EI that ATSDR previously conducted during included environmental sampling to evaluate non-drinking water exposure to per- and polyfluoroalkyl substances (PFAS) in two communities that were shown to be exposed to PFAS in their drinking water.
During the most recent clearance period (4/30/2022-present) a single Generic Exposure Investigation information collection request (ICR) was submitted. The EI conducted under this clearance period was an EI in Jasper and Newton Counties, Missouri to evaluate exposure to lead in a former mining community. ATSDR collected blood samples from community members most vulnerable to the impacts of lead exposure: children five years old and younger along with pregnant women and women of childbearing age. ATSDR partnered with the U.S. Environmental Protection Agency (EPA) and the Missouri Department of Health and Senior Services (MDHSS) who collected environmental samples, including soil, dust wipes, drinking water and paint, along with the results of the blood sampling. Appropriate EI procedures, including use of consent forms and questionnaires were used in the EI. The environmental sampling was submitted under this OMB Control Number with a burden of 426 hours.
All of ATSDR's targeted biological assessments (
The number of questions can vary depending on the number of chemicals being investigated, the route of exposure (
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 continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled U.S. National Authority for Containment of Poliovirus Data Collection Tools. Data collection will capture information relating to a poliovirus containment breach or incident at a U.S. facility and will assist the U.S. National Authority for Containment of Poliovirus (U.S. NAC) in the initial stages of the investigation into the breach, and also gather information regarding personal protective equipment and practices used for work and/or storage of infectious materials or potentially infectious at laboratory facilities.
CDC must receive written comments on or before January 3, 2025.
You may submit comments, identified by Docket No. CDC-2024-0087 by either of the following methods:
•
•
Submit all comments through the Federal eRulemaking portal (
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 H21-8, Atlanta, Georgia 30329; Telephone: 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;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
U.S. National Authority for Containment of Poliovirus Data Collection Tools (OMB Control No. 0920-1424, Exp. 12/31/2026)—Revision—Office of Readiness and Response (ORR), Centers for Disease Control and Prevention CDC)
The role of the National Authority for Containment of Poliovirus (U.S. NAC) is to ensure that the requirements established in the World Health Organization (WHO) Global Action Plan (GAP) III/IV standard are effectively implemented and maintained in facilities working with or storing infectious poliovirus or potentially infectious materials.
Risk assessments following an incident are a critical component for adequate application of the GAP standard. To support risk assessment activities, The Facility Incident Reporting Form for Poliovirus Release and Potential Exposure and the Facility Incident Reporting Form for Poliovirus Theft or Loss was created for facilities to capture and submit incident
The information collected in the Personal Protective Equipment (PPE) Survey for Laboratories will assist the CDC, U.S. NAC and NIOSH with developing guidance and recommendations for PPE selection and use in support of poliovirus containment as well as identify laboratory PPE commonly used to evaluate laboratory PPE performance characteristics in testing studies.
Information collected in the GAP Poliovirus Containment Poliovirus-Essential Facility Assessment Checklist will aid U.S. facilities in preparing for an audit to obtain a poliovirus certificate of containment. Data collected from the GAP Poliovirus Containment Poliovirus-Essential Facility Questionnaire will collect additional information on poliovirus materials held by a U.S. facility, their work activities, and facility features.
The Poliovirus Containment Sampling Plan and Sanitation Assessment Form for Wastewater (WW) Systems Supporting a Poliovirus-Essential Facility (PEF) in the United States will collect information to assess poliovirus essential facility's wastewater system, the primary safeguards to reduce and control the release of poliovirus from the facility. In addition, it will verify the safeguards of local wastewater utilities that receive wastewater from the PEF.
The Appeals and Complaints form is a new form that will be made available by the U.S. NAC of Poliovirus and will allow facilities or persons to appeal or forward complaints based on services provided. This form can be used to appeal or initiate complaints with regards to specific survey outreach that had been conducted or decisions rendered by the audit team after an audit.
OMB approval is sought for three years. The annualized estimated time burden for this information collection is 129 hours. There is no cost to respondents other than their time.
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 Healthcare Safety Network” 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 April 23, 2024 to obtain comments from the public and affected agencies. CDC received two 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
National Healthcare Safety Network (NHSN) (OMB Control No. 0920-0666, Exp. 06/30/2026)—Revision—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 provides facilities, health departments, states, regions, and the nation with data necessary to identify problem areas, measure the progress of prevention efforts, and ultimately eliminate healthcare-associated infections (HAIs) nationwide. NHSN also allows healthcare facilities to track blood safety errors and various HAI prevention practice methods such as healthcare personnel influenza vaccine status and corresponding infection control adherence rates.
The proposed changes in this new ICR includes revisions made to 74 approved NHSN data collection tools and 10 new forms, for a total of 84 forms in this package. CDC requests OMB approval for an estimated 4,398,109 annual burden hours. There is no cost to respondents other than their time to participate.
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 information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled Risk factors, clinical course, presence and persistence of virus in various bodily fluids, and risk of sexual transmission among U.S. adults with Oropouche virus (OROV) disease. This study will assist in the response to this emerging virus by; identifying risk factors for infection to inform prevention guidance and messaging, informing recognition, diagnosis, follow-up care, and counseling of patients with OROV disease, and understanding risks of sexual transmission to inform prevention recommendations, especially for pregnant people and their partners, or those considering pregnancy.
CDC must receive written comments on or before January 3, 2025.
You may submit comments, identified by Docket No. CDC-2024-0088 by either of the following methods:
•
•
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 H21-8, Atlanta, Georgia 30329; Telephone: 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;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
Risk factors, clinical course, presence and persistence of virus in various bodily fluids, and risk of sexual transmission among U.S. adults with Oropouche virus (OROV) disease—New—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
Oropouche virus is an emerging virus in the Americas that is spread by the bite of midges and some species of mosquitoes. Infection with Oropouche virus generally causes a febrile illness, but more severe disease such as meningitis and hemorrhagic disease can occur. Beginning in late 2023, the geographic range of Oropouche virus has expanded, with over 10,000 cases from six countries reported in 2024 as of October 15. The first U.S. cases were reported in the summer of 2024, all among returning international travelers. This recent geographic expansion, along with reports of deaths among cases, vertical transmission leading to fetal loss and birth defects, and identification of live virus in semen raise concerns about the broader threat this virus represents to the United States. There are numerous gaps in our understanding of this emerging virus, including the urgent need to evaluate the possibility of sexual transmission to inform prevention recommendations, especially for pregnant people and their partners, or those considering pregnancy.
The purpose of this investigation is to better define the risk factors, clinical course, viral shedding, and potential for sexual transmission among patients with Oropouche virus disease. Participants will be interviewed about their symptoms, medical and travel history, potential risk factors for infection, and sexual partners since becoming ill. They will be followed over time to see if their symptoms reoccur, which has been highlighted as a unique feature of Oropouche virus disease among similar viruses. They will also submit specimens of various bodily fluids over a 12-week period to be tested for Oropouche virus RNA. Lastly, sexual contacts of people who have been diagnosed with Oropouche virus disease will be interviewed to see if they experienced any symptoms consistent with Oropouche virus disease after these sexual encounters. Sexual contacts that report symptoms will be asked to have a blood sample collected and tested for evidence of Oropouche virus infection.
The findings of this investigation will inform prevention guidance, improve clinical recognition and diagnosis, and prevent further illnesses of Oropouche virus disease. Preliminary results will be used immediately to inform agency response activities and prevention guidance to help people protect themselves from Oropouche virus disease. CDC requests Emergency OMB approval for an estimated 663 annual burden hours.
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 World Trade Center (WTC) Health Program Enrollment, Appeals & Reimbursement. The WTC Health Program is a Federal limited benefit health care program providing medical monitoring and treatment benefits to eligible firefighters and related personnel, law enforcement officers, and rescue, recovery, and cleanup workers who responded to the September 11, 2001, attacks in New York City, at the Pentagon, and in Shanksville, Pennsylvania (responders), and to eligible persons who were present in the dust or dust cloud on September 11, 2001, or who worked, resided, or attended school, childcare, or adult daycare in the New York City disaster area (survivors).
CDC must receive written comments on or before January 3, 2025.
You may submit comments, identified by Docket No. CDC-2024-0086 by either of the following methods:
•
•
Submit all comments through the Federal eRulemaking portal (
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 H21-8, Atlanta, Georgia 30329;
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;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
World Trade Center Health Program Enrollment, Appeals & Reimbursement (OMB Control No. 0920-0891, Exp. 09/30/2025)—Revision—National Institute for Occupational Safety and Health (NIOSH), Centers for Disease Control and Prevention (CDC).
The National Institute for Occupational Safety and Health (NIOSH) seeks OMB approval for a Revision of an ongoing information collection titled World Trade Center Health Program Enrollment, Appeals & Reimbursement (OMB Control No. 0920-0891). In accordance with the James Zadroga 9/11 Health and Compensation Act of 2010, individuals newly seeking enrollment in the World Trade Center (WTC) Health Program as responders or survivors may apply to the Program. The recently passed National Defense Authorization Act for Fiscal Year 2024 (NDAA) expands Program enrollment eligibility for Pentagon and Shanksville responders. title I of the Zadroga Act (Pub. L. 111-347, as amended by Pub. L. 114-113 and Pub. L. 116-59), added title XXXIII to the Public Health Service Act (PHS Act), establishing the World Trade Center (WTC) Health Program within the Department of Health and Human Services (HHS). The Director of NIOSH serves as the Administrator of the WTC Health Program for most purposes, with certain payment functions carried out by the Centers for Medicare & Medicaid Services. As established by the Zadroga Act, the WTC Health Program is a Federal limited benefit health care program providing medical monitoring and treatment benefits to eligible firefighters and related personnel, law enforcement officers, and rescue, recovery, and cleanup workers who responded to the September 11, 2001, attacks in New York City, at the Pentagon, and in Shanksville, Pennsylvania (responders), and to eligible persons who were present in the dust or dust cloud on September 11, 2001, or who worked, resided, or attended school, childcare, or adult daycare in the New York City disaster area (survivors). The WTC Health Program has been authorized for 75 years (through 2090).
Respondents are WTC Health Program members and potential members. In this Revision, NIOSH requests OMB approval of the revised WTC Health Program Pentagon/Shanksville Application for Enrollment, to include language regarding the expanded eligibility criteria mandated by the National Defense Authorization Act (NDAA) for Fiscal Year 2024. NIOSH also requests OMB approval of a new web-based Youth Research Cohort (YRC) Registration portal that will be used to engage future cohort members and allow them to self-enroll into the YRC.
In this Revision, total annualized burden will increase from 12,882 hours to 16,132 (+3,250 hours). The greatest increase in burden (+3,000 hours) is the result of the new secure, public-facing web-based portal for the YRC. In December 2022, the Consolidated Appropriations Act, 2023 (Pub. L. 117-328), amended section 3341 of the PHS Act to direct the Administrator to establish a new cohort for future research. This portal has been developed to engage with future cohort members and streamline the enrollment process into the YRC. This web-based portal will maintain the privacy and data protection of future cohort members in accordance with the provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and HIPAA regulations.
Another increase in annualized burden (+250 hours) is due to the expanded eligibility for Program membership for Pentagon and Shanksville responders, as mandated in the NDAA. The WTC Health Program Pentagon/Shanksville Application for Enrollment has been updated to reflect the new eligibility criteria mandated by the NDAA. The revised application now includes an additional eligibility question targeting specific groups such as active duty, retired, or reserve members of the military, civilian employees of the Department of Defense (DOD), or certain DOD contractors who responded to the Pentagon or Shanksville sites. The application also now clarifies that in addition to the work status, the responder must have participated in rescue, recovery, demolition, debris cleanup, or other related services to be eligible to enroll in the Program.
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 continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled The National Violent Death Reporting System. (NVDRS). NVDRS is a state-based surveillance system developed to monitor the occurrence of violent deaths, including homicide, suicide, deaths due to legal intervention, deaths of undetermined intent, and unintentional firearm deaths in the U.S.
CDC must receive written comments on or before January 3, 2025.
You may submit comments, identified by Docket No. CDC-2024-0089 by either of the following methods:
•
•
Submit all comments through the Federal eRulemaking portal (
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;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
The National Violence Death Reporting System (NVDRS) (OMB Control No. 0920-0607, Exp. 9/30/2025)—Revision—National Center for Injury Prevention and Control (NCIPC), Centers for Disease Control and Prevention (CDC).
Violence against others or oneself is a major public health problem in the United States and is a particular problem for the young: suicide and homicide were among the top four leading causes of death for Americans 10-44 and 1-34 years of age in 2022. A key to preventing these violent deaths is to understand and target their circumstances. Given the magnitude of the problem, it is noteworthy that no national surveillance system for violent deaths existed in the U.S. until the National Violent Death Reporting System (NVDRS) was developed. NVDRS is a state-based surveillance system developed to monitor the occurrence of violent deaths (
CDC received initial OMB approval for NVDRS in November 2004 and renewals through July 2020. This Revision request includes several minor updates: (1) implement updates to the web-based system to improve performance, functionality, and accessibility; (2) add new data elements to the system; and (3) make minimal revisions to the NVDRS Coding Manual. The School Associated Violent Death (SAVD) module was added in the previous Revision request on July 2020, due to the discontinuation of the SAVD Surveillance System (OMB Control No. 0920-0604). SAVD currently monitors school-associated violent deaths across the U.S. by abstracting data from media reports. These data play an important role in assessing national trends in school-associated violent deaths and helping inform efforts to prevent fatal school violence. To address duplication, the SAVD was phased out and the SAVD module in NVDRS will capture in depth information about such incidents. The Public Safety Officer Suicide Reporting module was also added to the system to capture more detailed information on suicides among public safety officers. This module includes information specific to first responders and builds upon elements collected as part of current NVDRS. Like the SAVD module, it is a tab in the NVDRS web-based system that only applies to a subset of incidents.
NVDRS is an ongoing surveillance system that captures annual violent death counts, CDC aggregates de-identified data from each state into one national database that is analyzed and released in annual reports and other publications. 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. NVDRS generates public health surveillance information at the national, state, and local levels that is more detailed, useful, and timely. The information helps identify where prevention efforts need to be focused. CDC requests OMB approval for an estimated 41,827 annual burden hours. There are no costs to respondents other than their time to participate.
Food and Drug Administration, HHS.
Notice of availability; extension of comment period.
The Food and Drug Administration (FDA or we) is extending the comment period for a draft guidance for industry entitled “Voluntary Sodium Reduction Goals: Target Mean and Upper Bound Concentrations for Sodium in Commercially Processed, Packaged, and Prepared Foods (Edition 2).” The draft guidance, when finalized, will describe our views on the next voluntary goals (Phase II (3-year)) for sodium reduction in a variety of identified categories of
Submit either electronic or written comments on the draft guidance by January 13, 2025, to ensure that we consider your comment on the draft guidance before we begin work on the final version of the guidance.
You may submit comments on any guidance at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the draft guidance to the Nutrition Center of Excellence, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your request. See the
Kasey Heintz, Nutrition Center of Excellence, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-1376.
In the
We have received requests for a 90-day extension of the comment period. In general, the requests explained that industry needed more time to thoroughly review the draft guidance against numerous product lines and that industry also anticipates a need to manage multiple critical initiatives from FDA, including a final rule on “healthy” labeling and a proposed rule on front-of-package nutrition labeling.
We have considered the requests and are extending the comment period for an additional 60 days until January 13, 2025. We believe that this extension will allow adequate time for interested persons to submit comments without significantly delaying finalizing the guidance.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA, the Agency, or we) is announcing the availability of a final guidance for FDA staff entitled “Sec. 540.525 Scombrotoxin (Histamine)-forming Fish and Fishery Products—Decomposition and Histamine (CPG 7108.24) Compliance Policy Guide.” This compliance policy guide (CPG) is intended to provide FDA staff guidance on adulteration associated with decomposition and/or histamine identified during surveillance sampling and testing of fish and fishery products susceptible to histamine formation.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the guidance to Division of Seafood Safety, Office of Dairy and Seafood Safety, Office of Microbiological Food Safety, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740. Send two self-addressed adhesive labels to assist that office in processing your request. See the
Steven Bloodgood, Division of Seafood Safety, Office of Dairy and Seafood Safety, Office of Microbiological Food Safety, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-5316; or Jessica Ritsick, Office of Policy, Regulations, and Information, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2378.
We are announcing the availability of a CPG for FDA Staff entitled “Sec. 540.525 Scombrotoxin (Histamine)-forming Fish and Fishery Products—Decomposition and Histamine (CPG 7108.24).” We are issuing this guidance consistent with our good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on this topic. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This CPG is intended to provide FDA staff guidance on adulteration associated with decomposition and/or histamine identified during surveillance sampling and testing of fish and fishery products susceptible to histamine formation. This finalized CPG supersedes FDA's existing CPG on this topic.
In the
We received comments on the draft guidance and have modified the final guidance where appropriate. Changes to the guidance include the addition of a detailed explanation for our revisions to the histamine levels set forth in the guidance. The guidance announced in this notice finalizes the draft guidance dated December 2021.
This guidance contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 is not required.
Persons with access to the internet may obtain the guidance at
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects of the Paperwork Reduction Act of 1995, HRSA announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate and any other aspect of the ICR.
Comments on this ICR should be received no later than January 3, 2025.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the information collection request title for reference.
This is a request to expand the current OPTN data collection, approved under OMB No. 0915-0157. HRSA is submitting this new data collection, separate from OMB No. 0915-0157, since it includes new forms developed in response to an HHS Secretarial Data Directive that are not in use by OPTN. HRSA believes that separating these data collections will minimize confusion, increase clarity among OPTN members and stakeholders, and enable more direct feedback on the new forms. Both data collections include time-sensitive, life-critical data on transplant candidates and potential organ donor patients, the organ matching process, histocompatibility results, organ labeling and packaging, and pre-and post-transplantation data on recipients and donors. The OPTN collects these specific data elements from transplant centers.
HRSA and the OPTN use this information to: (1) facilitate organ placement and match donor organs with recipients; (2) monitor compliance of member organizations with federal laws and regulations and with OPTN requirements; (3) review and report periodically to the public on the status of organ donation, procurement, and transplantation in the United States; (4) provide data to researchers and government agencies to study the scientific and clinical status of organ transplantation; and (5) perform transplantation-related public health surveillance, including the possible transmission of donor disease.
This new collection consists of three new data forms as directed by the HHS Secretary, which were developed to improve the OPTN organ matching and allocation process and OPTN member compliance with OPTN requirements:
• One new form will collect data from the point of referral of a patient to an organ procurement organization (OPO) for potential deceased organ donation. These data will provide a more objective source of information on procurement practices, the management of donor patients, and how these practices inform the supply of deceased donor organs available for transplant. These data may also help to improve monitoring of OPO performance and would facilitate quality assurance and performance improvement efforts to reduce the variation in the quality-of-care OPOs provide to donors and donor families.
• Two new forms will expand data collection from the point of patient registration, referral, and evaluation at transplant centers. These data will enable collection of data from the point of referral. Pre-waitlisting data will provide insight into who gets referred
Once this collection is approved, HRSA will cease the use of the Death Notification Registration and the Deceased Donor Death Referral forms that are included within the existing OMB-approved Data System for Organ Procurement and Transplantation Network OMB No. 0915-0157. This decision was made to avoid unnecessary burden and redundancy in the data collected by this package and the existing OMB data collection instrument.
The average burden estimates of both new pre-waitlist forms are based on the 2023 burden estimates of existing OMB-approved Transplant Candidate Registration forms, approved under 0915-0157. The average burden estimate of the Ventilated Patient Form is based on the average burden estimate of the 2024 burden estimates of existing OMB-approved Death Notification Registration form with an additional 0.08 hour per collected form burden to reflect an increase in total data fields.
HRSA specifically requests comments on: (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Advisory Committee to the Director, National Institutes of Health.
This will be a hybrid meeting held in-person and virtually and will be open to the public as indicated below. Given the capacity constraints of the venue, the public is strongly encouraged to attend virtually via NIH videocast. Individuals who plan to attend in-person or view the virtual meeting and need special assistance or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The meeting can be accessed from the NIH Videocast at the following link:
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has procedures at
Information is also available on the Institute's/Center's home page:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Bureau of Land Management, Interior.
Notice of availability.
In compliance with the National Environmental Policy Act of 1969, as amended (NEPA), and the Federal Land Policy and Management Act of 1976, as amended (FLMPA), the Bureau of Land Management (BLM) has prepared a Proposed Resource Management Plan (RMP) Amendment and Final Environmental Impact Statement (EIS) for the Rough Hat Clark Solar Project and by this notice is announcing the start of a 30-day protest period of the Proposed RMP Amendment to the BLM Director.
This notice announces the opening of a 30-day protest period for the Proposed RMP Amendment. Protests must be postmarked or electronically submitted on the BLM's National NEPA Register site within 30 days of the date that the Environmental Protection Agency (EPA) publishes its Notice of Availability (NOA) in the
The Proposed RMP Amendment, Final EIS, and associated documents are available on the BLM National NEPA Register project website at
Instructions, including addresses, for filing a protest with the BLM for the Rough Hat Clark Solar Project can be found at:
Jessica Headen, Project Manager, telephone (702) 515-5206, address Bureau of Land Management, 4701 N Torrey Pines Drive, Las Vegas, NV 89130. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services for
The Proposed RMP Amendment is being considered to allow the BLM to evaluate the effects of granting a right-of-way (ROW) for the Rough Hat Clark Solar Project. This process requires amending the existing 1998 Las Vegas Resource Management Plan (Las Vegas RMP) to modify the Visual Resource Management (VRM) Class of lands south of State Route 160 and west of Tecopa Road to the Town of Pahrump, Nevada. The Applicant's proposed Project does not conform with the management objectives of the Project area's current VRM classification (Class III), and therefore the designated lands would be modified from VRM Class III to VRM Class IV.
The Proposed RMP Amendment covers a larger area than the Rough Hat Clark Solar Project application area. The Proposed RMP Amendment area would encompass approximately 9,960 acres of BLM-administered land. This area includes the location where the Yellow Pine Solar Project is currently under construction, as well as lands within the application areas for the Copper Rays, Mosey, and Purple Sage Solar Projects. Given the existing and proposed uses of this area, amending the VRM from Class III to Class IV is necessary to ensure activities conform with the Las Vegas RMP.
The need for the BLM's action is to respond to the Applicant's request for a ROW authorization to construct, operate, maintain, and decommission the proposed Project in accordance with the BLM's responsibility under Title V of FLPMA and 43 CFR part 2800. The BLM's action of considering the ROW application also would meet the BLM's obligation to contribute towards the legislative and administrative goals of advancing the development of renewable energy production on Federal public lands, as directed by Section 3104 of the Energy Act of 2020 and Executive Order 14057.
The Project as proposed would not conform to the 1998 Las Vegas RMP as required by 43 CFR 1610.5-3(a). The BLM would need to amend the RMP to bring it into compliance, as discussed above.
The purpose of the BLM's action is to determine if the Applicant's Project and alternatives are consistent with relevant laws, regulations, and policies, and to consider whether to grant, grant with modifications, or deny the ROW. The purpose of the RMP Amendment is to ensure that any development of renewable energy production in the general vicinity of the Applicant's proposed Project area conforms with the RMP's provisions, as provided for in 43 CFR 1610.5-3(c), specifically by reclassifying this geographic area as VRM Class IV.
The Applicant, Candela Renewables, LLC, applied to the BLM's Las Vegas Field Office for a ROW grant to provide the necessary land and access for the construction, operation, maintenance, and eventual decommissioning of the proposed Rough Hat Clark Solar Project and interconnection to the regional transmission system. The Proposed Action would include up to a 400-megawatt (MW) alternating current solar photovoltaic power generating facility with up to 700 MW of battery energy storage on approximately 2,469 acres of BLM-managed public land. The Project area is located in the Pahrump Valley in Clark County, Nevada, immediately adjacent to the Clark/Nye county line, three miles southeast of the Town of Pahrump, and approximately 38 miles west of the City of Las Vegas. The expected life of the Project is 30 years.
Alternatives to the Proposed Action were developed by the BLM to avoid or reduce various resource conflicts. Key resource constraints include the habitat for and presence of the Mojave desert tortoise listed as threatened under the Endangered Species Act, along with limited groundwater resources, vegetation at the Project area, and the generation of dust.
Alternative Action 1, referred to as the Resources Integration Alternative, was developed in response to issues raised by the public and agency considerations. The intent of the Resources Integrated Alternative is to minimize disturbance to vegetation and soils within the solar facility by setting maximum allowable disturbance thresholds to vegetation during construction, setting restoration goals, and utilizing topography-spanning technologies. The Resources Integration Alternative would implement overland travel for project construction as this method is less intensive than others and is expected to improve the retention of native vegetation, wildlife habitat, soils, seed banks, and biological soil crusts while minimizing water quality impacts and air quality impacts from fugitive dust.
The No Action Alternative would be a continuation of existing conditions and the ROW would not be approved.
The BLM evaluated the alternatives in consultation with other Federal and State agencies, Tribes, the public, and cooperating agencies. The BLM's Preferred Alternative is Alternative 1, the Resources Integration Alternative.
The BLM analyzed a combination of Project Design Features and Best Management Practices to eliminate or minimize impacts associated with the BLM Preferred Alternative. This includes required Solar PEIS Programmatic Design Features, Southern Nevada District Office Project Design Features, and required management plans, all of which are detailed in Appendix B of the Final EIS.
The BLM published the NOA of the Draft EIS and RMP Amendment in the
The BLM received a total of 207 substantive and non-substantive letters and verbally recorded comments from 7 Federal, State, and local agencies; 1 member of a Native American Tribe; 9 non-governmental organizations; 1 private company; and 189 individual members of the public. Detailed responses to comments can be found in Appendix G of the Final EIS. In response to the substantive comments received, the BLM made corrections to analyses or data in the EIS or explained why the comments did not warrant additional changes to the EIS. For example, the BLM updated the acreages of impacts for the Proposed Action and Alternative 1, added information regarding the U.S. Fish and Wildlife Service Biological Opinion and impacts to desert tortoise, revised descriptions of Project infrastructure, updated the groundwater analysis, revised the cultural resources and recreation analysis, and included two new mitigation measures addressing the monarch butterfly and desert tortoise.
The BLM planning regulations state that any person who participated in the preparation of the RMP and has an interest that will or might be adversely
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.
Bureau of Reclamation, Interior.
Notice of contract actions.
Notice is hereby given of contractual actions that have been proposed to the Bureau of Reclamation (Reclamation) and are new, discontinued, or completed since the last publication of this notice. This notice is one of a variety of means used to inform the public about proposed contractual actions for capital recovery and management of project resources and facilities consistent with section 9(f) of the Reclamation Project Act of 1939. Additional announcements of individual contract actions may be published in the
The identity of the approving officer and other information pertaining to a specific contract proposal may be obtained by calling or writing the appropriate regional office at the address and telephone number given for each region in the
Morgan Raymond, Reclamation Law Administration Division, Bureau of Reclamation, P.O. Box 25007, Denver, Colorado 80225-0007;
Consistent with section 9(f) of the Reclamation Project Act of 1939, and the rules and regulations published in 52 FR 11954, April 13, 1987 (43 CFR 426.22), Reclamation will publish notice of proposed or amendatory contract actions for any contract for the delivery of project water for authorized uses in newspapers of general circulation in the affected area at least 60 days prior to contract execution. Announcements may be in the form of news releases, legal notices, official letters, memorandums, or other forms of written material. Meetings, workshops, and/or hearings may also be used, as appropriate, to provide local publicity. The public participation procedures do not apply to proposed contracts for the sale of surplus or interim irrigation water for a term of 1 year or less. Either of the contracting parties may invite the public to observe contract proceedings. All public participation procedures will be coordinated with those involved in complying with the National Environmental Policy Act. Pursuant to the “Final Revised Public Participation Procedures” for water resource-related contract negotiations, published in 47 FR 7763, February 22, 1982, a tabulation is provided of all proposed contractual actions in each of the five Reclamation regions. When contract negotiations are completed, and prior to execution, each proposed contract form must be approved by the Secretary of the Interior, or pursuant to delegated or redelegated authority, the Commissioner of Reclamation or one of the regional directors. In some instances, congressional review and approval of a report, water rate, or other terms and conditions of the contract may be involved.
Public participation in and receipt of comments on contract proposals will be facilitated by adherence to the following procedures:
1. Only persons authorized to act on behalf of the contracting entities may negotiate the terms and conditions of a specific contract proposal.
2. Advance notice of meetings or hearings will be furnished to those parties that have made a timely written request for such notice to the appropriate regional or project office of Reclamation.
3. Written correspondence regarding proposed contracts may be made available to the general public pursuant to the terms and procedures of the Freedom of Information Act, as amended.
4. Written comments on a proposed contract or contract action must be submitted to the appropriate regional officials at the locations and within the time limits set forth in the advance public notices.
5. All written comments received and testimony presented at any public hearings will be reviewed and summarized by the appropriate regional office for use by the contract approving authority.
6. Copies of specific proposed contracts may be obtained from the appropriate regional director or his or her designated public contact as they become available for review and comment.
7. In the event modifications are made in the form of a proposed contract, the appropriate regional director shall determine whether republication of the notice and/or extension of the comment period is necessary.
Factors considered in making such a determination shall include, but are not limited to, (i) the significance of the modification, and (ii) the degree of public interest which has been expressed over the course of the negotiations. At a minimum, the regional director will furnish revised contracts to all parties who requested the contract in response to the initial public notice.
27. Clyde Little, Boysen Unit, Pick-Sloan Missouri Basin Program, Wyoming: Consideration for renewal of long-term irrigation water service Contract No. 039E6A0093, as amended.
28. Town of Kirby, Boysen Unit, Pick-Sloan Missouri Basin Program, Wyoming: Consideration for renewal of long-term water service for supplemental municipal water for Contract No. 5-07-60-WS173.
29. Central Oklahoma Master Conservancy District, Norman Project, Oklahoma: Consideration for renewal of a water service contract for municipal and industrial uses for Contract No. 219E640007.
30. Elevation NewCo, LLC, East Bench Unit, Helena-Great Falls Division, Pick-Sloan Missouri Basin Program, Montana: Consideration for name re-assignment of Contract No. 119E670012.
44. South Cache Water Users Association, Hyrum Project, Utah. Reclamation intends to enter into a repayment contract with the South Cache Water Users Association under the Safety of Dams Act for the reimbursable portion of the costs to repair the spillway at Hyrum Dam.
45. Strawberry Valley Project, Utah. The water users on the Strawberry Valley Project have requested to enter into a conversion contract with Reclamation under the Sale of Water for Miscellaneous Purposes Act to convert the project irrigation water to miscellaneous purposes.
46. Seedskadee Project, Wyoming. The Wyoming Water Development Commission (WWDC) desires to enter into a contract with Reclamation to acquire the use of the remaining water in Fontenelle Reservoir under Section 9 of the Reclamation Project Act of 1939. The WWDC also desires to enter into an exchange contract with Reclamation under Section 14 of the Reclamation Project Act of 1939.
47. Uncompahgre Project, Colorado River Storage Project, Colorado. The Uncompahgre Valley Water Users Association desires to enter into a renewal contract with Reclamation under Section 14 of the Reclamation Project Act of 1939 to exchange water between Taylor Park Reservoir and Blue Mesa Reservoir.
48. Navajo Gallup Project, Arizona. The Navajo Nation desires to enter into a contract with Reclamation under the Contributed Funds Act of 1922 to provide funding to increase the size of certain laterals on the Navajo Gallup Project.
49. Middle Rio Grande Project, New Mexico. The Bureau of Reclamation desires to store El Vado irrigation water in Abiquiu Reservoir under Section 14 of the Reclamation Project Act of 1939.
17. United States Department of the Navy, Boulder Canyon Project, All American Canal System, California: Terminate Interagency Agreement No. 6-07-30-W0351 pursuant to Article 4.
7. Stanfield Irrigation District, Umatilla Basin Project, Oregon: A Short-term water service contract to provide for the use of conjunctive use water, if needed, for the purposes of pre-saturation and for such use in October to extend their irrigation season. Completed June 27, 2024.
17. J.R. Simplot Company and Micron Technology, Inc., Boise Project, Arrowrock Division, Idaho: Request to renew municipal and industrial water service contract pursuant to Section 9(c)(2) of the Reclamation Project Act of 1939. Completed June 3, 2024.
39. CVP, California: Water Service Contract for fish & wildlife purposes with Contra Costa Water District and/or Los Vaqueros Reservoir Joint Powers Authority pursuant to Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706).
40. Tri-Valley Water District, CVP, California: Proposed partial assignment of 150 acre-feet of Tri-Valley Water District's CVP water supply to Kaweah Delta Water Conservation District.
41. Irrigation water districts, individual irrigators, M&I and miscellaneous water users, CVP, California: Execution of Temporary Water Service Contracts for Surplus Water Under Section 215 of the Reclamation Reform Act of 1982 with various entities for volumes up to 100,000 acre-feet per year per contract.
42. CVP, California. Administrative assignments of various water service/repayment contracts.
12. San Luis WD, Meyers Farms Family Trust, and Reclamation, CVP, California: Revision of an existing contract between San Luis WD, Meyers Farms Family Trust, and Reclamation providing for an increase in the exchange of water from 6,316 to 10,525 acre-feet annually and an increase in the storage capacity of the bank to 60,000 acre-feet. Completed June 25, 2024.
43. Meyers Farms Family Trust, CVP, California: Voluntary Full Assignment of Contract No. 07-WC-20-3529A, from Meyers Farms Family Trust to Westside Agriculture LLC. Completed July 25, 2024.
44. Meyers Farms Family Trust, CVP, California: Voluntary Full Assignment of Contract No. 9-07-20-W1608, from Meyers Farms Family Trust to Westside Agriculture LLC. Completed July 25, 2024.
45. Meyers Farms Family Trust, CVP, California: Voluntary Full Assignment of Contract No. 21-WC-20-5784, from Meyers Farms Family Trust to Westside Agriculture LLC. Completed July 25, 2024.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of an expedited review pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty order on persulfates from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
October 4, 2024.
Alexis Yim (202-708-1446), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigations Nos. 701-TA-746-747 and 731-TA-1724-1725 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of overhead door counterbalance torsion springs from China and India, provided for in subheadings 7308.90.95, 7320.20.50, 8412.80.10, and 8412.90.90 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Governments of China and India. Unless the Department of Commerce (“Commerce”) extends the time for initiation, the Commission must reach a preliminary determination in antidumping and countervailing duty investigations in 45 days, or in this case by December 13, 2024. The Commission's views must be transmitted to Commerce within five business days thereafter, or by December 20, 2024.
October 29, 2024.
Peter Stebbins ((202) 205-2039), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these investigations and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will be submitting the following information collection request to the Office of Management and Budget (OMB) for
Comments are encouraged and will be accepted for 30 days until December 4, 2024.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact: Niki Wiltshire, Personnel Security Division, by email at
The proposed information collection was previously published in the
—Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
—Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
—Enhance the quality, utility, and clarity of the information to be collected; and/or
—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,
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Overview of this information collection:
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218 Washington, DC 20530.
Employee Benefits Security Administration, Labor.
Notice of proposed exemption.
This document provides notice of the pendency before the Department of Labor (the Department) of a proposed individual exemption from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA). This proposed exemption would permit the purchase of a parcel of improved real property by the Boilermakers Western States Apprenticeship Fund (the Plan or Applicant) from a local union lodge whose members may be participants in the Plan. The Plan requests the exemption in order to continue to utilize the property to carry out its training program and its administrative duties.
All written comments and requests for a hearing should be submitted to the Employee Benefits Security Administration (EBSA), Office of Exemption Determinations, Attention: Application No. L-12069, via email to
Mr. Frank Gonzalez of the Department at (202) 693-8553. (This is not a toll-free number).
Additionally, the
The Department is considering granting an exemption under the authority of ERISA Section 408(a) and in accordance with the Department's exemption procedures regulation.
This proposed exemption would provide relief from certain restrictions set forth in ERISA sections 406(a)(1)(A) and (D), and 406(b)(1) and (2). However, this proposed exemption would not provide relief from any other violation of law.
1. The Plan is an apprenticeship program trust fund created to provide training benefits to individuals engaged in the boilermaker construction trade.
2. The Plan is a multiemployer plan created pursuant to collective bargaining agreements (under the Taft-Hartley Act of 1947)
3. The Plan provides training and education to eligible participants located in the following states: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming (the Western States Area).
4. The Plan is sponsored by the Boilermakers National Apprenticeship Program (the BNAP).
5. A board of trustees—the Boilermakers National Apprenticeship Board—administers the Plan (the Board of Trustees). The Board of Trustees consists of equal representation from locals of the Boilermakers Union (the Union Trustees) and signatory contractors/employers (the Employer Trustees). The Board of Trustees has discretion over the Plan's assets, including over the investment of such assets.
6. The Plan receives funding through collectively bargained contributions from contributing employers and grants,
7. During a five-year period ending on February 11, 2022, the Plan nearly doubled its apprentice numbers, and the participation rate continued to increase as of May 17, 2024, as the demand for boilermakers in the Western States Area continues to rise. Accordingly, the Plan is interested in opening a new regional training center and is seeking to purchase an improved real estate property parcel (the Property) from Lodge 4, a labor union, located in Page, Arizona, that is affiliated with the Boilermakers Union. Lodge 4 is a separate legal entity from both the Boilermakers Union and the other lodges of the Boilermakers Union. The Board of Trustees does not currently have any Union Trustees who were appointed by Lodge 4. Rather, the Union Trustees serving on the Plan's Board of Trustees are appointed either by the Boilermakers Union or other lodges of the Boilermakers Union (
8.
9. As discussed further below, the Plan's apprentices currently use the Property's buildings as training facilities (the Training Facility). The Applicant represents that this use of the Training Facility is essential for the Plan to fulfill its purpose of providing education and training opportunities to its apprentices.
10. The Applicant represents that the Property has been modified to carry out the purposes of the Plan. According to the Applicant, the Property is ideally situated to be a regional training facility for boilermaker apprentices and journeypersons, and the Facility is ideally suited for the Plan's purposes. The Property also has administrative space for the Plan's headquarters.
11. Lodge 4 has decided to move and no longer desires to operate the Training Facility. The Union Trustees recused themselves from voting with respect to the Plan's decision to enter into the Proposed Transaction, and the Plan's Employer Trustees
12. On January 20, 2022, the Employer Trustees gave their approval for the Plan to proceed with the purchase of the Property (the Proposed Transaction), subject to the Department's grant of this proposed exemption. The Plan intends to purchase the Property from Lodge 4 within ninety (90) days following the Department's grant of a final exemption, should such an exemption be granted. The Applicant represents that the Plan considered other possible locations and properties for a regional center, but after consulting with various service providers, it ultimately determined that purchasing the Property owned by Lodge 4 was the most appropriate given the Plan's goals, as explained below.
13. In connection with the Proposed Transaction, the Plan would pay the lesser of: (i) the fair market value of $920,000 identified in the appraisal conducted on April 1, 2021; and (ii) the updated appraised fair market value of the Property as determined by the qualified independent appraiser on the purchase date.
14. Lodge 4 and the Plan will each pay half of the costs associated with the proposed exemption, including but not limited to fees for qualified independent fiduciary services, qualified independent appraiser services, and legal fees for preparing the Plan's application to the Department requesting this proposed exemption.
15. The Plan intends to make a $460,000 cash down payment to Lodge 4 (approximately 4.7 percent of the Plan's total assets) and will finance the remaining $460,000 of the purchase price through a third-party bank (as further described below). The Plan's estimates that the total cost to purchase the Property will represent approximately 9.4 percent of the Plan's total assets.
16. On November 1, 2021, the Plan executed a Term Loan Commitment Letter with the Bank of Labor, a bank located in Kansas City, Kansas, for $600,000 (approximately 6.1 percent of the Plan's total assets).
17.
18. ERISA section 406(a)(1)(A) prohibits a plan fiduciary from causing the sale or exchange, or leasing, of property between a plan and a party in interest. ERISA section 406(a)(1)(D) provides that a plan fiduciary shall not cause the plan to engage in a transaction if (1) that fiduciary knows or should know that such transaction constitutes a direct or indirect transfer of any of the plan's assets to a party in interest or (2) would result in the plan's assets being used by or for the benefit of a party in interest.
19. The Plan's purchase of the Property from Lodge 4 in exchange for the Plan's funds would constitute a prohibited sale and transfer of Plan assets in violation of ERISA sections 406(a)(1)(A) and (D), respectively.
20. Additionally, ERISA section 406(b)(1) prohibits a plan fiduciary from dealing with a plan's assets “. . . in his own interest or for his own account.” ERISA section 406(b)(2) prohibits a plan fiduciary “in his individual or in any other capacity [from acting] in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries.”
21. The Union Trustees may have an interest in benefitting Lodge 4, a party in interest to the Plan, because Lodge 4 is also a Boilermakers Union lodge, and as such, it is affiliated with the Boilermakers Union. Although the Applicant represents that the Union Trustees “recused” themselves from voting on the Plan's decision to enter into the Proposed Transaction, whether the Union Trustees' recusal from any aspects of the Proposed Transaction negates a violation of ERISA section 406(b)(1) or (2), involves an inherently factual determination that is beyond the scope of this proposed exemption. Therefore, the Department cannot determine from the record whether the Union Trustees sufficiently recused themselves from engaging in the deliberations regarding of the Proposed Transaction or using their positions to influence the Employer Trustees' decision to approve the Proposed Transaction in order to determine definitively that there was no violation of ERISA section 406(b)(1) or (b)(2). To the extent the Union Trustees exercised any authority, control, or responsibility that make them a fiduciary to cause the Plan to engage in the Proposed Transaction, they would have violated ERISA section 406(b)(1) and (b)(2), because the Proposed Transaction would benefit Lodge 4, an entity in which the Union Trustees have an interest and involve Union Trustees acting on behalf of both the Plan and Lodge 4.
22.
23. The Applicant represents that the Plan has also invested nearly $600,000 in equipment at the Training Facility to equip 24 welding stations, including installing a $250,000 custom ventilation system designed to remove noxious fumes that are produced by the welding machines. The Applicant states that the Plan still owns this equipment, which is only used in connection with the training of participants by Lodge 4 in connection with the provision of services to the Plan, described in more detail below.
24. The Applicant represents that the Proposed Transaction would benefit the Plan because Lodge 4 intends to terminate its involvement with the Training Facility. If Lodge 4 no longer runs the Training Facility, the Plan can longer provide training there. Furthermore, the Training Facility is currently equipped with Plan-purchased equipment that is used to provide training for participants. If Lodge 4 terminates its involvement with the Training Facility and/or sells the Property, the Plan would need to remove and relocate the equipment at significant time and expense.
25. The Applicant represents that the Proposed Transaction would benefit the Plan because of the Property's location. The Property is centrally located in the Southern portion of the Western States Area with convenient access from New Mexico, Arizona, Southern Nevada, and Southern California. The Property also is located on the edge of the Navajo Nation reservation, which has traditionally been a large source of apprenticeship participants in that area, making the Property a convenient location to a segment of current and future apprenticeship participants.
26. The Applicant represents further that the Plan wants to create a regional training center on the Property due to the transient nature of the boilermaker trade and industry. The Applicant explains that journeypersons and apprentices travel based on where the projects are located, including traveling outside the boundary of their home lodge of the Boilermakers Union. As such, the location of the Boilermakers Union lodges and employers are less important than the location of the projects. Larger projects may involve journeymen and apprentices from multiple Boilermakers Union lodges. The Training Facility will be available to all apprentices in the Western States Area, regardless of their Boilermakers Union lodge affiliation. While there are other training facilities across the 13-
27. The Applicant represents further that the Proposed Transaction would benefit the Plan, because the Property will become the site for the Plan's administrative headquarters. If the Plan moves its administrative headquarters to the Property, it will no longer need the Leased Office and will avoid incurring the rental cost for that office. Additionally, combining the Training Facility with the Plan's administrative offices will provide closer access for the staff to monitor the Training Facility and for the Plan's apprenticeship and journeyperson participants to interact with the Plan's administrative staff.
28. The Applicant represents that the Plan would also benefit from the Proposed Transaction because the Property provides flexibility for expansion as the number of Boilermaker apprentices continues to grow and significant space for: (a) large training sessions where there are numerous vehicles and recreational vehicles utilized by participants; (b) outdoor training components such as training involving a rigging tower; and (c) expansion of training facilities and/or demonstrations.
29.
30. In determining the Property's fair market value, Hanning utilized two methods: (a) the cost approach; and (b) the sales comparison approach, and he applied primary weight to the sales comparison approach given the owner-occupied nature of the Property. Based on his analysis, Hanning concluded that the Property's fair market value was $920,000 as of April 1, 2021.
31. During the pendency of the Applicant's request for this proposed exemption, the Applicant submitted to the Department an updated report from the Qualified Independent Appraiser, dated July 28, 2022, indicating that no changes to the Property's structures have taken place that would change the Property's value reflected in the Appraisal Report dated April 1, 2021.
32. The Applicant states that the fees for the April 1, 2021 Appraisal Report, which are shared equally between the Plan and Lodge 4, totaled $3,750. Furthermore, in the event this proposed exemption is granted, the conditions for relief require the appraisal to be updated by the Qualified Independent Appraiser to reflect the fair market value of the Property on the Transaction's closing date. The Plan does not expect that the cost to update the appraisal will exceed $3,750.
33.
34. Wagner acknowledged that it understands its duties and responsibilities under ERISA in acting as the Independent Fiduciary, and will determine whether, with the assistance of one or more independent appraisals, the proposed real estate purchase transaction would be in the interests of the Plan and the Plan's participants and beneficiaries and protective of their rights. Wagner's Engagement Letter contains no provisions that indemnify Wagner for any failure to adhere to its contractual obligations or to state or Federal laws applicable to its work including ERISA or that waives any of the Plan's rights, claims, or remedies of the Plan under ERISA, State, or Federal law against Wagner with respect to the proposed transaction.
35. Wagner represents that the percentage of its current revenue that is derived from any party in interest involved in the Proposed Transaction is 0.13%. Furthermore, Wagner represents that it has no current or future interest in the outcome of the Proposed Transaction. Its sole financial interest in the transaction is the receipt of its fees for acting as the Independent Fiduciary.
