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Federal Deposit Insurance Corporation.
Final rule.
The Federal Deposit Insurance Corporation (FDIC) is amending the processes by which an insured State nonmember bank may establish a branch or relocate a main office or branch by eliminating certain filing requirements, reducing processing timelines, and updating public notice procedures. The FDIC is also making corresponding changes to procedures applicable to the relocation of an insured branch of a foreign bank.
The final rule will be effective February 27, 2026.
Sandra Macias, Chief, (202) 898-3642,
The objectives of the final rule are to improve the speed and certainty of, and reduce the regulatory burden associated with, the filing process for insured State nonmember banks seeking to establish a branch or relocate a main office or branch and for foreign banks seeking to relocate an insured branch (collectively, FDIC-supervised banks). The final rule also makes certain definitional clarifications to further improve regulatory efficiency and certainty.
As discussed further in sections III.A and III.C of this
Accordingly, the final rule accelerates expedited processing for institutions that satisfy certain criteria, removes select informational requirements, eliminates the public comment process, extends the expiration date for an approved filing, and excludes from the scope of filing requirements
Section 18(d)(1) of the Federal Deposit Insurance Act (FDI Act) requires the FDIC's prior written consent for an insured State nonmember bank to establish and operate a new domestic branch or to move its main office or any domestic branch from one location to another.
When considering whether to grant or withhold such consent, the FDIC must consider the factors listed in section 6 of the FDI Act (statutory factors). The statutory factors are as follows: (1) the financial history and condition of the depository institution; (2) the adequacy of the depository institution's capital structure; (3) the future earnings prospects of the depository institution; (4) the general character and fitness of the management of the depository institution; (5) the risk presented by the depository institution to the Deposit Insurance Fund; (6) the convenience and needs of the community to be served by the depository institution; and (7) whether the depository institution's corporate powers are consistent with the purposes of the FDI Act. In addition, when evaluating an application to establish a branch, relocate a branch, or relocate a main office, the Community Reinvestment Act (CRA) requires the FDIC to take into consideration the bank's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the bank.
Subpart C of 12 CFR part 303 of the FDIC Rules and Regulations (subpart C) implements section 18(d) of the FDI Act and sets forth the filing requirements and procedures for insured State nonmember banks to establish a branch,
The application processing timeline depends primarily upon whether the bank meets the definition of an “eligible depository institution.”
Under the current rule, the FDIC retains the right to move an application from expedited processing to standard processing when appropriate.
Subpart J of part 303 (subpart J) sets forth the procedures for an insured branch of a foreign bank seeking the FDIC's consent to move from one location to another at 12 CFR 303.184. The requirements in subpart J largely mirror the requirements found in subpart C.
From 2015 to September 30, 2025, the FDIC received 7,043 branch applications: 5,366 applications to establish a branch, 489 to relocate a main office, 1,183 to relocate a branch, and 5 applications related to an insured branch of a foreign bank, for an average of 655 applications received per year. During this period, the FDIC approved an average of 624 branch applications annually (479 branch establishment applications, 102 branch relocation applications, and 43 main office relocation applications). On average, 531 applications per year were approved under expedited processing (85 percent) and 92 were approved under standard processing (15 percent). From 2015 to September 30, 2025, the average time between the FDIC's receipt of an application to establish a branch or relocate a branch or main office and the application being approved, denied, returned to the applicant, or withdrawn, was 25 days for applications subject to expedited processing and 70 days for applications subject to standard processing.
On July 18, 2025, the FDIC published in the
Several comments were supportive of the NPR. More specifically, several commenters supported the FDIC's efforts to shorten filing processing timelines, simplify certain filing requirements, and eliminate unnecessary delays. Two of these commenters generally supported the elimination of public notice and comment requirements, and one of these commenters supported providing reasonable advance notice to customers for
Two commenters supported the proposed changes to expedited processing, with one of these commenters noting that the NPR would shorten expedited processing timelines and another of these commenters noting that the NPR would expand the number of eligible institutions. One commenter requested clarification on what would constitute a “substantially complete” filing and guidance on how the FDIC would determine an institution's eligibility for expedited processing.
One commenter expressed support for the proposed definitions. In particular, the commenter noted that clarification of terms, including “branch,” “remote service unit,” and “
One commenter requested that the FDIC make an additional change to 12 CFR 303.45(c) to extend the expiration date for an approved filing from 18 months to 36 months. The commenter reasoned that preparations for a relocation generally take longer than the 18 months provided by the current regulation, and a longer expiration period would enable institutions to seek regulatory approval earlier in the process.
Several commenters opposed aspects of the NPR. Four commenters asserted that some of the proposed changes may be inconsistent with the CRA. Specifically, three of these commenters expressed concerns regarding the proposed elimination of the provisions
One commenter opposed the creation of a new definition for
Three commenters expressed concerns regarding the proposed changes to expedited processing. Two of these commenters expressed concerns regarding the proposed shortening of the filing approval period and the proposed elimination of the FDIC's discretion to remove a filing from expedited processing. One of these commenters expressed concerns about making UFIRS 3-rated institutions eligible for expedited processing. The commenter reasoned that UFIRS 3-rated institutions are underperforming institutions and should not be permitted to receive “fast-tracked” approval under the proposed rule. Another of these commenters objected to the proposed eligibility of intrastate branch and main office relocation filings for expedited processing.
Public notice requirements under subpart A of 12 CFR part 303 of the FDIC Rules and Regulations (subpart A) generally apply to applications submitted under subpart C.
Three commenters generally supported the FDIC's efforts to streamline subpart C filings, with two of these commenters specifically supporting the elimination of the public notice and comment period. Four commenters objected to the elimination of the public notice and related public comment period.
Some commenters argued that the elimination would violate the CRA. As explained in the NPR, elimination of the public notice and related public comment period does not change the FDIC's obligations under the CRA. The FDIC will continue to take into consideration a bank's CRA rating.
Furthermore, as noted in the NPR, the FDIC expects that a bank will provide reasonable advance notice to customers affected by a branch or main office relocation. One commenter asked the FDIC to clarify the scope of this expectation and to provide additional details regarding compliance. As discussed in section III.E of this
The FDIC is adopting the changes to 12 CFR 303.7(a) and (c) as proposed. The FDIC will continue to comply with its obligations under the CRA, which does not require public notice or comment for branch establishments or branch and main office relocations.
Applications submitted under subpart C are generally subject to subpart A's provisions concerning hearings and other meetings.
Three commenters objected to the elimination of branch filings from the hearings and other meetings provisions in subpart A. Two of these commenters urged that the small number of requests for hearings received and granted by the FDIC is not a justification for eliminating the right of the public to request hearings. One of these commenters claimed that the elimination of branch filings from the hearings and other meetings provisions in subpart A, coupled with the proposed reduction of filing processing timelines, would provide limited opportunity for community feedback.
The FDIC is adopting the changes to 12 CFR 303.10(a) as proposed. The FDI Act does not require the FDIC to hold public hearings for applications submitted under subpart C, and they have not materially aided the FDIC's consideration of the statutory factors when evaluating an application to establish a branch or to relocate a main office or branch.
The FDIC is revising the definition of “branch” at 12 CFR 303.41(a) to clarify that a branch does not include an RSU to reflect the FDI Act's statutory exclusion of RSUs from the definition of “domestic branch.”
The FDIC is establishing a rule of construction within the definition of “branch relocation” at 12 CFR 303.41(b) in the final rule to provide that a branch relocation does not include a
The FDIC has found that in some situations a change in facility may be in a bank's best interest for a business, operational, or other reason outside the control of a bank, such as the same landlord expanding a shopping center and offering more advantageous lease
Although a
Several commenters supported the exclusion of
The FDIC is adopting 12 CFR 303.41(b) as proposed. The FDIC has retained the definition of
The FDIC is replacing the term “de novo branch” with “de novo interstate branch” in subpart C. The term “de novo branch” is defined in section 18(d)(4)(C) of the FDI Act within the more narrow context of interstate branching. However, the current definition of “de novo branch” in subpart C does not account for the interstate context of the statutory definition. The FDIC is revising 12 CFR 303.41(c) to change the defined term to “de novo interstate branch” and updating the definition to indicate that it is a branch of a bank that is established by the bank as a branch in a State other than the bank's home State or one in which the bank does not maintain a branch, and does not become a branch of such bank as a result of (1) the acquisition by the bank of an insured depository institution or a branch of an insured depository institution, or (2) the conversion, merger, or consolidation of any such institution or branch.
The final rule makes conforming changes to account for the new defined term by replacing “de novo branch” with “de novo interstate branch” where it is used in subpart C. Under the final rule, this defined term is only relevant to ensure that a filing for a de novo interstate branch will be deemed approved only after relevant host State filing requirements have been satisfied. The FDIC did not receive any comments regarding these conforming changes.
The FDIC is defining the term “remote service unit” in subpart C at 12 CFR 303.41(g). Section 3(o) of the FDI Act excludes automated teller machines (ATMs) and RSUs from the definition of “domestic branch” but does not define either term.
An RSU includes an ATM, automated loan machine, automated device for receiving deposits, personal computer, telephone, other similar electronic devices, and drop boxes. An RSU may be equipped with a telephone or tele-video device that allows contact with bank personnel. The final rule excludes a drop box from the definition of “branch” by including a drop box in the definition of “remote service unit” to avoid the incongruous result where the definition of “branch” encompasses a drop box but not an ATM.
The FDIC's definition of an RSU is intended to accommodate most facilities commonly referred to as “interactive teller machines” (ITMs). In 2024, the FDIC issued a Financial Institution Letter stating that an ITM would qualify for the RSU exclusion, and thus would not be a branch, under the following circumstances: (1) the ITM is an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank, which is equipped to enable existing customers to initiate an interactive session with remotely located bank personnel; and, (2) to the extent that bank personnel have the ability to remotely assist the customer with the operation of the ITM to perform core banking functions, customers must also be able to perform such transactions without the involvement of bank personnel and must have the sole discretion to initiate and terminate interactive sessions with bank personnel.
One commenter supported the exclusion of RSUs from the definition of “branch,” but suggested that the FDIC provide examples or frequently asked questions (FAQs) to help banks distinguish RSUs from other types of staffed service channels. The commenter noted that, as technology evolves, the line between RSUs and other staffed service channels may become less clear. The FDIC recognizes that technological advancements can make it difficult to assess what may distinguish an RSU from other staffed service channels. The FDIC intends to provide the industry with flexibility as innovations drive new methods of serving customers in a rapidly evolving technology landscape, and the agency may issue additional guidance based on future technological advancements at a later date.
The NPR proposed eliminating the timing requirement for the submission of a subpart C filing. Regulations at 12 CFR 303.42(a) currently require applicants to submit an application to the appropriate FDIC office on the date the bank's required newspaper notice is published or within 5 days after the date of the last required newspaper publication. The FDIC proposed eliminating the timing requirement because it is tied to the newspaper publication requirement, which the NPR also eliminated. The FDIC did not receive comments regarding this proposed change. The FDIC is adopting the revisions to 12 CFR 303.42(a) as proposed.
The NPR proposed to streamline the information required to be included with a branch filing under 12 CFR 303.42(b). The FDIC explained that through its routine examination and supervisory processes, it maintains sufficient information to consider the statutory factors without requiring a bank to compile and submit all the information currently required by subpart C.
The FDIC asked commenters for feedback on whether the proposed filing content requirements are appropriate to garner sufficient information for the FDIC to evaluate the statutory factors in the context of a branch establishment or a branch or main office relocation. Two commenters supported the proposed streamlining of filing content, noting that the result would reduce cost and regulatory burden for applicants. One commenter, however, noted that the sixth statutory factor under section 18(d)(1) of the FDI Act requires the FDIC to consider “the convenience and needs of the community to be served,”
The FDIC is adopting the revisions to 12 CFR 303.42(b) as proposed. The FDIC reiterates that it maintains sufficient information to consider the statutory factors without requiring a bank to compile and submit all of the information currently required by 12 CFR 303.42(b). Moreover, the FDIC is satisfied that it can obtain additional information necessary to analyze a branch establishment or a branch or main office relocation in accordance with the statutory factors, notwithstanding the streamlined content filing requirements in the final rule. In addition, the FDIC notes that the filing content requirements under 12 CFR 303.42 apply to all subpart C filings, which include intrastate main office relocations.
The NPR proposed to shorten the approval period for expedited processing for eligible depository institutions and eliminate the FDIC's discretion to remove a filing from expedited processing in 12 CFR 303.43(a). An application processed under expedited processing is currently deemed approved on the latest of the following: (1) 21 days after receipt by the FDIC of a substantially complete application; (2) 5 days after expiration of the comment period described in 12 CFR 303.44; or (3) in the case of an application to establish a de novo branch in a State that is not the applicant's home State and in which the applicant does not maintain a branch, 5 days after the FDIC receives confirmation from the host State that the applicant has both complied with the filing requirements of the host State and submitted a copy of the application with the FDIC to the host State bank supervisor.
The NPR proposed that a filing submitted by an eligible depository institution that is processed under expedited processing would be deemed approved on the later of the following: (1) the third business day after receipt by the FDIC of a substantially complete filing; or (2) in the case of a filing to establish and operate a de novo interstate branch in a State that is not the applicant's home State and in which the applicant does not maintain a branch, the fifth day after the FDIC receives confirmation from the host State that the applicant has both complied with the filing requirements of the host State and submitted a copy of the filing with the FDIC to the host State bank supervisor.
Some commenters expressed concern that the abbreviated approval period would not provide the FDIC with sufficient time to conduct a meaningful review of a subpart C filing. As explained in the NPR, the FDIC determined that qualification as an eligible depository institution,
One commenter encouraged the FDIC to explain how eligibility for expedited processing would be determined in practice. The FDIC notes that this would entail confirming that the institution meets the definition of “eligible depository institution” based on existing supervisory information.
The FDIC currently retains discretion to remove a filing from expedited processing for any reason described in 12 CFR 303.11(c)(2). Under the NPR, a subpart C filing from an eligible depository institution that satisfies the criteria for expedited processing would be deemed approved in accordance with the statutory factors, and the FDIC would not have discretion to remove the filing from expedited processing. The FDIC rarely exercised discretion to remove a subpart C filing from expedited processing and the proposed change would provide more certainty to filers who satisfy the expedited processing criteria.
One commenter supported the proposal to eliminate the FDIC's
Two commenters expressed concern that the FDIC would be unable to appropriately exercise its supervisory authority if its discretion to remove a filing from expedited processing was eliminated. The FDIC believes that the goal of providing more certainty to filers who satisfy the criteria for expedited processing supports elimination of its rarely exercised discretion to remove a filing from expedited processing. Accordingly, the final rule is adopted as proposed, with modifications. These modifications include eliminating the reference to a “substantially complete” application and clarifying that a filing will be processed under expedited processing if the informational requirements of 12 CFR 303.42 are satisfied. Furthermore, a modification to 12 CFR 303.43 clarifies that filers subject to sanctions under 12 CFR 369.5 are ineligible for expedited processing.
The NPR proposed to revise 12 CFR 303.43(b) to establish a new category of expedited processing for intrastate branch and main office relocation filings submitted by a bank that received an FDIC-assigned composite UFIRS rating of 3 or better as a result of its most recent Federal or State examination. Expedited processing would apply to intrastate branch and main office relocation filings by institutions rated 3 or better under 12 CFR 303.43(b) regardless of whether the institution satisfied the other criteria in 12 CFR 303.2(r) for an eligible depository institution.
Section 303.41(b) defines a “branch relocation” narrowly as a move within the same immediate neighborhood of the existing branch that does not substantially affect the nature of the business of the branch or the customers of the branch.
One commenter recommended the FDIC provide examples of what qualifies as an intrastate main office relocation. To promote clarity, the final rule adopts a definition of an “intrastate main office relocation” to be the relocation of a main office of a bank within the same State such that there is no change in the bank's home State.
One commenter objected to expanding expedited processing for intrastate branch and main office relocations so as to include banks that received an FDIC-assigned composite rating of 3 or better under the UFIRS. The commenter characterized these banks as “underperforming” and argued that offering expedited processing to these banks would disincentivize them from correcting deficiencies. The final rule retains expedited processing for intrastate branch and main office relocations because, as discussed above, these relocations are non-expansionary in nature. The FDIC notes that, under the final rule, expedited processing for branch establishments, as opposed to relocations, remains limited to eligible depository institutions.
Other commenters expressed concern that the FDIC would not have discretion to remove an intrastate branch or main office relocation filing submitted by a bank with a composite rating of 3 or better from expedited processing. As discussed above, expedited processing for these non-expansionary filings by banks with a composite rating of 3 or better would promote the FDIC's goal of providing more certainty and clarity regarding processing. The final rule adopts the provisions of 12 CFR 303.43(b) as proposed.
The NPR noted the FDIC was evaluating and updating its internal processes to further streamline and expedite the review and consideration of filings submitted under subpart C. One commenter recommended that the FDIC confirm that acknowledgement letters will clearly state when the expedited timeline begins and asked the FDIC to clarify how eligibility for expedited processing will be determined in practice. The FDIC intends to take these recommendations into account as it continues to update its internal processes and related publicly available materials to reflect the provisions of the final rule and comments received on the NPR.
The NPR proposed to eliminate the newspaper publication requirement in 12 CFR 303.44(a) and related provisions. One commenter urged the FDIC to maintain the newspaper publication requirement. The commenter reasoned that newspaper media outlets continue to play a role in educating the public. However, the NPR also noted the FDIC's expectation that banks seeking to relocate a branch or main office provide reasonable advance notice to customers and the appropriate FDIC office. The FDIC believes that this will accomplish the underlying goal of ensuring that customers are aware of proposed branch and main office relocations and able to conveniently access banking services.
One commenter requested that the FDIC provide clear guidance on what constitutes reasonable advanced notice to customers. The FDIC intends to provide the industry with flexibility in determining how to best provide reasonable advance notice to customers. An applicant can choose the best method or methods of communicating a proposed branch or main office relocation with its affected customer base. Although the requirements of section 42 of the FDI Act do not apply to relocations, the type of notice provided in such contexts, such as a notice in a regular account statement, would necessarily be considered reasonable advance notice.
One commenter requested that the FDIC extend the expiration date for an approved filing under 12 CFR 303.45(c) from 18 months to 36 months. The commenter reasoned that preparations for a relocation generally take longer than the 18 months provided by the current regulation, and a longer expiration period would enable banks to seek regulatory approval earlier in the process. In the final rule, the FDIC modifies 12 CFR 303.45(c) to extend the expiration date for an approved filing to 24 months. The final rule adopts this 24-month expiration period, as it is the FDIC's expectation that 24 months would provide a reasonable timeframe for banks to consummate a branch establishment or relocation.
The NPR proposed making changes to subpart J to correspond to those proposed for subpart C. The FDIC did not receive comments on its proposed revisions to subpart J. The final rule adopts the previously proposed changes to subpart J to correspond with the changes to subpart C discussed in this
As previously discussed, the objective of the final rule is to improve the speed and certainty of, and reduce the regulatory burden associated with, the filing process for insured State nonmember banks seeking to establish a branch or relocate a main office or branch and for foreign banks seeking to relocate an insured branch (collectively, FDIC-supervised banks).
This analysis utilizes all regulations and guidance applicable to FDIC-supervised banks, as well as information on their financial condition as of the quarter ending June 30, 2025, as the baseline to which the effects of the final rule are estimated.
The final rule applies to FDIC-supervised banks seeking to establish a branch, relocate a main office or branch, or relocate an insured branch of a foreign bank. As of the quarter ending June 30, 2025, the FDIC supervises 2,776 State nonmember banks or insured branches of foreign banks which collectively operate 25,250 branches and main offices.
The final rule reduces the regulatory requirements for branch filings. Specifically, it only requires FDIC-supervised banks that seek to make a
For FDIC-supervised banks that seek a
For the remaining 670 branch applications that do not involve
Summing up the quantified effects for the approximately 700 affected branch applications, the FDIC estimates that the final rule will result in approximately $298,000 in savings per year from the reduction of labor costs associated with preparing and submitting branch filings. As previously discussed, the final rule will generally reduce the time it takes for the FDIC to process a filing. In particular, the final rule will establish a deadline of three days for approval after receipt of a letter filing that includes the information set forth in 12 CFR 303.42; a reduction of between 18 days and 28 days, respectively.
The final rule's reduction in processing times for certain branch filings will have benefits for eligible depository institutions. Faster processing times will reduce uncertainty and costs associated with downtime while waiting for a decision from the FDIC. FDIC-supervised banks will be able to more swiftly respond to changes in local conditions that affect their branch network, such as a change in landlord for a bank's current location or a time-sensitive opportunity to relocate to a more desirable location. The FDIC does not have the information necessary to further quantify the benefits associated with the reduction in the time it takes for the FDIC to process filings, but believes that processing time reductions will improve productivity and competitiveness for applicants.
As previously discussed, the final rule clarifies certain definitions. Specifically, the final rule clarifies that the term “branch” does not include RSUs or drop boxes. In practice, the FDIC has not considered such locations branches. Finally, the final rule clarifies the definition of “de novo interstate branch.” The FDIC does not have the information necessary to quantify the benefits to prospective filers associated with these aspects of the final rule. However, the FDIC believes that these clarifications will benefit filers and the industry by reducing uncertainty.
As previously discussed, the FDIC does not believe that the final rule will pose any material direct costs to filers. The FDIC acknowledges that there may be ancillary costs to the public. For example, the elimination of the public notice and comment requirements for branch establishments and branch and main office relocations may have impacts that are difficult to quantify.
Finally, the FDIC believes that the final rule can provide indirect benefits to customers. To the extent that the shorter processing periods, reduced filing content requirements, and clarifications within the final rule reduce the time it takes banks to establish new branches and begin providing banking products and services at applicable locations, customers may benefit. The FDIC does not have the necessary information to quantify such benefits.
The FDIC considered implementing internal process changes related to the review of subpart C filings that would result in abbreviated review periods without implementing a regulatory change. However, the FDIC determined that improving the speed, certainty, and regulatory burden associated with the processes for subpart C filings would be better achieved through a formal notice and comment rulemaking that considered feedback from all stakeholders.
The Administrative Procedure Act requires an agency to publish a substantive rule not less than 30 days before its effective date, except when an agency otherwise publishes in the final rule good cause for providing for an earlier effective date.
Certain provisions of the final rule contain “collections of information” within the meaning of the Paperwork Reduction Act (PRA) of 1995.
Section 303.42,
The FDIC is removing the information collection “Section 303.184, Moving a Branch” from the ICR under the OMB Control No. 3064-0114 and including it in the ICR under OMB Control No. 3064-0070. Under 12 CFR 303.183, insured branches of foreign banks seeking approval from the FDIC to move locations complete a substantially similar application as domestic banks seeking FDIC approval to move locations. To ensure consistent burden estimates between similar respondents completing similar applications, the FDIC will include burden estimates from the information collection “Section 303.184, Moving a Branch” in the information collection “Application for a bank to establish a branch or move its main office or Branch.” Combining these two information collections does not affect the FDIC estimates of respondents for the information collection under OMB Control No. 3064-0070 because historically the FDIC rarely receives applications to move insured branches from foreign banks. In the most recent PRA renewal for OMB Control No. 3064-0114, the FDIC used a placeholder of a single respondent to maintain the information collection.
Pursuant to the Congressional Review Act, the OMB makes a determination regarding whether a final rule constitutes a “major rule,” defined in the Congressional Review Act as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions; or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. If OMB determines a rule is “major,” the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication. If a rule is not a “major rule,” it may take effect after the Federal agency submits to Congress a report required under the Congressional Review Act.
OMB has determined the final rule is not a major rule under the Congressional Review Act. Accordingly, the FDIC will submit the report to Congress required by the Congressional Review Act and the final rule will become effective as set forth under the
The Regulatory Flexibility Act (RFA) generally requires an agency, in connection with a final rule, to prepare and make available for public comment a final regulatory flexibility analysis that describes the impact of the final rule on small entities.
The final rule applies to certain FDIC-supervised banks seeking to establish a branch, relocate a main office or branch, or relocate an insured branch of a foreign bank. As of the quarter ending June 30, 2025, the FDIC supervised 2,776 banks, of which 2,055 were considered “small” for the purposes of RFA.
In general, the final rule will reduce the regulatory requirements for establishing or relocating a branch. Specifically, it will eliminate filing requirements for
As discussed in the Expected Effects section of this
For the remaining 290 branch applications from small banks that do not involve
Based on the quantified effects of the final rule described above, the FDIC estimates that the rule will not significantly affect more than one small bank.
As discussed in the Expected Effects section of this Supplementary Information, the final rule will also reduce the time it takes for the FDIC to process a filing. In particular, the final rule will establish a deadline of three days for approval after receipt of a letter filing that includes the information set forth in 12 CFR 303.42; a reduction of between 18 days and 28 days, respectively.
The final rule's reduction in processing times for certain branch filings will have benefits for eligible small depository institutions. Faster processing times will reduce the period of uncertainty for filers and reduce costs associated with downtime while waiting for a decision from the FDIC. Banks will be able to more swiftly respond to changes in local conditions, such as a change in landlord for a bank's current location or a time-sensitive opportunity to relocate to a more desirable location. The FDIC does not have the information necessary to further quantify the benefit associated with the reduction in the time it takes for the FDIC to process filings, but believes that processing time reductions will improve productivity and competitiveness for filers.
As mentioned above, the final rule extends the expiration date of an approved filing from 18 months to 24 months, lengthening the period of time an affected bank has to complete a branch relocation or establish a branch. This aspect of the final rule will benefit small applicants by providing greater flexibility for the planning and execution of the establishment or relocation of a branch or office. The FDIC does not have the information necessary to identify which small, FDIC-supervised institutions will utilize the additional time in future periods.
As previously discussed, the final rule clarifies certain definitions. Specifically, the final rule clarifies that “branch” does not include RSUs, drop boxes, or financial education programs that include the provision of bank products and services. In practice the FDIC has not considered such locations branches. Finally, the final rule clarifies the definition of “de novo interstate branch” for the purposes of the filings requirements for establishing a branch, relocating a main office or branch, or relocating an insured branch of a foreign bank. The FDIC does not have the information necessary to quantify the benefits to prospective filers associated with these aspects of the final rule. However, the FDIC believes that these clarifications will benefit filers and the industry by reducing uncertainty.
The unquantified benefits discussed above are in addition to the quantified benefits. Conservatively, if each branch filing affected by the final rule were submitted by a distinct small bank, then the final rule would affect 300 small banks. The FDIC does not believe that the unquantified benefits would likely result in a significant effect for the vast majority of the 300 affected banks.
Finally, the FDIC concludes that the final rule does not pose any material direct costs to filers.
In light of the foregoing, the FDIC certifies that the final rule does not have a significant economic impact on a substantial number of small entities. Accordingly, a final regulatory flexibility analysis is not required.
Section 722 of the Gramm-Leach-Bliley Act requires Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The FDIC invited comments regarding the use of plain language but did not receive any relevant comments. The FDIC sought to clearly state the provisions of the rule in a simple and straightforward manner.
Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 (RCDRIA) requires that the Federal banking agencies, including the FDIC, in determining the effective date and administrative compliance requirements of new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions (IDIs), consider, consistent with principles of safety and soundness and the public interest, any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions, as well as the
The final rule does not impose additional reporting, disclosure, or other new requirements on IDIs. As such, the provisions of RCDRIA do not apply to the FDIC's determination of the final rule's effective date.
Under Executive Order 12866, as affirmed and supplemented by Executive Order 13563, “significant regulatory actions” are subject to review by OMB. The FDIC has submitted this regulatory action to OMB for review. OMB has determined the rule is not a significant regulatory action as defined by section 3(f) of Executive Order 12866. For more information on the analysis conducted in connection with Executive Order 12866, refer to other sections of this
Executive Order 14192 directs agencies, unless prohibited by law, to identify at least 10 existing regulations to be repealed when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation with total costs greater than zero. Executive Order 14192 further requires that new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations. An Executive Order 14192 deregulatory action is an action that has been finalized and has total costs less than zero. This final rule is considered an Executive Order 14192 deregulatory action.
Administrative practice and procedure, Bank deposit insurance, Banks, banking, Reporting and recordkeeping requirements, Savings associations.
Banks, banking, Community development, Credit, Investments, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Board of Directors of the Federal Deposit Insurance Corporation amends 12 CFR parts 303 and 345 as follows:
12 U.S.C. 378, 1464, 1813, 1815, 1817, 1818, 1819(a) (Seventh and Tenth), 1820, 1823, 1828, 1829, 1831a, 1831e, 1831o, 1831p-1, 1831w, 1835a, 1843(l), 3104, 3105, 3108, 3207, 5414, 5415, and 15 U.S.C. 1601-1607.
(a)
(c) * * *
(1) * * *
(i) In the case of an application for deposit insurance for a
(a)
(b)
(1)
(i) A
(A) A direct line of sight exists between the two facilities;
(B) The facilities share the same parking area; or
(C) The facilities are located on contiguous properties or on the same block.
(ii)
(2) [Reserved]
(c)
(f)
(g)
(a)
(b)
(1) A statement of intent to establish a branch, or to relocate the main office or a branch;
(2) The exact location of the proposed site including the street address. With regard to messenger services, specify the geographic area in which the services will be available. With regard to a mobile branch, specify the community or communities in which the vehicle will operate and the manner in which it will be used;
(3) When a filing is submitted to relocate the main office of the bank from one State to another, a statement of the bank's intent regarding retention of branches in the State where the main office exists prior to relocation; and
(4) With respect to a branch relocation or a main office relocation, confirmation that advance written notice was provided to customers of the branch or main office being relocated.
(c)
(a)
(1) The third business day after receipt by the FDIC of a letter filing that includes the information set forth in § 303.42; or
(2) In the case of a filing to establish and operate a
(b)
(c)
(a)
(2) Within 10 days of the temporary relocation resulting from an emergency or disaster, the bank shall submit a filing to the appropriate FDIC office, that identifies the nature of the emergency or disaster, specifies the location of the temporary branch, and provides an estimate of the duration the bank plans to operate the temporary branch.
(3) As part of the review process, the FDIC will determine on a case by case basis whether additional information is necessary.
(b)
(c)
No filing or prior approval is required in order for a State nonmember bank to participate in one or more financial education programs that involve receiving deposits, paying withdrawals, or lending money if:
(a)
(2)
(3)
(4)
(b)
(2)
(c)
(1) The factors set forth in section 6 of the FDI Act (12 U.S.C. 1816) have been considered and favorably resolved;
(2) The filer is at least adequately capitalized as defined in subpart H of part 324 of this chapter;
(3) Any financial arrangements that have been made in connection with the proposed relocation and that involve the filer's directors, officers, major shareholders, or their interests are fair and reasonable in comparison to similar arrangements that could have been made with independent third parties;
(4) Compliance with the CRA and any applicable related regulations, including part 345 of this chapter, has been considered and favorably resolved;
(5) No CRA protest as defined in § 303.2(l) has been filed that remains unresolved or, where such a protest has been filed and remains unresolved, the Director or designee concurs that approval is consistent with the purposes of the CRA and the filer agrees in writing to any conditions imposed regarding the CRA; and
(6) The filer agrees in writing to comply with any conditions imposed by the FDIC, other than the standard conditions defined in § 303.2(dd) that may be imposed without the filer's written consent.
(d)
(1) Comply with any applicable State laws or regulations of the States affected by the proposed relocation; and
(2) Obtain any required regulatory approvals from the appropriate State licensing authority of the State to which the insured branch proposes to relocate before relocating the existing branch operations and surrendering its existing license to the appropriate State licensing authority of the State from which the branch is relocating.
12 U.S.C. 1814-1817, 1819-1820, 1828, 1831u, 2901-2908, 3103-3104, and 3108(a).
(c)
By order of the Board of Directors.
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
The FAA is adopting a new airworthiness directive (AD) for all Leonardo S.p.A. Model A119 and AW119 MKII helicopters. This AD was prompted by reports of trapped residue in the rear pneumatic line due to a non-optimal cleaning procedure. This AD requires accomplishing repetitive engine acceleration checks and, depending on the results, replacing the rear pneumatic line and inspecting the fuel control unit (FCU), and accomplishing any necessary corrective actions. This AD also requires replacing certain parts if the engine acceleration check exceeds the maximum limit, which terminates the repetitive acceleration checks. If the limits do not exceed the maximum limit, this AD would allow this replacement as an optional terminating action. Additionally, this AD prohibits installing an affected engine or FCU on a helicopter unless certain requirements are met. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective January 13, 2026.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of January 13, 2026.
The FAA must receive comments on this AD by February 12, 2026.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For European Union Aviation Safety Agency (EASA) material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999 000; email:
• You may view this material at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood
Mahmood Shah, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: (817) 222-5538; email:
The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments using a method listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Mahmood Shah, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2025-0199, dated September 16, 2025 (EASA AD 2025-0199) (also referred to as the MCAI), to correct an unsafe condition on Leonardo S.p.A. Model A119 and AW119MKII helicopters. The MCAI states that there have been reports of trapped residue in the rear pneumatic line caused by a non-optimal cleaning procedure during an engine shop visit.
This condition, if not corrected, could result in uncommanded fuel flow changes, which could lead to accelerations, power rollbacks, or instability, and consequent reduced control of the helicopter.
You may examine the MCAI in the AD docket at
The FAA reviewed EASA AD 2025-0199, which specifies procedures for repetitively conducting engine acceleration checks for certain helicopters and, depending on the results, replacing the rear pneumatic line and inspecting the FCU pneumatic line input fitting. If there is contamination in the FCU pneumatic line input fitting, EASA AD 2025-0199 specifies procedures for replacing the FCU and cleaning the forward pneumatic line. If no contamination is found in the FCU pneumatic line input fitting, EASA AD 2025-0199 specifies procedures for adjusting the engine acceleration and accomplishing repetitive engine acceleration checks until the rear pneumatic line, engine, or FCU is replaced.
Additionally, EASA AD 2025-0199 specifies that for certain helicopters replacing the rear pneumatic line with a serviceable one is a requirement and terminates the repetitive acceleration checks. EASA AD 2025-0199 also specifies that several actions including replacing certain parts and accomplishing certain checks also terminate the repetitive acceleration checks. Finally, EASA AD 2025-0199 prohibits installing an affected engine or FCU on a helicopter unless certain requirements are met.
This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
These products have been approved by the civil aviation authority (CAA) of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this AD after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This AD requires accomplishing the actions specified in EASA AD 2025-0199, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD. See “Differences Between this AD and the MCAI” for a discussion of the general differences included in this AD.
The owner/operator (pilot) holding at least a private pilot certificate may perform the initial acceleration checks and must enter compliance with the applicable paragraph(s) of the AD into the helicopter maintenance records in accordance with 14 CFR 43.9(a) and 91.417(a)(2)(v). The pilot may perform these checks as they involve only a ground check and monitoring of the engine gauges. These actions could be performed equally well by a pilot or a mechanic. This is an exception to the FAA's standard maintenance regulations.
The MCAI specifies to replace the affected pneumatic line with a serviceable pneumatic line immediately if acceleration exceeds the maximum value during the engine acceleration check and within 300 FH [flight hours] or 24 months, whichever occurs first, for all other helicopters. The 300-FH or 24-month compliance time would allow enough time to provide notice and opportunity for prior public comment so this AD allows the replacement as an optional terminating action for the repetitive acceleration checks but does not require the replacement in regards to paragraph (5) of EASA AD 2025-0199. The FAA is considering further rulemaking for this replacement that would allow the public the opportunity for prior public comment.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some CAA ADs as the primary source of information for compliance with requirements for corresponding
Section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 551
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because residue in the rear pneumatic line if not detected and addressed could result in uncommanded fuel flow changes resulting in accelerations, power rollbacks, or instability. Since this condition could already exist and result in reduced control of the helicopter at any time without warning the initial engine acceleration check must be accomplished within 10 hours time-in-service after the effective date of this AD. This compliance time is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b).
In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without prior notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects 12 helicopters of U.S. registry.
The FAA estimates the following costs to comply with this AD:
The FAA estimates the following costs to do any repairs or replacements that would be required based on the results of the check. The agency has no way of determining the number of helicopters that might need these repairs or replacements:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective January 13, 2026.
None.
This AD applies to Leonardo S.p.A. Model A119 and AW119 MKII helicopters, certificated in any category.
Joint Aircraft System Component (JASC) Code 7100, Powerplant System.
This AD was prompted by reports of trapped residue in the rear pneumatic line due to non-optimal cleaning procedures. The FAA is issuing this AD to detect and correct a contaminated rear pneumatic line. The unsafe condition, if not corrected, could result in uncommanded fuel flow changes, which could lead to accelerations, power rollbacks, or instability, and consequent reduced control of the helicopter.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraphs (h) and (i) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency AD 2025-0199, dated September 16, 2025 (EASA AD 2025-0199).
(1) Where EASA AD 2025-0199 refers to its effective date, this AD requires using the effective date of this AD.
(2) Where EASA AD 2025-0199 requires compliance in terms of flight hours, this AD requires using hours time-in-service.
(3) Where the definition of affected engines, affected FCU [fuel control unit], affected pneumatic line, and serviceable pneumatic line in EASA AD 2025-0199 all refer to “the P&WC SB No. A39125R1”, for this AD replace that text with “the applicable original issue of the alert service bulletin listed in the Ref. Publications section (referencing P&WC SB No. A39125R1)”.
(4) Where paragraph (1) and paragraph (4.2) of EASA AD 2025-0199 specifies “accomplish acceleration checks of the engine in accordance with the instructions of the Part 1 of the ASB (referencing Part A of the P&WC SB No. A39125R1)”, for this AD replace that text with “accomplish acceleration checks of the engine”. The owner/operator (pilot) holding at least a private pilot certificate may perform the checks required by paragraph (g) of this AD and must enter compliance with these paragraphs into the helicopter maintenance records in accordance with 14 CFR 43.9(a) and 91.417(a)(2)(v). The record must be maintained as required by 14 CFR 91.417, 121.380, or 135.439.
(5) Where paragraph (5) of EASA AD 2025-0199 specifies to replace the affected pneumatic line with a serviceable pneumatic line within 300 FH or 24 months, whichever occurs first, for this AD that replacement is only required before further flight per paragraph (2) of EASA AD 2025-0199. For this AD if not required by paragraph (2) of EASA AD 2025-0199 this replacement is an optional terminating action for the repetitive acceleration checks required by paragraph (1) of EASA AD 2025-0199.
(6) This AD does not adopt the “Remarks” section of EASA AD 2025-0199.
Although the material referenced in EASA AD 2025-0199 specifies to submit certain information to the manufacturer, this AD does not require that action.
(1) The Manager, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the International Validation Branch, send it to the attention of the person identified in paragraph (k) of this AD and email to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
For more information about this AD, contact Mahmood Shah, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: (817) 222-5538; email:
(1) The Director of the Federal Register approved the incorporation by reference of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2025-0199, dated September 16, 2025.
(ii) [Reserved]
(3) For EASA material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999 000; email:
(4) You may view this material at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Parkway, Room 6N-321, Fort Worth, TX 76177. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
The FAA is superseding Airworthiness Directive (AD) 2025-13-12, which applied to all Airbus SAS Model A350-941 and -1041 airplanes. AD 2025-13-12 required replacement of any affected elevator flight control remote module (FCRM), prohibited the installation of aileron or spoiler FCRMs in place of elevator or rudder FCRMs, and limited the installation of FCRMs under certain conditions. Since the FAA issued AD 2025-13-12, the manufacturer developed a modification that eliminates the unsafe condition. This AD continues to require the actions of AD 2025-13-12. This AD also requires installation of the flight control and guidance system (FCGS) primary computer (PRIM) P14.1.3 and secondary computer (SEC) S14.1.2 software standards and prohibits installation of earlier software standards. The FAA is issuing this AD to address the unsafe condition on these products.
This AD is effective January 13, 2026.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of January 13, 2026.
The FAA must receive comments on this AD by February 12, 2026.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For European Union Aviation Safety Agency (EASA) material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available at
Frank Carreras, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3539; email:
The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments using a method listed under the
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Frank Carreras, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3539; email:
The FAA issued AD 2025-13-12, Amendment 39-23078 (90 FR 30577, July 10, 2025) (AD 2025-13-12), for all Model A350-941 and -1041 airplanes. AD 2025-13-12 was prompted by an MCAI originated by EASA, which is the Technical Agent for the Member States of the European Union. EASA issued AD 2025-0129, dated June 5, 2025 (EASA AD 2025-0129), to correct an unsafe condition. EASA AD 2025-0129 states that an occurrence of loss of control of an outboard aileron surface was reported. Subsequent investigations determined that the electronic card of the FCRM of that aileron had been contaminated by hydraulic fluid. In addition, EASA determined that certain servocontrols were exposed to hydraulic contamination before delivery of the airplane to its first operator. Due to the similarity of design, elevator and rudder FCRMs could be subject to the same failure mode. EASA AD 2025-0129 also stated the AD was considered an interim action and that further AD action might follow.
AD 2025-13-12 required replacement of any affected elevator FCRM and prohibited the installation of aileron or spoiler FCRMs in place of elevator or rudder FCRMs. AD 2025-13-12 also limited the installation of aileron or spoiler FCRMs in place of elevator or rudder FCRMs. The FAA issued AD 2025-13-12 to address the unsafe condition on all Model A350-941 and -1041 airplanes.
Since the FAA issued AD 2025-13-12, EASA superseded EASA AD 2025-0129 with EASA AD 2025-0197R1,
The preamble to AD 2025-13-12 explained that the FAA considered that AD an interim action. The FAA has determined that further rulemaking is indeed necessary to mandate the terminating action developed by the airplane manufacturer.
The FAA is issuing this AD to address the unsafe condition on these products. You may examine the MCAI in the AD docket at
Although this AD does not explicitly restate the requirements of AD 2025-13-12, this AD retains all of the requirements of AD 2025-13-12. Those requirements are referenced in EASA AD 2025-0197R1, which, in turn, is referenced in paragraph (g) of this AD.
The FAA reviewed EASA AD 2025-0197R1. This material describes procedures for replacing affected FCRMs, which have been exposed to hydraulic fuel contamination, with serviceable FCRMs and repairing any related hydraulic leaks. EASA AD 2025-0197R1 prohibits “swapping” elevator or rudder FCRMs with spoiler or aileron FCRMs and installing an FCRM unless it is a serviceable FCRM. EASA AD 2025-0197R1 also describes procedures for modifying the FCGS by installing PRIM P14.1.3 and SEC S14.1.2 software standards and prohibits installation of earlier FCGS software standards after modification. EASA AD 2025-0197R1 specifies that the modification terminates the replacement of affected FCRMs, the prohibition for swapping elevator or rudder FCRMs with spoiler or aileron FCRMs, and the limitation for installing only a serviceable FCRM.
This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
These products have been approved by the civil aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this AD after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
This AD retains all requirements of AD 2025-13-12. This AD requires accomplishing the actions specified in EASA AD 2025-0197R1 described previously, except for any differences identified as exceptions in the regulatory text of this AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2025-0197R1 is incorporated by reference in this AD. This AD requires compliance with EASA AD 2025-0197R1 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2025-0197R1 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2025-0197R1. Material required by EASA AD 2025-0197R1 for compliance will be available at
Section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 551
An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because an aileron FCRM electronic card exposed to hydraulic fluid has led to loss of control of an outboard aileron surface, and elevator and rudder FCRM electronic cards exposed to hydraulic fluid are also subject to failure due to their similarity of design. Control of the airplane is significantly degraded through the loss of control of an elevator or rudder surface, resulting in loss of control of the airplane. To mitigate this unsafe condition, the FAA issued interim AD 2025-13-12 to require replacement of affected FCRMs. However, those replacements are not repetitive, and the modification must be accomplished to eliminate the unsafe condition. Additionally, the compliance time in this AD is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b).
In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.
The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.
The FAA estimates that this AD affects 39 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:
The FAA estimates the following costs to do any necessary on-condition action that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need this on-condition action:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866, and
(2) Will not affect intrastate aviation in Alaska.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) is effective January 13, 2026.
This AD replaces AD 2025-13-12, Amendment 39-23078 (90 FR 30577, July 10, 2025) (AD 2025-13-12).
This AD applies to all Airbus SAS Model A350-941 and -1041 airplanes, certificated in any category.
Air Transport Association (ATA) of America Code 27, Flight Controls.
This AD was prompted by a report of loss of control of an outboard aileron surface due to hydraulic fluid contaminating an electronic card of the flight control remote module (FCRM). The FAA is issuing this AD to address FCRM electronic cards exposed to hydraulic fluid contamination. This condition, if not detected and corrected, could lead to runaway of rudder or elevator surface, resulting in loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, European Union Aviation Safety Agency (EASA) AD 2025-0197R1, dated September 26, 2025 (EASA AD 2025-0197R1).
(1) Where EASA AD 2025-0197R1 refers to “07 May 2025 [the effective date of EASA AD 2025-0099],” this AD requires using July 25, 2025 (the effective date of AD 2025-13-12).
(2) Where EASA AD 2025-0197R1 refers to “12 June 2025 [the effective date of EASA AD 2025-0129],” this AD requires using July 25, 2025 (the effective date of AD 2025-13-12).
(3) Where EASA AD 2025-0197R1 refers to its effective date, this AD requires using the effective date of this AD.
(4) Where paragraph (1) of EASA AD 2025-0197R1 states “do not swap”, this AD requires replacing that text with “do not replace”.
(5) Where paragraph (2) of EASA AD 2025-0197R1 states “is reported on an aeroplane”, this AD requires replacing that text with “is documented in the aircraft maintenance records or has been reported to Airbus”.
(6) Where table 1 of EASA AD 2025-0197R1 states “close to”, this AD requires replacing that text with “adjacent to”.
(7) Where paragraph (13) of EASA AD 2025-0197R1 specifies installing certain software standards on the airplane in accordance with Airbus approved instructions, for this AD, those instructions must be approved using a method specified in paragraph (j)(2) of this AD.
(8) This AD does not adopt the “Remarks” section of EASA AD 2025-0197R1.
Although material referenced in EASA AD 2025-0197R1 specifies to submit certain information to the manufacturer, this AD does not include that requirement.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(ii) AMOCs approved previously for AD 2025-13-12 are approved as AMOCs for the corresponding provisions of EASA AD 2025-0197R1 that are required by paragraph (g) of this AD.
(2)
(3)
For more information about this AD, contact Frank Carreras, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3539; email:
(1) The Director of the Federal Register approved the incorporation by reference of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) European Aviation Safety Agency (EASA) AD 2025-0197R1, dated September 26, 2025.
(ii) [Reserved]
(3) For EASA material identified in this AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(4) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule amends, suspends, or removes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide for the safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective December 29, 2025. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of December 29, 2025.
Availability of matter incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30, 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001;
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Information Services, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA).
For information on the availability of this material at NARA, visit
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center online at
Rune Duke, Manager (Acting), Standards Section, Flight Procedures and Airspace Group, Aviation Safety, Federal Aviation Administration. Mailing Address: FAA Mike Monroney Aeronautical Center, Flight Procedures and Airspace Group, 6500 South MacArthur Blvd., STB Annex, Bldg. 26, Room 217, Oklahoma City, OK 73099. Telephone (405) 954-1139.
This rule amends 14 CFR part 97 by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.
The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.
The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.
Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air traffic control, Airports, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, 14 CFR part 97 is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule establishes, amends, suspends, or removes Standard Instrument Approach Procedures (SIAPS) and associated Takeoff Minimums and Obstacle Departure procedures (ODPs) for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective December 29, 2025. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of December 29, 2025.
Availability of matters incorporated by reference in the amendment is as follows:
1. U.S. Department of Transportation, Docket Ops-M30. 1200 New Jersey Avenue SE, West Bldg., Ground Floor, Washington, DC 20590-0001.
2. The FAA Air Traffic Organization Service Area in which the affected airport is located;
3. The office of Aeronautical Information Services, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Visit the National Flight Data Center at
Rune Duke, Manager (Acting), Standards Section, Flight Procedures and Airspace Group, Aviation Safety, Federal Aviation Administration. Mailing Address: FAA Mike Monroney Aeronautical Center, Flight Procedures and Airspace Group, 6500 South MacArthur Blvd., STB Annex, Bldg. 26, Room 217, Oklahoma City, OK 73099. Telephone (405) 954-1139.
This rule amends 14 CFR part 97 by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are 8260-3, 8260-4, 8260-5, 8260-15A, 8260-15B, when required by an entry on 8260-15A, and 8260-15C.
The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the
The material incorporated by reference is publicly available as listed in the
The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPs as identified in the amendatory language for part 97 of this final rule.
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flights safety relating directly to published aeronautical charts.
The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.
Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally
Air traffic control, Airports, Incorporation by reference, Navigation (air).
Accordingly, pursuant to the authority delegated to me, 14 CFR part 97 is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(f), 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722.
Office of the Assistant Secretary for Public and Indian Housing, HUD.
Final rule; extension of compliance date.
This document indefinitely delays the compliance date for HUD's final rule entitled “Strengthening the Section 184 Indian Housing Loan Guarantee Program” published on March 20, 2024 until HUD completes necessary updates to the handbook, which will provide necessary guidance for implementing the final rule.
The compliance date announced on January 17, 2025, at 90 FR 5604, is indefinitely delayed. HUD will publish a document in the
Chung-Yiu “Andrew” Lee, Senior Native American Policy Advisor, Office of Loan Guarantee, Office of Native American Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW, Room 4108, Washington, DC 20410; email at
On March 20, 2024, HUD published the final rule (89 FR 20032), which amended the regulations to the Section 184 Indian Housing Loan Guarantee Program (Section 184 Program). Since its inception, the Section 184 Program has experienced an increase in demand. As a result, the final rule updated program regulations to minimize potential risk and increase program participation by financial institutions, and added eligibility and participation requirements for Lender Applicants,
On June 14, 2024, HUD published a document in the
HUD is currently drafting a handbook to implement the final rule. The handbook will provide comprehensive guidance and clarification for all stakeholders to fully understand and implement the final rule. Given the size of the handbook, its accompanying forms, level of additional consultation with stakeholders needed to complete the handbook, and intensive training on key components of the new handbook that must be given to stakeholders, HUD has determined that it needs additional time before enforcing the final rule. Further, HUD has heard from Tribes, lenders, servicers, and other participants that additional time is needed after the publication of the handbook for these stakeholders to conform their policies, procedures, and systems to comply with the handbook and the final rule.
As a result of these factors, HUD is therefore indefinitely delaying the compliance date of the final rule. When HUD completes updates to the handbook, HUD will publish an additional
Department of Justice.
Final rule.
This rule amends the Department's organizational regulations by eliminating the Office of the Executive Secretariat as a separate office and consolidating its functions within the Justice Management Division.
Effective December 29, 2025.
John E. Thompson, Deputy General Counsel, Justice Management Division; email:
On January 17, 2025, the Department of Justice published a final rule amending its organizational regulations to establish the functions of the Office of the Executive Secretariat (“OES”) which had been created as a separate component of the Department on August 17, 2023. Office of the Executive Secretariat, 90 FR 5608 (Jan. 17, 2025).
Upon further consideration of the best way to organize the Department and consistent with the Administration's deregulatory and streamlining initiatives, this rule rescinds the prior establishment of OES as a separate component. This rule restores its functions to a staff within the Justice Management Division, which had formerly performed those functions prior to the August 17, 2023, establishment of OES.
This rule also revises 28 CFR 0.1 to delete OES from the list of Department components.
This rule is a rule of agency organization, procedure, and practice and is limited to matters of agency management and personnel. Therefore, it is not a substantive rule, and, as such, it is exempt from the requirements of prior notice and comment and a 30-day delay in the effective date.
In developing this final rule, the Department considered numerous statutes and executive orders applicable to the rulemaking process. The Department's analysis of the applicability of those statutes and executive orders to this rule is summarized below.
This final rule is not a significant regulatory action under section 3(f) of Executive Order 12866, and as supplemented by Executive Order 13563. This rule is limited to agency organization, management, and personnel as described by Executive Order 12866, section 3(d)(3), and therefore is not a “regulation” or “rule” as defined by that Executive Order. Accordingly, this action has not been reviewed by the Office of Management and Budget.
Further, as this rule relates to agency organization, management, or personnel, it is fully exempt from the numerical 10-for-1 and cost offset requirements of Executive Order 14192.
Executive Order 14294 requires agencies promulgating regulations with criminal regulatory offenses potentially subject to criminal enforcement to explicitly describe the conduct subject to criminal enforcement, the authorizing statutes, and the mens rea standard applicable to each element of those offenses. This final rule does not impose a criminal regulatory penalty and is thus exempt from E.O. 14924 requirements.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. 5 U.S.C. 601.
A Regulatory Flexibility Analysis is not required for this final rule because the Department is not required to publish a general notice of proposed rulemaking for this matter.
This final rule does not call for a new or revised collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
A rule has federalism implications under Executive Order 13132 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. E.O. 13132, sec. 1(a). The Department has analyzed this final rule under that Order and determined that this rule does not have federalism implications.
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, requires Federal agencies to determine whether a rule, if promulgated, will result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million (adjusted annually for inflation) or more in any one year. 2 U.S.C. 1532(a). This final rule does not require or result in expenditures by any of the above-named entities.
This final rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988.
This final rule does not have Tribal implications under Executive Order 13175 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.
This rule relates to agency management, personnel, and organization, and does not substantially affect the rights or obligations of non-agency parties. 5 U.S.C. 804(3)(B), (C). This action is accordingly not a “rule” as that term is used in the Congressional Review Act,
Authority delegations (Government agencies), Government employees, Organization and functions (Government agencies).
For the reasons stated above, the Department of Justice amends 28 CFR Part 0 as follows:
5 U.S.C. 301; 28 U.S.C. 509, 510, 515-519.
(p) Ensure that official documents requiring the review, approval, or signature by the Attorney General, Deputy Attorney General, or Associate Attorney General are assigned, tracked, and cleared within the Department of Justice, as appropriate; manage select interagency requests for official approval or concurrence by the Attorney General, Deputy Attorney General, or Associate Attorney General; Departmental clearances; and submissions from other agencies for review and clearance, including rulemakings and guidance documents circulated by the Office of Management and Budget pursuant to Executive Order 12866 or any successor order and documents circulated by the Department of State for clearance, within the Department of Justice.
Department of Homeland Security (DHS).
Final rule; technical amendment.
On January 2, 2025, DHS adjusted for inflation its civil monetary penalties for 2025, in accordance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 and Executive Office of the President (EOP) Office of Management and Budget (OMB) guidance. The new penalty amounts were effective for penalties assessed after January 2, 2025, whose associated violations occurred after November 2, 2015. DHS is making a technical amendment to the Code of Federal Regulations to make several clerical revisions to the codified 2025 penalty amounts.
This technical amendment is effective on December 29, 2025.
Hillary Hunnings, Attorney-Advisor, 202-878-9252,
On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Pub. L. 114-74 section 701 (Nov. 2, 2015)) (2015 Act). The 2015 Act amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) to further improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Act required agencies to make annual adjustments for inflation. On January 2, 2025, DHS published a final rule making the 2025 annual inflation adjustments to its civil monetary penalties pursuant to the 2015 Act and pursuant to guidance OMB issued to agencies on December 17, 2024 (January 2025 rule). See 90 FR 1 (Jan. 2, 2025). The penalty amounts were effective for penalties assessed after January 2, 2025,
DHS is making a technical amendment to the Code of Federal Regulations. This technical amendment will make several clerical revisions to the codified 2025 penalty amounts. Specifically, DHS is making clerical revisions in the Coast Guard's and the Transportation Security Administration's codified 2025 penalty amounts.
The preamble of the January 2025 rule described inflation adjustments to all 152 Coast Guard penalties. However, for five of the 152 penalties, the Coast Guard inadvertently failed to make corresponding adjustments to the codified penalty table in 33 CFR 27.3. This rule revises Table 1 in 33 CFR 27.3 to include the correct 2025 inflation-adjusted penalty amounts for the affected penalties, consistent with the amounts set out in the preamble of the January 2025 rule. The Coast Guard is revising only the five penalties in the table below. All other penalty amounts in the table remain unchanged.
In addition, TSA determined that a statutory revision enacted in May 2024 required an update to the January 2025 rule. The FAA Reauthorization Act of 2024 (Pub. L. 118-63, 138 Stat. 1025, 1102 (May 16, 2024)) amended 49 U.S.C. 46301 to raise the statutory maximum civil monetary penalty amounts that TSA may assess for security violations. This rule revises the relevant penalty provisions to incorporate the 2024 statutory amendment to 49 U.S.C. 46301 and the 2025 adjustment for inflation. This rule ensures that the regulatory text accurately reflects TSA's current statutory penalty authority and accordingly the civil monetary penalty amounts as adjusted for inflation.
DHS is issuing this rule without prior notice and comment because the Department has determined that good cause exists under 5 U.S.C. 553(b)(B). The APA permits an agency to dispense with notice and comment when doing so would be “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). This amendment falls within the unnecessary prong because, for both the Coast Guard and TSA revisions, it makes only non-substantive, corrective revisions to the civil monetary penalty adjustments published in the January 2025 rule.
As discussed above, the Coast Guard inadvertently excluded several properly inflation-adjusted penalty amounts from the codified table in 33 CFR 27.3 in the 2025 annual adjustment rule, even though the correct amounts appeared in
Also as discussed above, TSA updated the January 2025 rule to account for a statutory amendment enacted in May 2024 that increased certain maximum penalty authorities under 49 U.S.C. 46301. Without this update, the CFR would continue to reflect the outdated maximum amounts rather than those currently authorized by Congress. Accordingly, this rule revises the regulatory text to reflect the updated statutory maximum amounts. This revision is also non-substantive and corrective, as it merely conforms the CFR to statutorily authorized penalty maximums already in effect that the Department lacks discretion to modify.
DHS therefore finds notice and comment unnecessary under 5 U.S.C. 553(b)(B). For the same reasons, DHS also finds good cause under 5 U.S.C. 553(d)(3) to make this technical amendment effective upon publication.
Administrative practice and procedure, Penalties.
Administrative practice and procedure, Investigations, Law enforcement, Penalties.
Accordingly, for the reasons stated in the preamble, DHS is amending 33 CFR part 27, and 49 CFR part 1503 as follows:
Secs. 1-6, Pub. L. 101-410, 104 Stat. 890, as amended by Sec. 31001(s)(1), Pub. L. 104-134, 110 Stat. 1321 (28 U.S.C. 2461 note); Department of Homeland Security Delegation No. 0170.1, sec. 2 (106).
* * * The adjusted civil penalty amounts listed in Table 1 to this section are applicable for penalty assessments issued after December 29, 2025, with respect to violations occurring after November 2, 2015. * * *
6 U.S.C. 1142; 18 U.S.C. 6002; 28 U.S.C. 2461 (note); 49 U.S.C. 114, 20109, 31105, 40113-40114, 40119, 44901-44907, 44939, 46101-46107, 46109-46110, 46301, 46305, 46311, 46313-46314; Pub. L. 110-53 (121 Stat. 266, Aug. 3, 2007) secs. 1408 (6 U.S.C. 1137), 1501 (6 U.S.C. 1151), 1517 (6 U.S.C. 1167), and 1534 (6 U.S.C. 1184).
(c)
(2) For violations that occurred on or before November 2, 2015, $10,000 per violation, up to a total of $400,000 per civil penalty action, in the case of any other person (except an airman serving as an airman) not operating an aircraft for the transportation of passengers or property for compensation. For violations that occurred between November 2, 2015, and May 16, 2024, $17,062 per violation, up to a total of $682,509 per civil penalty action, in the case of any other person (except an airman serving as an airman) not operating an aircraft for the transportation of passengers or property for compensation. For violations that occurred on or before May 16, 2024, $10,000 per violation, up to a total of $400,000 per civil penalty action, in the case of any other person (except an airman serving as an airman) not operating an aircraft for the transportation of passengers or property for compensation. For violations that occurred after May 16, 2024, $17,062 per violation, up to a total of $1,200,000 per civil penalty action, in the case of any other person (except an airman serving as an airman) not operating an aircraft for the transportation of passengers or property for compensation.
(3) For violations that occurred on or before November 2, 2015, $25,000 per violation, up to a total of $400,000 per civil penalty action, in the case of a person operating an aircraft for the transportation of passengers or property for compensation (except an individual serving as an airman). For violations that occurred between November 2, 2015, and May 16, 2024, $42,657 per violation, up to a total of $682,509 per civil penalty action, in the case of a person (except an individual serving as an airman) operating an aircraft for the transportation of passengers or property for compensation. For violations that occurred on or before May 16, 2024, $25,000 per violation, up to a total of $400,000 per civil penalty action, in the case of a person operating an aircraft for the transportation of passengers or property for compensation (except an individual serving as an airman). For violations that occurred after May 16, 2024, $42,657 per violation, up to a total of $1,200,000 per civil penalty action, in the case of a person (except an individual serving as an airman) operating an aircraft for the transportation of passengers or property for compensation.
Coast Guard, Department of Homeland Security.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for certain navigable waters of the Houston Ship Channel around the Beltway 8 Bridge (Sam Houston Tollway Ship Channel Bridge), during bridge construction and demolition activities. The temporary safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by constructing a new bridge. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Sector Houston-Galveston.
This rule is effective without actual notice from December 29, 2025 through March 1, 2030. For the purposes of enforcement, actual notice will be used from December 22, 2025, until December 29, 2025.
To view available documents go to
If you have questions about this rule, contact Marine Science Technician Chief Petty Officer Anthony W. Booth, Sector Houston-Galveston Waterway Management Division, Coast Guard; Telephone (713) 398-5823, Email
On July 24, 2025, construction of the new Beltway 8 Bridge (Sam Houston Tollway Ship Channel Bridge) started over the navigable waters of the Houston Ship Channel. The Coast Guard previously published a short-term temporary safety zone to cover the initial phase of this construction, which covers only a small area along the north and south shorelines around the bridge (90 FR 35437, July 28, 2025). The Coast Guard also published a notice of proposed rulemaking (NPRM) to establish a long-term temporary safety zone for this project (90 FR 43950, September 11, 2025). In that NPRM, we stated why we issued the NPRM and invited comments on our proposed regulatory action.
Under the authority in 46 U.S.C. 70034, the COTP has determined that this rule is necessary to protect personnel, vessels, and the marine environment from potential hazards associated with this bridge demolition and construction project. Hazards associated with this project include falling construction equipment, materials, or other debris. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or their designated representative during periods of enforcement.
The Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
During the comment period that ended on October 14, 2025, we received one comment. The comment supported the safety zone and encouraged the Coast Guard to elaborate on timing for closure of the federal channel to improve coordination and to assist affected users with preparation for the closure. Due to the length of the project and complexity and uncertainty regarding the project schedule, the Coast Guard is unable to provide this detailed information at this time. However, the Coast Guard will work closely with the project managers to ensure the public and waterway users are notified well in advance of any closure that will prohibit vessel navigation on the waterway. The Coast Guard will provide advance notice to the public through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and the Vessel Traffic Service (VTS).
The Coast Guard is also making two clarifying changes to the regulatory text. In paragraph (c)(1), the phrase “while overhead bridge construction or demolition activities are occurring” has been deleted. Also in paragraph (d), the sentence “[t]hat date should include some margin for error in case of delays[,]” was also deleted. Although not requested or commented upon, the Coast Guard believes these changes in the regulatory text will prevent potential confusion regarding times when the safety zone is activated. As written now, the regulatory text clearly states that Coast Guard will provide advance notice to the public of the specific enforcement times and areas within the zone, which will depend on construction or demolition activities. There are no other changes in the regulatory text of this rule from the proposed rule in the NPRM.
This rule establishes a safety zone from December 22, 2025 through March 1, 2030. That date should include some margin for error in case of delays. Specific enforcement times and areas within the zone will depend on construction or demolition activities. The safety zone covers all navigable waters within the area encompassed by a line connecting the following points on the north and south shore of the Houston Ship Channel around the Beltway 8 Bridge (Sam Houston Tollway Ship Channel Bridge): Point 1 is the southeast corner at 29°44.033′ N 95°8.733′ W; thence west to Point 2 at 29°44.100′ N 95°8.833′ W; thence north to Point 3 at 29°44.267′ N 95°8.817′ W; thence east to Point 4 at 29°44.267′ N 95°8.717′ W; thence south returning to Point 1. No vessel or person is permitted to enter the safety zone without obtaining permission from the COTP or their designated representative.
We developed this 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.
The Coast Guard certifies that, although some small entities may intend to transit the safety zone above, this rule will not have a significant economic impact on a substantial number of small entities, as mandated by the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612 for the following reasons. During the times of overhead construction outside of the federal channel, vessels will still be allowed to transit under the bridge only within the federal channel. The channel will be closed for a short period when the construction or demolition is actively occurring over the main federal channel, and these closures will be coordinated between stakeholders, the construction contractor and Sector Houston-Galveston. The Coast Guard will work closely with the project managers to ensure the public and waterway users are notified well in advance of any closure that will prohibit vessel navigation on the main federal channel. While this zone will be in effect for several years, the Coast Guard (CG) anticipates that the main federal channel will remain open for the majority of the effective period.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 1-888-REG-FAIR (1-888-734-3247).
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
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.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have 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 is a safety zone. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; DHS Delegation No. 00170.1, Revision No. 01.4.
(a)
(b)
(c)
(2) Persons or vessels seeking to enter the safety zone must request permission from the COTP on VHF-FM channel 16 or by telephone at 866-539-8114. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, Department of Homeland Security.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for all navigable waters within a 500-foot radius of 38°12′11.1″ N, 92°37′59.4″ W, at Mile Marker 0.2 on the Lake of the Ozarks. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by a fireworks display. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Sector Upper Mississippi River.
This rule is effective from 8:30 p.m. through 10 p.m. on December 31, 2025.
To view available documents, go to
If you have questions about this rule, contact MST2 Rilie Inmon, Sector Upper Mississippi River Waterways Management Division, U.S. Coast Guard; telephone 319-520-8556, email
The Coast Guard received notification that fireworks will be launched from a barge on the Lake of the Ozarks at mile marker 0.2. Hazards from fireworks displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port (COTP) Sector Upper Mississippi River has determined that potential hazards associated with fireworks are a safety concern for anyone within 500 feet of the fireworks display. Therefore, the COTP is issuing this rule under the authority in 46 U.S.C. 70034, which is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone.
The Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), 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. We must establish this safety zone by December 31, 2025, to protect personnel, vessels, and the marine environment. Therefore, we do not have enough time to solicit and respond to comments.
For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the
This rule establishes a safety zone that will be enforced from 8:30 p.m. until 10 p.m. on December 31, 2025. The safety zone will cover all navigable water within a 500-foot radius of the fireworks barge on Lake of the Ozarks, at 38°12′11.08″ N, 92°37′59.35″ W. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or their designated representative.
We developed this 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.
The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the
Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 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 will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.
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.
As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have 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 is a safety zone. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.4.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on VHF-FM channel 16 or by telephone at 1-866-360-3386. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Federal Maritime Commission.
Final rule.
This final rule removes from the Code of Federal Regulations a section of the final rule published on February 26, 2024, entitled “Demurrage and Detention Billing Requirements.” This action is responsive to a decision of the U.S. Court of Appeals for the District of Columbia Circuit that set aside the properly issued invoices provision of the rule.
This action is effective on December 29, 2025.
David Eng, Secretary; Phone: (202) 523-5725; Email:
On February 26, 2024, the Federal Maritime Commission (Commission) published a final rule entitled “Demurrage and Detention Billing Requirements” under the authority of the Ocean Shipping Reform Act of 2022, Public Law 117-14 (June 16, 2022), 89 FR 14330. This rule established requirements for common carriers and marine terminal operators to include specific minimum information on demurrage and detention invoices, outlined certain detention and demurrage billing practices, such as determination of which parties may appropriately be billed for demurrage or detention charges, and set timeframes for issuing invoices, disputing charges with the billing party, and resolving such disputes.
In April 2024, the World Shipping Council, a trade association representing the largest vessel-operating common
The Commission is not required to provide notice and comment or delay the effective date of this rule. This rule is not subject to the requirement to provide public comment because it falls under the good cause exception at 5 U.S.C. 553(b)(B). The good cause exception is satisfied when notice and comment is “impracticable, unnecessary, or contrary to the public interest.” Notice and comment for this action would be unnecessary and contrary to the public interest. This rule is a necessary administrative step following the court's order setting aside 46 CFR 541.4. Per the court's decision, section 541.4 has no legal effect. Public comment would not have any impact on the action. For those same reasons, and because this rule implements a court order already in effect, the Commission has good cause to waive the 30-day effective date under 5 U.S.C. 553(d)(3). Delaying the ministerial act of removing the regulatory text in the
Common carriers, Demurrage and detention, Exports, Imports, Marine terminal operators.
For the reasons set forth in the preamble, the Commission amends 46 CFR part 541 as follows:
5 U.S.C. 553; 46 U.S.C. 40101, 40102, 40307, 40501-40503, 41101-41106, 40901-40904, and 46105; and 46 CFR 515.23.
By the Commission.
Office of the Secretary, U.S. Department of Agriculture.
Advanced notice of proposed rulemaking.
The Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA) implementing regulations establish requirements under which foreign persons must report interests in U.S. agricultural lands to the U.S. Department of Agriculture (USDA). AFIDA regulations describe the type of interest in agricultural land a foreign person must have to trigger the reporting requirement, specific information that must be included in the report, and the mechanics of filing the report with USDA. AFIDA also requires some information about foreign persons who hold an interest in the agricultural land even though they may not own it directly, provided those foreign persons have “significant interest or substantial control” in the direct interest holder. USDA uses information from the filings to produce periodic reports to Congress on the effect that foreign ownership of U.S. agricultural land has on family farms and rural communities, and for other purposes. AFIDA regulations were last updated in 2006. Since that time, national security attention to foreign ownership or substantial control of agricultural land has increased. Committee on Foreign Investment in the United States (CFIUS) agencies, including the U.S. Department of Defense, use USDA information from AFIDA filings to identify and review transactions that may pose national security risks, such as the location of agricultural land near sensitive military bases. Recent analyses, including a report by the Government Accountability Office (GAO), have identified flaws in USDA's processes for collecting, tracking, and sharing AFIDA data. These deficiencies, combined with evolving national security concerns and a Consolidated Appropriations Act, 2023 requirement for USDA to develop a streamlined process for electronic submission and retention of AFIDA disclosures, lead USDA to examine AFIDA regulations and invite public input on changes that would improve information collection activities in a manner responsive to national security and the use of agricultural land.
Comments must be received by January 28, 2026.
USDA invites public comments on this Advance Notice of Proposed Rulemaking (ANPRM) and encourages stakeholders, including farmers, industry representatives, CFIUS and national security agencies and experts, and state and local governments, to provide input. Comments will be considered in the development of any future regulatory changes to ensure the regulations effectively address national security interests and the effects of foreign-owned agricultural land on rural communities.
You may submit comments, identified by Docket ID: FSA-2024-0005, in the Federal eRulemaking Portal:
Mary Estep; telephone: (202) 720-3217; email:
AFIDA requires foreign persons who acquire, transfer, or hold interests in U.S. agricultural land to report such transactions to the Secretary of Agriculture. The statute was enacted by Congress in 1978 and directed USDA to analyze information contained in the reports and determine the effects of reported transactions and holdings, particularly on family farms and rural communities, and for other purposes. Foreign holdings of U.S. agricultural land increased by an average of 0.6 million acres per year from 2013 to 2017 and by an average of 2.6 million acres per year from 2017 to 2023.
USDA seeks input on regulatory or other changes that may improve the efficiency and effectiveness of its AFIDA reporting and filing requirements. USDA is interested in comments on topics including the interests in agricultural land covered under AFIDA, identification of required filers, and the information included on
(1) 7 U.S.C. 3501-3508.
(2) 7 CFR part 781.
(3) AFIDA summary information at the USDA Farm Service Agency (FSA) website, including AFIDA annual reports and form FSA-153. Available at:
(4) Government Accountability Office Report, “Foreign Investments in U.S. Agricultural Land: Enhancing Efforts to Collect, Track, and Share Key Information Could Better Identify National Security Risks,” GAO-24-106337, Published: January 18, 2024. Available at:
(5) The Committee on Foreign Investment in the United States (CFIUS) informational page on the U.S. Department of the Treasury website. Available at:
Three requirement categories define the content and scope of an AFIDA filing: (1) Identification of foreign persons required to file; (2) The totality of information the filer is required to provide about the agricultural land; and (3) Information the filer is required to provide about other foreign persons with indirect interest in the agricultural land. Current AFIDA requirements and limitations are summarized below.
According to AFIDA regulations in 7 CFR 781.3(b), “Any foreign person who held, holds, acquires, or transfers any interest in United States agricultural land is subject to the requirement of filing a report on form FSA-153” within 90 days of acquiring the interest or becoming a foreign person. Section 781.2 defines key terms.
Broadly, a foreign person is a foreign government, a person (usually a legal entity) created or organized under the laws of a foreign government or that has its principal place of business outside the United States, or an individual who is not a citizen or national of the United States or its territories. The term also includes a person (usually a legal entity) created or organized under the laws of any state in which one of the previously listed categories of “foreign person” holds a significant interest or substantial control. “Any interest” generally means all interests acquired, transferred, or held in agricultural lands by a foreign person. However, the definition of “any interest” specifically excludes security interests, leases of less than ten years, contingent future interests, noncontingent future interests that do not become possessory upon the termination of the present possessory estate, surface or subsurface easements and rights-of-way used for a purpose unrelated to agricultural production, and an interest solely in mineral rights.
Agricultural land is defined in section 781.2(b) as “land in the United States used for forestry production and land in the United States currently used for, or, if currently idle, land last used within the past five years, for farming, ranching, or timber production, except land not exceeding ten acres in the aggregate, if the annual gross receipts from the sale of the farm, ranch, or timber products produced thereon do not exceed $1,000. Farming, ranching, or timber production includes, but is not limited to, activities set forth in the Standard Industrial Classification Manual (1987), Division A, exclusive of industry numbers 0711-0783, 0851, and 0912-0919 which cover animal trapping, game management, hunting carried on as a business enterprise, trapping carried on as a business enterprise, and wildlife management. Land used for forestry production means, land exceeding 10 acres in which 10 percent is stocked by trees of any size, including land that formerly had such tree cover and that will be naturally or artificially regenerated.”
Section 781.3 describes the required content of an AFIDA report using the form FSA-153. While the current regulations require filings in the FSA county office local to the agricultural land, USDA is in the process of implementing an electronic filing process (“on-line filing portal”) as required by the Consolidated Appropriations Act of 2023. A foreign person required to submit a report must file a FSA-153 form report containing a list of items in section 781.3(e), including but not limited to legal name and address; citizenship, if an individual; type of interest in the land; the nature of the interest, name of the interest holder, country of creation or organization, and principal place of business if the foreign person is not a government or individual; a legal description of the agricultural land; the intended agricultural purpose of the land; the name, address, and relationship of any representative completing the FSA-153 form for the filer; how the tract of land was acquired or transferred and the relationship of the foreign person to the previous owner; and the date the interest in the land was acquired or transferred.
Section 781.3(f)(1) requires reporting by the filer on foreign persons who have a “significant interest or substantial control” in the filer. Any required filer, other than an individual or government, must also submit a report containing the legal name and the address of each foreign individual or government holding significant interest or substantial control in the filer. If the person holding significant interest or substantial control is an individual, the filer must also provide that individual's citizenship. And, if the person holding significant interest or substantial control is a foreign person who is not also an individual or government, the filer must provide that foreign person's name and nature of the interest held, the country in which the holder is created or organized, and the holder's principal place of business.
“Significant interest or substantial control” is defined in section 781.2(k) as (1) an interest of 10 percent or more held by foreign person, by a single foreign individual, by a single foreign business, or by a single foreign government; (2) an interest of 10 percent or more held by a domestic entity in which a foreign person holds significant interest or substantial control, by foreign individuals, foreign entities, or by foreign governments, whenever such persons, individuals, or governments are acting in concert with respect to such interest even though no single individual, person, or government holds an interest of 10 percent or more; or (3) an interest of 50 percent or more, in the aggregate, held by a domestic entity in which a foreign person holds significant interest or substantial control, by foreign individuals, foreign entities, or by foreign governments, even though such individuals, persons, or governments may not be acting in concert.
Any person named in a report filed under section 781.3(f) may then be required, upon request, to submit additional reporting on additional
USDA is aware of requirement gaps in the current AFIDA regulations and is considering how it may address those gaps in a manner that balances national security interests with other interests in U.S. agricultural land. Specifically, USDA notes multiple exclusions in the definitions of “agricultural land” and “any interest” that may remove particular interests (for example, leases less than 10 years) from reporting requirements. Filers are only required to identify their land interest through a legal description and identification of acreage. In some instances, legal descriptions may be narratives referencing landmarks or natural features of the land with limited utility to those not actually present on the land. USDA does not receive or have sufficiently detailed information to create a geospatial map with property boundaries.
While AFIDA does require a report on foreign persons who hold “significant interest or substantial interest” over direct interest holders, the definition of “significant interest or substantial interest” is challenging to understand and apply, sets a high threshold (10 and 50 percent), and treats countries with longstanding ties to the United States the same as countries designated as foreign adversaries by the Secretary of Commerce in 15 CFR 791.4(a). Furthermore, existing regulations only require filing by the foreign person who is the direct owner or lessee of the land and any foreign person who may be one or two tiers or levels above the direct owner or lessee in a chain of ownership or corporate relationship. USDA may affirmatively seek additional information from other interest holders named in reports, but it does not have the authority to request any additional detailed corporate structures or ownership information. Specifically, USDA lacks a mechanism to require additional detailed information about foreign interests throughout an ownership chain or in a complex corporate structure with multiple holding companies. USDA's information deficit extends to the identity, country, and ownership interest of the ultimate foreign owner if that person is more than two or possibly three steps removed from the direct interest holder.
USDA's policy goal is to obtain valuable, comprehensive, and verifiable information about interests in U.S. agricultural land held by foreign persons. USDA is further interested in streamlining and strengthening AFIDA regulations to improve process efficiency, address national security interests, and provide timely, accurate, and detailed data for CFIUS agencies' use.
The following topics represent particular areas in which USDA is interested in receiving comments. However, USDA also invites commenters to address additional issues involving AFIDA, particularly as they relate to national security interests. Commenters are encouraged to be as specific as possible. Please include the rationale underlying any suggested changes.
•
○ The definitions of “agricultural land,” “any interest,” and “foreign person” determine the universe of required filers. Are the definitions currently sufficient or are changes recommended?
○ Should USDA continue to treat foreign persons from countries designated as foreign adversaries the same as all other foreign persons with respect to the interest in agricultural land that triggers the filing requirement, or should different standards apply to foreign persons from countries designated as foreign adversaries?
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○ Should filers be required to provide any additional information or documentation than the list of items in section 781.3(e)? If so, what additional information should USDA require and why?
○ How can USDA best obtain a correct, verifiable description or geospatial map of the agricultural land that is broadly usable by a range of audiences?
•
○ What information should USDA require about interest holders who are multiple steps removed from the direct interest holder or part of complex organizational structures?
○ How can USDA best ensure that the information it receives is complete and verifiable?
National Credit Union Administration (NCUA).
Proposed rule.
The NCUA Board (Board) seeks comment on a proposed rule to remove the regulations related to approval and policies on making loans to other credit unions. While this provision will no longer be codified in regulation, Federal Credit Unions would remain subject to statutory requirements related to making loans to credit unions. Federally insured state-chartered credit unions would remain subject to any other applicable NCUA or state law or regulation.
Comments must be received by February 27, 2026.
Comments may be submitted in one of the following ways. (
•
•
•
Mailed and hand-delivered comments must be received by the close of the comment period.
Ariel Pereira, Senior Attorney, Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.
On February 23, 2021, the Board published a final rule amending various parts of the NCUA's regulations to permit low-income designated credit unions, complex credit unions, and new credit unions to issue subordinated debt for purposes of regulatory capital treatment.
In addition to the limits discussed above, § 701.25 imposes documentation requirements on FCU boards of directors, and through § 741.227 on FISCU boards as well. Specifically, paragraph (b) of § 701.25 requires the board of directors to approve all loans to other credit unions and to establish written policies for managing the associated credit risk. The policies must specify the limits on the aggregate principal amount of loans the FICU can make to all other credit unions and the aggregate principal amount of loans the FICU can make to any single credit union. Such limits specific to the FICU may not exceed the generally applicable limits established in § 701.25.
The Board is issuing this proposed rule pursuant to its authority under the Federal Credit Union Act (FCU Act).
The Board proposes to remove § 701.25(b). Upon reconsideration, the Board believes that the regulation is unnecessary and overly prescriptive. The FCU Act already requires a FCU's board of directors to approve all loans to other credit unions.
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
The proposal and the required summary can be found at
Pursuant to Executive Order 12866 (“Regulatory Planning and Review”), as amended by Executive Order 14215, 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 Executive Order.
Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.
The Regulatory Flexibility Act
To the extent that the proposed rule would have any economic impacts, they will be deregulatory in nature. The proposed rule would remove the requirement that FICU boards adopt minimum approval and written policy standards regarding loans to other credit unions. While these documentation requirements might impose some economic costs on FICUs, they are unlikely to be significant. Accordingly, any impacts associated with their rescission are also unlikely to impose a significant economic burden.
Accordingly, the NCUA certifies the proposed rule would not have a significant economic impact on a substantial number of small credit unions.
The Paperwork Reduction Act of 1995 (PRA) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of law, a person is not required to respond to, a collection of information, unless it displays a currently valid Office of Management and Budget control number. The PRA applies to rulemakings in which an agency creates a new or amends existing information collection requirements. For purposes of the PRA, an information-collection requirement may take the form of a reporting, recordkeeping, or a third-party disclosure requirement. The information collection requirements contained in Part 701.25(b) are approved by OMB under OMB Control Number 3133-0207 with a current expiration date of October 31, 2025.
The proposed rule would revise the following information collection requirement(s): Removal of the Policies for loans to credit unions—12 CFR 701.25(b).
Upon the publication of the final rule in the
If you want to comment on the proposed rescission of the information-collection requirements that would result from this proposed rule, please send your comments and suggestions on this proposed action as previously described in the
Executive Order 13132 encourages certain regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an agency as defined in 44 U.S.C. 3502(5), complies with the executive order to adhere to fundamental federalism principles. This proposed rule applies to FCUs and to FISCUs. The rulemaking may, therefore, have some direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. However, to the extent the rule has any such effects, it will be to relieve FISCUs of regulatory burden. The proposed rule would remove the requirement that FICU boards adopt minimum approval and written policy standards regarding loans to other credit unions. The NCUA welcomes comments on ways to eliminate, or at least minimize, any potential impact in this area.
The NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
Advertising, Aged, Civil rights, Credit, Credit unions, Fair housing, Individuals with disabilities, Insurance, Marital status discrimination, Mortgages, Religious discrimination, Reporting and recordkeeping requirements, Sex discrimination, Signs and symbols, Surety bonds.
For the reasons stated in the preamble, the NCUA Board proposes to amend 12 CFR part 701, as follows:
12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601
National Credit Union Administration (NCUA).
Proposed rule.
The NCUA Board (Board) seeks comment on a proposed rule to remove the segregated deposit and collateral requirements when a federally insured credit union (FICU) acts as a surety and guarantor. Removing this regulation will provide FICUs with greater flexibility to design products that meet member needs. FICUs would remain subject to the other requirements regarding surety and guaranty agreements.
Comments must be received by February 27, 2026.
Comments may be submitted in one of the following ways. (
•
•
•
Mailed and hand-delivered comments must be received by the close of the comment period.
Keisha Brooks, Attorney-Advisor, Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.
Federal Credit Unions (FCUs) may only engage in activities that are expressly authorized either by statute or within the FCU's incidental powers. The Federal Credit Union Act (FCU Act) explicitly grants FCUs the power to, among other activities, make loans to members and to provide letters of credit on behalf of members.
Section 701.20 defines these arrangements and, to promote safety and soundness, requires that the FCU's obligation be for a fixed amount and duration, that the FCU's performance of the agreement creates an authorized loan that complies with the applicable lending regulations, and that it obtains a segregated deposit from the member sufficient to cover the potential liability.
As provided in § 741.221 of the NCUA regulations, these requirements also apply to federally insured state credit unions (FISCUs) that are authorized under state law to enter into suretyship and guaranty agreements.
The Board has the legal authority to issue this proposed rule pursuant to its plenary rulemaking authority under the FCU Act and its specific rulemaking authority under the various acts the Board administers.
As part of its deregulatory initiative, the Board proposes to remove paragraphs (c)(3) and (d) of § 701.20, which impose segregated deposit and collateral requirements when FICUs act as a surety and guarantor. Under these provisions, depending on the nature of the collateral, an FCU must have a perfected security interest in collateral equal to 100 or 110 percent of the obligation. The 100 percent collateral category includes cash; obligations of the United States or its agencies; obligations fully guaranteed by the United States or its agencies as to principal and interest; and notes, drafts, bills of exchange, and bankers' acceptances that are eligible for rediscount or purchase by a Federal Reserve Bank.
The Board is now of the view that removing these segregated deposit and collateral requirements will provide FICUs the flexibility to design products that meet member needs. These proposed changes are intended to simplify the regulatory framework and reduce unnecessary compliance burdens.
It is not always necessary to have a segregated deposit that fully covers the liability. For example, current regulations require a FICU acting as a surety or guarantor to create an authorized loan that complies with the applicable NCUA lending regulations.
The Board invites comment on all aspects of this proposed rule.
The Providing Accountability Through Transparency Act of 2023 (5 U.S.C. 553(b)(4)) (Act) 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
The proposal and the required summary can be found at
Pursuant to Executive Order 12866 (“Regulatory Planning and Review”), as amended by Executive Order 14215, 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 Executive Order.
Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.
The Regulatory Flexibility Act
To the extent that the proposed rule would have any economic impacts, they will be deregulatory in nature. The current rule authorizes FCUs to enter into suretyship and guaranty agreements. The proposed rule would remove the segregated deposit and collateral requirements for FCUs to enter into such agreements. To the extent FISCUs are authorized to enter into surety and guaranty agreements under state law, FISCUs would similarly benefit from the removal. It is unlikely that small credit unions will participate in either of these activities. While these requirements might impose some economic costs or create an economic benefit for FICUs, they are unlikely to be significant.
Accordingly, the NCUA certifies the proposed rule would not have a significant economic impact on a substantial number of small credit unions.
The Paperwork Reduction Act of 1995 (PRA) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of law, a person is not required to respond to, a collection of information, unless it displays a currently valid Office of Management and Budget control number. The PRA applies to rulemakings in which an agency creates a new or amends existing information collection requirements. For purposes of the PRA, an information-collection requirement may take the form of a reporting, recordkeeping, or a third-party disclosure requirement. The NCUA has determined that the changes
Executive Order 13132 encourages certain agencies to consider the impact of their actions on state and local interests. The NCUA, an agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. This proposed rule would apply to all FICUs, including FISCUs.
The NCUA expects that any effect on states or on the distribution of power and responsibilities among the various levels of government will be minor. These proposed changes are not intended to affect the division of responsibilities between the NCUA and state regulatory authorities with oversight of FISCUs. The proposed rule would remove the segregated deposit and collateral requirements imposed by § 701.20 when FCUs or FISCUs act as a surety and guarantor. FISCUs would remain subject to the other requirements, including compliance with applicable NCUA and state lending regulations.