36. Wagner states that the Proposed Transaction will be implemented only after the Department grants a final exemption and the relevant conditions are satisfied, and Wagner determines that the Proposed Transaction would be in the interests of the Plan and of its participants and beneficiaries. In this regard, Wagner will prepare a statement of the reasons on which its “best interest” determination is based and will submit the statement to the Department (the Statement). Before the closing of the Proposed Transaction, Wagner will ensure that all of the preconditions to the real estate purchase are completed and will monitor the transaction until and coincident with the transaction's closing. The conditions for relief in the proposed exemption require Wagner to have the authority to take all appropriate actions to safeguard the Plan's interests and the interests of the Plan's participants and beneficiaries and to:
(i) Monitor the Proposed Transaction on the Plan's behalf on a continuing basis until the earlier of the closing or the date that the Proposed Transaction is terminated;
(ii) Ensure that the Proposed Transaction remains in the interests of the Plan and of the Plan's participants and their beneficiaries and, if not, take any appropriate actions available under the particular circumstances; and
(iii) Ensure compliance with all of the exemption conditions and obligations imposed on any party dealing with the Plan with respect to the Proposed Transaction.
37.
38. According to the IF Report, the Independent Fiduciary reviewed all the particulars of the Property and existing Training Facility, including the Independent Appraisal, the terms of the Real Estate Purchase and Sale Agreement between the Plan and Lodge
39. The Independent Fiduciary determined that the Property's location is convenient for the Plan's participants as well as the Plan's staff who will benefit from affordable housing in close proximity to the Property. As described in the IF Report, the purchase of the Property will further the Plan's long-term goals to stabilize the Plan's expenses with a regional center in this area. The IF Report provides that the Property's overall size appears to present the opportunity for expansion with minimal difficulty or hardship for the Plan and its participants as the number of Boilermakers Union members increase. The IF Report notes further that the Property has existing buildings with considerable life expectancy that are particularly suited to the Plan's intended use.
40. The IF Report provides that the Plan already owns the training equipment currently housed at the Training Facility, and removing and relocating this equipment to another location would be extremely costly. The equipment on the site will provide the Plan with significant start-up costs savings as compared to purchasing a comparable facility and having to pay to relocate this equipment or purchase new equipment to furnish the new facility. Wagner opines that the Property provides a turn-key facility, ready immediate occupancy, and use for the Plan's intended purposes.
41. The Independent Fiduciary notes that the Plan will save money by using the Property to house its administrative office instead of paying rent for the Leased Office and will benefit the Plan by locating its administrative offices on the Property where administrative staff will be able to monitor the Training Facility and interact with participants in connection with administrative matters.
42. The IF Report describes the Independent Fiduciary's review and approval of the methodology used by the Independent Appraiser. Wagner opined that, based on the intended use of the Property, it would be prudent for the Plan to rely on the appraised value as of April 1, 2021, subject to change pending the updated appraisal at date of purchase.
43. Finally, the Independent Fiduciary examined the Plan's ability to buy and finance the purchase of the Property, including the percent of the purchase price to total plan assets, any prospective earnings or savings from the proposed purchase, including the difference between the current lease arrangement and the proposed purchase of the Property, and the Plan's potential liabilities. The Independent Fiduciary determined that the Plan's use of its assets for the proposed real estate purchase of the Property will not negatively impact the overall financial health of the Plan and its programs. In this regard, the IF Report notes that the Plan receives continual stable funding through collectively bargained contributions from contributing employers to provide the benefits of its programs and subsidize training for the local Boilermaker lodges in the Western Region. According to the Plan, the monthly mortgage payments on the $460,000 loan will be less than $10,000. The Plan's average monthly income is above $200,000. Therefore, the Independent Fiduciary determined that the mortgage for the amount of $460,000 will not negatively affect the Plan's operating budget. In addition, the Plan will be relieved of incurring the additional rental expense to maintain its existing office space.
44.
45. The Proposed Transaction is a one-time transaction in which the Plan would make a $460,000 cash down payment and obtain a loan for the remaining balance of the purchase price that could not exceed $920,000. The loan's monthly payments could not exceed $10,000 and its collateral would be a first mortgage lien and assignment of the lease on the Property. The Plan must pay the lesser of the Property's fair market value of $920,000 as appraised on April 1, 2021, and an updated appraised value to be determined on the date of purchase, subject to cost sharing allocations regarding the cost for this exemption. The updated appraisal must be provided to the Department and will be made a part of the administrative record for this exemption application.
46. The terms and conditions of the Proposed Transaction must be at least as favorable to the Plan as the terms and conditions the Plan would have received in an arm's length transaction between unrelated and independent parties.
47. The Proposed Transaction must not be part of an agreement, arrangement, or understanding designed to benefit Lodge 4.
48. No later than 30 days after the Transaction is completed, the Independent Fiduciary must submit to the Department a written certification that all of the conditions of the final exemption have been met and must submit the Statement to the Department.
49. The Independent Fiduciary must:
(a) Determine that the Proposed Transaction is in the interest of and protective of the rights of the Plan and its participants and beneficiaries;
(b) Determine whether it is prudent for the Plan to proceed with the Proposed Transaction;
(c) Review, negotiate, and approve the terms and conditions of the Proposed Transaction;
(d) Represent the Plan's interests in connection with the Proposed Transaction, including monitoring the parties' compliance with terms of the contract of sale and the closing contract, enforcing the Plan's rights under the contract of sale and the closing contract, and ensuring the satisfaction of all preconditions for the Plan's purchase of the Property, including the terms of the proposed financing from an unrelated third-party bank;
(e) Monitoring to ensure that all exemption conditions are met and take whatever actions are necessary to protect the rights of the Plan and its participants and beneficiaries in the Proposed Transaction;
(f) Review the Appraisal Report and confirm that the underlying methodology is reasonable and accurate such that the valuation of the Property was reasonably derived;
(g) Ensure that the Appraisal Report is based on complete, current, and accurate information; the appraiser was prudently selected; the methodology used by the Qualified Independent Appraiser is consistent with sound valuation principles; and that it is reasonable under the circumstances to rely upon the Appraisal Report, as updated, to determine the fair market value of the Property as of the date of the transaction; and
(h) Not have entered into, or must not enter into, any agreement or instrument that violates either ERISA Section 410, or the Department's Regulations codified at 29 CFR 2509.75-4;
50. Furthermore, the Independent Fiduciary must not have entered into, and must not enter into, any agreement,
51. The Qualified Independent Appraiser must not have entered into, and must not enter into, any agreement, arrangement, or understanding that includes any provision that provides for the direct or indirect indemnification or reimbursement of the Qualified Independent Appraiser by the Plan or any other party for any failure to adhere to its contractual obligations or to state or Federal laws applicable to the Qualified Independent Appraiser's work. The Plan also must not waive any rights, claims or remedies of the Plan or its participants and beneficiaries under ERISA, the Code, or other Federal and state laws against the Qualified Independent Appraiser with respect to the Proposed Transaction.
52. The Employer Trustees but not the Union Trustees must determine that the Proposed Transaction is prudent and in the Plan's interest to proceed with the Transaction; the Union Trustees cannot participate or in any way influence the Employer Trustees' determination. Lastly, all the material facts and representations set forth in the Summary of Facts and Representations must be true and accurate at all times.
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Those persons who may be interested in the publication in the
The Department must receive all written comments and requests for a hearing no later than forty-five (45) days from the date of the publication of the Notice in the
All comments will be made available to the public.
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption under ERISA section 408(a) and/or Code section 4975(c)(2) does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions of ERISA and/or the Code, including any prohibited transaction provisions to which the exemption does not apply and the general fiduciary responsibility provisions of ERISA section 404, which, among other things, require a fiduciary to discharge their duties respecting the plan solely in the interest of the plan and its participants and beneficiaries and in a prudent manner in accordance with ERISA section 404(a)(1)(B); nor does it affect the requirement of Code section 401(a) that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;
(2) Before an exemption may be granted under ERISA section 408(a) and/or Code section 4975(c)(2), the Department must find that the exemption is administratively feasible, in the interests of the plan and of its participants and beneficiaries, and protective of the rights of participants and beneficiaries of the plan;
(3) The proposed exemption, if granted, would be supplemental to, and not in derogation of, any other provisions of ERISA and/or the Code, including statutory or administrative exemptions and transitional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is, in fact, a prohibited transaction; and
(4) The proposed exemption, if granted, would be subject to the express condition that the material facts and representations contained in the application are true and complete at all times and that the application accurately describes all material terms of the transactions which are the subject of the exemption.
(a) The term “Qualified Independent Fiduciary” means the Wagner Law
(b) The term “Qualified Independent Appraiser” means Accurity Morley & McConkie, LC, and any of its employees that provide any appraisal related service to the Plan in connection with this proposed exemption.
(c) The term “Mortgage Loan” means a mortgage loan from an independent, third-party bank consisting of a five-year term with payments based on 20-year amortization, ballooning at maturity, or such other mortgage loan prudently entered into by the Independent Fiduciary on behalf of the Plan.
The restrictions of ERISA Sections 406(a)(1)(A), (D), and 406(b)(1) and (2) shall not apply to the purchase of the improved real property located at 294 Cowboy Ray Road, Page, Arizona (the Property), by the Boilermakers Western States Apprenticeship Fund's (the Plan) from the “Navajo Nation” Lodge 4 of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers, and Helpers (Lodge 4), a party in interest with respect to the Plan (the Purchase); provided that the conditions in Section III are satisfied.
(a) The Purchase is a one-time transaction for the lesser of $920,000 in cash or an updated appraised value to be determined by the Qualified Independent Appraiser as of the Purchase's closing date (the Price). The updated report from the Qualified Independent Appraiser must be submitted to the Department within 30 days before the date the Purchase is completed for inclusion in the record for this exemption application;
(b) Approval of the Purchase must be made solely by Plan trustees that are not, and were not, appointed by a labor union that is affiliated with the International Brotherhood of Boilermakers, and such Plan trustees must prudently determine in a writing that the Purchase is in the Plan's best interest. Such non-union appointed Plan trustees must have considered other possible locations and properties that were unrelated to Lodge 4 prior to determining that the Purchase is the most appropriate given the Plan's goals. Any trustee appointed by a labor union that is affiliated with the International Brotherhood of Boilermakers cannot participate or in any way influence a non-union appointed Plan trustee;
(c) The Plan must retain the services of a Qualified Independent Fiduciary and the Qualified Independent Fiduciary must prudently:
(1) Determine that the Purchase is in the interest of, and protective of, the Plan and the Plan's participants;
(2) Determine whether it is prudent for the Plan to proceed with the Purchase;
(3) Review, negotiate, and approve the terms and conditions of the Purchase;
(4) Represent the Plan's interests in connection with the Purchase, including monitoring the parties' compliance with terms of the sales contract and the closing contract, enforcing the Plan's rights under the sale contract and closing contract, and ensuring the satisfaction of all conditions precedent to complete the Purchase, including the terms of the Mortgage Loan;
(5) Monitor to ensure that all of the exemption conditions are met and take whatever actions are necessary to protect the rights of the Plan and its participants and beneficiaries with respect to the Purchase;
(6) Review the Qualified Independent Appraisal Report and confirm that the underlying methodology is reasonable and accurate and that the valuation of the Property was reasonably derived;
(7) Ensure that the Qualified Independent Appraisal Report is based on complete, current, and accurate information; the Qualified Independent Appraiser was prudently selected; the methodology used by the Qualified Independent Appraiser is consistent with sound valuation principles; and that it is reasonable under the circumstances to rely upon the Qualified Independent Appraisal's report to determine the fair market value of the Property as of the date of the Purchase; and
(8) Not have entered into, and must not enter into, any agreement or instrument that violates either ERISA section 410, or the Department's Regulations codified at 29 CFR 2509.75-4;
(d) The terms and conditions of the Purchase must be at least as favorable to the Plan as the terms and conditions the Plan would have received in an arm's length transaction with an unrelated and independent party, each of which had full knowledge of the relevant facts, and neither of which were under any compulsion to buy or sell;
(e) The Purchase must not be part of an agreement, arrangement, or understanding designed to benefit Lodge 4 or the International Brotherhood of Boilermakers;
(f) In the event the Purchase is financed with a Mortgage Loan, then the Mortgage Loan must be approved by the Qualified Independent Fiduciary, and its monthly payments must not exceed $10,000;
(g) The Mortgage Loan collateral is limited to a first mortgage lien and assignment of lease and rents on the Property. The Plan may not obtain a Mortgage Loan from a bank that has any pecuniary interest in, or is owned, managed, or controlled in any degree by any party in interest with respect to the Plan as defined in ERISA section 3(14);
(h) The Plan must not pay any commissions, costs, or other expenses in connection with the Purchase subject to the cost sharing allocations regarding the cost for this exemption as provided below in paragraph (i);
(i) Lodge 4 and the Plan must each pay half of the costs associated with the proposed exemption including but not limited to fees for Qualified Independent Fiduciary services, fees for Qualified Independent Appraiser services, and fees for preparing the Plan's application to the Department requesting this proposed exemption, but not including the Price;
(j) The Qualified Independent Fiduciary must not have entered into, and must not enter into, any agreement, arrangement, or understanding that includes any provision that provides for the direct or indirect indemnification or reimbursement of the Qualified Independent Fiduciary by the Plan or other party for any failure to adhere to its contractual obligations or to state or Federal laws applicable to the Qualified Independent Fiduciary's work; or that waives any rights, claims, or remedies of the Plan under ERISA, state, or Federal law against the Qualified Independent Fiduciary with respect to the Purchase;
(k) The Qualified Independent Appraiser must not have entered into, and must not enter into, any agreement, arrangement, or understanding that includes any provision that provides for the direct or indirect indemnification or reimbursement of the Qualified Independent Appraiser by the Plan or any other party for any failure to adhere to its contractual obligations or to state or Federal laws applicable to the Qualified Independent Appraiser's work; or that waives any rights, claims or remedies of the Plan or its participants and beneficiaries under ERISA, the Code, or other Federal and state laws against the Qualified Independent Appraiser with respect to the Purchase;
(l) The Plan's trustees and the Qualified Independent Fiduciary maintain for a period of six (6) years
(m)(1) Except as provided in section (2) of this paragraph and not withstanding any provisions of subsections (a)(2) and (b) of ERISA Section 504, the records referred to in paragraph (l) above shall be unconditionally available at their customary location during normal business hours to:
(i) any duly authorized employee or representative of the Department or the Internal Revenue Service;
(ii) the Plan's trustees or any duly authorized representative of the Plan's trustees;
(iii) the Qualified Independent Fiduciary or any duly authorized representative of the Qualified Independent Fiduciary;
(iv) any participant or beneficiary of the Plan, or any duly authorized representative of such participant or beneficiary;
(2) Should Lodge 4 or any party refuse to disclose information to a person on the basis that such information is exempt from disclosure, such party shall provide a written notice advising that person of the reasons for the refusal and that the Department may request such information by the close of the thirtieth (30th) day following the request;
(n) Within 30 calendar days after the Property is purchased, the Qualified Independent Fiduciary must provide to the Department a written certification that all of the exemption conditions have been met and must provide to the Department the Statement documenting its conclusion that the Proposed Transaction is in the Plan's best interest; and
(o) All the material facts and representations set forth in the Summary of Facts and Representations are true and accurate at all times.
National Credit Union Administration (NCUA).
Notice.
The NCUA's staff draft “detailed business-type budget” is being made available for public review as required by Federal statute. The proposed resources will finance the agency's annual operations and capital projects, both of which are necessary for the agency to accomplish its mission of protecting the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance. The briefing schedule and comment instructions are included in the supplementary information section.
Requests to deliver an in-person statement at the November 22, 2024, budget briefing must be received on or before November 13, 2024. Written statements and presentations for those scheduled to appear at the budget briefing must be received on or before 1 p.m. Eastern, November 18, 2024.
Written comments may be submitted by November 27, 2024.
You may submit comments by any of the following methods (please send comments by one method only):
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• Copies of the NCUA Draft 2025-2026 Budget Justification and associated materials are also available on the NCUA website at
Eugene H. Schied, Chief Financial Officer, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428, or telephone: (703) 518-6571.
The following itemized list details the sections in this Notice made available for public review:
Section 212 of the Economic Growth, Regulatory Relief, and Consumer Protection Act amended 12 U.S.C. 1789(b)(1)(A) to require the NCUA Board (Board) to “on an annual basis and prior to the submission of the detailed business-type budget make publicly available and publish in the
The staff draft budget details the resources required to support NCUA's mission. The staff draft budget includes personnel and dollar estimates for three major budget components: (1) the Operating Budget; (2) the Capital Budget; and (3) the Share Insurance Fund Administrative Budget. The
The NCUA Chief Financial Officer will present the staff draft budget at a budget briefing open to the public and scheduled for Friday, November 22, 2024, at 10 a.m. eastern at the NCUA headquarters building, 1775 Duke Street, Alexandria, Virginia 22314. Interested parties unable to attend in person may visit the agency's homepage (
If you wish to participate in the briefing and deliver a statement, you must email a request to
Written comments on the staff draft budget will also be accepted by November 27, 2024, through the Federal eRulemaking Portal:
All comments should provide specific, actionable recommendations about the staff draft budget rather than general remarks. The NCUA Board will review and consider any comments from the public prior to approving the NCUA 2025-2026 budget.
Credit unions have provided financial services to their members for more than 100 years. Credit unions are not-for-profit financial cooperatives created to serve a membership with a common bond.
In 1970, the U.S. Congress established the NCUA as an independent federal agency to regulate, charter, and supervise federal credit unions. The NCUA operates and manages the National Credit Union Share Insurance Fund (Share Insurance Fund) with the backing of the full faith and credit of the United States, insuring the deposits of the account holders in all federal credit unions and most state-chartered credit unions.
As of June 30, 2024, the NCUA regulates and supervises 4,533 federally insured credit unions, which have approximately 141 million members and more than $2.3 trillion in assets across all states and U.S. territories.
Pursuant to the Federal Credit Union Act, authority for NCUA management is vested in the NCUA Board. The Board determines the resources needed for carrying out the NCUA's responsibilities under the Act.
Upon determination of the budgeted annual expenses for the agency's operations, the Board determines a fee schedule to assess federal credit unions. The Board considers federal credit unions' ability to pay such a fee and the necessity of the expenses the NCUA will incur in carrying out its responsibilities in connection with federal credit unions.
Pursuant to the law, the NCUA deposits fees collected are deposited in the agency's Operating Fund at the Treasury of the United States, and those fees are expended by the Board to defray the cost of carrying out the agency's operations, including the examination and supervision of federal credit unions.
The proposed budget for 2025-2026 supports the NCUA's fourth year implementing its
• Ensure a safe, sound, and viable system of cooperative credit that protects consumers.
• Improve the financial well-being of individuals and communities through access to affordable and equitable financial products and services.
• Maximize organizational performance to enable mission success.
The NCUA's strategic plan is the foundation for the agency's performance management and resource allocation processes. The annual performance plan functions as the agency's operational plan for each calendar year. It outlines the annual or short-term objectives, strategies, and corresponding performance goals and activities that contribute to the accomplishment of the agency's strategic goals. The NCUA budget provides the resources necessary for the agency to implement its strategic priorities and related programs and activities, to identify key challenges facing the credit union industry, and to leverage agency strengths to help credit unions address those challenges.
Appendix A provides additional information about how the budget aligns to the NCUA's strategic goals.
Each regional and central office director at the NCUA develops an initial budget request identifying the resources necessary for their office to support the agency's mission, goals, and objectives. These budgets are developed to ensure
The Office of the Chief Financial Officer presents draft budgets to the public on the agency's website and in the
The NCUA Board reviews the comments from the public about the draft budget and makes revisions in response to stakeholder views, individual Board office priorities, and changing economic conditions. The Board then approves the final budget levels and the associated OTR and the operating fees paid by credit unions to finance the agency's programs.
The NCUA
The NCUA's 2025-2026 staff draft budget justification includes three separate budgets: the Operating Budget, the Capital Budget, and the Share Insurance Fund Administrative Expenses Budget. Combined, these three budgets total $433.0 million for 2025, which is $0.3 million
Three significant factors, when combined, account for most of the 12.2 percent increase in the total budget between 2024 and 2025:
1. An increase of $25.9 million in funding for contracted services for 2025 compared to 2024. Of this amount, approximately $18.0 million results from a lower 2024 surplus carried over as part of the 2025 budget when compared to the surplus carried over from 2023 as part of the 2024 budget. Of the residual $7.9 million increase for contracted services, much of the additional funding will address new and evolving operational risks such as cybersecurity threats and for tools used to identify and resolve credit union system risk concerns such as interest rate risk, credit risk, and industry concentration risk. Growth in the contracted services budget category also results from new operations and maintenance costs for recently delivered capital investments. Other increased costs include general price inflation for core agency business operation systems such as accounting and payroll processing and various other recurring support costs.
2. An increase of $19.5 million for current employee compensation in 2025 compared to 2024. This increase accounts for merit pay raises for the NCUA's employees as required by the Collective Bargaining Agreement and expected inflationary cost increases for employee benefits.
3. A proposed increase of 14 positions compared to 2024, which equates to a headcount increase of 10 positions and four positions approved by the NCUA Board in the 2024 budget for 2025. Of
The following chart presents the major categories of spending supported by the proposed 2025 Operating Budget.
As shown in the following chart, the relative size of the NCUA budget (dotted line) has generally decreased when compared to balance sheets at federally insured credit unions (FICU, solid line).
The Operating Budget estimate for 2026 is $450.6 million and includes 11 additional positions compared to the 2025 level.
The proposed 2025 Capital Budget is $2.0 million higher than the 2024 Board-approved budget.
The Capital Budget supports the NCUA's ongoing effort to modernize its IT infrastructure and applications. Funding in the Capital Budget for upgrades to or replacement of obsolete IT systems is higher in 2025 than in 2024 and includes an increase in capital investment for cyclical system updates to the Modern Examination and Risk Identification Tool (MERIT) examination system. Other IT investments in the proposed 2025 Capital Budget include funds to ensure that agency systems comply with evolving cybersecurity requirements required of all federal agencies, enhancements to agency information security, investments to begin transitioning legacy hardware to a cloud-based storage environment, and various hardware investments to refresh agency networks and ensure staff have the tools necessary to achieve the agency's mission.
The Capital Budget also includes $480,000 for NCUA facility maintenance and improvements.
The proposed 2025 Share Insurance Fund Administrative Expenses Budget is $0.4 million higher than the 2024 Board-approved budget. The Share Insurance Fund Administrative Expenses Budget funds the tools and technology used by the Office of National Examinations and Supervision (ONES) to oversee credit union-run stress testing for the largest credit unions, travel for state examiners attending NCUA-sponsored training, audit support for the Share Insurance Fund's financial statements, and certain insurance-related expenses for Asset
The proposed 2025-2026 budget includes funding for the NCUA to increase staffing in critical areas necessary to operate as an effective federal financial regulator capable of addressing emerging issues and responding to changes in economic conditions that may impact the credit union system.
The percentage of insured shares in credit unions with composite Capital adequacy, Asset quality, Management, Earnings, Liquidity risk, and Sensitivity to market risk (CAMELS) ratings 1 and 2 has decreased each quarter since December 2021.
The NCUA must have the necessary resources to continue to monitor credit union performance and mitigate risks at these complex credit unions and all other non-complex credit unions through the examination process, offsite monitoring, and tailored supervision, consistent with its mission.
The NCUA employees are the agency's most valuable resource for achieving its mission. The agency is committed to maintaining a workforce with integrity, accountability, transparency, inclusion, and proficiency.
The proposed 2025-2026 budget includes investments across a range of NCUA priorities, including:
• Ensuring robust cybersecurity in the credit union system and at the agency.
• Continuing to strengthen and mature analytic capabilities and capacity in the areas of fraud and anti-money laundering, quantitative analytics and stress testing, and climate-related financial risk.
• Recalibrating examination and supervisory oversight over credit unions based on a prioritization of the risks presented to the system.
• Providing program and staff resources to increase assistance to small credit unions and credit unions designated as minority depository institutions (MDIs).
• Expanding the resources allocated to the NCUA's examination of credit unions' compliance with consumer financial protection laws and regulations.
• Investing in information technology systems and infrastructure to bolster the NCUA's supervisory capabilities.
The efficiency and effectiveness of the agency's workforce depends upon the availability of modern analytical tools and the resiliency of the NCUA's information technology systems. The NCUA is committed to implementing its new technology responsibly and delivering secure, reliable, and innovative solutions. The investments funded in the NCUA's Capital Budget will provide the tools and technology the workforce needs to achieve the NCUA mission.
The NCUA's cybersecurity program focuses on two main efforts: supervision of credit union cybersecurity programs and protection of the agency's systems, assets, data, and mission capabilities.
Cyberattacks continue to pose significant and growing risks to all organizations. The NCUA places credit union cybersecurity as a top enterprise and supervisory priority because of continued attacks on the nation's financial sector and the broader national critical infrastructure.
The NCUA engages in interagency cybersecurity preparedness as a member of the FFIEC and of the Financial and Banking Information Infrastructure Committee. The NCUA monitors cyber threats identified by federal and non-federal sources and shares relevant information about them with the credit union industry and financial sector partners.
The NCUA maintains a team within the Office of Examination and Insurance dedicated to developing and maintaining supervisory policies, procedures, and tools and examiner training for cybersecurity. The regions and the ONES employ highly trained regional information security specialists for information security examinations and supervision of credit unions.
All credit unions will periodically receive an information security examination as part of the agency's new Information Security Examination program (ISE). The ISE uses a risk-focused approach to examine credit unions' information security, providing examiners flexibility to focus on areas of material current or potential risk relevant to each credit union's unique business model. The objectives of an information security examination include:
• Evaluating management's ability to recognize, assess, monitor, and manage information systems and technology-related risks.
• Assessing whether the credit union has sufficient expertise to adequately plan, direct, and manage information systems and technology operations.
• Determining whether the board of directors has adopted and implemented adequate information systems and technology-related policies and procedures.
• Evaluating the adequacy of internal information systems and technology controls and oversight to safeguard member information.
The NCUA built and maintains the Automated Cybersecurity Evaluation Toolbox (ACET) to help credit unions voluntarily assess their level of cybersecurity preparedness. The tool incorporates appropriate cybersecurity standards and practices established for financial institutions. The tool maps each of its declarative statements to the
Enhanced and continuing examiner training related to information security and evolving cyber risks is planned for 2025.
The NCUA's approach to agency cybersecurity is based on requirements established by federal statute such as the Federal Information Security Management and Federal Information Security Modernization Act (FISMA), and government-wide policy such as the NIST's Cybersecurity Framework, and Executive Order (E.O.) 14028,
In 2021, a cross-agency working group at the NCUA conducted an internal review to determine the appropriate level of specialist positions required to ensure compliance with the Bank Secrecy Act (BSA) and consumer financial protection laws and regulations. The review evaluated staffing needs for three potential regional specialist groups in the areas of electronic payment systems, consumer compliance, and the BSA. Unlike other specialist areas where credit union asset size is a reasonable basis for allocating supervisory resources, BSA and consumer compliance risks are not necessarily concentrated in a particular asset group.
Since this review, the NCUA added specialist positions to each of the regions in two separate phases. These new specialist positions were offset by a reduction in general examiner positions throughout the regions. These positions are now fully annualized in the 2025 budget and no new specialist positions are proposed in the 2025 budget. The proposed 2025 budget recommends a net reduction of 10 positions across the NCUA's three regions. The draft budget is based on certain adjustments to the examination program that result in a net decrease in the staff time required to carry out the examination program. These changes would provide incentives for federally insured credit unions with assets between $1 billion and $10 billion to remain very sound. In return, sound practices at credit unions would allow the regions more flexibility to work with state regulators on coordinating joint examinations and reduce the time between exams for certain federal credit unions whose practices and management necessitate closer scrutiny. These changes would also result in a further cycle-time extension between exams for well-managed and well-capitalized smaller and mid-sized credit unions.
Small credit unions with less than $100 million in assets and MDIs are uniquely positioned to improve financial inclusion by offering their communities access to safe, fair, and affordable credit and other services. The NCUA's Small Credit Union and MDI Support Program is designed to support and preserve these credit unions. This program provides dedicated resource hours for field staff to conduct this important work, and the proposed 2025 budget continues to support this important effort.
Program assistance focuses on identifying available resources, providing training and guidance, and supporting credit union management in their efforts to address operational matters. Additional benefits of the program include:
• Building greater awareness of the unique needs of small credit unions and MDIs and their role serving underserved communities.
• Expanding opportunities for these credit unions to receive support through NCUA grants, training, and other initiatives.
• Furthering partnerships with organizations and industry mentors that can support small credit unions and MDIs.
The NCUA's consumer financial protection program supports the agency's statutory responsibility and strategic goal of ensuring a safe, sound, and viable system of cooperative credit that protects consumers. Within the division of fair lending supervision, NCUA staff conduct targeted fair lending examinations at federal credit unions to assess compliance with federal fair lending laws and regulations. These reviews are critical to identifying discriminatory lending patterns or practices and to reducing barriers to economic equity. Past examinations conducted by NCUA examiners have identified patterns or practices of discrimination violations, illegal race-based redlining, indirect lending pricing concerns, systemic Home Mortgage Disclosure Act violations, Regulation B notification and government monitoring information violations, and numerous instances of inadequate fair lending compliance management systems, including those related to discrimination based on age and marital status.
In 2024, the NCUA joined the other Federal Financial Institution Examination Council agencies to issue a statement of examination principles related to valuation discrimination and bias in residential real estate lending. The staff draft budget includes funding for the current division of fair lending supervision and for one new program officer who will help to develop Home Mortgage Disclosure Act analyses and examinations, oversee the annual fair lending examination selection process through outlier analysis, and fulfill fair lending speaking and Freedom of Information Act requests submitted by the public.
The agency is also engaged in a project to develop an expanded consumer compliance examination and enforcement program. That project will develop and be implemented over the course of several years.
Credit unions are an important part of the financial services industry and can play a key role in helping families achieve financial freedom by building generational wealth, aiding entrepreneurs in starting a business, and helping to create jobs and strengthen communities. To extend financial services to more individuals and communities, the 2025 capital budget supports a multi-year process automation project to implement an external facing portal that will make it
Two information technology investments in the 2025 budget support efforts to create cost efficiencies and avoid cost escalation in future years.
The NCUA recompeted the operations and maintenance contract for NCUA's examination platform in 2024. The new contract reduced the estimated cost of core MERIT Operations and Maintenance (O&M) support activities by $1.7 million for the 2025 operating budget when compared to the cost of the previous support vendor.
Migrating to a cloud computing environment offers significant advantages by enhancing efficiencies and improving security. By moving IT services from physical datacenters to cloud service providers, the NCUA can lower the risk and expense of maintaining physical infrastructure such as servers, storage, and networking equipment. Cloud infrastructure also enables faster and more efficient deployment of new services and system upgrades. This scalability leads to greater operational flexibility, reducing the time and cost of managing information technology operations. Furthermore, cloud service providers offer advanced cybersecurity measures, ensuring that data is protected with the latest encryption and security standards, enhancing the reliability and security of the NCUA's information technology environment. By leveraging cloud services, the NCUA can focus its resources on innovation and mission-critical tasks, rather than on costly and resource-intensive management of physical infrastructure.
The staff draft budget proposes a new Office of the Executive Secretary, which is a common function in many other federal agencies. The new office will centralize responsibility for the NCUA's policy review and decision-making processes, coordinate the clearance and submission of all policy documents to the Chairman and the NCUA Board, as appropriate, for review and approval, and facilitate discussions between the NCUA's program offices to align appropriate policies, among other things. Policy documents include regulations, recommendation memos, action memos, briefing memos, responses to correspondence, reports to Congress, and other policy documents. Appendix A includes a separate table illustrating the budget for the proposed Office of the Executive Secretary.
The NCUA Operating Budget provides the resources required for the agency to conduct activities prescribed by the Federal Credit Union Act. These mandates include: (1) chartering new federal credit unions; (2) approving field of membership applications of federal credit unions; (3) promulgating regulations and providing guidance; (4) performing regulatory compliance and safety and soundness examinations; (5) implementing and administering enforcement actions, such as prohibition orders, orders to cease and desist, orders of conservatorship and orders of liquidation; and (6) administering the Share Insurance Fund. The NCUA must also implement mandates required by other statutes including those related to BSA compliance, consumer financial protection, and diversity, equity, and inclusion.
There are five major expenditure categories in the Operating Budget. This section explains how these expenditures support the NCUA's operations and presents an overview of the Operating Budget.
• Merit and locality pay increases for the NCUA's employees are paid per the agency's Collective Bargaining Agreement (CBA) and its merit-based pay system.
• Contributions for employee retirement to the Federal Employee Retirement System (FERS), which are set by the U.S. Office of Personnel Management (OPM) based on actuarial estimates and cannot be negotiated or changed by the NCUA. The mandatory FERS contribution rate increases total NCUA benefits costs by 2.7 percent in 2025 compared to 2024. OPM's current assumptions for actuarial valuation of FERS remain unchanged in 2025 but remain a cost driver for the agency's pay and benefits growth. Because the NCUA must contribute 18.4 percent of
• Contributions for employee health insurance are also set by OPM. This insurance contribution increases total NCUA benefits costs by 1.3 percent in 2025 compared to 2024. The annual OPM estimate for the 2025 government share of the Federal Employees Health Benefits Program (FEHBP) premiums is expected to be released in October 2024, and the budget will be updated if there are material changes to FEHBP costs estimates.
• The employee salary and benefits category includes costs associated with other mandatory employer contributions such as Social Security, Medicare, transportation subsidies, unemployment, and workers' compensation. The limit on employee earnings subject to Social Security taxes increased in 2025 and applies to all employers in the United States. The projected additional employer Social Security contributions that result from this increase account for approximately one percent of the total adjustment to employee salaries.
Attracting a well-qualified workforce requires the agency to pay competitive salaries. In 2025, the NCUA's compensation levels will continue to “maintain comparability with other federal bank regulatory agencies” as required by the Federal Credit Union Act.
The pay and benefits budget includes all employee pay raises for 2025, such as merit and locality increases consistent with the CBA in place for 2024, and those for promotions, reassignments, and other changes, as described below. Consistent with other federal pay systems, the NCUA's compensation includes base pay and locality pay components.
The proposed 2025 Operating Budget supports a total agency staffing level of 1,261 positions.
The proposed 2025-2026 draft budget includes funding for the NCUA to increase permanent staffing in critical areas necessary to operate more effectively and address emerging risks. The staffing levels proposed for 2025 also reflect the resource requirements that support the NCUA's continued efforts to ensure its examination processes keep pace with the growing scale and complexity of the credit union system while the agency enhances the efficiency and effectiveness of its supervisory efforts.
The following chart illustrates the NCUA's staffing levels in recent years.
The proposed changes for the NCUA's 2025 staffing level include:
• Reducing the number of generalist examiners by a net of eight positions across the NCUA's three regional offices, including the reduction of one supervisory examiner.
• Adding two new Division of Supervision Director positions (one each in the Eastern and Western regions) while simultaneously reducing the number of regional Division of Supervision Deputy Director positions by four positions. The net change in regional staff is a reduction of two positions.
• Creating a new Office of the Executive Secretary with two dedicated staff positions authorized for 2025 and a third position for 2026. This office will centralize responsibility for coordinating the review of documents, related decision-making processes, and the clearance and submission of all documents to the NCUA Board members, as appropriate.
• Increasing ONES by three positions. The three new positions include a supervisor for the capital planning and stress testing division, a financial data analyst, and a new executive position to lead the financial risk management team. Additionally, three positions are recommended for 2026: one national credit union examiner, one national lending specialist, and one national payment systems officer.
• Increasing the Office of Business Innovation by two positions. The new positions include one artificial intelligence (AI) officer and one business innovation officer. Additionally, two new AI officers are recommended for 2026.
• Adding one new senior Equal Employment Opportunity (EEO) specialist in the Office of Minority and Women Inclusion.
• Increasing the Office of Consumer Financial Protection (OCFP) by three positions. The new positions include one consumer affairs specialist, one fair lending program officer, and a new division director in 2025.
• Increasing the Office of Examination and Insurance by three positions. The new positions include two new fraud officers and one climate financial risk officer in 2025. Additionally, one new systems officer is recommended for 2026.
• Increasing the Office of External Affairs and Communications by three positions. The new positions include one section 508 compliance manager and two division directors in 2025. Additionally, two new positions are recommended for 2026. These include one technical writer/editor and one stakeholder relations specialist.
• Funding two positions previously unfunded but authorized within the total NCUA staffing plan. These positions are both within the Office of Human Resources.
The proposed 2026 budget for pay and benefits is estimated at $329.2 million, a $16.9 million increase from the 2025 level. Included within this total is the full-year cost impact of new positions proposed for 2025 (approximately $4 million), $1.6 million for 11 new positions (three in ONES, two in the Office of Business Innovation, two in the Office of General Counsel, two in the Office of External Affairs and Communications, one in the Office of the Executive Secretary, and one in the Office of Examination and Insurance). The 2026 budget for pay and benefits also includes projected merit and locality pay increases consistent with recent compensation agreements (approximately $8.8 million), and associated increases in benefits for all employees (approximately $2.5 million).
During the COVID-19 pandemic, the NCUA and its employees transitioned to an offsite examination posture, developing new procedures and processes to continue examination and supervisory work. In 2025, the NCUA will continue to conduct portions of examinations offsite, which is expected to constrain the growth of future travel budgets. Nevertheless, per trip costs have increased in recent years due to price inflation across the U.S. economy. Despite the projected growth in travel expenses for 2025, the total budget for travel is approximately $4.7 million, or 17.4 percent, below the pre-pandemic 2019 travel budget of $26.8 million.
The proposed 2026 budget for travel is estimated at $24.2 million, a 9.5 percent increase compared to the 2025 level. This budget level reflects an expectation for continued travel-related cost inflation and travel to support a national training conference planned for 2026.
Funding within this budget category pays for facilities-related costs, telecommunications services, data storage, and information technology network support. Telecommunications charges include leased data lines and data service subscriptions, Voice over Internet Protocol and mobile telephony, and other network charges. Facilities-related budgets pay for the cost of the office leases, utilities, rental of the disaster recovery and continuity of operations sites, meeting space rental for offsite events, and postage.
The proposed 2026 budget for the rent, communications, and utilities category is $7.9 million, or a 15.4 percent increase compared to 2025. The full, second-year cost of the Southern Region office lease is the primary driver for this increase.
Recurring costs in the administrative expenses category include employee relocation expenses, recruitment and advertising expenses, shipping, printing, subscriptions, examiner training and meeting supplies, office furniture, and employee supplies and materials. The NCUA pays relocation costs to employees who are competitively selected for a promotion or new job within the agency in a different geographic area than where they live.
The proposed 2026 budget for administrative expenses is $5.9 million, an increase of $0.8 million, or 14.7 percent increase from the level proposed in the 2025 budget. The costs associated with a planned agency-wide National Training Conference is the major contributor to the budget increase.
The remaining $7.9 million of budgetary growth is driven by a combination of factors, including operations and maintenance costs for newly delivered capital projects, inflationary cost increases for contracted services, and additional analytic and operational tools necessary to address cybersecurity threats and growing complexity and risk in the credit union system.
Acquiring specific expertise or services from contract providers is often the most cost-effective way for the NCUA to accomplish its mission. Such services include critical mission support such as information technology equipment and software development, accounting and auditing services, and specialized subject matter expertise that enable staff to focus on executing core mission requirements. Most of the funding in the contracted services category supports the NCUA's supervision framework, including tools used to identify and address risk concerns such as interest rate risk, credit risk, and industry concentration risk.
Growth in the contracted services budget category also results from new operations and maintenance costs for deployed capital investment projects. Other costs include core NCUA business operation systems such as accounting and payroll processing, and various recurring costs, as described in the following seven major categories:
The following chart illustrates the breakout of the seven categories for the total proposed 2025 contracted services budget of $78.0 million, of which $5.0 million is funded from prior year available balances.
Major programs within the contracted services category include:
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A significant share of the budget for contracted services finances ongoing IT infrastructure support for the agency. The 2025 budget includes operations and maintenance of the MERIT system, which replaced the legacy Automated Integrated Regulatory Examination System (AIRES) in 2021. Several of the NCUA's other core information technology systems and processes also require contract support in 2025, which results in increased costs for contracted services, as described below.
Within the Office of Chief Information Officer's budget, an additional $2.0 million compared to the 2024 budget level is required for:
• Implementation of the NCUA's Cybersecurity Supply Chain Risk Management tools, which help identify, assess, and mitigate risks to ensure integrity and security of products and services purchased by the agency. NIST standards require implementation of robust supply risk management procedures.
• IT software, infrastructure services, and operations and maintenance labor support for NCUA systems, including legacy applications.
• O&M associated with the agency's new onboarding and offboarding system, which is being designed to fulfill new personnel background investigation standards required by the Defense Counterintelligence and Security Agency.
The Asset Management Assistance Center's contracted services budget increases by $1.1 million compared to the 2024 budget level. These funds will provide additional examination support for NCUA's field examiners and ensure sufficient surge resources are available to respond to emergent matters.
The Office of External Affairs and Communication's contracted services budget increases by $688,000 compared to the 2024 budget level. These funds will provide for a new website hosting and services support.
Within the Office of General Counsel, the contracted services budget increases by $470,000 compared to the 2024 budget level. This increase primarily relates to anticipated legal fees associated with agency consumer financial protection efforts.
Within the Office of Business Innovation, the contracted services budget increases by approximately $331,000 compared to the 2024 budget level. These funds will provide contract support for the agency's information system security processes and fund a survey administered by a third party about credit unions' examination experiences.
The proposed contracted services budget for 2026 is $83.5 million. Excluding the $5.0 million from surplus carryover used in 2025, the 2026 budget level represents a net increase of $5.5 million, or approximately 7.1 percent.
Annually, the NCUA carries out a rigorous review of agency's needs for IT, facility improvements and repairs, and other multi-year capital investments. The NCUA's executives and staff review the agency's inventory of IT systems, IT hardware, and owned facilities and equipment to determine what requires repair, major renovation, or replacement. The staff then make recommendations for prioritized investments to the NCUA Board.
IT systems and hardware require significant capital expenditures for modern organizations. The 2025 Capital Budget's highest priorities include continuing investments to bolster the NCUA's cybersecurity posture and enable the agency to comply with E.O. 14028,
Routine repairs and lifecycle-driven property renovations are also necessary to maintain investments in the NCUA-owned facilities. Each year the NCUA assesses the physical condition of the agency's properties to determine the need for essential repairs, replacement of building systems that have reached the end of their engineered lives, or renovations required to support changes in the agency's organizational structure, or address revisions to building standards and codes. The 2025 Capital Budget includes funding for the costs associated with routine repairs, maintenance, and lifecycle-driven property renovations for the agency's Alexandria, Virginia, headquarters. Following an assessment and recommendations presented to the Board, a decision was made to sell the NCUA-owned office building in Austin, Texas, which is expected to be completed in 2025. Given potential challenges in the commercial real estate market, however, proceeds from this transaction have not been factored into the 2025 staff draft budget.
Detailed descriptions of all proposed 2025 capital projects, including a discussion of how each project helps the agency achieve its goals and objectives, are provided in Appendix B.
Investments in the MERIT platform in 2025 will focus on upgrading the MERIT system platform to take advantage of security improvements, a streamlined interface, and new record management capability; modifying the ISE output files for more efficient import into MERIT; and implementing single sign-on for Partner Gateway applications including for new reports.
The Cloud Migration and Modernization project is a major multi-year investment that involves moving applications, data, and IT infrastructure from servers located at NCUA controlled facilities to cloud computing environments. This project will also include updating and optimizing existing applications for cloud-native capabilities. By leveraging cloud computing solutions, the NCUA can reduce costs related to data center hosting, IT hardware purchasing, IT maintenance, and associated IT labor costs. The cloud computing environment also provides enhanced security functionality for the agency's systems. Aspects of this project were included under the “Executive Order on Improving the Nation's Cybersecurity” project in past years' budgets.
This project will strengthen the NCUA's network security by automating and enhancing security patch management and scanning functions for users connected to the agency's networks. In addition, this project will integrate the NCUA's firewall services within the overall network infrastructure and with the new patch and scanning functionality.
This capital investment supports the development of initial requirements and scoping for a public-facing portal that credit unions and organizing groups will use to submit their field of membership and new charter requests.
The purpose of this capital investment is to ensure the NCUA complies with E.O. 14028. The project will continue efforts to enable Multi-Factor Authentication for certain NCUA applications, adhere to best practices for supply chain risk management, and implement Zero Trust Architecture for the agency's infrastructure and applications.
This capital project will improve system availability and stability by replacing outdated or end-of-life network and platform hardware to ensure business continuity and efficient operations. Proposed projects for 2025 include refreshing hardware and software, and costs associated with backup storage at the NCUA's disaster recovery site.
This investment will support a modernized, phased workflow, dashboards, and automated management of over 350 performance plan packages to facilitate the employee performance management program for the NCUA's employees.
The purpose of this multi-year capital investment is to boost overall agency productivity, efficiency, and security by providing the NCUA staff with new laptops that offer improved processing power and speed to multitask more effectively, enhanced mobility features like reduced weight and longer battery life, and advanced security features to better combat evolving cyber threats. The budgeted amount for 2025 will support testing and selection of new, standard laptop configurations that will work with the NCUA's business applications and requirements.
The proposed 2025 budget supports the NCUA's multi-year headquarters building improvement plan that identifies projects that can be completed incrementally, prioritizing the replacement of health and safety infrastructure. The headquarters building is 30 years old, and many original components need replacement. The ongoing multi-year approach recognizes the critical building management and maintenance needs while reducing the potential budgetary impact of such projects in a single budget year.
This project will allow NCUA to update applications and databases to accommodate new regulatory requirements or initiatives. Multiple legacy systems are often impacted when regulatory changes are finalized, or new initiatives are approved by the NCUA Board. These changes can require significant time and programming resources to ensure that related systems maintain their functionality before updated rules take effect.
The purpose of this project is to develop a new personnel security management system for the NCUA in compliance with the Trusted Workforce 2.0 directive promulgated by ODNI and OPM. This system will centralize personnel security case management and serve as a repository for agencywide onboarding/offboarding actions.