The proposed rulemaking may, therefore, have some direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. However, to the extent the rule has any such effects, it will be to relieve FISCUs of a regulatory burden.
The NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999. The proposed rule relates to the collateral requirements for FICUs to enter into surety and guaranty agreements, and any effect on family well-being is expected to be indirect. The proposed regulatory changes are exclusively concerned with removing the unnecessary segregated deposit and collateral requirements specific to such agreements. Any potential positive effect on family well-being, including financial well-being is, at most, indirect.
Advertising, Aged, Civil rights, Credit, Credit unions, Fair housing, Individuals with disabilities, Insurance, Marital status discrimination, Mortgages, Religious discrimination, Reporting and recordkeeping requirements, Sex discrimination, Signs and symbols, Surety bonds.
For the reasons stated in the preamble, the NCUA Board proposes to amend 12 CFR part 701, as follows:
12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601
(c) * * *
(1) The federal credit union limits its obligations under the agreement to a fixed dollar amount and a specified duration and
(2) The federal credit union's performance under the agreement creates an authorized loan that complies with the applicable lending regulations, including the limitations on loans to one member or associated members or officials for purposes of §§ 701.21(c)(5), (d); 723.4(c).
National Credit Union Administration (NCUA).
Proposed rule.
The NCUA Board (Board) is issuing this proposed rule to streamline its regulations governing advertising and the notice of insured status. This proposed rule would eliminate provisions concerning the official advertising statement. This action is undertaken to reduce regulatory complexity, and the intended effect is to reduce the administrative burden and costs for federally insured credit unions (FICUs) and provide them with greater flexibility in their advertising activities. The proposed rule would not amend requirements related to displaying the official sign.
Comments must be received by February 27, 2026.
Comments may be submitted in one of the following ways. (Please send comments by one method only):
•
•
•
Mailed and hand-delivered comments must be received by the close of the comment period.
Rachel Ackmann, Senior Attorney, Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.
The Board comprehensively revised and streamlined part 740 in a 2003 final rule.
Over the subsequent years, the NCUA amended these regulations several times. In the 2006 final rule, the NCUA revised the official sign to reflect statutory changes from the Federal Deposit Insurance Reform Act of 2005, which included adding a statement that insured accounts are backed by the full faith and credit of the United States Government.
A subsequent 2008 final rule provided credit unions with additional flexibility by permitting the use of a shortened advertising statement, “Federally insured by NCUA,” or the official sign itself in advertisements.
However, in a 2018 final rule, the NCUA reversed the 2011 change to the broadcast advertisement exemption to provide regulatory relief and restore parity with regulations for banks insured by the Federal Deposit Insurance Corporation.
Section 205(a) of the Federal Credit Union Act (FCU Act) (12 U.S.C. 1785(a)) requires each FICU to display a sign relating to the insurance of its share accounts.
The 2005 statutory amendment retained the requirement for FICUs to post official signs but removed the requirement to include official advertising statements. The NCUA issued a final rule implementing changes associated with the 2005 statutory amendments in 2006 (2006 final rule) but did not remove the portions of part 740 that implemented the historical requirement to include an official advertising statement.
This proposed rule would amend two sections within part 740 and is intended to promote regulatory efficiency and reduce unnecessary burdens on FICUs. This proposed rule would remove § 740.5 related to the official advertising statement and revise § 740.0 to remove references to the official advertising statement. This action is intended to provide FICUs with greater flexibility in their advertising activities while ensuring that members continue to receive clear and accurate information about their share insurance coverage through other required disclosures.
Section 740.5 establishes the specific requirements for the official advertising statement. It mandates that FICUs include one of three prescribed official statements or an alternative, namely—“This credit union is federally insured by the National Credit Union Administration,” “Federally insured by NCUA,” “Insured by NCUA,” or a reproduction of the official sign—in all advertisements, unless specifically exempted. The regulation requires the statement to be clearly legible and with a font that is no smaller than the smallest font used for other consumer information in the advertisement. Section 740.5 also details numerous exemptions, specifying that the official statement is not required for certain items such as stationery, checks, signs within a credit union's office, directory listings, radio and television advertisements of 30 seconds or less, promotional items where inclusion is impractical, and advertisements that do not relate to member accounts, such as those for loans or safe deposit box services.
The Board is proposing to eliminate § 740.5 because the section imposes an unnecessary and undue compliance burden on FICUs that is disproportionate to its limited public benefit. The highly prescriptive nature of the rule, with its specific textual requirements and complex list of exceptions for items ranging from radio spots to promotional pens, forces FICUs to dedicate administrative resources to compliance. This approach is inflexible and poorly suited to the modern, fast-paced advertising landscape, particularly in the context of digital and social media, where space is often limited and communication must be concise.
Furthermore, the Board believes the rule is largely unnecessary because its core objective—ensuring members are aware of their federal insurance coverage—is effectively achieved through other, more direct means. The NCUA has long held it is important for consumers of advertisements to know that the share accounts in the advertising FICU are federally insured by the NCUA.
However, the Board now believes these objectives are best met through other provisions of part 740, and the advertising statement is unnecessary. First, the requirements in § 740.4, which are not being amended by this rule, mandate the display of the official NCUA sign in a FICU's offices and on its website where members can open share accounts and deposit funds.
This policy to remove the requirement for an official advertising statement is also supported by the fact that the requirement in § 740.5 is not statutorily mandated. As discussed above, the FCU Act explicitly directs the Board to issue regulations regarding the display of the official sign. No provision in the FCU Act compels the Board to create or enforce a separate, distinct official advertising statement to be included in all advertisements. As the rule is not required by law and imposes an unnecessary burden, its removal is a logical step to streamline the regulatory framework. FICUs may continue to include an advertising statement, provided the inclusion is not inaccurate or deceptive, but will not be required to include an advertising statement.
Finally, the proposed rule would also amend § 740.0, which outlines the scope of part 740. Part 740 currently references the official advertising statement. With the removal of the substantive requirements in § 740.5, retaining a scope section that references these rules would be inaccurate and create confusion. Therefore, the proposed rule would remove references in § 740.0 to the advertising statement.
The Board solicits comments on all aspects of the proposed rule.
The Providing Accountability Through Transparency Act of 2023 (5 U.S.C. 553(b)(4)) (Act) 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
The Board is issuing this proposed rule to streamline its regulations governing advertising and the notice of insured status. This proposed rule would eliminate provisions concerning the official advertising statement. This action is undertaken to reduce regulatory complexity and the intended effect is to reduce the administrative burden and costs for FICUs and provide them with greater flexibility in their advertising activities.
The proposal and the required summary can be found at
Pursuant to Executive Order 12866 (“Regulatory Planning and Review”), as amended by Executive Order 14215, 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 Executive Order.
Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.
The Regulatory Flexibility Act
This rule is narrow in scope and purely deregulatory. Further, FICUs may voluntarily continue to include the official advertising statement in their advertisements and may choose not to change their current practices. Accordingly, the NCUA certifies the proposed rule would not have a significant economic impact on a substantial number of small credit unions.
The Paperwork Reduction Act of 1995 (PRA) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of
Executive Order 13132 encourages certain agencies to consider the impact of their actions on state and local interests. The NCUA, a regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. This proposed rule would apply to all FICUs, including state-chartered credit unions. The NCUA expects that any effect on states or on the distribution of power and responsibilities among the various levels of government will be minor. The proposed changes would remove an existing requirement on state-chartered credit unions and would not affect the division of responsibilities between the NCUA and state regulatory authorities with oversight of federally insured, state-chartered credit unions. These changes relate to the NCUA's insurance of member accounts, which is a distinct federal function. The proposed changes are deregulatory and would relieve burdens on state-chartered credit unions. The rulemaking would therefore not have a direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
The NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
Bank deposit insurance, Credit unions, Reporting and recordkeeping requirements, Signs and symbols.
For the reasons set forth in the preamble, the Board proposes to amend 12 CFR part 740 to read as follows:
12 U.S.C. 1766, 1781, 1785, and 1789.
This part applies to all federally insured credit unions. It prescribes the requirements for the official sign insured credit unions must display. It requires that all other kinds of advertisements be accurate. It also establishes requirements for advertisements of excess insurance.
National Credit Union Administration (NCUA).
Proposed rule.
The NCUA Board (Board) is publishing this proposed rule to amend the requirements for federally insured credit unions (FICUs) to report catastrophic acts to the agency. By providing more time for FICUs to notify the agency of the occurrence of a catastrophic act and by eliminating the specific list of items to be documented, the Board expects the proposed rule to reduce the compliance burden and allow FICUs to focus their resources on recovery and core functions without compromising safety and soundness.
Comments must be received on or before February 27, 2026.
Comments may be submitted in one of the following ways. (Please send comments by one method only):
•
•
•
Mailed and hand-delivered comments must be received by the close of the comment period.
Gira Bose, Senior Staff Attorney, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.
Part 748 requires a FICU to notify the appropriate NCUA Regional Director within five business days of any catastrophic act that occurs at its office(s). NCUA regulations define a catastrophic act as “any disaster, natural or otherwise, resulting in physical destruction or damage to the credit union or causing an interruption in vital member services, as defined in § 749.1 of this chapter, projected to last more than two consecutive business days.”
In 2007, NCUA amended the definition of catastrophic act “to address concerns that relatively minor events could be construed to trigger the need to file a report and, also, clarifying the causal link between a disaster and an interruption in vital member services.”
The Board is issuing this proposed rule pursuant to its authority under the Federal Credit Union Act (FCU Act).
The Board is proposing to further ease the reporting burden with the following amendments. First, the proposal would amend the regulation to require that credit unions notify “NCUA” rather than the specific “regional director.” This change is intended to modernize the reporting process and provide greater operational flexibility for both FICUs and the agency. By designating “NCUA” as the recipient, the agency can centralize and streamline the intake of these critical reports, ensuring they are routed efficiently to the appropriate personnel for response and monitoring. This change would remove the burden on a credit union, which may be operating under emergency conditions, to identify and direct its report to a specific regional office.
Second, the proposal would extend the timeframe for submitting a catastrophic act report from “5 business days” to “15 calendar days.” The Board believes the current five-day deadline may be impractical for an institution recovering from a significant operational disruption. Extending the deadline to 15 calendar days provides credit union management with a more reasonable amount of time to stabilize operations, assess the full scope of the damage, and provide a more accurate report to the agency. This change acknowledges the significant operational challenges that follow a catastrophic act and would allow a credit union to prioritize recovery efforts over immediate administrative reporting.
Finally, the Board proposes to remove the prescriptive list of items that a credit union should include in its internal record of a catastrophic act and replace it with a requirement that a credit union record the basic facts of the event. The current rule suggests documenting details such as the location, timing, loss amount, and potential operational deficiencies. While maintaining a record containing the basic facts of an event is a prudent business practice, the Board believes that specifying the exact contents of this internal record to the degree currently required is an unnecessary and overly prescriptive regulatory burden. FICUs already maintain records of such events as part of their own business continuity and disaster recovery planning. Removing the list of items in this sentence would reduce administrative overhead and allow FICUs the flexibility to document these incidents in a manner that best suits their operational and recordkeeping policies, while still ensuring a record is created and maintained. This change would also make the regulation clearer by removing a provision that is phrased as a suggestion and not a requirement with the use of the word “should.”
Commenters are invited to provide feedback on these proposed changes to the catastrophic act reporting requirements. Specifically, the Board seeks feedback on whether the proposed amendments appropriately balance the agency's need for timely information with the operational burdens faced by FICUs during a crisis. The Board is also seeking comment on whether credit unions should be permitted to use existing notification tools, such as the form currently used to report cybersecurity incidents under section 748.1(c), to report catastrophic acts. Commenters are also invited to address whether the proposed 15-calendar-day reporting timeframe is appropriate and whether the removal of the recordkeeping elements would provide meaningful burden reduction.
The Providing Accountability Through Transparency Act of 2023 (5 U.S.C. 553(b)(4)) (Act) 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
In summary, NCUA is publishing this proposed rule to amend the
The proposal and the required summary can be found at
Pursuant to Executive Order 12866 (“Regulatory Planning and Review”), as amended by Executive Order 14215, 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 Executive Order.
Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.
The Regulatory Flexibility Act
The proposed rule reduces and simplifies aspects of part 748 related to catastrophic act reporting. Even if the magnitude of the change is significant, the NCUA certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities.
Accordingly, the NCUA certifies the proposed rule would not have a significant economic impact on a substantial number of small credit unions.
The Paperwork Reduction Act of 1995 (PRA) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of law, a person is not required to respond to, a collection of information, unless it displays a currently valid Office of Management and Budget (OMB) control number. The PRA applies to rulemakings in which an agency creates a new or amends existing information collection requirements. For purposes of the PRA, an information-collection requirement may take the form of a reporting, recordkeeping, or a third-party disclosure requirement. The NCUA has determined that the changes described in this notice do not create a new information collection or revise an existing information collection as defined by the PRA.
Executive Order 13132 encourages certain agencies to consider the impact of their actions on state and local interests. The NCUA, an agency as defined in 44 U.S.C. 3502(5), complies with the executive order to adhere to fundamental federalism principles. This proposed rule is intended to reduce the burden on FICUs by simplifying catastrophic act reporting. The rulemaking would therefore not have direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
The NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999.
Credit unions; reporting and recordkeeping requirements; computer technology; internet; security measures; privacy; personally identifiable information; confidential business information; crime; currency.
By the National Credit Union Administration Board, this 19th day of December, 2025.
For the reasons stated in the preamble, the NCUA Board proposes to amend 12 CFR part 748, as follows:
12 U.S.C. 1766(a), 1786(b)(1), 1786(q), 1789(a)(11); 15 U.S.C. 6801-6809; 31 U.S.C. 5311 and 5318.
(b)
United States Patent and Trademark Office, Commerce.
Notice of proposed rulemaking.
The United States Patent and Trademark Office (USPTO or Office) is proposing to amend the Rules of Practice in Patent Cases to require patent applicants and patent owners whose domicile is not located within the United States (U.S.) or its territories (hereinafter foreign applicants/inventors and patent owners) to be represented by a registered patent practitioner. A requirement that foreign applicants/inventors and patent owners be represented by a registered patent practitioner would bring the United States in line with most other countries that require that such parties be represented by a licensed or registered person of that country. Additionally, this requirement would increase efficiency and enable the USPTO to more effectively use available mechanisms to enforce compliance by all foreign applicants/inventors and patent owners with U.S. statutory and regulatory requirements in patent matters, and enhance the USPTO's ability to respond to false certifications, misrepresentations, and fraud.
Comments must be received by January 28, 2026 to ensure consideration.
For reasons of government efficiency, comments must be submitted through the Federal eRulemaking Portal at
Visit the Federal eRulemaking Portal for additional instructions on providing comments via the portal. If electronic submission of or access to comments is not feasible due to a lack of access to a computer and/or the internet, please contact the USPTO using the contact information below for special instructions.
Mark Polutta, Senior Legal Advisor, at (571) 272-7709, or Andrew St. Clair, Legal Advisor, at (571) 270-0238, of the Office of Patent Legal Administration or via email addressed to
Pursuant to its authority under 35 U.S.C. 2(b)(2), the USPTO is proposing to revise the rules in part 1 of title 37 of the Code of Federal Regulations to require foreign applicants/inventors and patent owners to be represented by a registered patent practitioner, as defined in 37 CFR 1.32(a)(1) (
Almost all IP Offices require foreign applicants/inventors and patent owners to be represented by a person licensed or registered in that country. The USPTO is proposing to implement a similar requirement. Requiring foreign applicants/inventors and patent owners to be represented by a registered patent practitioner would help to harmonize patent filing practice across IP Offices.
The USPTO utilizes extra resources to assist
The requirement for representation by a registered patent practitioner is also necessary to enforce compliance by all foreign patent applicants/inventors and patent owners with U.S. statutory and regulatory requirements in patent matters. Registered patent practitioners are subject to the USPTO Rules of Professional Conduct and disciplinary sanctions for violations of those rules.
The USPTO has noticed an increase in the number of false micro entity certifications to claim a reduction in fees and other false certification documents being filed. False certifications unjustly diminish the monetary resources of the USPTO, and false certifications on petitions or requests to expedite examination result in applications being unjustly advanced out of turn. Requiring submissions to be
Requiring foreign patent applicants/inventors and patent owners to use registered patent practitioners will also facilitate fraud mitigation and protect the integrity of the U.S. patent system. As discussed, registered patent practitioners have a duty to cooperate with investigations and respond to lawful requests for information.
For example, the USPTO currently sends fee deficiency notices in applications which appear to have false micro entity certifications, and can also send requests for information or show cause orders in applications in which an apparent misrepresentation has been made. In patent applications with
Unsigned or improperly signed papers are not entered into the record of the application or patent.
The definition of the term “domicile” is provided in proposed 37 CFR 1.9(p). The domicile of an inventor-applicant will normally be determined by the residence information provided in the application data sheet (ADS) under 37 CFR 1.76, or the inventor's oath or declaration under 37 CFR 1.63 (including a substitute statement under 37 CFR 1.64). The domicile of an applicant who is not an inventor will normally be determined based on the mailing address provided in the Applicant Information section of the ADS. If an ADS is inconsistent with the information provided in another document that was submitted at the same time or prior to the ADS submission, the ADS will control.
A paper filed on behalf of the patent owner may indicate the domicile of the patent owner if such information is not present in the application file. When it is necessary for the USPTO to act on a paper submitted in the file of an issued patent and the paper is not signed by a registered patent practitioner, the paper may not be treated on its merits. For example, if a petition to accept unintentionally delayed payment of a maintenance fee in an expired patent under 37 CFR 1.378(b) is filed that is not signed by a registered patent practitioner, the petition may be dismissed before consideration on the merits if it cannot be determined whether the paper complies with 37 CFR 1.31 and 1.33(b).
Regarding the assessment of compliance referred to above, applicants, patent owners, and practitioners are reminded that the presentation to the Office of any paper by a party, whether a practitioner or non-practitioner, constitutes a certification under 37 CFR 11.18(b). A misrepresentation of the domicile of an applicant or patent owner would not be “to the best of the party's knowledge, information and belief, formed after an inquiry reasonable under the circumstances” as required under 37 CFR 11.18(b)(2). Violations of 37 CFR 11.18(b)(2) by a party, whether a practitioner or non-practitioner, may result in the imposition of sanctions under 37 CFR 11.18(c), which may include termination of the proceedings.
The following is a discussion of proposed amendments to 37 CFR part 1:
Section 1.9 is proposed to be amended to add new paragraph (p) defining domicile as the permanent legal place of residence of a natural person or the principal place of business of a juristic entity. The domicile of an inventor-applicant will normally be determined by the residence information provided in the ADS under 37 CFR 1.76, or the inventor's oath or declaration under 37 CFR 1.63 (including a substitute statement under 37 CFR 1.64). The domicile of an applicant who is not an inventor will normally be determined based on the mailing address provided in the Applicant Information section of the ADS.
Section 1.31 is proposed to be amended to add the title and rule to include “patent owner,” and reformatting the rule language into paragraphs (a) and (b). The section is further proposed to be amended to indicate that an applicant as defined in § 1.42 or patent owner whose domicile is not located within the U.S. or its territories must be represented by a registered patent practitioner. The section is also proposed to be amended to require that a patent owner who is a juristic entity must be represented by a registered patent practitioner. The section previously required a juristic entity who was the applicant to be represented by a registered patent
The phrase “an applicant as defined in § 1.42” in paragraph (a) encompasses any inventor, joint inventor, legal representative, person to whom the inventor has assigned, person to whom the inventor is under an obligation to assign, or person who otherwise shows sufficient proprietary interest in the matter who is named as an applicant. Thus, an applicant as defined in § 1.42 must be represented by a registered patent practitioner if at least one of the parties identified as the applicant has a domicile that is not located within the U.S. or its territories.
Section 1.32 is proposed to be amended to add the definition of patent practitioner to partially parallel § 11.10(a).
Section 1.33 is proposed to be amended to add paragraph (b)(3) to indicate that for amendments and other papers filed in an application or patent unless otherwise specified submitted on behalf of a juristic entity, an applicant as defined in § 1.42 whose domicile is not located within the United States or its territories, or a patent owner whose domicile is not located within the United States or its territories must be signed by a patent practitioner. These revisions to paragraph (b)(3) are consistent with the changes to § 1.31, discussed above.
A foreign domiciled inventor who is the applicant may initially file a U.S. patent application with the USPTO and pay the filing fee at the time of filing. However, any application data sheet that accompanies the application papers or is submitted later, as well as all follow-on correspondence, must be signed by a patent practitioner. A patent practitioner must also sign any petition that is filed in such an application, including but not limited to a request for prioritized examination and a petition to make special. To pay the issue fee, PTOL-85 Part B would also have to be signed by a patent practitioner.
This rulemaking would revise the procedures governing the representation of patent applicants and patent owners at the USPTO. The proposed changes do not change the substantive criteria of patentability. Therefore, the changes in this rulemaking involve rules of agency practice and procedure and/or interpretive rules and do not require notice-and-comment rulemaking, pursuant to 5 U.S.C. 553(b)(A)).
As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553 or any other law, neither a Regulatory Flexibility Act analysis nor a certification under the Regulatory Flexibility Act (5 U.S.C. 601,
The USPTO proposes to require that foreign applicants/inventors and patent owners be represented by a registered patent practitioner, as defined in proposed 37 CFR 1.32(a)(1). An “applicant” is the person applying for a patent, and can be any inventor, joint inventor, legal representative, person to whom the inventor has assigned, person to whom the inventor is under an obligation to assign, or person who otherwise shows sufficient proprietary interest in the matter who is named as an applicant. Under this proposed rule, foreign applicants/inventors and patent owners must be represented by a registered patent practitioner if at least one of the parties identified as an applicant or a patent owner has a domicile that is not located within the U.S. or its territories. A patent practitioner as defined in proposed 37 CFR 1.32(a)(1) means a registered patent attorney or registered patent agent under 37 CFR 11.6 or an individual given limited recognition under § 11.9(a) or (b) or § 11.16. When representation by a registered patent practitioner is required, papers such as amendments and other replies, application data sheets, information disclosure statements, or petitions, will not be entered unless they are signed by a registered patent practitioner; papers which are required to be signed by a specific party, such as the inventor's oath or declaration under 37 CFR 1.63, are excluded. The requirement for a registered patent practitioner is applicable to all applications types (
The USPTO undertakes this proposed rule pursuant to its authority under 35 U.S.C. 2(b)(2), which authorizes the USPTO Director to establish regulations, not inconsistent with law, governing the conduct of proceedings in the Office. The policy objectives of the proposed rule are to: (1) treat foreign applicants/inventors and patent owners similarly to how U.S. applicants/inventors and patent owners are treated in other countries and harmonize U.S. practice with the rest of the world; (2) increase efficiency by reducing the extra resources the USPTO spends to handle
The Small Business Administration (SBA) small business size standards that are applicable to most analyses conducted to comply with the RFA are set forth in 13 CFR 121.201. These regulations generally define small businesses as those with fewer than a specified maximum number of employees or less than a specified level of annual receipts for the entity's industrial sector or North American Industry Classification System (NAICS) code. As provided by the RFA, and after consulting with the SBA, the USPTO formally adopted an alternate size standard for the purpose of conducting an analysis or making a certification under the RFA for patent-related regulations.
If patent applicants assert or certify entitlement for reduced patent fees, the USPTO captures this data in its patent application data repository (formerly the Patent Application Locating and Monitoring (PALM) system and now called the One Patent Service Gateway (OPSG) system), which tracks information on each patent application submitted to the Office.
Unlike the SBA small business size standards set forth in 13 CFR 121.201, the size standard for the USPTO is not industry specific. The Office's definition of a small business concern for RFA purposes is a business or other concern that: (1) meets the SBA's definition of a “business concern or concern” set forth in 13 CFR 121.105; and (2) meets the size standards set forth in 13 CFR 121.802 for the purpose of paying reduced patent fees, namely, an entity: (a) whose number of employees, including affiliates, does not exceed 500 persons; and (b) which has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern that would not qualify as a nonprofit organization or a small business concern under this definition.
In fiscal year (FY) 2022, the USPTO received 512,038 patent applications.
As seen in Table 1 below, of the total 512,038 patent applications filed in FY 2022, 215,459 (42.1%) were filed by U.S. applicants/inventors and patent owners, and 296,579 (57.9%) were filed by foreign applicants/inventors and patent owners.
Table 2 below shows the number of applications that were filed without a registered patent practitioner (
The USPTO anticipates that this proposed rule would not have a substantial impact on foreign small entities. Of the total 295,362 foreign represented applications, 75,111 are considered to be small entities for the purposes of this analysis because they paid the “small” or “micro” entity fee (foreign represented small entities), and of the 1,217 foreign
The proposed rule imposes no new reporting or recordkeeping requirements. Compliance with the rule will be enforced by requiring an appropriate signature on papers submitted in patent matters. Any registered patent practitioner retained by the foreign applicants/inventors and patent owners as a result of this proposed rule would be required to be a registered patent attorney or registered patent agent under 37 CFR 11.6 or an individual given limited recognition under § 11.9(a) or (b) or § 11.16.
This proposed rule does not duplicate, overlap, or conflict with other Federal rules.
The USPTO considered one alternative before proposing the requirement that foreign applicants/inventors and patent owners be represented by a registered patent practitioner, as defined in proposed 37 CFR 1.32(a)(1). A description of the proposed rule and the one alternative follows.
Due to the difficulty in quantifying the intangible benefits associated with the proposed rule, the Office provides a discussion of the qualitative benefits to patent applicants/inventors and patent owners. The primary benefits of the proposed rule are ensuring compliance by all foreign patent applicants/inventors and patent owners with U.S. statutory and regulatory requirements in patent matters, and facilitating fraud mitigation and protecting the integrity of the U.S. patent system. The USPTO has noticed an increase in the number of false micro entity certifications to claim a reduction in fees and other false certification documents being filed. False certifications unjustly diminish the monetary resources of the USPTO, and false certifications on petitions or requests to expedite examination result in applications being unjustly advanced out of turn. Requiring submissions to be made by registered patent practitioners subject to the USPTO Rules of Professional Conduct and concomitant disciplinary sanctions imposed by the USPTO Director will make it less likely that the submissions will be signed by an unauthorized party or contain inaccurate or fraudulent statements, particularly with regard to any certification of micro entity status to claim a reduction in fees and any certification relevant to expediting the application.
The proposed rule also addresses the increasing problem of patent application pendency.
The RFA requires agencies to consider the economic impact of their regulatory proposals on small entities, specifically
Tables 3, 4, and 5 below provide the estimated costs for a U.S. patent practitioner to prosecute an application based on professional rates as reported by the American Intellectual Property Law Association in the 2023 Report on the Economic Survey.
Table 3 below provides the estimated cost to impacted entities if a U.S. patent practitioner is retained prior to filing of a non-provisional application. These cases include applications of foreign origin where no substantive direction is provided by the foreign attorney, and thus the patent practitioner would be required to provide substantive legal advice to prosecute the application, including legal services connected with preparing, filing, and prosecuting an application. Based on the total estimated number of applications filed by foreign applicants/inventors and patent owners that are also considered to be small entities, the total legal cost for non-provisional applications to comply with this proposed rule would range from $13,124,820 to $13,334,200 for minimal complexity applications, to $16,430,820 to $19,395,200 for relatively complex applications.
Table 4 below provides the estimated cost to impacted entities if a U.S. patent practitioner is retained to file a non-provisional application of foreign origin that is in condition for filing and in which the foreign attorney provides substantive direction. In these cases, the U.S. patent practitioner would provide only minimal legal services connected with the initial filing an application and the subsequent filing of other documents. Based on the total estimated number of applications filed by foreign applicants/inventors and patent owners that are also considered to be small entities, the total legal cost for a non-provisional application to comply with this proposed rule would range from $4,336,370 to $4,545,750 for minimal complexity applications, to $5,190,420 to $5,399,800 for relatively complex applications.
Table 5 below provides a list of services that may be provided to impacted entities before or during prosecution, but are dependent on the nature of the application. The prosecution of a patent application is highly variable and a particular application may or may not require any of these services. If these services are provided, then the costs below would be added to the total legal costs in Tables 3 or 4, as applicable. The table below provides the percentage of all applications that have utilized these services.
As seen above, the USPTO estimates that only 1,102 (or 1.4%) foreign
This rulemaking has been determined to be not significant for purposes of Executive Order 12866 (September 30, 1993).
The USPTO has complied with Executive Order 13563 (January 18, 2011). Specifically, and as discussed above, the USPTO has, to the extent feasible and applicable: (1) reasonably determined that the benefits of the rule justify its costs; (2) tailored the rule to impose the least burden on society consistent with obtaining the agency's regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole, and provided online access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches
This regulation is not an Executive Order 14192 regulatory action because it is not significant under Executive Order 12866.
This rulemaking pertains strictly to federal agency procedures and does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (August 4, 1999).
This rulemaking will not: (1) have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (November 6, 2000).
This rulemaking is not a significant energy action under Executive Order 13211 because this rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).
This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (February 5, 1996).
This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (April 21, 1997).
This rulemaking will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (March 15, 1988).
Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801,
The changes set forth in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of $100 million (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of $100 million (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969.
The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions that involve the use of technical standards.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501,
Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.
The USPTO is committed to compliance with the E-Government Act to promote the use of the internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes.
Administrative practice and procedure, Biologics, Courts, Freedom of information, Inventions and patents, Reporting and recordkeeping requirements, Small businesses.
For the reasons stated in the preamble, the USPTO proposes to amend 37 CFR part 1 as follows:
35 U.S.C. 2(b)(2), unless otherwise noted.
(p) The term domicile as used in this chapter means the permanent legal place of residence of a natural person or the principal place of business of a juristic entity.
(a) An applicant for patent or patent owner may file and prosecute the applicant's or patent owner's own case, or the applicant or patent owner may give power of attorney so as to be represented by one or more patent practitioners or joint inventors, except that the following persons or entities must be represented by a patent practitioner:
(1) a juristic entity (
(2) an applicant as defined in § 1.42, in which the domicile of at least one of the parties identified as the applicant in the application is not located within the United States or its territories; and
(3) a patent owner, in which the domicile of at least one of the parties identified as the patent owner is not located within the United States or its territories.
(b) The Office cannot aid in the selection of a patent practitioner.
(a) * * *
(1)
(b) * * *
(3) The applicant (§ 1.42) or patent owner. Unless otherwise specified, all papers submitted on behalf of a juristic entity, an applicant as defined in § 1.42 in which the domicile of at least one of the parties identified as the applicant is not located within the United States or its territories, or a patent owner in which the domicile of at least one of the parties identified as the patent owner is not located within the United States or its territories must be signed by a patent practitioner.
Assistant Secretary for Technology Policy (ASTP)/Office of the National Coordinator for Health Information Technology (ONC) (collectively, ASTP/ONC), Department of Health and Human Services (HHS).
Proposed rule; withdrawal of non-finalized provisions.
ASTP/ONC published in the
The non-finalized provisions of the proposed rule published at 89 FR 63498 on August 5, 2024, are withdrawn effective December 29, 2025.
Comments on the proposed rule published at 89 FR 63498 on August 5, 2024, can be found at
Michael Lipinski, Office of Policy, Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology, 202-690-7151.
On August 5, 2024, ASTP/ONC issued the HTI-2 Proposed Rule proposing to update 45 CFR parts 170 and 171 and add part 172. The comment period closed on October 4, 2024.
ASTP/ONC finalized certain proposals from the HTI-2 Proposed Rule in December 2024 through the Health Data, Technology, and Interoperability: Trusted Exchange Framework and Common Agreement (TEFCA) (HTI-2) Final Rule (89 FR 101772) and the Health Data, Technology, and Interoperability: Protecting Care Access (HTI-3) Final Rule (89 FR 102512).
On January 31, 2025, President Donald J. Trump signed Executive Order (E.O.) 14192, “Unleashing Prosperity Through Deregulation.”
We determined that certain proposals would improve interoperability and reduce costs and burden within the U.S. health care system. Therefore, we finalized proposals for six new and one revised certification criteria in the Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and
ASTP/ONC is, however, withdrawing the remaining non-finalized proposals from the HTI-2 Proposed Rule for the following reasons: comments received on the HTI-2 Proposed Rule and the above-referenced RFIs; a focus on deregulation; and changes in applicable technologies, such as newer standards, updated application programming interfaces, and emerging artificial intelligence technologies. As to comments received on the HTI-2 Proposed Rule, a number of commenters expressed concerns regarding the non-finalized proposals, such as a lack of clarity in some proposals, the availability of newer and/or more appropriate standards for certain proposed certification criteria, and excessive costs and burden for meeting certain proposals, if finalized. ASTP/ONC will consider these and other stakeholder comments in conjunction with Administration and ASTP/ONC policies and priorities when crafting any future regulatory proposals related to the non-finalized provisions of the HTI-2 Proposed Rule. For now, we have concluded finalization of proposals from the HTI-2 Proposed Rule. We withdraw the remaining proposals of the HTI-2 Proposed Rule, generally identified as proposals to:
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○ “Care coordination—Transitions of care—Create” (§ 170.315(b)(1)(iii)(A)(
○ “Care coordination—Clinical information reconciliation and incorporation—Reconciliation” (§ 170.315(b)(2)(iii)(D)(
○ “Decision support interventions—Decision support configuration” (§ 170.315(b)(11)(ii)(A) and (B), and “Source attributes” (§ 170.315(b)(11)(iv)(A)(
○ “Patient engagement—View, download, and transmit to 3rd party—View” (§ 170.315(e)(1)(i)(A)(
○ “Transmission to public health agencies—electronic case reporting” (§ 170.315(f)(5)(i)(C)(
○ “Design and performance—Consolidated CDA creation performance” (§ 170.315(g)(6)(i)(A) and (B));
○ “Design and performance—Application access—all data request—Functional requirements” (§ 170.315(g)(9)(i)(A)(
○ “Design and performance—Standardized API for patient and population services—Data response” (§ 170.315(g)(10)(i)(A) and (B)).
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○ § 170.315(d)(7) “health IT encryption;”
○ § 170.315 (d)(9) “trusted connection;” and
○ § 170.315 (d)(12) “protect stored authentication credentials.”
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○ § 170.207(a)—Problems;
○ § 170.207(c)—Laboratory tests;
○ § 170.207(e)—Immunizations;
○ § 170.207(f)—Race and Ethnicity;
○ § 170.207(n)—Sex;
○ § 170.207(o)—Sexual orientation and gender information; and
○ § 170.207(p)—Social, psychological, and behavioral data.
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○ § 170.315(g)(10) certification criterion;
○ § 170.315(g)(20), (30), and (32) through (35) proposed certification criteria;
○ § 170.315(j)(2), (5), (8), and (11) proposed certification criteria; and
○ API Conditions and Maintenance of Certification requirements in § 170.404.
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We finalized two new criteria: “workflow triggers for decision support interventions—clients” (45 CFR 170.315(j)(20)) and “subscriptions—client” (45 CFR 170.315(j)(21)) in the HTI-4 Final Rule.
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We adopted electronic prior authorization criteria in 45 CFR 170.315(g)(31), (32), and (33) in the HTI-4 Final Rule based on the capabilities originally proposed in the HTI-2 Proposed Rule for the “prior authorization API—provider” certification criterion (45 CFR 170.315(g)(34)).
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability of proposed fishery management plan amendment; request for comments.
NMFS announces that the Mid-Atlantic Fishery Management Council has submitted Amendment 21 to the Atlantic Surfclam and Ocean Quahog Fishery Management Plan for review and approval by the Secretary of Commerce. We are requesting comments from the public on the amendment. Amendment 21, also known as the Species Separation Requirements Amendment, would allow both surfclams and ocean quahogs to be landed on the same fishing trip. To ensure accurate accounting for the catch, the amendment would also implement additional monitoring and reporting requirements, both at sea and at the dealer where the mixed catch would be sorted.
Comments must be received on or before February 27, 2026.
You may submit comments on this document, identified by NOAA-NMFS-2025-1197, by any of the following methods:
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Copies of Amendment 21, including the draft Environmental Assessment (EA), are available on request from the Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901. These documents are also accessible via the internet at
Douglas Potts, Fishery Policy Analyst, 978-281-9341.
We are soliciting public comments on Amendment 21, also known as the Species Separation Requirements Amendment, and its incorporated documents through the end of the comment period stated in this notice of availability. All comments received by February 27, 2026, will be considered in the approval/disapproval decision on the amendment. To be considered, comments must be received by close of business on the last day of the comment period. Comments received after that date will not be considered in the decision to approve or disapprove Amendment 21, including those postmarked or otherwise transmitted by the last day of the comment period. If the amendment is approved, a proposed rule would be published in the
The Mid-Atlantic Fishery Management Council developed this amendment at the request of members of the commercial surfclam fishing industry who were increasingly encountering a mix of surfclams and ocean quahogs on the same fishing trip. When the Council adopted an Individual Transferable Quota (ITQ) management system for the surfclam and ocean quahog fisheries in 1990, regulations were adopted that prohibited landing both species on the same trip. This provision simplified enforcement of the new ITQ system and had minimal impact on the fishery as the two species were geographically separated. Surfclams were predominantly found in shallower water and ocean quahogs occupied deeper waters farther offshore. As ocean bottom
The measures approved by the Council in Amendment 21 would allow vessels to land both surfclams and ocean quahogs on the same fishing trip. The landed catch would be sorted after it arrives at the dealer's processing facility. To ensure accurate accounting for catch, including landings and discards of both species under the ITQ system, Amendment 21 calls for the creation of a new monitoring program within dealer processing facilities. It also calls for additional at-sea observer coverage up to an initial target coverage of 5 percent of all clam dredge fishing trips. The additional monitoring would be funded by the industry through cost recovery. The Magnuson-Stevens Fishery Conservation and Management Act authorizes the government to collect a fee to recover the actual costs directly related to management, data collection, and enforcement of any limited access privilege program, such as the surfclam and ocean quahog ITQ program. This fee cannot exceed three percent of the ex-vessel value of the fish harvested under the program.
Additional details of the proposed measures are available in the amendment document. Specific regulatory changes to implement this amendment, if approved, would be detailed in a future proposed rule that would include an additional opportunity for public comment.
16 U.S.C. 1801
Food Safety and Inspection Service (FSIS), U.S. Department of Agriculture (USDA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 and Office of Management and Budget (OMB) regulations, FSIS is announcing its intention to renew an approved information collection regarding swine slaughter inspection. The approval for this information collection will expire on February 28, 2026. FSIS is making no changes to the information collection.
Submit comments on or before February 27, 2026.
FSIS invites interested persons to submit comments on this
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Gina Kouba, Office of Policy and Program Development, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, Mailstop 3758, South Building, Washington, DC 20250-3700; 202-720-5046.
FSIS is requesting a renewal of the approved information collection regarding swine slaughter inspection. The approval for this information collection will expire on February 28, 2026. FSIS is making no changes to the information collection.
FSIS requires that all swine slaughter establishments operating under the New Swine Slaughter Inspection System (NSIS) monitor their systems through microbial testing and recordkeeping. Swine slaughter establishments operating under NSIS must also maintain records to document the total number of animals and carcasses sorted and removed per day and the reasons for their removal. Swine slaughter establishments may record their disposition data on FSIS Form 6200-3, Establishment Sorting Record, or provide the same information as requested on the form electronically if it is submitted in a format approved by FSIS.
FSIS has made the following estimates based upon an information collection assessment:
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Copies of this information collection assessment can be obtained from Gina Kouba, Office of Policy and Program Development, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW, Mailstop 3758, South Building, Washington, DC 20250-3700; 202-720-5046.
Public awareness of all segments of rulemaking and policy development is important. Consequently, FSIS will announce this
FSIS will also announce and provide a link to this
In accordance with Federal civil rights law and USDA civil rights regulations and policies, the 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, 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.
Persons with disabilities who require alternative means of communication for program information (
To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at How to File a Program Discrimination Complaint and at any USDA office or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or (3) email:
USDA is an equal opportunity provider, employer, and lender.
Boart Longyear Company submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in West Valley City, Utah, within FTZ 30. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on December 2, 2025.
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 product is diamond drill bits (duty rate 5.0%).
The proposed foreign-status materials/components include graphite rods for machining into molds, graphite molds, synthetic industrial diamonds used for drill bits, diamond powder, and tungsten powder (duty rate ranges from duty-free to 7.0%). The request indicates that certain materials/components are subject to duties under section 1702(a)(1)(B) of the International Emergency Economic Powers Act (section 1702), or section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 1702 and section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign (PF) status (19 CFR 146.41). The request also indicates that graphite rods are subject to an antidumping/countervailing duty (AD/CVD) order/investigation if imported from the People's Republic of China. The Board's regulations (15 CFR 400.13(c)(2)) require that merchandise subject to AD/CVD orders, or items which would be otherwise subject to suspension of liquidation under AD/CVD procedures if they entered U.S. customs territory, be admitted to the zone in PF status.
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 Juanita Chen at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from Brazil. The period of investigation (POI) is January 1, 2023, through December 31, 2023.
Applicable December 29, 2025.
Samuel Evans, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2420.
On March 31, 2025, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
For a complete discussion of the events that followed the
The products covered by this investigation are hard empty capsules from Brazil. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
As provided in section 782(i) of the Act, in May 2025, Commerce verified the information reported by ACG do Brasil S.A. (ACG Brazil) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided at verification.
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs that were submitted by interested parties in this investigation are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
In making this final determination, Commerce relied, in part, on facts otherwise available, including with an adverse inference, pursuant to sections 776(a) and (b) of the Act. For a further discussion of our application of adverse facts available (AFA),
Based on our findings at verification, we made changes to our subsidy rate calculations for ACG Brazil for the provision of electricity for less-than-adequate-remuneration program, as well as the Ex-Tarifário program. For a discussion of these changes,
Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and
Commerce calculated an individual estimated countervailable subsidy rate for ACG Brazil, the only individually examined exporter/producer in this investigation. Because the only individually calculated rate is not zero,
Commerce determines that the following estimated countervailable subsidy rates exist for the period January 1, 2023, through December 31, 2023:
Commerce intends to disclose its calculations performed to interested parties in this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty (CVD) order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for entries of subject merchandise in the amounts indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of capsules from Brazil. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of import of capsules from Brazil. In addition, we are making available to the ITC all non-privileged and non-proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Suspension of Liquidation” section.
This notice will serve as the final reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published in accordance with sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of this investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of this investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that hard empty capsules (capsules) from Brazil are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 735 of the Tariff Act of 1930, as amended (the Act), for the period of investigation October 1, 2023, through September 30, 2024.
Applicable December 29, 2025.
Gemma Larsen, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-8125.
On May 29, 2025, Commerce published in the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
A summary of the events that occurred since the
The products covered by this investigation are capsules from Brazil. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Act. Specifically, we conducted on-site verifications of the sales and cost information submitted by ACG do Brasil S.A. (ACG Brazil), for use in our final determination. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by ACG Brazil.
All issues raised in the case brief submitted by ACG Brazil in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the dumping margin calculation for ACG Brazil since the
Section 735(c)(5)(A) of the Act provides that Commerce shall determine an estimated all-others rate for all exporters and producers not individually examined. This rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for producers and exporters individually investigated, excluding any zero and
Commerce calculated an individual estimated weighted-average dumping margin for ACG Brazil, the only individually examined producer/exporter in this investigation, that is not zero,
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations and analysis performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in the
In accordance with section 733(d)(1)(B) of the Act, we instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of subject merchandise, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption on or after May 29, 2025, the date of publication of the
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue an antidumping duty order, reinstate the suspension of liquidation under section 736(a) of the Act, and require a cash deposit of estimated antidumping duties for such entries of subject merchandise in the amounts indicated above, in accordance with section 736(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, then this proceeding will be terminated, the suspension of liquidation will be lifted, and all cash deposits for estimated antidumping duties will be refunded.
In accordance with section 735(d) of the Act, Commerce will notify the ITC of its final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation, of capsules no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, all cash deposits will be refunded or canceled, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instructions by Commerce, antidumping duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Suspension of Liquidation” section.
This notice serves as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This final determination is issued and published in accordance with sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of the investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of the investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of the investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of the investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of the investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that paper file folders from Cambodia are not being, or are not likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is October 1, 2023, through September 30, 2024.
Applicable December 29, 2025.
Kelsie Hohenberger, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2517.
On May 29, 2025, Commerce published its
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
The products covered by this investigation are paper file folders from Cambodia. For a complete description of the scope of this investigation,
No interested party commented on the scope of the investigation as it appeared in the
As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), in June 2025, we conducted verification of information submitted by Three-Color Stone Stationery (Cambodia) Co., Ltd. (TCS) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by TCS.
As noted above, we have incorporated certain changes in our final margin calculations for TCS. Specifically, we are: (1) relying on a revised cost database submitted by TCS following the
Commerce determines that the following estimated weighted-average dumping margin exists:
Commerce has not calculated an estimated weighted-average dumping margin for all other producers and exporters pursuant to sections 735(c)(1)(B) and (c)(5) of the Act, because it has not made an affirmative final determination of sales at LTFV.
Commerce intends to disclose the calculations performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in the
In the
In accordance with section 735(d) of the Act, Commerce will notify the ITC of its negative final determination of sales at LTFV. Because the final determination is negative, this proceeding is terminated in accordance with section 735(c)(2) of the Act.
This notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The products within the scope of this investigation are file folders consisting primarily of paper, paperboard, pressboard, or other cellulose material, whether coated or uncoated, that has been folded (or creased in preparation to be folded), glued, taped, bound, or otherwise assembled to be suitable for holding documents. The scope includes all such folders, regardless of color, whether or not expanding, whether or not laminated, and with or without tabs, fasteners, closures, hooks, rods, hangers, pockets, gussets, or internal dividers. The term “primarily” as used in the first sentence of this scope means 50 percent or more of the total product weight, exclusive of the weight of fasteners, closures, hooks, rods, hangers, removable tabs, and similar accessories, and exclusive of the weight of the packaging.
Subject folders have the following dimensions in their folded and closed position: lengths and widths of at least 8 inches and no greater than 17 inches, regardless of depth.
The scope covers all varieties of folders, including but not limited to manila folders, hanging folders, fastener folders, classification folders, expanding folders, pockets, jackets, and wallets.
Excluded from the scope are:
• mailing envelopes with a flap bearing one or more adhesive strips that can be used permanently to seal the entire length of a side such that, when sealed, the folder is closed on all four sides;
• binders, with two or more rings to hold documents in place, made of paperboard or pressboard encased entirely in plastic;
• binders consisting of a front cover, back cover, and spine, with or without a flap; to be excluded, a mechanism with two or more metal rings that must be included on or adjacent to the interior spine;
• non-expanding folders with a depth exceeding 2.5 inches and that are closed or closeable on the top, bottom, and all four sides (
• expanding folders that have: (1) 13 or more pockets; (2) a flap covering the top; (3) a latching mechanism made of plastic and/or metal to close the flap; and (4) an affixed plastic or metal carry handle;
• folders that have an outer surface (other than the gusset, handles, and/or closing mechanisms, if any) that is covered entirely with fabric, leather, and/or faux leather;
• fashion folders, which are defined as folders with all of the following characteristics: (1) plastic lamination covering the entire exterior of the folder; (2) printing, foil stamping, embossing (
• portfolios, which are folders having: (1) a width of at least 16 inches when open flat; (2) no tabs or dividers; and (3) one or more pockets that are suitable for holding letter size documents and that cover at least 15 percent of the surface area of the relevant interior side or sides; and
• report covers, which are folders having: (1) no tabs, dividers, or pockets; and (2) one or more fasteners or clips, each of which is permanently affixed to the center fold, to hold papers securely in place.
Imports of the subject merchandise are provided for under Harmonized Tariff Schedule of the United States (HTSUS) subheading 4820.30.0040. Subject imports may also enter under other HTSUS subheadings. While the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that imports of hard empty capsules (capsules) from India are being, or are likely to be, sold in the United States at
Applicable December 29, 2025.
Joseph Molokwu or Luke Caruso, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-8043 or (202) 482-2081, respectively.
On May 29, 2025, Commerce published in the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
A summary of the events that occurred since Commerce published the
The products covered by this investigation are capsules from India. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Act. Specifically, we conducted on-site verifications of the sales and cost information submitted by ACG Associated Capsules Private Limited (ACG India) and HealthCaps India Limited (HIL).
All issues raised in the case briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the dumping margin calculations for ACG India and HIL since the
Section 735(c)(5)(A) of the Act provides that Commerce shall determine an estimated all-others rate for all exporters and producers not individually examined. This rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and
Commerce calculated individual estimated weighted-average dumping margins for ACG India and HIL that are not zero,
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations and analysis performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in the
In accordance with section 735(c)(1)(B) of the Act, we instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of subject merchandise, as described in Appendix I of this notice, which were entered, or withdrawn from warehouse, for consumption on or after May 29, 2025, the date of publication of the
If the U.S. International Trade Commission (ITC) publishes an affirmative final injury determination, then Commerce will publish an antidumping duty order, reinstate the suspension of liquidation under section 736(a) of the Act, and require a cash deposit of estimated antidumping duties for entries of subject merchandise in the amounts indicated above, in accordance with section 736(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, then this proceeding will be terminated, the suspension of liquidation will be lifted, and all cash deposits for estimated antidumping duties will be refunded.
To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of export subsidies countervailed in a companion countervailing duty (CVD) investigation, when CVD provisional measures are in effect. Accordingly, where Commerce made an affirmative determination for countervailable export subsidies, Commerce would offset the estimated weighted-average dumping margins by the appropriate export subsidy rate.
In accordance with section 735(d) of the Act, Commerce will notify ITC of its final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) of capsules for importation from India no later than 45 days after this final determination. If the ITC determines that such injury does not exist, then this proceeding will be terminated, all cash deposits posted will be refunded, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, then Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed in the ” Suspension of Liquidation and Cash Deposit Requirements” section above.
This notice serves as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under the APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is
This final determination and notice are issued and published in accordance with sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of these investigations regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of these investigations regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of these investigations regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of these investigations are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by these investigations is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On October 9, 2025, the U.S. Court of International Trade (CIT) issued its final judgment in
Applicable October 19, 2025.
Brittany Bauer, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3860.
On May 4, 2023, Commerce published its
Fedmet Resources Corporation appealed Commerce's
In its final remand redetermination, issued in March 2025, Commerce found, under protest, that MCBs with any added alumina were excluded from the scope of the
In its decision in
Commerce will instruct U.S. Customs and Border Protection (CBP) that, pending any appeals, the cash deposit rate will be zero percent for refractory bricks with any added alumina. In the event that the CIT's final judgment is upheld on appeal, Commerce will instruct CBP to liquidate entries of refractory bricks with added alumina without regard to antidumping and countervailing duties and to lift suspension of liquidation of such entries.
This notice is issued and published in accordance with sections 516A(c) and (e) and 777(i)(1) of the Act.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On November 20, 2025, the U.S. Court of International Trade (CIT) issued its final judgment in
Applicable December 1, 2025.
Anne Entz, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3845.
On September 30, 2021, Commerce published its
Certain parties appealed Commerce's
In its final remand redetermination, issued in August 2025, Commerce: (1) reconsidered its application of the Cohen's
In its decision in
Because there is now a final court judgment, Commerce is amending its
Pursuant to section 735(c)(2) of the Act, Commerce shall “issue an antidumping duty order under section 736” of the Act when the final determination is affirmative. As a result of this amended final determination, Commerce is hereby amending the
Because Koehler has a superseding cash deposit rate,
This notice is issued and published in accordance with sections 516A(c) and (e) and 777(i)(1) of the Act.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from India. The period of investigation (POI) is April 1, 2023, through March 31, 2024.
Applicable December 29, 2025.
Katherine Smith or Gorden Struck, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0557 or (202) 482-8151, respectively.
On March 31, 2025, Commerce published
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
For a complete description of the events that followed the
The products covered by this investigation are hard empty capsules from India. For a complete description of the scope of the investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
As provided in section 782(i) of the Act, in July and August 2025, Commerce conducted verification of the subsidy information reported by ACG Associated Capsules Private Limited (ACPL) and its affiliates, ACG Pam Pharma Technologies Private Limited (ACG PAM) and ACG Universal Capsules Private Limited (AUCPL) (collectively, ACG).
The subsidy programs under investigation, and the issues raised in
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
Based on our review and analysis of the information received during verification and comments received from parties, for this final determination, we made certain changes to the countervailable subsidy rate calculations for ACG, and for all other producers/exporters. For a discussion of these changes,
Section 705(c)(5)(A) of the Act provides that in a final determination, Commerce shall determine an estimated all-others rate for companies not individually examined equal to the weighted average of the estimated countervailable subsidy rates established for exporters and producers individually examined, excluding any zero or de minimis countervailable subsidy rates and any rates based entirely under section 776 of the Act (facts available). If the individual estimated countervailable subsidy rates established for all exporters and producers individually examined are zero, de minimis, or determined entirely under section 776 of the Act, section 705(c)(5)(A)(ii) of the Act provides that Commerce may use any reasonable method to establish an estimated all-others countervailable subsidy rate for exporters and producers not individually investigated, including averaging the weighted average countervailable subsidy rates determined for the exporters and producers individually investigated.
In this investigation, we continue to calculate an individual total net countervailable subsidy rate for ACG, the only individually examined producer/exporter in this investigation, that is not zero,
Commerce determines that the following estimated net countervailable subsidy rates exist for the period April 1, 2023, through March 31, 2024:
Commerce intends to disclose its calculations performed to interested parties in this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of capsules from India. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threated with material injury, by reason of import of capsules from India. In addition, we are making available to the ITC all non-privileged and non-proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn, for
This notice will serve as the only reminder to parties subject to the APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of this investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of this investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from the Socialist Republic of Vietnam (Vietnam). The period of investigation (POI) is January 1, 2023, through December 31, 2023.
Applicable December 29, 2025.
Jonathan Schueler or Joshua Nixon, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-9175 or (202) 482-8361, respectively.
On March 31, 2025, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on
For a complete description of the events that followed the
The products covered by this investigation are capsules. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
As provided in section 782(i) of the Act, in May 2025, Commerce conducted on-site verifications of the subsidy information reported by the Government of Vietnam, the Government of Korea, Suheung Vietnam Co., Ltd. (Suheung Vietnam), and Cuu Long Joint Stock Company. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by the respondents.
The subsidy programs under investigation, and the issues raised in the case and rebuttal briefs by parties in this investigation, are discussed in the Issues and Decision Memorandum. For a list of the issues raised by parties, and addressed in the Issues and Decision Memorandum,
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
In making this final determination, Commerce relied, in part, on facts available, pursuant to section 776(a) of the Act.
Based on our findings at verification and our review and analysis of the comments received from parties, for this final determination, we made certain changes to the countervailable subsidy rate calculations for Suheung Vietnam and for all other producers/exporters from the
In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an individual estimated countervailable subsidy rate for the mandatory respondent, Suheung Vietnam. Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and
Commerce determines that the following estimated countervailable subsidy rates exist for the period January 1, 2023, through December 31, 2023:
Commerce intends to disclose its calculations and analysis performed to interested parties in this final determination within five days of any public announcement, or if there is no public announcement, within five days of the date of the publication of this notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of capsules from Vietnam. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of capsules from Vietnam. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.
If the ITC determines that material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in HECs are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of these investigations regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of these investigations regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of these investigations regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of these investigations are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by these investigations is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that hard empty capsules (capsules) from the People's Republic of China (China) are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation April 1, 2024, through September 30, 2024.
Applicable December 29, 2025.
Rebecca Janz or Jerry Xiao, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2972 or (202) 482-2273, respectively.
On May 29, 2025, Commerce published in the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
A summary of the events that occurred since the
The products covered by this investigation are capsules from China. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, we conducted on-site verifications of the sales and cost information submitted by Shandong Healsee Capsule Ltd. (Shandong Healsee) and Shanxi JC Biological Technology Co., Ltd. (Shanxi JC) for use in our final determination. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by Shandong Healsee and Shanxi JC.
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the margin calculations for Shandong Healsee and Shanxi JC since the
We preliminarily granted a separate rate to certain respondents that we did
Consistent with the
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce intends to disclose the calculations performed in connection with this final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in the
In accordance with section 733(d)(2) of the Act, we instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of subject merchandise entries, as described in Appendix I of this notice, that were entered, or withdrawn from warehouse, for consumption on or after May 29, 2025, the date of publication of the
Because the estimated weighted-average dumping margin is zero for the Shanxi JC producer/exporter combination, we will discontinue the suspension of liquidation and refund all cash deposits already collected for this producer/exporter combination, pursuant to section 735(c)(2) of the Act, and we will exclude merchandise exported and produced by Shanxi JC from the antidumping duty order, in the event an order is instituted, in accordance with section 735(a)(4) of the Act and 19 CFR 351.204(e)(1). However, entries of shipments of subject merchandise from Shanxi JC in any other exporter/producer combination, or by third parties that sourced subject merchandise from the excluded producer/exporter combination, will be subject to suspension of liquidation at the China-wide entity rate.
Other than for entries produced and exported by Shanxi JC, if the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue an antidumping duty order, reinstate the suspension of liquidation, and require a cash deposit for estimated weighted-average antidumping duties, in accordance with section 736(a) of the Act, as follows: (1) the cash deposit rate for the exporter/producer combinations listed in the table above will be the rate identified in the table; (2) for all combinations of Chinese exporters/producers of subject merchandise that have not received their own separate rate above, the cash deposit rate will be the cash deposit rate established for the China-wide entity; and (3) for all non-Chinese exporters of subject merchandise that have not received their own separate rate above, the cash deposit rate will be the cash deposit rate applicable to the Chinese exporter/producer combination that supplied that non-Chinese exporter.
If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 735(d) of the Act, Commerce will notify the ITC of its final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation, of capsules no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, all cash deposits will be refunded or canceled, and suspension of liquidation will be lifted. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instructions by Commerce, antidumping duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Suspension of Liquidation” section above.
This notice serves as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This final determination is issued and published in accordance with sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of the investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of the investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of the investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of the investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of the investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by the investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that hard empty capsules (capsules) from the Socialist Republic of Vietnam (Vietnam) are being, or are likely to be, sold in the United States at less than fair value (LTFV) for the period of investigation April 1, 2024, through September 30, 2024.
Applicable December 29, 2025.
Jinny Ahn or Harrison Tanchuck, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0339 or (202) 482-7421, respectively.
On May 29, 2025, Commerce published in the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
A summary of the events that occurred since the
The products covered by this investigation are capsules from Vietnam. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
Commerce conducted verification of the information relied upon in making its final determination in this investigation, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act). Specifically, we conducted on-site verifications of sales and cost information submitted by Suheung Vietnam Co., Ltd. (SHVN) for use in our final determination. We used standard verification procedures, including an examination of relevant sales and accounting records, and original source documents provided by SHVN.
All issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached to this notice as Appendix II.
We made certain changes to the margin calculation for SHVN since the
Commerce finds that, pursuant to sections 776(a)(2)(B) and (C) of the Act, the use of partial adverse facts available is warranted in determining the
We preliminarily granted a separate rate to SHVN, the sole company that submitted a separate rate application in this investigation.
Consistent with the
Commerce determines that the following estimated weighted-average dumping margins exist:
Commerce
In accordance with section 733(d)(2) of the Act, we instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of subject merchandise, as described in Appendix I of this notice, which are entered, or withdrawn from warehouse, for consumption on or after May 29, 2025, the date of publication of the
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue an antidumping duty order, reinstate the suspension of liquidation under section 736(a) of the Act, and require a cash deposit of estimated antidumping duties for such entries of subject merchandise in the amounts indicated above, in accordance with section 736(a) of the Act, as follows: (1) the cash deposit rate for the exporter/producer combinations listed in the table above will be the rate identified in the table; (2) for all combinations of Vietnamese exporters/producers of subject merchandise that have not received their own separate rate above, the cash deposit rate will be the cash deposit rate established for the Vietnam-wide entity; and (3) for all non-Vietnamese exporters of subject merchandise that have not received their own separate rate above, the cash deposit rate will be the cash deposit rate applicable to the Vietnamese exporter/producer combination that supplied that non-Vietnamese exporter.
If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of export subsidies countervailed in a companion countervailing duty (CVD) investigation, when CVD provisional measures are in effect. Accordingly, where Commerce made an affirmative determination for countervailable export subsidies, Commerce would offset the estimated weighted-average dumping margins by the appropriate export subsidy rate.
In accordance with section 735(d) of the Act, Commerce will notify the ITC of its final affirmative determination of sales at LTFV. Because Commerce's final determination is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation, of capsules no later than 45 days after this final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, all cash deposits will be refunded or
This notice also serves as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
This final determination is issued and published in accordance with sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of this investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of this investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of hard empty capsules (capsules) from the People's Republic of China (China). The period of investigation is January 1, 2023, through December 31, 2023.
Applicable December 29, 2025.
Laura Delgado or John Conniff, 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) 482-1468 or (202) 482-1009, respectively.
On March 31, 2025, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
For a complete discussion of the events that followed the
The products covered by this investigation are capsules from China. For a complete description of the scope of this investigation,
In the Preliminary Scope Memorandum, we set aside a period of time for parties to raise issues regarding product coverage (
As provided in section 782(i) the Act, in April 2025, Commerce verified the information reported by Jiangsu Lefan Capsule Co., Ltd. (Jiangsu Lefan) and Shanxi JC Biological Technology Co., Ltd. (Shanxi JC) for use in our final determination. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided at verification.
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs that were submitted by interested parties in this investigation are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
In making this final determination, Commerce relied, in part, on facts otherwise available, including with an adverse inference, pursuant to sections 776(a) and (b) of the Act. For a full discussion of our application of adverse facts available (AFA),
Based on our review and analysis of the information received during verification and comments received from parties, for this final determination, we made certain changes to the countervailable subsidy rate calculations for Jiangsu Lefan, Shanxi JC, and for all other producers/exporters.
Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and
Commerce calculated individual estimated countervailable subsidy rates for Jiangsu Lefan and Shanxi JC that are not zero,
Commerce determines that the following estimated countervailable subsidy rates exist for the period January 1, 2023, through December 31, 2023:
Commerce intends to disclose its calculations performed to interested parties in this final determination within five days of its public announcement or, if there is no public announcement, within five days of the date of the publication of this notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty (CVD) order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for entries of subject merchandise in the amounts indicated above. Pursuant to section 705(c)(2) of the Act, if the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of capsules from China. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of import of capsules from China. In addition, we are making available to the ITC all non-privileged and non-proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated, and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Suspension of Liquidation” section.
This notice will serve as the final reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published in accordance with sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The merchandise subject to the scope of this investigation is hard empty capsules, which are comprised of two prefabricated, hollowed cylindrical sections (cap and body). The cap and body pieces each have one closed and rounded end and one open end, and are constructed with different or equal diameters at their open ends.
Hard empty capsules are unfilled cylindrical shells composed of at least 80 percent by weight of a water soluble polymer that is considered non-toxic and appropriate for human or animal consumption by the United States Pharmacopeia—National Formulary (USP-NF), Food Chemical Codex (FCC), or equivalent standards. The most common polymer materials in hard empty capsules are gelatin derived from animal collagen (including, but not limited to, pig, cow, or fish collagen), hydroxypropyl methylcellulose (HPMC), and pullulan.
Hard empty capsules may also contain water and additives, such as opacifiers, colorants, processing aids, controlled release agents, plasticizers, and preservatives. Hard empty capsules may also be imprinted or otherwise decorated with markings.
Hard empty capsules are covered by the scope of this investigation regardless of polymer material, additives, transparency, opacity, color, imprinting, or other markings.
Hard empty capsules are also covered by the scope of this investigation regardless of their size, weight, length, diameter, thickness, and filling capacity.
Cap and body pieces of hard empty capsules are covered by the scope of this investigation regardless of whether they are imported together or separately, and regardless of whether they are imported in attached or detached form.
Hard empty capsules covered by the scope of this investigation are those that disintegrate in water, simulated intestinal fluid, simulated gastric fluid, or other similar water-based (
Hard empty capsules are classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, hard empty capsules may be imported under HTSUS subheading 1905.90.9090; gelatin hard empty capsules may be imported under HTSUS subheading 3503.00.5510; HPMC hard empty capsules may be imported under HTSUS subheading 3923.90.0080; and pullulan hard empty capsules may be imported under HTSUS subheading 2106.90.9998. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by this investigation is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of paper file folders from the Kingdom of Cambodia (Cambodia). The period of investigation (POI) is January 1, 2023, through December 31, 2023.
Applicable December 29, 2025.
Shane Subler or Brandon James, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6241 and (202) 482-7472, respectively.
On March 28, 2025, Commerce published the
Due to the lapse in appropriations and Federal Government shutdown, on November 14, 2025, Commerce tolled all deadlines in administrative proceedings by 47 days.
For a complete discussion of the events that followed the
The products covered by this investigation are paper file folders. For a complete description of the scope of this investigation,
No interested party commented on the scope of the investigation as it appeared in the
As provided in section 782(i) of the Act, in July 2025, Commerce conducted on-site verification of the subsidy information reported by the Royal Government of Cambodia (RCG) and Three Color Stone Stationery (Cambodia) Co., Ltd. (TCS). We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by the RGC and TCS.
The subsidy programs under investigation and the issues raised in the case and rebuttal briefs submitted by interested parties in this investigation are discussed in the Issues and Decision Memorandum. For a list of the issues raised by interested parties and addressed in the Issues and Decision Memorandum,
Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce determines that there is a subsidy,
In making this final determination, Commerce relied, in part, on facts otherwise available, including with adverse inferences, pursuant to sections 776(a) and (b) of the Act. For a full discussion of our application of adverse facts available (AFA),
For this final determination, we have included an additional subsidy program addressed in the Post-Preliminary
In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an individual estimated countervailable subsidy rate for the mandatory respondent, TCS. Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and
Commerce determines that the following estimated countervailable subsidy rates exist for the period January 1, 2023, through December 31, 2023:
Commerce normally discloses the calculations for a final determination to interested parties within five days of any public announcement or, if there is no public announcement, within five days of the date of the publication of the notice in the
As a result of our
If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above, in accordance with section 706(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.
In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of paper file folders from Cambodia. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of paper file folders from Cambodia. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order, without the written consent of the Assistant Secretary for Enforcement and Compliance. If the ITC determines that material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded.
If the ITC determines that such injury does exist, Commerce will issue a countervailing duty order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.
In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This determination is issued and published in accordance with sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).
The products within the scope of this investigation are file folders consisting primarily of paper, paperboard, pressboard, or other cellulose material, whether coated or uncoated, that has been folded (or creased in preparation to be folded), glued, taped, bound, or otherwise assembled to be suitable for holding documents. The scope includes all such folders, regardless of color, whether or not expanding, whether or not laminated, and with or without tabs, fasteners, closures, hooks, rods, hangers, pockets, gussets, or internal dividers. The term “primarily” as used in the first sentence of this scope means 50 percent or more of the total product weight, exclusive of the weight of fasteners, closures, hooks, rods, hangers, removable
Subject folders have the following dimensions in their folded and closed position: lengths and widths of at least 8 inches and no greater than 17 inches, regardless of depth.
The scope covers all varieties of folders, including but not limited to manila folders, hanging folders, fastener folders, classification folders, expanding folders, pockets, jackets, and wallets.
Excluded from the scope are:
• mailing envelopes with a flap bearing one or more adhesive strips that can be used permanently to seal the entire length of a side such that, when sealed, the folder is closed on all four sides;
• binders, with two or more rings to hold documents in place, made of paperboard or pressboard encased entirely in plastic;
• binders consisting of a front cover, back cover, and spine, with or without a flap; to be excluded, a mechanism with two or more metal rings must be included on or adjacent to the interior spine;
• non-expanding folders with a depth exceeding 2.5 inches and that are closed or closeable on the top, bottom, and all four sides (
• expanding folders that have: (1) 13 or more pockets; (2) a flap covering the top; (3) a latching mechanism made of plastic and/or metal to close the flap; and (4) an affixed plastic or metal carry handle;
• folders that have an outer surface (other than the gusset, handles, and/or closing mechanisms, if any) that is covered entirely with fabric, leather, and/or faux leather;
• fashion folders, which are defined as folders with all of the following characteristics: (1) plastic lamination covering the entire exterior of the folder; (2) printing, foil stamping, embossing (
• portfolios, which are folders having: (1) a width of at least 16 inches when open flat; (2) no tabs or dividers; and (3) one or more pockets that are suitable for holding letter size documents and that cover at least 15 percent of the surface area of the relevant interior side or sides; and
• report covers, which are folders having: (1) no tabs, dividers, or pockets; and (2) one or more fasteners or clips, each of which is permanently affixed to the center fold, to hold papers securely in place.
Imports of the subject merchandise are provided for under Harmonized Tariff Schedule of the United States (HTSUS) category 4820.30.0040. Subject imports may also enter under other HTSUS classifications. While the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public hearings and webinars.
The Gulf Fishery Management Council (Gulf Council) will hold three in-person public hearings and one webinar to solicit public comments on Shallow-water Grouper.
The public hearings will take place January 8-21, 2026. The in-person public hearings and webinar will begin at 6 p.m. and will conclude no later than 8 p.m. local time. For specific dates and times, see
Please visit the Gulf Council website at
Emily Muehlstein; Public Information Officer;
The agenda for the following three in-person public hearings and webinar is as follows: Council staff will begin with a presentation on the purpose, need, and proposed management alternatives in Shallow-water Grouper Amendment 58A.
Staff and a Council member will be available to answer any questions, and the public will have the opportunity to provide testimony on the amendment and other related testimony.
Thursday, January 8, 2026; Maderia Beach City Hall, 300 Municipal Drive, Madeira Beach, FL 33708, (727) 391-9951.
Monday, January 12, 2026; Hilton Galveston Island, 5400 Seawall Boulevard, Galveston, TX 77551, (409) 744-5000.
Tuesday, January 13, 2026; Louisiana Department of Wildlife and Fisheries (LDWF) Lafayette Office Large Conference Room #2039, 200 Dulles Drive, Lafayette, LA 70508.
Wednesday, January 21, 2026; via webinar.
Visit
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kathy Pereira (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA regulations for taking marine mammals incidental to geophysical surveys related to oil and gas activities in the Gulf of America, originally published as “Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico,” notification is hereby given that NMFS has issued a revised Letter of Authorization (LOA) to WesternGeco LLC (WesternGeco), in place of Viridien, for the take of marine mammals incidental to geophysical survey activity in the Gulf of America (GOA).
The LOA is effective through April 19, 2026.
The LOA, LOA request, and supporting documentation are available online at:
Jenna Harlacher, Office of Protected Resources, NMFS, (301) 427-8401.
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry operators”), in U.S. waters of the GOA
The regulations at 50 CFR 217.180
NMFS subsequently discovered that the 2021 rule was based on erroneous take estimates. We conducted another rulemaking using correct take estimates and other newly available and pertinent information relevant to the analyses supporting some of the findings in the 2021 final rule and the taking allowable under the regulations. We issued a final rule in April 2024, effective May 24, 2024 (89 FR 31488, April 24, 2024).
The 2024 final rule made no changes to the specified activities or the specified geographical region in which those activities would be conducted, nor to the original 5-year period of effectiveness. In consideration of the new information, the 2024 rule presented new analyses supporting affirmance of the negligible impact determinations for all species, and affirmed that the existing regulations, which contain mitigation, monitoring, and reporting requirements, are consistent with the “least practicable adverse impact” standard of the MMPA.
On August 1, 2025, NMFS issued an LOA to Viridien (90 FR 37842, August 6, 2025) to take marine mammals incidental to a three-dimensional (3D) ocean bottom node (OBN) survey over 2,023 lease blocks in the Garden Banks, Keathley Canyon, East Breaks, and Alaminos Canyon areas, with water depths ranging from approximately 185 to 2,095 meters (m). See section F of the LOA application for a map of the area. Additional description of the planned survey, as well as analysis related to the issuance of that LOA, is available in Viridien's LOA application and the aforementioned
On December 9, 2025, Viridien requested the transfer of the LOA to its partner in the planned survey effort (WesternGeco). WesternGeco confirmed to NMFS that it similarly requested transfer of the LOA. With the transfer of the LOA, WesternGeco agrees to comply with the associated terms, conditions, stipulations, and restrictions of the original LOA. No other changes were requested. The revised LOA remains effective through April 19, 2026.
The revised LOA sets forth only a change in the LOA holder. There are no other changes to the LOA as described in the August 6, 2025,
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued an LOA to WesternGeco authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; proposed incidental harassment authorization; request for comments on proposed authorization and possible renewal.
NMFS has received a request from Pacific Gas & Electric (PG&E) for authorization to take marine mammals incidental to construction for a sediment remediation project in San Francisco Bay, CA. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is requesting comments on its proposal to issue an incidental harassment authorization (IHA) to incidentally take marine mammals during the specified activities. NMFS is also requesting comments on a possible one-time, 1-year renewal that could be issued under certain circumstances and if all requirements are met, as described in Request for Public Comments at the end of this notice. NMFS will consider public comments prior to making any final decision on the issuance of the requested MMPA authorization and agency responses will be summarized in the final notice of our decision.
Comments and information must be received no later than January 28, 2026.
Comments should be addressed to Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service, and should be submitted via email to
Kristy Jacobus, Office of Protected Resources, NMFS, (301) 427-8401.
The MMPA prohibits the “take” of marine mammals, with certain exceptions. Section 101(a)(5) (D) of the MMPA (16 U.S.C. 1361
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stocks for taking for certain subsistence uses (collectively referred to as “mitigation”); and requirements pertaining to the monitoring and reporting of the takings. The definitions of all applicable MMPA statutory terms used above are included in the relevant sections below and can be found in section 3 of the MMPA (16 U.S.C. 1362) and NMFS regulations at 50 CFR 216.103.
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
On May 4, 2023, NMFS received an application from PG&E requesting the take of marine mammals incidental to construction of a Sediment Remediation Project in Remedial Response Areas A and B, Piers 39 to 43
On August 11, 2025, NMFS received a request from PG&E for an IHA to take marine mammals incidental to construction in Remedial Response Area C, Pier 41
PG&E complied with all the requirements (
This proposed IHA would cover 1 year of a larger project for which PG&E obtained prior IHAs and intends to request take authorization for subsequent facets of the project. The larger 5-7 year project involves construction to remediate contaminated sediment.
PG&E is proposing to conduct pile driving to remediate sediments impacted by polycyclic aromatic hydrocarbons (PAHs) around the area offshore and under Pier 41
The proposed IHA would be valid for the statutory maximum of 1 year from the date of effectiveness. It will become effective upon written notification from the applicant to NMFS, but not beginning later than 1 year from the date of issuance or extending beyond 2 years from the date of issuance. In-water construction is anticipated to occur over 62 construction days between March and November. However, project delays may occur due to a number of factors, including availability of equipment and/or materials, weather-related delays, equipment maintenance and/or repair, and other contingencies. Pile driving will occur during daylight hours. Any impact pile driving would occur from June 1 to November 30 to protect sensitive life stages of Endangered Species Act (ESA)-listed fish species in the area.
PG&E's proposed construction activities would occur in San Francisco Bay, CA, about 3.7 miles (mi) (6 kilometers [km]) from the entrance. PG&E's sediment remediation project area encompasses Pier 39, both the Pier 39 East and West Basins, defined by existing breakwaters, and the intertidal and subtidal areas between Pier 39 and 45 along the margin of San Francisco Bay. The project area is divided into five remedial response areas. All pile driving during the timeframe of this proposed IHA would be in Remedial Response Area C, which is the Pier 41
PG&E proposes to conduct construction in San Francisco Bay to remediate sediments impacted with PAHs. Construction components include installation of piles to attach a turbidity curtain; installation of sediment pins to promote slope stability; removal and installation of piles to relocate the Blue and Gold Fleet (BGF); removal of impacted sediment using mechanical dredges; and capping and armoring of sediment left in place.
Underwater noise generated by dredging, capping, and armoring are within range of other background noise in San Francisco Bay and are not anticipated to result in take of marine mammals.
Pile driving to install and remove piles is expected to result in take of marine mammals and these activities are described below in detail.
Turbidity curtain—Because increased water turbidity might occur during dredging and capping activities, a turbidity curtain would be installed across the full depth of the water column extending to the sediment surface. The turbidity curtain would be attached to 20 temporary steel shell piles less than 12 inches (30.5 centimeters [cm]) in diameter. The piles would be installed with primarily vibratory methods. Impact pile driving would be used as needed to seat the piles. The piles would be removed using vibratory methods.
Slope stabilization—In order to prevent rotational or sliding failure in dredged and capped areas, approximately 500 18-inch (45.7-cm) diameter tapered timber piles (referred to as sediment pins) would be installed using vibratory and impact hammers.
BGF Relocation—Relocation of the BGF would require removal of piles and overwater structures at the current location and reinstallation after remediation actions are complete. Eight 24-inch (61-cm) steel shell piles, two 42-inch (106.7-cm) steel shell piles, and five 30-inch (76.2-cm) steel shell piles would be removed using vibratory methods. These piles would then be replaced by eight 30-inch (76.2-cm) steel shell piles, five 36-inch (91.4-cm) steel shell piles, four 24-inch (61-cm) steel shell piles, and four 36-inch (91.4-cm)
Proposed mitigation, monitoring, and reporting measures are described in detail later in this document (please see Proposed Mitigation and Proposed Monitoring and Reporting sections).
Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history of the potentially affected species. NMFS fully considered all of this information, and we refer the reader to these descriptions, instead of reprinting the information. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SARs;
Table 3 lists all species or stocks for which take is expected and proposed to be authorized for this activity and summarizes information related to the population or stock, including regulatory status under the MMPA and ESA and potential biological removal (PBR), where known. PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS' SARs). While no serious injury or mortality is anticipated or proposed to be authorized here, PBR and annual serious injury and mortality (M/SI) from anthropogenic sources are included here as gross indicators of the status of the species or stocks and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS' U.S. Pacific and Alaska SARs. All values presented in table 3 are the most recent available at the time of publication (including from the draft 2024 SARs) and are available online at:
As indicated above, all eight species (with nine managed stocks) in table 3 temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur. While the humpback whale occasionally enters San Francisco Bay, if this species is to approach the Level B harassment zone, construction will be shutdown. Therefore, no take is expected of humpback whale and the species will not be discussed further.
With the exception of the gray whale, a description of all marine mammals proposed for take in this IHA can be found in the notice of the proposed 2024 IHA (88 FR 82836, November 11, 2023), and the information remains applicable to this proposed IHA as well. NMFS has reviewed recent draft Stock Assessment Reports, information on relevant Unusual Mortality Events, and recent scientific literature, and determined that no new information affects our original analysis of impacts to these species under this proposed IHA.
For the 2024 IHA, no take was authorized for gray whales, and PG&E shut down if gray whales approached the estimated Level B harassment isopleth. During construction conducted under the 2024 IHA, gray whales were present in San Francisco Bay more than expected, resulting in multiple instances of shutdown. Therefore, PG&E is requesting take for small numbers of gray whales by Level B harassment in this IHA. Gray whales will be discussed below.
During the summer and fall most Eastern North Pacific gray whales feed in the Chukchi, Beaufort, and northwestern Bering Seas, with a small number that summer and feed along the Pacific coast between Kodiak Island, Alaska and northern California. The southward migration generally occurs from December through February and peaks in January, and the northward migration generally occurs from February through May and peaks in March (NOAA National Centers for Coastal Ocean Science, 2007). Although their presence in San Francisco Bay is generally considered uncommon, increased numbers of gray whales have been seen in San Francisco Bay in recent years, and gray whales were observed in San Francisco Bay more often than expected during PG&E's construction under the 2024 IHA (Integral Consulting Inc., 2025a).
Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Not all marine mammal species have equal hearing capabilities (
For more detail concerning these groups and associated frequency ranges, please see NMFS (2024) for a review of available information.
A description of the potential effects of the specified activities on marine mammals and their habitat may be found in the notice of the proposed 2024 IHA (88 FR 82836, November 27, 2023).
This section provides an estimate of the number of incidental takes proposed for authorization through the IHA, which will inform NMFS' consideration of “small numbers,” the negligible impact determinations, and impacts on subsistence uses.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as any act of pursuit, torment, or annoyance, which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes would be by Level B harassment only, in the form of behavioral reactions and/or temporary threshold shift (TTS) for individual marine mammals resulting from exposure to pile driving. Based on the nature of the activity and the anticipated effectiveness of the mitigation measures (
As described previously, no serious injury or mortality is anticipated or proposed to be authorized for this activity. Below we describe how the proposed take numbers are estimated.
For acoustic impacts, generally speaking, we estimate take by considering: (1) acoustic criteria above which NMFS believes there is some reasonable potential for marine mammals to be behaviorally harassed or incur some degree of auditory injury (AUD INJ); (2) the area or volume of water that will be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) the number of days of activities. We note that while these factors can contribute to a basic calculation to provide an initial prediction of potential takes, additional information that can qualitatively inform take estimates is also sometimes available (
NMFS recommends the use of acoustic criteria that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur AUD INJ of some degree (equated to Level A harassment).
PG&E's proposed construction activity includes the use of continuous (vibratory pile driving) and impulsive (impact pile driving) sources, and therefore the RMS SPL thresholds of 120 and 160 dB re 1 μPa are applicable.
The 2024 Updated Technical Guidance criteria include both updated thresholds and updated weighting functions for each hearing group. The thresholds are provided in the table below. The references, analysis, and methodology used in the development of the criteria are described in NMFS' 2024 Updated Technical Guidance, which may be accessed at:
Here, we describe operational and environmental parameters of the activity that are used in estimating the area ensonified above the acoustic thresholds, including source levels and transmission loss coefficient.
The sound field in the project area is the existing background noise plus additional construction noise from the proposed project. Marine mammals are expected to be affected via sound generated by the primary components of the project (
The project includes vibratory pile installation and removal and impact pile installation. Source levels for these activities are based on hydroacoustic monitoring conducted under the 2024 IHA (Reyff and Ambaskar, 2025) and 2025 renewal IHA (Illingworth & Rodkin, 2025) and on reviews of measurements of the same or similar types and dimensions of piles available in the literature. Source levels for each pile size are presented in table 6. Source levels for vibratory installation and removal of piles of the same diameter are assumed to be the same. PG&E plans to use a bubble curtain for all impact pile driving, and a 5 dB reduction in source level is assumed from those presented in table 6 for impact pile driving due to the use of a bubble curtain.
Absent site-specific data, the recommended TL coefficient for most nearshore environments is the practical spreading value of 15. This value results in an expected propagation environment that would lie between spherical and cylindrical spreading loss conditions, known as practical spreading. As is common practice in coastal waters, here we assume practical spreading (4.5 dB reduction in sound level for each doubling of distance) for all impact and vibratory installation of piles without site-specific acoustical monitoring (
As described above, PG&E conducted hydroacoustic monitoring for the vibratory installation of 12-, 24-, 30-, and 36-inch (61-, 76.2-, and 91.4-cm) steel shell piles, and the TL coefficients were 22, 24.9, 22.5, and 23.9, respectively (Reyff and Ambaskar, 2025, Illingworth & Rodkin, 2025). PG&E proposes to use these site specific TL coefficients for the respective piles, and NMFS concurs.
The ensonified area associated with Level A harassment is more technically challenging to predict due to the need to account for a duration component. Therefore, NMFS developed an optional User Spreadsheet tool to accompany the 2024 Updated Technical Guidance that can be used to relatively simply predict an isopleth distance for use in conjunction with marine mammal density or occurrence to help predict potential takes. We note that because of some of the assumptions included in the methods underlying this optional tool, we anticipate that the resulting isopleth estimates are typically going to be overestimates of some degree, which may result in an overestimate of potential take by Level A harassment. However, this optional tool offers the best way to estimate isopleth distances when more sophisticated modeling methods are not available or practical. For stationary sources, such as pile driving, the optional User Spreadsheet tool predicts the distance at which, if a marine mammal remained at that distance for the duration of the activity, it would be expected to incur AUD INJ. Inputs used in the NMFS User Spreadsheet are provided in table 7. Level A and Level B harassment isopleths are provided in table 8.
In this section we provide information about the occurrence of marine mammals, including density or other relevant information which will inform the take calculations.
Because reliable marine mammal density information is not available for San Francisco Bay, PG&E reviewed several resources and datasets to estimate marine mammal occurrence. These datasets include (but are not limited to):
• 5 years of sighting and stranding data from The Marine Mammal Center (TMMC) (NMFS, 2021b as cited by Integral Consulting Inc., 2025a) and California Academy of Sciences (CAS) (NMFS, 2021a as cited by Integral Consulting Inc., 2025a);
• Monitoring data collected over 5 days in Remedial Response Areas A, B, and C in 2020 during sediment investigations in the initial phase of the sediment remediation project (Haase, 2021);
• Monitoring data collected over 11 days of construction in Remedial Response Areas A and B in the Spring of 2025 (Integral Consulting Inc., 2025b);
• Counts from nearby haulouts; and
• Citizen-reported live sightings from
Depending on the distribution of sightings and granularity of data, different sources have been used to estimate the number of individuals of each species with the potential to occur in the vicinity of the project.
Gray whales may enter the Bay in late winter and early spring or in the fall during their migrations and, in recent years, there have been an increased number of gray whales in the western and Central Bay (Integral Consulting Inc., 2025a). During construction in March-April 2025, multiple gray whales were observed in San Francisco Bay (Integral Consulting Inc., 2025b). According to TMMC, in June 2025, 9 individual gray whales were observed in June over 14 days (TMMC, unpublished data). PG&E estimates that one gray whale will occur in the project area every other day (0.5 whales/day), and NMFS concurs with this approach.
Historically, observations of bottlenose dolphins have occurred west of Treasure Island and were concentrated along the nearshore area of San Francisco south to Redwood City. Since 2016, one individual has been regularly seen near the former Alameda Air Station, and five animals were regularly seen in the summer and fall of 2018 in the same location (Integral Consulting Inc., 2025a). In February 2019, an adult and juvenile were seen on two separate occasions northwest of the Oakland Inner Harbor, approximately 4 mi (6.4 km) from PG&E's proposed project area (Integral Consulting Inc., 2025a). No bottlenose dolphins were observed during pre-construction monitoring in 2020 (Haase, 2021) or during construction in the spring of 2025 (Integral Consulting Inc., 2025b). Although bottlenose dolphins are relatively uncommon in San Francisco Bay, NMFS conservatively assumes that one group of bottlenose dolphins will be present in the project area per month of construction. A group size is estimated to be five animals based on sightings of bottlenose dolphins in San Francisco Bay (Integral Consulting Inc., 2025a).
Harbor porpoise are primarily seen near the Golden Gate Bridge, Marin County, and the city of San Francisco on the northwest side of San Francisco Bay (Keener
Remedial Response Area C, where PG&E proposes to conduct construction, is adjacent to the Pier 39 K-Dock where California sea lions regularly haul out. The Sea Lion Center at Pier 39 regularly counted the sea lions at K-Dock from 1991 through 2018, and from 2016 through 2018, the yearly average ranged from 89 to 229 animals per day, and the average over all 3 years was 191 (Integral Consulting Inc., 2025a). Over 5 days of monitoring in 2020, a total of 463 sea lions were observed, ranging from 56 to 129 per day (Haase, 2021). During construction in March and April 2025, California sea lions were seen on each of 11 monitoring days, with a total of 92 California sea lions seen, ranging from 3 to 18 California sea lions per day (Integral Consulting Inc., 2025b). Although there are times of year when the K-Dock is unoccupied or there are few individuals present, it is difficult to predict abundance based on the time of year. Therefore, PG&E is conservatively assuming 191 sea lions per day, based on the average K-dock counts, and NMFS concurs.