This project funds short-term contractor support to develop CUSO Reports, data collection forms such as the CUSO Registry Online form, and to realign MARS and TMS development in support of regional redistricting, new work code classifications, new examiner specialties, and new supervisory examiner groups.
The goal of this capital investment is to leverage data analytics solutions to minimize technology burdens on examination staff during off-site monitoring while streamlining the way that offices identify emerging and increasing risks to the Share Insurance Fund.
This capital investment will provide dedicated computing resources required for data ingested through the ONES large credit union data collection program.
This capital project investment will fund a pilot program to test the capability of Microsoft's AI tool, Microsoft 365 Copilot, for possible development across the NCUA.
The Share Insurance Fund Administrative Expenses Budget funds direct costs associated with authorized Share Insurance Fund activities.
The Share Insurance Fund Administrative Expenses Budget also pays for costs associated with the corporate resolution program and related NCUA Guaranteed Notes (NGN) program. On June 14, 2021, the last outstanding NGN Trust matured. Given the significantly reduced size of the legacy asset portfolio in the corporate asset management estates, the proposed 2025 budget for the corporate resolution program continues to decrease compared to the 2024 funding levels. The remaining assets held by the NCUA are subject to ongoing litigation and will be sold once all claims to ownership of underlying assets are resolved.
The proposed 2025 budget increase is primarily driven by an increase in the projected costs of state examiners traveling to NCUA-sponsored training, increases in the cost of data and analytic models used for analysis of large credit unions, costs of AMAC activities, and inflationary growth in the cost of audit support. The proposed 2024 Share Insurance Fund Administrative Expenses Budget includes:
• $2.5 million for operating and maintenance costs of the Asset and Liabilities Management system, which allows the NCUA to build internal
• $0.3 million for certain insurance-related activities and expenses of AMAC, such as consulting expenses necessary to avoid or attempt to prevent a liquidation or conservatorship and staff travel for consultation on complex or problem cases.
• $1.5 million for state examiner travel to NCUA-sponsored training classes and $0.2 million to ensure that state supervisory authorities can securely and efficiently access NCUA applications and the NCUA's MERIT system for state examination and supervision activities.
• $0.9 million for financial reporting, including the annual financial audit and for contractor support to ensure effective internal controls for the fund.
• $0.1 million for corporate resolution program legacy asset waterfall models and valuation analysis support and data. The budget for NGN support decreases by 60.1 percent between 2024 and 2025.
The proposed 2026 budget supports similar workload and resources for the Share Insurance Fund, which at $5.4 million is $0.1 million lower than the proposed 2025 level. With the anticipated wind-down of the program in 2025 (subject to the status of ongoing litigation), there is no corporate resolution budget planned for 2026 at this time.
The NCUA incurs various expenses to achieve its statutory mission, including those involved in examining and supervising federally insured credit unions. The NCUA Board adopts an Operating Budget, a Capital Budget, and a Share Insurance Fund Administrative Expenses Budget each year to fund most of the costs to operate the agency.
The Federal Credit Union Act authorizes two primary sources to fund the Operating Budget:
(1) Requisitions from the Share Insurance Fund “for such administrative and other expenses incurred in carrying out the purposes of [Title II of the Act] as [the Board] may determine to be proper,”
(2) “[F]ees and assessments (including income earned on insurance deposits) levied on insured credit unions under [the Act].”
Taken together, these authorities effectively require the Board to determine which expenses are appropriately paid from each source while giving the Board broad discretion in allocating expenses.
In 1972, the U.S. Government Accountability Office recommended the NCUA adopt a method for allocating Operating Budget costs—that is, the portion of the NCUA's budget funded by requisitions from the Share Insurance Fund and the portion covered by operating fees paid by federal credit unions.
The NCUA uses the OTR methodology to allocate agency expenses between these two primary funding sources. Specifically, the OTR is the formula the NCUA uses to allocate insurance-related expenses to the Share Insurance Fund under Title II of the Act. Almost all other operating expenses are funded through collecting annual
Two statutory provisions directly limit the Board's discretion with respect to Share Insurance Fund requisitions for the NCUA's Operating Budget and, hence, the OTR. First, expenses funded from the Share Insurance Fund must carry out the purposes of Title II of the Act, which relate to share insurance.
The NCUA conducts a comprehensive workload analysis annually. This analysis estimates the amount of time necessary to conduct examinations and supervise federally insured credit unions to carry out the NCUA's dual mission as insurer and regulator. This analysis starts with a field-level review of every federally insured credit union to estimate the number of workload hours needed for the year. These estimates are informed by the overall parameters of the NCUA's examination program, as most recently updated by the Exam Flexibility Initiative approved by the Board.
There have not been any major changes to the parameters of the examination program since the current OTR methodology went into effect.
The NCUA Board approved the current methodology for calculating the OTR at its November 2017 open meeting.
Based on the Board-approved methodology and the proposed budget, the OTR for 2025 is estimated to be 61.7 percent, which is the same percentage as 2024.
At the start of each year, the Office of the Chief Financial Officer estimates the share of annual spending that will be paid by the Share Insurance Fund through the OTR and calculates a monthly cash advance that is transferred from the Share Insurance Fund to the Operating Fund at the start of each month. During the financial close at the end of each month, the OTR is multiplied by each month's actual Operating Fund cash disbursement and expenditures, and the product of that calculation is transferred from the Operating Fund to the Share Insurance Fund or vice versa depending upon whether the Share Insurance Fund share of the cash disbursements was lower or higher than the OTR cash advance. This monthly reconciliation captures the variance between actual and budgeted amounts, so that when the NCUA's expenditures are less than budgeted, the amount charged to the Share Insurance Fund is also less—and those lower expenditures benefit both federally chartered and federally insured, state-chartered credit unions.
The following chart illustrates the share of the proposed 2025 Operating Budget that would be paid by federal credit unions (69.3%) and federally insured, state-chartered credit unions (30.7%).
The Board delegated authority to the Chief Financial Officer to administer the methodology approved by the Board for calculating the operating fee and to set the fee schedule as calculated per the approved methodology. In December 2023, the Board approved and published in the
Under the current methodology to determine the annual operating fee assessed on federal credit unions serving consumers, the NCUA first calculates the average of total assets reported in the preceding four calendar quarters available at the time of the calculation, net of any reported Paycheck Protection Program loans. Credit unions with assets less than approximately $2 million are not assessed an operating fee and their assets are therefore excluded from this calculation.
Based on the Board-approved operating fee methodology, which is summarized in the following tables, the share of the proposed 2025 budget funded by the operating fee is $155.8 million. This equates to 0.01354 percent of the actual average of natural person federal credit union assets for the four calendar quarters ending on June 30, 2024. The calculated operating fee rate for 2025 increases by 9.02 percent compared to the rate in 2024. This computation is shown in the table on the following page.
As part of the Board-approved operating fee methodology, the NCUA can adjust the share of the budget funded by the operating fee based on an analysis of the agency's future cash flow requirements compared to past years' collections that were not spent as planned. Any projected surplus cash from past years' fee collections not required to finance agency operations can accordingly be used to lower the operating fee share of the proposed budget. Because such cash surpluses result from past years' operating fee collections, they do not offset the portion of the budget funded by the OTR. As the final 2025-2026 budget is prepared for consideration by the NCUA Board, the Chief Financial Officer will evaluate the agency's cash position and make a recommendation about any surplus cash that can be credited to the operating fee.
To set the assessment scale for 2025, total growth in natural person federal credit union assets is calculated as the change between the average of the four most-current quarters (that is, the third and fourth quarters of 2023 and the first two quarters of 2024) and the previous four quarters (that is, the third and fourth quarters of 2022 and the first two quarters of 2023), which is calculated as 4.01 percent. The fee exemption threshold and the asset level dividing points for the fee tiers are likewise increased by this same growth rate to preserve the same relative relationship of the scale to the applicable asset base.
To illustrate the rate for each asset tier for which operating fees are charged, the tables below show the effect of the average 9.02 percent increase in the operating fee for natural person federal credit unions, using the current $2.08 million exemption threshold.
The table below shows the combined total of the 2025 Operating, Capital, and Share Insurance Fund Administrative Expenses budgets, organized by the NCUA's three current strategic goals.
The National Science Board's (NSB) Committee on Strategy hereby gives notice of the scheduling of a teleconference for the transaction of National Science Board business pursuant to the National Science Foundation Act and the Government in the Sunshine Act.
Thursday, November 7, 2024, from 11:00 a.m.-12:00 p.m. Eastern.
This meeting will be held by teleconference through the National Science Foundation.
Open.
The agenda of the teleconference is: Chair's Opening Remarks; Development of 2026-2030 Strategic Plan and Learning Agenda.
Point of contact for this meeting is: Michelle McCrackin (
Nuclear Regulatory Commission.
Appointments.
On October 1, 2024, the U.S. Nuclear Regulatory Commission (NRC) announced appointments to the NRC Performance Review Board (PRB) responsible for making recommendations on performance appraisal ratings and performance awards for NRC Senior Executives and Senior Level System employees. This notice provides an update to the list of PRB member appointees.
November 4, 2024.
Please refer to Docket ID NRC-2024-0171 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:
•
•
•
Jennifer M. Golder, Secretary, Executive Resources Board, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-287-0741, email:
On October 1, 2024, the NRC published a notice announcing members to the NRC PRB (89 FR 79976). Since then, the NRC has added one new member to list of PRB member appointees. The following individual, appointed as a member of the NRC PRB, is responsible for making recommendations to the appointing and awarding authorities on performance appraisal ratings and performance awards for Senior Executives and Senior Level System employees:
• Robert J. Lewis Deputy Executive Director for Materials, Waste, Research, State, Tribal, Compliance, Administration, and Human Capital Programs, Office of the Executive Director for Operations.
All appointments are made pursuant to chapter 43 of title 5 of the
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.
Pursuant to 39 CFR 3041.405, the Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to Competitive negotiated service agreement(s). The request(s) may propose the addition of a negotiated service agreement from the Competitive product list or the modification of an existing product currently appearing on the Competitive product list.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
Section II identifies the docket number(s) associated with each Postal Service request, if any, that will be reviewed in a public proceeding as defined by 39 CFR 3010.101(p), the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each such request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 and 39 CFR 3000.114 (Public Representative). Section II also
The Commission invites comments on whether the Postal Service's request(s) identified in Section II, if any, are consistent with the policies of title 39. Applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3041. Comment deadline(s) for each such request, if any, appear in Section II.
Section III identifies the docket number(s) associated with each Postal Service request, if any, to add a standardized distinct product to the Competitive product list or to amend a standardized distinct product, the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. Standardized distinct products are negotiated service agreements that are variations of one or more Competitive products, and for which financial models, minimum rates, and classification criteria have undergone advance Commission review.
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This Notice will be published in the
Wednesday, November 13, 2024, at 9:00 a.m.; Thursday, November 14, 2024, at 10:00 a.m.
Washington, DC, at U.S. Postal Service Headquarters, 475 L'Enfant Plaza SW, in the Benjamin Franklin Room.
Wednesday, November 13, 2024, at 9:00 a.m.—Closed. Thursday, November 14, 2024, at 10:00 a.m.—Open.
A public comment period will begin immediately following the adjournment of the open session on November 14, 2024. During the public comment period, members of the public present at the meeting, or who have previously registered to participate virtually, may comment on any item or subject listed on the agenda for the open session. Registration of speakers at the public comment period is required. Speakers must register online at
Michael J. Elston, Secretary of the Board, U.S. Postal Service, 475 L'Enfant Plaza SW, Washington, DC 20260-1000. Telephone: (202) 268-4800.
10:00 a.m., November 13, 2024
Members of the public wishing to attend the meeting must submit a written request at least 24 hours prior to the meeting to receive dial-in information. All requests must be sent to
This meeting will be open to the public.
Stephanie Hillyard, Secretary to the Board, (312) 751-4920.
2:00 p.m. on Thursday, November 7, 2024.
The meeting will be held via remote means and/or at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations and enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BYX Exchange, Inc. (the “Exchange” or “BYX”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to update its Fee Schedule to provide a temporary discount on fees assessed to BYX Members (“Members”)
By way of background, the Exchange currently makes available for purchase Depth Data, which is a daily archive of the Exchange's depth of book real-time feed, which provides depth-of-book quotations and execution information based on equity orders entered into the System. The Exchange also offers Historical Depth Data, which offers such data on a historical basis,
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Historical Depth Report available for purchase to Users on the LiveVol DataShop website (
The Exchange's affiliated equities and options exchanges (
The Exchange proposes to provide a temporary pricing incentive program in which Members or Non-Members that purchase Historical Depth Reports will receive a percentage fee discount where specific purchase thresholds are met. Specifically, the Exchange proposes to provide a 20% discount for ad-hoc purchases of Historical Depth Data of $20,000 or more.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee changes will further broaden the availability of U.S. equity market data to investors consistent with the principles of Regulation NMS. The Exchange believes the dissemination of historical market depth data via Historical Depth Reports benefits investors through increased transparency and may promote better informed trading, as well as research and studies of the equities industry. Nevertheless, the Exchange notes that such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through similar reports.
The Exchange operates in a highly competitive environment. Indeed, there are currently 16 registered equities exchanges that trade equities. Based on publicly available information, no single equities exchange has more than 13% of the equity market share.
The Exchange believes that the proposed incentive program for any Member or non-Member who purchases Historical Depth Reports is reasonable because such purchasers would receive a 20% discount for purchasing $20,000 or more worth of Historical Depth Reports. The Exchange believes the proposed discount is reasonable as it will give purchasers the ability to use and test the Historical Depth Reports at a discounted rate, prior to purchasing additional months or a monthly subscription, and will therefore encourage users to purchase Historical Depth Reports. Further, the proposed discount is intended to promote increased use of the Exchange's Historical Depth Reports by defraying some of the costs a purchaser would ordinarily have to expend before using the data product. The Exchange believes that the proposed discount is equitable and not unfairly discriminatory because it will apply equally to all Members and non-Members who purchase Historical Depth Reports. Lastly, the purchase of this data product is discretionary and not compulsory. Indeed, no market participant is required to purchase the Historical Depth Reports, and the Exchange is not required to make Historical Depth Reports available to all investors. Potential purchasers may request the data at any time if they believe it to be valuable or may decline to purchase such data. As noted above, the Exchange has previously adopted similar discount programs.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment in which the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, including the adoption of similar discounts to those fees, the Exchange believes that the degree to which fee changes (including discounts and rebates) in this market may impose any burden on competition is extremely limited. As discussed above, the Exchange's Historical Depth Reports offering is subject to direct competition from several other options exchanges that offer similar data products. Moreover, purchase of Historical Depth Reports is optional. It is designed to help investors understand underlying market trends to improve the quality of investment decisions, but is not necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to compete more effectively. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges. Further, the Exchange believes that these changes
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
LCH SA is proposing to amend the fees it charges clearing members for cash and securities collateral posted as initial margin for its clearing services including CDSClear (the “Proposed Rule Change”).
The text of the Proposed Rule Change has been annexed as Exhibit 5 to File No. SR-LCH SA-2024-004.
In its filing with the Commission, LCH SA 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. LCH SA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
LCH SA currently applies a spread for clearing member cash collateral and charges fees on securities collateral posted to cover initial margin requirements for its CDSClear business. Cash collateral spreads are primarily based on underlying market conditions for a given currency and are subtracted from a reference index to determine a total rate to be applied to CDSClear house and client accounts. Securities collateral fees are primarily based on a combination of factors, including, but not limited to operational costs to manage a specific non-cash collateral type, the liquidation profile and
LCH SA currently accepts euro, GBP and USD cash to satisfy initial margin requirements for its CDSClear business. Clearing members that post these eligible currencies as margin may receive interest on these balances based on an associated benchmark index and cash collateral spreads applied by LCH SA. The total rate that clearing members and their clients may be eligible for is the difference between the value of the underlying benchmark index and the spreads applied by LCH SA. Interest earned on cash collateral is based on daily balances by account and posted monthly to clearing member accounts.
LCH SA currently applies the following cash collateral spreads for CDSClear house and client accounts:
LCH SA is proposing to decrease the cash collateral spread for EUR, GBP and USD by 2bps. Accordingly, LCH SA will apply a revised spread of 19.5bps, 33bps and 28bps for EUR, GBP and USD cash collateral balances, respectively, posted for initial margin. In addition, LCH SA is proposing to add a column reflecting the current Default Fund spread for purposes of transparency, however LCH SA is not proposing any changes to this spread. LCH SA is also not proposing any changes to the cash collateral spread for CDSClear clients. LCH SA is proposing these changes primarily to encourage members to post more cash collateral, as non-cash collateral deposited has become a larger proportion of all margin collateral on deposit. An increase in the proportion of cash collateral on deposit will enhance LCH SA's Liquidity Coverage Ratio, provide LCH SA with the required operational liquidity to inject into the settlement and payment networks and to ensure there is no disruption in clearing services, should LCH SA liquidate the portfolio of a defaulted clearing member.
LCH SA is proposing to reduce the spreads for eligible cash collateral balances to encourage CDSClear clearing members to post more cash as initial margin for clearing and to better diversify the mix of collateral posted as initial margin from clearing members, as non-cash collateral has become a greater portion of all margin collateral on deposit. LCH SA believes this will enhance its liquidity risk management processes by ensuring it maintains sufficient liquid resources (
LCH SA is also proposing to amend the fees it charges clearing members for securities collateral posted as initial margin. Eligible securities collateral currently includes government securities from select countries, select European supranational debt, government agency debt issued by Rentenbank (Germany), Kreditanstalt für Wiederaufbau (Germany) and CADES (France) and select equities listed on the EURO STOXX 50 index. The fees charged on each securities collateral type varies based on the mechanism of how the clearing member posts the collateral. For example, securities collateral may be deposited via Full Title Transfer (FTT) to an account opened by LCH SA at various central securities depositories (CSDs). Clearing members may also pledge securities collateral directly to LCH SA, whereby it will deposit securities via a Single Pledgor Pledged Account (SPPA) opened by LCH SA at Euroclear Bank. LCH SA also offers a Tri-Party solution whereby LCH SA and a Clearing member may appoint Euroclear Bank and/or Euroclear France as a triparty agent and authorize such triparty agent to enter settlement instructions on their behalf into the securities settlement system to affect movements of securities between a giver account and a taker account opened with the relevant triparty agent on a full title transfer basis for the purposes of transferring Collateral to LCH SA or releasing such collateral. LCH SA currently applies the following fees for securities collateral for CDSClear house and client accounts:
LCH SA is proposing to increase the fees for securities collateral posted via FTT or tri-party for clearing members by 1bp and by 10bps for securities collateral posted via pledge. LCH SA is also proposing to remove the second footnote to the securities collateral fee table, as the Triparty fees are now currently effective for all services. LCH SA is not proposing any changes to the fees charged to CDSClear Clients or for other non-cash collateral types. As previously noted, LCH SA charges different fees depending on the type of securities, the way that such securities are deposited, as well as the type of activity these cover. As a reminder, LCH SA has the capacity to raise euro liquidity by:
• pledging euro securities posted via FTT in the Banque de France 3G Pool; and
• executing cross-currency repo trades to borrow euro cash, collateralized by U.S. Treasuries and GBP Gilts posted via FTT.
However, securities posted by clearing members via pledge cannot be used for liquidity risk management purposes, and as such, are not considered liquid assets. LCH SA believes the increase in the fees for securities collateral and concurrent decrease in the spread for cash collateral will create an additional incentive for clearing members to post cash as initial margin. Consequently, this will strengthen LCH SA's Liquidity Coverage Ratio and further enhance LCH SA's liquidity risk profile.
LCH SA believes that the Proposed Rule Change is consistent with the requirements of Section 17A of the Exchange Act
LCH SA believes the amendments to the spread applied to cash collateral and fees applied to securities collateral for the CDSClear business are reasonable. To ensure it continues to maintain sufficient liquid resources to meet the minimum liquid resource requirement as set forth in Exchange Act Rule 17Ad-22(e)(7)(i),
In addition, LCH SA believes the Proposed Rule Change is equitable for all participants. All CDSClear Members will continue to have the choice to post either securities collateral or cash collateral to satisfy initial margin requirements. Clearing members wishing to post securities collateral via FTT will continue to face a lower fee than posting via a pledge arrangements. Likewise, clearing members may continue to post securities collateral via the tri-party option at a lower fee rate than FTT or via pledge. LCH SA believes the change in securities collateral fees are equitable for all clearing members and enables LCH SA to strengthen its liquidity risk profile.
LCH SA also believes the amendments to the spreads applied to cash collateral and fees applied to securities collateral for the CDSClear business are consistent with the requirements set forth in Exchange Act Rule 17Ad-22(e)(7)(i).
For these reasons, LCH SA believes the Proposed Rule Change is consistent with the requirements of Section 17A(b)(3)(D) of the Act
Section 17A(b)(3)(I) of the Act
Written comments relating to the Proposed Rule Change have not been solicited or received. LCH SA will notify the Commission of any written comments received by LCH SA.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder. 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-LCH SA-2024-004 and should be submitted on or before November 25, 2024.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission” or “SEC”).
Notice.
Notice of an application under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act.
Applicants request an order to permit certain registered closed-end investment companies to issue multiple classes of shares and to impose asset-based
Institutional Investment Strategy Fund and Buena Capital Advisors, LLC.
The application was filed on May 29, 2024, and amended on August 28, 2024 and October 25, 2024.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC's Secretary at
The Commission:
Steven I. Amchan, Senior Counsel, or Lisa Reid Ragen, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
For Applicants' representations, legal analysis, and conditions, please refer to Applicants' amended application, dated October 25, 2024, which may be obtained via the Commission's website by searching for the file number at the top of this document, or for an Applicant using the Company name search field on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
For the Commission, by the Division of Investment Management, under delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 30e-2 (17 CFR 270.30e-2) under the Investment Company Act of 1940 (15 U.S.C. 80a-1
Rule 30e-2, however, permits, under certain conditions, delivery of a single shareholder report to investors who share an address (“householding”). Specifically, rule 30e-2 permits householding of annual and semi-annual reports by UITs to satisfy the delivery requirements of rule 30e-2 if, in addition to the other conditions set forth in the rule, the UIT has obtained from each applicable investor written or implied consent to the householding of shareholder reports at such address. The rule requires UITs that wish to household shareholder reports with implied consent to send a notice to each applicable investor stating that the investors in the household will receive one report in the future unless the investors provide contrary instructions. In addition, at least once a year, UITs relying on the rule for householding must explain to investors who have provided written or implied consent how they can revoke their consent. The purpose of the notice and annual explanation requirements associated with the householding provisions of the rule is to ensure that investors who wish to receive individual copies of shareholder reports are able to do so.
The Commission estimates that the annual burden associated with rule 30e-2 is 15 hours per respondent. The Commission estimates that there are currently approximately 660 UITs that file 1342 reports per year. Therefore, the Commission estimates that the total hour burden is approximately 10,065 hours. In addition to the burden hours, the Commission estimates that the annual cost of contracting for outside services associated with rule 30e-2 is $6,667 per respondent, for a total cost of approximately $4,495,700.
Estimates of average burden hours are made solely for the purposes of the Paperwork Reduction Act and are not derived from a comprehensive or even representative survey or study of the costs of Commission rules and forms. The collection of information under rule 30e-2 is mandatory. The information provided under rule 30e-2 will not be kept confidential. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street NE, Washington, DC 20549 or send an email to:
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Section 1003 of the NYSE American LLC Company Guide to provide for the suspension and delisting of any company that: (i) has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 200 shares or more to one; or (ii) has effectuated a reverse stock split and the effectuation of such reverse stock split results in the company's security falling below any of the continued listing requirements of Section 1003. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend subsection (f) (“Other Events”) of Section 1003 (“Application of Policies”) of the Company Guide to add two additional circumstances under which the Exchange would have the authority to suspend and delist a listed company. Specifically, proposed Section 1003(f)(vi) would give the Exchange the authority to suspend and delist any listed company that has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 200 shares or more to one. In addition, proposed Section 1003(f)(vii) would give the Exchange the authority to suspend and delist any listed company that has effected a reverse stock split if the effectuation of such reverse stock split results in the company's security falling below any of the continued listing requirements of Section 1003. Any action taken by a listed company that is governed by proposed Sections 1003(f)(vi) and 1003(f)(vii) would result in the immediate commencement of suspension and delisting procedures in accordance with the procedures set out in Section 1010 of the Company Guide.
Section 1003(f)(v) (“Low Selling Price Issues”) of the Company Guide provides that, in the case of a common stock selling for a substantial period of time at a low price per share, the Exchange may suspend and delist a company if such company shall fail to effect a reverse split of such shares within a reasonable time after being notified that the Exchange deems such action to be appropriate under all the circumstances. In its review of the question of whether it deems a reverse split of a given issue to be appropriate, the Exchange will consider all pertinent factors including, market conditions in general, the number of shares outstanding, plans which may have been formulated by management, applicable regulations of the state or country of incorporation or of any governmental agency having jurisdiction over the issuer, the relationship to other Exchange policies regarding continued listing, and, in respect of securities of foreign issuers, the general practice in the country of origin of trading in low-selling price issues. Proposed Section 1003(f)(vii) is consistent with the provisions of Section 1003(f)(v) as described above, as well as with the Exchange's consistent policy that it would immediately suspend and delist a listed company if the company effects a reverse stock split to cure a low selling price issue under Section 1003(f)(v) and the company would fall below another quantitative continued listing standard as a direct result of effecting that reverse stock split.
Many companies seek to address low selling price issues under Section 1003(f)(v) by effectuating a reverse stock
The Exchange believes that it is consistent with the protection of investors and the public interest to delist any company that (i) has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 200 shares or more to one or (ii) takes a deliberate action that causes it to fall below an Exchange listing standard, including as in the current proposal, the effectuation of a reverse split that causes a company to fall below a quantitative continued listing standard.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes the proposed rule change furthers the objectives of Section 6(b)(7) of the Act
The Exchange believes that the proposal will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of Section 6(b)(8) of the Act.
The Exchange believes that the proposal will not impose a burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed rule change is designed to protect investors and facilitate a fair and orderly market, which are both important purposes of the Act. To the extent that there is any impact on intermarket competition, it is incidental to these objectives.
The Exchange does not believe that the proposed rule change imposes a burden on intra-market competition because the provisions apply to all market participants and issuers on the Exchange equally.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to 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 17Ac2-2 and Form TA-2 require registered transfer agents to file an annual report of their business activities with the Commission. These reporting requirements are designed to ensure that all registered transfer agents are providing the Commission with sufficient information on an annual basis about the transfer agent community and to permit the Commission to effectively monitor business activities of transfer agents.
The amount of time needed to comply with the requirements of amended Rule 17Ac2-2 and Form TA-2 varies. Of the total 315 registered transfer agents, approximately 9.2% (or 29 registrants) would be required to complete only questions 1 through 3 and the signature section of amended Form TA-2, which the Commission estimates would take each registrant approximately 30 minutes, for a total burden of approximately 15 hours (29 × .5 hours = 14.5 rounded up to 15). Approximately 26.5% of registrants (or 84 registrants) would be required to answer questions 1 through 5, question 11, and the signature section, which the Commission estimates would take approximately 1 hour and 30 minutes, for a total of 126 hours (84 × 1.5 hours). Approximately 64.2% of the registrants (or 203 registrants) would be required to complete the entire Form TA-2, which the Commission estimates would take approximately 6 hours, for a total of 1,218 hours (203 × 6 hours). The aggregate annual burden on all 315 registered transfer agents is thus approximately 1,359 hours (15 hours + 126 hours + 1,218 hours) and the average annual burden per transfer agent is approximately 4.314 hours (1,359 ÷ 315).
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 by January 3, 2025.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street NE, Washington, DC 20549, or send an email to:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe C2 Exchange, Inc. (the “Exchange” or “C2 Options”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the
The Exchange proposes to update its Fee Schedule to provide a temporary 20% discount on fees assessed to Exchange Trading Permit Holders and non-Trading Permit Holders that purchase $20,000 or more of ad hoc purchases of C2 Historical Depth Data (“Historical Depth Reports”), effective October 18, 2024 through December 31, 2024.
By way of background, the Exchange currently makes available for purchase Depth Data, which is a daily archive of the Exchange's depth of book real-time feed, which provides depth-of-book quotations and execution information based on options orders entered into the System. The Exchange also offers Historical Depth Data, which offers such data on a historical basis,
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Historical Depth Report available for purchase to Users on the LiveVol DataShop website (
The Exchange and affiliated equities and options exchanges (
The Exchange proposes to provide a temporary pricing incentive program in which Trading Permit Holders or non-Trading Permit Holders that purchase Historical Depth Reports will receive a percentage fee discount where specific purchase thresholds are met. Specifically, the Exchange proposes to provide a temporary 20% discount for ad-hoc purchases of Historical Depth Data of $20,000 or more.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee changes will further broaden the availability of U.S. options market data to investors consistent with the principles of Regulation NMS. The Exchange believes the dissemination of historical depth of book data via Historical Depth Reports benefits investors through increased transparency and may promote better informed trading, as well as research and studies of the options industry. Nevertheless, the Exchange notes that such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through similar reports.
The Exchange also operates in a highly competitive environment. Indeed, there are currently 17 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 17% of the market share.
The Exchange believes that the proposed incentive program for any Member or non-Member who purchases Historical Depth Reports is reasonable because such purchasers would receive a 20% discount for purchasing $20,000 or more worth of Historical Depth Reports. The Exchange believes the proposed discount is reasonable as it will give purchasers the ability to use and test the Historical Depth Reports at a discounted rate, prior to purchasing additional months or a monthly subscription, and will therefore encourage and promote users to purchase the Historical Depth Reports. Further, the proposed discount is intended to promote increased use of the Exchange's Historical Depth Reports by defraying some of the costs a purchaser would ordinarily have to expend before using the data product. The Exchange believes that the proposed discount is equitable and not unfairly discriminatory because it will apply equally to all Trading Permit Holders and non-Trading Permit Holders who purchase Historical Depth Reports. Lastly, the purchase of this data product is discretionary and not compulsory. Indeed, no market participant is required to purchase the Historical Depth Reports, and the Exchange is not required to make Historical Depth Reports available to all investors. Potential purchasers may request the data at any time if they believe it to be valuable or may decline to purchase such data. As noted above, the Exchange has previously adopted this discount program at other times.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment in which the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, including the adoption of similar discounts to those fees, the Exchange believes that the degree to which fee changes (including discounts and rebates) in this market may impose any burden on competition is extremely limited. As discussed above, the Exchange's Historical Depth Reports offering is subject to direct competition from several other options exchanges that offer similar data products. Moreover, purchase of Historical Depth Reports is optional. It is designed to help investors understand underlying market trends to improve the quality of investment decisions, but is not necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to compete more effectively. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges. Further, the Exchange believes that these changes will not cause any unnecessary or inappropriate burden on intermarket competition, as the proposed incentive program applies uniformly to any purchaser of Historical Depth Reports.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX Options”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to update its Fee Schedule to provide a temporary 20% discount on fees assessed to Exchange Members
By way of background, the Exchange currently makes available for purchase Depth Data, which is a daily archive of the Exchange's depth of book real-time feed, which provides depth-of-book quotations and execution information based on options orders entered into the System. The Exchange also offers Historical Depth Data, which offers such data on a historical basis,
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Historical Depth Report available for purchase to Users on the LiveVol DataShop website (
The Exchange's equities platform (“BZX Equities”) and affiliated equities and options exchanges (
The Exchange proposes to provide a temporary pricing incentive program in which Members or Non-Members that purchase Historical Depth Reports will receive a percentage fee discount where specific purchase thresholds are met. Specifically, the Exchange proposes to provide a temporary 20% discount for ad-hoc purchases of Historical Depth Data of $20,000 or more.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of
In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee changes will further broaden the availability of U.S. options market data to investors consistent with the principles of Regulation NMS. The Exchange believes the dissemination of historical depth of book data via Historical Depth Reports benefits investors through increased transparency and may promote better informed trading, as well as research and studies of the options industry. Nevertheless, the Exchange notes that such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through similar reports.
The Exchange also operates in a highly competitive environment. Indeed, there are currently 17 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 17% of the market share.
The Exchange believes that the proposed incentive program for any Member or non-Member who purchases Historical Depth Reports is reasonable because such purchasers would receive a 20% discount for purchasing $20,000 or more worth of Historical Depth Reports. The Exchange believes the proposed discount is reasonable as it will give purchasers the ability to use and test the Historical Depth Reports at a discounted rate, prior to purchasing additional months or a monthly subscription, and will therefore encourage and promote users to purchase the Historical Depth Reports. Further, the proposed discount is intended to promote increased use of the Exchange's Historical Depth Reports by defraying some of the costs a purchaser would ordinarily have to expend before using the data product. The Exchange believes that the proposed discount is equitable and not unfairly discriminatory because it will apply equally to all Members and non-Members who purchase Historical Depth Reports. Lastly, the purchase of this data product is discretionary and not compulsory. Indeed, no market participant is required to purchase the Historical Depth Reports, and the Exchange is not required to make Historical Depth Reports available to all investors. Potential purchasers may request the data at any time if they believe it to be valuable or may decline to purchase such data. As noted above, the Exchange has previously adopted this discount program at other times.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment in which the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, including the adoption of similar discounts to those fees, the Exchange believes that the degree to which fee changes (including discounts and rebates) in this market may impose any burden on competition is extremely limited. As discussed above, the Exchange's Historical Depth Reports offering is subject to direct competition from several other options exchanges that offer similar data products. Moreover, purchase of Historical Depth Reports is optional. It is designed to help investors understand underlying market trends to improve the quality of investment decisions, but is not necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to compete more effectively. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges. Further, the Exchange believes that these changes will not cause any unnecessary or inappropriate burden on intermarket competition, as the proposed incentive program applies uniformly to any purchaser of Historical Depth Reports.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
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.
On April 12, 2024, the Securities and Exchange Commission (the “Commission”) received an application from the New York Stock Exchange LLC (the “NYSE”) to amend an exemption granted to the NYSE on November 16, 2006 (the “2006 Exemption”)
Section 12(a) of the Exchange Act provides in relevant part that it “shall be unlawful for any member, broker or dealer to effect any transaction in any security (other than an exempted security) on a national securities exchange unless a registration is effective as to such security for such exchange.” Section 12(b)
At the same time, brokers or dealers who trade debt securities other than on a national securities exchange may trade debt securities regardless of whether the issuer registered that class of debt under the Exchange Act. This is the case because, while the Exchange Act requires issuers to register certain equity securities that are not traded on a national securities exchange, it does not require issuers to register debt securities that are not traded on a national securities exchange. In particular, Section 12(g)
As the Commission has stated in the past, this disparate regulatory treatment between debt securities traded on an exchange versus “over-the-counter” (“OTC”) may have negatively and unnecessarily affected the structure and development of the debt markets.
As another example, in 2002, the Commission approved the Financial Industry Regulatory Authority's (“FINRA”) rules for the Transaction Reporting and Compliance Engine (“TRACE”) to, among other things, improve price transparency in the corporate bond market.
The Commission stated that granting the 2006 Exemption “will serve the public interest by minimizing unnecessary regulatory disparity and promoting competition” between the corporate debt security markets.
The NYSE posts on its website a list of the bonds that can be traded on the NYSE Bonds platform.
In its application, the NYSE requests that we amend one of the conditions in the 2006 Exemption. That exemption permits the NYSE to trade debt securities
(a) The issuer of the debt security has registered the offer and sale of such security under the Securities Act of 1933;
(b) The issuer of the debt security or the issuer's parent company if the issuer is a wholly-owned subsidiary, has at least one class of common or preferred equity securities registered under Section 12(b)
(c) The transfer agent of the debt security is registered under Section 17A
(d) The trust indenture for the debt security is qualified under the Trust Indenture Act of 1939;
(e) The NYSE has complied with the undertakings (see below) set forth in its exemptive application to distinguish between debt securities registered under Section 12(b) of the Exchange Act and listed on the NYSE and debt securities trading pursuant to this requested exemptive relief; and
(f) The NYSE will delist a class of debt securities that were listed on the NYSE as of November 16, 2006 only if the issuer of such class of debt securities does not object to the delisting of those securities.
The NYSE states that it would continue to comply with the undertakings that are a condition of the 2006 Exemption in connection with its current request.
(a) Provide definitions of “listed” debt securities and “traded” debt securities on NYSE Bonds and on the NYSE's website;
(b) Identify on NYSE Bonds and on the NYSE's website whether a particular debt security is “listed” or “traded”;
(c) Directly provide members and member organizations notification prior to the date that trading of the debt securities commences on NYSE Bonds to clarify the distinction between “listed” debt securities and “traded” debt securities and to provide notification that eligible debt securities will be traded on NYSE Bonds;
(d) Issue a press release upon approval of this exemption request stating that “listed” debt securities would trade alongside “traded” debt securities on NYSE Bonds; and
(e) Obtain corporate action information from a third-party bond issue tracking service for debt securities covered by this request.
The NYSE states that the current regulatory landscape puts the NYSE at a competitive disadvantage vis-à-vis Alternative Trading Systems (“ATSs”), which are permitted to trade any corporate bond that is currently available to trade in the secondary market.
Section 36 of the Exchange Act grants the Commission the authority to “conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.”
In order to facilitate investor protection, we propose the following additional condition: the NYSE will ensure daily monitoring of delistings of equity securities of each issuer whose debt securities are listed for trading on NYSE Bonds or, if the issuer of the debt securities is a wholly-owned subsidiary, equity securities of the issuer's parent company. The Commission preliminarily believes that this condition will help protect investors by facilitating appropriate monitoring and timely handling of equity security delistings for each issuer whose debt securities are listed for trading on NYSE Bonds or, if the issuer of the debt securities is a wholly-owned subsidiary, equity securities of the issuer's parent company.
We request and encourage any interested person to submit comments regarding the NYSE's application, including whether the request should be granted. In particular, we solicit comment on the following questions:
1. Is the scope of the requested exemption appropriate? If not, please explain and provide examples of an appropriate scope.
2. Please describe how the requested exemption would or would not protect investors and the public interest. For example, would investors lose access to any material information?
3. Please describe how the requested exemption would or would not help to maintain fair and orderly markets.
4. Would the requested exemption impact competition between exchanges and the OTC markets for trading in corporate bonds? If so, please describe the impact on competition, and how this impact would occur.
5. Would the requested exemption increase the transparency of the public debt markets? If so, please describe the kind of transparency it would foster.
6. Increased trading on the NYSE Bonds platform that might follow from the requested exemption would result in greater dissemination of last sale prices as they occur on NYSE Bonds exclusive of any mark-ups, mark-downs, or other charges, and bid and ask quotations. To what extent would the information disseminated by NYSE Bonds and, in particular, the pre-trade information improve overall market quality in the corporate bond market in terms of access to information, liquidity or other factors?
7. Would the requested exemption impact competition between national securities exchanges? If so, explain how.
8. Would issuers be more or less likely to issue debt securities to trade on NYSE Bonds in accordance with this exemptive relief?
9. Are there differences between issuers, in terms of industry, capitalization or other characteristics, who list their equity securities on the NYSE and those who list their equity securities on other registered national securities exchanges? If so, are there any such differences that warrant not expanding the 2006 Exemption as requested?
10. Are there differences between the listing standards for equity securities among national securities exchanges that warrant not expanding the 2006 Exemption as requested?
11. The current condition requiring the issuer of the debt security to have at least one class of common or preferred equity securities registered under Section 12(b) of the Exchange Act and listed on the NYSE was designed to assure that the issuer of debt securities has a significant and continuous listing (and oversight) relationship with the NYSE. Does the loss of such a direct relationship with the issuer under the requested exemption warrant not expanding the 2006 Exemption as requested?
12. Are there particular listing standards for an issuer's listed securities the presence of which should be a condition for expanding the 2006 Exemption?
13. Any new or amended listing standards must be filed with the Commission, meet the statutory standard and comply with Rule 19b-4, and be approved by the Commission. Would approving this request affect the incentives of each of the national securities exchanges, including the NYSE, to maintain or change its listing standards?
14. Are there differences between exchange-traded debt securities and debt securities traded in the OTC market broadly or on ATSs in particular that have developed since 2006 that warrant not expanding the 2006 Exemption as requested?
15. Are there any implications or concerns that may arise because NYSE members would be able to trade a debt security of an issuer that is not subject to the rules of the NYSE (even with respect to its equity securities) and where the NYSE has no formal listing agreement with the issuer, and the issuer's equity securities are listed on a national securities exchange other than the NYSE?
16. Should we condition the requested exemption on any additional listing standards on any exchange where the issuer's securities are listed?
17. Are the conditions sufficiently designed so that investors are appropriately protected?
18. Is the undertaking regarding the use of corporate action information from a third party bond issue tracking service adequate to provide the NYSE and its members with sufficient information regarding corporate actions relevant to debt securities traded on NYSE Bonds? Is such undertaking sufficient for NYSE to ascertain compliance with the requirements of NYSE Rule 1401, on initial and continued trading? If not, what additional information or measures would be appropriate? Should any such additional information or measures be required as an additional condition of the exemption?
19. Should the provision of corporate action information provided by a third-party bond issue tracking service to the NYSE and its members be a condition of the exemption?
20. Should we require additional conditions to the requested exemption if any of the events identified in the information to be provided by the third-party bond issue tracking service to the NYSE were to occur?
21. The NYSE states that it would continue to “[i]dentify on NYSE Bonds and on the NYSE's website whether a particular debt security is “listed” or “traded” and the NYSE explains the manner in which it would do so.
22. Should we add the proposed condition that the NYSE ensure daily monitoring of delistings of equity securities of each issuer whose debt securities are listed for trading on NYSE Bonds or, if the issuer of the debt securities is a wholly-owned subsidiary, equity securities of the issuer's parent company? Would that condition help to ensure compliance with the requested exemption and timely handling of an event of delisting of such equity securities?
23. Should we make any other modifications to the existing conditions or add any other conditions?
24. Would the requested change to the listing condition impact any of the other conditions to the exemption? If so, which condition or conditions, and why?
25. Would there be any adverse consequences to market participants if we granted this exemption as requested?
Comments should be received on or before December 4, 2024. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For further information, you may contact Ingram Weber, Special Counsel, Office of Rulemaking, at (202) 551-3430, in the Division of Corporation Finance or Justin Pica, Assistant Director, at (202) 551-7476, in the Division of Trading and Markets; U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
By the Commission.
The New York Stock Exchange LLC (the “Exchange” or “NYSE”) requests that the Securities and Exchange Commission (the “Commission”) amend a single term of previously granted exemptive relief to permit Exchange members and member organizations to trade certain debt securities that are not registered under Section 12(b)
Section 12(a)
In 2006, the Commission granted exemptive relief from Section 12(a) of the Exchange Act to permit Exchange members and member organizations to trade unregistered debt securities on the NYSE's Automated Bond System (ABS),
The 2006 Exemption is limited to debt securities of an issuer, or a wholly-owned subsidiary of an issuer, with at least one class of common or preferred equity securities that is (i) registered under Section 12(b) of the Exchange Act and (ii) listed on the NYSE. The Exchange now asks the Commission to amend this single limitation. As amended, unregistered debt securities could be traded on NYSE Bonds if their issuer (or their issuer's parent) had a class of common or preferred equity listed on
More specifically, if the Commission were to grant the Exchange's request, in order for an unregistered debt security to be traded on NYSE Bonds, the debt security would have to meet the following conditions:
(a) The issuer of the debt securities registered the offer and sale of that class of debt securities under the Securities Act of 1933, as amended (the “1933 Act”);
(b) The issuer of the debt securities or the issuer's parent, if the issuer is a wholly-owned subsidiary, has at least one class of common or preferred equity securities registered under Section 12(b)
(c) The transfer agent for the debt securities is registered under Section 17A
(d) The trust indenture for the debt security is qualified under the Trust Indenture Act of 1939,
(e) The NYSE has complied with the undertakings (see below) set forth in its exemptive application to distinguish between debt securities registered under Section 12(b) of the Exchange Act and listed on the NYSE and debt securities trading pursuant to this requested exemptive relief; and
(f) The NYSE will delist a class of debt securities that were listed on the NYSE as of November 16, 2006 only if the issuer of such class of debt securities does not object to the delisting of those securities.
In connection with the 2006 Exemption, the Exchange undertook that it would take or had taken a number of specified steps. The Exchange undertakes that it will continue to provide this same information in connection with this request. Specifically, the NYSE will continue to:
(a) Provide definitions of “listed” debt securities and “traded” debt securities on NYSE Bonds and on the NYSE's website;
(b) Identify on NYSE Bonds and on the NYSE's website whether a particular debt security is “listed” or “traded”;
(c) The NYSE will directly provide members and member organizations notification prior to the date that trading of the debt securities commences on NYSE Bonds to clarify the distinction between “listed” debt securities and “traded” debt securities and to provide notification that eligible debt securities will be traded on NYSE Bonds;
(d) Issue a press release upon approval of this exemption request stating that “listed” debt securities would trade alongside “traded” debt securities on NYSE Bonds; and
(e) Obtain corporate action information from IDS for debt securities covered by this request.
With respect to undertaking (e), IDS, an affiliate of the Exchange, is a bond issue tracking service that provides the NYSE a customized on-line reference for corporate actions relevant to bonds. The tracking system provides information and data electronically to the NYSE, and provides:
• Notification of calls (redemptions) of traded bonds,
• Notification of tender offers for traded bonds,
• Notice of defaults in payment of interest on traded bonds,
• Notice of consent solicitations for traded bonds, and
• Notice of corporate actions for traded bonds (includes tender offers, issuer name changes, CUSIP number changes).
The tracking system does not provide notification of changes in trustees, obligors or transfer agents with respect to traded debt securities. NYSE receives this information electronically from IDS on a daily basis. IDS independently obtains, researches and organizes the information. The NYSE does not itself verify the information provided by IDS.
NYSE currently has rules that set forth the requirements for trading unlisted debt securities on NYSE Bonds.
“The term Debt Securities includes only securities that, if they were to be listed on the NYSE, would be listed under Sections 102.03 or 103.05 of the NYSE's Listed Company Manual; provided, however, that such securities shall not include any security that is defined as an “equity security” under Section 3(a)(11) of the Exchange Act.