TMMC recorded 44 northern fur seals in San Francisco Bay from 2016 to 2021 (NMFS, 2021b). CAS recorded an additional 3 for a total of 47 over 5 years (NMFS, 2021a), yielding 0.03 norther fur seals per day, or approximately 10
Steller sea lions are rare in San Francisco Bay. TMMC recorded four Steller sea lions in San Francisco Bay from 2016 to 2021 (NMFS, 2021b), and CAS recorded no Steller sea lions over the same time frame (NMFS, 2021a). On rare occasions, Steller sea lions are seen on the Pier 39 K-Dock haulout. An adult male was spotted there in May 2023 (Segura, 2023), and, in previous years, a single male Steller sea lion had been observed using the Pier 39 K-Dock haulout intermittently during July and August and occasionally September (Integral Consulting Inc., 2025a). No Steller sea lions were observed during the 2020 or 2025 monitoring (Haase, 2021; Integral Consulting Inc., 2025b). Given the known occasional occurrences of Steller sea lions at Pier 39, NMFS feels it is appropriate to assume five Steller sea lions in PG&E's proposed project area during the time period of construction.
Harbor seals in San Francisco Bay forage mainly within 7 mi (11.3 km) of their primary haulout site (Grigg
PG&E proposes to conduct vibratory removal of 42-inch (106.7-cm) steel shell piles over 2 days (one pile per day). The Level B harassment isopleth for the vibratory removal of the 42-inch (106.7-cm) steel shell pile is 21,544 m. This isopleth would extend to Castro Rocks in northern San Francisco Bay, which is a well-known harbor seal haulout, and therefore, PG&E proposes to add harbor seals from Castro Rocks haulout to the take determined by the daily occurrence estimate described above. The National Park Service conducts annual surveys of haulouts in San Francisco Bay. Over the past 10 years of surveys, the highest mean number of harbor seals observed at Castro Rocks was 237 seals (in 2019) (Codde, 2020; Codde & Allen, 2017, 2018, 2020, 2025). The vibratory removal of 42-inch (106.7-cm) steel shell piles is expected to last approximately 20 minutes each day. PG&E estimates that 50 harbor seals from Castro Rocks will occur within the Level B harassment isopleth during each day of vibratory removal of 42-inch (106.7-cm) steel shell piles, resulting in 100 harbor seals.
TMMC recorded 903 northern elephant seals in San Francisco Bay from 2016 to 2021 (NMFS, 2021b). The CAS reported an additional 6 northern elephant seals over the same time frame (NMFS, 2021a), for a total of 909 seals, yielding an average of 0.5 elephant seals per day. No northern elephant seals were observed during monitoring efforts conducted in 2020 and 2025 (Haase, 2021; Integral Consulting Inc., 2025b). In order to ensure sufficient authorization of northern elephant seal takes, PG&E assumed 0.5 elephant seals will occur in the proposed project area per day (
Here we describe how the information provided above is synthesized to produce a quantitative estimate of the take that is reasonably likely to occur and proposed for authorization.
To estimate take by Level B harassment for gray whale, harbor porpoise, California sea lion, and northern elephant seal the expected daily occurrence was multiplied by the estimated number of 62 pile driving days (see table 9). Similarly, for harbor seals, the expected daily occurrence was multiplied by the estimated number of 62 pile driving days and 100 harbor seals was added to this number to account for take of harbor seals at Castro Rocks during 2 days of vibratory removal of 42-inch (106.7-cm) steel shell piles (50 harbor seals per day) (see table 9). For northern fur seals and Steller sea lions, PG&E is assuming five animals of each species will occur in the proposed project area during the course of PG&E's construction (see table 9). For bottlenose dolphins, PG&E estimates that one group of five bottlenose dolphins will occur in the proposed project area per month of pile driving. Based on 5 months of pile driving, NMFS proposes to authorize 25 takes of bottlenose dolphins by Level B harassment (table 9).
In order to issue an IHA under section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to the activity, and other means of effecting the least practicable impact on the species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stock for taking for certain subsistence uses (latter not applicable for this action). NMFS regulations require applicants for incidental take authorizations (ITAs) to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting the activity or other means of effecting the least practicable adverse impact upon the affected species or stocks, and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, NMFS considers two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned), the likelihood of effective implementation (probability implemented as planned), and;
(2) The practicability of the measures for applicant implementation, which may consider such things as cost, and impact on operations.
The mitigation requirements described in the following were proposed by PG&E in its adequate and complete application or are the result of subsequent coordination between NMFS and PG&E. PG&E has agreed that all of the mitigation measures are practicable. NMFS has fully reviewed the specified activities and the mitigation measures to determine if the mitigation measures would result in the least practicable adverse impact on marine mammals and their habitat, as required by the MMPA, and has determined the proposed measures are appropriate. NMFS describes these below as proposed mitigation requirements, and has included them in the proposed IHA.
PG&E must establish shutdown zones for all pile driving activities. The purpose of a shutdown zones is generally to define an area within which shutdown of the activity would occur upon sighting of a marine mammal (or in anticipation of an animal entering the defined area). Shutdown zones will vary based on the activity type and marine mammal hearing group (see table 10). Specifically, PG&E will establish shutdown zones for otariids based on the otariid Level A harassment zone and shutdown zones for all other marine mammals based on the largest Level A harassment zone for each pile size/type and driving method, as shown in table 10. A minimum shutdown zone of 10 m would be required for all in-water construction activities to avoid physical interaction with marine mammals.
Prior to pile driving, shutdown zones will be established based on zones represented in table 10. Protected species observers (PSOs) will survey the shutdown zones for at least 30 minutes before pile driving activities start. If marine mammals are found within the shutdown zone, pile driving will be delayed until the animal has moved out of the shutdown zone, either verified by a PSO or by waiting until 15 minutes has elapsed without a sighting. If a marine mammal approaches or enters the shutdown zone during pile driving, the activity will be halted. Pile driving may resume after the animal has moved out of and is moving away from the shutdown zone or after at least 15 minutes has passed since the last observation of the animal.
If a species for which authorization has not been granted, or a species which has been granted but the authorized takes are met, is observed approaching or within the Level B harassment zone, pile driving activities will be shutdown. Activities will not resume until the animal has been confirmed to have left the area or 15 minutes has elapsed with no sighing of the animal.
The placement of PSOs during all pile driving activities (described in the
Monitoring must take place from 30 minutes prior to initiation of pile driving activities (
Soft-start procedures are used to provide additional protection to marine mammals by providing warning and/or giving marine mammals a change to leave the area prior to the hammer operating at full capacity. For impact pile driving, contractors would be required to provide an initial set of three strikes from the hammer at reduced energy, followed by a 30-second waiting period, then two subsequent reduced-energy strike sets. Soft start would be implemented at the start of each day's impact pile driving and at any time following cessation of impact pile driving for a period of 30 minutes or longer.
A bubble curtain must be employed during all impact pile driving. The bubble curtain must distribute air bubbles around 100 percent of the piling circumference for the full depth of the water column. The lowest bubble ring must be in contact with the mudline for the full circumference of the ring. The weights attached to the bottom ring must ensure 100 percent substrate contact. No parts of the ring or other objects may prevent full substrate contact. Air flow to the bubblers must be balanced around the circumference of the pile.
NMFS conducted an independent evaluation of the proposed measures, and has preliminarily determined that the proposed mitigation measures provide the means of effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, section 101(a)(5)(D) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present while conducting the activities. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
The monitoring and reporting requirements described in the following were proposed by PG&E in its adequate and complete application and/or are the result of subsequent coordination between NMFS and PG&E. PG&E has agreed to the requirements. NMFS describes these below as requirements and has included them in the proposed IHA.
Marine mammal monitoring must be conducted in accordance with the conditions in this section and the IHA. Marine mammal monitoring during pile driving and removal must be conducted by NMFS-approved PSOs in a manner consistent with the following:
• PSOs must be independent of the activity contractor (for example,
• At least one PSO would have prior experience performing the duties of a PSO during construction activity pursuant to a NMFS' issued ITA;
• Other PSOs may substitute education (degree in biological science or related field) or training for experience;
• Where a team of three or more PSOs is required, a lead observer or monitoring coordinator would be designated. The lead observer would be required to have prior experience working as a marine mammal observer during construction;
• PSOs must be approved by NMFS prior to beginning any activity subject to the IHA.
PSOs should have the following additional qualifications:
• Ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behavior;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to the number and species of marine mammals observed; dates and times when in-water construction activities were conducted; dates, times, and reason for implementation of mitigation (or why mitigation was not implemented when required); and marine mammal behavior; and
• Ability to communicate orally, by radio or in person, with project personnel to prove real-time information on marine mammals observed in the area as necessary.
PG&E would have between one and three PSOs on site at all times during pile driving activities. One PSO would be designated as the Lead PSO and would receive updates from the other PSOs. The Lead PSO would be stationed at the active pile driving rig or at the best vantage point practicable to monitor the shutdown zones and implement shutdown and delay procedures. The other PSOs would be stationed at the best vantage points practicable to observe the monitoring zones. Exact locations would be determined in the field based on the pile driving site, field conditions, and in coordination with contractors, but may include docks, barges, and tower structures. PSOs would be equipped with high quality binoculars or spotting scopes for monitoring and radios and cell phones for maintaining contact with other observers and work crew. Monitoring would be conducted 30 minutes before, during, and 30 minutes after all in-water construction activities. PSOs would record all incidents of marine mammal occurrence, regardless of distance from activity, and would document any behavioral reactions in concert with distance from piles being driven or removed. Pile driving activities include the time to install or remove a single pile or series of piles, as long as the time elapsed between uses of the pile driving equipment is no more than 30 minutes.
Hydroacoustic monitoring, to be conducted for purposes of measuring sound source levels and sound propagation, will be conducted in accordance with a NMFS-approved acoustic monitoring plan. PG&E plans to conduct hydroacoustic monitoring throughout the entirety of the sediment remediation project, which is expected to span over multiple ITAs. Across the entire project, PG&E will collect data on a representative number of piles (at least 10 percent of each pile type and installation method). Given that PG&E's proposed hydroacoustic monitoring effort would span multiple IHAs, specific effort under any given IHA may vary. Therefore, under this proposed IHA, PG&E will only conduct hydroacoustic monitoring for pile types/installation methods for which hydroacoustic monitoring has not been previously conducted. PG&E may request that NMFS adjust the shutdown zones and revise the Level A and Level B harassment zones, as appropriate, pending NMFS' review and approval of the results of acoustic monitoring.
PG&E must submit a draft marine mammal monitoring report to NMFS within 90 days after the completion of pile driving activities, or 60 days prior to the requested issuance of any future IHAs for the project, or other projects at the same location, whichever comes first. A final report must be prepared and submitted within 30 calendar days of following receipt of any NMFS comments on the draft report. If no comments are received from NMFS within 30 calendar days of receipt of the draft report, the report shall be considered final. The marine mammal report would include an overall description of work completed, a narrative regarding marine mammal sightings, and associated PSO data sheets and/or raw sighting data. Specifically, the report would include:
• Dates and times (begin and end) of all marine mammal monitoring;
• Construction activities occurring during each daily observation period, including: (a) the number and type of piles that were driven and the method (
• PSO locations during marine mammal monitoring;
• Environmental conditions during monitoring periods (at beginning and end of PSO shift and whenever conditions change significantly), including Beaufort sea state and any other relevant weather conditions including cloud cover, fog, sun glare, and overall visibility to the horizon, and estimated observable distance;
• Upon observation of a marine mammal, the following information must be recorded: (a) name of PSO who sighted the animal(s) and PSO location and activity at time of sighting; (b) time of sighting; (c) identification of the animal(s) (
• Number of marine mammals detected within the harassment zones, by species; and
• Summary information about implementation of any mitigation (
The hydroacoustic monitoring report must, at minimum, include the following:
• Hydrophone equipment and methods, recording device, sampling rate, distance (m) from the pile where recordings were made; depth of water and recordings device(s);
• Type and size of pile being driven, substrate type, method of driving during recordings (
• Whether a sound attenuation device is used and, if so, a detailed description of the device used and the duration of its use per pile;
• For impact pile driving (per pile): Number of strikes and strike rate; depth of substrate to penetrate; pulse duration and mean, median, and maximum sound levels (dB re: 1 µPa): root mean square sound pressure level (SPL
• For vibratory driving/removal (per pile): Duration of driving per pile; mean, median, and maximum sound levels (dB re: 1 µPa): root mean square sound pressure level (SPLrms), cumulative sound exposure level (SELcum) (and timeframe over which the sound is averaged);
• One-third octave band spectrum and power spectral density plot; and
• Transmission loss values for each pile size and type and installation method, when appropriate.
In the event that personnel involved in the construction activities discover an injured or dead marine mammal, PG&E must report the incident to the Office of Protected Resources, NMFS (
• Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
• Species identification (if known) or description of the animal(s) involved;
• Condition of the animal(s) (including carcass condition if the animal is dead);
• Observed behaviors of the animal(s), if alive;
• If available, photographs or video footage of the animal(s); and
• General circumstances under which the animal was discovered.
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
To avoid repetition, the discussion of our analysis applies to all the species listed in table 3, given that the anticipated effects of this activity on these different marine mammal stocks are expected to be similar. There is little information about the nature or severity of the impacts, or the size, status, or structure of any of these species or stocks that would lead to a different analysis for this activity.
Level A harassment is extremely unlikely given the small size of the Level A harassment isopleths and the required mitigation measures designed to minimize the possibility of injury to marine mammals. No serious injury or mortality is anticipated given the nature of the activity.
Pile driving activities have the potential to disturb or displace marine mammals. Specifically, the project activities may result in take, in the form of Level B harassment from underwater sounds generated from impact and vibratory pile driving activities. Potential takes could occur if individuals move into the ensonified zones when these activities are underway.
The takes by Level B harassment would be due to potential behavioral disturbances. The potential for harassment is minimized through construction methods and the implementation of planned mitigation strategies (see Proposed Mitigation section).
Behavioral responses of marine mammals to pile driving at the project site, if any, are expected to be mild and temporary. Marine mammals within the Level B harassment zone may not show any visual cues they are disturbed by activities or could become alert, avoid the area, leave the area, or display other mild responses that are not observable such as changes in vocalization patterns. Given the short duration of noise-generating activities per day and that pile driving and removal would occur over approximately 62 days during a span of 5 months, any harassment would be temporary. There are no other areas or times of known biological importance for any of the affected species.
Take would occur within a limited, confined area of each stock's range. Further, the amount of take authorized is extremely small when compared to stock abundance.
No marine mammal stocks for which incidental take authorization is proposed are listed as threatened or endangered under the ESA. Only one stock, the Eastern North Pacific Stock of the northern fur seal, is listed as depleted under the MMPA. However, we do not expect the proposed authorizations in this action to affect the stock. No injury or mortality is proposed for authorization, take by Level B harassment is limited (five takes over the duration of the project), and the proposed action should have no effect on the reproduction of this species. In addition, the five authorized takes for the northern fur seal include both the depleted Eastern North Pacific Stock and the California stock, which is not depleted.
The relatively low marine mammal occurrences in the area, shutdown zones, and planned monitoring make
The project is not expected to have significant adverse effects on marine mammal habitat. There are no known Biologically Important Areas (BIAs) or ESA-designated critical habitat within the project area, and the activities would not permanently modify existing marine mammal habitat.
In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect any of the species or stocks through effects on annual rates of recruitment or survival:
• No serious injury or mortality is anticipated or authorized;
• The specified activities and associated ensonified areas are very small relative to the overall habitat ranges of all species;
• The project area does not overlap known BIAs or ESA-designated critical habitat;
• The lack of anticipated significant or long-term effects or marine mammal habitat; and
• The presumed efficacy of the mitigation measures in reducing the effects of the specified activity.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from the proposed activity will have a negligible impact on all affected marine mammal species or stocks.
As noted previously, only take of small numbers of marine mammals may be authorized under section 101(a)(5)(A) and (D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. When the predicted number of individuals to be taken is fewer than one-third of the species or stock abundance, the take is considered to be of small numbers (see 86 FR 5322, January 19, 2021). Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
The amount of take NMFS proposes to authorize is below one-third of the estimated stock abundances for all stocks (table 9). These are all likely conservative estimates because they assume all takes are of different individual animals which is likely not the case. Some individuals may return multiple times in a day, but PSOs would count them as separate takes if they cannot be individually identified.
Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals would be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531
No incidental take of ESA-listed species is proposed for authorization or expected to result from this activity. Therefore, NMFS has determined that formal consultation under section 7 of the ESA is not required for this action.
As a result of these preliminary determinations, NMFS proposes to issue an IHA to PG&E for conducting pile driving activities in San Francisco Bay, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated. A draft of the proposed IHA can be found at:
We request comment on our analyses, the proposed authorization, and any other aspect of this notice of proposed IHA for the proposed construction. We also request comment on the potential renewal of this proposed IHA as described in the paragraph below. Please include with your comments any supporting data or literature citations to help inform decisions on the request for this IHA or a subsequent renewal IHA.
On a case-by-case basis, NMFS may issue a one-time, 1-year renewal IHA following notice to the public providing an additional 15 days for public comments when (1) up to another year of identical or nearly identical activities as described in the Description of Proposed Activity section of this notice is planned or (2) the activities as described in the Description of Proposed Activity section of this notice would not be completed by the time the IHA expires and a renewal would allow for completion of the activities beyond that described in the
• A request for renewal is received no later than 60 days prior to the needed renewal IHA effective date (recognizing that the renewal IHA expiration date cannot extend beyond 1 year from expiration of the initial IHA).
• The request for renewal must include the following:
1. An explanation that the activities to be conducted under the requested renewal IHA are identical to the activities analyzed under the initial IHA, are a subset of the activities, or include changes so minor (
2. A preliminary monitoring report showing the results of the required monitoring to date and an explanation showing that the monitoring results do not indicate impacts of a scale or nature not previously analyzed or authorized.
• Upon review of the request for renewal, the status of the affected species or stocks, and any other pertinent information, NMFS determines that there are no more than minor changes in the activities, the mitigation and monitoring measures will remain the same and appropriate, and the findings in the initial IHA remain valid.
U.S. Integrated Ocean Observing System (IOOS®), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Notice of open meeting; opportunity for public comment.
Notice is hereby given of a hybrid meeting of the U.S. Integrated Ocean Observing System (IOOS®) Advisory Committee (Committee). The meeting is open to the public and an opportunity for oral and written comments will be provided.
The meeting will be held virtually and in-person on January 20, 2026 from 8:45 a.m. to 5 p.m. Eastern Standard Time (EST) and January 21, 2026 from 8:45 a.m. to 12 p.m. (EST). Registration is required to attend either virtually or in person; please register online at
The meeting will be held in-person at 1315 East-West Hwy., Silver Spring, MD, 4th Floor Conference Room. To register for the meeting and/or submit public comments, use this link
Krisa Arzayus, Designated Federal Official, U.S. IOOS Advisory Committee, U.S. IOOS Program, 240-533-9455,
The Committee was established by the NOAA Administrator as directed by section 12304(d) of the Integrated Coastal and Ocean Observation System Act (the Act) as amended by Section 103 of the Coordinated Ocean Observations and Research Act of 2020 (COORA) (Pub. L. 116-271, Title I). 33 U.S.C. 3603(d). The Committee advises the NOAA Administrator and the Interagency Ocean Observation Committee (IOOC) on matters related to the responsibilities and authorities set forth in the Act and other appropriate matters as the Administrator, the Ocean Policy Committee described at 33 U.S.C. 3603(c)(1), and IOOC may refer to the Committee for review and advice. The charter and summaries of prior meetings can be found online at
The meeting will be open to public participation (check agenda on website to confirm time). The Committee expects that public statements presented at its meetings will not be repetitive of previously submitted verbal or written statements. In general, each individual or group making a verbal presentation will be limited to a total time of three (3) minutes. Written comments should be received by January 12, 2026 11:59 p.m. EST, to provide sufficient time for Committee review. Written comments received after January 12, 2026 11:59 p.m. EST, will be distributed to the Committee, but may not be reviewed prior to the meeting date. To submit written comments, please fill out the brief form at
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Krisa Arzayus, Designated Federal Official by phone (240-533-9455) or email (
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of letter of authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, its implementing regulations, and NMFS' MMPA regulations for taking marine mammals incidental to geophysical surveys related to oil and gas activities in the Gulf of America (GOA), originally published as “Taking Marine Mammals Incidental to Geophysical Surveys Related to Oil and Gas Activities in the Gulf of Mexico,” notification is hereby given that NMFS has modified the Letter of Authorization (LOA) issued to TGS for the taking of marine mammals incidental to geophysical survey activity in the GOA.
This LOA is effective through April 19, 2026.
The LOA, LOA request, and supporting documentation are available online at:
Jenna Harlacher, Office of Protected Resources, NMFS, (301) 427-8401.
Section 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth. NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which: (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On January 19, 2021, we issued a final rule with regulations to govern the unintentional taking of marine mammals incidental to geophysical survey activities conducted by oil and gas industry operators, and those persons authorized to conduct activities on their behalf (collectively “industry operators”), in U.S. waters of the (Gulf of America) GOA
The regulations at 50 CFR 217.180
NMFS subsequently discovered that the 2021 rule was based on erroneous take estimates. We conducted another rulemaking using correct take estimates and other newly available and pertinent information relevant to the analyses supporting some of the findings in the 2021 final rule and the taking allowable under the regulations. We issued a final rule in April 2024, effective May 24, 2024 (89 FR 31488, April 24, 2024).
The 2024 final rule made no changes to the specified activities or the specified geographical region in which those activities would be conducted, nor to the original 5-year period of effectiveness. In consideration of the new information, the 2024 rule presented new analyses supporting affirmance of the negligible impact determinations for all species, and affirmed that the existing regulations, which contain mitigation, monitoring, and reporting requirements, are consistent with the least practicable adverse impact (LPAI) standard of the MMPA.
NMFS issued a LOA to TGS on December 20, 2024, for the take of marine mammals incidental to a three-dimensional (3D) ocean bottom node survey in the East Breaks area, effective December 20, 2024, through December 19, 2025. Please see the
On July 22, 2025, TGS informed NMFS that its planned survey area and timing had shifted and, accordingly, they requested a modification to the LOA to reflect the new survey area and dates. No survey activity had begun. TGS requested the expiration date be extended to April 19, 2026, and increase the survey to 105 total days of sound source operation in Zone 6. On August 19, 2025, NMFS issued a modified LOA to TGS (90 FR 41060; August 22, 2025).
On November 26, 2025, TGS notified NMFS that the survey area had changed again based on market interest. TGS is now requesting 140 total days of sound source operation with 139 days in zone 6 and 1 day in zone 7. The monthly
For the Rice's whale, recent survey data, sightings, and acoustic data support Rice's whale occurrence in waters throughout the GOA between approximately 100 meters (m) and 400 m depth along the continental shelf break, and associated habitat-based density modeling has identified similar habitat (
TGS's planned activities will overlap with this depth range, with approximately 10 percent of the area expected to be ensonified by the survey above root-mean-squared pressure received levels (RMS SPL) of 160 decibel (dB) (referenced to 1 micropascal (re 1 μPa)) overlapping the 100-400 m isobaths. Therefore, there is some reasonable potential for take of Rice's whale to occur in association with this survey. The generic acoustic exposure modeling results in one take of Rice's whales and we have rounded that up to a group size, authorizing two Rice's whale takes.
Based on the results of our analysis, NMFS has determined that the level of taking expected for this survey and authorized through the LOA is consistent with the findings made for the total taking allowable under the regulations. See table 1 in this notice and table 6 of the rule (89 FR 31488, April 24, 2024).
Under the rule, NMFS may not authorize incidental take of marine mammals in an LOA if it will exceed “small numbers.” In short, when an acceptable estimate of the individual marine mammals taken is available, if the estimated number of individual animals taken is up to, but not greater than, one-third of the best available abundance estimate, NMFS will determine that the numbers of marine mammals taken of a species or stock are small (see 89 FR 31535, May 24, 2024). For more information please see NMFS' discussion of small numbers in the 2021 final rule (86 FR 5438, January 19, 2021).
The take numbers for authorization are determined as described above and in the
This product is used by NMFS in making the necessary small numbers determinations through comparison with the best available abundance estimates (see discussion at 86 FR 5391, January 19, 2021). For this comparison, NMFS' approach is to use the maximum theoretical population, determined through review of current stock assessment reports (SAR;
Based on the analysis contained herein of TGS's proposed survey activity described in its LOA application, as subsequently modified by TGS, and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the affected species or stock sizes (
NMFS has determined that the level of taking for this LOA request is consistent with the findings made for the total taking allowable under the incidental take regulations and that the amount of take authorized under the LOA is of no more than small numbers. Accordingly, we have issued a modification to the LOA to TGS authorizing the take of marine mammals incidental to its geophysical survey activity, as described above.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; proposed incidental harassment authorization; request for comments on proposed authorization and possible renewal.
NMFS has received a request from the Alaska Department of Transportation and Public Facilities (ADOT&PF) for authorization to take marine mammals incidental to the Cold Bay Ferry Terminal Reconstruction Project in Cold Bay, Alaska. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is requesting comments on its proposal to issue an incidental harassment authorization (IHA) to incidentally take marine mammals during the specified activities. NMFS is also requesting comments on a possible one-time, 1-year renewal that could be issued under certain circumstances and if all requirements are met, as described in Request for Public Comments at the end of this notice. NMFS will consider public comments prior to making any final decision on the issuance of the requested MMPA authorization and agency responses will be summarized in the final notice of our decision.
Comments and information must be received no later than January 28, 2026.
Comments should be addressed to Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service and should be submitted via email to
Kelsey Potlock, Office of Protected Resources, NMFS, (301) 427-8401.
The MMPA prohibits the “
Authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s) and will not have an unmitigable adverse impact on the availability of the species or stock(s) for taking for subsistence uses (where relevant). Further, NMFS must prescribe the permissible methods of taking and other “means of effecting the least practicable adverse impact” on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stocks for taking for certain subsistence uses (collectively referred to as “
To comply with the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. 4321
This action is consistent with categories of activities identified in Categorical Exclusion B4 (IHAs with no anticipated serious injury or mortality) of the Companion Manual for NAO 216-6A, which do not individually or cumulatively have the potential for significant impacts on the quality of the human environment and for which we have not identified any extraordinary circumstances that would preclude this categorical exclusion. Accordingly, NMFS has preliminarily determined that the issuance of the proposed IHA qualifies to be categorically excluded from further NEPA review.
On July 30, 2025, NMFS received a request from ADOT&PF for an IHA to take marine mammals incidental to pile-driving activities for the Cold Bay Ferry Terminal Reconstruction Project in Cold Bay, Alaska. Following NMFS' review of the application, ADOT&PF submitted revised versions on November 14, 2025, November 21, 2025, December 11, 2025, and December 19, 2025. The application was deemed adequate and complete on
NMFS previously issued several IHAs to ADOT&PF for similar coastal construction work between 2018 and 2025 (
ADOT&PF has requested an IHA to take marine mammals incidental to in-water construction activities. The original Cold Bay Dock was constructed by the State of Alaska in 1978, expanded in 1993, and then refurbished in 2015. Currently, the structure is nearing the end of serviceable life and is at risk of failing, which would be detrimental for the communities that so heavily rely on this infrastructure. At present, use restrictions are currently in place that limit axel loads and gross vehicle weights until the dock can be fully replaced. Given the receipt of additional funding, ADOT&PF plans to replace the aging public dock to improve accessibility; support commercial, subsistence, and recreation users; continue uninterrupted ferry service; secure cargo delivery and bulk materials offloading; ensure public safety; and safeguard vessel moorage. Additionally, this project would maintain access to essential services for surrounding communities that rely on Cold Bay as a hub for fuel, goods, cargo, and potable drinking water. The new dock would be designed and built to accommodate commercial use, freight and fuel transportation, private vessel use, and public uses like emergency medical services and public transportation through the Alaska Marine Highway System (AMHS).
Given the proposed use of vibratory and impact pile driving to remove and install piles, there is potential of the take of marine mammals by Level B harassment and, for a subset of the species, Level A harassment. No serious injury and/or mortality is expected or proposed for this project.
ADOT&PF has been awarded funds by the U.S. Department of Transportation's (DOT) Maritime Administration (MARAD) under the Port Infrastructure Development Program (via the Infrastructure Investment and Jobs Act (Pub. L. 117-58, November 15, 2021)), a discretionary grant program awarded on a competitive basis to projects that improve the safety, efficiency, or reliability of the movement of goods into, out of, around, or within a port (
ADOT&PF intends to begin their project on May 1, 2028, and continue for one year through April 30, 2029. The entire project is anticipated to consist of 18 months of activities (in-water and on-shore), whereas the in-water activities (
However, project delays may occur due to a number of factors, including other permitting requirements, availability of equipment and/or materials, weather-related delays, equipment maintenance and/or repair, transit to and from ports to survey locations, and other contingencies. Therefore, the analysis herein represents a best estimate of activities and timeframe and does not imply limits to activities in a given month.
The proposed project is located within southwestern tip of the Alaska Peninsula (Township 57 South, Range 89 West of the Seward Meridian; U.S. Geological Survey Quadrangle COLD BAY A-3) (see figure 1). Situated at approximately Latitude 55°12′ N, Longitude 162°42′ W, the city encompasses 53.41 square miles (mi
Geologically, the region is part of the Aleutian arc, a highly active segment of the Pacific Ring of Fire. The landscape is dominated by prominent volcanic features, including Frosty Peak and Mount Simeon nearby, with the more distant and active Pavlof and Shishaldin Volcanoes. The region contains complex geology, which is shaped by a long history of volcanic, glacial, and tectonic processes. The immediate topography of Cold Bay is characterized by a rolling, treeless tundra dotted with numerous lakes and swamps. This landscape is part of a broad coastal lowland on the northern side of the peninsula, which generally lies less than 100 ft (30.5 m) above sea level. Cold Bay's most defining physical characteristic is its location on a narrow isthmus separating two great marine ecosystems: the cold, shallow, and enclosed Bering Sea to the north, and the deep, warmer, and open North Pacific Ocean to the south. This unique geographical position creates a convergence zone of powerful ocean currents, temperature gradients, and salinities, resulting in one of the most biologically productive marine environments on the planet. The City of Cold Bay lies on the shore of Cold Bay, a large Pacific Ocean embayment, and is adjacent to the Izembek Lagoon (a shallow, 30-mi (48-km) coastal ecosystem that contains one of the world's largest beds of eelgrass (
Cold Bay serves as a primary commercial and transportation hub for the Alaska Peninsula and a gateway to the Aleutian Islands. It is the headquarters for the Izembek National Wildlife Refuge (see U.S. Fish and Wildlife Service (2025a)) and a key logistics and support center for the commercial fishing industry in the region. The city's primary infrastructure includes the Port of Cold Bay, which serves the state ferry system, and the Cold Bay Airport, a critical regional hub and emergency diversion airport for trans-Pacific flights with one of the longest runways in Alaska.
ADOT&PF has proposed to remove components of the existing and aging structure and install new components to better serve the Cold Bay community. The existing Cold Bay Dock is a critical facility for the community and surrounding areas, serving as the sole location for the sea-based delivery of fuel, goods, cargo, and potable drinking water. Per the 2022-2027 Alaska Statewide Comprehensive Economic Development Strategy, officials have highlighted that coastal communities, such as Cold Bay, depend on efficient and well-functioning waterfront infrastructure to receive goods. Currently, the dock is nearing the end of its serviceable life and is at risk of failing. Use restrictions are in place that limit axle loads and gross vehicle weights until the dock can be replaced. The new dock would be designed and built to accommodate a variety of uses, including commercial use, freight and fuel transportation, private vessel uses, and public uses like emergency medical services and public transportation through the AMHS.
The project would be completed in stages, depending on the structure being constructed, including development of a trestle and abutment, a dock, dolphin piles, and then demolition/removal of old structures (
To develop the new infrastructure, a 360 ft (109.7 m) by 54 ft (16.5 m) pile-supported dock with adjacent mooring dolphins would be developed. The applicant would also develop fendering (both heavy-duty on the primary face and light-duty fenders on opposite faces) around the new dock. All access to the dock would be made available by a 22 ft (6.7 m) by 1,800 ft (548.6 m) pile-supported trestle. The trestle and dock would be constructed using pre-cast concrete elements, supported by pile-driven steel foundation piles. For the trestle and dock construction, vibratory pile driving would be used whenever feasible, but impact pile driving likely would be needed to proof piles. The trestle would be constructed using prefabricated sections supported by pile bents. A pile-supported abutment would support the nearshore end of the trestle. All pier-support piles would be installed first, followed by the pre-cast concrete caps, and then the superstructure would be set. The trestle piles would require both vibratory and impact pile driving methods, to install and (in some cases remove) a total of 208 temporary piles, 261 new permanent piles, and 322 existing piles. No simultaneous pile driving is planned. Pile specifics for the dock trestle are described here:
• Vibratory and impact installation of 113 permanent trestle support piles (36-inch (in); 91.44-centimeter (cm) pipe piles);
• Vibratory and impact installation and vibratory removal of 150 temporary trestle piles (24-in (60.96-cm) to 36-in (91.44-cm) pipe or H-piles);
• Vibratory and impact installation of 80 permanent dock support piles (36-in (91.44-cm) pipe piles);
• Vibratory and impact installation and vibratory removal of 50 temporary dock piles (24-in (60.96-cm) to 36-in (91.44-cm) pipe piles);
• Vibratory installation of 20 fender piles (30-in (76.2-cm) pipe piles); and
• Vibratory installation of 40 fender piles (24-in (60.96-cm) pipe piles).
The construction of the dock would proceed similarly to trestle construction, where the dock piles would be installed using both vibratory and impact methods. All permanent piles would be driven at their pre-planned locations, which would be followed by a setting of pre-cast concrete caps and structural panel systems that make up the superstructure of the dock. Piles would be set and driven using a crane either located on a barge or working on a temporary structure. Fenders (using two fender piles) would be installed along the offshore dock face to protect the dock from moored vessels. Single pile fenders would be installed on the shoreward dock face. Installation would only be by vibratory pile driving. Lastly, various dock appurtenances and utilities would be installed, although these would not necessitate any pile driving. These would serve the current and future needs of the dock and consist of water, electrical, and fuel piping, such as the installation of utility lines and diesel/gasoline fuel lines, a portable water supply line, and new lighting along the new trestle and dock.
Upon completion of the dock and trestle structures, the applicant would install two dolphins at opposite ends, using four temporary pile templates initially driven for the installation of each dolphin and removed following completion. Temporary piles would be installed using vibratory pile driving, and impact pile driving would be used to proof the vertical load supporting piles or in the case of obstructions. All temporary piles would be extracted using vibratory pile driving. Pile specifics for the dolphins are described here:
• Vibratory and impact installation of eight permanent dolphin piles (36-in (76.2-cm) pipe piles); and
• Vibratory installation and removal of eight temporary dolphin piles (24-in (60.96-cm) to 36-in (76.2-cm) pipe piles).
During all the construction, demolition and removal of the existing older dock structure would be coordinated with the installation of the new structure to minimize any potential disturbance to users of the facility. Trestle demolition would not be performed until the new trestle is completed. Demolition for the dock and trestle would include removal of the concrete superstructure, support piles, fenders and all dock utilities and appurtenances. Removal of the superstructure would be accomplished by first saw-cutting and pulling the concrete deck panels. The existing pile caps would then be cut, while the supporting piles would be cut at the pile/cap interface and then the caps would be lifted and removed. Pile extraction would proceed following the removal of the superstructure. All piles would be removed using vibratory pile driving equipment or cut off at the mudline. Piles removed during demolition would include:
• 180 trestle piles (16-in (40.64-cm) pipe piles);
• 24 dock piles (16-in (40.64-cm) pipe piles);
• 65 dock piles (26-in (66-cm) pipe piles);
• 9 dolphin piles (16-in (40.64-cm) pipe piles);
• 13 fender piles (20-in (50.8-cm) pipe piles); and
• 31 fender piles (16-in (40.64-cm) timber piles).
Upon completion, refuse and excess materials from the project would be either reclaimed, recycled, or disposed of and all project equipment would be demobilized to the port of origin.
A summary of all piles planned to be installed or removed and their specific attributes are included in table 2 below.
Proposed mitigation, monitoring, and reporting measures are described in detail later in this document (please see Proposed Mitigation and Proposed Monitoring and Reporting).
Sections 3 and 4 of the application summarize available information regarding status and trends, distribution and habitat preferences, and behavior and life history of the potentially affected species. NMFS fully considered all of this information, and we refer the reader to these descriptions, instead of reprinting the information. Additional information regarding population trends and threats may be found in NMFS' Stock Assessment Reports (SARs;
Table 3 lists all species or stocks for which take is expected and proposed to be authorized for this activity and summarizes information related to the population or stock, including regulatory status under the MMPA and Endangered Species Act (ESA) and potential biological removal (PBR), where known. PBR is defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population (as described in NMFS' SARs). While no serious injury or mortality is anticipated or proposed to be authorized here, PBR and annual serious injury and mortality (M/SI) from anthropogenic sources are included here as gross indicators of the status of the species or stocks and other threats.
Marine mammal abundance estimates presented in this document represent the total number of individuals that make up a given stock or the total number estimated within a particular study or survey area. NMFS' stock abundance estimates for most species represent the total estimate of individuals within the geographic area, if known, that comprises that stock. For some species, this geographic area may extend beyond U.S. waters. All managed stocks in this region are assessed in NMFS' Alaska SARs. All values presented in table 3 are the most recent available at the time of publication (including from the draft 2024 SARs) and are available online at:
As indicated above, all six species (with eight managed stocks) in table 3 temporally and spatially co-occur with the activity to the degree that take is reasonably likely to occur.
For all marine mammal species, there are no known biologically important areas (BIA) within the coastal site that ADOT&PF's proposed activities would be expected to impact. For fin whales (
In addition, northern sea otters may (
Hearing is the most important sensory modality for marine mammals underwater, and exposure to anthropogenic sound can have deleterious effects. To appropriately assess the potential effects of exposure to sound, it is necessary to understand the frequency ranges marine mammals are able to hear. Not all marine mammal species have equal hearing capabilities or hear over the same frequency range (
Of the species potentially present in the action area, two are considered low-frequency (LF) cetaceans (
For more detail concerning these groups and associated frequency ranges, please see NMFS (2024) for a review of available information.
This section includes a summary and provides a discussion of the ways in which components of the specified activity may impact marine mammals and their habitat. The Estimated Take of Marine Mammals section later in this document includes a quantitative analysis of the number of individuals that are expected to be taken by this activity. The Negligible Impact Analysis and Determination section considers the content of this section, the Estimated Take of Marine Mammals section, and the Proposed Mitigation section, to draw conclusions regarding the likely impacts of these activities on the reproductive success or survivorship of individuals and whether those impacts are reasonably expected to, or reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
Acoustic effects on marine mammals during the specified activity are expected to potentially occur from impact and vibratory pile installation and removal. The effects of underwater noise from ADOT&PF's proposed activities have the potential to result in Level B harassment of marine mammals in the action area and, for some species as a result of certain activities, Level A harassment.
Overall, the proposed activities include the removal and installation of old, temporary, and permanent piles in Cold Bay, Alaska. There are a variety of types and degrees of effects to marine mammals, prey species, and habitat that could occur as a result of the project. Below we provide a brief description of the types of sound sources that would be generated by the project, the general impacts from these types of activities, and an analysis of the anticipated impacts on marine mammals from the project, with consideration of the proposed mitigation measures.
Activities associated with the project that have the potential to incidentally take marine mammals though exposure to sound would include impact pile driving for installation, and vibratory pile driving for installation and removal. Impact hammers typically operate by repeatedly dropping and/or pushing a heavy piston onto a pile to drive the pile into the substrate. Sound generated by impact hammers is impulsive, characterized by rapid rise times and high peak levels, a potentially injurious combination (Hastings and Popper, 2005). Vibratory hammers install piles by vibrating them and allowing the weight of the hammer to push them into the substrate. Vibratory hammers typically produce less sound (
The likely or possible impacts of ADOT&PF's proposed activities on marine mammals could involve both non-acoustic and acoustic stressors. Potential non-acoustic stressors could result from the physical presence of the equipment and personnel. However, given there are no known pinniped haul-out sites in the vicinity of the project site, visual and other non-acoustic stressors would be limited, and any impacts to marine mammals are expected to primarily be acoustic in nature. While there are known rookeries for Steller sea lions at Clubbing Rocks North (57 km (35.4 mi) to the south), Clubbing Rocks South (58 km (36 mi) to the south), and Pinnacle Rock (76 km (47.2 mi) to the southeast), no Steller sea lion haulouts have been reported in Cold Bay (Fritz
The introduction of anthropogenic noise into the aquatic environment from impact and vibratory pile driving is the primary means by which marine mammals may be harassed from ADOT&PF's specified activity. Anthropogenic sounds cover a broad range of frequencies and sound levels and can have a range of highly variable impacts on marine life from none or minor to potentially severe responses depending on received levels, duration of exposure, behavioral context, and various other factors. Broadly, underwater sound from active acoustic sources, such as those in the project, can potentially result in one or more of the following: temporary or permanent hearing impairment, non-auditory physical or physiological effects, behavioral disturbance, stress, and masking (Richardson
We describe the more severe effects of certain non-auditory physical or physiological effects only briefly as we do not expect that use of impact and vibratory hammers are reasonably likely to result in such effects (see below for further discussion). Potential effects from impulsive sound sources can range in severity from effects such as behavioral disturbance or tactile perception to physical discomfort, slight injury of the internal organs and the auditory system, or mortality (Yelverton
In general, animals exposed to natural or anthropogenic sound may experience physical and psychological effects, ranging in magnitude from none to severe (Southall
The degree of effect of an acoustic exposure on marine mammals is dependent on several factors, including, but not limited to, sound type (
Richardson
Below, we provide additional detail regarding potential impacts on marine mammals and their habitat from noise in general, starting with hearing impairment, as well as from the specific activities ADOT&PF plans to conduct, to the degree it is available.
Depending on the degree (elevation of threshold in dB), duration (
Many studies have examined noise-induced hearing loss in marine mammals (see Finneran (2015) and Southall
The amount and onset of TTS depends on the exposure frequency. Sounds below the region of best sensitivity for a species or hearing group are less hazardous than those near the region of best sensitivity (Finneran and Schlundt, 2013). At low frequencies, onset-TTS exposure levels are higher compared to those in the region of best sensitivity (
Relationships between TTS and AUD INJ thresholds have not been studied in marine mammals, and there are no measured PTS data for cetaceans, but such relationships are assumed to be similar to those in humans and other terrestrial mammals. AUD INJ typically occurs at exposure levels at least several dB above that inducing mild TTS (
Behavioral responses to sound are highly variable and context-specific and any reactions depend on numerous intrinsic and extrinsic factors (
Habituation can occur when an animal's response to a stimulus wanes with repeated exposure, usually in the absence of unpleasant associated events (Wartzok
As noted above, behavioral state may affect the type of response. For example, animals that are resting may show greater behavioral change in response to disturbing sound levels than animals that are highly motivated to remain in an area for feeding (Richardson
Available studies show wide variation in response to underwater sound; therefore, it is difficult to predict specifically how any given sound in a particular instance might affect marine mammals perceiving the signal (
Disruption of feeding behavior can be difficult to correlate with anthropogenic sound exposure, so it is usually inferred by observed displacement from known foraging areas, the appearance of secondary indicators (
Respiration rates vary naturally with different behaviors and alterations to breathing rate as a function of acoustic exposure can be expected to co-occur with other behavioral reactions, such as a flight response or an alteration in diving. However, respiration rates in and of themselves may be representative of annoyance or an acute stress response. Various studies have shown that respiration rates may either be unaffected or could increase, depending on the species and signal characteristics, again highlighting the importance in understanding species differences in the tolerance of underwater noise when determining the potential for impacts resulting from anthropogenic sound exposure (
Avoidance is the displacement of an individual from an area or migration path as a result of the presence of a sound or other stressors, and is one of the most obvious manifestations of disturbance in marine mammals (Richardson
A flight response is a dramatic change in normal movement to a directed and rapid movement away from the perceived location of a sound source. The flight response differs from other avoidance responses in the intensity of the response (
Behavioral disturbance can also impact marine mammals in more subtle
Many animals perform vital functions, such as feeding, resting, traveling, and socializing, on a diel cycle (24-hour cycle). Disruption of such functions resulting from reactions to stressors such as sound exposure are more likely to be significant if they last more than one diel cycle or recur on subsequent days (Southall
Neuroendocrine stress responses often involve the hypothalamus-pituitary-adrenal system. Virtually all neuroendocrine functions that are affected by stress—including immune competence, reproduction, metabolism, and behavior—are regulated by pituitary hormones. Stress-induced changes in the secretion of pituitary hormones have been implicated in failed reproduction, altered metabolism, reduced immune competence, and behavioral disturbance (
The primary distinction between stress (which is adaptive and does not normally place an animal at risk) and “
Relationships between these physiological mechanisms, animal behavior, and the costs of stress responses are well studied through controlled experiments and for both laboratory and free-ranging animals (
Marine mammals vocalize for different purposes and across multiple modes, such as whistling, echolocation click production, calling, and singing. Changes in vocalization behavior in response to anthropogenic noise can occur for any of these modes and may result from a need to compete with an increase in background noise or may
Under certain circumstances, marine mammals experiencing significant masking could also be impaired from maximizing their performance fitness in survival and reproduction. Therefore, when the coincident (masking) sound is human-made, it may be considered harassment when disrupting or altering critical behaviors. It is important to distinguish TTS and PTS, which persist after the sound exposure, from masking, which occurs during the sound exposure. Because masking (without resulting in TS) is not associated with abnormal physiological function, it is not considered a physiological effect, but rather a potential behavioral effect (though not necessarily one that would be associated with harassment).
The frequency range of the potentially masking sound is important in determining any potential behavioral impacts. For example, low-frequency signals may have less effect on high-frequency echolocation sounds produced by odontocetes but are more likely to affect detection of mysticete communication calls and other potentially important natural sounds such as those produced by surf and some prey species. The masking of communication signals by anthropogenic noise may be considered as a reduction in the communication space of animals (
Masking occurs in the frequency band that the animals utilize and is more likely to occur in the presence of broadband, relatively continuous noise sources such as vibratory pile driving. Energy distribution of vibratory pile driving sound covers a broad frequency spectrum and is anticipated to be within the audible range of marine mammals present in the proposed action area. Since noises generated from the proposed construction activities are mostly concentrated at low frequencies (<2 kHz), these activities likely have less effect on mid-frequency echolocation sounds produced by odontocetes (toothed whales). However, lower frequency noises are more likely to affect detection of communication calls and other potentially important natural sounds such as surf and prey noise. Low-frequency noise may also affect communication signals when they occur near the frequency band for noise and thus reduce the communication space of animals (
While in some cases marine mammals have exhibited little to no obviously detectable response to certain common or routine industrialized activities (Cornick
We recognize that pinnipeds in the water could be exposed to airborne sound that may result in behavioral harassment when looking with their heads above water. Most likely, airborne sound would cause behavioral responses similar to those discussed above in relation to underwater sound. For instance, anthropogenic sound could cause hauled out pinnipeds to exhibit changes in their normal behavior, such as reduction in vocalizations, or cause them to flush from haulouts, temporarily abandon the area, and or move further from the
ADOT&PF's proposed activities could have localized, temporary impacts on marine mammal habitat, including prey, by increasing in-water SPLs. Increased noise levels may affect acoustic habitat and adversely affect marine mammal prey in the vicinity of the project areas (see discussion below). Elevated levels of underwater noise would ensonify the project areas where both fishes and mammals occur and could affect foraging success. Additionally, marine mammals may avoid the area during the proposed construction activities; however, displacement due to noise is expected to be temporary and is not expected to result in long-term effects to the individuals or populations.
The total area likely impacted by ADOT&PF's activities is relatively small compared to the available habitat in and around Cold Bay. Avoidance by potential prey (
The proposed project would occur within the same general footprint as the existing marine infrastructure. The nearshore and intertidal habitat where the proposed project would occur is an area of relatively high marine vessel traffic. Most marine mammals do not generally use the area within the footprint of the project area. Temporary, intermittent, and short-term habitat alteration may result from increased noise levels during the proposed construction activities. Effects on marine mammals would be limited to temporary displacement from pile installation and removal noise, and effects on prey species would be similarly limited in time and space.
Effects to turbidity and sedimentation are expected to be short-term, minor, and localized. Turbidity within the water column has the potential to reduce the level of oxygen in the water and irritate the gills of prey fish species in the proposed project area. However, turbidity plumes associated with the project would be temporary and localized, and fish in the proposed project area would be able to move away from and avoid the areas where plumes may occur. Therefore, it is expected that the impacts on prey fish species from turbidity, and therefore on marine mammals, would be minimal and temporary. In general, the area likely impacted by the proposed construction activities is relatively small compared to the available marine mammal habitat in Cold Bay.
Fishes utilize the soundscape and components of sound in their environment to perform important functions such as foraging, predator avoidance, mating, and spawning (
Fish react to sounds that are especially strong and/or intermittent low-frequency sounds, and behavioral responses such as flight or avoidance are the most likely effects. Short duration, sharp sounds can cause overt or subtle changes in fish behavior and local distribution. The reaction of fish to noise depends on the physiological state of the fish, past exposures, motivation (
SPLs of sufficient strength have been known to cause injury to fishes and fish mortality (summarized in Popper
Fish populations in the proposed project area that serve as marine mammal prey could be temporarily affected by noise from pile installation and removal. The frequency range in which fishes generally perceive underwater sounds is 50 to 2,000 Hz, with peak sensitivities below 800 Hz (Popper and Hastings, 2009). Fish behavior or distribution may change, especially with strong and/or intermittent sounds that could harm fishes. High underwater SPLs have been documented to alter behavior, cause hearing loss, and injure or kill individual fish by causing serious internal injury (Hastings and Popper, 2005).
Zooplankton is a food source for several marine mammal species, as well as a food source for fish that are then preyed upon by marine mammals. Population effects on zooplankton could have indirect effects on marine mammals. Data are limited on the effects of underwater sound on zooplankton species, particularly sound from construction (Erbe
The Essential Fish Habitat (EFH) designation for the Cold Bay, Alaska region is fundamentally driven by the Izembek Lagoon complex, which harbors one of the world's most extensive and productive eelgrass (
The habitat is vital for sustaining major regional fisheries, serving as an important area for all five species of Pacific salmon (genus
The greatest potential impact to marine mammal prey during construction would occur during impact pile driving. However, in most cases, the duration of impact pile driving would be limited to the final stage of installation (proofing) after the pile has been driven as close as practicable to the design depth with a vibratory driver. In-water construction activities would only occur during daylight hours, allowing fish to forage and transit the project area in the evening. Vibratory pile driving could possibly elicit behavioral reactions from fishes, such as temporary avoidance of the area, but is unlikely to cause injuries to fishes or have persistent effects on local fish populations. Construction also would have minimal permanent and temporary impacts on benthic invertebrate species, a marine mammal prey source. In addition, it should be noted that the area in question is low-quality habitat since it is already highly developed and experiences a high level of anthropogenic noise from normal operations and other vessel traffic.
The proposed project is not expected to result in any habitat related effects that could cause significant or long-term negative consequences for individual marine mammals or their populations, since installation and removal of in-water piles would be temporary and intermittent. The total seafloor area affected by pile installation and removal is a very small area compared to the vast foraging area available to marine mammals outside this project area. For marine mammals, while the area is commonly used or traversed by some species, the proposed project area does not contain any particularly high-value habitat and is not usually important to any of the other species potentially affected by ADOT&PF's proposed activities. While opportunistic foraging could occur, more foraging habitat is available outside the Bay, in more open ocean waters. Overall, the area impacted by the project is relatively small compared to the available habitat just outside the project area, and there are no areas of particular importance that would be impacted by this project during the period planned for activities to occur. Any behavioral avoidance by fish of the disturbed area would still leave significantly large areas of fish and marine mammal foraging habitat in the nearby vicinity. As described in the preceding, the potential for the ADOT&PF's construction to affect the availability of prey to marine mammals or to meaningfully impact the quality of physical or acoustic habitat is considered insignificant. Therefore, impacts of the project are not likely to have adverse effects on marine mammal foraging habitat in the proposed project area.
In summary, given the relatively small areas being affected, as well as the temporary and mostly transitory nature of the proposed construction activities, any adverse effects from ADOT&PF's activities on prey habitat or prey populations are expected to be minor and temporary. The most likely impact to fishes at the project site would be temporary avoidance of the area. Any behavioral avoidance by fish of the disturbed area would still leave significantly large areas of fish and marine mammal foraging habitat in the nearby vicinity. Thus, we preliminarily conclude that impacts of the specified
This section provides an estimate of the number of incidental takes proposed for authorization through the IHA, which will inform NMFS' consideration of “small numbers,” the negligible impact determinations, and impacts on subsistence uses.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “
Authorized takes would primarily be by Level B harassment, as use of the acoustic sources (
As described previously, no serious injury or mortality is anticipated or proposed to be authorized for this activity. Below we describe how the proposed take numbers are estimated.
For acoustic impacts, generally speaking, we estimate take by considering: (1) acoustic criteria above which NMFS believes there is some reasonable potential for marine mammals to be behaviorally harassed or incur some degree of AUD INJ; (2) the area or volume of water that would be ensonified above these levels in a day; (3) the density or occurrence of marine mammals within these ensonified areas; and, (4) the number of days of activities. We note that while these factors can contribute to a basic calculation to provide an initial prediction of potential takes, additional information that can qualitatively inform take estimates is also sometimes available (
NMFS recommends the use of acoustic criteria that identify the received level of underwater sound above which exposed marine mammals would be reasonably expected to be behaviorally harassed (equated to Level B harassment) or to incur AUD INJ of some degree (equated to Level A harassment). We note that the criteria for AUD INJ, as well as the names of two hearing groups, have been recently updated (NMFS, 2024) as reflected below in the Level A harassment section.
ADOT&PF's proposed pile driving includes the use of continuous (vibratory hammer) and impulsive (impact hammer) sources, and therefore the RMS SPL thresholds of 120 and 160 dB re 1 μPa are applicable.
The 2024 Updated Technical Guidance criteria include both updated thresholds and updated weighting functions for each hearing group (table 6). The thresholds are provided in the table below. The references, analysis, and methodology used in the development of the criteria are described in NMFS' 2024 Updated Technical Guidance, which may be accessed at:
Here, we describe operational and environmental parameters of the activity that are used in estimating the area ensonified above the acoustic thresholds, including source levels and transmission loss coefficient.
The sound field in the project area is the existing background noise plus additional construction noise from the proposed project. Marine mammals are expected to be affected via sound generated by the primary components of the project (
Transmission Loss (
This formula neglects loss due to scattering and absorption, which is assumed to be zero in this case. The degree to which underwater sound propagates away from a sound source depends on various factors, most notably the water bathymetry and the presence or absence of reflective or absorptive conditions, including in-water structures and sediments. Spherical spreading occurs in a perfectly unobstructed (free-field) environment not limited by depth or water surface, resulting in a 6 dB reduction in sound level for each doubling of distance from the source (20*log
The ensonified area associated with Level A harassment is more technically challenging to predict due to the need to account for a duration component. Therefore, NMFS developed an optional User Spreadsheet tool to accompany the 2024 Updated Technical Guidance that can be used to relatively simply predict an isopleth distance for use in conjunction with marine mammal density or occurrence to help predict potential takes (found on our website here:
We note that because of some of the assumptions included in the methods underlying this optional tool, we anticipate that the resulting isopleth estimates are typically going to be overestimates of some degree, which may result in an overestimate of potential take by Level A harassment. However, this optional tool offers the best way to estimate isopleth distances when more sophisticated modeling methods are not available or practical. For stationary sources, such as vibratory pile driving and impact pile driving, the optional User Spreadsheet tool predicts the distance at which, if a marine mammal remained at that distance for the duration of the activity, it would be expected to incur AUD INJ. Inputs used in the optional User Spreadsheet tool, and the resulting estimated isopleths, are reported below in tables 8 and 9. Using the practical spreading model, NMFS determined that the underwater noise would yield the calculated distances to the Level A harassment and Level B harassment thresholds for marine mammals shown in table 10.
It should be noted that, based on the geography of Cold Bay and the surrounding islands outside of the mouth of the Bay, the sound would not reach the entire distance of the Level B harassment isopleths. The size and shape of the Bay are expected to truncate the largest Level B harassment isopleths.
In this section, we provide information about the occurrence of marine mammals, including density or other relevant information, which will inform the take calculations. Then, we describe how all of the information detailed above is synthesized to produce a quantitative estimate of the take that is reasonably likely to occur and proposed for authorization.
In their ITA application, ADOT&PF calculated their requested take based on the synthetization of different resources, including websites from state and Federal agencies (
Estimated take was calculated different for each species, depending on the likely occurrence of the species in the proposed project area (see table 11). This means that some occurrences were calculated on a daily basis, some on a weekly, or some on a monthly (or multi-monthly) basis. This is all assumed to occur within 231 days of project activities requiring the use of in-water pile driving, consisting of both vibratory and impact approaches, which can vary in total number of days based on the specific construction activity.
After reviewing the available resources to determine an appropriate occurrence level (
Humpback whales are common in the general region during the summer months; however, their presence within the project area is uncommon due to the shallow and sheltered nature of Cold Bay. Given that all work and noise are expected to be confined to the Bay, but in some cases, exceed the practicable shutdown zone, NMFS proposes to conservatively authorize two groups of two humpback whales for take by Level A harassment.
More specific information on species/stock occurrence, which was incorporated into the analysis, can be found in section 6 of ADOT&PF's application and is not repeated here; instead, we reference the reader to the application for this additional information. Below, we provide the areal calculations (table 12), and we summarize the relevant group sizes and information presented on the occurrence of each species/stock and provide the numerical values proposed for authorization in the table below (table 13).
In order to issue an IHA under section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to the activity, and other means of effecting the least practicable impact on the species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of the species or stock for taking for certain subsistence. NMFS regulations require applicants for incidental take authorizations (ITA) to include information about the availability and feasibility (economic and technological) of equipment, methods, and manner of conducting the activity or other means of effecting the least practicable adverse impact upon the affected species or stocks, and their habitat (50 CFR 216.104(a)(11)).
In evaluating how mitigation may or may not be appropriate to ensure the least practicable adverse impact on species or stocks and their habitat, as well as subsistence uses where applicable, NMFS considers two primary factors:
(1) The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, and their habitat, as well as subsistence uses. This considers the nature of the potential adverse impact being mitigated (likelihood, scope, range). It further considers the likelihood that the measure will be effective if implemented (probability of accomplishing the mitigating result if implemented as planned), the likelihood of effective implementation (probability implemented as planned), and;
(2) The practicability of the measures for applicant implementation, which may consider such things as cost, and impact on operations.
The mitigation requirements described in the following were proposed by ADOT&PF in its adequate and complete application or are the result of subsequent coordination between NMFS and ADOT&PF. ADOT&PF has agreed that all of the mitigation measures are practicable. NMFS has fully reviewed the specified activities and the mitigation measures to determine if the mitigation measures would result in the least practicable adverse impact on marine mammals and their habitat, as required by the MMPA, and has determined the proposed measures are appropriate. NMFS describes these below as proposed mitigation requirements and has included them in the proposed IHA.
In addition to the measures described later in this section, ADOT&PF would be required to follow these general mitigation measures:
• Takes proposed for authorization, by Level A harassment and Level B harassment only, would be limited to the species and numbers listed in table 14. Construction activities would be required to be halted upon observation of either a species for which incidental take was not authorized or for a species for which incidental take has been authorized but the number of takes has been met, entering or is within the harassment zone, if the IHA is issued.
• The taking by serious injury or death of any of the species listed in table 14 or any taking of any other species of marine mammal would be prohibited and would result in the modification, suspension, or revocation of the IHA, if issued. Any taking exceeding the amounts proposed for authorization listed in table 14 would be prohibited and would result in the modification, suspension, or revocation of the IHA, if issued;
• Ensure that construction supervisors and crews, the marine mammal monitoring team, and relevant ADOT&PF staff are trained prior to the start of all construction activities, so that responsibilities, communication procedures, marine mammal monitoring protocol, and operational procedures are clearly understood. New personnel joining during the project must be trained prior to commencing work;
• ADOT&PF, construction supervisors and crews, PSOs, and relevant ADOT&PF staff must avoid direct physical interaction with marine mammals during construction activities. If a marine mammal comes within 10 m (32.8 ft) of such activity, operations must cease and vessels must reduce speed to the minimum level required to maintain steerage and safe working conditions, as necessary to avoid direct physical interaction;
• Employ PSOs and establish monitoring locations as described in the Protected Species Monitoring and Mitigation Plan (PSMMP) (see NMFS' website). ADOT&PF must monitor the project area to the maximum extent possible based on the required number of PSOs, required monitoring locations, and environmental conditions;
• ADOT&PF also would abide by the reasonable and prudent measures and terms and conditions of a Biological Opinion and Incidental Take Statement, if issued by NMFS, pursuant to Section 7 of the ESA; and
• ADOT&PF, in alignment with the PSMMP, would abide by vessel measures related to North Pacific right whales (50 CFR 224.103(c)), Steller sea lions (50 CFR 224.103(d)), and humpback whales (50 CFR 224.103(b), 50 CFR 223.214).
Additionally, the following mitigation measures apply to ADOT&PF's in-water construction activities.
ADOT&PF would be required to establish pre- and post-monitoring zones with radial distances (based on the distances to the Level B harassment threshold and feasibility for PSOs in the field) for all construction activities (see table 14). Monitoring would take place from 30 minutes prior to initiation of any pile driving activity (
ADOT&PF would use soft start techniques when impact pile driving. Soft-start requires contractors to provide an initial set of three strikes at reduced energy, followed by a 30-second waiting period, then two subsequent reduced-energy strike sets. A soft-start would be implemented at the start of each day's impact pile driving and at any time following cessation of impact pile driving for a period of 30 minutes or longer. Soft-start procedures are used to provide additional protection to marine mammals by providing warning and/or giving marine mammals a chance to leave the area prior to the hammer operating at full capacity.
ADOT&PF would be required to establish shutdown zones with radial distances, as identified in table 15 for all construction activities. The purpose of a shutdown zone is generally to define an area within which shutdown of the activity would occur upon sighting of a marine mammal (or in anticipation of an animal entering the defined area). Additionally, ADOT&PF would be required to shutdown in the event an unauthorized species is present, to avoid take of that unauthorized species. Shutdown zones would vary based on the activity type and marine mammal hearing group.
If a marine mammal is observed entering or within the shutdown zones indicated in table 15, pile driving activities must be delayed or halted. If pile driving is delayed or halted due to the presence of a marine mammal, the activity may not commence or resume until either the animal has voluntarily exited and been visually confirmed beyond the shutdown zones or a specific time period has passed without re-detection of the animal (
ADOT&PF has not proposed, to utilize a bubble curtain during any of the proposed pile driving activities presented herein due to feasibility concerns related to the costs and time necessary to install and operate the curtains. Time delays are impractical for the proposed project due to the short field season available in the extreme environment of the Aleutian Islands.
NMFS conducted an independent evaluation of the proposed measures, and has preliminarily determined that the proposed mitigation measures provide the means of effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, areas of similar significance, and on the availability of such species or stock for subsistence uses.
In order to issue an IHA for an activity, section 101(a)(5)(D) of the MMPA states that NMFS must set forth requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present while conducting the activities. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the area in which take is anticipated (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
ADOT&PF would abide by all monitoring and reporting measures contained within the IHA, if issued, and their PSMMP (see NMFS' website). The monitoring and reporting requirements described in the following were proposed by ADOT&PF in its adequate and complete application and/or are the result of subsequent coordination between NMFS and ADOT&PF. ADOT&PF has agreed to the requirements. NMFS describes these below as requirements and has included them in the proposed IHA.
All PSOs must be NMFS-approved. PSOs would be independent of the activity contractor (for example, employed by a subcontractor) and have no other assigned tasks during monitoring periods. At least one PSO would have prior experience performing the duties of a PSO during an activity pursuant to a NMFS-issued ITA. Other PSOs may substitute other relevant experience (including relevant Alaska Native traditional knowledge), education (degree in biological science or related field), or training for prior experience performing the duties of a PSO during construction activity pursuant to a NMFS-issued ITA.
Additionally, PSOs would be required to meet the following qualifications:
• The ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behaviors;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to:
(1) Number and species of marine mammals observed;
(2) Dates and times when in-water construction activities were conducted;
(3) Dates, times, and reason for implementation of mitigation (or why mitigation was not implemented when required); and
(4) Marine mammal behavior.
• The ability to communicate orally, by radio or in person, with project personnel to provide real-time information on marine mammals observed in the area as necessary.
ADOT&PF must establish monitoring locations, as described in PSMMP (see NMFS' website). ADOT&PF must use a minimum of two PSOs. Where a team of three or more PSOs is required, a lead observer (“
For all pile driving activities, a minimum of one PSO must be assigned to each active pile driving location to monitor the applicable shutdown zones for the entirety of active construction operations (see PSMMP). Given the maximum effective observation distance, PSOs would be required to continuously monitor the entirety of the shutdown zones and as much as possible of the Level B harassment zones given visibility constraints, using binoculars and other resources to aid in observation. At all locations, all PSOs, to the extent practicable, must use an elevator platform at observation points to enhance observation ability. PSOs would be required to record all observations of marine mammals, regardless of distance from the pile being driven, as well as the additional data indicated below and in section 6 of the IHA, if issued.
ADOT&PF would be required to submit an annual draft summary report on all construction activities and marine mammal monitoring results to NMFS within 90 days following the end of construction or 60 calendar days prior to the requested issuance of any subsequent IHA for similar activity at the same location, whichever comes first. The draft summary report would include an overall description of construction work completed, a narrative regarding marine mammal sightings, and associated raw PSO data sheets (in electronic spreadsheet format). Specifically, the report must include:
• Dates and times (begin and end) of all marine mammal monitoring;
• Construction activities occurring during each daily observation period, including: (a) how many and what type of piles were driven or removed and the method (
• PSO locations during marine mammal monitoring; and
• Environmental conditions during monitoring periods (at beginning and end of PSO shift and whenever conditions change significantly), including Beaufort sea state and any other relevant weather conditions including cloud cover, fog, sun glare, and overall visibility to the horizon, and estimated observable distance.
Upon observation of a marine mammal, the following information must be reported:
• Name of PSO who sighted the animal(s) and PSO location and activity at the time of the sighting;
• Time of the sighting;
• Identification of the animal(s) (
• Distance and bearing of each observed marine mammal relative to the pile being driven or removed for each sighting;
• Estimated number of animals (min/max/best estimate);
• Estimated number of animals by cohort (
• Animal's closest point of approach and estimated time spent within the estimated harassment zone(s);
• Description of any marine mammal behavioral observations (
• Number of marine mammals detected within the estimated harassment zones, by species; and
• Detailed information about implementation of any mitigation (
If no comments are received from NMFS within 30 days after the submission of the draft summary report, the draft report would constitute the final report. If ADOT&PF received comments from NMFS, a final summary report addressing NMFS' comments would be submitted within 30 days after receipt of comments.
In the event that personnel involved in ADOT&PF's activities discover an injured or dead marine mammal, ADOT&PF would report the incident to the NMFS Office of Protected Resources (OPR) (
• Description of the incident;
• Environmental conditions (
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Photographs or video footage of the animal(s) (if equipment is available).
• Time, date, and location (latitude/longitude) of the first discovery (and updated location information if known and applicable);
• Species identification (if known) or description of the animal(s) involved;
• Condition of the animal(s) (including carcass condition if the animal is dead);
• Observed behaviors of the animal(s), if alive; and
• General circumstances under which the animal was discovered.
NMFS has defined negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
To avoid repetition, the discussion of our analysis applies to all of the species listed in table 3, given that the anticipated effects of this activity on these different marine mammal stocks are expected to be similar. There is little information about the nature or severity of the impacts, or the size, status, or structure of any of these species or stocks that would lead to a different analysis for these activities.
Impact pile driving for installation and vibratory pile driving for installation and/or removal activities associated with the proposed project, as outlined previously, have the potential to disturb or displace marine mammals. Specifically, the specified activities may result in take in the form of Level A harassment and/or Level B harassment from underwater sounds generated from pile driving installation and removal. Potential takes could occur if individuals of these species are present in zones ensonified above the thresholds for Level A harassment or Level B harassment identified above when these activities are underway.
Given the nature of the proposed activities, NMFS does not anticipate serious injury or mortality due to ADOT&PF's proposed project, even in the absence of required mitigation. The Level A harassment zones identified in table 10 are based upon an animal exposed to vibratory pile driving and/or impact pile driving for periods ranging from 20 to 60 minutes for in-water pile driving per day. Overall, construction activities are not expected to exceed 12 hours per day (likely ranging between 10-12 hours but not all of that would be spent actively pile driving). Exposures of this length are, however, unlikely for vibratory driving for installation and/or removal, given marine mammal movement throughout the area. Even during impact driving scenarios, an animal exposed to the accumulated sound energy would likely only experience limited AUD INJ at the lower frequencies where pile driving energy is concentrated.
As stated in the Proposed Mitigation section, ADOT&PF would implement shutdown zones that equal or exceed many of the Level A harassment isopleths shown in table 15. Take by Level A harassment is proposed for five marine mammal species/stocks. This is precautionary to account for the potential that an animal could enter and remain within the area between a Level A harassment zone and the shutdown zone for long enough to be taken by Level A harassment. Additionally, in some cases, this precaution would account for the possibility that an animal could enter a shutdown zone without detection and remain in the Level A harassment zone for a duration long enough to be taken by Level A harassment before being observed and a shutdown occurring. That said, any take by Level A harassment is expected to arise from, at most, a small degree of AUD INJ because animals would need to be exposed to higher levels and/or longer duration than are expected to occur here to incur any more than a small degree of AUD INJ. Given the proximity to shore and the secluded nature of the Bay, exposure over extended periods of time are not considered likely to occur before the animal is observed by PSOs and the proposed mitigation measures are implemented. Additionally, and as noted previously, some subset of the individuals that are behaviorally harassed could also simultaneously incur some small degree of TTS for a short duration of time. Because of the small degree anticipated, any AUD INJ or TTS potentially incurred here is not expected to adversely affect an animal's individual fitness, let alone annual rates of recruitment or survival.
For all species and stocks, take is expected to occur within a limited, confined area (adjacent to the project site) of the stock's range. The intensity and duration of take by Level A harassment and Level B harassment would be expected to be minimized through the proposed mitigation measures described herein. Furthermore, the amount of take proposed for authorization is small compared to the relative stock's abundance, even assuming that every take for any particular species could wholly occur to individuals of an individual stock (where estimates of the stocks population are available).
Behavioral responses of marine mammals to pile driving for pile installation and/or pile removal at the project site, if any, are expected to be mild, short-term, and temporary. Given that old piles would be removed, temporary piles would be installed and then subsequently removed, and new piles would be permanently installed over 231 days in total (not necessarily be consecutive) over 10 to 12 hours per day, any harassment is expected to be temporary and intermittent. Marine mammals within the Level B harassment zones may not show any visual cues they are disturbed by activities or they could become alert, avoid the area, leave the area, or display other mild responses that are not observable, such as changes in vocalization patterns. Additionally, many of the species present in this region would only be present temporarily based on seasonal patterns or during active transit between other habitats. Most likely, during pile driving, individuals would be expected to move away from the sound source and be temporarily displaced from the areas of pile driving throughout the duration of pile driving activities. However, this reaction has been
The potential for harassment is minimized by implementing the proposed mitigation measures. During all impact driving, implementation of soft-start procedures and monitoring of established shutdown zones by trained and qualified PSOs shall be required, significantly reducing any possibility of injury. Given sufficient notice through soft-start (for impact driving), marine mammals are expected to move away from an irritating sound source before it becomes potentially injurious.
Any impacts on marine mammal prey that would occur during ADOT&PF's proposed activities would have, at most, short-term effects on foraging of individual marine mammals, and likely no effect on the populations of marine mammals as a whole. Indirect effects on marine mammal prey during the construction are expected to be minor, and these effects are unlikely to cause substantial effects on marine mammals at the individual level, with no expected effect on annual rates of recruitment or survival.
The area likely impacted by the project is relatively small compared to the available habitat in the surrounding waters of the Aleutian Islands. Although the Aleutian Islands are part of several identified BIAs (
In addition, it is unlikely that minor noise effects in a small, localized area of habitat would have any effect on the reproduction or survival of any individuals, much less the stocks' annual rates of recruitment or survival. In combination, we believe that these factors, as well as the available body of evidence from other similar activities, demonstrate that the potential effects of the specified activities would have only minor, short-term effects on individuals. As already said, the specified activities are not expected to impact rates of recruitment or survival; therefore, these effects would not be expected to result in population-level impacts.
In summary and as described above, the following factors primarily support our preliminary determination that the impacts resulting from this activity are not expected to adversely affect any of the species or stocks through effects on annual rates of recruitment or survival:
• No serious injury or mortality is anticipated or proposed for authorization;
• Any Level A harassment exposures are anticipated to result in slight AUD INJ (
• The anticipated incidents of Level B harassment would consist of, at worst, temporary modifications in behavior that would not result in fitness impacts to individuals;
• The area affected by the specified activity is very small relative to the overall habitat ranges of all species, does not include any rookeries, and does not spatially overlap with any BIAs;
• Effects on species that serve as prey for marine mammals from the activities are expected to be short-term and, therefore, any associated impacts on marine mammal feeding are not expected to result in significant or long-term consequences for individuals, or to accrue to adverse impacts on their populations;
• There are no known haulout locations for Steller sea lions near the proposed project site;
• While harbor seals are known to haul out near the mouth of Kinzarof Lagoon (located approximately 4.5 mi (7.2 km) from the City of Cold Bay's coastal infrastructure, at the closest point), all activities are occurring in-water, and any harbor seals hauled out would not be expected to be affected by in-water noise. Any seals in the water would have the ability to surface as this in-air habitat is expected to be unaffected at distance by the proposed in-water activities;
• The project area is located in an industrialized and commercial dock; and
• The proposed mitigation measures, such as employing vibratory driving to the maximum extent practicable, soft-starts, and shutdowns, are expected to reduce the effects of the specified activity to the least practicable adverse impact level.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the proposed monitoring and mitigation measures, NMFS preliminarily finds that the total marine mammal take from the proposed activity would have a negligible impact on all affected marine mammal species or stocks.
As noted previously, only take of small numbers of marine mammals may be authorized under section 101(a)(5)(A) and (D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, where estimated numbers are available, NMFS compares the number of individuals taken to the most appropriate estimation of abundance of the relevant species or stock in our determination of whether an authorization is limited to small numbers of marine mammals. When the predicted number of individuals to be taken is fewer than one-third of the species or stock abundance, the take is considered to be of small numbers (86 FR 5322, January 19, 2021). Additionally, other qualitative factors may be considered in the analysis, such as the temporal or spatial scale of the activities.
NMFS is proposing to authorize incidental take by Level A harassment and/or Level B harassment of six species (eight stocks) of marine mammals. No mortality or serious injury has been requested, nor is it anticipated to occur from the activities described herein. The maximum number of instances of takes by Level A harassment and/or Level B harassment, relative to the best available population abundance, is less than one-third for all species and stocks potentially impacted (see table 13).
Based on the analysis contained herein of the proposed activity (including the proposed mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS preliminarily finds that small numbers of marine mammals would be taken relative to the population size of the affected species or stocks.
In order to issue an IHA, NMFS must find that the specified activity would
Hunting and fishing for the purpose of subsistence has been a critical component of the history and culture of Alaska, including the Aleutian Islands. The Unangan have displayed highly skilled techniques for fishing, hunting of marine mammals, and gathering and usage of shellfish and plants for thousands of years (Keating
Therefore, NMFS preliminarily determines that the proposed project is not likely to adversely affect the availability of any marine mammal species/stock that would traditionally be used for subsistence purposes, and would only minimally affect any subsistence harvest in the region because of the following reasons:
• There are minimal recorded subsistence harvests of marine mammals in the area;
• The construction activities would be localized and temporary in nature in a sheltered Bay;
• Harbor seals and Steller sea lions do not have dedicated haul outs in Cold Bay, meaning their numbers are not occurring regularly enough to be a dependable resource, unlike the abundant rivers and streams, which provide ample fishing opportunities and is a more popular source of subsistence for local residents;
• The proposed mitigation measures would minimize any disturbances of marine mammals in the area;
• NMFS expects that the majority of effects on marine mammals would not rise above behavioral impacts and would be temporary in nature; and
• No serious injury or mortality is expected to result from the project activities; therefore, the project would not result in a significant change to the availability of subsistence resources.
Based on the description of the specified activity, the measures described to minimize adverse effects on the availability of marine mammals for subsistence purposes, and the proposed mitigation and monitoring measures, NMFS has preliminarily determined that there would not be an unmitigable adverse impact on subsistence uses from ADOT&PF's proposed activities.
Section 7(a)(2) of the ESA of 1973 (16 U.S.C. 1531
NMFS is proposing to authorize take of humpback whales (Mexico-North Pacific stock), humpback whales (Western North Pacific stock), and Steller sea lions (Western stock), which are all listed under the ESA. The Permits and Conservation Division has requested initiation of section 7 consultation with NMFS' Alaska Regional Office for the issuance of this IHA. NMFS would conclude the ESA consultation prior to reaching a determination regarding the proposed issuance of the authorization.
As a result of these preliminary determinations, NMFS proposes to issue an IHA to ADOT&PF for conducting construction work for the Cold Bay Ferry Terminal Reconstruction Project in Cold Bay, Alaska, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated. A draft of the proposed IHA can be found at:
We request comment on our analyses, the proposed authorization, and any other aspect of this notice of proposed IHA for the proposed construction project. We also request comment on the potential renewal of this proposed IHA as described in the paragraph below. Please include with your comments any supporting data or literature citations to help inform decisions on the request for this IHA or a subsequent renewal IHA.
On a case-by-case basis, NMFS may issue a one-time, 1-year renewal IHA following notice to the public providing an additional 15 days for public comments when (1) up to another year of identical or nearly identical activities as described in the Description of Proposed Activity section of this notice is planned or (2) the activities as described in the Description of Proposed Activity section of this notice would not be completed by the time the IHA expires and a renewal would allow for completion of the activities beyond that described in the
• A request for renewal is received no later than 60 days prior to the needed renewal IHA effective date (recognizing that the renewal IHA expiration date cannot extend beyond 1 year from expiration of the initial IHA).
• The request for renewal must include the following:
1. An explanation that the activities to be conducted under the requested renewal IHA are identical to the activities analyzed under the initial IHA, are a subset of the activities, or include changes so minor (
2. A preliminary monitoring report showing the results of the required monitoring to date and an explanation showing that the monitoring results do not indicate impacts of a scale or nature not previously analyzed or authorized.
• Upon review of the request for renewal, the status of the affected species or stocks, and any other pertinent information, NMFS determines that there are no more than minor changes in the activities, the mitigation and monitoring measures will remain the same and appropriate, and the findings in the initial IHA remain valid.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice, 2026 cost recovery fee percentages and average mothership cooperative program pricing.
This action provides participants in the Pacific Coast Groundfish Trawl Rationalization Program with the 2026 cost recovery fee percentages and the average mothership (MS) price per pound to be used in the catcher/processor (C/P) Co-op program to calculate the fee amount for the upcoming calendar year. For the 2026 calendar year, NMFS announces the following fee percentages by sector specific program: 3.0 percent for the Shorebased Individual Fishing Quota (IFQ) Program; 0.3 percent for the C/P Co-op Program; and 3.0 percent for the MS Co-op Program. For 2026, the MS pricing to be used as a proxy by the C/P Co-op Program is $0.10/pound (lb) for Pacific whiting.
Applicable January 1, 2026.
Christopher Biegel, (503) 231-6291,
Section 304(d)(2)(A) of the Magnuson‐Stevens Fishery Conservation and Management Act (MSA) authorizes and requires NMFS to collect fees to recover the costs directly related to the management, data collection and analysis, and enforcement connected to and in support of a limited access privilege program (LAPP) (16 U.S.C. 1854(d)(2)), also called “cost recovery.” Cost recovery fees recover the actual costs directly related to the management, data collection and analysis, and enforcement of the programs (MSA Section 303A(e), 16 U.S.C. 1853a(e)). Section 304(d)(2)(B) of the MSA mandates that cost recovery fees not exceed 3 percent of the annual ex-vessel value of fish harvested by a program subject to a cost recovery fee, and that the fee be collected either at the time of landing, filing of a landing report, or sale of such fish during a fishing season or in the last quarter of the calendar year in which the fish is harvested.
The Pacific Coast Groundfish Trawl Rationalization Program is a LAPP, implemented in 2011, and consists of three sector-specific programs: the Shorebased IFQ Program, the MS Co-op Program, and the C/P Co-op Program. In accordance with the MSA and based on a recommended structure and methodology developed in coordination with the Pacific Fishery Management Council (Council), NMFS began collecting mandatory fees of up to 3 percent of the ex‐vessel value of groundfish from each program (Shorebased IFQ Program, MS Co-op Program, and C/P Co-op Program) in 2014. NMFS collects the fees to recover the incremental costs of management, data collection and analysis, and enforcement of the Groundfish Trawl Rationalization Program. Additional background can be found in the cost recovery proposed rule (78 FR 7371, February 1, 2013) and final rule (78 FR 75268, December 11, 2013). The details of cost recovery for the Groundfish Trawl Rationalization Program are in regulation at 50 CFR 660.115 (Trawl fishery—cost recovery program), 660.140 (Shorebased IFQ Program), 660.150 (MS Co-op Program), and 660.160 (C/P Co-op Program).
By December 31 of each year, NMFS announces the next year's fee percentages and the applicable MS pricing for the C/P Co-op Program. To calculate the fee percentages, NMFS used the formula specified in regulation at § 660.115(b)(1), where the fee percentage by sector equals the lower of 3 percent or direct program costs (DPC) for that sector divided by total ex-vessel value (V) for that sector multiplied by 100 (Fee percentage = the lower of 3 percent or (DPC/V) × 100).
“DPC” as defined in the regulations at § 660.115(b)(1)(i), are the actual incremental costs for the previous fiscal year directly related to the management, data collection and analysis, and enforcement of each program (Shorebased IFQ Program, MS Co-op Program, and C/P Co-op Program). Actual incremental costs means those net costs that would not have been incurred but for the implementation of the Groundfish Trawl Rationalization Program, including both increased costs for new requirements of the program and reduced costs resulting from any program efficiencies or adjustments to costs from previous years.
“V”, as specified at § 660.115(b)(1)(ii), is the total ex-vessel value, as defined at § 660.111, for each sector from the previous calendar year. To determine the ex-vessel value for the Shorebased IFQ Program, NMFS used the ex-vessel value for calendar year 2024 as reported in the Pacific Fisheries Information Network (PacFIN) from Shorebased IFQ electronic fish tickets as this was the most recent complete set of data. To determine the ex-vessel value for the MS Co-op Program and the C/P Co-op Program, NMFS used the retained catch estimates (weight) for each sector as reported in the North Pacific Observer Program database multiplied by the average price of Pacific whiting as reported by participants in the MS Co-op program for 2024.
The fee calculations for the 2026 fee percentages are described below.
• 5.1 percent = ($2,110,933.27/$41,126,145.00) × 100.
• 0.3 percent = ($50,758.19/$15,663,157.09) × 100.
• 4.2 percent = ($218,726.38/$5,208,949.27) × 100.
However, the calculated fee percentage cannot exceed the statutory limit of 3.0 percent. Both the IFQ Program (5.1 percent) and MS Co-op Program (4.2 percent) fee calculations exceed this limit, therefore, the 2026 fee
MS pricing is the average price per pound that the C/P Co-op Program will use to determine the fee amount due for that sector. The C/P sector value (V) is calculated by multiplying the retained catch estimates (weight) of Pacific whiting harvested by the vessel registered to a C/P-endorsed limited entry trawl permit by the MS pricing. NMFS has calculated the 2026 MS pricing to be used as a proxy by the CP Co-op Program as: $0.10/lb for Pacific whiting.
Cost recovery fees are submitted to NMFS by fish buyers via
IFQ:
MS:
C/P:
As stated in the preamble to the cost recovery proposed and final rules, in the spring of each year, NMFS will release an annual report documenting the details and data used for the fee percentage calculations. Annual reports are available at:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed additions to the Procurement List.
The Committee is proposing to add service(s) to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Comments must be received on or before: January 28, 2026 .
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.
In accordance with 41 CFR 51-5.3(b), the Committee intends to add the service requirements listed below to the Procurement List as a mandatory purchase only for the contracting activities at the locations listed with the proposed qualified nonprofit agency as the authorized source of supply. Prior to adding the service to the Procurement List, the Committee will consider other pertinent information, including information from Government personnel and relevant comments from interested parties regarding the Committee's intent to geographically limit this services requirement.
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and deletions from the Procurement List.
This action adds product(s) and 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.
For further information or to submit comments contact: Michael R. Jurkowski, Telephone: (703) 489-1322 or email
On September 18, 2026 (90 FR 45023) and November 20, 2025 (90 FR 52358), 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. This final notice is published pursuant to 41 U.S.C. 8503(a)(2) and 41 CFR 51-2.3. The Committee has determined that the product(s) and service(s) listed below are suitable for procurement by the Federal Government and has added these product(s) and service(s) to the Procurement List as a mandatory purchase for Federal entities. In accordance with 41 CFR 51-5.2, the Committee has authorized the qualified nonprofit agencies described with the product(s) and service(s) as the mandatory source(s) of supply.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the product(s) and impact of the additions on the current or most recent contractors, the Committee has determined that the product(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 product(s) and service(s) to the Government.
2. The action will 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) proposed for addition to the Procurement List.
Accordingly, the following product(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 Veteran Affairs, VISN 7, Multiple Locations, GA, SC Laundry and Linen Service 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 Veteran Affairs will refer its business elsewhere, this addition must be effective on January 12, 2026, ensuring timely execution for a January 12, 2026 start date. The Committee published an initial notice of proposed Procurement List addition in the
On November 20, 2026 (90 FR 52358), 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:
8415-00-NSH-0341—Shirt, Underlayer for Fleece Jacket, 200 Weight, Army, Long Sleeved, Black, XS
8415-01-470-1130—Jacket, 100 Weight Fleece, Extreme Cold Weather Clothing System (ECWCS), S
8415-01-470-1135—Jacket, 100 Weight Fleece, Extreme Cold Weather Clothing System (ECWCS), M
8415-01-470-1136—Jacket, 100 Weight Fleece, Extreme Cold Weather Clothing System (ECWCS), L
8415-01-470-1137—Jacket, 100 Weight Fleece, Extreme Cold Weather Clothing System (ECWCS), XL
Department of the Army, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 28, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Department of the Army, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 28, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Department of the Army, DoD.
Notice of availability.