For the avoidance of doubt, note that the term Debt Securities does not include a security that, if listed on the NYSE, would have been listed under Section 703.19 of the NYSE's Listed Company Manual or any equity-linked debt securities listed under Rule 5P. The references in this Rule to Sections 102.03, 103.05, and 703.19 of the NYSE's Listed Company Manual are to those sections as in effect on January 31, 2005.”
Rule 1401 specifies that only Debt Securities with an outstanding market value or principal amount of at least $5 million will be permitted to be traded by NYSE members and member organizations. Rule 1401 also specifies that trading in Debt Securities will be suspended if (a) the outstanding aggregate market value or principal amount of the Debt Securities has fallen to less than $1,000,000, or (b) the Debt Securities either (1) no longer qualify for a statutory exemption from the registration requirements of Section 12(b) of the Exchange Act, or (2) may no longer be traded by NYSE members or member organizations on an unregistered basis pursuant to the 2006 Exemption.
In order to ensure that Debt Securities have at least $5,000,000 in aggregate market value or principal amount at the time trading commences, as required under Rule 1401(1), the NYSE, as it currently does, will review two existing corporate bond issue databases (IDS and FactSet) that provide issue size information for the preponderance of corporate bonds.
To monitor the $1,000,000 suspension threshold, as required under Rule 1401(2),
The NYSE intends to provide an opportunity for NYSE members and member organizations to trade all eligible debt securities. Once eligible debt securities are identified, the NYSE will notify NYSE members and member organizations that such debt securities are eligible to be traded on NYSE Bonds through Trader Updates and postings on the NYSE website. Debt securities that would be ineligible for trading include convertible debt securities, debt securities that were listed under Section 703.19 of the NYSE's Listed Company Manual, debt issued by listed company subsidiaries that are not wholly-owned, and foreign government debt.
The NYSE believes that increased exchange trading of debt securities will have substantial benefits to market participants in the form of greater transparency around pricing and issuer information. The regulatory structure around trading of debt securities, however, has not sufficiently incentivized trading on a regulated national securities exchange. Presently, all equity and debt securities that are not “exempted securities” or are not otherwise exempt from Exchange Act registration must be registered by the issuer under the Exchange Act before a member, broker or dealer may trade that class of securities on a national securities exchange. By contrast, brokers or dealers who trade debt securities in the over-the-counter, or OTC, market may trade debt securities regardless of whether the issuer registered that class of debt under the Exchange Act. In fact, debt securities traded OTC need not even be issued by reporting companies.
The Commission has taken a number of steps over the years to address its view “that this disparate regulatory treatment may have negatively and unnecessarily affected the structure and development of the debt markets.”
The Commission has also sought to increase the level of transparency in the public debt markets. In this regard, the National Association of Securities Dealers, Inc. (“NASD”), now the Financial Industry Regulatory Authority, Inc. (“FINRA”), introduced TRACE (Trade Reporting and Compliance Engine) to bring transparency to the bond market by providing comprehensive, real-time access to bond price information. Introduced in 2002, TRACE captures and disseminates consolidated information on secondary market transactions in publicly traded TRACE-eligible securities—representing all OTC market activity in these bonds.
The Commission's 2006 Exemption was another step to “serve the public interest by minimizing unnecessary regulatory disparity and promoting competition.”
NYSE Bonds is an electronic order-driven matching system
NYSE Bonds primarily serves the “small-lot” corporate bond market. Small-lot bond buyers and sellers are primarily individuals, bank trust accounts, and small institutions. In addition, bond dealers use NYSE Bonds to offset so-called “tail-end” bond positions acquired in the course of large-lot trading. NYSE Bonds is the only system that provides the public with real-time disclosure of quotations and trade prices, exclusive of mark-ups/mark-downs, commissions, or other charges.
Growth in electronic trading of corporate bonds has been noteworthy. It has been decades in the making, but electronic trading in corporate bonds has made notable inroads in a market known for its low-tech ways. In November 2023, 45% of US investment-grade bond volume was traded electronically.
In addition, the Exchange believes that investors in debt securities are adversely impacted by the competitive constraints on exchanges trading debt securities. In contrast to OTC markets trading debt securities, the Exchange's bond market disseminates
The Exchange believes that increasing the universe of unregistered debt securities that may be traded on the Exchange will have significant benefits to market participants. First, the Exchange's proposal will not result in any loss of debt security or issuer information to investors for the following reasons: The Exchange is only requesting exemptive relief with respect to the trading by Exchange members and member organization of debt securities issued by companies listed on a national securities
Only debt securities that are registered under the 1933 Act would be eligible to be traded by NYSE members and member organizations on NYSE Bonds. Additionally, under Section 15(d) of the Exchange Act, issuers not required to register their debt securities under Section 12 of the Exchange Act are subject to Section 13 reporting requirements for the fiscal year following the effective date of a registration statement filed under the 1933 Act.
The 1933 Act registration statements themselves supply much of the relevant information needed by the bond markets and investors. Indeed, for the most part, the Exchange Act registration Form 8-A simply incorporates by reference the information found in the 1933 Act registration statement. The 1933 Act registration statement also contains a much more detailed and relevant description of the debt issue than is required by Rule 12b-3 of the Exchange Act.
Most of the other disclosure items required in connection with debt securities arise with respect to Forms 8-K, 10-Q and 10-K. These forms would continue to be filed by eligible listed companies and, where required by Sections 15(d) or 13 under the Exchange Act, by eligible wholly-owned subsidiaries, regardless of whether the debt securities are registered under the Exchange Act. Item 2.04 of Form 8-K requires disclosure of any triggering event, such as a default, that accelerates or increases a direct financial obligation. Item 3.03 of Form 8-K requires disclosure of any material modification to the rights of security holders. Item 601(b)(4) of Regulation S-K (required to be included in 10-Ks and 10-Qs) discusses the definition of the rights of debt holders. Part II—Item 3(a) of Form 10-Q requires that, to the extent that the registrant has not previously disclosed such information on Form 8-K, the registrant must provide information regarding defaults in the payment of principal, interest, sinking fund, etc., “with respect to
If, as described above, a wholly-owned subsidiary ceases to provide Exchange Act reports itself, much of the information that had been provided by the wholly-owned subsidiary will be provided instead by the wholly-owned subsidiary's listed parent company in its own Exchange Act reports. The listed parent company, however, will not be required to list and describe the debt securities issued by the wholly-owned subsidiary on the cover page of its own annual report on Form 10-K or to include as an exhibit to its own Forms 10-K or 10-Q the exhibits that would have been required to be filed by the wholly-owned subsidiary pursuant to Item 601(b)(4) of Regulation S-K (relating to creation of a new class of securities or indebtedness or the modification of existing rights of security holders).
There are also a variety of databases providing bond information, including information regarding the listing and/or trading location of a bond. A few examples of these database services include Standard & Poor's Market Intelligence, the Mergent Bond Record, APEX, Bloomberg and the Commission's EDGAR internet service, among other services. In addition, the Exchange's own bond issue directory is available on the Exchange's website and carries the description of each listed bond issue, including bonds currently exempt from Exchange Act registration requirements, such as Tennessee Valley Authority bonds.
Most notably, of course, OTC bond trading functions without the information obtained as a result of Exchange Act registration. OTC bond trading relies on the information disclosed in the 1933 Act registration statement and the indentures filed under the Trust Indenture Act, including amendments to the indenture affecting the rights of bondholders.
In addition to helping ensure that investors have access to current information about debt securities traded on the Exchange, the NYSE's present request will have additional benefits. First, the request will increase competition by allowing more exchanges to provide a trading venue for debt securities which will, in turn, likely increase trading volume and liquidity of debt securities. This will provide investors and market participants with greater pricing transparency for bonds traded on the Exchange. In granting an exemption pursuant to Section 36 of the Exchange Act, the Commission must consider whether the requested exemption is “necessary or appropriate in the public interest, and is consistent with the protection of investors.”
The Exchange believes that its request to amend a single term of the 2006 Exemption to permit unregistered debt securities to be traded on NYSE Bonds if their issuer (or their issuer's parent) had a class of common or preferred equity listed on
As noted above, the Commission has already shown its willingness to lessen the opaqueness in the bond market by providing exemptive relief to the Exchange pursuant to which the Exchange currently trades debt securities of issuers that are listed on NYSE and such issuers' wholly-owned subsidiaries. By extending this exemption to allow Exchange members and member organizations to trade debt securities of issuers that are listed on any national securities exchange and such issuers' wholly-owned subsidiaries would further remove unnecessary and anti-competitive barriers to exchange trading of debt securities. In addition, trading of such debt securities on NYSE Bonds would provide market participants trading such securities, as well as the owners of such securities, much greater levels of price transparency than is currently available. Accordingly, we urge the Commission to use its exemptive power to remove the requirement that debt securities of non-NYSE-listed equity issuers and their wholly-owned subsidiaries be registered under the Exchange Act in order to be traded on the Exchange.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 7.31(f)(1) regarding Directed Orders. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
Rule 7.31(f)(1) currently defines a Directed Order as a Limit Order with instructions to route on arrival at its limit price to a specified alternative trading system (“ATS”) with which the Exchange maintains an electronic linkage. Directed Orders are available for all securities eligible to trade on the Exchange. Directed Orders are not assigned a working time and do not interact with interest on the Exchange Book. Rule 7.31(f)(1) further provides that the ATS to which a Directed Order is routed is responsible for validating whether the order is eligible to be accepted, and if such ATS determines to reject the order, the order would be cancelled.
Rule 7.31(f)(1)(A) provides that a Directed Order must be designated for the Exchange's Core Trading Session. A Directed Order must be designated with a Time in Force modifier of IOC or Day and is routed to the specified ATS with such modifier. Rule 7.31(f)(1)(A) also provides that a Directed Order may not be designated with any other modifiers defined in Rule 7.31.
Rule 7.31(f)(1)(B) provides that a Directed Order in a security to be opened in an initial public offering (“IPO”) or a Direct Listing will be rejected if received before the IPO Auction or Direct Listing Auction concludes.
Rule 7.31(f)(1)(C) provides that an incoming Directed Order will be rejected if received during a trading halt or pause.
Rule 7.31(f)(1)(D) provides that a request to cancel a Directed Order designated Day is routed to the ATS to which the order was routed.
The Exchange proposes to amend Rule 7.31(f)(1) to provide for Directed Orders routed to an algorithm. Specifically, the Exchange proposes to permit Directed Orders to be designated to route to a broker-dealer algorithm with which the Exchange has established connectivity. The Exchange proposes to route Directed Orders only to a range of broker-dealer algorithms that have completed its onboarding process and established routing connectivity with the Exchange.
As proposed, the member organization entering the Directed Order would select the algorithm to which the Directed Order would be routed and provide instructions for the handling of such order by the routing destination. Member organizations would select from the available algorithm providers without any input or control from the Exchange. As with the existing Directed Order routed to an ATS, the Exchange's only role would be to route the order to the designated algorithm as instructed. Neither the Exchange nor ArcaSec will make any routing decisions and will only route Directed Orders to valid destinations as instructed by the member organization. The Exchange will not have any visibility into where or how a Directed Order is executed by an algorithm, including whether that
To effect this change, the Exchange first proposes to amend the definition of a Directed Order in Rule 7.31(f)(1) to provide that a Directed Order is a Limit Order with instructions to route on arrival to an ATS or algorithm with which the Exchange maintains an electronic linkage. Directed Orders will continue to be available for all securities eligible to trade on the Exchange and will not be assigned a working time or interact with interest on the Exchange Book. The Exchange further proposes to amend Rule 7.31(f)(1) to specify that the ATS or algorithm to which the Directed Order is routed, as applicable, will validate whether the order is eligible to be accepted, and if it rejects the order, the order will be cancelled.
In amending Rule 7.31(f)(1) to allow for the routing of Directed Orders to an algorithm, the Exchange also proposes to permit Directed Orders designated to route to an algorithm to be Market Orders. The Exchange believes that permitting Directed Orders routed to algorithms to be entered as Market Orders would facilitate market participants' existing functional workflows when routing to algorithms. A member organization routing a Directed Order to an algorithm may, for example, wish to send a parent order with Market Order instructions for execution via smaller limited child orders over several hours of the trading day.
The Exchange next proposes to delete the first sentence of current Rule 7.31(f)(1)(A), which provides that Directed Orders must be designated for the Exchange's Core Trading Session. Consistent with this proposed change, the Exchange also proposes to delete current Rule 7.34(c)(1)(E), which provides that Directed Orders designated for the Early Trading Session will be rejected, and to make a conforming change in Rule 7.34(c)(1) to reference “paragraphs (c)(1)(A) through (D)” to reflect the deletion of Rule 7.34(c)(1)(E). The Exchange's proposal to permit Directed Orders to be routed during any trading session is intended to allow the routing destinations receiving such orders to determine whether they are eligible to trade in a given trading session. The Exchange will pass on the instructions provided by the member organization entering the Directed Order, and the routing destination will be responsible for validating whether the order will be accepted or rejected, as contemplated by Rule 7.31(f)(1).
The Exchange further proposes to amend Rule 7.31(f)(1)(A) to provide that a Directed Order to an ATS must be designated as IOC or Day and will be routed as such, whereas a Directed Order to an algorithm may only be designated as Day and routed as such, consistent with market participants' existing functional workflows when routing to algorithms. The Exchange also proposes to clarify language currently in Rule 7.31(f)(1)(A) providing that Directed Orders may not be combined with any other modifiers set forth in this Rule, to instead provide that Directed Orders will not be processed with any other modifiers set forth in this Rule.
The Exchange next proposes to amend Rule 7.31(f)(1)(C) to specify that, during a trading halt or pause, Directed Orders routed to an ATS would continue to be rejected, whereas Directed Orders to an algorithm would be routed as specified. The Exchange proposes that Directed Orders routed to an algorithm would be routed during a trading halt or pause, consistent with market participants' existing functional workflows when routing to algorithms. The Exchange believes that the proposed elimination of certain restrictions on Directed Orders currently set forth in Rules 7.31(f)(1)(A) and (C) would provide member organizations with additional flexibility when entering Directed Orders, which would remain subject to the rules and specifications of the destinations to which such orders are routed. As provided in Rule 7.31(f)(1), as amended, the ATS or algorithm to which a Directed Order is routed would validate whether the order is eligible to be accepted.
Finally, the Exchange proposes to amend Rule 7.31(f)(1)(D) to provide that a request to cancel a Directed Order designated Day will be routed to the ATS or algorithm to which the order was routed.
The proposed change would provide member organizations with a technology solution to leverage their existing Exchange connectivity to route Directed Orders to either an ATS or algorithm, thereby affording them increased access to execution tools and enhanced operational efficiency.
Because of the technology changes associated with this proposed rule change, the Exchange will announce the implementation date by Trader Update.
The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934,
The Exchange believes that the proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market and promote just and equitable principles of trade because the Directed Order, as proposed, would offer member organizations access to additional execution tools and trading opportunities by permitting them to designate orders submitted to the Exchange to be routed directly to a specified algorithm for execution. In particular, the Exchange believes that amending the Directed Order to include routing to an algorithm would provide greater choice and flexibility for member organizations and their customers. The Exchange further believes that the proposed change would remove impediments to and perfect the mechanism of a free and open market by offering member organizations a technology solution that would provide them with the option to send orders that they wish to route to an alternate destination for execution through the Exchange, thereby promoting operational efficiencies through leveraging their existing protocols and specifications for Exchange connectivity. Finally, the Exchange notes that the proposed functionality is not novel as a Directed Order to an algorithm would otherwise generally function in the same way as the existing Directed Order to an ATS, and the proposed change would simply facilitate member organizations' existing ability to direct orders to be executed via an algorithm.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed change to the rules governing Directed Orders would promote competition because it would enhance an order type on the Exchange that would provide access to additional execution tools and trading opportunities for market participants.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe EDGX Exchange, Inc. (the “Exchange” or “EDGX Options”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to update its Fee Schedule to provide a temporary 20% discount on fees assessed to Exchange Members
By way of background, the Exchange currently makes available for purchase Depth Data, which is a daily archive of the Exchange's depth of book real-time feed, which provides depth-of-book quotations and execution information based on options orders entered into the System. The Exchange also offers Historical Depth Data, which offers such data on a historical basis,
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Historical Depth Report available for purchase to Users on the LiveVol DataShop website (
The Exchange's equities platform (“EDGX Equities”) and affiliated equities and options exchanges (
The Exchange proposes to provide a temporary pricing incentive program in which Members or Non-Members that purchase Historical Depth Reports will receive a percentage fee discount where specific purchase thresholds are met. Specifically, the Exchange proposes to provide a temporary 20% discount for ad-hoc purchases of Historical Depth Data of $20,000 or more.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee changes will further broaden the availability of U.S. options market data to investors consistent with the principles of Regulation NMS. The Exchange believes the dissemination of historical depth of book data via Historical Depth Reports benefits investors through increased transparency and may promote better informed trading, as well as research and studies of the options industry. Nevertheless, the Exchange notes that such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through similar reports.
The Exchange also operates in a highly competitive environment. Indeed, there are currently 17 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 17% of the market share.
The Exchange believes that the proposed incentive program for any Member or non-Member who purchases Historical Depth Reports is reasonable because such purchasers would receive a 20% discount for purchasing $20,000 or more worth of Historical Depth Reports. The Exchange believes the proposed discount is reasonable as it will give purchasers the ability to use and test the Historical Depth Reports at a discounted rate, prior to purchasing additional months or a monthly subscription, and will therefore encourage and promote users to purchase the Historical Depth Reports. Further, the proposed discount is intended to promote increased use of the Exchange's Historical Depth Reports by defraying some of the costs a purchaser would ordinarily have to expend before using the data product. The Exchange believes that the proposed discount is equitable and not unfairly discriminatory because it will apply equally to all Members and non-Members who purchase Historical Depth Reports. Lastly, the purchase of this data product is discretionary and not compulsory. Indeed, no market participant is required to purchase the Historical Depth Reports, and the Exchange is not required to make the Historical Depth Reports available to all investors. Potential purchasers may request the data at any time if they believe it to be valuable or may decline to purchase such data. As noted above, the Exchange has previously adopted similar discount programs for other historical data products offered by the Exchange.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment in which the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own fees in response, including the adoption of similar discounts to those fees, the Exchange believes that the degree to which fee changes (including discounts and rebates) in this market may impose any burden on competition is extremely limited. As discussed above, the Exchange's Historical Depth Reports offering is subject to direct competition from several other options exchanges that offer similar data products. Moreover, purchase of Historical Depth Reports is optional. It is designed to help investors understand underlying market trends to improve the quality of investment decisions, but is not necessary to execute a trade.
The proposed rule changes are grounded in the Exchange's efforts to compete more effectively. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges. Further, the Exchange believes that these changes will not cause any unnecessary or inappropriate burden on intermarket competition, as the proposed incentive program applies uniformly to any purchaser of Historical Depth Reports.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l-3520), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval.
Rule 3a-4 (17 CFR 270.3a-4) under the Investment Company Act of 1940 (15 U.S.C. 80a) (“Investment Company Act” or “Act”) provides a nonexclusive safe harbor from the definition of investment company under the Act for certain investment advisory programs. These programs, which include “wrap fee” programs, generally are designed to provide professional portfolio management services on a discretionary basis to clients who are investing less than the minimum investments for individual accounts usually required by the investment adviser but more than the minimum account size of most mutual funds. Under wrap fee and similar programs, a client's account is typically managed on a discretionary basis according to pre-selected investment objectives. Clients with similar investment objectives often receive the same investment advice and may hold the same or substantially similar securities in their accounts. Because of this similarity of management, some of these investment advisory programs may meet the definition of investment company under the Act.
In 1997, the Commission adopted rule 3a-4, which clarifies that programs organized and operated in accordance with the rule are not required to register under the Investment Company Act or comply with the Act's requirements.
For a program to be eligible for the rule's safe harbor, each client's account must be managed on the basis of the client's financial situation and investment objectives and in accordance with any reasonable restrictions the client imposes on managing the account. When an account is opened, the sponsor
Additionally, the sponsor (or its designee) must provide each client with a quarterly statement describing all activity in the client's account during the previous quarter. The sponsor and personnel of the client's account manager who know about the client's account and its management must be reasonably available to consult with the client. Each client also must retain certain indicia of ownership of all securities and funds in the account.
The Commission staff estimates that 27,979,460 clients participate each year in investment advisory programs relying on rule 3a-4.
The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. The estimate is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules and forms. 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 control number.
Written comments are invited on: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted by January 3, 2025.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
Please direct your written comments to: Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street NE, Washington, DC 20549 or send an email to:
Pursuant to Section 19(b)(1)
The Exchange proposes to adopt new NYSE Arca Rule 8.800-E to provide for the listing and trading of Commodity- and Digital Asset-Based Investment Interests, which are securities issued by a trust, limited liability company, or other similar entity that holds specified commodities, digital assets, Derivative Securities Products, and/or cash. The Exchange also proposes to list and trade shares of the Grayscale Digital Large Cap Fund LLC (the “Fund”) under proposed NYSE Arca Rule 8.800-E. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below.
The Exchange proposes to adopt new NYSE Arca Rule 8.800-E to provide for the listing and trading of Commodity- and Digital Asset-Based Investment Interests, which are securities issued by a trust, limited liability company, or other similar entity that holds specified commodities, digital assets, Derivative Securities Products, and/or cash. The Exchange also proposes to list and trade shares of the Fund under proposed NYSE Arca Rule 8.800-E.
Proposed Rule 8.800-E(a) provides that the Exchange will consider for trading, whether by listing or pursuant to unlisted trading privileges, Commodity- and/or Digital Asset-Based Investment Interests that meet the criteria of this rule. The Exchange will file separate proposals under Section 19(b) of the Securities Exchange Act of 1934 before trading, either by listing or pursuant to unlisted trading privileges, Commodity- and/or Digital Asset-Based Investment Interests. All statements or representations contained in such rule filing regarding (a) the description of the index, portfolio, or reference asset, (b) limitations on index or portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in such rule filing will constitute continued listing requirements. An issuer of such securities must notify the Exchange of any failure to comply with such continued listing requirements. If an issue of Commodity- and/or Digital Asset-Based Investment Interests does not satisfy these requirements, the Exchange may halt trading in the securities and will initiate delisting proceedings pursuant to Rule 5.5-E(m).
Proposed Rule 8.800-E(b) provides that this rule is applicable only to Commodity- and/or Digital Asset-Based Investment Interests. Except to the extent inconsistent with this Rule, or unless the context otherwise requires, the provisions of the Bylaws and all other rules and procedures of the Board of Directors shall be applicable to the trading on the Exchange of such securities. Commodity- and/or Digital Asset-Based Investment Interests are included within the definition of “security” or “securities” as such terms are used in the Bylaws and Rules of the Exchange.
Proposed Rule 8.800-E(c)(1) defines a Commodity- and/or Digital Asset-Based Investment Interest as a security (a) that is issued by a trust, limited liability company, or other similar entity (the “Fund”) that holds (1) specified commodities and/or digital assets deposited with the Fund, or (2) specified commodities and/or digital assets and, in addition to such specified commodities and/or digital assets, Derivative Securities Products (as defined in NYSE Arca Rule 1.1) deposited with the Fund and/or cash; (b) that is issued by such Fund in a specified aggregate minimum number in return for a deposit of a quantity of the underlying commodity(ies), digital asset(s), Derivative Securities Products, and/or cash; and (c) that, when aggregated in the same specified minimum number, may be redeemed at a holder's request by such Fund which will deliver to the redeeming holder the quantity of the underlying commodity(ies), digital asset(s), Derivative Securities Products, and/or cash.
Proposed Rule 8.800-E(c)(2) provides that the term “commodity,” as used in this rule, includes commodities as defined in Section 1a(9) of the Commodity Exchange Act.
Proposed Rule 8.800-E(c)(3) defines the term “digital asset,” for purposes of this rule, as any digital representation of value recorded on a cryptographically secured, distributed ledger (
Proposed Rule 8.800-E(d) provides that the Exchange may trade, either by listing or pursuant to unlisted trading privileges, Commodity- and/or Digital Asset-Based Investment Interests based on an underlying commodity(ies), digital asset(s), and/or Derivative Securities Products. Each issue of a Commodity- and/or Digital Asset-Based Investment Interest shall be designated as a separate series and shall be identified by a unique symbol.
Proposed Rule 8.800-E(e)(1) sets forth initial listing criteria for Commodity- and/or Digital Asset-Based Investment Interests. Proposed Rule 8.800-E(e)(1)(i) provides that the Exchange will establish a minimum number of Commodity- and/or Digital Asset-Based Investment Interests required to be outstanding at the time of commencement of trading on the Exchange. Proposed Rule 8.800-E(1)(ii) provides that there shall be no limitation on the percentage of a Fund's portfolio that may be invested in commodity and/or digital asset holdings, except that, in the aggregate, at least 90% of the weight of such holdings shall, on both an initial and continuing basis, consist of commodities and/or digital assets concerning which the Exchange is able to obtain information via the Intermarket Surveillance Group (“ISG”) from other members of the ISG or via a comprehensive surveillance sharing agreement (“CSSA”).
Proposed Rule 8.800-E(e)(2) and subparagraphs (i) through (viii) thereunder set forth continued listing criteria for Commodity- and/or Digital Asset-Based Investment Interests. Proposed Rule 8.800-E(e)(2) provides that the Exchange will maintain surveillance procedures for securities listed under this rule and will consider the suspension of trading in, and will initiate delisting proceedings under NYSE Arca Rule 5.5-E(m) of, such series under any of the following circumstances:
• if, following the initial twelve-month period following commencement of trading on the Exchange of Commodity- and/or Digital Asset-Based Investment Interests, the Fund has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Commodity- and/or Digital Asset-Based Investment Interests (proposed Rule 8.800-E(e)(2)(i));
• if, following the initial twelve-month period following commencement of trading on the Exchange of Commodity- and/or Digital Asset-Based Investment Interests, the Fund has fewer than 50,000 securities issued and outstanding (proposed Rule 8.800-E(e)(2)(ii));
• if, following the initial twelve-month period following commencement of trading on the Exchange of Commodity- and/or Digital Asset-Based Investment Interests, the market value of all securities issued and outstanding is less than $1,000,000 (proposed Rule 8.800-E(e)(2)(iii));
• if the value of the underlying commodity(ies) and/or digital asset(s) is no longer calculated or available on at least a 15-second delayed basis from a source unaffiliated with the sponsor, Fund, custodian or the Exchange (proposed Rule 8.800-E(e)(2)(iv));
• if the Intra-Day Fund Value is no longer made available on at least a 15-second delayed basis (proposed Rule 8.800-E(e)(2)(v));
• if any of the continued listing requirements set forth in this Rule 8.800-E are not continuously maintained (proposed Rule 8.800-E(e)(2)(vi));
• if the Exchange submits a rule filing pursuant to Section 19(b) of the Securities Exchange Act of 1934 to permit the listing and trading of a series of Commodity- and/or Digital Asset-Based Investment Interests and any of the statements or representations regarding (a) the description of the index, portfolio, or reference asset, (b) limitations on index or portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in such rule filing are not continuously maintained (proposed Rule 8.800-E(e)(2)(vii)); or
• if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable (proposed Rule 8.800-E(e)(2)(viii)).
Proposed Rule 8.800-E(e)(3) and the subparagraphs thereunder set forth certain requirements specific to Commodity- and/or Digital Asset-Based Investment Interests issued by a trust. Proposed Rule 8.800-E(e)(3)(i) provides that the stated term of a trust shall be as stated in the trust prospectus; however, a trust may be terminated under such earlier circumstances as may be specified in the trust prospectus. In addition, a trust may terminate in accordance with the provisions of the trust prospectus, which may provide for termination if the value of the trust falls below a specified amount. Proposed Rule 8.800-E(e)(3)(ii) provides for the following requirements on an initial and continued listing basis: (1) that the trustee of a trust must be a trust company or banking institution having substantial capital and surplus and the experience and facilities for handling corporate trust business, and that, in cases where, for any reason, an individual has been appointed as trustee, a qualified trust company or banking institution must be appointed co-trustee; and (2) that no change is to be made in the trustee of a listed issue without prior notice to and approval of the Exchange.
Proposed Rule 8.800-E(f) provides that, upon termination of a Fund issuing securities pursuant to Rule 8.800-E, the Exchange requires that Commodity- and/or Digital Asset-Based Investment Interests issued in connection with the Fund be removed from Exchange listing.
Proposed Rule 8.800-E(g) provides that voting rights shall be as set forth in the applicable prospectus of the Fund issuing Commodity- and/or Digital Asset-Based Investment Interests.
Proposed Rule 8.800-E(h) provides that neither the Exchange nor any agent of the Exchange shall have any liability for damages, claims, losses or expenses caused by any errors, omissions, or delays in calculating or disseminating any underlying commodity value, the current value of the underlying commodity required to be deposited to the Fund in connection with issuance of Commodity- and/or Digital Asset-Based Investment Interests; resulting from any negligent act or omission by the Exchange, or any agent of the Exchange, or any act, condition or cause beyond the reasonable control of the Exchange, its agent, including, but not limited to, an act of God; fire; flood; extraordinary weather conditions; war; insurrection; riot; strike; accident; action of government; communications or power failure; equipment or software malfunction; or any error, omission or delay in the reports of transactions in an underlying commodity.
Proposed Rule 8.800-E(i) provides that an ETP Holder acting as a registered Market Maker in Commodity- and/or Digital Asset-Based Investment Units with no exposure to a non-U.S. currency or currencies must file with the Exchange in a manner prescribed by the Exchange and keep current a list identifying all accounts for trading that a Market Maker may have or over which it may exercise investment discretion in an underlying commodity, related commodity futures or options on commodity futures, or any other related commodity derivatives; an underlying digital asset, related digital asset futures or options on digital assets, or any other related digital asset derivatives; or an underlying series of Derivative Securities Products, related future or options on such Derivative Securities Products, or any other related derivatives of such Derivative Securities Products. An ETP Holder acting as a registered Market Maker in Commodity- and/or Digital Asset-Based Investment Interests with exposure to one or more non-U.S. currencies (“Underlying FX”) also must file with the Exchange, in a manner prescribed by the Exchange, and keep current a list identifying all accounts for trading in Underlying FX and derivatives overlying Underlying FX which the Market Maker may have or over which it may exercise investment discretion, as well as a list of all commodity and commodity-related accounts referenced above. No Market Maker in Commodity- and/or Digital-Asset Based Investment Interests shall trade in a commodity, Underlying FX, or any related derivative in an account that the Market Maker (1) directly or indirectly controls trading activities or has a direct interest in the profits or losses thereof, (2) is required by this rule to disclose to the Exchange, and (3) has not reported to the Exchange.
In addition to the existing obligations under Exchange rules regarding the production of books and records, the ETP Holder acting as a Market Maker in Commodity- and/or Digital Asset Based Investment Interests shall make available to the Exchange such books, records, or other information pertaining to transactions by such entity or registered or non-registered employee affiliated with such entity for its or their own accounts for trading the underlying physical commodity, related commodity futures or options on commodity futures, applicable Underlying FX, or any other related commodity or applicable Underlying FX derivatives, as may be requested by the Exchange.
Finally, the Exchange proposes to include the following commentary to Rule 8.800-E. Proposed Commentary .01 provides that ETP Holders shall provide to all purchasers of newly issued Commodity- and/or Digital Asset-Based Investment Interests a prospectus for the series of Commodity- and/or Digital Asset-Based Investment Interests. Proposed Commentary .02 provides that transactions in Commodity- and/or Digital-Asset Based Investment Interests will occur during the trading hours specified in NYSE Arca Rule 7.34-E.
The Exchange also proposes to amend Rule 5.3-E to include Commodity- and/or Digital Asset-Based Investment Interests listed pursuant to proposed Rule 8.800-E among the derivative or special purpose securities that are subject to a limited set of corporate governance and disclosure policies and to amend Rule 5.3-E(e) to include Commodity- and/or Digital Asset-Based Investment Interests listed pursuant to proposed Rule 8.800-E among the derivative or special purpose securities to which the requirements concerning shareholder/annual meetings do not apply.
Commodity- and/or Digital Asset-Based Investment Interests listed and traded pursuant to proposed Rule 8.800-E would be substantially similar to Commodity-Based Trust Shares listed and traded pursuant to current Rule 8.201-E, with two main differences. First, whereas Commodity-Based Trust Shares are issued by a trust, Commodity- and/or Digital Asset-Based Investment Interests could be issued, as a proposed, by a trust, limited liability company, or other similar entity. Second, whereas Commodity-Based Trust Shares are based on an underlying commodity only, the Exchange proposes that Commodity- and/or Digital Asset-Based Investment Interests could be
The Exchange proposes to list and trade shares (“Shares”)
The manager of the Fund is Grayscale Investments, LLC (“Manager”), a Delaware limited liability company. The Manager is a wholly owned indirect subsidiary of Digital Currency Group, Inc. (“Digital Currency Group”). The custodian for the Fund is Coinbase Custody Trust Company, LLC (“Custodian”).
The Fund is a Cayman Islands limited liability company, formed on January 25, 2018, that operates pursuant to a limited liability company agreement between the Manager and the Shareholders (“LLC Agreement”). The Fund has no fixed termination date.
The Fund is one of the world's largest diversified crypto investment funds by assets under management as of the date of this filing. The Fund has approximately $490.8 million in assets under management,
According to the Annual Report, the Fund's assets consist solely of the Fund Components.
Each Share represents a proportional interest, based on the total number of Shares outstanding, in each of the digital assets held by the Fund, as determined by reference to the respective Digital Asset Reference Rates and weightings of each the Fund's digital asset holdings,
The activities of the Fund are limited to (i) issuing “Baskets” (as defined below) in exchange for Fund Components and cash transferred to the Fund as consideration in connection with creations, (ii) transferring or selling Fund Components as necessary to cover the “Manager's Fee”
The Fund will not be actively managed.
According to the Annual Report, and as further described below, the Fund's investment objective is for the value of the Shares (based on net asset value (“NAV”) per Share) to reflect the value of the Fund Components held by the Fund, as determined by reference to their Digital Asset Reference Rates and weightings within the Fund, less the Fund's expenses and other liabilities.
While an investment in the Shares is not a direct investment in the Fund Components, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to the digital assets held by the Fund. Generally speaking, a substantial direct investment in the Fund Components may require expensive and sometimes complicated arrangements in connection with the acquisition, security and safekeeping of the Fund Components and may involve the payment of substantial fees to acquire such Fund Components from third-party facilitators through cash payments of U.S. dollars. Because the value of the Shares is correlated with the value of Fund Components held by the Fund, it is important to understand the investment attributes of, and the market for, the Fund Components.
The Fund uses the Digital Asset Reference Rate of each Fund Component to calculate its NAV, which is the aggregate value, expressed in U.S. dollars, of the Fund's assets, less the U.S. dollar value of the Fund's expenses and other liabilities calculated in the manner set forth under “Valuation of Fund Components and Determination of NAV.” “NAV per Share” is calculated by dividing NAV by the number of Shares then outstanding.
The following is a description of the material terms of the LLC Agreement as it relates to valuation of the Fund digital assets and the NAV calculations.
At 4:00 p.m., New York time, on each business day or as soon thereafter as practicable, the Manager will evaluate the digital assets held by the Fund and calculate and publish the NAV of the Fund. To calculate the NAV, the Manager will:
1. For each Fund Component then held by the Fund:
a. Determine the Digital Asset Reference Rate for the Fund Component as of such business day;
b. Multiply the Digital Asset Reference Rate by the aggregate number of tokens of the Fund Component held by the Fund as of 4:00 p.m., New York time, on the immediately preceding business day;
c. Add the U.S. dollar value of the number of tokens of the Fund Component receivable under pending creation orders, if any, as calculated by multiplying the applicable Fund Component Basket Amount
d. Subtract the U.S. dollar value of the number of tokens of the Fund Component to be distributed under pending redemption orders, if any, as calculated by multiplying the applicable Fund Component Basket Amount by the applicable Digital Asset Reference Rate, and multiplying the result by the number of Baskets pending under such pending redemption orders;
2. Calculate the sum of the resulting U.S. dollar values for all Fund Components then held by the Fund, as determined pursuant to paragraph 1 above;
3. Add (i) the amount of U.S. dollars then held by the Fund plus (ii) the amount of any U.S. dollars to be received by the Fund in connection with any pending creations;
4. Subtract the amount of any U.S. dollars to be distributed under pending redemption orders;
5. Subtract the U.S. dollar amount of accrued and unpaid Additional Fund Expenses, if any;
6. Subtract the U.S. dollar value of the accrued and unpaid Manager's Fee as of 4:00 p.m., New York time on the immediately preceding business day (the amount derived from steps 1 through 7, the “NAV Fee Basis Amount”); and
7. Subtract the U.S. dollar value of the accrued and unpaid Manager's Fee that accrues for such business day, as calculated based on the NAV Fee Basis Amount for such business day.
Notwithstanding the foregoing, in the event that the Manager determines that the primary methodology used to determine any of the Digital Asset Reference Rates is not an appropriate basis for valuation of the Fund's digital assets, the Manager will utilize the cascading set of rules as described in “Fund Valuation of Fund Components” below.
Bitcoin is a digital asset that is created and transmitted through the operations of the peer-to-peer Bitcoin network, a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Bitcoin network, the infrastructure of which is collectively maintained by a decentralized user base. The Bitcoin network allows people to exchange tokens of value, called Bitcoin, which are recorded on a public transaction ledger known as a blockchain. Bitcoin can be used to pay for goods and services, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on Digital Asset Markets that trade Bitcoin or in individual end-user-to-end-user transactions under a barter system.
The Bitcoin network was initially contemplated in a white paper that also described Bitcoin and the operating software to govern the Bitcoin network. The white paper was purportedly authored by Satoshi Nakamoto. However, no individual with that name has been reliably identified as Bitcoin's creator, and the general consensus is that the name is a pseudonym for the actual inventor or inventors. The first Bitcoins were created in 2009 after Nakamoto released the Bitcoin network source code (the software and protocol that created and launched the Bitcoin network). The Bitcoin network has been under active development since that time by a group of engineers known as core developers. The core developers are able to access, and can alter, the Bitcoin network source code and, as a result, they are responsible for quasi-official releases of updates and other changes to the Bitcoin network's source code. The release of updates to the Bitcoin network's source code does not guarantee that the updates will be automatically adopted. Users and miners must accept any changes made to the Bitcoin source code by downloading the proposed modification of the Bitcoin network's source code. A modification of the Bitcoin network's source code is effective only with respect to the Bitcoin users and miners that download it. If a modification is accepted by only a percentage of users and miners, a division in the Bitcoin network will occur such that one network will run the pre-modification source code and the other network will run the modified source code. Such a division is known as a “fork.”
Core development of the Bitcoin network source code has increasingly focused on modifications of the Bitcoin network protocol to increase speed and scalability and also allow for non-financial, next generation uses. For example, following the recent activation of Segregated Witness on the Bitcoin network, an alpha version of the Lightning network was released. The Lightning network is an open-source decentralized network that enables instant off-blockchain transfers of the ownership of Bitcoin without the need of a trusted third party. The system utilizes bidirectional payment channels that consist of multi-signature addresses. One on-blockchain transaction is needed to open a channel and another on-blockchain transaction can close the channel. Once a channel is open, value can be transferred instantly between counterparties who are engaging in real Bitcoin transactions without broadcasting them to the Bitcoin network. New transactions will replace previous transactions and the counterparties will store everything locally as long as the channel stays open to increase transaction throughput and reduce computational burden on the Bitcoin network. Other efforts include increased use of smart contracts and distributed registers built into, built atop or pegged alongside the Bitcoin blockchain. For example, the white paper for Blockstream, an organization that includes core developer Pieter Wuille, calls for the use of “pegged sidechains” to develop programming environments that are built within Bitcoin blockchain ledgers that can interact with and rely on the security of the Bitcoin network and the Bitcoin blockchain, while remaining independent from them. Open-source projects such as RSK are a manifestation of this concept and seek to create the first open-source, smart contract platform built on the Bitcoin blockchain to enable automated, condition-based payments with increased speed and scalability. The Fund's activities will not directly relate to such projects, though such projects may utilize Bitcoin as tokens for the facilitation of their non-financial uses, thereby potentially increasing demand for Bitcoin and the utility of the Bitcoin network as a whole. Conversely, projects that operate and are built within the blockchain may increase the data flow on the Bitcoin network and could either “bloat” the size of the Bitcoin blockchain or slow confirmation times. At this time, such projects remain in early stages and have not been materially integrated into the Bitcoin blockchain or the Bitcoin network.
The supply of new Bitcoin is mathematically controlled so that the number of Bitcoin grows at a limited rate pursuant to a pre-set schedule. The number of Bitcoin awarded for solving a new block is automatically halved after every 210,000 blocks are added to the blockchain. Currently, the fixed reward for solving a new block is 3.125 Bitcoin per block and this is expected to decrease by half to become 1.5625 Bitcoin after the next 210,000 blocks have entered the Bitcoin Network, which is expected to be mid-2028. This deliberately controlled rate of Bitcoin creation means that the number of Bitcoin in existence will increase at a controlled rate until the number of Bitcoin in existence reaches the pre-determined 21 million Bitcoin. As of June 30, 2024, approximately 19.7 million Bitcoins were outstanding and the date when the 21 million Bitcoin limitation will be reached is estimated to be the year 2140.
Ether is a digital asset that is created and transmitted through the operations of the peer-to-peer “Ethereum Network,” a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Ethereum Network, the infrastructure of which is collectively maintained by a decentralized user base. The Ethereum Network allows people to exchange tokens of value, called Ether, which are recorded on a public transaction ledger
Furthermore, the Ethereum Network also allows users to write and implement smart contracts—that is, general-purpose code that executes on every computer in the network and can instruct the transmission of information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional instructions and create digital assets other than Ether on the Ethereum Network. Smart contract operations are executed on the Ethereum blockchain in exchange for payment of Ether. The Ethereum Network is one of a number of projects intended to expand blockchain use beyond just a peer-to-peer money system.
The Ethereum Network went live on July 30, 2015.
Smart contracts are programs that run on a blockchain that can execute automatically when certain conditions are met. Smart contracts facilitate the exchange of anything representative of value, such as money, information, property, or voting rights. Using smart contracts, users can send or receive digital assets, create markets, store registries of debts or promises, represent ownership of property or a company, move funds in accordance with conditional instructions and create new digital assets.
Development on the Ethereum Network involves building more complex tools on top of smart contracts, such as decentralized apps (“DApps”); organizations that are autonomous, known as decentralized autonomous organizations (“DAOs”); and entirely new decentralized networks. For example, a company that distributes charitable donations on behalf of users could hold donated funds in smart contracts that are paid to charities only if the charity satisfies certain pre-defined conditions.
Moreover, the Ethereum Network has also been used as a platform for creating new digital assets and conducting their associated initial coin offerings. As of March 31, 2024, a majority of digital assets were built on the Ethereum Network, with such assets representing a significant amount of the total market value of all digital assets.
More recently, the Ethereum Network has been used for decentralized finance (“DeFi”) or open finance platforms, which seek to democratize access to financial services, such as borrowing, lending, custody, trading, derivatives and insurance, by removing third-party intermediaries. DeFi can allow users to lend and earn interest on their digital assets, exchange one digital asset for another and create derivative digital assets such as stablecoins, which are digital assets pegged to a reserve asset such as fiat currency. Over the course of 2023, between $20 billion and $30 billion worth of digital assets were locked up as collateral on DeFi platforms on the Ethereum Network.
The Solana protocol introduced the Proof-of-History (“PoH”) consensus mechanism as an alternative to Proof-of-Stake (“PoS”) blockchains like Ethereum and Proof-of-Work (“PoW”) blockchains like Bitcoin.
The Solana protocol was first conceived by Anatoly Yakovenko in a 2017 whitepaper. Development of the Solana network is overseen by the Solana Foundation, a Swiss non-profit organization, and Solana Labs, Inc., a Delaware corporation, which administered the original network launch and token distribution. Smart contract operations are executed on the Solana blockchain in exchange for payment of SOL.
XRP is a digital asset that was created by Chris Larsen, Jed McCaleb, Arthur Britto and David Schwartz (the “XRP Creators”) in 2012. Built out of the frustrations of Bitcoin's utility for payments, the XRP ledger (the ledger to which XRP is native) is designed to be a global real-time payment and settlement system. The XRP Creators developed this unique digital asset to solve the scalability concerns that they believed were inherent in the structure of Bitcoin. In particular, XRP was created to improve the efficiency of payments. To this end, the open source code (available at
For example, the XRP ledger can accommodate 4,400 transactions per second. This is, in part, because XRP is not mined like Bitcoin, but is designed for the ledgers to close in seconds based on a system of consensus. Further, because of the consensus methodology underlying the XRP design, network transaction fees are substantially lower than Bitcoin, typically less than $0.01.
Given the unique qualities of XRP and the natural suitability of this digital asset to solve the friction experience with payments, the XRP Creators started a company, calling it Ripple, to further develop the ecosystem around XRP and build software solutions to address the friction in sending, processing, and sourcing liquidity for global payments. Thus, the company, Ripple, began as, and continues to be, a payments software company. Today, Ripple is focused on designing and deploying state-of-the-art and industry-leading software to enable banks and financial institutions to more easily effect cross-border payments. For maximum efficiency, Ripple's software can integrate XRP to solve liquidity and value transfer challenges.
AVAX is a digital asset that is created and transmitted through the operations of the peer-to-peer Avalanche network, a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Avalanche network, the infrastructure of which is collectively
The Avalanche network uses a variation of a proof-of-stake consensus protocol. Unlike with other blockchains, whereby every validator node validates every transaction, each Avalanche validator is only required to validate what is known as the “Primary Network.” The Primary Network in turn secures the following three blockchains, which are each dedicated to a specific use and, together with the Primary Network, comprise the core Avalanche infrastructure: the Exchange (X) Chain, on which AVAX and other assets exist and are traded; the Platform (P) Chain, which coordinates validators and creates subnets (as defined below); and the Contract (C) Chain, which executes smart contracts.
Whereas all validators are required to validate the Primary Network and the three blockchains described above, active validators of the Primary Network may additionally elect to validate certain non-core blockchains (
Digital assets and digital asset transactions are recorded and validated on blockchains, the public transaction ledgers of a digital asset network. Each digital asset blockchain serves as a record of ownership for all of the units of such digital asset, even in the case of certain privacy-preserving digital assets, where the transactions themselves are not publicly viewable. All digital assets recorded on a blockchain are associated with a public blockchain address, also referred to as a digital wallet. Digital assets held at a particular public blockchain address may be accessed and transferred using a corresponding private key.
Public addresses and their corresponding private keys are generated by the Custodian in secret key generation ceremonies at secure locations inside faraday cages, which are enclosures used to block electromagnetic fields and thus mitigate against attacks. The Custodian uses quantum random number generators to generate the public and private key pairs.
Once generated, private keys are encrypted, separated into “shards,” and then further encrypted. After the key generation ceremony, all materials used to generate private keys, including computers, are destroyed. All key generation ceremonies are performed offline. No party other than the Custodian has access to the private key shards of the Fund, including the Fund itself.
Private key shards are distributed geographically in secure vaults around the world, including in the United States. The locations of the secure vaults may change regularly and are kept confidential by the Custodian for security purposes.
The “Digital Asset Account” is a segregated custody account controlled and secured by the Custodian to store private keys, which allows for the transfer of ownership or control of the Fund's Fund Components on the Fund's behalf. The Digital Asset Account uses offline storage, or “cold storage,” mechanisms to secure the Fund's private keys. The term cold storage refers to a safeguarding method by which the private keys corresponding to digital assets are disconnected and/or deleted entirely from the internet. Cold storage of private keys may involve keeping such keys on a non-networked (or “air-gapped”) computer or electronic device or storing the private keys on a storage device (for example, a USB thumb drive) or printed medium (for example, papyrus, paper, or a metallic object). A digital wallet may receive deposits of digital assets but may not send digital assets without use of the digital assets' corresponding private keys. In order to send digital assets from a digital wallet in which the private keys are kept in cold storage, either the private keys must be retrieved from cold storage and entered into an online, or “hot,” digital asset software program to sign the transaction, or the unsigned transaction must be transferred to the cold server in which the private keys are held for signature by the private keys and then transferred back to the online digital asset software program. At that point, the user of the digital wallet can transfer its digital assets.
The Custodian is the custodian of the Fund's private keys (which, as noted above, facilitate the transfer of ownership or control of the Fund Components) in accordance with the terms and provisions of the custodian agreement by and between the Custodian, the Manager and the Fund (the “Custodian Agreement”). Transfers from the Digital Asset Account require certain security procedures, including, but not limited to, multiple encrypted private key shards, usernames, passwords and 2-step verification. Multiple private key shards held by the Custodian must be combined to reconstitute the private key to sign any transaction in order to transfer the Fund's assets. Private key shards are distributed geographically in secure vaults around the world, including in the United States.
As a result, if any one secure vault is ever compromised, this event will have no impact on the ability of the Fund to access its assets, other than a possible delay in operations, while one or more of the other secure vaults is used instead. These security procedures are intended to remove single points of failure in the protection of the Fund's assets.
Transfers of Fund Components to the Digital Asset Account will be available to the Fund once processed on the relevant blockchain.
Subject to obtaining regulatory approval to operate a redemption program and authorization of the Manager, the process of accessing and withdrawing Fund Components from the Fund to redeem a Basket by an Authorized Participant
The Manager will maintain ownership and control of the Fund Components in a manner consistent with good delivery requirements for spot commodity transactions.
According to the Annual Report, the value of digital assets is determined by the value that various market participants place on digital assets through their transactions. The most common means of determining the value of a digital asset is by surveying one or more Digital Asset Trading Platforms where the digital asset is traded publicly and transparently (
On each online Digital Asset Trading Platform, digital assets are traded with publicly disclosed valuations for each executed trade, measured by one or more fiat currencies such as the U.S. dollar or Euro, or by the digital asset Bitcoin. Over-the-counter dealers or market makers do not typically disclose their trade data.
As of June 30, 2024, the Digital Asset Trading Platforms included in the Digital Asset Reference Rates were Coinbase, Kraken, LMAX Digital,
Currently, there are several Digital Asset Trading Platforms operating worldwide, and online Digital Asset Trading Platforms represent a substantial percentage of buying and selling activity and provide the most data with respect to prevailing valuations of the Fund Components. These trading platforms include established trading platforms such as those included in the Digital Asset Reference Rates, which provide a number of options for buying and selling the Fund Components. The below tables reflect the trading volume in each Fund Component and market share
The domicile, regulation, and legal compliance of the Digital Asset Trading Platforms included in the Digital Asset Reference Rates vary. Information regarding each Digital Asset Trading Platform may be found, where available, on the websites for such Digital Asset Trading Platforms, among other places.
Since July 1, 2022, the digital assets held by the Fund have consisted of the digital assets that make up the CoinDesk Large Cap Select Index (the “DLCS” or the “Index”), as rebalanced from time to time, subject to the Manager's discretion to exclude individual digital assets in certain rules-based circumstances as further described in the “Index Components Compared to Fund Components—Exclusion Criteria” below. The DLCS is designed and managed by the Index Provider.
The digital assets that make up the DLCS (the “Index Components”) are drawn from the universe (the “Index Universe”) of investable digital assets meeting the following criteria: (i) the digital asset must be ranked in the top 250 in the Index Provider's Digital Asset
The Index Provider applies market capitalization, liquidity and data availability criteria to the digital assets in the Index Universe in order to arrive at between five and ten digital assets that, in the Index Provider's judgment, represent a diversified benchmark for the largest and most liquid digital assets in the digital asset market (the “Large Cap sector”), rather than exposure to all digital assets in the Index Universe. The respective weightings of the Index Components within the DLCS are determined by the Index Provider based on market capitalization criteria and are referred to as the “Index Weightings.” The process followed by the Index Provider to determine the Index Universe, the Index Components and their respective Index Weightings is referred to as the “DLCS Methodology.”
The Fund seeks to (i) provide large cap coverage of the digital asset market; (ii) minimize transaction costs through low turnover of the Fund's portfolio; and (iii) create a portfolio that could be replicated through direct purchases in the Digital Asset Market. Because Index Components target the Large Cap sector and are included in the DLCS in accordance with market capitalization and liquidity criteria, as of June 30, 2024, the DLCS covered approximately 83% of the market capitalization of the entire digital asset market, excluding stablecoins and meme coins, based on data provided by the Index Provider calculated using data from CoinMarketCap.com. Additionally, as of June 30, 2024, the DLCS covered approximately 92% of the market capitalization of the Index Universe.
The Fund Components consist of the Index Components except that the Manager may determine to exclude a particular Index Component in its discretion under certain rules-based circumstances (including to comply with the requirements of Rule 8.800-E). The weightings of each Fund Component (the “Weightings”) are generally expected to be the same as the Index Weightings except when the Manager determines to exclude one or more digital assets from the Fund Components, in which case the Weightings are generally expected to be calculated proportionally to the respective Index Weightings for the remaining Index Components. The Fund uses the DLCS Methodology, described further below, to construct its portfolio.
The Manager will ensure that the Fund's holdings are consistent with the requirements of Rule 8.800-E(c)(1), including by working with the Reference Rate Provider to modify the DLCS such that at least 90% of the Weightings will consist of commodities and/or digital assets concerning which the Exchange may obtain information via the ISG from other members of the ISG or via CSSA.
Under the DLCS Methodology and subject to the below, a digital asset included in the Index Universe will generally be eligible for inclusion in the DLCS as an Index Component, and thus the Fund's portfolio as a Fund Component, if it satisfies market capitalization, liquidity and data availability metrics determined by the Index Provider. Digital assets will be included in the DLCS on a market capitalization-weighted basis. For example, a digital asset with a larger market capitalization will have a higher representation in the DLCS, and thus the Fund's portfolio (unless the Manager excludes the digital asset from the Fund). Market capitalization refers to a digital asset's market value, as determined by multiplying the number of tokens of such digital asset in circulation by the market price of a token of such digital asset. The market price per token of a Fund Component will be determined by reference to the applicable Digital Asset Reference Rate. The market capitalization of any digital assets not in the DLCS, and therefore not held by the Fund, will be determined based on data that the Index Provider obtains directly from trading platforms and other service providers. Because the Fund creates Shares in exchange for Fund Components on a daily basis, the market capitalization of each Fund Component is calculated, and its Weighting therefore fluctuates, daily in accordance with changes in the market price of such Fund Components.
The DLCS, and therefore the Fund, is rebalanced on a quarterly basis according to the DLCS Methodology during a period beginning 14 days before the second business day of each January, April, July, and October (each such period, an “Index Rebalancing Period”).
In order for a new digital asset to qualify for inclusion in the DLCS, and thus the Fund's portfolio during a period during which the Manager reviews for rebalancing the Fund's portfolio in accordance with the policies and procedures set forth in the Annual Report (the “Fund Rebalancing Period”), it must be included in the Index Universe and be among the 20 highest ranked digital assets in the Index Universe by market capitalization. Such 20 digital assets are referred to as the “Selection Universe.” In order for a digital asset in the Selection Universe to be included in the Fund's portfolio during a Fund Rebalancing Period, such digital asset must (i) have a current market capitalization that is at least 1.2 times the median current market capitalization of the Selection Universe; (ii) have a median daily value traded (“MDVT”) for the Index Rebalancing Period that is at least 1.2 times the MDVT of the Selection Universe for the Index Rebalancing Period; (iii) trade on at least three Constituent Trading Platforms as of the first day of the Index Rebalancing Period; (iv) have been included in the Selection Universe during the Index Rebalancing Period (as defined below) for the prior quarter; (v) the inclusion of such new digital asset will not result in the Fund holding more than ten Fund Components; and (vi) such digital asset must have a minimum weight of 1.0% (collectively, the “Index Inclusion Criteria”). In the event that more than ten digital assets meet the Index Inclusion Criteria, the qualifying digital assets will be ranked by current market capitalizations. Those ranked below the top ten will be excluded.
The Index Provider may include a digital asset that does not meet the Index Inclusion Criteria in the DLCS if the Index Components no longer collectively meet the five constituent minimum, at which point the Index Provider would first relax the market capitalization and liquidity requirements included in the Index Inclusion Criteria to those included in the “Removal Criteria” described below and include the next largest digital assets by current market capitalization that met such requirements, until there were five Index Components. If after relaxing such requirements, there were still fewer than five Index Components, the Index Provider would further relax the requirements and include the next largest digital assets by current market
During each Index Rebalancing Period, a digital asset will be removed as an Index Component from the DLCS, and therefore removed from the Fund if it is also a Fund Component, if (i) it is not included in the Selection Universe; (ii) it fails to be listed on at least three Constituent Trading Platforms; (iii) it has a current market capitalization that is less than 1.0 times the median current market capitalization of the Selection Universe; (iv) it has an MDVT for the Index Rebalancing Period that is less than 1.0 times the MDVT of the Selection Universe for the Index Rebalancing Period; or (v) such digital asset has a weight of less than 0.8%, and if its removal would not result in the DLCS holding less than five Index Components (collectively, the “Removal Criteria”).
Outside of the quarterly Index Rebalancing Period, the Index Provider may remove a digital asset as an Index Component from the DLCS under extraordinary circumstances. For example, if an Index Component is determined to be a “security” under the federal securities laws by the Commission, a federal court or other U.S. government agency, or under such consideration by any U.S. government oversight agency, it would be removed from the DLCS at a date determined and announced by the Index Provider. In the event the Index Provider removes an Index Component outside of the quarterly rebalancing period, the Manager expects the Fund would rebalance and the relevant digital asset would be removed as a Fund Component as soon as practical.
The Fund Components consist of the Index Components except when the Manager determines to exclude a particular Index Component in view of one or more of the following criteria (the “Exclusion Criteria”), as determined in the sole discretion of the Manager:
• none or few of the Authorized Participants or service providers has the ability to trade or otherwise support the digital asset;
• the Manager believes, based on current guidance, that use or trading of the digital asset raises or potentially raises significant governmental, policy or regulatory concerns or is subject or likely subject to a specialized regulatory regime, such as the U.S. federal securities or commodities laws or similar laws in other significant jurisdictions;
• the digital asset's underlying code contains, or may contain, significant flaws or vulnerabilities; or
• there is limited or no reliable information regarding, or concerns over the intentions of, the core developers of the digital asset.
The Weightings are generally expected to be the same as the Index Weightings except when one or more digital assets have been excluded from the Fund Components based on the Exclusion Criteria, in which case the Weightings are generally expected to be calculated proportionally to the respective Index Weightings for the remaining Index Components.
The Manager may exclude a digital asset or rebalance the Weighting of an existing Fund Component to the extent its inclusion as a Fund Component or projected Weighting would exceed a threshold that could, in the Manager's sole discretion, require the Fund to register as an investment company under the Investment Company Act or require the Manager to register as an investment adviser under the Investment Advisers Act.
The Manager will retain discretion to include or exclude individual digital assets from the Fund Components only in certain rules-based circumstances, as described above. Accordingly, the Manager believes that the Fund will be in compliance with Rule 10A-3
According to the Annual Report, the Constituent Trading Platforms used to derive Digital Asset Reference Rates are selected by the Reference Rate Provider utilizing a methodology that is guided by the International Organization of Securities Commissions (“IOSCO”) principles for financial benchmarks. For a trading platform to become a Constituent Trading Platform, it must satisfy the criteria listed below (the “Inclusion Criteria”):
• Sufficient USD or USDC liquidity relative to the size of the listed assets;
• No evidence in the past 12 months of trading restrictions on individuals or entities that would otherwise meet the trading platform's eligibility requirements to trade;
• No evidence in the past 12 months of undisclosed restrictions on deposits or withdrawals from user accounts;
• Real-time price discovery;
• Limited or no capital controls;
• Transparent ownership including a publicly-owned ownership entity;
• Publicly available language and policies addressing legal and regulatory compliance in the US, including KYC, AML and other policies designed to comply with relevant regulations that might apply to it;
• Be an exchange that is licensed and able to service investors in one or more of the following jurisdictions: United States, United Kingdom; European Union; Hong Kong; or Singapore
• Offer programmatic spot trading of the trading pair and reliably publish trade prices and volumes on a real-time basis through Rest and Websocket APIs.
A Digital Asset Trading Platform is removed from the Constituent Trading Platform when it no longer satisfies the criteria for inclusion. The Reference Rate Provider does not currently include data from over-the-counter markets or derivatives platforms among the Constituent Trading Platforms. According to the Annual Report, over-the-counter data is not currently included because of the potential for trades to include a significant premium or discount paid for larger liquidity, which creates an uneven comparison
The Reference Rate Provider and the Manager have entered into the index license agreement, dated as of February 1, 2022 (as amended, the “Index License Agreement”), governing the Manager's use of the Digital Asset Reference Rates that are Index Prices.
Reference Rate Provider may change the trading venues that are used to calculate a Digital Asset Reference Rate or otherwise change the way in which a Digital Asset Reference Rate is calculated at any time. For example, the Reference Rate Provider has scheduled quarterly reviews in which it may add or remove Constituent Trading Platforms that satisfy or fail the criteria described above. While the Reference Rate Provider is not required to publicize or explain the changes or to alert the Manager to such changes, it has historically notified the Fund (and other subscribers to the Index) of any material changes to the Constituent Trading Platforms, including any additions or removals of the Constituent Trading Platforms, in addition to issuing press releases in connection with the same in accordance with its index review and index change communication policies. The Manager will notify investors of any such material event by filing a current report on Form 8-K. Although the Digital Asset Reference Rate methodology is designed to operate without any manual intervention, rare events would justify manual intervention. Intervention of this kind would be in response to non-market-related events, such as the halting of deposits or withdrawals of funds on a Digital Asset Trading Platform, the unannounced closure of operations on a Digital Asset Trading Platform, insolvency or the compromise of user funds. In the event that such an intervention is necessary, the Reference Rate Provider would issue a public announcement through its website, API and other established communication channels with its clients.
Since July 1, 2022, all of the Digital Asset Reference Rates have been Indicative Prices. The Indicative Price is calculated by multiplying the average price on each Constituent Trading Platform by the trading volume on such Constituent Trading Platform for the prior 60 minutes as of 4:00 p.m., New York time, multiplied by the Constituent Trading Platform's weighting based on trading volume relative to the other Constituent Trading Platforms included in the Reference Rate. Each Constituent Trading Platform is weighted relative to its share of trading volume to the trading volume of all Constituent Trading Platform, meaning that price inputs from Constituent Trading Platforms with higher trading volumes will be weighted more heavily in calculating the Indicative Price than price inputs from Constituent Trading Platforms with lower trading volumes. Price and volume inputs are weighted as received with no further adjustments made to the weighting of each trading platform based on market anomalies observed on a Constituent Trading Platform or otherwise.
For purposes of illustration, outlined below is an example using a limited number of trades.
The Index Provider may also use Index Prices as the reference rate for an Index Component in the future, and if it does so, then the Manager will use an Index Price for the relevant Fund Component. When a Digital Asset Reference Rate is an Index Price, the Reference Rate Provider applies an algorithm to the trade data used to determine the Indicative Price. Each Digital Asset Reference Rate's algorithm is expected to reflect a four-pronged methodology to calculate the Index Price from the Constituent Trading Platforms:
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The Reference Rate Provider re-evaluates the weighting algorithm on a periodic basis, but maintains discretion to change the way in which an Index Price is calculated based on its periodic review or in extreme circumstances. The exact methodology to calculate each Index Price is not publicly available. Still, each Index is designed to limit exposure to trading or price distortion of any individual Digital Asset Trading Platform that experiences periods of unusual activity or limited liquidity by discounting, in real-time, anomalous price movements at individual Digital Asset Trading Platforms.
For the purposes of illustration, outlined below are examples of how the attributes that impact weighting and adjustments in the aforementioned methodology may be utilized to generate an Index Price for a digital asset. The Index Price algorithm, as described above, accounts for manipulation at the outset by only including data from executed trades on Constituent Trading Platforms that charge trading fees. Then, the below-listed elements may impact the weighting of the Constituent Trading Platforms on the Index Price as follows:
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If the Digital Asset Reference Rate for a Fund Component becomes unavailable, or if the Manager determines in good faith that such Digital Asset Reference Rate does not reflect an accurate price for such Fund Component, then the Manager will, on a best efforts basis, contact the Reference Rate Provider to obtain the Digital Asset Reference Rate directly from the Digital Asset Reference Rate Provider.
If after such contact such Digital Asset Reference Rate remains unavailable or the Manager continues to believe in good faith that such Digital Asset Reference Rate does not reflect an accurate price for the relevant digital asset, the Manager uses the following cascading set of rules to calculate the Digital Asset Reference Rates for that Fund Component.
1. Digital Asset Reference Rate = The price set by the relevant Indicative Price or Index Price as of 4:00 p.m., New York time, on the valuation date.
2. Digital Asset Reference Rate = The price set by Coin Metrics Real-Time Rate as of 4:00 p.m., New York time, on the valuation date (the “Secondary Digital Asset Reference Rate”). The Secondary Reference Rate is a real-time reference rate price, calculated using
3. Digital Asset Reference Rate = The price set by the Fund's principal market (as defined in the Annual Report) (the “Tertiary Pricing Option”) as of 4:00 p.m., New York time, on the valuation date. The Tertiary Pricing Option is a spot price derived from the relevant principal market's public data feed that is believed to be consistently publishing pricing information as of 4:00 p.m., New York time, and is provided to the Manager via an application programming interface. If the Tertiary Pricing Option becomes unavailable, or if the Manager determines in good faith that the Tertiary Pricing Option does not reflect an accurate price for such Fund Component, then the Manager will, on a best efforts basis, contact the Tertiary Pricing Provider to obtain the Tertiary Pricing Option directly from the Tertiary Pricing Provider. If after such contact the Tertiary Pricing Option remains unavailable after such contact or the Manager continues to believe in good faith that the Tertiary Pricing Option does not reflect an accurate price for such Fund Component, then the Manager will employ the next rule to determine the Digital Asset Reference Rate. There are no predefined criteria to make a good faith assessment and it will be made by the Manager in its sole discretion.
4. Digital Asset Reference Rate = The Manager will use its best judgment to determine a good faith estimate of the Digital Asset Reference Rate. There are no predefined criteria to make a good faith assessment and it will be made by the Manager in its sole discretion.
In the event of a fork, the Reference Rate Provider may calculate the Digital Asset Reference Rate based on a digital asset that the Manager does not believe to be the appropriate asset that is held by the Fund.
The Manager may, in its sole discretion, select a different reference rate provider, select a different indicative or index price provided by the Reference Rate Provider, or calculate the Indicative Price or Index Price by using the cascading set of rules set forth above.
On January 10, 2024, the Commission approved the listing and trading of shares of the Grayscale Bitcoin Trust (BTC) and Bitwise Bitcoin ETF under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares); the Hashdex Bitcoin ETF under NYSE Arca Rule 8.500-E (Trust Units); the iShares Bitcoin Trust and Valkyrie Bitcoin Fund under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares); and the ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, the WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Fund, and Franklin Bitcoin ETF under BZX Rule 14.11(e)(4) (Commodity-Based Trust Shares) (collectively, the “Bitcoin ETPs”).
[B]ased on the record before the Commission and the improved quality of the correlation analysis in the record, including the Commission's own analysis, the Commission is able to conclude that fraud or manipulation that impacts prices in spot bitcoin markets would likely similarly impact CME bitcoin futures prices. And because the CME's surveillance can assist in detecting those impacts on CME bitcoin futures prices, the Exchanges' comprehensive surveillance-sharing agreement with the CME—a U.S. regulated market whose bitcoin futures market is consistently highly correlated to spot bitcoin, albeit not of “significant size” related to spot bitcoin—can be reasonably expected to assist in surveilling for fraudulent and manipulative acts and practices in the specific context of the [Bitcoin ETPs].
Similarly, on May 23, 2024, the Commission approved the listing and trading of shares of the Grayscale Ethereum Trust and the Bitwise Ethereum ETF under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares); the iShares Ethereum Trust under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares); and the VanEck Ethereum Trust, ARK 21Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund, and the Franklin Ethereum ETF under BZX Rule 14.11(e)(4) (Commodity-Based Trust Shares) (collectively, the “Ether ETPs”).
[B]ased on the record before the Commission and the correlation analyses in the record, including the Commission's own analysis, the Commission is able to conclude that fraud or manipulation that impacts prices in spot ether markets would likely similarly impact CME ether futures prices. And because the CME's surveillance can assist in detecting those impacts on CME ether futures prices, the Exchanges' comprehensive surveillance-sharing agreement with the CME—a U.S.-regulated market whose ether futures market is consistently highly correlated to spot ether, albeit not of “significant size” related to spot ether—can be reasonably expected to assist in surveilling for fraudulent and manipulative acts and practices in the specific context of the [Ether ETPs].
The Fund is structured and will operate in a manner materially the same as the Bitcoin ETPs and Ether ETPs and the Fund Components primarily consist of Bitcoin and Ether. Accordingly, the Manager believes that, for the reasons set forth in the Bitcoin ETP Approval Order and Ether ETP Approval Order, listing and trading Shares of the Fund would be consistent with the requirements of the Act.
The Manager acknowledges that the Fund Components currently include minority positions in digital assets that are not Bitcoin or Ether (
In the Prior Spot Digital Asset ETP Disapproval Orders, the Commission outlined that a proposal relating to a digital asset-based ETP could satisfy its concerns regarding potential for fraud and manipulation by demonstrating:
(1)
(2)
(3)
As described below, the Manager believes the structure and operation of the Fund are designed to prevent fraudulent and manipulative acts and practices, to protect investors and the public interest, and to respond to concerns that the Commission may have with respect to potential fraud and manipulation in the context of a Digital Asset-based ETP.
In the Prior Spot Digital Asset ETP Disapproval Orders, the Commission disagreed with the proposition that a digital asset's fungibility, transportability and exchange tradability combine to provide unique protections against, and allow such digital asset to be uniquely resistant to, attempts at price manipulation. The Commission reached its conclusion based on concessions by one issuer that 95% of the reported trading in the digital asset, Bitcoin, is “fake” or non-economic, effectively admitting that the properties of Bitcoin do not make it inherently resistant to manipulation. Such issuer's concessions were further compounded by evidence of potential and actual fraud and manipulation in the historical trading of Bitcoin on certain marketplaces such as (1) “wash” trading, (2) trading based on material, non-public information, including the dissemination of false and misleading information, (3) manipulative activity involving Tether, and (4) fraud and manipulation.
The Manager acknowledges the possibility that fraud and manipulation may exist in commodity markets and that digital asset trading, such as certain of the Fund Components,
The Commission has recognized that a listing exchange could demonstrate that other means to prevent fraudulent and manipulative acts and practices are sufficient to justify dispensing with the requisite surveillance-sharing agreement.
The Manager believes the Fund's use of the Index and Digital Asset Reference Rates represents a novel means to prevent fraud and manipulation from impacting a reference price for the Fund Components and that it offers protections beyond those that exist in traditional commodity markets or equity markets. Specifically, digital assets, such as the Fund Components, are novel and exist outside traditional commodity markets. It therefore stands to reason that the methods by which they trade will be novel and that the market for digital assets like the Fund Components will have different attributes than traditional commodity markets. Digital assets like the Fund Components were only introduced within the past decade, twenty years after the first U.S. exchange-traded funds (“ETFs”) were offered
The Fund has priced its Shares consistently for approximately two years based on the Index and its use of the Digital Asset Reference Rates. The Manager believes the Fund's use of the Index and Digital Asset Reference Rates specifically addresses the Commission's concerns in that they serve as an alternative means to prevent fraud and manipulation. Specifically, the Index and its use of the Digital Asset Reference Rates can (i) mitigate the effects of fraud, manipulation and other anomalous trading activity on the Fund Components' reference rates, (ii) provide a real-time, volume-weighted fair value of the Fund Components and (iii) appropriately handle and adjust for non-market related events.
As described in more detail below, the Manager believes that the Index and its use of Digital Asset Reference Rates accomplishes those objectives in the following ways:
1. The Digital Asset Reference Rates track the Digital Asset Trading Platform Market prices through trading activity at “U.S.-Compliant Trading Platforms”;
2. The Digital Asset Reference Rates are constructed and maintained by an expert third-party index provider, allowing for prudent handling of non-market-related events; and
3. The Digital Asset Reference Rates mitigate the impact of instances of fraud, manipulation and other anomalous trading activity concentrated on any one specific trading platform through a cross-trading platform composite reference rate over a 60-minute period.
To reduce the risk of fraud, manipulation, and other anomalous trading activity from impacting the Digital Asset Reference Rates, only U.S.-Compliant Trading Platforms are eligible to be included in the Digital Asset Reference Rates.
The Digital Asset Reference Rates maintain a minimum of two and a maximum of three trading platforms to track the Digital Asset Trading Platform Market while offering replicability for traders and market makers.
U.S.-Compliant Trading Platforms possess safeguards that protect against fraud and manipulation. For example, U.S.-Compliant Trading Platforms regulated by the NYDFS under the BitLicense program have regulatory requirements to implement measures designed to effectively detect, prevent, and respond to fraud, attempted fraud, market manipulation, and similar wrongdoing, and to monitor, control, investigate and report back to the NYDFS regarding any wrongdoing.
• Submission of audited financial statements including income statements, statements of assets/liabilities, insurance, and banking;
• Compliance with capitalization requirements set at NYDFS's discretion;
• Prohibitions against the sale or encumbrance to protect full reserves of custodian assets;
• Fingerprints and photographs of employees with access to customer funds;
• Retention of a qualified Chief Information Security Officer and annual penetration testing/audits;
• Documented business continuity and disaster recovery plan, independently tested annually; and
• Participation in an independent exam by NYDFS.
Other U.S.-Compliant Trading Platforms have voluntarily implemented measures to protect against common forms of market manipulation.
Furthermore, all U.S.-Compliant Trading Platforms are considered MSBs
• Identify people with ownership stakes or controlling roles in the MSB;
• Establish a formal Anti-Money Laundering (AML) policy in place with documentation, training, independent review, and a named compliance officer;
• Implement strict customer identification and verification policies and procedures;
• File Suspicious Activity Reports (SARs) for suspicious customer transactions;
• File Currency Transaction Reports (CTRs) for cash-in or cash-out transactions greater than $10,000; and
• Maintain a five-year record of currency exchanges greater than $1,000 and money transfers greater than $3,000.
Lastly, because of Bitcoin's and Ether's classifications as commodities, the CFTC has authority to police fraud and manipulation on U.S.-Compliant Trading Platforms that trade those digital assets.
The Manager acknowledges that there are substantial differences between FinCEN and New York state regulations and the Commission's regulation of the national securities exchanges.
The Reference Rate Provider reviews and periodically updates which trading platforms are included in the Digital Asset Reference Rates by utilizing a methodology that is guided by the IOSCO principles for financial benchmarks.
According to the Reference Rate Provider's methodology, for a trading platform to become a Constituent Trading Platform, it must satisfy the following Inclusion Criteria:
• Sufficient USD or USDC liquidity relative to the size of the listed assets;
• No evidence in the past 12 months of trading restrictions on individuals or entities that would otherwise meet the trading platform's eligibility requirements to trade;
• No evidence in the past 12 months of undisclosed restrictions on deposits or withdrawals from user accounts;
• Real-time price discovery;
• Limited or no capital controls;
• Transparent ownership including a publicly-owned ownership entity;
• Publicly available language and policies addressing legal and regulatory compliance in the US, including KYC, AML and other policies designed to comply with relevant regulations that might apply to it;
• Be an exchange that is licensed and able to service investors in one or more of the following jurisdictions: United States, United Kingdom; European Union; Hong Kong; or Singapore
• Offer programmatic spot trading of the trading pair and reliably publish trade prices and volumes on a real-time basis through Rest and Websocket APIs.
Although the Reference Rate Provider's methodology is designed to operate without any human interference, rare events would justify manual intervention. Manual intervention would only be in response to “non-market-related events” (
The Digital Asset Reference Rates are based on the price and volume data of multiple U.S.-Compliant Trading Platforms over a 60-minute period that satisfy the Reference Rate Provider's Inclusion Criteria. By referencing multiple trading venues and weighting them based on trade activity, the impact of any potential fraud, manipulation, or anomalous trading activity occurring on any single venue is reduced. Specifically, the effects of fraud, manipulation, or anomalous trading activity occurring on any single venue are de-weighted and consequently diluted by non-anomalous trading activity from other Constituent Trading Platforms.
Although each Digital Asset Reference Rate is designed to accurately capture the market price of the digital asset it tracks, third parties may be able to purchase and sell such digital assets on public or private markets not included among the constituent Digital Asset Trading Platforms of such Digital Asset Reference Rate, and such transactions may take place at prices materially higher or lower than the Digital Asset Reference Rate. Moreover, there may be variances in the prices of digital assets on the various Digital Asset Trading Platforms, including as a result of differences in fee structures or administrative procedures on different Digital Asset Trading Platforms.
For example, based on data provided by the Reference Rate Provider, on any given day during the twelve months ended June 30, 2024, the maximum differential between the 4:00 p.m., New York time spot price of Bitcoin on any single Digital Asset Trading Platform included in the Digital Asset Reference Rate was 1.47% and the average of the maximum differentials of the 4:00 p.m., New York time spot price of each Digital Asset Trading Platform included in the Digital Asset Reference Rate was 1.33%. During this same period, the average differential between the 4:00 p.m., New York time spot prices of all the Digital Asset Trading Platforms included in the Digital Asset Reference Rate was 0.01%. Further, on any given day during the twelve months ended June 30, 2024, the maximum differential between the 4:00 p.m., New York time spot price of Ether on any single Digital Asset Trading Platform included in the Digital Asset
For approximately two years, the Fund has consistently priced its Shares at 4:00 p.m., New York time based on the Index and its use of the Digital Asset Reference Rates. While that pricing would be known to the market, the Manager believes that, even if efforts to manipulate the price of the Fund Components at 4:00 p.m., E.T. were successful on any trading platform, such activity would have had a limited effect on the pricing of the Fund, due to the controls embedded in the structure of the Index and its use of the Digital Asset Reference Rates.
Accordingly, the Manager believes that the Index and it use of the Digital Asset Reference Rates have proven their ability to (i) mitigate the effects of fraud, manipulation and other anomalous trading activity on the Fund Components reference rates, (ii) provide a real-time, volume-weighted fair value of the Fund Components and (iii) appropriately handle and adjust for non-market related events. For these reasons, the Manager believes that the Index represents an effective alternative means to prevent fraud and manipulation and the Fund's reliance on the Index and its use of the Digital Asset Reference Rates addresses the Commission's concerns with respect to potential fraud and manipulation.
Authorized Participants may submit orders to create or redeem Shares under procedures for “Cash Orders.”
The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares. Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive the Fund Components as part of the creation or redemption process or otherwise direct the Fund or a third party with respect to purchasing, holding, delivering, or receiving the Fund Components as part of the creation or redemption process.
The Fund will create Shares by receiving the Fund Components from a third party that is not the Authorized Participant and the Fund, or an affiliate of the Fund (and in any event not the Authorized Participant), is responsible for selecting the third party to deliver the Fund Components. Further, the third party will not be acting as an agent of the Authorized Participant with respect to the delivery of the Fund Components to the Fund or acting at the direction of the Authorized Participant with respect to the delivery of the Fund Components to the Fund. The Fund will redeem Shares by delivering the Fund Components to a third party that is not the Authorized Participant and the Fund, or an affiliate of the Fund (and in any event not the Authorized Participant), is responsible for selecting the third party to receive the Fund Components. Further, the third party will not be acting as an agent of the Authorized Participant with respect to the receipt of the Fund Components from the Fund or acting at the direction of the Authorized Participant with respect to the receipt of the Fund Components from the Fund.
Cash Orders are made through the participation of a Liquidity Provider
According to the Registration Statement, the Fund creates Baskets (as described below) of Shares only upon receipt of the Fund Components and redeems Shares only by distributing the Fund Components. “Authorized Participants” are the only persons that may place orders to create and redeem Baskets. Each Authorized Participant must (i) be a registered broker-dealer and (ii) enter into an agreement with the Manager and Transfer Agent that provides the procedures for the creation and redemption of Baskets and for the delivery of the Fund Components required for the creation and redemption of Baskets via a Liquidity Provider (each, a “Participant Agreement”). An Authorized Participant may act for its own account or as agent for broker-dealers, custodians and other securities market participants that wish to create or redeem Baskets. Shareholders who are not Authorized Participants will only be able to create or redeem their Shares through an Authorized Participant.
The Fund issues Shares to and redeems Shares from Authorized Participants on an ongoing basis, but only in one or more “Baskets” (with a Basket being a block of 10,000 Shares). The Fund will not issue fractions of a Basket.
The creation and redemption of Baskets will be made only in exchange for the delivery to the Fund, or the distribution by the Fund, of the number of whole and fractional Fund Components represented by each Basket being created or redeemed, which is determined by dividing (x) the number of the Fund Components owned by the Fund at 4:00 p.m., New York time, on the trade date of a creation or redemption order, after deducting the number of Fund Components representing the U.S. dollar value of accrued but unpaid fees and expenses of the Fund (converted using the Digital Asset Reference Rates at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of the Fund Components (
The creation of Baskets requires the delivery to the Fund of the Total Basket Amount and the redemption of Baskets requires the distribution by the Fund of the Total Basket Amount.
Although the Fund creates Baskets only upon the receipt of the Fund Components, and redeems Baskets only by distributing the Fund Components, an Authorized Participant will submit Cash Orders, pursuant to which the Authorized Participant will deposit cash with, or accept cash from, the Transfer Agent in connection with the creation and redemption of Baskets.
Cash Orders will be facilitated by the Transfer Agent and Liquidity Engager, acting other than in its capacity as Manager. On an order-by-order basis, the Liquidity Engager will engage one or more Liquidity Providers to obtain or receive the Fund Components in exchange for cash in connection with such order, as described in more detail below.
Unless the Manager requires that a Cash Order be effected at actual execution prices (an “Actual Execution Cash Order”),
Alternatively, the Manager may require that a Cash Order be effected as an Actual Execution Cash Order, in its sole discretion based on market conditions and other factors existing at the time of such Cash Order, and under such circumstances, any price differential of the Fund Components between the trade date and the settlement date will be borne solely by the Authorized Participant until such Fund Components have been received or liquidated by the Fund.
In the case of creations, to transfer the Total Basket Amount to the Fund's Digital Asset Account, the Liquidity Provider will transfer the Fund Components to one of the public key addresses associated with the Digital Asset Account and as provided by the Manager. In the case of redemptions, the same procedure is conducted, but in reverse, using the public key addresses associated with the wallet of the Liquidity Provider and as provided by such party. All such transactions will be conducted on the blockchain and parties acknowledge and agree that such transfers may be irreversible if done incorrectly.
Authorized Participants do not pay a transaction fee to the Fund in connection with the creation or redemption of Baskets, but there may be transaction fees associated with the validation of the transfer of the Fund Components by the online, end-user-to-end-user network hosting a public transaction ledger, known as a Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing such network, which will be paid by the Custodian in the case of redemptions and the Authorized Participant or the Liquidity Provider in the case of creations. Service providers may charge Authorized Participants administrative fees for order placement and other services related to creation of Baskets. As discussed above, Authorized Participants will also pay the Variable Fee in connection with Variable Fee Cash Orders. Under certain circumstances Authorized Participants may also be required to deposit additional cash in the Cash Account, or be entitled to receive excess cash from the Cash Account, in connection with creations and redemptions pursuant to Actual Execution Cash Orders. Authorized Participants will receive no fees, commissions or other form of compensation or inducement of any kind from either the Manager or the Fund and no such person has any obligation or responsibility to the Manager or the Fund to effect any sale or resale of Shares.
On any business day, an Authorized Participant may place an order with the Transfer Agent to create one or more Baskets.
Cash Orders for creation must be placed with the Transfer Agent no later than 1:59:59 p.m., New York time.
The Manager may in its sole discretion limit the number of Shares created pursuant to Cash Orders on any specified day without notice to the Authorized Participants and may direct the Marketing Agent to reject any Cash Orders in excess of such capped amount. In exercising its discretion to limit the number of Shares created pursuant to Cash Orders, the Manager expects to take into consideration a number of factors, including the availability of Liquidity Providers to facilitate Cash Orders and the cost of processing Cash Orders.
Creations under Cash Orders will take place as follows, where “T” is the trade date and each day in the sequence must be a business day. Before a creation order is placed, the Manager determines if such creation order will be a Variable Fee Cash Order or an Actual Execution Cash Order, which determination is communicated to the Authorized Participant.
The procedures by which an Authorized Participant can redeem one or more Baskets mirror the procedures for the creation of Baskets. On any business day, an Authorized Participant may place a redemption order specifying the number of Baskets to be redeemed.
The redemption of Shares pursuant to Cash Orders will only take place if approved by the Manager in writing, in its sole discretion and on a case-by-case basis. In exercising its discretion to approve the redemption of Shares pursuant to Cash Orders, the Manager expects to take into consideration a number of factors, including the availability of Liquidity Providers to facilitate Cash Orders and the cost of processing Cash Orders.
Cash Orders for redemption must be placed no later than 1:59:59 p.m., New York time on each business day. The Authorized Participants may only redeem Baskets and cannot redeem any Shares in an amount less than a Basket.
Redemptions under Cash Orders will take place as follows, where “T” is the trade date and each day in the sequence must be a business day. Before a redemption order is placed, the Manager determines if such redemption order will be a Variable Fee Cash Order or an Actual Execution Cash Order, which determination is communicated to the Authorized Participant.
The creation or redemption of Shares may be suspended generally,
The Fund's website (
One or more major market data vendors will provide the Intra-Day Fund Value (“IFV”) per Share updated every 15 seconds, as calculated by the Exchange or a third party financial data provider during the Exchange's Core Trading Session (9:30 a.m. to 4:00 p.m., E.T.).
The IFV disseminated during the NYSE Arca Core Trading Session should not be viewed as an actual real-time update of the NAV per Share, which will be calculated only once at the end of each trading day. The IFV will be widely disseminated on a per Share basis every 15 seconds during the NYSE Arca Core Trading Session by one or more major market data vendors. In addition, the IFV will be available through on-line information services.
The NAV for the Fund will be calculated by the Manager once a day and will be disseminated daily to all market participants at the same time. To the extent that the Manager has utilized the cascading set of rules described in “Index Price” above, the Fund's website will note the valuation methodology used and the price per Fund Components resulting from such calculation. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the Consolidated Tape Association (“CTA”).
Quotation and last sale information for the Fund Components will be widely disseminated through a variety of major market data vendors, including Bloomberg and Reuters. In addition, real-time price (and volume) data for the Fund Components is available by subscription from Reuters and Bloomberg. The spot price of the Fund Components is available on a 24-hour basis from major market data vendors, including Bloomberg and Reuters. Information relating to trading, including price and volume information, will be available from major market data vendors and from the trading platforms on which the Fund Components are traded. The normal trading hours for Digital Asset Trading Platforms are 24-hours per day, 365-days per year.
On each business day, the Manager will publish the Digital Asset Reference Rates, the Fund's NAV, and the NAV per Share on the Fund's website as soon as practicable after its determination. If the NAV and NAV per Share have been calculated using a price per Fund Components other than the Digital Asset Reference Rates for such Evaluation Time, the publication on the Fund's website will note the valuation methodology used and the price per Fund Components resulting from such calculation.
The Fund will provide website disclosure of its NAV daily. The website disclosure of the Fund's NAV will occur at the same time as the disclosure by the Manager of the NAV to Authorized Participants so that all market participants are provided such portfolio information at the same time. Therefore, the same portfolio information will be provided on the public website as well as in electronic files provided to Authorized Participants. Accordingly, each investor will have access to the current NAV of the Fund through the Fund's website, as well as from one or more major market data vendors.
The value of the Index, as well as additional information regarding the Index such as the DLCS Methodology, is publicly available on a continuous basis.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. Shares will trade on the NYSE Arca Marketplace from 4:00 a.m. to 8:00 p.m., E.T. in accordance with NYSE Arca Rule 7.34-E (Early, Core, and Late Trading Sessions). The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. 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 Shares will conform to the initial and continued listing criteria under NYSE Arca Rule 8.800-E. The trading of the Shares will be subject to NYSE Arca Rule 8.800-E(i), which sets forth certain restrictions on Equity Trading Permit Holders (“ETP Holders”) acting as registered Market Makers in Commodity-Based Trust Shares to facilitate surveillance. The Exchange represents that, for initial and continued listing, the Fund will be in compliance with Rule 10A-3
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of
The Exchange may halt trading during the day in which an interruption to the dissemination of the IFV or the value of the Index occurs. If the interruption to the dissemination of the IFV or the value of the Index persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the NYSE Arca Core Trading Session on the trading day following the interruption. In addition, if the Exchange becomes aware that the NAV per Share is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV per Share is available to all market participants.
The Exchange represents that trading in the Shares of the Fund will be subject to the existing trading surveillances administered by the Exchange, as well as cross-market surveillances administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations.
The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares with other markets and other entities that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares from markets and other entities that are members of ISG or with which the Exchange has in place a CSSA.
Under proposed Rule 8.800-E(i), an ETP Holder acting as a registered Market Maker in the Shares is required to provide the Exchange with information relating to its accounts for trading in any underlying commodity, related futures or options on futures, or any other related derivatives. Commentary .04 of NYSE Arca Rule 11.3-E requires an ETP Holder acting as a registered Market Maker, and its affiliates, in the Shares to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of any material nonpublic information with respect to such products, any components of the related products, any physical asset or commodity underlying the product, applicable currencies, underlying indexes, related futures or options on futures, and any related derivative instruments (including the Shares). As a general matter, the Exchange has regulatory jurisdiction over its ETP Holders and their associated persons, which include any person or entity controlling an ETP Holder. To the extent the Exchange may be found to lack jurisdiction over a subsidiary or affiliate of an ETP Holder that does business only in commodities or futures contracts and that subsidiary or affiliate is a member of another regulatory organization, the Exchange could obtain information regarding the activities of such subsidiary or affiliate through a surveillance sharing agreement with that regulatory organization.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
All statements and representations made in this filing regarding (a) the description of the portfolios of the Fund, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in this rule filing shall constitute continued listing requirements for listing the Shares on the Exchange.
The Manager has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Rule 5.5-E(m).
Prior to the commencement of trading, the Exchange will inform its ETP Holders in an “Information Bulletin” of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (1) the procedures for creations of Shares in Baskets; (2) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares; (3) information regarding how the value of the Digital Asset Reference Rates and the IFV are disseminated; (4) the possibility that trading spreads and the resulting premium or discount on the Shares may widen during the Opening and Late Trading Sessions, when an updated IFV will not be calculated or publicly disseminated; and (5) trading information. The Exchange notes that investors purchasing Shares directly from the Fund will receive a prospectus.
In addition, the Information Bulletin will reference that the Fund is subject to various fees and expenses as described in the Annual Report. The Information Bulletin will disclose that information about the Shares of the Fund is publicly available on the Fund's website.
The Information Bulletin will also discuss any relief, if granted, by the Commission or the staff from any rules under the Act.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that proposed Rule 8.800-E is designed to prevent fraudulent and manipulative acts and practices in that the proposed rules relating to listing and trading of Commodity- and/or Digital Asset-Based Investment Interests provide specific initial and continued listing criteria required to be met by such securities.
Proposed Rule 8.800-E(a) provides that the Exchange will file separate proposals under Rule 19(b) of the Act before the listing and trading of Commodity- and/or Digital Asset-Based Investment Interests. All statements or representations contained in such rule filing regarding (a) the description of the index, portfolio, or reference asset, (b) limitations on index or portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in such rule filing will constitute continued listing requirements. An issuer of such securities must notify the Exchange of any failure to comply with such continued listing requirements. If an issue of Commodity- and/or Digital Asset-Based Investment Interests does not satisfy these requirements, the Exchange may halt trading in the securities and will initiate delisting proceedings pursuant to Rule 5.5-E(m).