The Department of the Army (Army) announces the availability of a Record of Decision (ROD) regarding the proposed implementation of real property actions at Military Ocean Terminal Sunny Point (MOTSU), North Carolina. In accordance with the National Environmental Policy Act (NEPA), the ROD identifies the Army's selected alternative, the basis for its selection, the environmentally preferred alternative, and the mitigation and protective measures the Army commits to implement with the selected alternative. The ROD is based on the results of the Army's Final Environmental Impact Statement (EIS), which analyzed the potential effects of the implementation of various projects needed for the safety and mission of the facility and provides an analysis of the effects of implementing real property maintenance, repair, upgrade, and development actions. The proposed action is needed to address improvements to real property related to explosive safety, waterfront maintenance, security, and linear infrastructure. The projects and programs address compliance with federal, state, DoD, and Army standards vital to safety, security, and other mission needs. The EIS includes a final Finding of No Practicable Alternative (FONPA) prepared because portions of the proposed action occur in floodplains or involve construction in wetlands, or both.
Frederick Rice, Director, Public and Congressional Affairs Office, Military Surface Deployment and Distribution Command; telephone: (618) 220-6284; email:
MOTSU is the Army Transportation Command's East Coast strategic ammunition port and is among DoD's seaports supporting global operations. The proposed action includes barricade safety, waterfront maintenance, Pleasure Island Explosive Safety Clear Zone security, linear infrastructure (
The FEIS—published on July 9, 2025, and prepared in parallel with federal consultation processes (
1.
2.
Under the No-Action Alternative, the projects would not be implemented. While the No-Action Alternative would not satisfy the Proposed Action's purpose and need, in accordance with NEPA regulations, the No-Action Alternative provides a comparative baseline for gauging the Action Alternatives' potential effects.
The Final EIS determined the Full Implementation Alternative and Partial Implementation Alternatives would have potentially significant adverse effects on wetlands. The Army prepared a Finding of No Practicable Alternative (FONPA) addressing potential effects on wetlands and floodplains. The FONPA is included as an appendix to the Final EIS. The Final EIS concluded the adverse effects on all analyzed resources other than wetlands would be less than significant under either action alternative.
Based on the analysis presented in the Final EIS, the Full Implementation Alternative is the Army's selected
The ROD adopts multiple mitigation and protective measures to prevent or minimize the potential adverse environmental effects of the Full Implementation Alternative. The Army is using all practicable means to avoid or minimize environmental harm caused by the selected alternative. MOTSU Department of Public Works Environmental personnel will review the planning documents for each of the proposed projects prior to initiation to ensure compatibility with applicable regulatory requirements, best management practices, and minimization measures. Additional surveys, sampling, or testing may be required.
The ROD is available on the project website at:
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 28, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Washington Headquarter Services, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 28, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
60-Day information collection notice.
In compliance with the
Consideration will be given to all comments received by February 27, 2026.
You may submit comments, identified by docket number and title, by any of the following methods:
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to ODASD(MC&FP), Mr. Trevor Dean, 1500 Defense Pentagon, Washington, DC 20301, (703) 571-2359.
Department of the Navy, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by January 28, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Reginald Lucas, (571) 372-7574,
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing an extension without change of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or before February 27, 2026.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Carolyn Rose, 202-453-5967.
The Department, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Department is soliciting comments on the proposed information collection request (ICR) that is described below. The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
The Department is required to report to the U.S. Department of the Treasury (Treasury) the status and condition of its non-tax debt portfolio in accordance with the requirements of the Debt Collection Improvement Act of 1996 (DCIA) and the Digital Accountability and Transparency Act of 2014 (DATA Act). Receivable information is reported to Treasury via the Treasury Report on Receivables and Debt Collection Activities (previously called the TROR).
The Department is unable to prepare an accurate and compliant Treasury Report without additional data from its GAs. The continuing guidance requires the GAs to submit to the Department:
age debt according to DCIA;
report the eligibility of DCIA-aged debt for referral to the Treasury Offset Program (TOP); and
report compliance with Form 1099-C reporting.
Neither the regulations or the data requirements have changed since the last extension of this ICR in 2023.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a revision of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or Before February 27, 2026.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Carolyn Rose, 202-453-5967.
The Department, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Department is soliciting comments on the proposed information collection request (ICR) that is described below. The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Environmental Management, Department of Energy.
Notice of open meeting.
This notice announces a virtual meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Northern New Mexico. The Federal Advisory Committee Act requires that public notice of this meeting be announced in the
Wednesday, January 21, 2026, 11 a.m. to 2 p.m. MST.
This meeting will be held virtually. To receive the virtual access information, please contact Bridget Maestas, Northern New Mexico Citizens Advisory Board (NNMCAB) Executive Director, at the telephone number or email listed below at least two days prior to the meeting.
Bridget Maestas, NNMCAB Executive Director, by Phone: 505-709-7466 or Email:
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC may not conduct or sponsor a collection of information unless it displays a currently valid control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before February 27, 2026. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele, (202) 418-2991.
The companies listed in this notice have applied to the Board for approval, pursuant to the Home Owners' Loan Act (12 U.S.C. 1461
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, Benjamin W. McDonough, Deputy Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than January 28, 2026.
1.
Board of Governors of the Federal Reserve System.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC) announces the following meeting for the Subcommittee on Procedures Reviews (SPR) of the Advisory Board on Radiation and Worker Health (ABRWH or the Advisory Board). This meeting is open to the public, but without a public comment period. The public is welcome to submit written comments in advance of the meeting, to the contact person below. The public is also welcome to listen to the meeting by joining the audio conference (information below). The audio conference line has 150 ports for callers.
The meeting will be held on January 28, 2026, from 11 a.m. to 4:30 p.m., EST.
Written comments must be received on or before January 21, 2026.
You may submit comments by mail to: Rashaun Roberts, Ph.D., Designated Federal Officer, National Institute for Occupational Safety and Health, Centers for Disease Control and Prevention, 1090 Tusculum Avenue, Mailstop C-24, Cincinnati, Ohio 45226. Email:
Written comments received in advance of the meeting will be included in the official record of the meeting.
Rashaun Roberts, Ph.D., Designated Federal Officer, National Institute for Occupational Safety and Health, Centers for Disease Control and Prevention, 1090 Tusculum Avenue, Mailstop C-24, Cincinnati, Ohio 45226, Telephone: (513) 533-6800, Email:
The charter was issued on August 3, 2001, renewed at appropriate intervals, and rechartered under Executive Order 14109 (September 29, 2023) on March 22, 2024. Unless continued by the President, the Advisory Board will terminate on September 30, 2027, consistent with Executive Order 14354 of September 29, 2025.
1. Administrative items, including: a. SPR-approved documents for next Full Board meeting, b. discussion of professional judgement assessment of six PER-017 case reviews. c. list of documents awaiting NIOSH responses, including: i. Discussion of SPR priorities, and 2. Carry-over items from March 14, 2024, SPR Meeting including a. ORAUT-OTIB-0036, rev. 00 “Internal Dosimetry Coworker Data for Portsmouth Gaseous Diffusion Plant” b. ORAUT-OTIB-0040, rev. 00 PC-1 “External Coworker Dosimetry Data for the Portsmouth Gaseous Diffusion Plant.”; 3. NIOSH responses to Board questions and SC&A review including: a. ORAUT-OTIB-0052, rev. 00 “Parameters to Consider When Processing Claims for Construction Trade Workers,” b. ORAUT-RPRT-0071, rev. 00 “External Dose Coworker Methodology,” and c. “Internal Dosimetry Coworker Data for Portsmouth Gaseous Diffusion Plant”; 4. SC&A issued reviews: a. DCAS-PER-075, rev. 0 “Battelle Memorial Institute TBD revision,” b. DCAS-PER-040, rev. 0 “Mallinckrodt TBD Revisions,” c. DCAS-PER-051, rev. 0, ST4 “Weldon Spring Plant,” d. DCAS-PER-083, rev. 0, ST4 “Weldon Spring Plant,” e. DCAS-PER-079 rev. 0 “Pinellas TBD Revision,” f. DCAS-PER-034 rev. 0 “Harshaw Chemical Company TBD Revision,” g. DCAS-PER-036, rev. 0 “Blockson TBD Revision,” h. DCAS-PER-039, rev. 0 “Baker Perkins TBD Revision,” 5. Newly-Issued Guidance and Supplemental Topics. Agenda items are subject to change as priorities dictate. For additional information, please contact Toll Free 1(800) 232-4636.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Children's Bureau, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families (ACF) is requesting a 3-year extension of the Children's Justice Act (CJA) Program Instruction (Office of Management and Budget (OMB) #: 0970-0425, expiration March 31, 2026). There are no changes requested to the instructions.
In compliance with the requirements of the Paperwork Reduction Act of 1995, ACF is soliciting public comment on the specific aspects of the information collection described above. You can obtain copies of the proposed collection of information and submit comments by emailing
The length of the CJA Program Instruction has been reduced by 18 percent from 17 pages to 14 pages. Edits have been made to remove requests for information not required by statute, reduce duplicative information, and simplify language. As a result of the reduction in the length of time needed to both read and respond to the Program Instruction, the estimated response burden has been lowered by 17 percent from 60 hours to 50 hours per response.
Office of Administration, Office of Grants Policy, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families (ACF) is requesting revisions and a one-year
In compliance with the requirements of the Paperwork Reduction Act of 1995, ACF is soliciting public comment on the specific aspects of the information collection described above. You can obtain copies of the proposed collection of information and submit comments by emailing
Since 2023, there have been two versions of the UPD: the traditional version and the simplified version (SimplerNOFOs). SimplerNOFOs were implemented as a pilot, as approved by OMB. SimplerNOFOs streamline the process for applicants and has been well received by programs and applicants. ACF has expanded use of the simplified version as a result. At this time, ACF is proposing to transition completely to the SimplerNOFO UPD, but will retain two sets of instructions for now due to the way NOFOs are currently developed. The distinction is made in the instructions with the labels “SimplerNOFO” v. “Traditional NOFO”.
ACF uses the information provided by applicants, along with other OMB-approved information collections (Standard Forms), to evaluate and rank applications. Use of the UPD protects the integrity of the ACF award selection process.
This current request would extend OMB approval for an additional year, with the following changes:
A larger revision effort is in process and will be submitted to OMB in the future. This future revision request will include two additional opportunities for public comment.
The Office of Community Services, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families (ACF) is requesting a 3-year extension of the form Low Income Home Energy Assistance Program (LIHEAP) Quarterly Reports (Office of Management and Budget (OMB) #: 0970-0589, expiration October 31, 2025). Changes are proposed, which would reduce redundancy and administrative burden for respondents.
In compliance with the requirements of the Paperwork Reduction Act of 1995, ACF is soliciting public comment on the specific aspects of the information collection described above. You can obtain copies of the proposed collection of information and submit comments by emailing
1. Track key information, such as the number of households served, in “real time” versus in the new fiscal year.
2. Effectively address challenges in a timely manner, including supporting emerging training and technical assistance needs, addressing challenges with obligating funds, and addressing outreach and intake issues, such as reaching newly eligible households.
3. Ensure accountability and transparency by using the information
• Total households assisted,
• Performance management including the number of occurrences in which LIHEAP funding prevented the loss of or restored home energy services, and
• The estimated percentage of LIHEAP funds that have been obligated by funding component.
Grant recipients will also have an opportunity to highlight additional training/technical assistance needs/suggestions, which the Office of Community Services uses to inform support such as training and resources.
ACF also proposes several small changes to the LIHEAP Quarterly Report beginning with the Quarter 4 report due October 31, 2025 and beyond. Those changes only affect Section III of the Quarter 3 (due July 31, 2026 and beyond) and Quarter 4 reports (due October 31, 2025 and beyond). The changes to Section III involve inclusion of the primary data elements from the separate LIHEAP Carryover and Reallotment Report (OMB #: 0970-0106), which ACF wishes to discontinue use of in favor of only obtaining such data through the LIHEAP Quarterly Report. Section III would more clearly distinguish “carryover” fund estimated (Quarter 3) and final amounts (Quarter 4) from “reallotment” fund estimated and final amounts. The Quarter 3 and 4 Section III also includes a “remarks” field for grant recipients to complete only if they are indicating a request to carryover funds to obligate in the next FFY. The federal LIHEAP statute requires all grant recipients requesting carryover to explain why they wish to carryover and how they intend to use such carryover funds in the next year (42 U.S.C. 8626(b)(2)(A)).
The estimated time per response for this report was increased from 12 to 16 hours to account for the proposed changes. These changes are expected to reduce effort overall, however, by eliminating the Carryover and Reallotment Report, as discussed above.
Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
This notice describes the proposal to extend data collection under the Administration for Children and Families (ACF) Generic Program-Specific Performance Progress Report (PPR) (0970-0490). This overarching generic currently allows ACF program offices to collect performance and progress data from recipients and sub-recipients who receive funding from ACF under a grant or cooperative agreement. This generic mechanism provides the opportunity for ACF program offices to tailor requests for performance and progress data to specific funding recipients. There are no proposed changes to the overarching generic.
In compliance with the requirements of the Paperwork Reduction Act of 1995, ACF is soliciting public comment on the specific aspects of the information collection described above. You can obtain copies of the proposed collection of information and submit comments by emailing
ACF program offices have benefited from the ability to create and use a program-specific PPR that is more effective and includes specific data elements that reflects a specific program's indicators, demographics, priorities and objectives.
A generic program-specific PPR that can be tailored for program-specific needs allows program offices to collect useful data in a uniform and systematic manner. The reporting format allows program offices to gather uniform program performance data from each grantee, allowing aggregation at the program level to calculate outputs and outcomes, providing a snapshot and allowing for longitudinal analysis.
Data from a tailored program-specific PPR that demonstrates a program's successes and challenges have been useful for accountability purposes, such as required reports to Congress. Moreover, it has been useful for program management and oversight, such as identifying grantees' technical assistance needs and ensuring compliance with federal and programmatic regulations and policies. To review currently approved PPRs under this generic, see:
The following burden estimates include burden associated with currently approved individual requests that ACF expects will be extended through this extension request and an estimate of burden for potential new requests under this generic. Burden associated with currently approved individual requests has been updated to reflect current estimates for number of respondents, time per response, and reporting cadence. Note that new requests may be submitted during this comment period, which would be included with the extension request in 2026.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ZELSUVMI and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product.
Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product, ZELSUVMI (berdazimer sodium), indicated for the topical treatment of molluscum contagiosum (MC) in adults and pediatric patients 1 year of age and older. Subsequent to this approval, the USPTO received a patent term restoration application for ZELSUVMI (U.S. Patent No. 9,855,211) from LNHC, Inc. and the USPTO requested FDA's assistance in determining the patent's eligibility for patent term restoration. In a letter dated June 27, 2025, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of ZELSUVMI represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ZELSUVMI is 4,144 days. Of this time, 3,778 days occurred during the testing phase of the regulatory review period, while 366 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application(s) for patent extension, this applicant seeks 1,280 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
be filed in accordance with § 10.20, must contain sufficient facts to merit an FDA investigation, and must certify that a true and complete copy of the petition has been served upon the patent applicant. (See H. Rept. 857, part 1, 98th Cong., 2d sess., pp. 41-42, 1984.) Petitions should be in the format specified in 21 CFR 10.30.
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or the Agency) is announcing the issuance of two Emergency Use Authorizations (EUA) (Authorization) under the Federal Food, Drug, and Cosmetic Act (FD&C Act) for new animal drug products. FDA has issued one EUA for a new animal drug product as requested by Elanco US Inc. for the treatment of infestations caused by New World screwworm (
The Authorizations are effective on their dates of issuance: October 24, 2025, and November 21, 2025, respectively.
Submit written requests for single copies of the EUAs to the Policy and Regulations Staff, Center for Veterinary Medicine, Food and Drug Administration, 5001 Campus Drive, College Park, MD 20740. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Steven Fleischer, Center for Veterinary Medicine, Food and Drug Administration, 5001 Campus Drive, College Park, MD 20740, 240-402-0809,
Section 564 of the FD&C Act (21 U.S.C. 360bbb-3) allows FDA to strengthen public health protections against biological, chemical, nuclear, and radiological agents. Among other things, section 564 of the FD&C Act allows FDA to authorize the use of an unapproved medical product or an unapproved use of an approved medical product in certain situations. With this EUA authority, FDA can help ensure that medical countermeasures may be used in emergencies to diagnose, treat, or prevent serious or life-threatening diseases or conditions caused by biological, chemical, nuclear, or radiological agents when there are no adequate, approved, and available alternatives (among other criteria).
Section 564(b)(1) of the FD&C Act provides that, before an EUA may be issued, the Secretary of HHS must declare that circumstances exist justifying the authorization based on one of the following grounds: (A) a determination by the Secretary of Homeland Security that there is a domestic emergency, or a significant potential for a domestic emergency, involving a heightened risk of attack with a biological, chemical, radiological, or nuclear agent or agents; (B) a determination by the Secretary of Defense that there is a military emergency, or a significant potential for a military emergency, involving a heightened risk to U.S. military forces, including personnel operating under the authority of title 10 or title 50, U.S. Code, of attack with (i) a biological, chemical, radiological, or nuclear agent or agents (“CBRN”); or (ii) an agent or agents that may cause, or are otherwise associated with, an imminently life-threatening and specific risk to U.S. military forces;
Once the Secretary of HHS has declared that circumstances exist justifying an authorization under section 564 of the FD&C Act, FDA may authorize the emergency use of a drug, device, or biological product if the Agency concludes that the statutory criteria are satisfied. Under section 564(h)(1) of the FD&C Act, FDA is required to publish in the
Under section 564(c) of the FD&C Act, FDA may issue an EUA only if, after consultation with the HHS Assistant Secretary for Preparedness and Response, the Director of the National Institutes of Health, and the Director of the Centers for Disease Control and Prevention (to the extent feasible and appropriate given the applicable circumstances), FDA
The Authorizations follow the August 18, 2025, determination by the Secretary of HHS that there is a public health emergency, or a significant potential for a public health emergency, that affects, or has a significant potential to affect, national security or the health and security of U.S. citizens living abroad and that involves NWS. On the basis of such determination, the Secretary of HHS declared, on August 18, 2025, that circumstances exist justifying the authorization of emergency use of animal drugs to treat or prevent NWS myiasis in animals. Notice of the Secretary's determination and declaration was provided in the
The initial Authorizations, included below in their entirety after section IV of this document (not including the authorized versions of the fact sheets and other written materials), provide
An electronic version of this document and the full text of the Authorization is available on the internet at:
Food and Drug Administration, HHS.
Notice of roundtable discussion; establishment of a public docket; request for comments.
The Food and Drug Administration (FDA, the Agency, or we) is announcing a roundtable discussion with small tobacco product manufacturers to solicit input on premarket tobacco product application (PMTA) submissions for electronic nicotine delivery systems (ENDS) products. The topics to be discussed will include certain components of PMTAs such as product characterization, manufacturing controls, pharmacological profile (
The roundtable meeting will be held on February 10, 2026, 9:00 a.m. to 5 p.m., Eastern Time. Electronic or written comments on the roundtable may be submitted beginning December 29, 2025. See the
The roundtable meeting will be held in the White Oak Great Room and virtually. Entrance for the roundtable panelists (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before February 3, 2026, to be considered for the roundtable discussion. All other electronic comments must be submitted on or before March 12, 2026. The
The public can submit comments on the roundtable topics during the open comment period; the request for comments is not limited to small tobacco product manufacturers.
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Daniel Gittleson, Office of Regulations, Center for Tobacco Products, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. G335, Silver Spring, MD 20993-0002, 1-877-287-1373, email:
Tobacco products that meet the definition of a “new tobacco product,” and that an applicant intends to market in the United States, including ENDS, are subject to the requirements for a PMTA set forth in section 910(b) of the Federal Food, Drug, and Cosmetic Act (FD&C Act). When reviewing PMTAs, the Agency evaluates, among other things, a tobacco product's components, ingredients, additives, constituents, design, harmful and potentially harmful constituents (HPHCs), and health risks, as well as how the product is manufactured, packaged, and labeled. After reviewing a company's PMTA, FDA determines if the application includes or lacks sufficient evidence to demonstrate that permitting the marketing of the products would be appropriate for the protection of the public health (APPH), which is the applicable legal standard required by the FD&C Act (see section 910(c) of the FD&C Act).
Through this notice, FDA announces a roundtable discussion to gather feedback from small tobacco product manufacturers (see 21 U.S.C. 387(16)) about their experience with, and other opinions about, the premarket application process. The topics to be discussed will include certain components of PMTAs such as product characterization, manufacturing controls, pharmacological profile (
The purpose of the roundtable is to provide small ENDS manufacturers an opportunity to share their experience and other opinions about the premarket application process. Roundtable topics to be discussed include certain components of ENDS PMTAs, such as product characterization, manufacturing controls, pharmacological profile (
The foundational information necessary to evaluate the quality and consistency of a new tobacco product is based on an understanding of the product as delivered to the user. One of the critical pieces of information is a complete product listing and description, including details of the product design. Also included in ENDS product characterization is the measurement of constituents in the aerosol, including HPHCs, which provide details of a user's exposure to nicotine and other potentially harmful ingredients. This roundtable will discuss the types of information needed to fully characterize a product in an application and can cover topics including product formulation, validation of analytical measurements, and the assessment of leachables and extractables, where appropriate.
In addition to product characterization, a complete understanding of a manufacturer's internal controls and practices is important for FDA to ensure that products delivered to a user will be sufficiently similar to the products that were tested and that form the basis of our scientific assessment of nicotine and potential toxic constituent exposure from the new product. This information includes standard operating procedures (SOPs); work instructions; certificates of analysis; the linkage between label claim and actual measured nicotine delivery; and stability of new products during storage, transport, and shelf life, and these are all topics which may be covered and discussed in the roundtable.
One of the most important aspects of FDA's evaluation of APPH for a new tobacco product focuses on the abuse liability of the new tobacco product including the delivery and uptake of nicotine by a user of the product. Nicotine exposure typically is evaluated through clinical studies that evaluate nicotine pharmacokinetics after use of the new tobacco product. Occasionally, it is possible to bridge the findings of one ENDS product to another, thus allowing a reduction in the number of studies needed to support a product. However, the proper designs of these clinical studies for ENDS products can be complex and need to be highly developed before work is initiated. This roundtable will address criteria that could improve the quality of the clinical studies for ENDS products submitted by applicants and provide participants an opportunity to ask questions about design basics to inform their applications.
The understanding of the potential benefits that a new ENDS tobacco product may offer to users of combusted tobacco products by switching to the new ENDS tobacco product is critical to FDA's APPH determination. Examples of population studies to assess switching include longitudinal cohort studies or randomized controlled trials of the new tobacco product with adult users. This roundtable will include a discussion of the critical considerations in the design and administration of these adult benefit studies.
The toxicological assessment of a new tobacco product application for APPH includes a careful evaluation of critical elements of potential and actual risk posed by the use of the product. These critical elements typically include, among other topics, the hazard identification and associated risk assessment of HPHCs found in the aerosol of ENDS products and the risks associated with constituents in a new product. This roundtable will discuss approaches that an applicant could use to evaluate their products for potential risks from a genotoxicity approach (ELCR), inhalation toxicity, and HPHC exposure.
Registration for the roundtable is open to small tobacco product manufacturers as defined in section 900(16) of the FD&C Act. The term “small tobacco product manufacturer” means a tobacco product manufacturer that employs fewer than 350 employees. For purposes of determining the number of employees of a manufacturer under the preceding sentence, the employees of a manufacturer are deemed to include the employees of each entity that controls, is controlled by, or is under common control with such manufacturer. For example, if a parent company owns two subsidiaries, the total number of employees would include the employees in the parent company plus the number of employees in the two subsidiaries. Additionally, registration for participation in the roundtable will be limited to 30 participants
• Name of proposed attendee, job title, address, email, and telephone number
• Name of company and brief company description
• How many people the company employs (including subsidiaries)
• Indicate which of the 5 topics you wish to discuss as a panel member (you may select multiple topics):
A. Product Characterization
B. Manufacturing Controls
C. Pharmacological Profile
D. Studies of Adult Benefit
E. Toxicological Profile
Registration for panelists is on a rolling basis determined by space availability, with priority given to early registrants. FDA will evaluate registrations based on the submitted information until a maximum of 30 participants have been selected for the roundtable and will then inform applicants of selection decisions. Due to time and space constraints, there is a limit of one person to represent and speak on behalf of each company. Panel registrants will receive confirmation as to whether they have been accepted. If panelist registration closes prior to the submission deadline, we will update the website to reflect that change. For persons interested in viewing the roundtable virtually, information will be provided on our website:
If you need special accommodations due to a disability, please email:
Notice of this meeting is given pursuant to 21 CFR 10.65.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for LEQEMBI and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product LEQEMBI (lecanemab- irmb). LEQEMBI is indicated for the treatment of Alzheimer's disease. Subsequent to this approval, the USPTO received a patent term restoration application for LEQEMBI (U.S. Patent No. 8,025,878) from BioArctic AB, and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated January 30, 2024, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of LEQEMBI represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for LEQEMBI is 4,546 days. Of this time, 4,300 days occurred during the testing phase of the regulatory review period, while 246 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 5 years of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Federal Food, Drug, and Cosmetic Act (FD&C Act), as amended by the Over-the-Counter Monograph Drug User Fee Amendments (herein referred to as “OMUFA II”), authorizes the Food and Drug Administration (FDA, the Agency, or we) to assess and collect user fees from qualifying manufacturers of over-the-counter (OTC) monograph drugs and submitters of OTC monograph order requests (OMOR)s for fiscal years 2026 through 2030. In this notice, FDA is announcing the OMOR fee rates for fiscal year (FY) 2026. FDA plans to announce the FY 2026 OMUFA facility fee rates,
These OMOR fees are effective on October 1, 2025, and will remain in effect through September 30, 2026.
Olufunmilayo Ariyo, Office of Financial Management, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993, 240-402-4989; or the User Fees Support Staff at
Section 744M of the FD&C Act (21 U.S.C. 379j-72), as amended by OMUFA II,
For OMUFA purposes, an OMOR is a request for an administrative order, with respect to an OTC monograph drug, which is submitted under section 505G(b)(5) of the FD&C Act (see section 744L(7) of the FD&C Act).
Under section 744M(a)(2)(A) of the FD&C Act, the Agency is authorized to assess and collect fees from submitters of OMORs, except for OMORs that request certain safety-related changes (as discussed below). There are two levels of OMOR fees, based on whether the OMOR at issue is a Tier 1 or Tier 2 OMOR.
For FY 2026, the OMUFA fee rates for OMORs are: Tier 1 OMOR fees ($587,529) and Tier 2 OMOR fees ($117,505). These fees are effective for the period from October 1, 2025, through September 30, 2026. This document is issued pursuant to section 744M(a)(2) and (c)(5) of the FD&C Act and describes the calculations used to set the OMUFA OMOR fees for FY 2026 in accordance with the directives in the statute.
For FY 2026, the Tier 1 OMOR fee is $587,529 and the Tier 2 OMOR fee is $117,505, including an adjustment for inflation (see sections 744M(a)(2)(A)(i) and (ii) of the FD&C Act, respectively). OMOR fees are not included in the OMUFA target revenue calculation, which is based on the facility fees (see section 744M(b) of the FD&C Act).
An OMOR fee is generally assessed to each person who submits an OMOR (see section 744M(a)(2)(A) of the FD&C Act). OMOR fees are due on the date of the submission of the OMOR (see section 744M(a)(2)(B) of the FD&C Act). The payor should submit the OMOR fee that applies to the type of OMOR they are submitting (
An OMOR fee will not be assessed if the OMOR seeks to make certain safety changes with respect to an OTC monograph drug. Specifically, no fee will be assessed if FDA finds that the OMOR seeks to change the drug facts labeling of an OTC monograph drug in a way that would add to or strengthen: (1) a contraindication, warning, or precaution; (2) a statement about risk associated with misuse or abuse; or (3) an instruction about dosage and administration that is intended to increase the safe use of the OTC monograph drug (see section 744M(a)(2)(C) of the FD&C Act).
The dollar amount of the inflation adjustment to the fee for OMORs for FY 2026 is equal to the product of the applicable fee for FY 2025 and the inflation adjustment percentage.
• The average annual percent change in the cost, per full-time equivalent (FTE) position at FDA, of all personnel compensation and benefits (PC&B) paid with respect to such positions for the first 3 years of the preceding 4 FYs, multiplied by the proportion of PC&B costs to total FDA costs of OTC monograph drug activities for the first 3 years of the preceding 4 FYs (see section 744M(c)(1)(C)(i) of the FD&C Act); and
• The average annual percent change that occurred in the Consumer Price Index (CPI) for urban consumers (Washington-Arlington-Alexandria, DC-VA-MD-WV; Not Seasonally Adjusted; All items; Annual Index) for the first 3 years of the preceding 4 years of available data multiplied by the proportion of all costs other than PC&B costs to total costs of OTC monograph drug activities for the first 3 years of the preceding 4 FYs (see section 744M(c)(1)(C)(ii) of the FD&C Act).
Table 1 summarizes the actual cost and FTE data for the specified FYs, provides the percent changes from the
Under the statute, this 5.4494 percent is multiplied by the proportion of PC&B costs to the total FDA costs of OTC monograph drug activities for the first 3 years of the preceding 4 FYs (see section 744M(c)(1)(C)(i) of the FD&C Act).
Table 2 shows the PC&B and the total obligations for OTC monograph drug activities for the first 3 of the preceding 4 FYs.
The payroll adjustment is 5.4494 percent from table 1 multiplied by 56.4429 percent from table 2, resulting in 3.0758 percent.
Table 3 provides the summary data for the percent changes in the specified CPI for the Washington-Arlington-Alexandria, DC-VA-MD-WV area.
The statute specifies that this 4.3202 percent be multiplied by the proportion of all costs other than PC&B to total costs of OTC monograph drug activities (see section 744M(c)(1)(C)(ii) of the FD&C Act). Because 56.4429 percent was obligated for PC&B (as shown in table 2), 43.5571 percent is the portion of costs other than PC&B (100 percent−56.4429 percent = 43.5571 percent). The non-payroll adjustment is 4.3202 percent × 43.5571 percent, or 1.8818 percent.
Next, we add the payroll adjustment (3.0758 percent) to the non-payroll adjustment (1.8818 percent), for a total inflation adjustment of 4.9576 percent (rounded) for FY 2026.
Under section 744M(a)(2)(A) of the FD&C Act, each person that submits a qualifying OMOR shall be subject to a fee for an OMOR. The amount of such fee shall be:
(1) For a Tier 1 OMOR, $500,000, adjusted for inflation for the FY (see section 744M(a)(2)(A)(i) of the FD&C Act); and
(2) For a Tier 2 OMOR, $100,000, adjusted for inflation for the FY (see section 744M(a)(2)(A)(ii) of the FD&C Act).
In addition, under section 744M(c)(1)(B)(i) of the FD&C Act and for purposes of section 744M(a)(2) of the FD&C Act, the inflation adjustment for the FY 2026 OMOR fee shall be equal to the product of:
(1) the fee for FY 2025 under section 744M(a)(2) of the FD&C (as in effect during OMUFA I); and
(2) the inflation adjustment percentage under subparagraph (C) of section 744M(c)(1) of the FD&C Act.
Therefore, for FY 2026, the base of OMOR fees taken from the preceding FY (
The fee rates for FY 2026 are displayed in Table 4.
The new OMOR fee rates are for the period from October 1, 2025, through September 30, 2026. To pay the OMOR fees, complete an OTC Monograph User Fee Cover Sheet, available at:
Secure electronic payments can be submitted using the User Fees Payment Portal at
For payments made by wire transfer, include the unique user fee ID number to ensure that the payment is applied to the correct fee(s). Without the unique user fee ID number, the payment may not be applied, which could result in FDA not filing an OMOR request, or other consequences of nonpayment. The originating financial institution may charge a wire transfer fee. Include applicable wire transfer fees with payment to ensure fees are fully paid. Questions about wire transfer fees should be addressed to the financial institution. The following account information should be used to send payments by wire transfer: U.S. Department of the Treasury, TREAS NYC, 33 Liberty St., New York, NY 10045, Acct. No.: 75060099, Routing No.: 021030004, SWIFT: FRNYUS33. FDA's tax identification number is 53-0196965.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ROMVIMZA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The
Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biological product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product, ROMVIMZA (vimseltinib), indicated for the treatment of adult patients with symptomatic tenosynovial giant cell tumor (TGCT) for which surgical resection will potentially cause worsening functional limitation or severe morbidity. Subsequent to this approval, the USPTO received a patent term restoration application for ROMVIMZA (U.S. Patent No. 9,181,223) from Deciphera Pharmaceuticals, LLC and the USPTO requested FDA's assistance in determining the patent's eligibility for patent term restoration. In a letter dated June 27, 2025, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of ROMVIMZA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ROMVIMZA is 3,020 days. Of this time, 2,777 days occurred during the testing phase of the regulatory review period, while 243 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application(s) for patent extension, this applicant seeks 1,632 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for OJEMDA and is publishing this notice of that determination as required by law. FDA has made the determination because of the
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biological product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicants may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product, OJEMDA (tovorafenib), indicated for the treatment of patients 6 months of age and older with relapsed or refractory pediatric low-grade glioma (LGG) harboring a BRAF fusion or rearrangement, or BRAF V600 mutation. Subsequent to this approval, the USPTO received a patent term restoration application for OJEMDA (U.S. Patent No. 8,293,752) from Day One Biopharmaceuticals, Inc.and Viracta
FDA has determined that the applicable regulatory review period for OJEMDA is 4,942 days. Of this time, 4,705 days occurred during the testing phase of the regulatory review period, while 237 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application(s) for patent extension, the applicants seek 5 years of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration's (FDA or Agency) Center for Drug Evaluation and Research (CDER) is proposing to withdraw approval of three abbreviated new drug applications (ANDAs) and is announcing an opportunity for the ANDA holders to request a hearing on this proposal. The basis for the proposal is that these ANDA holders have repeatedly failed to file required annual reports for those ANDAs.
The ANDA holder may submit a request for a hearing by January 28, 2026. Submit all data, information, and analyses upon which the request for a hearing relies February 27, 2026. Submit electronic or written comments by February 27, 2026.
The request for a hearing may be submitted by the ANDA holder by either of the following methods:
Submit electronic comments in the following way:
•
Submit written/paper submissions as follows:
•
• Because your request for a hearing will be made public, you are solely responsible for ensuring that your request does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. The request for a hearing must include the Docket No. FDA-2025-N-4684 for “Egis Pharmaceuticals Limited,
• Confidential Submissions—To submit any data analyses with confidential information that you do not wish to be made publicly available, submit your data and analyses only as a written/paper submission. You should submit two copies total of all data and analyses. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of any decisions on this matter. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked, and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Martha Nguyen, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 75, Rm. 1676, Silver Spring, MD 20993-0002, 301-796-3471,
The holder of an approved ANDA to market a new drug for human use is required to submit annual reports to FDA concerning its approved ANDA under §§ 314.81 and 314.98 (21 CFR 314.81 and 21 CFR 314.98). The holders of the approved ANDAs listed in table 1 have repeatedly failed to submit the required annual reports and have not responded to the Agency's request for submission of the reports.
Therefore, under §§ 314.150(b)(1) and 314.200, notice is given to the holders of the approved ANDAs listed in table 1 and to all other interested persons that the Director of CDER proposes to issue an order, under section 505(e) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(e)), withdrawing approval of the ANDAs and all amendments and supplements thereto on the grounds that the ANDA holders have failed to submit reports required under § 314.81 and 314.98.
In accordance with section 505 of the FD&C Act and part 314 (21 CFR part 314), the ANDA holders are hereby provided an opportunity for a hearing to show why the approval of the ANDA listed previously should not be withdrawn and an opportunity to raise, for administrative determination, all issues relating to the legal status of the drug products covered by these ANDAs.
An ANDA holder who decides to seek a hearing must file the following: (1) A written notice of participation and request for a hearing (see
The failure of an ANDA holder to file a timely written notice of participation and request for a hearing, as required by § 314.200, constitutes an election by that ANDA holder not to avail itself of the opportunity for a hearing concerning CDER's proposal to withdraw approval of the ANDAs and constitutes a waiver of any contentions concerning the legal status of the drug products. FDA will then withdraw approval of the ANDAs, and the drug products may not thereafter be lawfully introduced or delivered for introduction into interstate commerce. Any new drug product introduced or delivered for introduction into interstate commerce without an approved ANDA is subject to regulatory action at any time.
A request for a hearing may not rest upon mere allegations or denials but must present specific facts showing that there is a genuine and substantial issue of fact that requires a hearing. If a request for a hearing is not complete or is not supported, the Commissioner of Food and Drugs will enter summary judgment against the person who requests the hearing, making findings and conclusions, and denying a hearing.
All submissions under this notice of opportunity for a hearing must be filed in two copies. Except for data and information prohibited from public disclosure under 21 U.S.C. 331(j) or 18 U.S.C. 1905, the submissions may be seen at the Dockets Management Staff (see
This notice is issued under section 505(e) of the FD&C Act and under authority delegated to the Director of CDER by the Commissioner of Food and Drugs.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Submit written comments (including recommendations) on the collection of information by January 28, 2026.
To ensure that comments on the information collection are received, OMB recommends that written comments be submitted to
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
This information collection implements statutory and regulatory requirements that govern positron emission tomography (PET) drugs. FDA has promulgated regulations in 21 CFR part 212 establishing current good manufacturing practice (CGMP) intended to ensure that PET drugs meet the requirements of the Federal Food, Drug, and Cosmetic Act (the act) regarding safety, identity, strength, quality, and purity. While regulations in 21 CFR part 212, subpart A set forth general provisions, additional requirements are established in 21 CFR part 212 as follows:
Records must be maintained at the PET drug production facility or another location that is reasonably accessible to responsible officials of the production facility and to employees of FDA designated to perform inspections. All records, including those not stored at the inspected establishment, must be legible, stored to prevent deterioration or loss, and readily available for review and copying by FDA employees. All records and documentation referenced in this part must be maintained for a period of at least 1 year from the date of final release, including conditional final release, of a PET drug product.
The regulations contain what we believe are the minimum standards for quality production of PET drugs at all types of PET drug production facilities. These CGMP requirements are designed according to the unique characteristics of PET drugs, including their short half-lives and because most PET drugs are produced at locations close to the patients to whom the drugs are administered. We have also taken into account that time spent on recording procedures, processes, and specifications may be somewhat higher in the year in which records are first established and correspondingly lower in subsequent years, when only updates and revisions will be required.
We have also issued Agency guidance entitled, “PET Drugs—Current Good Manufacturing Practice (CGMP),” (December 2009), available for download from our website at
Respondents to the information collection include are PET production facilities, including academic or hospital facilities as well as commercial facilities.
In the
We estimate the burden of the collection of information as follows:
Our estimated burden for the information collection reflects an overall increase of 14,348 hours and a corresponding increase of 12,851 records. We attribute this adjustment to an increase in our estimate of the number of small firms due to new facilities.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ADZYNMA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension applicants may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product ADZYNMA (ADAMTS13, recombinant-krhn). ADZYNMA is indicated for prophylactic or on-demand enzyme replacement therapy (ERT) in adult and pediatric patients with congenital thrombotic thrombocytopenic purpura (cTTP). Subsequent to this approval, the USPTO received patent term restoration applications for ADZYNMA (U.S. Patent Nos. 7,517,522; 8,623,352; 9,351,935; 9,572,778; 10,758,599) from Regents of the University of Michigan and Takeda Pharmaceutical Company Limited, and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated June 27, 2025, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of ADZYNMA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ADZYNMA is 4,059 days. Of this time, 3,821 days occurred during the testing phase of the regulatory review period, while 238 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, the applicants seek 702, 1,346, 1,479,
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ALHEMO and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product ALHEMO (concizumab-mtci). ALHEMO is indicated for routine prophylaxis to prevent or reduce the frequency of bleeding episodes in adult and pediatric patients 12 years of age and older with:
• hemophilia A (congenital factor VIII deficiency) with FVIII inhibitors
• hemophilia B (congenital factor IX deficiency) with FIX inhibitors Subsequent to this approval, the USPTO received a patent term restoration application for ALHEMO (U.S. Patent No. 8,361,469) from Novo Nordisk A/S, and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated June 27, 2025, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of ALHEMO represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ALHEMO is 3,475 days. Of this time, 2,625 days occurred during the testing phase of the regulatory review period, while 850 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,826 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing that it has received a petition requesting partial exemption from the premarket notification requirements for radiology computer-aided detection and/or diagnosis devices and computer-aided triage and notification devices. Specifically, the petition requests exemption from the premarket notification requirements for the following generic device types when certain conditions described in the petition are met: radiological computer-assisted diagnostic software for lesions suspicious of cancer; medical image analyzers; radiological computer aided triage and notification software; and radiological computer-assisted detection and diagnosis software. FDA is publishing this notice to obtain comments in accordance with procedures established by the Federal Food, Drug, and Cosmetic Act (FD&C Act).
Submit either electronic or written comments on the notice by February 27, 2026.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Gugandeep Kaur, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5504, Silver Spring, MD 20993-0002, 240-402-9534.
The FD&C Act, as amended, establishes a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) establishes three classes of devices, reflecting the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three classes of devices are class I (general controls), class II (special controls), and class III (premarket approval).
Section 513(a)(1) of the FD&C Act defines the three classes of devices. Class I devices are those devices for which the general controls of the FD&C Act (controls authorized by or under section 501, 502, 510, 516, 518, 519, or 520 (21 U.S.C. 351, 352, 360, 360f, 360h, 360i, or 360j) or any combination of such sections) are sufficient to provide reasonable assurance of safety and effectiveness of the device; or those devices for which insufficient information exists to determine that general controls are sufficient to provide reasonable assurance of safety and effectiveness or to establish special controls to provide such assurance, but because the devices are not purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, and do not present a potential unreasonable risk of illness or injury, are to be regulated by general controls (section 513(a)(1)(A) of the FD&C Act).
Class II devices are those devices for which general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but for which there is sufficient information to establish special controls to provide such assurance, including the issuance of performance standards, post-market surveillance, patient registries, development and dissemination of guidelines, recommendations, and other appropriate actions FDA deems necessary to provide such assurance (section 513(a)(1)(B) of the FD&C Act).
Class III devices are those devices for which insufficient information exists to determine that general controls and special controls would provide a reasonable assurance of safety and effectiveness, and are purported or represented to be for a use in supporting or sustaining human life or for a use which is of substantial importance in preventing impairment of human health, or present a potential unreasonable risk of illness or injury (section 513(a)(1)(C) of the FD&C Act).
Under section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and FDA's implementing regulations in part 807 (21 CFR part 807), persons who propose to begin the introduction or delivery for introduction into interstate commerce for commercial distribution of a device intended for human use are required to
The 21st Century Cures Act (Pub. L. 114-255) (Cures Act) was signed into law on December 13, 2016. Section 3054 of the Cures Act amended section 510(m) of the FD&C Act. As amended, section 510(m)(1) of the FD&C Act requires that within 90 days of the date of enactment of the Cures Act, and at least once every 5 years thereafter (as FDA determines appropriate), FDA publish in the
There are a number of factors FDA may consider to determine whether a 510(k) is necessary to provide reasonable assurance of the safety and effectiveness of a class II device. These factors are discussed in the
Accordingly, FDA generally considers the following factors to determine whether a report under section 510(k) is necessary or if an exemption would be appropriate for class II devices: (1) the device does not have a significant history of false or misleading claims or of risks associated with inherent characteristics of the device; (2) characteristics of the device necessary for its safe and effective performance are well established; (3) changes in the device that could affect safety and effectiveness will either (a) be readily detectable by users by visual examination or other means such as routine testing, before causing harm, or (b) not materially increase the risk of injury, incorrect diagnosis, or ineffective treatment; and (4) any changes to the device would not be likely to result in a change in the device's classification. FDA may also consider that, even when exempting devices from the 510(k) requirements, these devices would still be subject to the general limitations on exemptions (see 21 CFR 892.9).