Proposed Rule 8.800-E(e) sets forth initial and continued listing criteria applicable to Commodity- and/or Digital Asset-Based Investment Interests. Proposed Rule 8.800-E(e)(1)(i) provides that, for each series of Commodity- and/or Digital Asset-Based Investment Interests, the Exchange will establish a minimum number of Commodity- and/or Digital Asset-Based Investment Interests required to be outstanding at the time of commencement of trading on the Exchange. Proposed Rule 8.800-E(e)(1)(ii) provides that in the aggregate, at least 90% of the weight of the commodity and/or digital asset holdings of a series of Commodity- and/or Digital Asset-Based Investment Interests shall, on both an initial and continuing basis, consist of commodities and/or digital assets for which the Exchange may obtain information pursuant to its ISG membership or for which the principal market is a market with which the Exchange has a CSSA. In addition, proposed Rule 8.800-E(e)(2) provides that the Exchange will maintain surveillance procedures for securities listed under proposed Rule 8.800-E and sets forth the circumstances under which the Exchange would consider the suspension of trading in and delisting under Rule 5.5-E(m) of a series of Commodity- and/or Digital Asset-Based Investment Interests.
With respect to proposed Rule 8.800-E, the Exchange believes that the proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest because Commodity- and/or Digital Asset-Based Investment Interests listed and traded pursuant to proposed Rule 8.800-E would be substantially similar to Commodity-Based Trust Shares listed and traded pursuant to current Rule 8.201-E. Commodity- and/or Digital Asset-Based Investment Interests differ from Commodity-Based Trust Shares only in that Commodity- and/or Digital Asset-Based Investment Interests could be issued, as a proposed, by a trust, limited liability company, or other similar entity (rather than only by a trust), and in that Commodity- and/or Digital Asset-Based Investment Interests could be based, as proposed, on underlying commodities, digital assets (provided that at least 90% of commodity and/or digital asset holdings are those concerning which the Exchange may obtain information via the ISG from other members of the ISG or via CSSA), and/or Derivative Securities Products. The Exchange believes this additional flexibility with respect to the structure of the entity issuing Commodity- and/or Digital Asset-Based Investment Interests and the holdings underlying such securities would remove impediments to and perfect the mechanism of a free and open market, as well as promote competition, by promoting the listing and trading of a new type of ETP, to the benefit of all market participants. The Exchange further believes that the proposed requirement that at least 90% of any commodity and/or digital asset holdings are those concerning which the Exchange may obtain information via the ISG from other members of the ISG or via a CSSA would remove impediments to and perfect the mechanism of a free and open market, as well as protect investors and the public interest, because it would offer flexibility to issuers of series of Commodity- and/or Digital Asset-Based Investment Interests, to the benefit of investors, while facilitating information sharing among market participants regarding the vast majority of any commodities and/or digital assets underlying series of Commodity- and/or Digital Asset-Based Investment Interests. As noted above, this requirement is based on a similar provision approved by the Commission in Commentary .01(d)(1) to Rule 8.600-E regarding Managed Fund Shares.
The Exchange also believes that the proposed addition of Commodity- and/or Digital Asset-Based Investment Interests 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 promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system by holding Commodity- and/or Digital Asset-Based Investment Interests to the same requirements currently applicable to other similar derivative and special purpose securities such as those listed pursuant to Rule 8.201-E.
With respect to the proposed listing and trading of Shares of the Fund, the Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Rule 8.800-E. The Exchange has in place surveillance procedures that are adequate to properly monitor trading in the Shares in all trading sessions and to deter and detect violations of Exchange rules and applicable federal securities laws. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares with other markets that are members of the ISG, and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares and Fund Component derivatives from such markets. In addition, the Exchange may obtain information regarding trading in the Shares and Fund Component derivatives from markets that are members of ISG or with which the Exchange has in place a CSSA. Also, pursuant to NYSE Arca Rule 8.800-E(i), the Exchange is able to obtain information regarding Market Maker accounts for trading in the Shares and the underlying Fund Components or any Fund Component derivatives through ETP Holders acting as registered Market Makers, in connection with such ETP Holders' proprietary or
The proposed rule change is also designed to prevent fraudulent and manipulative acts and practices because, although the Digital Asset Trading Platform Market is not inherently resistant to fraud and manipulation, the Index and its use of the Digital Asset Reference Rates serves as a means sufficient to mitigate the impact of instances of fraud and manipulation on a reference price for the Fund Components. Specifically, the Index and its use of the Digital Asset Reference Rates provides a better benchmark for the price of the Fund Components than the Digital Asset Trading Platform Market price because (1) the Digital Asset Reference Rates track the Digital Asset Trading Platform Market price through trading activity at U.S.-Compliant Trading Platforms; (2) is the Digital Asset Reference Rates are constructed and maintained by an expert third-party index provider, allowing for prudent handling of non-market-related events; and (3) the Digital Asset Reference Rates mitigate the impact of instances of fraud, manipulation and other anomalous trading activity concentrated on any one specific trading platform through a cross-trading platform composite reference rate over a 60-minute period. The Fund has relied on the Index and its use of the Digital Asset Reference Rates to price the Shares for approximately two years, and the Index and its use of the Digital Asset Reference Rates has proven its ability to (i) mitigate the effects of fraud, manipulation and other anomalous trading activity from impacting the Fund Components' reference rates, (ii) provide a real-time, volume-weighted fair value of the Fund Components and (iii) appropriately handle and adjust for non-market related events, such that efforts to manipulate the price of the Fund Components would have had a negligible effect on the pricing of the Fund, due to the controls embedded in the structure of the Index. In addition, certain of the Digital Asset Reference Rates' Constituent Trading Platforms also have or have begun to implement market surveillance infrastructure to further detect, prevent, and respond to fraud, attempted fraud, and similar wrongdoing, including market manipulation. The proposed rule change is also designed to prevent fraudulent and manipulative acts and practices because, as noted above, fraud or manipulation that impacts prices in spot Bitcoin markets or spot Ether markets would likely similarly impact CME Bitcoin futures and CME Ether futures prices, and the Exchange could obtain information from the CME to assist in detecting and deterring potential fraud or manipulation with respect to certain Fund Components.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that there is a considerable amount of price and market information available on public websites and through professional and subscription services for the Fund Components. Investors may obtain, on a 24-hour basis, Fund Component pricing information based on the spot price for the Fund Components from various financial information service providers. The closing price and settlement prices of the Fund Components are readily available from the Digital Asset Trading Platforms and other publicly available websites. In addition, such prices are published in public sources, or on-line information services such as Bloomberg and Reuters. The NAV per Share will be calculated daily and made available to all market participants at the same time. The Fund will provide website disclosure of its NAV daily. One or more major market data vendors will disseminate for the Fund on a daily basis information with respect to the most recent NAV per Share and Shares outstanding. In addition, if the Exchange becomes aware that the NAV per Share is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA. The IFV will be widely disseminated on a per Share basis every 15 seconds during the NYSE Arca Core Trading Session (normally 9:30 a.m., E.T., to 4:00 p.m., E.T.) by one or more major market data vendors. The Exchange represents that the Exchange may halt trading during the day in which an interruption to the dissemination of the IFV or the value of the Index occurs. If the interruption to the dissemination of the IFV or the value of the Index persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the NYSE Arca Core Trading Session on the trading day following the interruption.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a CSSA for at least 90% of the Fund's commodity and/or digital asset holdings. In addition, as noted above, investors will have ready access to information regarding the Fund's NAV, IFV, and quotation and last sale information for the Shares.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change will facilitate the listing and trading of an additional type of exchange-traded product which will enhance competition among market participants, to the benefit of investors and the marketplace.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to update its Fee Schedule to provide a temporary 20% discount on fees assessed to Exchange Trading Permit Holders and non-Trading Permit Holders that purchase $20,000 or more of ad hoc purchases of CBOE Options Historical Depth Data (“Historical Depth Reports”), effective October 18, 2024 through December 31, 2024.
By way of background, the Exchange currently makes available for purchase Depth Data, which is a daily archive of the Exchange's depth of book real-time feed, which provides depth-of-book quotations and execution information based on options orders entered into the System. The Exchange also offers Historical Depth Data, which offers such data on a historical basis,
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Historical Depth Report available for purchase to Users on the LiveVol DataShop website (
The Exchange and affiliated equities and options exchanges (
The Exchange proposes to provide a temporary pricing incentive program in which Trading Permit Holders or non-Trading Permit Holders that purchase Historical Depth Reports will receive a percentage fee discount where specific purchase thresholds are met. Specifically, the Exchange proposes to provide a temporary 20% discount for ad-hoc purchases of Historical Depth Data of $20,000 or more.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee changes will further broaden the availability of U.S. options market data to investors consistent with the principles of Regulation NMS. The Exchange believes the dissemination of historical depth of book data via Historical Depth Reports benefits investors through increased transparency and may promote better informed trading, as well as research and studies of the options industry. Nevertheless, the Exchange notes that such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through similar reports.
The Exchange also operates in a highly competitive environment. Indeed, there are currently 17 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 17% of the market share.
The Exchange believes that the proposed incentive program for any Member or non-Member who purchases Historical Depth Reports is reasonable because such purchasers would receive a 20% discount for purchasing $20,000 or more worth of Historical Depth Reports. The Exchange believes the proposed discount is reasonable as it will give purchasers the ability to use and test the Historical Depth Reports at a discounted rate, prior to purchasing additional months or a monthly subscription, and will therefore encourage and promote users to purchase the Historical Depth Reports. Further, the proposed discount is intended to promote increased use of the Exchange's Historical Depth Reports by defraying some of the costs a purchaser would ordinarily have to expend before using the data product. The Exchange believes that the proposed discount is equitable and not unfairly discriminatory because it will apply equally to all Trading Permit Holders and non-Trading Permit Holders who purchase Historical Depth Reports. Lastly, the purchase of this data product is discretionary and not compulsory. Indeed, no market participant is required to purchase the Historical Depth Reports, and the Exchange is not required to make Historical Depth Reports available to all investors. Potential purchasers may request the data at any time if they believe it to be valuable or may decline to purchase such data. As noted above, the Exchange has previously adopted this discount program at other times.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment in which the Exchange must continually adjust its fees to remain competitive. Because competitors are free to modify their own
The proposed rule changes are grounded in the Exchange's efforts to compete more effectively. In this competitive environment, potential purchasers are free to choose which, if any, similar product to purchase to satisfy their need for market information. As a result, the Exchange believes this proposed rule change permits fair competition among national securities exchanges. Further, the Exchange believes that these changes will not cause any unnecessary or inappropriate burden on intermarket competition, as the proposed incentive program applies uniformly to any purchaser of Historical Depth Reports.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Sapphire Fee Schedule (the “Fee Schedule”) to adopt certain non-transaction fees for Purge Ports as described below.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set
On July 15, 2024, the U.S. Securities and Exchange Commission (“Commission”) approved the Exchange's Form 1 application to register as a national securities exchange under Section 6 of the Exchange Act,
Despite proposing to adopt fees herein, the Exchange also proposes to waive the proposed Purge Port fees for an Initial Waiver Period,
The Exchange proposes to amend Section 5)d)iii), which was reserved for use by an earlier proposal,
A logical port represents a port established by the Exchange within the Exchange's System for trading and billing purposes. Each logical port grants a Member
Purge Ports are designed to assist Market Makers in the management of, and risk control over, their orders, particularly if the firm is dealing with a large number of securities. For example, if a Market Maker detects market indications that may influence the execution potential of their orders, the Market Maker may use Purge Ports to reduce uncertainty and to manage risk by purging all orders in a number of securities. This allows Market Makers to seamlessly avoid unintended executions, while continuing to evaluate the market, their positions, and their risk levels. Purge Ports are used by Market Makers that conduct business activity that exposes them to a large amount of risk across a number of securities. Purge Ports enable Market Makers to cancel all open orders, or a subset of open orders through a single cancel message. The Exchange notes that Purge Ports increase efficiency of already existing functionality enabling the cancellation of orders.
The Exchange operates a highly performant system with significant throughput and determinism which should allow participants to enter, update and cancel orders at high rates. Market Makers have the ability to cancel individual orders through the existing functionality, such as through the use of a mass cancel message by which a Market Maker may request that the Exchange remove all or a subset of its quotations and block all or a subset of its new inbound quotations.
Similarly, Members may also use cancel-on-disconnect control when they experience a disruption in connection to the Exchange to automatically cancel all orders, as configured or instructed by the Member or Market Maker.
The Exchange believes that market participants benefit from a dedicated purge mechanism for specific Members and to the market as a whole. Market Makers will have the benefit of efficient risk management and purge tools. The market will benefit from potential
The proposed fee change is immediately effective.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs.
In proposing to charge fees for port services, the Exchange is especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related service, and in carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
As detailed below, the Exchange recently calculated its aggregate annual costs for providing Purge Ports to be $426,238 (or approximately $35,518 per month, rounded to the nearest dollar when dividing the annual cost by 12 months). To recoup the costs of providing Purge Ports to its Market Makers going forward, as described below, the Exchange proposes to amend its Fee Schedule to charge a fee of $600 per Matching Engine for Purge Ports. The Exchange notes that the projected revenue will not be greater than the costs to the Exchange to provide Purge Ports, however the Exchange believes that it is necessary to accept this condition in order to successfully launch MIAX Sapphire.
The Exchange's affiliates
As an initial step, the Exchange determined the total cost for the Exchange and its affiliated markets for each cost driver as part of the Exchange's 2024 budget review process. The 2024 budget review is a company-wide process that occurs over the course of many months, includes meetings among senior management, department heads, and the Finance Team. Each department head is required to send a “bottom up” budget to the Finance Team allocating costs at the profit and loss account and vendor levels for the Exchange and its affiliated markets based on a number of factors, including server counts, additional hardware and software utilization, current or anticipated functional or non-functional development projects, capacity needs, end-of-life or end-of-service intervals, number of members, market model (
The next step involves determining what portion of the cost allocated to the Exchange pursuant to the above methodology is to be allocated to each core service,
This next level of the allocation methodology at the individual exchange level also took into account factors similar to those set forth under the first step of the allocation methodology process described above, to determine the appropriate allocation to connectivity or market data versus allocations for other services. This allocation methodology was developed through an assessment of costs with senior management intimately familiar with each area of the Exchange's operations. After adopting this allocation methodology, the Exchange then applied an allocation of each cost driver to each core service, resulting in the cost allocations described below. Each of the below cost allocations is unique to the Exchange and represents a percentage of overall cost that was allocated to the Exchange pursuant to the initial allocation described above.
By allocating segmented costs to each core service, the Exchange was able to estimate by core service the potential margin it might earn based on different fee models. The Exchange notes that it has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, connectivity and port service fees, membership fees, regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue. The Exchange also notes that as a general matter each of these sources of revenue is based on services that are interdependent. For instance, the Exchange's system for executing transactions is dependent on physical hardware and connectivity; only Members and parties that they sponsor to participate directly on the Exchange may submit orders to the Exchange; some Members (but not all) consume market data from the Exchange in order to trade on the Exchange; and, the Exchange consumes market data from external sources in order to comply with regulatory obligations. Accordingly, given this interdependence, the allocation of costs to each service or revenue source required judgment of the Exchange and was weighted based on estimates of the Exchange that the Exchange believes are reasonable, as set forth below. While there is no standardized and generally accepted methodology for the allocation of an exchange's costs, the Exchange's methodology is the result of an extensive review and analysis and will be consistently applied going forward for any other cost-justified potential fee proposals. In the absence of the Commission attempting to specify a methodology for the allocation of exchanges' interdependent costs, the Exchange will continue to be left with its best efforts to attempt to conduct such an allocation in a thoughtful and reasonable manner.
Through the Exchange's extensive updated Cost Analysis, which was again recently further refined, the Exchange analyzed every expense item in the Exchange's general expense ledger to determine whether each such expense relates to the provision of connectivity and port services, and, if such expense did so relate, what portion (or percentage) of such expense actually supports the provision of Purge Port services, and thus bears a relationship that is, “in nature and closeness,” directly related to Purge Port services. In turn, the Exchange allocated certain costs more to physical connectivity and others to ports, while certain costs were only allocated to such services at a very low percentage or not at all, using consistent allocation methodologies as described above. Based on this analysis, the Exchange estimates that the aggregate monthly cost to provide Purge Port services is $35,518, as further detailed below.
The following chart details the individual line-item costs considered by the Exchange to be related to offering Purge Ports as well as the percentage of the Exchange's overall costs that such costs represent for each cost driver (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering Purge Ports. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for Purge Ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
The Exchange notes that it and its affiliated markets anticipate that by year-end 2024, there will be 289 employees (excluding employees at non-options/equities exchange subsidiaries of Miami International Holdings, Inc. (“MIH”), the holding company of the Exchange and its affiliated markets), and each department leader has direct knowledge of the time spent by each employee with respect to the various tasks necessary to operate the Exchange. Specifically, twice a year, and as needed with additional new hires and new project initiatives, in consultation with employees as needed, managers and department heads assign a percentage of time to every employee and then allocate that time amongst the Exchange and its affiliated markets to determine each market's individual Human Resources expense. Then, managers and department heads assign a percentage of each employee's time allocated to the Exchange into buckets including network connectivity, ports, market data, and other exchange services. This process ensures that every employee is 100% allocated, ensuring there is no double counting between the Exchange and its affiliated markets.
For personnel costs (Human Resources), the Exchange calculated an allocation of employee time for employees whose functions include providing and maintaining Purge Ports and performance thereof (primarily the Exchange's network infrastructure team, which spends most of their time performing functions necessary to provide port and connectivity services). As described more fully above, the Exchange's parent company allocates costs to the Exchange and its affiliated markets and then a portion of the Human Resources costs allocated to the Exchange is then allocated to port services. From that portion allocated to the Exchange that applied to ports, the Exchange then allocated a weighted average of 4.8% of each employee's time from the above group to Purge Ports.
The Exchange also allocated Human Resources costs to provide Purge Ports to a limited subset of personnel with ancillary functions related to establishing and maintaining such ports (such as information security, sales, membership, and finance personnel). The Exchange allocated cost on an employee-by-employee basis (
The estimates of Human Resources cost were therefore determined by consulting with such department leaders, determining which employees are involved in tasks related to providing Purge Ports, and confirming that the proposed allocations were reasonable based on an understanding of the percentage of time such employees devote to those tasks. This includes personnel from the Exchange departments that are predominately involved in providing Purge Ports: Business Systems Development, Trading Systems Development, Systems Operations and Network Monitoring, Network and Data Center Operations, Listings, Trading Operations, and Project Management. Again, the Exchange allocated 4.8% of each of their employee's time assigned to the Exchange for Purge Ports, as stated above. Employees from these departments perform numerous functions to support Purge Ports, such as the installation, re-location, configuration, and maintenance of Purge Ports and the hardware they access. This hardware includes servers, routers, switches, firewalls, and monitoring devices. These employees also perform software upgrades, vulnerability assessments, remediation and patch installs, equipment configuration and hardening, as well as performance and capacity management. These employees also engage in research and development analysis for equipment and software supporting Purge Ports and design, and support the development and on-going maintenance of internally-developed applications as well as data capture and analysis, and Member and internal Exchange reports related to network and system performance. The above list of employee functions is not exhaustive of all the functions performed by Exchange employees to support Purge Ports, but illustrates the breath of functions those employees perform in support of the above cost and time allocations.
Lastly, the Exchange notes that senior level executives' time was only allocated to the Purge Ports related Human Resources costs to the extent that they are involved in overseeing tasks related to providing Purge Ports. The Human Resources cost was calculated using a blended rate of compensation reflecting salary, equity
The Connectivity cost driver includes external fees paid to connect to other exchanges and third parties, cabling and switches required to operate the Exchange. The Connectivity cost driver is more narrowly focused on technology used to complete connections to the Exchange and to connect to external markets. The Exchange notes that its connectivity to external markets vendors is required in order to receive market data to run the Exchange's matching engine and basic operations compliant with existing regulations, primarily Regulation NMS.
The Exchange relies on various connectivity providers for connectivity to the entire U.S. options industry, and infrastructure services for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes connectivity providers to connect to other national securities exchanges and the Options Price Reporting Authority (“OPRA”). The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Connectivity provided by these service providers is critical to the Exchanges daily operations and performance of its System Networks which includes Purge Ports. Without these services providers, the Exchange would not be able to connect to other national securities exchanges, market data providers or OPRA and, therefore, would not be able to operate and support its System Networks, including Purge Ports. In addition, the connectivity is necessary for the Exchange to notify OPRA and other market participants that an order has been cancelled, and that quotes may have been cancelled as a result of a Market Maker purging quotes via their Purge Port. Also, like other types of ports offered by the Exchange, Purge Ports leverage the Exchange's existing 10Gb ULL connectivity, which also relies on connectivity to other national securities exchanges and OPRA. The Exchange does not employ a separate fee to cover its connectivity provider expense and recoups that expense, in part, by charging for Purge Ports.
The next cost driver consists of internet services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami. For purposes of Purge Ports, the Exchange also includes a portion of its costs related to external market data. External market data includes fees paid to third parties, including OPRA, to receive and consume market data from other markets. The Exchange includes external market data costs towards Purge Ports because such market data is necessary to offer certain services related to such ports, such as checking for market conditions (
For the reasons set forth above, the Exchange believes it is reasonable to allocate a small amount of such costs to Purge Ports since market data from other exchanges is consumed at the Exchange's Purge Port level to validate purge messages and the necessity to cancel a resting quote via a purge message or via some other means.
Data Center costs includes an allocation of the costs the Exchange incurs to provide Purge Ports in the third-party data centers where it maintains its equipment as well as related costs for market data to then enter the Exchange's System. The Exchange does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties. The Exchange has allocated a percentage of its Data Center cost (1.1%) to Purge Ports because the third-party data centers and the Exchange's physical equipment contained therein are necessary for providing Purge Ports. In other words, for the Exchange to operate in a dedicated physical space with direct connectivity by market participants to its trading platform, the data centers are a critical component to the provision of Purge Ports. If the Exchange did not maintain such a presence, then Purge Ports would be of little value to market participants.
Hardware and Software Licenses includes hardware and software licenses used to operate and monitor physical assets necessary to offer Purge Ports for each Matching Engine of the Exchange. This hardware includes servers, network switches, cables, optics, protocol data units, and cabinets, to maintain a state-of-the-art technology platform. Without hardware and software licenses, Purge Ports would not be able to be offered to market participants because hardware and software are necessary to operate the Exchange's Matching Engines, which are necessary to enable the purging of quotes. The Exchange also routinely works to improve the performance of the hardware and software used to operate the Exchange's network and System. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to allocate a certain percentage of its hardware and software expense to help offset those costs of providing Purge Port connectivity to its Matching Engines.
The vast majority of the software the Exchange uses to provide Ports has been developed in-house and the cost of such development, which takes place over an extended period of time and includes not just development work, but also quality assurance and testing to ensure the software works as intended, is depreciated over time once the software is activated in the production environment. Hardware used to provide Purge Ports includes equipment used for
All hardware and software, which also includes assets used for testing and monitoring of order entry infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which is owned by the Exchange and some of which is leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange allocated 1.6% of all depreciation costs to providing Purge Ports. The Exchange allocated depreciation costs for depreciated software necessary to operate the Exchange because such software is related to the provision of Purge Ports. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost driver was therefore narrowly tailored to depreciation related to Purge Ports.
Finally, a portion of general shared expenses was allocated to overall Purge Port costs as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide Purge Ports. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
Based on projected 2024 data, the total monthly cost allocated to Purge Ports is $35,518. This total is divided by the total number of Matching Engines (8) in which Market Makers may use Purge Ports for each month, divided by the anticipated number of Market Makers results in an approximate cost of $634 per Matching Engine per month for Purge Port usage (when rounding to the nearest dollar). The Exchange notes that the flat fee of $600 per month per Matching Engine entitles each Market Maker to two Purge Ports per Matching Engine. The Exchange anticipates that the majority of Market Makers will connect to all eight of the Exchange's Matching Engines and utilize Purge Ports on each Matching Engine. The Exchange recognizes that costs are greater than anticipated revenues but accepts this condition as a necessary cost to be incurred when launching a new exchange.
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core services (including Purge Ports) and did not double-count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of this proposal. For instance, in calculating the Human Resources expenses to be allocated to Purge Ports based upon the above described methodology, the Exchange has a team of employees dedicated to network infrastructure and with respect to such employees the Exchange allocated network infrastructure personnel with a higher percentage of the cost of such personnel (21.7%) given their focus on functions necessary to provide Ports. The salaries of those same personnel were allocated only 4.8% to Purge Ports and the remaining 95.2% was allocated to connectivity, other port services, transaction services, membership services and market data. The Exchange did not allocate any other Human Resources expense for providing Purge Ports to any other employee group, outside of a smaller allocation of 2.2% for Purge Ports, of the cost associated with certain specified personnel who work closely with and support network infrastructure personnel. This is because a much wider range of personnel are involved in functions necessary to offer, monitor and maintain Purge Ports but the tasks necessary to do so are not a primary or full-time function.
In total, the Exchange allocated 3.6% of its personnel costs to providing Purge Ports. In turn, the Exchange allocated the remaining 96.4% of its Human Resources expense to membership services, transaction services, connectivity services, other port services and market data. Thus, again, the Exchange's allocations of cost across core services were based on real costs of operating the Exchange and were not double-counted across the core services or their associated revenue streams.
As another example, the Exchange allocated depreciation expense to all core services, including Purge Ports, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes the actual cost of the computer equipment, such as dedicated servers, computers, laptops, monitors, information security appliances and storage, and network switching infrastructure equipment, including switches and taps that were purchased to operate and support the network. Without this equipment, the Exchange would not be able to operate the network and provide Purge Port services to its Market Makers. However, the Exchange did not allocate all of the depreciation and amortization expense toward the cost of providing Purge Port services, but instead allocated approximately 1.6% of the Exchange's overall depreciation and amortization expense to Purge Ports. The Exchange allocated the remaining depreciation and amortization expense (approximately 98.4%) toward the cost of providing transaction services, membership services, connectivity services, other port services, and market data.
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. The Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from Purge Ports, the Exchange will have to be successful in retaining existing Market Makers that wish to maintain Purge Ports or in obtaining new Market Makers that will purchase such services. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing.
The Exchange notes that the Cost Analysis is based on the Exchange's 2024 fiscal year of operations and projections. It is possible, however, that actual costs may be higher or lower. To the extent the Exchange sees growth in use of connectivity services it will receive additional revenue to offset future cost increases. However, if use of port services is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange is committing to conduct a one-year review after implementation of these fees. The Exchange expects that it may propose to adjust fees at that time, to increase fees in the event that revenues fail to cover costs and a reasonable mark-up of such costs. Similarly, the Exchange may propose to decrease fees in the event that revenue
The proposed fees will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide port services. Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection(s). The above cost, namely those associated with hardware, software, and human capital, enable the Exchange to measure network performance with nanosecond granularity. These same costs are also associated with time and money spent seeking to continuously improve the network performance, improving the subscriber's experience, based on monitoring and analysis activity. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by amending fees for Purge Port services. Subscribers, particularly those of Purge Ports, expect the Exchange to provide this level of support so they continue to receive the performance they expect. This differentiates the Exchange from its competitors. As detailed above, the Exchange has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services (connections and ports), membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue.
The Exchange's Cost Analysis estimates the annual cost to provide Purge Port services will equal $426,238. Based on projected Purge Port services usage, the Exchange would generate annual revenue of approximately $403,200. The Exchange estimates it will incur a 5.7% loss when comparing revenues to the cost of providing Purge Port services.
Based on the above discussion, the Exchange believes that even if the Exchange earns the above revenue or incrementally more or less, the proposed fees are fair and reasonable because they will not result in pricing that deviates from that of other exchanges or a supra-competitive profit, when comparing the total expense of the Exchange associated with providing Purge Port services versus the total projected revenue of the Exchange associated with network Purge Port services.
The Exchange believes that the proposed rule change would promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market because offering Market Makers optional Purge Port services with a flexible fee structure promotes choice, flexibility, and efficiency. The Exchange believes Purge Ports enhance Market Makers' ability to manage orders, which would, in turn, improve their risk controls to the benefit of all market participants. The Exchange believes that Purge Ports foster cooperation and coordination with persons engaged in facilitating transactions in securities because designating Purge Ports for purge messages may encourage better use of such ports. This may, concurrent with the ports that carry orders and other information necessary for market making activities, enable more efficient, as well as fair and reasonable, use of Market Makers' resources. The Exchange believes that proper risk management, including the ability to efficiently cancel multiple orders quickly when necessary is valuable to all firms, including Market Makers that have heightened quoting obligations that are not applicable to other market participants.
Purge Ports do not relieve Market Makers of their quoting obligations or firm quote obligations under Regulation NMS Rule 602.
The Exchange also believes that offering Purge Ports at the Matching Engine level promotes risk management across the industry, and thereby facilitates investor protection. Some market participants, in particular the larger firms, could and do build similar risk functionality in their trading systems that permit the flexible cancellation of orders entered on the Exchange at a high rate. Offering Matching Engine level protections ensures that such functionality is widely available to all firms, including smaller firms that may otherwise not be willing to incur the costs and development work necessary to support their own customized mass cancel functionality.
The Exchange also believes that moving to a per Matching Engine fee for Purge Ports is reasonable due to the Exchange's architecture that provides the Exchange the ability to provide two (2) Purge Ports per Matching Engine.
The Exchange believes that the proposed Purge Port fees are equitable because the proposed Purge Ports are completely voluntary as they relate solely to optional risk management functionality.
The Exchange also believes that the proposed amendments to its Fee Schedule are not unfairly discriminatory because they will apply uniformly to all Market Makers that choose to use the optional Purge Ports. Purge Ports are completely voluntary and, as they relate solely to optional risk management functionality, no Market Maker is required or under any regulatory obligation to utilize them. All Market Makers that voluntarily select
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. Purge Ports are completely voluntary and are available to all Market Makers on an equal basis at the same cost. While the Exchange believes that Purge Ports provide a valuable service, Market Makers can choose to purchase, or not purchase, these ports based on their own determination of the value and their business needs. No Market Maker is required or under any regulatory obligation to utilize Purge Ports. Accordingly, the Exchange believes that Purge Ports offer appropriate risk management functionality to firms that trade on the Exchange without imposing an unnecessary or inappropriate burden on competition.
The Exchange also does not believe the proposal would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges are free to introduce their own purge port functionality and lower their prices to better compete with the Exchange's offering. The Exchange does not believe the proposed rule change would cause any unnecessary or inappropriate burden on intramarket competition. Particularly, the proposal would apply uniformly to any market participant, in that it does not differentiate between Market Makers. The proposal would allow any interested Market Maker to purchase Purge Port functionality based on their business needs.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to 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.
U.S. Small Business Administration.
Notice.
This is a notice of an Economic Injury Disaster Loan (EIDL) declaration for the State of Oregon dated October 29, 2024.
Issued on October 29, 2024.
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's EIDL declaration, applications for disaster loans may be submitted online using the MySBA Loan Portal
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for economic injury is 208440.
The States which received an EIDL Declaration are Oregon, Washington.
Federal Aviation Administration (FAA), Department of Transportation (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 for a new information collection. The collection involves creation of accounts, storage of training and awards history, and management of FAA Safety Team (FAASTeam) volunteers. The information to be collected will be used to and/or is necessary because it allows for individual users to complete and track their individual training and awards accomplishments and allows for contact information to be available to users for FAASTeam volunteers.
Written comments should be submitted by January 3, 2025.
Written comments and recommendations for the proposed information collection should be sent within 60 days of publication of this notice to
Find this particular information collection by selecting “Currently under 60-day Review—Open for Public Comments” or by using the search function.
Bradford Wood by email at:
Issued in Washington, DC.
Federal Aviation Administration (FAA), DOT.
Notice.
The FAA has determined that the minimum random drug and alcohol testing percentage rates for the period January 1, 2025, through December 31, 2025, will remain at 25 percent of safety-sensitive employees for random
Ms. Vicky Dunne, Federal Aviation Administration, Office of Aerospace Medicine, Drug Abatement Division, Program Policy Branch; Email
Similarly, 14 CFR 120.217(c), requires the decision on the minimum annual random alcohol testing rate to be based on the random alcohol test violation rate. If the violation rate remains less than 0.50%, the Administrator may continue the minimum random alcohol testing rate at 10%. In 2023, the random alcohol test violation rate was 0.141%. Therefore, the minimum random alcohol testing rate will remain at 10% for calendar year 2025.
If you have questions about how the annual random testing percentage rates are determined, please refer to the Code of Federal Regulations Title 14, section 120.109(b) (for drug testing), and 120.217(c) (for alcohol testing).
Issued in Washington, DC.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of information collection; request for comment.
Under the Paperwork Reduction Act of 1995 (PRA) and its implementing regulations, FRA seeks approval of the Information Collection Request (ICR) summarized below. Before submitting this ICR to the Office of Management and Budget (OMB) for approval, FRA is soliciting public comment on specific aspects of the activities identified in the ICR.
Interested persons are invited to submit comments on or before December 31, 2024.
Written comments and recommendations for the proposed ICR should be submitted on regulations.gov to the docket, Docket No. FRA-2024-0015. All comments received will be posted without change to the docket, including any personal information provided. Please refer to the assigned OMB control number (2130-0005) in any correspondence submitted. FRA will summarize comments received in response to this notice in a subsequent notice, made available to the public, and include them in its information collection submission to OMB for approval.
Ms. Arlette Mussington, Information Collection Clearance Officer, at email:
The PRA, 44 U.S.C. 3501-3520, and its implementing regulations, 5 CFR part 1320, require Federal agencies to provide 60 days' notice to the public to allow comment on information collection activities before seeking OMB approval of the activities.
FRA believes that soliciting public comment may reduce the administrative and paperwork burdens associated with the collection of information that Federal regulations mandate. In summary, comments received will advance three objectives: (1) reduce reporting burdens; (2) organize information collection requirements in a “user-friendly” format to improve the use of such information; and (3) accurately assess the resources expended to retrieve and produce information requested.
The summary below describes the ICR that FRA will submit for OMB clearance as the PRA requires:
In this 60-day notice, FRA is updating existing form FRA F 6180.3 Hours of Service Report to make the following edits:
• The term “Division” has been changed to “Place of Excess Service (City/State)”.
• Changing “Train or Engine Number (
• “Type of Service” has been updated by adding the following check boxes: “TEY”; “Signal”; “Dispatch” (
• The column, “Conservative Time Off Duty in Preceding 23-Hour Period” has been updated to “Previous Time Off”.
• Changing the term “Cause” to “Brief Description of Excess Service”.
Additionally, FRA made multiple adjustments that increased the previously approved burden hours from 1,283,507 to 1,284,832 hours. This increase, after a thorough review, is the result of the changes described in the following sections summarized below:
• Under § 228.19, Monthly reports of excess service, FRA determined that the annual submissions of form FRA F 6180.3, Exception Report, would increase the burden hours by 567 hours and 567 responses.
• Under §§ 228.103 and 228.107, Construction of employees' sleeping quarters—Petition request, FRA anticipates receiving zero petitions over the next three-year collection period. Accordingly, the burden hours were reduced by 48 hours.
• Under § 228.207, Refresher training, and § 228.411, Training programs on fatigue and related topics, FRA made burden estimate adjustments that more accurately reflect the number of responses and estimated average time required by each section, increasing the burden by 6 hours.
• Under § 228.407(f), Consultation with directly affected employees, FRA has determined that this requirement is not covered under the System Safety Program (SSP). Therefore, an estimated 800 burden hours has been added to this section.
Overall, the adjustments increased the total burden by 1,325 hours.
FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information that does not display a currently valid OMB control number.
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of information collection; request for comment.
Under the Paperwork Reduction Act of 1995 (PRA) and its implementing regulations, FRA seeks approval of the Information Collection Request (ICR) summarized below. Before submitting this ICR to the Office of Management and Budget (OMB) for approval, FRA is soliciting public comment on specific aspects of the activities identified in the ICR.
Interested persons are invited to submit comments on or before January 3, 2025.
Written comments and recommendations for the proposed ICR should be submitted on
Ms. Arlette Mussington, Information Collection Clearance Officer, at email:
The PRA, 44 U.S.C. 3501-3520, and its implementing regulations, 5 CFR part 1320, require Federal agencies to provide 60 days' notice to the public to allow comment on information collection activities before seeking OMB approval of the activities.
FRA believes that soliciting public comment may reduce the administrative and paperwork burdens associated with the collection of information that Federal regulations mandate. In summary, comments received will advance three objectives: (1) reduce
The summary below describes the ICR that FRA will submit for OMB clearance as the PRA requires:
The study will also be used to address research needs as identified in FRA Broad Agency Announcement (BAA) RSI-003 Workforce Recruitment: Attracting and Retaining Women of Rail and to inform development of a resource toolkit to support the rail industry in attracting and retaining a more gender-diverse workforce. The data collection effort will consist of surveys, interviews, and focus groups that are designed to (1) identify the current attitudes, gender-specific barriers, cultural norms, and beliefs (written and unwritten) regarding women in traditionally male-dominated positions and (2) identify lessons learned, strategies, and practices that organizations are implementing to attract more women in the workplace.
A digital outreach strategy will be employed to solicit volunteer participants. Eligible participants include all rail industry workers, leaders in similar industries, middle and high school teachers and students, and college faculty and students. Surveys will be conducted via an online platform. The only data that will be collected through the survey is attitude and opinion data. Following the survey, interviews and focus groups will be conducted via established conferences, organization meetings, and through conference calls. Participants will only be asked to share opinions on the research topics. No personally identifying data will be collected with either the survey or interview/focus group activities.
The results of this study will be published in an FRA research report and will be used to inform development of a resource toolkit to support the rail industry in attracting and retaining a more gender-diverse workforce.
FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information that does not display a currently valid OMB control number.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of receipt of petition for temporary exemption; request for public comment.
Legacy Limousines and Luxury Coaches has petitioned NHTSA for a temporary exemption from the requirement to install Type 2 seat belts (
Comments must be received on or before December 4, 2024.
NHTSA invites you to submit comments on the petition described herein and the questions posed below. You may submit comments identified by docket number in the heading of this notice by any of the following methods:
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Sara R. Bennett, Office of the Chief Counsel, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone: (202) 366-2992; Fax: (202) 366-3820.
NHTSA is responsible for promulgating and enforcing Federal motor vehicle safety standards (FMVSS) designed to improve motor vehicle safety. Generally, a manufacturer may not manufacture for sale, sell, offer for sale, or introduce or deliver for introduction into interstate commerce a vehicle that does not comply with all applicable FMVSS.
The National Traffic and Motor Vehicle Safety Act (Safety Act), codified at 49 U.S.C. chapter 301, authorizes the Secretary of Transportation to exempt motor vehicles, on a temporary basis and under specified circumstances, and on terms the Secretary considers appropriate, from a FMVSS or bumper standard. This authority is set forth at 49 U.S.C. 30113. The Secretary has delegated the authority for implementing this section to NHTSA.
The Safety Act authorizes the Secretary to grant, in whole or in part, a temporary exemption to a vehicle manufacturer if the Secretary makes one of four specified findings.
The Secretary must evaluate the petition for exemption under at least one of the following bases:
(i) Compliance would cause substantial economic hardship, and the manufacturer tried to comply in good faith;
(ii) the exemption would make easier the development or field evaluation of a new motor vehicle safety feature, and the safety level is equal to the safety level of the standard;
(iii) the exemption would make the development or field evaluation of a low-emission motor vehicle easier, and the safety leve of the vehicle is not unreasonably lowered; or
(iv) compliance would prevent the manufacturer from selling a motor vehicle with an overall safety level at least equal to the overall safety level of nonexempt vehicles.
NHTSA established 49 CFR part 555,
On November 25, 2013, NHTSA published a final rule amending FMVSS No. 208 to require seat belts for each passenger seating position in all new over-the-road buses (OTRBs) (regardless of gross vehicle weight rating (GVWR)), and all other buses with GVWRs greater than 11,793 kilograms (kg) (26,000 pounds (lb)) (with certain exclusions).
In the notice of proposed rulemaking (NPRM) preceding the final rule, NHTSA proposed to permit manufacturers the option of installing either a Type 1 (lap belt) or a Type 2 (lap and shoulder belt) on side-facing seats.
However, after the NPRM was published, the Motorcoach Enhanced Safety Act of 2012 was enacted as part of the Moving Ahead for Progress in the 21st Century Act (MAP-21), Public Law 112-141 (July 6, 2012). Section 32703(a) of MAP-21 directed the Secretary of Transportation (authority delegated to NHTSA) to “prescribe regulations requiring safety belts to be installed in motorcoaches at each designated seating position.” As MAP-21 defined “safety belt” to mean an integrated lap and shoulder belt, the final rule amended FMVSS No. 208 to require lap and shoulder belts at all designated seating positions, including side-facing seats, on OTRBs.
Even so, the agency reiterated its view that “the addition of a shoulder belt at [side-facing seats on light vehicles] is of limited value, given the paucity of data related to side facing seats.”
Given that background, and believing that few OTRBs would have side-facing seats, NHTSA stated in the November 2013 final rule that the manufacturers at issue may petition NHTSA for a temporary exemption under 49 CFR part 555 to install lap belts instead of lap and shoulder belts at side-facing seats.
Since issuing the November 2013 final rule, NHTSA has granted temporary exemptions to more than a dozen final stage manufacturers of entertainer buses for the same shoulder belt requirement of FMVSS No. 208 for side-facing seats on entertainer buses.
In the most recent decision notice granting one of these exemptions, NHTSA's rationale for granting the exemption cited the uncertainties about shoulder belts on side-facing seats, the relatively small number of side-facing seats on buses subject to the November 2013 final rule, and that FMVSS No. 208 does not require shoulder belts on side-facing seats on any other vehicle type.
In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR part 555, Legacy Limousine and Luxury Coaches submitted a petition asking NHTSA for a temporary exemption from the shoulder belt requirement of FMVSS No. 208 for side-facing seats on its vehicles. The petitioner seeks to install Type 1 seat belts (lap belt only) at side-facing seating positions, instead of Type 2 seat belts (lap and shoulder belts) as required by FMVSS No. 208. Petitioner seeks this exemption because it states it is otherwise unable to sell a motor vehicle whose overall level of safety is equivalent to or exceeds the overall level of safety of nonexempted motor vehicles. 49 CFR 555.6(d). The only difference between the requested exempt vehicles and non-exempted vehicles is that the non-exempted vehicles have lap/shoulder belts at side-facing seating positions, while exempted vehicle would have no belts or lap belts at side-facing seating positions.
Legacy Limousine and Luxury Coaches is a corporation that identifies itself as a final-stage manufacturer of entertainer-type motorcoaches. Legacy Limousine and Luxury Coaches states it is responsible for ensuring that the completed coach meets the FMVSS. The company typically receives a bus shell from an incomplete vehicle manufacturer and customizes the OTRB.
According to the petition, the bus shell received from the incomplete vehicle manufacturer generally contains the following components: exterior frame; driver's seat; dash cluster, speedometer, emissions light and emissions diagnosis connector; exterior lighting, headlights, marker lights, tum signal lights, and brake lights; exterior glass, windshield and side lights with emergency exits; windshield wiper system; braking system; tires, tire pressure monitoring system and suspension; and engine and transmission.
Petitioner states it then builds out the complete interior of the vehicle, which might include: roof escape hatch; fire suppression systems (interior living space, rear tires, electrical panels, bay storage compartments, and generator); ceiling, side walls and flooring; seating; electrical system, generator, invertor and house batteries; interior lighting; interior entertainment equipment; heating, ventilation and cooling system; galley with potable water, cooking equipment, refrigerators, and storage cabinets; bathroom and showers; and sleeping positions.
Pursuant to 49 CFR 555.5(b)(7), the petitioner must state why granting an exemption allowing it to install Type 1 instead of Type 2 seat belts in side-facing seats would be in the public interest and consistent with the objectives of the Safety Act.
Petitioner argues that NHTSA clearly had reservations about the safety effects of Type 2 seat belts on side-facing seats in motorcoaches. Petitioner notes that Congress mandated that NHTSA require Type 2 seat belts in side-facing seating positions in motorcoaches. NHTSA required it, per the direction from Congress, but NHTSA stated “the addition of a shoulder belt at [side-facing seats on light vehicles] is of limited value, given the paucity of data related to side facing seats.”
Petitioner states that granting its petition would be consistent with the Safety Act and in the public interest because NHTSA's analysis in developing the 2013 final rule found no demonstrable increase in associated risk related to the use of Type 1 seat belts.
The agency seeks comment from the public on the merits of Legacy Limousine and Luxury Coaches' petition for a temporary exemption from FMVSS No. 208's shoulder belt requirement for side-facing seats. The petitioner seeks to install lap belts at the side-facing seats; it does not seek to be completely exempted from a belt requirement. Further, the petitioner's request does not pertain to forward-facing designated seating positions on its vehicles. Under FMVSS No. 208, forward-facing seating positions on motorcoaches must have Type 2 lap and shoulder belts, and the petitioners are not raising issues about that requirement for forward-facing seats. After considering public comments and other available information, NHTSA will publish a notice of final action on the petition in the
Please see
• Your comments must be written in English.
• To ensure that your comments are correctly filed in the Docket, please include the Docket Number shown at the beginning of this document in your comments.
• If you are submitting comments electronically as a PDF (Adobe) File, NHTSA asks that the documents be submitted using the Optical Character Recognition (OCR) process, thus allowing NHTSA to search and copy certain portions of your submissions. Comments may be submitted to the docket electronically by logging onto the Docket Management System website at
• You may also submit two copies of your comments, including the attachments, to Docket Management at the address given above under
Please note that pursuant to the Data Quality Act, in order for substantive data to be relied upon and used by the agency, it must meet the information quality standards set forth in the OMB and DOT Data Quality Act guidelines. Accordingly, we encourage you to
We will consider all comments that Docket Management receives before the close of business on the comment closing date indicated above under
You may see the comments on the internet. To read the comments on the internet, go to
Please note that, even after the comment closing date, we will continue to file relevant information in the Docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically check the Docket for new material.
Issued in Washington, DC, under authority delegated in 49 CFR 1.95 and 501.5.
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 tax treatment of salvage and reinsurance.
Written comments should be received on or before January 3, 2025 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of the form and instructions should be directed to LaNita Van Dyke, at (202) 317-6009, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The following paragraph applies to all the collections of information covered by this notice.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be 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 (IRS), 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 information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning Form 8725—Excise Tax on Greenmail and TD 8379.
Written comments should be received on or before January 3, 2025 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of the form and instructions should be directed to LaNita Van Dyke, at (202) 317-6009, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
U.S.-China Economic and Security Review Commission.
Notice of open public event.
Notice is hereby given of the following open public event of the U.S.-China Economic and Security Review Commission. The Commission is mandated by Congress to monitor, investigate, and report to Congress annually on “the national security implications of the bilateral trade and economic relationship between the United States and the People's Republic of China.” Pursuant to this mandate, the Commission will hold a public release of its 2024 Annual Report to Congress in Washington, DC on November 19, 2024.
The release is scheduled for Tuesday, November 19, 2024 at 10:30 a.m.
This release will be held in-person at or near the U.S. Capitol and adjacent Congressional office buildings (specific building and room number to be announced) and online via live webcast on the Commission's website at
Any member of the public seeking further information concerning the event should contact Jameson Cunningham, 444 North Capitol Street NW, Suite 602, Washington, DC 20001; telephone: 202-624-1496, or via email at
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. ch.10, that a meeting of the Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board will be held January 7, 2025, via WebEx. The meeting will be held between 3 and 5 p.m. EDT. The meeting will be closed to the public from 3:30-5 p.m. EDT for scientific review and the discussion, examination, and reference to the research applications. Discussions will
The objective of the Board is to provide for the fair and equitable selection of the most meritorious research projects for support by VA research funds and to offer advice for research program officials on program priorities and policies. The ultimate objective of the Board is to ensure the high quality and mission relevance of VA's legislatively mandated Biomedical Laboratory and Clinical Science Research and Development programs.
Board members advise the Directors of the Biomedical Laboratory and Clinical Sciences Research Services and the Chief Research and Development Officer on the scientific and technical merit, mission relevance, and protection of human subjects of Biomedical Laboratory and Clinical Sciences Research and Development proposals. The Board does not consider grants, contracts, or other forms of extramural research.
Members of the public may attend the open portion of the meeting. The time limited agenda does not enable public comments or presentations. To attend the open portion of the meeting (3-3:30 p.m. EDT), the public may join by dialing the phone number 1-404-397-1596 and entering the meeting number (access code): 2823 274 3705. Public comments accepted during the open portion of the meeting and public stakeholders who want to speak to the committee will be afforded three minutes during the public comment period. These stakeholders must notify the DFO of their intention to speak to the committee.
Written public comments must be sent to Michael R. Burgio, Ph.D., Designated Federal Officer, Advisory Committee Management Office, 811 Vermont Avenue NW, Room 4342A, Washington, DC 20006, or to
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. ch.10, that a meeting of the Joint Biomedical Laboratory Research and Development and Clinical Science Research and Development Services Scientific Merit Review Board will be held January 7, 2025, via WebEx. The meeting will be held between 3 and 5 p.m. EDT. The meeting will be closed to the public from 3:30-5 p.m. EDT for scientific review and the discussion, examination, and reference to the research applications. Discussions will involve reference to staff and consultant critiques of research proposals. Discussions will deal with scientific merit of each proposal and qualifications of personnel conducting the studies, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy. Additionally, premature disclosure of research information could significantly obstruct implementation of proposed agency action regarding the research proposals. As provided by Public Law 92-463 subsection 10(d), and as amended by Public Law 94-409, closing the committee meeting is in accordance with 5 U.S.C. 552b(c)(6) and (9)(B).
The objective of the Board is to provide for the fair and equitable selection of the most meritorious research projects for support by VA research funds and to offer advice for research program officials on program priorities and policies. The ultimate objective of the Board is to ensure the high quality and mission relevance of VA's legislatively mandated Biomedical Laboratory and Clinical Science Research and Development programs.
Board members advise the Directors of the Biomedical Laboratory and Clinical Sciences Research Services and the Chief Research and Development Officer on the scientific and technical merit, mission relevance, and protection of human subjects of Biomedical Laboratory and Clinical Sciences Research and Development proposals. The Board does not consider grants, contracts, or other forms of extramural research.
Members of the public may attend the open portion of the meeting. The time limited agenda does not enable public comments or presentations. To attend the open portion of the meeting (3-3:30 p.m. EDT), the public may join by dialing the phone number 1-404-397-1596 and entering the meeting number (access code): 2823 274 3705. These stakeholders must notify the DFO of their intention to speak to the committee.
Written public comments must be sent to Michael R. Burgio, Ph.D., Designated Federal Officer, Advisory Committee Management Office, 811 Vermont Avenue NW, Room 4342A, Washington, DC 20006, or to
Federal Housing Finance Agency.
Notice of proposed rulemaking.
The Federal Housing Finance Agency (FHFA or the Agency) is proposing to revise regulations addressing boards of directors and overall corporate governance of the Federal Home Loan Banks (Banks) and the Bank System's Office of Finance (OF) to update and clarify regulatory requirements on a variety of topics including: FHFA's annual designation of Bank directorships; Bank director eligibility and professional qualifications; nomination, election, and removal of Bank directors; the conduct of System board and committee meetings; conflicts of interest; and the respective responsibilities of System boards of directors and executive management.
Written comments must be received on or before February 3, 2025.
You may submit your comments on the proposed rule, identified by regulatory information number (RIN) 2590-AB24, by any one of the following methods:
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Lindsay Spadoni, Assistant General Counsel, Office of General Counsel, (202) 649-3634,
FHFA invites comments on all aspects of the proposed rule and will take all comments into consideration before issuing a final rule. Comments will be posted to the electronic rulemaking docket on the FHFA public website at
The Bank System consists of eleven district Banks and the OF. The Banks are wholesale, cooperatively owned financial institutions, the debt of which is the joint and several obligation of all eleven Banks. They are organized under authority of the Federal Home Loan Bank Act (Bank Act) to serve the public interest by enhancing the availability of residential housing finance and community lending credit through their member institutions and, to a very limited extent, through certain eligible nonmembers. In general, only members may obtain advances (low-cost secured loans) and access other products and services provided by a Bank.
The Bank Act vests the management of each Bank in its board of directors.
The Bank Act requires that at least two of a Bank's independent directors qualify as “public interest” independent directors, each of which must “have more than 4 years of experience in representing consumer or community interests on banking services, credit needs, housing, or financial consumer protections.”
Part 1261 of FHFA's regulations, entitled “Federal Home Loan Bank Directors,” implements the statutory provisions and otherwise establishes requirements and processes relating to the composition and operations of Bank boards of directors. With respect to the former, sections in subpart B of the regulation (§§ 1261.2 through 1261.15) cover the annual designation of Bank directorships by the FHFA Director, director eligibility, the nomination and election processes, reporting and record retention requirements, handling conflicts of interest, and the filling of vacancies. Sections in subpart C (§§ 1261.20 through 1261.24) address director compensation and expenses and the conduct of board and committee meetings.
In addition to the corporate governance issues addressed in part 1261, part 1239 of FHFA's regulations, entitled “Responsibilities of Boards of Directors, Corporate Practices, and Corporate Governance,” addresses duties and responsibilities of directors, required board committees, and programs and policies each Bank must establish and maintain. Although part 1239 generally applies to all of FHFA's regulated entities, subpart E of the regulation sets forth requirements that are specific to the Banks. Part 1273 of FHFA's regulations governs the Bank System's OF, with governance issues—including composition and meetings of the OF board of directors—being addressed primarily in § 1273.8.
The proposed rule would make numerous revisions to part 1261, as well as more limited revisions to parts 1239 and 1273 to address various issues related to the corporate governance of the Banks and the OF. While the greater portion of the proposed changes to existing regulatory text are intended merely to restate existing requirements more clearly, many of the proposed revisions are substantive. The latter are being proposed primarily to ensure that the Banks maintain strong corporate governance that enables them to effectively fulfill their public policy mission while maintaining safe and sound operations. New proposed requirements and authorities would help ensure the Banks have the leadership and resources to forestall avoidable difficulties and to address challenges that may arise in the years ahead. The proposed revisions reflect FHFA's view that corporate governance of the Banks is strengthened when: the public interest is adequately represented; Bank boards have the collective knowledge and expertise to guide the Bank through new and emerging risks and complex problems; independent directors represent a true independent voice; each Bank has the tools to ensure that its directors are fit to serve in a fiduciary role with the Bank; and Bank directors and management are incentivized to carry out their duties and responsibilities conscientiously.
As discussed further below, several of the proposed changes implement action items from FHFA's
The FHLBank System at 100 Report provides a blueprint for innovative and prudent steps to bolster and improve the Bank System over the next several years, with the goal of ensuring that the Banks remain well positioned to meet the needs of their members and the communities they serve as they approach their 100th anniversary. The Report was informed by a year-long review of the Bank System involving significant stakeholder outreach, a historical review of the role of the Banks, and detailed analysis of both the strengths and areas for improvement in the System's current structure. As stated in the Report, FHFA's vision for the future is to have an effectively governed Bank System that efficiently provides stable and reliable funding to creditworthy members and delivers innovative products and services to support the housing and community development needs of the communities its members serve, all in a safe and sound manner. The Report noted that each Bank's “effectiveness in achieving its mission and safety and soundness goals is influenced by its governance.”
The Report laid out four regulatory actions to be taken by FHFA to strengthen Bank boards of directors and enable them to effectively address emerging risks and to oversee the safety and soundness and mission achievement of the Banks in today's financial market environment: (1) clarify required qualifications for public interest independent directors; (2) expand the list of qualifying experience for regular independent directors to reflect business developments in housing finance and new and emerging risks and complex problems; (3) encourage the Banks to evaluate potential gaps in board knowledge and pursue opportunities to address these gaps by nominating individuals with particular skills, backgrounds, and experience; and (4) facilitate the nomination of individuals with
The proposed rule would clarify required qualifications for public interest independent directors, including by specifying criteria for a Bank to consider when determining if an individual has “represented” consumer or community interests on banking services, credit needs, housing, or financial consumer protections, as required by statute to qualify as a public interest independent director. The rule would codify existing guidance that a person must have advocated for, or otherwise acted primarily on behalf of or for the direct benefit of, consumers or the community to meet the representation requirement.
The revised regulation would require each Bank to take affirmative measures to ensure that its board of directors has the knowledge and experience needed to adequately oversee the management of the Bank. Based on input received during the FHLBank System at 100 outreach, the proposed rule would add artificial intelligence, information technology and security, climate-related risk, Community Development Financial Institution (CDFI) business models, and modeling to the list of qualifying experience for regular independent directors. To ensure coverage of critical areas, each Bank's board would be required to conduct an annual assessment of the skills and experience possessed by its incumbents and those for which the board has a need. “Skills and experience” assessments are authorized, but not required, under the existing regulation.
Banks would be required to take active steps to seek independent directorship nominees—and to encourage member directorship nominees—who possess needed skills and experience. The revised regulation also would require the Banks to prioritize knowledge and experience relevant to the business, programs, and mission of the Bank and gained primarily through full time paid executive, management, or other senior positions when considering potential independent directorship nominees. To provide Banks with more flexibility to address critical needs when filling board vacancies, the proposed rule would add a provision expressly permitting Banks to fill a vacant public interest independent directorship by redesignating a qualifying incumbent regular independent director as a public interest independent director and vice versa. The Bank could then find new nominees to fill the resulting independent directorship vacancy (a practice FHFA currently permits).
At several points during the outreach phase of the FHLBank System at 100 initiative, stakeholders stressed the importance of independent voices on a Bank's board. The proposed rule includes provisions addressing director independence. It would make modest changes to increase the separation between independent directors and Bank members by extending “independence” requirements (which currently only apply to seated directors) to independent directorship nominees and prohibiting former member directors from serving as an independent director until they have been off the board for at least two years.
In response to a Notice of Regulatory Review comment, the proposed rule includes a new provision clarifying the definition of “advances” for purposes of the prohibition against an independent director serving as an officer, employee, or director of any “recipient of advances” from the Bank. This issue is of particular relevance for independent directors who lead or work for entities certified as housing associates.
The proposed rule would codify requirements and authorities relating to the “fitness” of an individual to serve as a director. It would require that a Bank decline to nominate or seat as a director any individual it knows to be “unfit” to serve and authorize each Bank's board to adopt bylaws or policies under which it may remove directors “for cause” upon a two-thirds vote of the board. As proposed, “cause” for removal would include code of ethics or policy violations, violations of the law, posing a risk of material harm to the Bank, conduct or a mental condition indicating an inability to oversee the Bank, and poor performance or lack of participation. The proposed rule would also require that each Bank's board conduct an annual assessment of director performance and participation to determine whether each director is contributing positively to the board's ability to adequately oversee the operations of the Bank. The proposed rule would require that director compensation reflect performance, as determined through the annual assessment, and permit the board to remove a director where the assessment reveals that a director's continuous poor performance or lack of participation is compromising the board's ability to adequately oversee the operations of the Bank. Additionally, the proposed rule would allow the FHFA Director to establish and provide notice of an annual amount of director compensation determined to be reasonable.
As further assurance that all Bank directors are fit to serve, the proposed rule would codify as a regulatory requirement the Banks' existing practice of conducting thorough background checks on independent directorship nominees, as well as individuals under consideration to fill a vacant directorship. It would also for the first time expressly require the Banks to conduct background checks for their member directorship nominees. The revised regulation would prohibit a Bank from including any individual on the ballot without having first confirmed, based on the background check, the individual's fitness to serve in a fiduciary role with the Bank.
With respect to directorship terms and term limits, the proposed rule would expressly provide that FHFA may continue, as part of the annual designation of directorships process, to adjust downward the length of terms from time to time where required to maintain the even staggering of directorship terms on a Bank's board. The proposed rule would make clear that such truncated terms do not count as “full terms” for purposes of the statutory term limit provisions, but that full terms on either side of a truncated term must be counted as consecutive for those purposes.
In one of only a few revisions to address corporate governance issues below the board level, the proposed rule would require each Bank to adopt and implement a conflicts of interest policy covering all Bank employees. The required policy would establish appropriate limitations, standards, and procedures on the holding of outside positions and financial interests by Bank employees and close family members and associates. Although the treatment of different types of employees under such a policy may be
Finally, the proposed rule would revise the regulation's existing provisions on record retention. Changes would increase the amount of time a Bank must retain materials pertaining to its directors and the director nomination and election process from two years to the longer of seven years or seven years after the director to which the information pertains leaves the board. This requirement is consistent with recognized best practices and should not be burdensome to implement in an electronic environment.
Although the proposed rule would impose new requirements (in addition to codifying some existing expectations), it would also implement new, or make permanent previously temporary, flexibilities. As requested in a Notice of Regulatory Review comment, the proposed rule would remove the requirement that Bank boards satisfy their six meeting per year minimum only through in-person meetings. The proposed revision would codify the substance of a waiver that has been in place since early in the COVID-19 pandemic by permitting Bank and OF board and committee meetings to be held by video or teleconferencing, or in a hybrid format, provided all directors have an opportunity to communicate, have access to all written documents and presentations, and all participants are within a state or U.S. Territory that is part of a Bank district.
To reduce burden in other areas, the proposed rule would also implement a number of other recommendations received as comments on the Notice of Regulatory Review. These changes include expanding the range of arms-length transactions not considered to be a prohibited “financial interest” for purposes of the Bank director conflicts-of-interest requirements, updating and expanding the authorized methods for withdrawal of OF operating funds, and allowing the OF board of directors to delegate review and approval of contracts as specified in applicable governance documents.
In addition to these substantive revisions, the proposed rule would make non-substantive revisions throughout part 1261 to improve the readability of the regulatory text and provide greater clarity on the requirements, processes, and authorities pertaining to Bank directors. In particular, provisions governing the annual designation of directorships, director eligibility, the nomination and election processes, and the filling of vacant directorships would be updated. These proposed non-substantive revisions include substitution of clearer phrasing, changes to assure consistent use of terminology, consolidation of related subject matter, replacement of statutory cross-references with either substantive text or regulatory cross-references, reorganization of sections and revision of headings, and removal of transitional material that is no longer needed.
Section 1261.2 of the existing regulation sets forth definitions applicable to subpart B of part 1261, which consists of the provisions governing Bank director eligibility, nominations, and elections. Existing § 1261.2 includes definitions for “independent directorship,” “member directorship,” “public interest director,” and “public interest directorship.” As described below, the proposed rule would add to and revise the regulatory terms describing the Bank directorship types and sub-types. The proposals are intended to provide clarity, and revisions to existing definitions are not intended to change the scope of the defined terms.
The existing regulation defines the terms “independent directorship” and “member directorship” by means of cross-references to the relevant provisions of the Bank Act. The proposed rule would replace these statutory references with cross-references to the regulatory provisions establishing the eligibility and designation requirements for those two types of Bank directorships. FHFA believes it is preferable to define terms with reference to the regulation itself, as opposed to requiring reference to the statute the regulation is intended to implement. Because part 1261 addresses both “directorships” (the designated seats comprising a Bank's board) and “directors” (the individuals filling those seats), those variants would be defined together for each directorship type.
While both the Bank Act and the existing regulation define “public interest directorship” (referring to an independent directorship to be filled by an individual meeting the “representing consumer or community interests” qualification requirement), both refer to an independent directorship to be filled by an individual meeting the “knowledge and experience” qualification requirement of the statute with such undefined terms as “an independent directorship, other than a public interest directorship” and “an independent director that is not a public interest director.” The proposed rule would establish a joint definition for “regular independent directorship and regular independent director” to refer to those types of independent directorships and directors, and would define the terms with a cross-reference to the new provision addressing the qualifications requirements for such directors under the proposed rule (§ 1261.5(c)(1), discussed below).
The existing regulation defines “public interest directorship” as “an independent directorship filled by an individual with more than four years of experience representing consumer or community interests in banking services, credit needs, housing or consumer financial protections.” The regulation separately defines “public interest director” to mean “an individual serving in a public interest directorship.” The proposed rule would revise the former term to “public interest
The proposed rule would also add a definition for the term “nominee,” referring to an individual formally nominated by a Bank's members or board of directors, as appropriate, to stand for election for a Bank directorship. This change is intended to allow a clearer distinction in the regulatory text between requirements that apply to persons requesting or being considered for nomination for a directorship and requirements that apply only to those that have been duly nominated.
Existing § 1261.2 defines the term “voting State” to mean “the District of Columbia, Puerto Rico, or the State of the United States in which a member's principal place of business, as determined in accordance with 12 CFR part 1263, is located as of the record date,” and further clarifies that “[t]he
Where appropriate, the proposed rule would also revise numerous references to a “State” in existing part 1261 to refer to a “voting State.” This is especially important with respect to provisions on the allocation of member directorships and member directorship nominations and voting, as the latter term includes the concept that members in U.S. Virgin Islands nominate, vote for, and are represented by member directors for Puerto Rico, while members in American Samoa, Guam, or the Northern Mariana Islands nominate, vote for, and are represented by member directors for Hawaii.
Section 1261.3 of the existing regulation sets forth “General provisions” addressing board size and composition, length of term of directorships, annual elections, location of members for purposes of voting to fill member directorships, and the calculation of dates for purposes of determining compliance with deadlines required under the regulation. The proposed rule would remove the material on board size and composition in existing § 1261.3(a), the substance of which would be consolidated with related material on the designation of directorships in revised § 1261.4. The remaining paragraphs of § 1261.3 would be redesignated as appropriate and revised to remove or replace statutory references and streamline language for greater clarity and consistency. No change in substantive meaning is intended.
Section 1261.4 of the existing regulation addresses the annual “designation of directorships” process which results in the issuance of an order by the FHFA Director designating the size and composition of each Bank's board of directors for the following calendar year. The proposed rule would make various revisions to this section to consolidate provisions relating to the designation of directorships and to provide clarity regarding the methods through which FHFA determines the appropriate size and composition for each Bank's board and the requirements and procedures associated with the process. The proposed rule would also change the heading of § 1261.4 to “Annual designation of directorships” to reflect that the process is annual and that the Director designates not only member directorships, but also independent directorships for each Bank. The proposed revisions are not intended to change any current procedure or requirement.
The proposed rule would redesignate existing § 1261.4(a) as § 1261.4(b) and would add a new paragraph (a) providing that the Director will annually issue a written order designating for each Bank's board of directors for the following calendar year: (1) the total number of member directorships and their allocation among the voting States of the Bank's district; (2) the total number of independent directorships; and (3) the directorships for which an election will be held for terms beginning on January 1 of the following year, and the length of those terms.
Redesignated § 1261.4(b), requiring each Bank to submit a capital stock report to provide data for the allocation of member directorships and the determination of the number of votes each member may cast in the election, would remain substantively unchanged. For clarity, however, the sentence providing that “[i]f a Bank has issued more than one class of stock, it shall report the total shares of stock of all classes required to be held by members” would be revised to refer to “the total shares of
Paragraphs (b) and (c) of existing § 1261.4—entitled “Designation of member directorships” and “Allocation of directorships,” respectively—would be replaced by a new § 1261.4(c), which is intended to describe the process through which FHFA sets the total number of member directorships for each Bank and allocates them among the respective States of the Bank district.
Proposed paragraph (c)(1) would describe the first part of the statutorily required process, whereby member directorships are allocated among the States of each district based on the relative amount of Bank stock the members in each respective state were required to hold as of December 31 of the preceding year. As described in the proposed regulatory text, FHFA begins by choosing for each Bank a “base” number of member directorships to allocate among the states of the district. For practical reasons, the base number is typically eight,
Proposed § 1261.4(c)(1)(i) provides that FHFA will then use the “method of equal proportions” to allocate those member directorships among the voting States of the Bank district, based on the ratio of the number of shares of Bank stock required to be held by the members in each State to the number of shares required to be held by all members of the Bank. As required by statute,
In practice, when allocating member directorships for a Bank, FHFA first allocates one member directorship to each State in the Bank district to fulfill the minimum statutory requirement. Any remaining seats are then allocated using the “method of equal proportions,” which is the method that has been used to apportion seats in the United States House of Representatives since 1941.
Under the method of equal proportions, after each state has been allocated one seat, a priority value is calculated for each potential subsequent seat a state could be allocated—out to the maximum of six member directorships that may be allocated to each State—based on the following formula:
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The remaining seats are then allocated sequentially among the states of the district based on those priority values.
For example, if FHFA were to allocate eight member directorships among the states of a Bank district including three states having required member stock holdings of 20 million, 12.5 million, and 5 million shares, respectively, the priority values for potential seats #2 through #6 for each state would be as follows:
This would result in a priority order for the allocation of seats #2 through #6 for each state as follows:
Assuming a base number of eight total member directorships are to be allocated, there would be five remaining seats after each state has been allocated one seat. Based on the priority order reflected in the table above, State A would be allocated the first of the remaining seats, State B the second, State A the third and fourth, and State B the fifth, resulting in an overall allocation of four seats to State A, three seats to State B, and one seat to State C.
The Bank Act generally requires that FHFA allocate member directorships based on the ratio of required stock holdings. However, the statute also requires that, whenever the number of member directorships representing the members located in any State would not be at least equal to the total number representing that State on December 31, 1960, FHFA “shall add to the board of directors” such additional seats as are necessary to bring the total number being allocated to that State up to the 1960 total (the “grandfather provision”).
Existing § 1261.4(c) implements the grandfather provision through a bare cross-reference to the statute. In contrast, proposed § 1261.4(c)(2) would expressly provide that, where the stock-based allocation has resulted in a state being allocated fewer member directorships than shown for that State in § 1261.15, FHFA will allocate it as many additional member directorships as are necessary to increase the total number of member directorships for that State to the number shown on the table in that section. Only those states that have been “grandfathered” at more than one member directorship appear on the table in § 1261.15. Proposed § 1261.4(c)(2) would deem the minimum number of member directorships required to fulfill the “grandfather provision” to be one for those States not appearing on the table. In the example above, if all three States had been represented by three member directorships in 1960, FHFA would need to allocate two additional seats to State C, beyond the one earned in the stock-based allocations, increasing the total number of member directorships for the Bank to 10.
Proposed § 1261.4(d) would state that, after the total number of member directorships and their allocation have been determined for each Bank, FHFA will set the number of independent directorships at a number within the statutorily prescribed range of at least 40 percent, but less than 50 percent, of total directorships. In the example above, with 10 member directorships, FHFA could choose to designate seven, eight, or nine independent directorships (with independent directors representing 41 percent, 44 percent, or 47 percent of boards comprising 17, 18, or 19 directors). That decision is based on a variety of general and Bank-specific considerations, including the number of independent directorships designated for the current year.
Under the designation of directorships process, year-to-year changes in the relative level of required stock holdings for the members in the various States of a Bank district may result in the redesignation of one or more member directorships from one state to another. In some cases, the interaction of changes in the relative level of required stockholdings with the requirements of the grandfather provision may result in the addition of a new member directorship to a Bank's board. This could also lead to the addition of a new independent directorship if needed to maintain the required ratio of independent directorships to total directorships. In other instances, FHFA may simply choose to add a new independent directorship for policy reasons or at the request of a Bank's board.
Proposed § 1261.4(e) would address these redesignations and additions. Proposed paragraph (e)(1) (like existing § 1261.4(e)) would make clear that the member directorship representing the state that is losing a seat terminates as of December 31 of the year the designation of directorships order is issued and a new directorship is created as of January 1 of the following year to represent the state that is gaining a seat. The Bank would need to hold an election to fill the newly added member directorship during the year the designation of directorships order is issued, with the duly elected director to begin serving on the following January 1. The individual occupying the member directorship being terminated would cease to be a director after December 31 of the current year.
As does the existing regulation, proposed paragraph (e)(1) would further provide that the length of the initial term of the newly added member directorship shall be adjusted to equal the remaining term of the directorship being terminated, to ensure that the terms of the Bank's directorships remain staggered with approximately one quarter of the terms expiring each year, as required by statute.
Finally, proposed § 1261.4(f) would provide that the board of directors of each Bank shall determine the number of public interest independent directorships to be included among its designated independent directorships for the following year, a requirement that appears in § 1261.3(a) of the existing regulation. Under the proposed provision, a Bank would now also be expressly permitted to change the number of public interest independent directorships during the year (a practice which FHFA has permitted). As required by statute, a Bank would at all times need to have at least two such directorships.
The proposed rule would make numerous revisions to § 1261.5 of the existing regulation, which governs director eligibility, including qualifications for independent directors and term limits. These revisions are intended to consolidate provisions relating to director eligibility, strengthen eligibility requirements to encourage strong corporate governance, fill in gaps in the coverage of the existing regulation, and provide greater overall clarity than the existing regulation.
The proposed rule would make clarifying revisions to § 1261.5(a), which implements the statutory eligibility requirements for member directors, with no intended change to the substance. The heading to the provision would be revised to make clear (as does the existing text) that the eligibility requirements apply not just to sitting directors, but to nominees as well. Proposed paragraph (a)(1) would provide that each member director, and each nominee for a member directorship must be: (i) a citizen of the United States; and (ii) an officer or director of a member institution that is located in the voting State of the Bank district to which the directorship being occupied, sought, or filled has been allocated under proposed § 1261.4(c). As required by statute, paragraph (a)(1)(ii) would make clear that the member institution with which any member director or member directorship nominee is associated must meet all minimum capital requirements established by its appropriate Federal banking agency or appropriate State regulator. As does existing § 1261.5(a), paragraph (a)(2) would provide that the institution with which the director is associated must have been a member as of the “record date” (that is, December 31 of the year preceding the election) or, in the case of a director chosen by a Bank's board of directors to fill a vacancy, as of the time the board acts.
Existing § 1261.5(b) provides that each member director, and each nominee to a member directorship, must be an officer or director of a member located in the State to which the Director has allocated the directorship. Because its substance would be incorporated into proposed § 1261.5(a), the proposed rule would delete this provision.
Existing § 1261.5(c), entitled “Eligibility requirements for independent directors,” provides that each independent director and each nominee to an independent directorship shall be: (1) a citizen of the United States; and (2) a bona fide resident of the district in which the Bank is located. The Bank Act actually sets forth a total of four requirements each independent director must meet to be eligible to serve. In addition to the two covered by existing § 1261.5(c), an independent director may not serve as an officer of any Bank or as a director, officer, or employee of any member of a Bank, or of any recipient of advances from a Bank
The proposed rule would redesignate § 1261.5(c) as § 1261.5(b) and would expand the list of eligibility requirements set forth therein to include the independence and qualifications requirements. This proposed revision is intended to provide clarity by itemizing in one provision all of the requirements an individual must meet to be eligible for nomination and service as an independent director. In the case of the
The proposed rule would add a new paragraph (c) to § 1261.5 to address the required professional qualifications for both regular and public interest independent directors. Under the existing regulation, both sets of required qualifications are fully or partially stated in multiple provisions, which FHFA believes is a potential source of confusion.
The existing regulation, at § 1261.7(e), provides that each independent director that is not a public interest independent director (
These additions were developed both from input on critical areas of expertise that should be covered by a Bank's board of directors sought and received during the FHLBank System at 100 initiative and from understanding of the Banks' corporate governance needs developed through FHFA's general supervisory efforts. Their inclusion is intended to encourage each Bank's board to take active steps to ensure it has sufficient knowledge and expertise regarding recent business developments in housing finance and new and emerging risks and complex problems that could affect Bank operations. To allow FHFA and the Banks to respond more rapidly to evolving conditions and risks going forward, the list of qualifying knowledge or expertise for regular independent directors in proposed § 1261.5(c)(1) would also include “such other areas as the Director shall determine,” thus allowing FHFA to add other areas to the list, as appropriate, without going through the rulemaking process. Such additions would be conveyed through guidance.
FHFA requests comment on whether these areas of qualifying experience are appropriate and whether other specific areas should be included.
Proposed § 1261.5(c)(2) would implement the statutory requirement that each public interest independent director qualify by having “more than four years of experience representing consumer or community interests in banking services, credit needs, housing, or consumer financial protection.” The application of this requirement has been a frequent subject of inquiry and discussion between FHFA and Bank boards of directors and staff, potential directors, and trade groups since it was adopted as part of the Housing and Economic Recovery Act of 2008 (HERA).
The new provision would stipulate that, for purposes of determining compliance with the public interest qualification requirements, “representing” means advocating for, or otherwise acting primarily on behalf of or for the direct benefit of, consumers or the community in one of the four enumerated areas. Those who have not advocated for or acted on behalf of or for the direct benefit of consumers and the community in any material capacity cannot reasonably be viewed as representatives of those constituencies. Industry-side interests are more than adequately represented among the Banks' member and regular independent directors. Among other things, FHFA believes that experience related to fair housing, fair lending, consumer protection, affordable housing, community development, and diversity and inclusion that otherwise meets the requirements of the statute and regulation would be qualifying experience for public interest independent directors.
Proposed § 1261.5(c)(2) would also provide that qualifying experience in one of the four enumerated areas may have been acquired in professional, public service, or significant volunteer positions, so long as the work done was substantial in terms of time commitment and responsibility and that the experience was accrued from activities personally undertaken by the director or nominee, as opposed to being attributed based solely on the activities of organizations with which the person was associated.
Prior to 2008, the Bank Act required the appointment of at least two “community interest” directors at each Bank “chosen from organizations with more than a 2-year history of representing consumer or community interests on banking services, credit needs, housing, or financial consumer protections.” In 2008, HERA substituted the current language focusing on the personal experience of the individual in representing community or consumer interests, as opposed to the mission of the organization with which they were affiliated. The additional clarifying regulatory text is intended to ensure that nominees meet the statutory requirement of personal experience and have the kind of knowledge, experience, and perspective necessary to oversee a Bank and guide it in the safe and sound fulfillment of its public policy mission. Experience gained through full-time paid employment is almost always qualifying. FHFA has generally viewed experience with nonprofits, community
Both regular and public interest independent directors need to have the capacity to challenge Bank management on important issues, including the sufficiency and effectiveness of its mission programs. While Bank boards can benefit from a wide variety of viewpoints, FHFA has observed that the most effective directors possess knowledge and experience that are relevant to the business, programs, and mission of the Bank and that provide a basis for understanding the actual and potential impact of the Bank's activities on its members and on communities within the Bank's district. FHFA also believes that service in full-time executive, management, or other senior paid professional positions generally provides the most valuable experience for a Bank director. Proposed § 1261.5(c)(3) would require that Banks' boards prioritize those characteristics when soliciting and choosing Bank independent directorship nominees.
With respect to length of board service, the Bank Act limits Bank directors to “three consecutive full terms” and requires former directors who have termed out to sit out for a minimum of two years before seeking to serve again as a Bank director.
Proposed § 1261.5(d) (which would be re-titled “Term limits”) would continue to address director term limits using the principles reflected in the existing regulation. The proposed rule, however, would remove from the regulatory text the post-HERA transition material, which is no longer needed because all directors who were serving at the time of the statutory change have now termed out, and otherwise streamline the language and structure of the provision. Consistent with other revisions, the proposed rule would replace cross-references to the Bank Act with either an express substantive statement or a cross-reference to a substantive regulatory provision. As proposed, § 1261.5(d) would continue to provide that truncated terms do not count as full terms, but would make clear that two full terms on either side of a truncated term count as consecutive full terms; that is, while a truncated term may not count in the term limit calculation, it cannot re-set the term limit calculation back to zero.
Existing § 1261.5(e) explains that a director shall become ineligible to remain in office if, during their incumbency, the directorship to which they have been elected is eliminated. The proposed rule would add to this provision a cross-reference to the section of the proposed rule (§ 1261.4, governing the designation of directorships) under which a seat could be eliminated. As under the existing regulation, proposed § 1261.5(e) would continue to provide that the incumbent director shall become ineligible after the close of business on December 31 of the year in which the directorship is eliminated.
Section 1261.6 of the existing regulation, governing the determination of members votes, would not be changed by the proposed rule.
Section 1261.7 of the existing regulation governs nominations for member and independent directorships, including election announcements, the submission and acceptance of member directorship nominations, independent directorship qualifications and nominations, and eligibility verification. The proposed rule would make numerous textual and structural revisions to § 1261.7, most of which are non-substantive and intended only to provide clarity.
Existing § 1261.7(a) requires that “[w]ithin a reasonable time in advance of an election,” a Bank provide notice to each member in its district of the commencement of the election process to include: (1) the number of member directorships designated for each voting State and the total number of independent directorships; (2) the name of, and pertinent information about, each incumbent Bank director; (3) a brief statement of the skills and experience the Bank believes are most likely to add strength to its board; (4) an attachment identifying every member, its voting state, and the number of votes it is eligible to cast; and (5) a certificate to be used by member institutions to make any desired nominations.
The proposed rule would make three substantive revisions to the list of information to be included in or with the election announcement, each of which FHFA believes is consistent with the current practice of most Banks. First, the proposed rule would require that the statement regarding the number of member and independent directorships include the number of independent directorships designated by the Bank as public interest independent directorships for the following calendar year. Second, the proposed rule would require that the election notice identify the member directorships, regular independent directorships, and public interest independent directorships, respectively, for which the Bank will be holding an election in the current year. Finally, while the existing regulation makes inclusion of a brief statement of sought-after skills and experience contingent on the Bank having carried out the assessment of board skills and experience permitted under existing § 1261.9, the proposed rule would make the inclusion of the statement mandatory because, as discussed below, the annual assessment would also be made mandatory. In addition to these substantive revisions, the proposed rule would also move a misplaced heading and renumber the paragraphs to accommodate the additional material.
The proposed rule would combine into proposed § 1261.7(b) material that appears in existing paragraphs (b) and (c) governing member directorship nominations by members and the acceptance of such nominations by a Bank's board. The one substantive change would be the removal in two places of the requirement that election and nomination records be retained for at least two years after the date of the election. These provisions would be replaced by a new § 1261.7(f), requiring
In the existing regulation, § 1261.7(d) and (e) address independent director nominations and independent director required qualifications, respectively. The proposed rule would remove § 1261.7(e) in its entirety because, under the revised regulation, the required qualifications for regular and public interest independent directors would be stated in only one provision—proposed § 1261.5(c). Further duplicative statements regarding the required qualifications would also be removed from existing § 1261.7(d), which would be redesignated as § 1261.7(c). The proposed rule would also remove from the redesignated provision language indicating that an interested individual may not submit, and a Bank may not consider, an Independent Director Application Form that does not demonstrate that the applicant is both eligible and qualified to serve; these restrictions are not consistent with the intended use of the completed Form as a means through which eligibility may be determined. Instead, the proposed rule would include in proposed § 1261.7(d)(3), discussed below, a new express provision prohibiting a Bank's board from nominating any individual for an independent directorship or accepting the nomination of any individual for a member directorship if it has not concluded based on the appropriate completed Form and supplementary materials that the individual is eligible to serve.
The proposed rule would also remove the language in existing § 1261.7(d)(3) requiring that each Bank determine and announce to its members the number of public interest independent directorships to be included among its authorized independent directorships for the following year, because this requirement would be covered by proposed § 1261.4(f). The proposed rule would also remove language requiring each Bank to retain all completed Independent Director Application Forms for at least two years after the date of the election because, as mentioned, the record retention requirements for all records related to the nomination and election of directors would now be governed by proposed § 1261.7(f). The remaining changes to the existing provisions on the nomination of independent directors would be non-substantive textual and organizational revisions (including the division of different topical material into paragraphs) for better readability.
Existing § 1261.7(f) addresses the steps each Bank must take to verify the eligibility of its member and independent director nominees. It requires each Bank to use the information provided on the Member Director Eligibility Certification Form or the Independent Director Application Form, as applicable, to verify that each nominee meets the relevant eligibility requirements and, for independent directorship nominees, possesses the required qualifications. The provision further requires that, before announcing any independent director nominee, the Bank deliver to FHFA for review a copy of the proposed nominee's executed Independent Director Application Form. Although the existing regulation does not generally require FHFA approval of Bank independent directorship nominees, existing § 1261.7(f) requires a Bank's board to consider any comments on a proposed nominee provided by FHFA within two weeks of FHFA's receipt of the Application Form for that individual.
The proposed rule would redesignate § 1261.7(f) as § 1261.7(d) and, for clarity, would break the existing text into topical paragraphs and revise references to the member and independent director eligibility requirements to add cross-references to the applicable substantive provisions of the revised regulation (proposed § 1261.5(a) and (b) respectively). The proposed rule would also add a new paragraph (d)(3) expressly prohibiting a Bank's board from nominating any individual for an independent directorship or including on the ballot any individual nominated for a member directorship except where it has concluded that the individual meets the applicable eligibility requirements and is not term limited. Although this concept is implicit in the existing regulation, FHFA believes it is preferable for the regulation to set forth a clear statement to this effect.
The proposed rule would add a new § 1261.7(e), which would prohibit a Bank's board from nominating any person for an independent directorship or including on the election ballot any individual nominated for a member directorship without having first conducted a thorough background check and concluding that the individual is fit to serve in a fiduciary role with the Bank. The proposed rule would require each Bank to include a discussion of the results of the background check for each independent directorship nominee when submitting its Independent Director Application Forms to FHFA, including any potentially concerning information that was revealed and how the Bank's concerns were allayed. In recent years, the Banks have typically conducted background checks on independent directorship nominees and addressed the results of those checks in their submissions to FHFA; the proposed rule would codify this practice. The rule would also require each Bank to conduct a background check on nominees for a member directorship, as the risks background checks are designed to mitigate are no less of a concern for member directors than they are for independent directors.
Although the Bank Act clearly vests in a Bank's members the authority to nominate and elect their own representatives on a Bank's board, the continued safe and sound operation of every Bank depends upon the reservation of some mechanism for identifying and addressing potential risks to the institution that could be posed by its own directors. Bank directors not only have a unique opportunity to influence a Bank's course of action, they also are privy to the most sensitive inside information, including confidential supervisory information (CSI), about the operations, finances, and personnel of the Bank. It is critical that a Bank's board retain the ability to police itself and prevent individuals whose history of criminality, malfeasance, poor judgment, or other concerning behavior indicates they are not fit to fulfill a fiduciary role with the Bank from being or remaining seated as directors. Conducting a background investigation in support of a director's nomination, whether for a member or independent directorship, is a common-sense way to prevent problems before they start.
In July 2020, FHFA's Division of Bank Regulation issued a Supervisory Letter discussing the importance of conducting a thorough background check on any individual a Bank's board intends to nominate for an independent directorship. The guidance given in the letter remains applicable to background checks to be carried out under proposed § 1261.7(e).
Without a background investigation, a Bank could not reasonably determine whether a potential nominee meets its own standards, including codes of conduct, codes of ethics, conflicts of interest policies, and anti-fraud policies. A background check also gives a Bank an opportunity to verify that eligibility requirements have been met and that the employment and educational history shown on nominee's Application Forms is accurate. On occasion, a background check may reveal information that calls into question the validity of the responses on the Application Form, or the fitness of the nominee to serve in a fiduciary role with a large financial institution like the Bank. Examples that may give rise to concerns about the latter include a criminal record, past bankruptcy, or failure to pay taxes. A Bank should evaluate the circumstances surrounding each issue of concern and take appropriate steps to determine whether the risk can be satisfactorily mitigated or whether the board should decline to the nominate an individual for an independent directorship or post a member-nominated individual on the ballot for a member directorship. In either case, the board should thoroughly document its decision-making process.
Finally, the proposed rule would add a new § 1261.7(f), which would require each Bank to retain all information received under proposed § 1261.7 for at least seven years after the date of the election in question and, in the case of any information about a specific director, for at least seven years after that director leaves the board. Each Bank would be required to maintain those records pursuant to a duly adopted policy. As mentioned above, existing § 1261.7 includes a number of separate provisions requiring that a Bank retain various documents for at least two years after an election.
Where information involves an individual that was elected to the board, proposed § 1261.7(f) would require the information to be retained for the duration of that director's service and then for at least seven years after that director leaves the board. Issues regarding sitting Bank directors arise from time to time that call for reference to information or materials submitted years earlier as part of the nomination process and these materials should remain accessible until well after the directors to which they pertain have left the board.
Section 1261.8 of the existing regulation governs the various aspects of the Bank director election process. The proposed rule would make several substantive revisions to this section, including revisions regarding the required contents of a Bank's director election ballot, the authority of a Bank's board to decline to seat a director-elect for cause, and the length of time ballots need to be retained.
Existing § 1261.8(b) provides that if a Bank has conducted an annual assessment of the skills and experience possessed by the board permitted by § 1261.9 and has included the results of the assessment as part of the election notice, it may include with each ballot a statement of the results of that assessment or any subsequent assessment. As discussed below, the proposed rule would revise § 1261.9 to make the now optional assessment mandatory for each Bank. The proposed rule would also require that the results of that assessment be included as part of the election notice required under § 1261.7(a).
Consistent with those changes, the proposed rule would delete existing § 1261.8(b) and revise § 1261.8(a) to require that a Bank include on the ballot a statement of the results of the assessment, including an explanation for any differences between the statement on the ballot and that appearing on the earlier election notice. Revised § 1261.8(a) would also require that each Bank include on its election ballot a brief description of the skills and experience of each nominee for a member directorship. This is permitted but not required under the existing regulation, which does require that that qualifying areas of expertise for independent directorship nominees be noted on the ballot (a requirement that would be retained under the proposed rule). To accommodate these substantive revisions, the provisions within § 1261.8(a) would be redesignated as paragraphs (a)(1) through (6).
Given the ever changing business and societal landscape within which the Banks operate, it is prudent to look beyond the four to six regular independent directors they are likely to have on their respective boards and find ways to promote the nomination and election to member directorships of individuals that have the experience to cover some of the critical areas of board expertise. For example, if the Chief Technology Officer (CTO) of a Bank member were to be elected as a member director, that individual would likely be able to provide the board with necessary expertise in information technology and security and possibly in other critical areas enumerated in proposed § 1261.5(c).
Even if the nomination and election of member directors is largely within the control of Bank members in the respective voting States of the district, the required statement of needed skills and expertise on the election notice and ballot and the required inclusion on the ballot of a statement on the knowledge and skills possessed by individual member directorship nominees would encourage Bank members to take into account the expertise needed to allow the board to most effectively supervise the operations of the Bank. The coverage of vital areas of expertise through member directors, where possible, would allow the Bank to seek independent directors to cover some of the areas of expertise that senior officers and directors of Bank member institutions would be less likely to have.
Existing § 1261.8(f)(4) provides that a “[b]ank shall not declare elected a nominee that it has reason to know is ineligible to serve, nor shall it seat a director-elect that it has reason to know is ineligible to serve.” This provision, which would be redesignated as § 1261.8(e)(4), would be revised also to prohibit a Bank's board from declaring elected a nominee or seating any director-elect it has reason to know is “unfit” to serve. As discussed above with respect to the background check required under § 1261.7(e), a Bank's board must retain the ability to address the directorship status of individuals
Because § 1261.8(b) would be eliminated, the proposed rule would redesignate existing paragraphs (c) though (h) as paragraphs (b) through (g). It would also make multiple non-substantive changes throughout the section by adding cross-references to appropriate provisions of the revised regulation, removing redundant statements of the required qualifications for independent directors, and making other minor changes to nomenclature and phrasing.
Existing § 1261.9 addresses actions affecting director elections. Paragraph (a) authorizes each Bank to “conduct an annual assessment of the skills and experience possessed by its board of directors as a whole and [to] determine whether the capabilities of the board would be enhanced through the addition of individuals with particular skills and experience.” The proposed rule would make this annual assessment mandatory and require that the results of the assessment be reflected in the election announcement under proposed § 1261.7(a) and the election ballot under proposed § 1261.8(a), as discussed above. It would also require that the assessment be undertaken “pursuant to policies adopted by the board.”
To effectively oversee a Bank's operations, its board should be balanced and includes a diversity of experience and perspectives across member and independent directors. Periodic assessment of the knowledge and skills possessed by sitting board directors and identification of areas that require better coverage is critical to ensuring that a Bank's board of directors is able to effectively oversee and guide the operations of the Bank.
FHFA requests comment on whether requiring that such an assessment be completed on a less frequent cadence than annually would compromise a Bank's ability to plan effectively.
Aside from this, to plan effectively, Bank boards of directors should develop and maintain a director's service timeline to track all directors' terms from beginning to end; develop and annually review and update a director position description for member directors, regular independent directors, and public interest independent directors; and focus recruiting on addressing gaps in knowledge and skills identified by the assessment. Insufficient board succession planning can lead to a lack of experience and expertise needed to effectively oversee a Bank's operations. For example, if several long-tenured directors were to vacate a Bank's board simultaneously, the board may face a critical loss of institutional knowledge. Without appropriate succession planning, a Bank's board may find itself lacking knowledge, skills, and abilities that are critical to providing effective strategic direction and oversight.
The remaining revisions to § 1261.9(a) would be non-substantive clarifying revisions to change the heading from the cryptic “Banks” to the more descriptive “Annual assessment of skills and experience,” add cross-references to appropriate provisions of the revised regulation, remove redundant statements of the required qualifications for independent directors, and make other minor changes to nomenclature and phrasing. Existing § 1261.9(b) and (c) would remain unchanged.
Section 1261.10 is currently entitled “Independent director conflict of interests.” Because the focus of the section is to elaborate on the “independence” requirements for independent directors, the proposed rule would revise the heading of § 1261.10 to read “Independent director independence.” Conflicts-of-interest policies for all Bank directors are covered separately from independence requirements, in § 1261.11.
Existing § 1261.10(a) prohibits any independent director from serving as an officer, employee, or director of any member of the Bank, or of any recipient of advances from the Bank, or as an officer of any Bank, during that director's term of service on the Bank's board. The proposed rule would redesignate paragraph (a) as paragraph (a)(1) and revise the provision to prohibit an independent director from serving not only as an officer, but also as any kind employee, of another Bank. Permitting even a non-executive employee of one Bank to serve on the board of another Bank could not only compromise the independence of the board on which the individual sits, but could also give rise to internal control concerns for the Bank employing the individual.
The proposed rule would further revise newly-redesignated § 1261.10(a)(1) to prohibit not just the seating, but also the nomination of individuals with any of the impermissible connections. Under the existing regulation, FHFA has permitted Banks to nominate individuals with a prohibited connection for an independent directorship, provided the nominee agrees to relinquish the impermissible position prior to being seated on the board. Extending the independence requirement to the nomination phase creates greater separation between a director's term of service and pursuit of possible conflicting interests and helps ensure that anyone wishing to serve as an independent director is committed to being a true outside voice.
The proposed rule would also create a new paragraph (a)(2), which would define the term “advances” for purposes of applying the prohibition against the seating or nomination of any officer, employee, or director of any “recipient of advances” from the Bank. As proposed, the term would include any loan from a Bank to the recipient, regardless of form or nomenclature, except for debt securities traded in the public capital markets. This definition is intended to prevent Banks and housing associates such as state housing finance agencies (SHFAs) from skirting the independence requirements by creating bespoke lending terms for the housing associate by which an independent director or nominee is employed in an arrangement called something other than an “advance.” At the same time, the definition would allow Banks to support their housing associates through the purchase of debt securities on the open market on the same terms and conditions as are applicable to other market participants even where an employee of the housing associate is serving as an independent director. Providing clarity regarding the meaning of the word “advances” in this context was suggested in the Bank System's joint letter in response to FHFA's Spring 2023 Notice of Regulatory Review. FHFA requests comment on whether the proposed definition adequately addresses the relevant legal and policy concerns or whether a different definition would be more appropriate.
The proposed rule would make no revisions to existing § 1261.10(b).
Existing § 1261.10(c) provides that, for purposes of determining compliance with the independence requirements, a Bank shall attribute to the independent director any officer position, employee position, or directorship of the director's spouse. The proposed rule would further strengthen independence requirements by extending the attribution requirement to all “immediate family members” of the director or nominee. Existing § 1261.11(f) defines “immediate family member” to include a “parent, sibling, spouse, child, or dependent, or any relative sharing the same residence as the director” for purposes of the director conflicts-of-interest requirements; under the proposed rule, the same definition would apply for purposes of the independence provisions. The proposed change recognizes that director independence can be compromised through the activities and financial interests of close family members other than a spouse, seeks to prevent circumvention of the spirit of the independence requirement, and aligns the standards for the independence requirement with those of the conflicts-of-interest requirements.
In line with the extension of the independence requirements to nominees under proposed § 1261.10(a), the rule would also add a new paragraph (d) to § 1261.10 to require any former member director to wait at least two years after leaving a member directorship before returning to the board as an independent director (assuming all eligibility requirements are met for the position). The two-year requirement parallels the two-year requirement set forth in the statutory provision at 18 U.S.C. 207 that is the primary source of post-employment restrictions applicable to officers and employees of the executive branch of the Federal Government and the two year period during which former Bank directors who have termed out are prohibited from serving.
In § 1261.11, the proposed rule would revise the section heading to read “Conflicts of interest” instead of “Conflict of interests” and would make related conforming changes throughout the section. The only other changes to § 1261.11 would be to revise the definition of “financial interest” in paragraph (f) and to list definitions in alphabetical order.
Existing § 1261.11(b) requires a Bank director to disclose any “financial interests,” as well as those of any immediate family member or business associate, in any matter to be considered by the Bank's board of directors and in any other proposed or actual business matter involving the Bank and any other person or entity and to refrain from considering or voting on any issue in which the director, any immediate family member, or any business associate has any financial interest. For purposes of those requirements, existing § 1261.11(f) defines “financial interest” to mean “a direct or indirect financial interest in any activity, transaction, property, or relationship that involves receiving or providing something of monetary value, and includes, but is not limited to any right, contractual or otherwise, to the payment of money, whether contingent or fixed.” The provision further states that the term “does not include a deposit or savings account maintained with a member, nor does it include a loan or extension of credit obtained from a member in the normal course of business on terms that are available generally to the public.”
In its letter in response to FHFA's Spring 2023 Notice of Regulatory Review, the Bank System commented that the list of exclusions in the definition of “financial interest” found in existing § 1261.11 is too narrow in scope and should be broadened to reflect other financial services products obtained under similar circumstances. In response to the comment, FHFA is proposing to revise the exclusion from the definition of “financial interest” in § 1261.11(f) to refer to “a deposit or savings account, loan or extension of credit, or other accounts and products obtained in the normal course of business on non-preferential terms generally available to the public from a member institution or from a non-member counterparty to the Bank on whose board the director sits.”
In the same letter, the Bank System recommended that FHFA harmonize the standard for what constitutes a conflict under FHFA's Affordable Housing Program (AHP) regulation
The proposed rule would not make any other revisions to § 1261.11.
The proposed rule would make only one change to § 1261.12, which establishes reporting requirements for Bank directors. Existing § 1261.12(b) provides that at any time a director believes or has reason to believe that they no longer meet the eligibility requirements set forth in the Bank Act or the regulation, the director shall promptly notify the Bank and FHFA in writing. The proposed rule would eliminate the requirement that a director submit the notification to FHFA, requiring only that it be submitted to the Bank. The last sentence of § 1261.12(b) requires a Bank to promptly notify FHFA in writing any time it believes or has reason to believe that any director no longer meets the eligibility requirements, and this has typically been the method through which FHFA has been informed of director ineligibility. Director eligibility is an issue for a Bank to monitor and address in the first instance and there is no reason for an individual director to contact FHFA directly about eligibility issues.
Existing § 1261.13 addresses the ineligibility of Bank directors. It provides that upon a determination by FHFA or a Bank that any director of the Bank no longer satisfies the statutory or regulatory eligibility requirements, or has failed to comply with the reporting requirements, the directorship shall immediately become vacant. The proposed rule would retain this provision without revision, other than to redesignate it as paragraph (a), with the heading “Ineligibility.”
The proposed rule would also create a new paragraph (b) to establish the authority of a Bank's board to remove directors for good cause, which may be based upon: (i) a material violation of the Bank's code of ethics or other applicable Bank policy; (ii) a material violation of the Bank Act, FHFA regulations or other criminal or civil law; (iii) a determination by the board that continuation in office of such director would be materially harmful to the Bank; (iv) conduct, or a mental or physical condition, that raises substantial questions concerning the director's ability to fulfill their duties and obligations; or (v) a determination under proposed § 1261.22(b)(3) (discussed below, requiring that the board assess director performance annually) that the director's continuous poor performance or lack of participation is compromising the board's ability to adequately oversee the operations of the Bank. Under the proposed rule, a Bank would also be required to promptly notify FHFA in writing of any pending or final removal actions taken pursuant to this authority.
As stated above with respect to the required background check for directorship nominees, the safe and sound operation of every Bank depends, in part, upon the existence of some mechanism for identifying and addressing potential risks to a Bank that could be posed by its own directors. It is important that a Bank's board have clear authority to address risks posed by sitting directors, as well as potential risks posed by those seeking to become directors. FHFA believes that the prescribed list of “good cause” bases for removal, as well as the requirements that two-thirds of disinterested Bank directors vote to remove and that a Bank carry out any actions pursuant to policies adopted by the Bank's board should minimize the chance that any removal authority would be abused or applied in anything other than an objective fashion in the best interests of the Bank.
Some Banks already have a policy providing for the good cause removal of directors, which FHFA believes is appropriate. FHFA believes it is important to make clear that each Bank's board retains this limited authority and requests comment on whether it would be appropriate to require each Bank to adopt policies on good cause removal. The Agency also requests comment on whether any factors should be added or eliminated from the list of “good cause” bases for removal and on whether the revised regulation should require separate votes by member and independent directors or something other than a two-thirds vote for removal.
Section 1261.14 of the existing regulation establishes the requirements and procedures for the filling of vacant Bank directorships by the Bank's board of directors. The proposed rule would make numerous clarifying edits to this section.
Existing § 1261.14(a), entitled “Filling of unexpired terms,” requires that, when a directorship vacancy occurs, the Bank's board elect an individual to complete the unexpired term of office of the vacant directorship. The election is determined by a majority vote of the remaining Bank directors sitting as a board, regardless of whether the remaining Bank directors constitute a quorum.
While retaining the same basic approach, the proposed rule would restate the standards for determining who is eligible to fill a particular vacancy and expressly allow Banks some flexibility in filling vacant independent directorships. The proposed rule would also reconfigure existing paragraph (a)(1) into the introductory paragraph to § 1261.14(a) and redesignate the succeeding paragraphs accordingly.
With respect to determining who is an eligible successor to a director that has left the board, the existing regulation provides that the board “shall elect only an individual who satisfies all the eligibility requirements in the Bank Act and in this subpart that applied to his or her predecessor and, for independent directorships, also satisfies any of the qualifications in the Bank Act or this subpart.” The proposed rule would delete this language and state, simply, in § 1261.14(a)(2) that a Bank's board must: (i) fill a vacant member directorship only with an individual who meets the member director eligibility requirements set forth in proposed § 1261.5(a) (including by being an officer or director of a member located in the voting state to which the vacant member directorship is allocated); and (ii) fill a vacant independent directorship only with an individual who meets the eligibility requirements for independent directors set forth in proposed § 1261.5(b).
By statute, a Bank's board must at all times have at least two seats designated as public interest independent directorships. If one of those seats becomes vacant, it should be filled as expeditiously as possible. Proposed § 1261.14(a)(3) would provide more express flexibility in filling a vacant public interest independent directorship than the existing regulation by permitting a Bank's board either to: (i) elect an individual who is qualified under § 1261.5(c)(2) to serve as a public interest independent director to fill the vacancy; or (ii) elect to redesignate as a public interest independent director a sitting regular independent director who is qualified under § 1261.5(c)(2) to serve as a public interest independent director. In the latter case, the board would elect another individual who is qualified under § 1261.5(c)(1) to serve as a regular independent director to fill the resulting vacant regular independent directorship. The proposed change would also make it possible for the board of directors to redesignate a public interest independent director as a regular independent director. This may occur, for example, if the Bank already has more than two sitting public interest independent directors on its board. Although FHFA views such scenarios as permissible under the existing language and has permitted Banks to fill vacant public interest and regular independent directorships in that way, the proposed revisions would
Proposed § 1261.14(a)(4) would make clear that a Bank's board of directors must consult with the Bank's Advisory Council before considering any individual to fill a vacant independent directorship, just as is required under existing § 1261.7(d)(2) (proposed § 1261.7(c)(3)) when a board is considering independent directorship nominations during the regular election cycle.
Existing § 1261.14(b), entitled “Verifying eligibility,” requires that prior to any election to fill a board vacancy, the Bank obtain an executed Application or Certification Form (as appropriate) from each individual being considered to fill the vacancy and use the Forms to verify each individual's eligibility and qualifications. The existing provision also requires that the Bank deliver to FHFA for its review a copy of the Application Form of each individual being considered by the board.
The proposed rule would make several clarifications to § 1261.14(b), as well as breaking the revised material into four paragraphs for better readability. Proposed § 1261.14(b)(1) would continue to require that a Bank obtain the appropriate executed Application or Certification Form from each individual being considered to fill a vacancy and would clarify that this requirement applies even when a Bank's board is contemplating the redesignation of a sitting regular independent director as a public interest independent director or vice versa.
Proposed § 1261.14(b)(2) would require that a Bank conduct a background check on any individual being considered to fill a vacant directorship in the same manner as required for nominees in the regular election cycle under proposed § 1261.7(e).
Proposed § 1261.14(b)(3) would continue to require that a Bank's board deliver to FHFA for review the executed Independent Director Application Form for each individual being considered by the board to fill a vacant independent directorship and would clarify that (as is the case for its review of Independent Director Application Forms during the regular election cycle) FHFA has two weeks within which to provide comments to the Bank. The proposed provision would also require a Bank to provide a summary of the background check.
Finally, proposed § 1261.14(b)(4) would require a Bank to retain all information obtained under § 1261.14(b) for at least seven years after the date of the election in question and, in the case of any information about a specific director, for at least seven years after that director leaves the board. This parallels the retention requirements that would apply to materials received during the regular nomination and election cycles under §§ 1261.7(f) and 1261.8(e)(5).
Existing § 1261.14(c), governing notification, would remain unchanged under the proposed rule.
In the remainder of subpart B of part 1261, the proposed rule would make no changes to existing § 1261.15 (setting forth the table for “grandfathered” member directorships) and would remove § 1261.16, which contains no regulatory text and is designated as reserved.
In subpart C of the existing regulation, § 1261.21 addresses Bank and OF director compensation.
Current section 7(i)(1) of the Bank Act is identical to the provision regarding director compensation originally enacted as section 7(h) of the Bank Act in 1932, providing that “[e]ach bank may pay its directors reasonable compensation for the time required of them, and their necessary expenses, in the performance of their duties, in accordance with the resolutions adopted by such directors, subject to the approval of the board.”
When originally enacted in 1932, the Bank Act defined “board” as the Federal Home Loan Bank Board (FHLBB), the original regulator of the Bank System.
Original section 7(h) was redesignated as section 7(i) in 1935.
Reading “board” otherwise—as referring to a Bank's board of directors—leads to an implausible outcome. For example, the Bank's board of directors would then be statutorily required to act twice on the matter of directors' compensation—once by resolution and once by “approval”—or one of the two actions (resolution or approval) is unnecessary, because it would be redundant.
In 1989, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) established the Federal Housing Finance Board (Finance Board) to replace the FHLBB as the Bank System regulator and revised the Bank Act to replace all uses of “board” except in section 7 with “Board,” which FIRREA defined as the Finance Board.
Most recently, section 7(i) of the Bank Act was amended by HERA in 2008, when section 7(i)(2), which was added by the Gramm-Leach-Bliley Act (GLBA) in 1999 and imposed statutory limits on Bank director compensation, was repealed.
The legislative and regulatory history that substantiates FHFA's authority to approve Bank director compensation also affirms its authority to establish limits on “reasonable” compensation. As early as 1974, the Bank System regulator limited Bank director compensation by policy, exercising statutory authority identical to that in existing section 7(i)(1).
In common with earlier Bank System regulators, FHFA views its express statutory authority to approve Bank director compensation on the basis that it is reasonable as conferring authority to establish and provide to the Banks and OF an amount of director compensation that FHFA has determined would be reasonable. After administering the existing regulation for almost 15 years, FHFA believes it could be useful to provide the Banks and OF information on a level or amount of director compensation FHFA has determined to be reasonable, for consideration when each Bank and OF develops its directors' compensation policy.
The existing regulation requires each Bank and OF to submit its director compensation policy to FHFA for prior
Currently, if FHFA determines that proposed director compensation is not reasonable, it does not provide the relevant Bank or OF information on an alternative amount of compensation that FHFA would deem to be reasonable. Instead, the Bank or OF must submit a new proposal, subject to a new FHFA review. FHFA believes this process imposes a burden on the Banks and OF which could be reduced or avoided if FHFA provided notice of a maximum amount of annual director compensation FHFA has determined would be reasonable. Because FHFA has not previously exercised that authority, and for consistency with earlier System regulators which stated such authority in regulation, FHFA now believes it should state its authority to establish an amount of “reasonable” director compensation and to provide prior notice of that amount to the Banks and OF in regulation.
FHFA does not propose to establish a maximum amount or level of compensation in this regulatory action. In the future, FHFA may establish such an amount and may do so through a regulatory amendment or an order. FHFA may also provide guidance on an amount of Bank or OF director compensation it believes would be reasonable. In any case, FHFA expects any amount or level of “reasonable” compensation so established would reflect consideration factors such as those set forth above.
Likewise, FHFA does not propose to amend other provisions of existing subpart C that currently require each Bank and OF, when submitting its directors' compensation policy to FHFA, to include all studies or other supporting materials upon which the board relied in determining the level of compensation and expenses to pay to its directors; require FHFA to review the policy; and acknowledge FHFA's authority to disapprove the policy if FHFA determines that compensation and/or expenses to be paid to the directors are not reasonable.
Existing § 1261.22 requires that a Bank adopt a written compensation policy to “provide for the payment of reasonable compensation and expenses to the directors for the time required of them in performing their duties as directors.” The policy must “address the activities or functions for which director attendance or participation is necessary and which may be compensated, and . . . explain and justify the methodology used to determine the amount of compensation to be paid to the Bank director.” A Bank's compensation policy must require that compensation be reduced, as necessary, to reflect lesser attendance or performance at board or committee meetings during a given year.
The proposed rule would split paragraph (b), addressing minimum contents for Bank compensation plans, into two paragraphs. It would also add a third paragraph, § 1261.22(b)(3), requiring each Bank to establish, as part of its compensation policy, a fair and impartial process for annually evaluating individual director performance and participation, including, but not limited to, an assessment of whether each director: (i) demonstrated understanding of the Bank System; (ii) demonstrated knowledge of the Bank's policies and governance documents; (iii) demonstrated understanding of his or her legal and ethical responsibilities as a board member; (iv) made suggestions congruent with the Bank's mission, vision and values (even if divergent from majority opinion); and (v) acted in support of Board decisions, regardless of initial position. The proposed rule would also revise newly designated § 1261.22(b)(2) to stipulate that, as a consequence for poor performance or participation, a Bank's board may not only reduce a director's pay, but may also remove a director whose lack of performance or participation is compromising the board's ability to adequately oversee the operations of the Bank. This authority is also referenced in proposed § 1261.13, which addresses a board's authority to remove a director for good cause.
Bank directors hold positions of trust and are well compensated for their time and efforts. Each Bank needs all of its directors to devote the time, attention, and thought necessary to properly oversee the Bank and its operations. It is a matter of strong corporate governance for a Bank's board of directors to have an effective process for assessing the performance of board directors; this process can help improve individual and collective board performance.
The proposed rule would make multiple substantive changes to codify a waiver FHFA first issued in 2020 permitting Bank System board and committee meetings to be held in virtual formats.
Existing § 1261.24(a) requires that the board of directors of each Bank hold as many meetings each year as are necessary and appropriate to carry out its fiduciary duties regarding its oversight of the Bank, provided that each board must hold a minimum of six in-person meetings during each calendar year. A similar regulatory requirement applies to the board of directors of the OF.
The requirements for Bank and OF boards to hold at least six in-person meetings are prudential measures adopted by FHFA as an aid to promoting sound governance; they are not required by statute. In response to the COVID-19 pandemic, the FHFA Director issued a letter in March 2020 waiving the need to comply with the in-person board meeting regulatory requirements and with provisions of compensation policies tying compensation to attendance at in-person board and committee meetings. Over the course of the pandemic, the waiver was extended nine times and the last extension remains in effect without an expiration date.
Although the COVID-19 public health emergency has ended and FHFA prefers that Banks and OF hold in-person board meetings whenever possible, it also recognizes the benefits of allowing greater flexibility in fulfilling the Agency's regulatory requirement to hold at least six board meetings a year, particularly in times of emergency. The proposed revisions allowing boards to meet remotely at their discretion without seeking prior Agency approval could promote efficiency by minimizing delays in response to urgent issues and reducing travel costs and unexpected travel disruptions while fostering greater board participation for directors unable to attend in person. Additionally, the Bank System has already demonstrated its ability to use electronic platforms to engage in discourse and conduct business over the past four years. The proposed rule would permanently address the issue by codifying the substance of the existing waiver into regulation.
The principal effect of modifying the regulation would be to allow the Banks and OF an alternative means of holding a board meeting that would otherwise be held in person. The interests of the members and the public should be equally represented through either type of board meeting. Expectations for attendance and performance at meetings and the compensation methodology should be communicated to board members in the compensation policy, which, with supporting materials, must be submitted to the FHFA Director annually.
The proposed rule would revise existing § 1261.24(a) to remove the requirement that the six minimum board meetings be “in-person.” In conjunction with this, the proposed rule would revise § 1261.24(b) to provide that “[a] Bank's board of directors and its committees may conduct meetings in-person, through video conferencing or teleconferencing, or in a hybrid format, provided that all directors have an opportunity to communicate and have access to all written documents and presentations.” Any meeting of the type described can be counted as one of the minimum six meetings required under § 1261.24(a).
Proposed § 1261.24(b)(2) would state an expectation that that each Bank will “generally” hold board and committee meetings within the Bank district and would retain the prohibition against holding any board or committee meeting that is not within a “State” as defined by 12 CFR 1201.1. This definition includes “United States, American Samoa, the Commonwealth of the Northern Mariana Islands, the District of Columbia, Guam, Puerto Rico, or the United States Virgin Islands.”
The proposed rule would also add to § 1261.24 a new paragraph (c) to define “quorum” to mean “for purposes of meetings of a Bank's board of directors, . . . a majority of sitting directors, which must include a majority of sitting independent directors.” This provision would better ensure that independent voices are heard on critical Bank issues and provide consistency within the Bank System. The proposed provision parallels the definition of “quorum” as it is currently stated in the OF regulation at 12 CFR 1273.8(b).
Although each Bank is required under existing § 1261.11 to adopt a conflicts-of-interest policy to cover all of its board directors, there is currently no equivalent requirement with respect to Bank employees, many of whom are in no less a position of trust at the Bank than are its board directors.
Part 1239 of FHFA's regulations addresses responsibilities of boards of directors, corporate practices, and corporate governance for FHFA's regulated entities. The proposed rule would add to part 1239 a new § 1239.31 requiring each Bank to adopt a conflicts-of-interest policy covering its employees and establishing the requirements for those policies. The content and format of the new section is based on that of § 1261.11, which addresses the Bank director conflicts-of-interest policy requirement, appropriately modified to be applicable to Bank employees.
Proposed § 1239.31(a) would require that each Bank's board of directors adopt a written conflicts-of-interest policy covering all employees, which must, at a minimum: (1) require that all employees of the Bank discharge their official responsibilities in an objective and impartial manner in furtherance of the interests of the Bank's membership as a whole and consistent with the public interest; (2) establish appropriate limitations, standards, and procedures
Paralleling § 1261.11, paragraphs (b) and (c) of proposed § 1239.31 would prohibit employees in most cases from disclosing or using confidential information they receive by reason of their position with the Bank and discourage Bank employees from accepting gifts that appear to be intended to influence the employee's actions.
Proposed paragraph (d) would employ the same definitions that are used in proposed § 1261.11(f). For purposes of attribution, “immediate family member” means a parent, sibling, spouse, child, or dependent, or any relative sharing the same residence as the director and the term “business associate” means any individual or entity with whom a director has a business relationship, including, but not limited to: (1) Any corporation or organization of which the employee is an officer or partner, or in which the employee beneficially owns ten percent or more of any class of equity security, including subordinated debt; (2) Any other partner, officer, or beneficial owner of ten percent or more of any class of equity security, including subordinated debt, of any such corporation or organization; and (3) Any trust or other estate in which an employee has a substantial beneficial interest or as to which the employee serves as trustee or in a similar fiduciary capacity. The definition of “financial interest” matches the revised definition of that term in proposed § 1261.11(f).
The proposed rule would also make several revisions to part 1273, which governs the OF. Primarily, the proposed rule would amend part 1273 to revise the provision governing the minimum number and site of OF board meetings to match the revised language with respect to the Bank's boards in § 1261.24. The remaining proposed revisions are in response to comments provided by the Bank System in response to FHFA's Spring 2023 Notice of Regulatory Review.
Existing § 1273.5 addresses the funding of the OF. Existing § 1273.5(b)(1)(ii) limits OF operating funds withdrawals to check, wire transfer, or draft signed by the Chief Executive Officer (CEO) or other persons designated by the OF board of directors.
In its letter sent in response to FHFA's Spring 2023 Notice of Regulatory Review, the Bank System commented that the existing regulation governing the withdrawal of OF operating funds is both limited and outdated. It suggested that the regulation be modernized to permit the use of other widely accepted fund transfer methods that have been or will be developed in the future and that the regulation be expanded to allow CEO delegation of authority to achieve greater operational efficiency. In response, FHFA is proposing to revise § 1273.5(b)(1)(ii) to expand the range of permissible OF withdrawal methods to include “draft[s]” and “other funds transfer methods with written authorization by the CEO or other persons designated by the CEO or OF board of directors in accordance with OF governance documents.”
Existing § 1273.8 addresses the “general duties of the OF board of directors.” Paragraph (b) of this section establishes requirements for OF board meetings, requiring that the OF board of directors conduct its business by majority vote of its members at meetings convened in accordance with its by-laws, and hold no fewer than six in-person meetings annually.
The proposed rule would subdivide § 1273.8(b) into four paragraphs for clarity and would revise the existing text concerning meeting frequency and location in a manner paralleling the proposed changes to the board meeting requirements for the Banks set forth in § 1261.24. The reasons for these revisions are discussed in depth in the discussion of proposed § 1261.24, above.
Proposed § 1273.8(b)(1) would allow the OF board of directors and its committees to conduct meetings “in person, through video conferencing or teleconferencing, or in a hybrid format, provided that all meeting attendees have an opportunity to communicate and have access to all written documents and presentations.” Under the proposed rule, all such meetings could be counted toward the minimum of six board meetings per year that is required under the existing regulation and as proposed. The proposed rule, in § 1273.8(b)(2), would prohibit the OF from holding any board or committee meeting that is not within a “State” as defined by 12 CFR 1201.1 and would also require that all directors be located within a State, as so defined, when attending the meeting via teleconference or video conference. Proposed § 1273.8(b)(3) and (4) would retain the meeting notice and quorum provisions, respectively, of the existing regulation.
In existing § 1273.8, paragraph (d) enumerates duties of the OF board, other than those relating to Bank System consolidated obligations, among which is included the duty to review and approve all contracts of the OF, except for contracts for which exclusive authority is provided to the Audit Committee by regulation. In its letter sent in response to FHFA's Spring 2023 Notice of Regulatory Review the Bank System commented that the current requirement seems impractical and unnecessary, as those activities generally fall under management's responsibilities. In response, FHFA is proposing to eliminate the requirement that the OF board of directors review and approve
Section 1313(f) of the Safety and Soundness Act requires the Director of FHFA, when promulgating regulations relating to the Banks, to consider the differences between the Banks and the Enterprises (Fannie Mae and Freddie Mac) as they relate to: the Banks' cooperative ownership structure; the
The proposed rule would not contain any changes to information collection requirements that would require the approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act.
The Regulatory Flexibility Act
The Providing Accountability Through Transparency Act of 2023 (5 U.S.C. 553(b)(4)) requires that a notice of proposed rulemaking include the internet address of a summary of not more than 100 words in length of a proposed rule, in plain language, that shall be posted on the internet website under section 206(d) of the E-Government Act of 2002 (44 U.S.C. 3501 note) (commonly known as
Administrative practice and procedure, Federal home loan banks, Government-sponsored enterprises, Reporting and recordkeeping requirements.
Administrative practice and procedure, Compensation, Conflicts of interest, Directors, Elections, Eligibility, Federal home loan banks, Meetings, Reporting and recordkeeping requirements.
Administrative practice and procedure, Audit committee, Consolidated obligations, Directors.
Accordingly, for the reasons stated in the preamble, under the authority of 12 U.S.C. 4511, 4513, and 4526, FHFA proposes to amend parts 1239, 1261, and 1273 of chapter XII of title 12 of the Code of Federal Regulations, as follows:
12 U.S.C. 1426, 1427, 1432(a), 1436(a), 1440, 4511(b), 4513(a), 4513(b), 4526, and 15 U.S.C. 78
(a)
(1) Require that all Bank employees discharge their official responsibilities in an objective and impartial manner in furtherance of the interests of the Bank's membership as a whole and consistent with the public interest;
(2) Establish appropriate limitations, standards, and procedures regarding the holding of outside positions and financial interests by Bank employees and close family members and associates;
(3) Prohibit Bank executive officers and senior management from holding paid positions with any entity that is, or may be eligible to become, a member or housing associate of any Bank or with any affiliate of such entity;
(4) Prohibit Bank employees from participating in any particular matter in which the employee or any immediate family member or business associate has a financial interest;
(5) Prohibit Bank employees from otherwise holding financial interests that conflict with the conscientious performance of duty;
(6) Require Bank employees to disclose actual or apparent conflicts of interests and establish procedures for addressing such conflicts, including recusal;
(7) Require the establishment of internal controls to ensure that conflicts-of-interest reports are made and filed and that conflicts-of-interest issues are disclosed and resolved; and
(8) Establish procedures to monitor compliance with the conflicts-of-interest policy.
(b)
(c)
(d)
(i) Any corporation or organization of which the employee is an officer or partner, or in which the employee beneficially owns ten percent or more of any class of equity security, including subordinated debt;
(ii) Any other partner, officer, or beneficial owner of ten percent or more of any class of equity security, including subordinated debt, of any such corporation or organization; and
(iii) Any trust or other estate in which an employee has a substantial beneficial interest or as to which the employee serves as trustee or in a similar fiduciary capacity.
12 U.S.C. 1426, 1427, 1432, 4511 and 4526.
As used in this subpart:
(1) Maintains a principal residence in the Bank district; or
(2) If serving as an independent director, owns or leases in his or her own name a residence in the Bank district and is employed in a voting State in the Bank district.
(a)
(b)
(c)
(d)
(a)
(1) The total number of member directorships and their allocation among the voting States of the Bank's district;
(2) The total number of independent directorships; and
(3) The directorships for which an election will be held for terms beginning on the January 1 of the following year, and the length of those terms.
(b)
(2) The number of shares of Bank stock that any member was required to hold as of the record date shall be determined in accordance with the minimum investment established by the capital plan for that Bank.
(c)
(1)
(ii) In no case shall the number of member directorships allocated to a voting State be fewer than one or more than six.
(iii) If a Bank has issued more than one class of stock, the Director will allocate the member directorships based on the combined number of shares required to be held by members.
(iv) The Director will allocate a Bank's member directorships based upon members' minimum required stock holdings as of the record date, as shown in the Bank's capital stock report required by paragraph (b) of this section.
(2)
(d)
(e)
(2)
(f)
(a)
(i) A citizen of the United States; and
(ii) An officer or director of a member that is located in the voting State of the Bank district to which the directorship being occupied, sought, or filled has been allocated under § 1261.4(c) and that meets all minimum capital requirements established by its appropriate Federal banking agency or appropriate State regulator.
(2) In the case of a director elected by a Bank's members under § 1261.8, the institution of which the director is an officer or director must have been a member as of the record date. In the case of a director elected by a Bank's board of directors to fill a vacancy under § 1261.14, the institution of which the director is an officer or director must be a member at the time the board acts.
(b)
(1) Be a citizen of the United States;
(2) Be a bona fide resident of the district in which the Bank is located;
(3) Meet the independence requirements of § 1261.10; and
(4) Meet the applicable qualifications requirements specified in paragraph (c) of this section.
(c)
(2)
(3)
(i) Possess knowledge and experience that are relevant to the business, programs, and mission of the Bank and that provide a basis for understanding the actual and potential impact of the Bank's activities on its members and on communities within the Bank's district; and
(ii) Have gained their knowledge and experience primarily through full time paid executive, management, or other senior positions.
(d)
(i) Any incumbent director whose term of office would not expire before the new term of office would begin; and
(ii) Any person that has been elected to each of three consecutive full terms as a director of a Bank and has served for all or part of each of those terms, unless the term of the directorship to be filled begins at least two years after the expiration of the third consecutive term.
(2) For purposes of determining whether a person is ineligible under the term limit provision of paragraph (d)(1)(ii) of this section:
(i) A four-year term of office shall count as a full term;
(ii) A term of office that is adjusted to a period of fewer than four years as provided in § 1261.4(e) shall not count as a full term;
(iii) Any full term of office that ends immediately before a term of office that is adjusted to a period of fewer than four years as provided in § 1261.4(e), and any full term of office commencing immediately following such adjusted term of office, shall count as consecutive full terms of office; and
(iv) Any period of time served by a director who has been elected by the board of directors to fill a vacancy under § 1261.14 shall not count as a full term.
(e)
(a)
(b)
(c)
(a)
(1) The number of member directorships designated for each voting State in the Bank district and the number of independent directorships designated for the Bank, including the number of independent directorships designated by the Bank as public interest independent directorships, for the following calendar year;
(2) The name of each incumbent Bank director, the name and location of the member at which each member director serves, and the name and location of the organization with which each independent director is affiliated, if any, and the expiration date of each Bank director's term of office;
(3) Identification of the member directorships, regular independent directorships, and public interest independent directorships for which an election will be held;
(4) A brief statement describing the skills and experience the Bank believes are most likely to add strength to the board of directors, as determined through the annual assessment required under § 1261.9;
(5) An attachment indicating the name, location, and FHFA ID number of every member in the member's voting State, and the number of votes each such member may cast for each directorship to be filled by such members, as determined in accordance with § 1261.6; and
(6) If a member directorship is to be filled by members in a voting State, a nominating certificate for those members.
(b)
(ii) The nominating certificate shall include the name of the nominee and the name, location, and FHFA ID number of the member the nominee serves as an officer or director.
(iii) The Bank shall establish a deadline for delivery of nominating
(2)
(c)
(2)
(3)
(4)
(5)
(d)
(2)
(ii) Before announcing any independent director nominee, the Bank shall deliver to FHFA for its review a copy of the independent director application forms executed by the individuals nominated for independent directorships. If within two weeks of such delivery FHFA provides comments to the Bank on any independent director nominee, the board of directors of the Bank shall consider FHFA's comments in determining whether to proceed with those nominees or to reopen the nomination.
(3)
(e)
(f)
(a)
(1) For states in which one or more member directorships are to be filled in the election, an alphabetical listing of the names of each nominee for such directorship, the name, location, and FHFA ID number of the member each nominee serves, the nominee's title or position with the member, a brief description of the skills and experience of each nominee, and the number of member directorships to be filled by the members in that voting State in the election;
(2) An alphabetical listing of the names of each nominee for a public interest independent directorship and a brief description of how each nominee meets the qualifications requirements for public interest independent directors set forth in § 1261.5(c)(2);
(3) An alphabetical listing of the names of each nominee for regular independent directorships and a brief description of how each nominee meets the required qualification requirements for regular independent directors set forth in § 1261.5(c)(1);
(4) A statement of the results of assessments conducted under § 1261.9 and, if the statement differs from the statement provided under § 1261.7(a)(4), an explanation of why the statements differ;
(5) A statement that write-in candidates are not permitted; and
(6) A confidentiality statement prohibiting the Bank from disclosing how any member voted.
(b)
(c)
(1) Mark on the ballot the name of not more than one of the nominees for each directorship to be filled. Each nominee so selected shall receive all of the votes that the member is entitled to cast.
(2) Execute and deliver the ballot to the Bank on or before the closing date. A Bank shall not allow a member to change a ballot after it has been delivered to the Bank.
(d)
(e)
(2)
(ii) If the number of nominees exceeds the number of directorships to be filled, the Bank shall declare elected the nominee receiving the highest number of votes. If more than one directorship is to be filled, the Bank shall declare elected each successive nominee receiving the next highest number of votes for such directorship until all such open directorships are filled.
(iii) If the number of nominees is no more than the number of directorships to be filled, the Bank shall declare elected each nominee receiving at least 20 percent of the number of votes eligible to be cast in the election. If any directorship is not filled due to any nominee's failure to receive at least 20 percent of the votes eligible to be cast, the Bank shall continue the election process for that directorship under the procedures in paragraph (g) of this section.
(3)
(4)
(5)
(f)
(1) For each member directorship, the name of the director-elect, the name and location of the member at which he or she serves, his or her title or position at the member, the voting State represented, and the expiration date of the term of office;
(2) For each independent directorship, the name of the director-elect, whether the director-elect will fill a public interest or a regular independent directorship and, as appropriate, the consumer or community interest represented by such director, any qualifications under § 1261.5(c)(1), and the expiration date of the term of office;
(3) For member directorships, the total number of eligible votes, the number of members voting in the election, and the total number of votes cast for each nominee, which shall be reported by State; and
(4) For independent directorships, the total number of eligible votes, the number of members voting in the election, and the total number of votes cast for each nominee, which shall be reported for the district at large.
(g)
(1) The Bank's board of directors, after again consulting with the Bank's Advisory Council, shall nominate at least as many individuals as there are independent directorships to be filled. It may nominate individuals who failed to be elected in the initial vote. The Bank thereafter shall deliver to FHFA a copy of the independent director application form executed by each nominee.
(2) The Bank then shall follow the provisions in this section that are applicable to the election process for independent directors, except for the following:
(i) The Bank shall not place the name of any nominee on a ballot without prior approval of FHFA; and
(ii) The Bank may adopt a closing date that is earlier than 30 calendar days after delivery of the ballots to the eligible voting members, provided the Bank determines that an earlier closing date provides a reasonable amount of time to vote the ballots.
(a)
(b)
(2) A Bank director, officer, attorney, employee or agent and the board of directors and Advisory Council (including members of the Council) of a Bank may support the candidacy of any individual nominated by the board of directors for election to an independent directorship.
(c)
(1) Communicate in any manner that a director, officer, attorney, employee, or agent of a Bank, directly or indirectly, supports or opposes the nomination or election of a particular individual for a directorship; or
(2) Take any other action to influence the voting with respect to any particular individual.
(a)
(2) For purposes of paragraph (a)(1) of this section, “advances” includes any loan from a Bank to the recipient, regardless of form or nomenclature, except for debt securities traded in the public capital markets.
(b)
(c)
(d)
(a)
(1) Require the directors to administer the affairs of the Bank fairly and impartially and without discrimination in favor of or against any member;
(2) Require independent directors to comply with § 1261.10(a);
(3) Prohibit the use of a director's official position for personal gain;
(4) Require directors to disclose actual or apparent conflicts of interest and establish procedures for addressing such conflicts;
(5) Require the establishment of internal controls to ensure that conflicts of interest reports are made and filed and that conflicts of interest issues are disclosed and resolved; and
(6) Establish procedures to monitor compliance with the conflicts of interest policy.
(b)
(c)
(d)
(e)
(f)
(i) Any corporation or organization of which the director is an officer or partner, or in which the director beneficially owns ten percent or more of any class of equity security, including subordinated debt;
(ii) Any other partner, officer, or beneficial owner of ten percent or more of any class of equity security, including subordinated debt, of any such corporation or organization; and
(iii) Any trust or other estate in which a director has a substantial beneficial interest or as to which the director serves as trustee or in a similar fiduciary capacity.
(a)
(b)
(a)
(b)
(i) A material violation of the Bank's code of ethics or other applicable Bank policy;
(ii) A material violation of the Bank Act, FHFA regulations, or other civil or criminal law;
(iii) A determination by the board that continuation in office of such director would be materially harmful to the Bank;
(iv) Conduct, or a mental or physical condition, that raises substantial questions concerning the director's ability to fulfill his or her duties and obligations; or
(v) A determination under § 1261.22(b)(3) that the director's continuous poor performance or lack of participation is compromising the board's ability to adequately oversee the operations of the Bank.
(2) A Bank shall promptly notify FHFA in writing of any pending or final removal action under this paragraph (b).
(a)
(1) The board of directors may fill an anticipated vacancy prior to the effective date of the vacancy, provided the board does so no sooner than the date of the regularly scheduled board meeting that occurs immediately prior to the effective date of the vacancy.
(2) The board of directors shall:
(i) Fill a vacant member directorship only with an individual who meets the requirements of § 1261.5(a); and
(ii) Fill a vacant independent directorship only with an individual who meets the requirements of § 1261.5(b).
(3) If a Bank does not have at least two sitting public interest independent directors, its board of directors shall either:
(i) Elect an individual who is qualified under § 1261.5(c)(2) to serve as a public interest independent director to fill the vacancy; or
(ii) Elect to redesignate as a public interest independent director a sitting regular independent director who is qualified under § 1261.5(c)(2) to serve as a public interest independent director and elect another individual who is qualified under § 1261.5(c)(1) to serve as a regular independent director to fill the resulting vacant regular independent directorship.
(4) If the Bank has more than two sitting public interest independent directors, the board of directors may redesignate as a regular independent director a sitting public interest independent director who is qualified under § 1261.5(c)(2).
(5) The board of directors of the Bank shall consult with the Bank's Advisory Council before considering any individual to fill a vacant independent directorship.
(b)
(1) The Bank shall obtain an executed member director eligibility certification form prescribed by FHFA from each individual being considered to fill a vacant member directorship and an executed independent director application form prescribed by FHFA from each individual being considered to fill a vacant independent directorship (including any sitting regular independent director to be redesignated as public interest independent director). Using the executed forms, each Bank shall verify each individual's eligibility and, as to independent directors, also shall verify that the individual meets the qualifications requirements for regular independent directors under § 1261.5(c)(1) or public interest independent directors under § 1261.5(c)(2), as appropriate.
(2) For each individual being considered to fill a vacant directorship, the Bank shall conduct a background check, as provided in § 1261.7(e).
(3) The Bank shall deliver to FHFA for its review a copy of the executed independent director application form for each individual being considered by the board to fill a vacant independent directorship, as well as a summary of the results of the background check. If within two weeks of such delivery FHFA provides comments to the Bank on any of those individuals, the board of directors of the Bank shall consider FHFA's comments in determining whether to elect a director from among those individuals or to seek additional individuals for consideration.
(4) The Bank shall retain the information it receives pursuant to this paragraph (b) for at least seven years after the date of the election in question and, in the case of any information about a specific director, for at least seven years after that director leaves the board.
(c)
(1) For each member directorship filled by the board of a Bank, the name of the director, the name, location, and FHFA ID number of the member the director serves, the director's title or position with the member, the voting State that the director represents, and
(2) For each independent directorship filled by the board of a Bank, the name of the director, the name and location of the organization with which the director is affiliated, if any, the director's title or position with such organization, and the expiration date of the director's term of office.
Except with respect to member directorships of a Bank resulting from the merger of any two or more Banks, the number of member directorships allocated to each State shall not be less than the number of directorships allocated to that State on December 31, 1960. The following table sets forth the States within Bank districts not created from the merger of two or more Banks whose members held more than one directorship on December 31, 1960:
As used in this subpart:
(a)
(b)
(2)
(i) The total compensation paid to each director;
(ii) The total expenses paid to each director;
(iii) The total compensation paid to all directors;
(iv) The total expenses paid to all directors;
(v) The total of all expenses incurred at group functions that are not reimbursed to individual directors, such as the cost of group meals in connection with board and committee meetings;
(vi) The total number of meetings held by the board and its designated committees; and
(vii) The number of board and designated committee meetings each director attended in-person or remotely, through video conferencing or teleconferencing, and in accordance with § 1261.24(b).
(a)
(b)
(2) The compensation policy shall require that any compensation paid to a director reflect the amount of time the director has spent on official Bank business and shall require that compensation be reduced or a director removed, as necessary, to reflect lesser attendance or performance at board or committee meetings during a given year.
(3) In addition to attendance, the compensation policy shall establish a fair and impartial process for annually evaluating individual director performance and participation, including, but not limited to, an assessment of whether each director:
(i) Demonstrated understanding of the Bank System;
(ii) Demonstrated knowledge of the Bank's policies and governance documents;
(iii) Demonstrated understanding of his or her legal and ethical responsibilities as a board member;
(iv) Made suggestions congruent with the Bank's mission, vision and values (even if divergent from majority opinion); and
(v) Acted in support of Board decisions, regardless of initial position.
(c)
(d)
The Director may determine, based upon his or her review of a Bank's director compensation policy, methodology and/or other related materials, that the compensation and/or expenses to be paid to the directors are not reasonable. In such case, the Director may order the Bank to refrain from making any further payments under that compensation policy. Any such order shall apply prospectively only and will not affect either compensation or expenses that have
(a)
(b)
(2) Each Bank should generally hold board and committee meetings within the district served by the Bank. A Bank shall not hold board or committee meetings in any location that is not within a State, as defined by 12 CFR 1201.1. A director must be located within a State when attending a meeting remotely through video conferencing or teleconferencing.
(c)
12 U.S.C. 1431, 1440, 4511(b), 4513, 4514(a), 4526(a).
(b) * * *
(1) At the direction of and pursuant to policies and procedures adopted by the OF board of directors, the Banks shall periodically reimburse the OF in order to maintain sufficient operating funds under the budget approved by the OF board of directors. The OF operating funds shall be:
(i) Available for expenses of the OF and the OF board of directors, according to their approved budgets; and
(ii) Subject to withdrawal by check, draft, wire transfer, or other funds transfer methods with written authorization by the CEO or other persons designated by the CEO or OF board of directors in accordance with OF governance documents.
(b)
(2)
(3)
(4)
(d)
(1) Set policies for management and operation of the OF;
(2) Approve a strategic business plan for the OF in accordance with the provisions of 12 CFR 1239.14, as appropriate;
(3) Select, employ, determine the compensation for, and assign the duties and functions of a CEO of the OF who shall—
(i) Be head of the OF and direct the implementation of the OF board of directors' policies;
(ii) Serve as a member of the Directorate of the FICO, pursuant to section 21(b)(1)(A) of the Bank Act (12 U.S.C. 1441(b)(1)(A)); and
(iii) Serve as a member of the Directorate of the REFCORP, pursuant to section 21B(c)(1)(A) of the Bank Act (12 U.S.C. 1441b(c)(1)(A));
(4) Review and approve contracts of the OF, as specified in OF governance documents; and
(5) Assume any other responsibilities that may from time to time be assigned to it by FHFA.