FDA has received the following petition requesting partial exemption from the premarket notification requirements for certain class II devices: Nancy Stade, J.D., of Rubrum Advising, LLC, 404 Pembroke Rd., Bala Cynwyd, PA 19004, on behalf of Harrison.ai, for the following devices:
• Radiological computer-assisted diagnostic software for lesions suspicious of cancer, classified under § 892.2060 (21 CFR 892.2060), product code POK.
• Medical image analyzer, classified under § 892.2070 (21 CFR 892.2070), product code MYN.
• Radiological computer aided triage and notification software, classified under § 892.2080 (21 CFR 892.2080), product codes QAS and QFM.
• Radiological computer-assisted detection and diagnosis software, classified under § 892.2090 (21 CFR 892.2090), product codes QBS and QDQ.
The petition requests exemption from the premarket notification requirements for these devices when:
• The manufacturer has previously obtained a 510(k);
• For devices under § 892.2080, the manufacturer must have at least one clearance under the same classification regulation;
• For devices under § 892.2060, 892.2070, or 892.2090, the manufacturer must have at least one clearance under any of those same three classification regulations;
• The manufacturer must implement a robust post-market plan, transparency, and training measures as described in the petition; and
• All existing special controls, quality systems, establishment registration, and device listing requirements will remain in force.
FDA seeks comment on the petition in accordance with section 510(m)(2) of the FD&C Act.
While this notice contains no collection of information, it does refer to previously approved FDA collections of information. The previously approved collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections of information in part 807, subpart E, regarding premarket notification submissions, have been approved under OMB control number 0910-0120.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory Council on Minority Health and Health Disparities.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will be videocast and can be accessed from the NIH Videocasting and Podcasting website (
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
The meeting identified below has been scheduled in the event the Council is unable to complete all agenda items identified for the February 6, 2026, meeting. Information on the agenda items and/or the necessity to hold the meeting listed below will be posted on the Institute/Center homepage (link identified below).
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: NIMHD:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory Mental Health Council.
The meeting will be held as a virtual meeting and open to the public, as indicated below. Individuals who plan to view the virtual meeting and need special assistance, such as sign language interpretation or other reasonable accommodations, should submit a request using the following link:
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.
The meeting identified below has been scheduled in the event the Council is unable to complete all agenda items identified for the February 5, 2026, meeting. Information on the agenda items and/or the necessity to hold the meeting listed below will be posted on the Institute/Center homepage (link identified below).
Registration is not required to attend the open portion of this meeting.
Any interested person may file written comments with the committee by forwarding the statement to
Information is also available on the Institute's/Center's home page:
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Periodically, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish a summary of information collection requests under the Office of Management and Budget (OMB) review, in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these documents, call the SAMHSA Reports Clearance Officer on (240) 276-0661.
Executive Order 12862 directs Federal agencies to provide service to the public that matches or exceeds the best service available in the private sector. In order to work continuously to ensure that our programs are effective and meet our customers' needs, SAMHSA seeks to obtain the OMB approval of a generic clearance to collect qualitative feedback on our service delivery. By qualitative feedback we mean information that provides useful insights on perceptions and opinions but are not statistical surveys that yield quantitative results that can be generalized to the population of study.
This collection of information is necessary to enable SAMHSA to garner customer and stakeholder feedback in an efficient, timely manner, in accordance with our commitment to improving service delivery. The information collected from our customers and stakeholders will help ensure that users have an effective, efficient, and satisfying experience with SAMHSA's programs. This feedback will provide insights into customer or stakeholder perceptions, experiences and expectations, provide an early warning of issues with service, or focus attention on areas where communication, training or changes in operations might improve delivery of products or services. These collections will allow for ongoing, collaborative and actionable communications between SAMHSA and its customers and stakeholders. It will also allow feedback to contribute directly to the improvement of program management.
This is an extension to the currently approved 0930-0393 Fast Track Generic Clearance for the Collection of Qualitative Feedback on SAMHSA Service Delivery which replaced multiple previously approved SAMHSA information collections including 0930-0197 Voluntary Customer Satisfaction Surveys to Implement Executive Order 12862 in SAMHSA, 0930-0196 Pretesting of Substance Abuse Prevention and Treatment and Mental Health Services Communications Messages, and 0930-0313 SAMHSA's Publications and Digital Products website Registration Survey. Changes were not made to this Information Collection Request from the previous approval. The information collections (ICs) under Generic collections 0930-0196 and 0930-0197 were transferred to the Fast Track Generic. After the IC transferred, the 0196 and 0197 Generic collections were discontinued. The 0930-0313 SAMHSA's Publications and Digital Products website Registration Survey consisted of customer satisfaction/feedback questions along with a SAMHSA website survey and a SAMHSA store survey developed utilizing the main pool of questions. The 0930-0313 information collection became an IC under the new Fast Track once it was approved and the 0313-information collection request (ICR) was discontinued. SAMHSA will continue due diligence to improve efficiency and lower burden by determining if other information collections are better served by becoming part of the Fast Track Generic.
A variety of instruments and platforms will be used to collect information from respondents. The annual burden hours requested (60,250) are based on the number of collections we expect to conduct over the requested period for this clearance. The burden estimates were calculated based on replacing previously approved burden hours for ICRs 0930-0197, 0930-0196 and 0930-0313 and internal assessments of projected IC submission over the next three years.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation of Altol Chemical and Environmental Laboratory (Ponce, PR), as a commercial laboratory.
Notice is hereby given, pursuant to CBP regulations, that Altol Chemical and Environmental Laboratory (Ponce, PR), has been accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of September 5, 2024.
Altol Chemical and Environmental Laboratory (Ponce, PR) was accredited as a commercial laboratory as of September 5, 2024. The next triennial inspection date will be scheduled for September 2027.
Mr. Robert P. Munivez, Laboratories and Scientific Services, U.S. Customs and Border Protection, 4150 Interwood South Parkway, Houston, TX 77032, tel. 281-560-2937.
Notice is hereby given pursuant to 19 CFR 151.12, that Altol Chemical and Environmental Laboratory, 228 Sabanetas Industrial Park, Ponce, PR 00716, has been accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12.
Altol Chemical and Environmental Laboratory (Ponce, PR) is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):
Anyone wishing to employ this entity to conduct laboratory analyses should request and receive written assurances from the entity that it is accredited by the U.S. Customs and Border Protection to conduct the specific test requested. Alternatively, inquiries regarding the specific test this entity is accredited to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344-1060. The inquiry may also be sent to
U.S. Geological Survey, Interior.
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the U.S. Geological Survey (USGS) is proposing to renew an information collection.
Interested persons are invited to submit comments on or before January 28, 2026.
You may submit comments by one of the following methods:
Michele Wolf by email at
In accordance with the PRA of 1995 (44 U.S.C. 3501
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comments addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) How the agency might minimize the burden of the collection of information on those who are to respond, including using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personally identifiable information (PII) in your comment, you should be aware that your entire comment—including your PII—may be made publicly available at any time. While you can ask us in your comment to withhold your PII from public review, we cannot guarantee that we will be able to do so.
Annual data preservation priorities are provided in the Program Announcement as guidance for applicants to consider when submitting proposals. Since its inception in 2007, NGGDPP has awarded 46 states with $32 million, which, when matched or exceeded by the states, amounts to over $64 million invested in the rescue and preservation efforts. We will protect information from respondents considered proprietary under the Freedom of Information Act (5 U.S.C. 552) and implementing regulations (43 CFR part 2), and under regulations at 30 CFR 250.197, “Data and information to be made available to the public or for limited inspection.” Responses are voluntary. No questions of a “sensitive” nature are asked. We intend to release the project abstracts and identify states for awarded/funded projects only.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the PRA of 1995 (44 U.S.C. 3501
Bureau of Indian Affairs, Interior.
Notice.
The Department of the Interior (Department) announces that the group known as the Burt Lake Band of Ottawa and Chippewa Indians (BLB)
Comments and evidence must be postmarked by April 28, 2026.
The narrative portion of the re-petition request, submitted by BLB (with any redactions in accordance with 25 CFR 83.50(b)), is available at the OFA website:
Ms. Nikki Bass, OFA Director, Office of the Assistant Secretary-Indian Affairs, Department of the Interior, by phone: (202) 513-7650; or by email:
On March 21, 2025, the Department revised the Federal acknowledgment regulations in 25 CFR part 83 to establish a conditional and time-limited opportunity for petitioners denied Federal acknowledgment to request authorization to re-petition.
On August 22, 2025, OFA received a request for authorization to re-petition from BLB, in accordance with 25 CFR 83.50. This group has been assigned Petition Number R002.
The contact information for BLB is Bart T. Stupak, 600 Massachusetts Avenue NW, Washington, DC 20004.
Under 25 CFR 83.51(b)(1), OFA publishes on its website the following:
i. The narrative portion of the request for authorization to re-petition, as submitted by the petitioner (with any redactions appropriate under 25 CFR 83.50(b));
ii. The name, location, and mailing address of the petitioner and other information to identify the entity;
iii. The date of receipt;
iv. The opportunity for individuals and entities to submit comments and evidence supporting or opposing the petitioner's request for acknowledgment within 120 days of this notice of the request; and
v. The opportunity for individuals and entities to request to be kept informed of general actions regarding the petitioner.
The Department publishes this notice and request for comment in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by Department Manual part 209, chapter 8.
Bureau of Indian Affairs, Interior
Notice of request for nominations.
The Bureau of Indian Affairs is seeking nominations for individuals to be considered for appointment to the Advisory Board for Exceptional Children (Advisory Board). There will be five positions available to serve specifically in the areas of: Indian persons with disabilities; Teachers of children with disabilities; State education officials; Local Education Officials; State Interagency Coordinating Councils under Section 641 of the Act in States having Indian reservations; and Tribal representatives or tribal organization representatives. Advisory Board members shall serve a staggered term of two years or three years from the date of their appointment. The BIE will consider nominations received in response to this request for nominations, as well as other sources. The
Please submit nominations by February 27, 2026.
Please submit nominations to Ms. Jennifer Davis, Designated Federal Officer (DFO), Bureau of Indian Education, Division of Performance and Accountability, 2600 N Central Ave., Suite 800, Phoenix, AZ 85004, or Fax to (602) 265-0293 or email to
Jennifer Davis, DFO, at Telephone (202) 860-7845; or email
The Advisory Board was established in accordance with the Federal Advisory Committee Act, 5 U.S.C. Ch. 10. The following provides information about the Committee, the membership, and the nomination process.
(a) Members of the Advisory Board will provide guidance, advice and recommendations with respect to special education and related services for children with disabilities in BIE funded schools in accordance with the requirements of IDEA.
(b) The Advisory Board will: (1) Provide advice and recommendations for the coordination of services within the BIE and with other local, State and Federal agencies; (2) Provide advice and recommendations on a broad range of policy issues dealing with the provision of educational services to American Indian children with disabilities; (3) Serve as advocates for American Indian students with special education needs by providing advice and recommendations regarding best practices, effective program coordination strategies, and recommendations for improved educational programming; (4) Provide advice and recommendations for the preparation of information required to be submitted to the Secretary of Education under 20 U.S.C. 1411 (h)(2); (5) Provide advice and recommend policies concerning effective inter/intra agency collaboration, including modifications to regulations, and the elimination of barriers to inter- and intra-agency programs and activities; and (6) Will report and direct all correspondence to the Assistant Secretary—Indian Affairs through the Director, BIE with a courtesy copy to the Designated Federal Officer (DFO).
(a) Pursuant to 20 U.S.C. 1411(h)(6), the Advisory Board will be composed of up to fifteen individuals involved in or concerned with the education and provision of services to American Indian infants, toddlers, children, and youth with disabilities. The Advisory Board composition will reflect a broad range of viewpoints and will include at least one member representing each of the following interests: American Indians with disabilities; teachers of children with disabilities; American Indian parents or guardians of children with disabilities; service providers; state education officials; local education officials; state interagency coordinating councils (for states having Indian reservations); tribal representatives or tribal organization representatives; and other members representing the various divisions and entities of the BIE.
(b) The Assistant Secretary—Indian Affairs may provide the Secretary of the Interior recommendations for the chairperson; however, the chairperson and other Advisory Board members will be appointed by the Secretary of the Interior. Advisory Board members shall serve staggered terms of two years or three years from the date of their appointment.
(a) Members of the Advisory Board will not receive compensation, but will be reimbursed for travel, including subsistence, and other necessary expenses incurred in the performance of their duties in the same manner as persons employed intermittently in Government Service under 5 U.S.C. 5703.
(b) The Advisory Board meets at least three or four times a year, budget permitting, but additional meetings may be held as deemed necessary by the Assistant Secretary—Indian Affairs or the DFO.
(c) All Advisory Board meetings are open to the public.
(a) Nominations are requested from individuals, organizations, and federally recognized tribes, as well as from State Directors of Special Education (within the 23 states in which BIE-funded schools are located) concerned with the education of Indian children with disabilities as described above.
(b) Nominees should have expertise and knowledge of the issues and/or needs of American Indian children with disabilities. Such knowledge and expertise are needed to provide advice and recommendations to the BIE regarding the needs of American Indian children with disabilities.
(c) A summary of the candidates' qualifications (resume or curriculum vitae) must be included with a completed nomination application form, which is located on the Bureau of Indian Education website. Nominees must have the ability to attend Advisory Board meetings, carry out Advisory Board assignments, participate in teleconference calls, and work in groups.
If you wish to nominate someone for appointment to the Advisory Board, please do not make the nomination until the person has agreed to have his or her name submitted to the BIE for this purpose. A person can also self-nominate.
Please submit a complete application form and a copy of the nominee's resume or curriculum vitae to the DFO by February 27, 2026. The nomination application form can be found on the BIE website at
This collection of information is authorized by OMB Control Number 1076-0179, “Solicitation of Nominations for the Advisory Board for Exceptional Children” Dated: 11/30/2027.
National Park Service, Interior.
Request for nominations.
The National Park Service (NPS), U.S. Department of the Interior, is requesting nominations for qualified persons to serve as members on the Cedar Creek and Belle Grove National Historical Park Advisory Commission (Commission).
Written nominations must be received by January 28, 2026.
Nominations or requests for further information should be sent to Karen Beck-Herzog, Site Manager, Cedar Creek and Belle Grove National Historical Park, P.O. Box 700, Middletown, Virginia 22645, or via email
Karen Beck-Herzog, via telephone (540) 868-0938.
The Commission was established in accordance with the Cedar Creek and Belle Grove National Historical Park Act of 2002 (16 U.S.C. 410iii-7). The Commission was designated by Congress to provide advice to the Secretary of the Interior on the preparation and implementation of the park's general management plan and in the identification of sites of significance outside the park boundary.
The Commission consists of 15 members appointed by the Secretary, as follows:
(a) 1 representative from the Commonwealth of Virginia; (b) 1 representative each from the local governments of Strasburg, Middletown, Frederick County, Shenandoah County, and Warren County; (c) 2 representatives of private landowners within the Park; (d) 1 representative from a citizen interest group; (e) 1 representative from the Cedar Creek Battlefield Foundation; (f) 1 representative from the Belle Grove, Incorporated; (g) 1 representative from the National Trust for Historic Preservation; (h) 1 representative from the Shenandoah Valley Battlefields Foundation; (i) 1 ex-officio representative from the National Park Service; and (j) 1 ex-officio representative from the United States Forest Service. Alternate members may be appointed to the Commission.
We are currently seeking primary and alternate members to represent Belle Grove, Inc., the Cedar Creek Battlefield Foundation, the Shenandoah Valley Battlefields Foundation, the National Trust for Historic Preservation, the Town of Strasburg, the Town of Middletown, Shenandoah County, Frederick County, Warren County, and private landowners within the Park.
Each member shall be appointed for a term of three years and may be reappointed for not more than two successive terms. A member may serve after the expiration of that member's term until a successor has been appointed. The Chairperson of the Commission shall be elected by the members to serve a term of one-year renewable for one additional year.
Nominations should be typed and should include a resume providing an adequate description of the nominee's qualifications, including information that would enable the Department of the Interior to make an informed decision regarding meeting the membership requirements of the Commission and permit the Department to contact a potential member. All documentation, including letters of recommendation, must be compiled and submitted in one complete package. All those interested in membership must follow the nomination process.
Members of the Commission serve without compensation. However, while away from their homes or regular places of business in the performance of services for the Commission as approved by the NPS, members may be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons employed
Bureau of Reclamation, Interior.
Notice of availability.
The Bureau of Reclamation (Reclamation) has made available the draft 2026 Criteria for Evaluating Water Management Plans (Standard Criteria) for public review and comment.
Interested persons are invited to submit comments on the draft 2026 Standard Criteria on or before March 30, 2026.
Send written comments to Mr. Thomas Hawes, Bureau of Reclamation, Attention: CBG-400, 2800 Cottage Way, Sacramento, CA 95825; or via email at
Mr. Thomas Hawes at (916) 978-5271, or via email at
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. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
Section 3405(e) of the Central Valley Project Improvement Act (Pub. L. 102-575, title 34) requires the Secretary of the Interior to, among other things, “develop criteria for evaluating the adequacy of all water conservation plans” developed by certain contractors. According to section 3405(e)(1), these criteria must promote “the highest level of water use efficiency reasonably achievable by project contractors using best available cost-effective technology and best management practices.” In accordance with this legislative mandate, Reclamation developed and published the Standard Criteria, which is updated every 3 years.
On the basis of the record
The Commission instituted these reviews on May 1, 2025 (90 FR 18704) and determined on August 4, 2025, that it would conduct expedited reviews (90 FR 45958, September 24, 2025).
The Commission made these determinations pursuant to section 751(c) of the Act (19 U.S.C. 1675(c)). It completed and filed its determinations in these reviews on December 22, 2025. The views of the Commission are contained in USITC Publication 5692 (December 2025), entitled
By order of the Commission.
On the basis of the record
The Commission instituted this review on September 3, 2024 (89 FR 71417) and determined on December 9, 2024, that it would conduct a full review (90 FR 6010, January 17, 2025). Notice of the scheduling of the Commission's review and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission made this determination pursuant to section 751(c) of the Act (19 U.S.C. 1675(c)). It completed and filed its determination in this review on December 19, 2025. The views of the Commission are contained
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on September 23, 2025, under section 337 of the Tariff Act of 1930, as amended, on behalf of Align Technology, Inc. of Tempe, Arizona. A letter supplementing the complaint was filed on November 20, 2025. The complaint, as supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain clear aligners and components thereof by reason of the infringement of certain claims of U.S. Patent No. 11,766,313 (“the '313 patent”); U.S. Patent No. 11,766,314 (“the '314 patent”); U.S. Patent No. 8,899,977 (“the '977 patent”); U.S. Patent No. 12,059,321 (“the '321 patent”); U.S. Patent No. 10,980,616 (“the '616 patent”); and U.S. Patent No. 11,490,996 (“the '996 patent”). The complaint further alleges that an industry in the United States exists as required by the applicable Federal Statute.
The complainant requests that the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, may be viewed on the Commission's electronic docket (EDIS) at
Susan Orndoff, The Office of Docket Services, U.S. International Trade Commission, telephone (202) 205-1802.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain products identified in paragraph (2) by reason of infringement of one or more of claims 1 and 16 of the '313 patent; claims 1,11, and 21 of the '314 patent; claims 1 and 9 of the '977 patent; claim 1 of the '321 patent; claims 1, 12, and 20 of the '616 patent; and claims 1, 17, and 21 of the '996 patent, and whether an industry in the United States exists as required by subsection (a)(2) of section 337;
(2) Pursuant to section 210.10(b)(1) of the Commission's Rules of Practice and Procedure, 19 CFR 210.10(b)(1), the plain language description of the accused products or category of accused products, which defines the scope of the investigation, is “clear plastic aligners used to treat misaligned teeth and bites, and components of those aligners including the tri-layer material used to construct the aligner”;
(3) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainant is:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(3) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
The Office of Unfair Import Investigations will not participate as a party in this investigation.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty orders on ferrovanadium from China and South Africa would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
November 24, 2025.
Alec Resch (202-708-1448), 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 reviews 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 reviews must be served on all other parties to the reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint
In particular, the Commission is interested in comments that:
(i) explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions on the public interest must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
In this notice, OSHA grants a permanent variance to CBNA/Halmar Joint Venture (CBNA/Halmar) related to work in compressed air environments.
The permanent variance specified by this notice becomes effective on December 29, 2025 and shall remain in effect until the completion of the Potomac River Tunnel Project or until modified or revoked by OSHA.
Information regarding this notice is available from the following sources:
On April 1, 2024, CBNA/Halmar Joint Venture (CBNA/Halmar or the applicant), submitted under Section 6(d) of the Occupational Safety and Health Act of 1970 (the Act), 29 U.S.C. 655, and 29 CFR 1905.11 (Variances and other relief under Section 6(d)) an application for a permanent variance from several provisions of the OSHA standard that regulates work in compressed air, 1926.803 of 1926 Subpart S—Underground Construction, Caissons, Cofferdams, and Compressed Air, and an interim order allowing it to proceed while OSHA considers the request for a permanent variance (OSHA-2025-0002-0002). This notice addresses CBNA/Halmar's application for a permanent variance and interim order for construction of the Potomac River Tunnel Project in Washington, DC only and is not applicable to future CBNA/Halmar Joint Venture tunneling projects.
This notice addresses CBNA/Halmar's application for a permanent variance and interim order from the provisions of the standard that: (1) require the use of the decompression values specified in decompression tables in Appendix A of subpart S (29 CFR 1926.803(f)(1)); and (2) require the use of automated operational controls and a special decompression chamber (29 CFR 1926.803(g)(1)(iii) and (xvii), respectively).
OSHA reviewed CBNA/Halmar's application for the variance and interim order and determined that they were appropriately submitted in compliance with the applicable variance procedures in Section 6(d) of the Occupational Safety and Health Act of 1970 (OSH Act; 29 U.S.C. 655) and OSHA's regulations at 29 CFR 1905.11 (Variances and other relief under section 6(d)), including the requirement that the applicant inform workers and their representatives of their rights to petition the Assistant Secretary of Labor for Occupational Safety and Health for a hearing on the variance application.
OSHA reviewed the alternative procedures in CBNA/Halmar's application and preliminarily determined that the applicant's proposed alternatives, on the whole, subject to the conditions in the request and imposed by the interim order, provide measures that are as safe and healthful as those required by the cited OSHA standards. On July 24, 2025, OSHA published a
OSHA did not receive any comments or other information disputing the preliminary determination that the alternatives were at least as safe as OSHA's standard, nor any objections to OSHA granting a permanent variance. Accordingly, through this notice OSHA grants a permanent variance, subject to the conditions set out in this document.
The information that follows about CBNA/Halmar, its methods, and the Potomac River Tunnel Project comes from the CBNA/Halmar variance application.
CBNA/Halmar is a contractor for the Potomac River Tunnel Project (the project), that works on complex tunnel projects using innovations in tunnel-excavation methods. The applicant's workers engage in the construction of tunnels using advanced shielded mechanical excavation techniques in conjunction with an earth pressure balanced micro-tunnel boring machine (TBM). Using shielded mechanical excavation techniques, in conjunction with precast concrete tunnel liners and backfill grout, TBMs provide methods to achieve the face pressures required to maintain a stabilized tunnel face through various geologies and isolate that pressure to the forward section (the working chamber) of the TBM.
CBNA/Halmar asserts that it bores tunnels using a TBM at levels below the water table through soft soils consisting of clay, silt, and sand. TBMs are capable of maintaining pressure at the tunnel face, and stabilizing existing geological conditions, through the controlled use of a mechanically driven cutter head, bulkheads within the shield, ground-treatment foam, and a screw conveyor that moves excavated material from the working chamber. The forward-most portion of the TBM is the working chamber, and this chamber is the only pressurized segment of the TBM. Within the shield, the working chamber consists of two sections: the forward working chamber and the staging chamber. The forward working chamber is immediately behind the cutter head and tunnel face. The staging chamber is behind the forward working chamber and between the man-lock door and the entry door to the forward working chamber.
The TBM has twin man-locks located between the pressurized working chamber and the non-pressurized portion of the machine. Each man-lock has two compartments. This configuration allows workers to access the man-locks for compression and decompression, and medical personnel to access the man-locks if required in an emergency.
CBNA/Halmar's Hyperbaric Operations Manual (HOM) for the Potomac River Tunnel Project indicates that the maximum pressure to which it is likely to expose workers during project interventions for the tunnel drives is 49.5 pounds per square inch gauge (p.s.i.g.). The applicant will pressurize the working chamber to the level required to maintain a stable tunnel face, which for this project CBNA/Halmar estimates will be up to a pressure not exceeding 49.5 p.s.i.g., which does not exceed the maximum pressure specified by the OSHA standard at 29 CFR 1926.803(e)(5).
CBNA/Halmar employs specially trained personnel for the construction of the tunnel. To keep the machinery working effectively, CBNA/Halmar asserts that these workers must periodically enter the excavation working chamber of the TBM to perform hyperbaric interventions during which workers would be exposed to air pressures up to 49.5 p.s.i.g, which does not exceed the maximum pressure specified by the existing OSHA standard at 29 CFR 1926.803(e)(5). These interventions consist of conducting inspections or maintenance work on the cutter-head structure and cutting tools of the TBM, such as changing replaceable cutting tools and disposable wear bars, and, in rare cases, repairing structural damage to the cutter head.
During interventions, workers enter the working chamber through one of the twin man-locks that open into the staging chamber. To reach the forward part of the working chamber, workers pass through a door in a bulkhead that separates the staging chamber from the forward working chamber. The man-locks and the working chamber are designed to accommodate three people, which is the maximum crew size allowed under the permanent variance. When the required decompression times are greater than work times, the twin man-locks allow for crew rotation. During crew rotation, one crew can be compressing or decompressing while the second crew is working. Therefore, the working crew always has an unoccupied man-lock at its disposal.
CBNA/Halmar asserts that these innovations in tunnel excavation have greatly reduced worker exposure to hazards of pressurized air work because they have eliminated the need to pressurize the entire tunnel for the project and thereby reduce the number of workers exposed, as well as the total duration of exposure, to hyperbaric pressure during tunnel construction. These advances in technology have substantially modified the methods used by the construction industry to excavate subaqueous tunnels compared to the caisson work regulated by the current OSHA compressed-air standard for construction at 29 CFR 1926.803.
In addition to the reduced exposures resulting from the innovations in tunnel-excavation methods, CBNA/Halmar asserts that innovations in hyperbaric medicine and technology improve the safety of decompression from hyperbaric exposures. These procedures, however, deviate from the decompression process that OSHA requires for construction in 29 CFR 1926.803(f)(1) and the decompression tables in Appendix A of 29 CFR 1926, subpart S. Nevertheless, according to CBNA/Halmar, their use of decompression protocols incorporating oxygen is more efficient, effective, and safer for tunnel workers than compliance with the decompression tables specified by the existing OSHA standard.
CBNA/Halmar contends that the alternative safety measures included in the application provide CBNA/Halmar's workers with a place of employment that is at least as safe as they would be under OSHA's compressed-air standard for construction. CBNA also provided OSHA a project-specific HOM (OSHA-2025-0002-0003) for the Potomac River Tunnel Project that requires specialized medical support and hyperbaric supervision to provide assistance to a team of specially trained man-lock attendants and hyperbaric or compressed-air workers to support their assertions of equivalency in worker protection.
OSHA included all of the above information in the
Pursuant to the requirements of OSHA's variance regulations (29 CFR 1905.11), the applicant has certified that it notified its affected workers
OSHA has previously approved several nearly identical variances involving the same types of tunneling equipment used for similar projects (tunnel construction variances). OSHA notes that it granted several subaqueous tunnel construction permanent variances from the same provisions of OSHA's compressed-air standard (29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii)) that are the subject of the present application: (1) Impregilo, Healy, Parsons, Joint Venture (IHP JV) for the Anacostia River Tunnel in Washington, DC (80 FR 50652, August 20, 2015); (2) Traylor JV for the Blue Plains Tunnel in Washington, DC (80 FR 16440, March 27, 2015); (3) Tully/OHL USA Joint Venture for the New York Economic Development Corporation's New York Siphon Tunnel project (79 FR 29809, May 23, 2014); (4) Salini-Impregilo/Healy Joint Venture for the Northeast Boundary Tunnel in Washington, DC (85 FR 27767, May 11, 2020); (5) McNally/Kiewit SST for the Shoreline Storage Tunnel in Cleveland, Ohio (88 FR 15080, March 10, 2023); (6) Traylor Shea Joint Venture for the Alexandria RiverRenew Tunnel Project in Alexandria, Virginia and Washington, DC (88 FR 15090, March 10, 2023); (7) Traylor-Sundt Joint Venture, for the Integrated Pipeline Tunnel Project in Dallas, Texas (88 FR 83152, November 28, 2023); (8) Ballard Marine Construction for the Bay Park Conveyance Tunnel Project in Nassau County, New York (89 FR 8442, February 7, 2024); and (9) Ballard Marine Construction for the Lower Olentangy Tunnel Project in Columbus, Ohio (89 FR 78906, September 26, 2024). OSHA also granted an interim order to Ballard Marine Construction for the Suffolk County, New York Outfall Tunnel Project (86 FR 5253, January 19, 2021), as well as an interim order to McNally/ASI Marine for the Southerly Tunnel and Consolidation Project in Cleveland, Ohio (90 FR 34887, July 24, 2025) in addition to the interim order granted for this project. The proposed alternate conditions in this notice are nearly identical to the alternate conditions of the previous permanent variances.
OSHA's compressed-air standard for construction requires decompression in accordance with the decompression tables in Appendix A of 29 CFR 1926, subpart S (see 29 CFR 1926.803(f)(1)). As an alternative to the OSHA decompression tables, the applicant proposes to use newer decompression schedules (the 1992 French Decompression Tables) that rely on staged decompression and supplement breathing air used during decompression with air or oxygen (as appropriate).
Depending on the maximum working pressure and exposure times, the 1992 French Decompression Tables provide for air decompression with or without oxygen. CBNA/Halmar asserts that oxygen decompression has many benefits, including (1) keeping the partial pressure of nitrogen in the lungs as low as possible; (2) keeping external pressure as low as possible to reduce the formation of gas bubbles in the blood; (3) removing nitrogen from the lungs and arterial blood and increasing the rate of nitrogen elimination; (4) improving the quality of breathing during decompression stops so that workers are less tired and to prevent bone necrosis; (5) reducing decompression time by approximately 33 percent as compared to air decompression; and (6) reducing inflammation.
In addition, the project-specific HOM requires a physician, certified in hyperbaric medicine, to manage the medical condition of CAWs during hyperbaric exposures and decompression. A trained and experienced man-lock attendant is also required to be present during hyperbaric exposures and decompression. This man-lock attendant is to operate the hyperbaric system to ensure compliance with the specified decompression table. A hyperbaric supervisor, who is trained in hyperbaric operations, procedures, and safety, directly oversees all hyperbaric interventions, and ensures that staff follow the procedures delineated in the HOM or by the attending physician.
CBNA/Halmar seeks a permanent variance from the OSHA standard at 29 CFR 1926.803(g)(1)(iii), which requires automatic controls to regulate decompression. As noted above, the applicant is conducting the staged decompression according to the 1992 French Decompression Tables under the direct control of the trained man-lock attendant and under the oversight of the hyperbaric supervisor.
Breathing air under hyperbaric conditions increases the amount of nitrogen gas dissolved in a CAW's tissues. The greater the hyperbaric pressure under these conditions and the more time spent under the increased pressure, the greater the amount of nitrogen gas is dissolved in the tissues. When the pressure decreases during decompression, tissues release the dissolved nitrogen gas into the blood system, which then carries the nitrogen gas to the lungs for elimination through exhalation. Releasing hyperbaric pressure too rapidly during decompression can increase the size of the bubbles formed by nitrogen gas in the blood system, resulting in decompression illness (DCI), commonly referred to as “the bends.” This description of the etiology of DCI is consistent with current scientific theory and research on the issue.
The 1992 French Decompression Tables, proposed for use by the applicant, provide for stops during worker decompression (
The OSHA compressed-air standard for construction requires employers to use a special decompression chamber of sufficient size to accommodate all CAWs being decompressed at the end of the shift when total decompression time exceeds 75 minutes (see 29 CFR 1926.803(g)(1)(xvii)). Use of the special decompression chamber enables CAWs to move about and flex their joints to prevent neuromuscular problems during decompression.
Space limitations in the TBM do not allow for the installation and use of an additional special decompression lock or chamber. The applicant proposes that it be permitted to rely on the man-locks and staging chamber in lieu of adding a separate, special decompression chamber. Because only a few workers out of the entire crew are exposed to hyperbaric pressure, the man-locks (which, as noted earlier, connect directly to the working chamber) and the staging chamber are of sufficient size to accommodate all of the exposed workers during decompression. The applicant uses the existing man-locks, each of which adequately accommodates a three-member crew for this purpose when decompression lasts up to 75 minutes. When decompression exceeds 75 minutes, crews can open the door connecting the two compartments in each man-lock (during decompression stops) or exit the man-lock and move into the staging chamber where additional space is available. The applicant asserts that this alternative arrangement is as effective as a special decompression chamber in that it has sufficient space for all the CAWs at the
After reviewing the proposed alternatives, OSHA has determined that the applicant's proposed alternatives, on the whole, subject to the conditions in the request and imposed by this permanent variance, provide measures that are as safe and healthful as those required by the cited OSHA standards addressed in section IV of this notice.
In addition, OSHA has determined that each of the following alternatives are at least as effective as the specified OSHA requirements:
The applicant has proposed to implement equally effective alternative measures to the requirement in 29 CFR 1926.803(f)(1) for compliance with OSHA's decompression tables. The HOM specifies the procedures and personnel qualifications for performing work safely during the compression and decompression phases of interventions. The HOM also specifies the decompression tables the applicant proposes to use (the 1992 French Decompression Tables). Depending on the maximum working pressure and exposure times during the interventions, the tables provide for decompression using air, pure oxygen, or a combination of air and oxygen. The decompression tables also include delays or stops for various time intervals at different pressure levels during the transition to atmospheric pressure (
Prior to granting the previous permanent variances to Traylor JV, IHP JV, Tully/OHL JV, Salini-Impregilo/Healy JV, McNally/Kiewit SST JV, Traylor Shea JV, McNally/ASI Marine and Ballard Marine Bay Park Tunnel New York, OSHA conducted a review of the scientific literature and concluded that the alternative decompression method (
Some of the literature indicates that the alternative decompression method may be safer, concluding that decompression performed in accordance with these tables resulted in a lower occurrence of DCI than decompression conducted in accordance with the decompression tables specified by the standard. For example, H.L. Andersen studied the occurrence of DCI at maximum hyperbaric pressures ranging from 4 p.s.i.g. to 43 p.s.i.g. during construction of the Great Belt Tunnel in Denmark (1992-1996).
OSHA found no studies in which the DCI incidence reported for the 1992 French Decompression Tables were higher than the DCI incidence reported for the OSHA decompression tables.
OSHA's experience with the previous seven variances, which all incorporated nearly identical decompression plans and did not result in safety issues, also provides evidence that the alternative procedure as a whole is at least as effective for this type of tunneling project as compliance with OSHA's decompression tables. The experience of State Plans
The applicant developed, and proposed to implement, an equally effective alternative to 29 CFR 1926.803(g)(1)(iii), which requires the use of automatic controllers that continuously decrease pressure to achieve decompression in accordance with the tables specified by the standard. The applicant's alternative includes using the 1992 French Decompression Tables for guiding staged decompression to achieve lower occurrences of DCI, using a trained and competent attendant for implementing appropriate hyperbaric entry and exit procedures, and providing a competent hyperbaric supervisor and attending physician certified in hyperbaric medicine to oversee all hyperbaric operations.
In reaching this conclusion, OSHA again notes the experience of previous nearly identical tunneling variances, the experiences of States with OSHA-approved State Plans, and a review of the literature and other information noted earlier.
The applicant developed, and proposed to implement, an effective alternative to the use of the special decompression chamber required by 29 CFR 1926.803(g)(1)(xvii). The TBM's man-lock and working chamber appear to satisfy all of the conditions of the special decompression chamber, including that they provide sufficient space for the maximum crew of three CAWs to stand up and move around, and safely accommodate decompression times up to 360 minutes. Therefore, again noting OSHA's previous experience with nearly identical variances including the same alternative, OSHA preliminarily determined that the TBM's man-lock and working chamber function as effectively as the special decompression chamber required by the standard.
Based on a review of available evidence, the experience of State Plans that granted variances (Nevada, Oregon, and Washington)
Pursuant to Section 6(d) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 655(d)), and based on the record discussed above, the agency finds that when CBNA/Halmar complies with the conditions of the following order, the working conditions of the workers are at least as safe and healthful as if it complied with the working conditions specified by paragraphs (f)(1), (g)(1)(iii), and (g)(1)(xvii) of 29 CFR 1926.803. Therefore, CBNA/Halmar must: (1) comply with the conditions listed below under “Conditions Specified for the Permanent Variance” for the period between the date of this notice and completion of the Potomac River Tunnel Project; (2) comply fully with all other applicable provisions of 29 CFR part 1926; and (3) provide a copy of this
The conditions for the variance are set out in the Order at the end of this document. This section provides additional detail regarding the conditions in the Order.
The scope of the permanent variance limits coverage to the work situations specified. Clearly defining the scope of the permanent variance provides CBNA/Halmar, their employees, potential future applicants, other stakeholders, the public, and OSHA with necessary information regarding the work situations in which the permanent variance applies. To the extent that CBNA/Halmar exceeds the defined scope of this variance, it will be required to comply with OSHA's standards. This permanent variance applies only to the applicant, CBNA/Halmar, and only to the remainder of construction work on the Potomac River Tunnel Project.
Condition B defines abbreviations used in the permanent variance. OSHA believes that defining these abbreviations serves to clarify and standardize their usage, thereby enhancing the applicant's and its employees' understanding of the conditions specified by the permanent variance.
The condition defines a series of terms, mostly technical terms, used in the permanent variance to standardize and clarify their meaning. OSHA believes that defining these terms serves to enhance the applicant's and its employees' understanding of the conditions specified by the permanent variance.
This condition requires the applicant to develop and submit to OSHA a HOM specific to the Potomac River Tunnel Project at least six months before using the TBM for tunneling operations. The applicant must also submit, at least six months before using the TBM, proof that the TBM's hyperbaric chambers have been designed, fabricated, inspected, tested, marked, and stamped in accordance with the requirements of the most recent edition of ASME PVHO-1 (
The submission of the HOM enables OSHA to determine whether the safety and health instructions and measures it specifies are appropriate to the field conditions of the tunnel (including expected geological conditions), conform to the conditions of the variance, and adequately protect the safety and health of the CAWs. It also facilitates OSHA's ability to ensure that the applicant is complying with these instructions and measures. The requirement for proof of compliance with ASME PVHO-1 is intended to ensure that the equipment is structurally sound and capable of performing to protect the safety of the employees exposed to hyperbaric pressure. The applicant has submitted the HOM and proof of compliance with the most recent edition of ASME PVHO-1.
Additionally, the condition includes a series of related hazard prevention and control requirements and methods (
This condition requires the applicant to develop and implement an effective system of information sharing and communication. Effective information sharing and communication are intended to ensure that affected workers receive updated information regarding any safety-related hazards and incidents, and corrective actions taken, prior to the start of each shift. The condition also requires the applicant to ensure that reliable means of emergency communications are available and maintained for affected workers and support personnel during hyperbaric operations. Availability of such reliable means of communications enables affected workers and support personnel to respond quickly and effectively to hazardous conditions or emergencies that may develop during TBM operations.
This condition requires the applicant to develop and implement an effective qualification and training program for affected workers. The condition specifies the factors that an affected worker must know to perform safely during hyperbaric operations, including how to enter, work in, and exit from hyperbaric conditions under both normal and emergency conditions. Having well-trained and qualified workers performing hyperbaric intervention work is intended to ensure that they recognize, and respond appropriately to, hyperbaric safety and health hazards. These qualification and training requirements enable affected workers to cope effectively with emergencies, as well as the discomfort and physiological effects of hyperbaric exposure, thereby preventing worker injury, illness, and fatalities.
Paragraph (2)(e) of this condition requires the applicant to provide affected workers with information they can use to contact the appropriate healthcare professionals if the workers believe they are developing hyperbaric-related health effects. This requirement provides for early intervention and treatment of DCI and other health effects resulting from hyperbaric exposure,
Condition G requires the applicant to develop, implement, and operate a program of frequent and regular inspections of the TBM's hyperbaric equipment and support systems, and associated work areas. This condition helps to ensure the safe operation and physical integrity of the equipment and work areas necessary to conduct hyperbaric operations. The condition also enhances worker safety by reducing the risk of hyperbaric-related emergencies.
Paragraph (3) of this condition requires the applicant to document tests, inspections, corrective actions, and repairs involving the TBM, and maintain these documents at the jobsite for the duration of the job. This requirement provides the applicant with information needed to schedule tests and inspections to ensure the continued safe operation of the equipment and systems, and to determine that the actions taken to correct defects in hyperbaric equipment and systems were appropriate, prior to returning them to service.
This condition requires the applicant to consult with the designated medical advisor regarding special compression or decompression procedures appropriate for any unacclimated CAW and then implement the procedures recommended by the medical advisor. This proposed provision ensures that the applicant consults with the medical advisor, and involves the medical advisor in the evaluation, development, and implementation of compression or decompression protocols appropriate for any CAW requiring acclimation to the hyperbaric conditions encountered during TBM operations. Accordingly, CAWs requiring acclimation have an opportunity to acclimate prior to exposure to these hyperbaric conditions. OSHA believes this condition will prevent or reduce adverse reactions among CAWs to the effects of compression or decompression associated with the intervention work they perform in the TBM.
Under OSHA's recordkeeping requirements in 29 CFR part 1904 regarding Recording and Reporting Occupational Injuries and Illnesses, the employer must maintain a record of any recordable injury, illness, or fatality (as defined by 29 CFR part 1904) resulting from exposure of an employee to hyperbaric conditions, or any other work condition, by completing the OSHA Form 301 Incident Report and OSHA Form 300 Log of Work-Related Injuries and Illnesses. The applicant did not seek a variance from this standard and therefore CBNA/Halmar must comply fully with those requirements.
Examples of important information to include on the OSHA Form 301 Injury and Illness Incident Report (along with the corresponding questions on the form) are:
• the task performed;
• the composition of the gas mixture (
• an estimate of the CAW's workload;
• the maximum working pressure;
• temperature in the work and decompression environments;
• unusual occurrences, if any, during the task or decompression
• time of symptom onset;
• duration between decompression and onset of symptoms
• type and duration of symptoms;
• a medical summary of the illness or injury.
• duration of the hyperbaric intervention;
• possible contributing factors;
• the number of prior interventions completed by the injured or ill CAW; and the pressure to which the CAW was exposed during those interventions.
Condition I adds additional reporting responsibilities, beyond those already required by the OSHA standard. The applicant is required to maintain records of specific factors associated with each hyperbaric intervention. The information gathered and recorded under Condition I, in concert with the information provided under Condition J (using OSHA Form 301 Injury and Illness Incident Report to investigate and record hyperbaric recordable injuries as defined by 29 CFR 1904.4, 1904.7, and 1904.8-.12), enables the applicant and OSHA to assess the effectiveness of the permanent variance in preventing DCI and other hyperbaric-related effects.
Under the notifications condition, the applicant is required, within specified periods of time, to notify OSHA of: (1) any recordable injury, illness, in-patient hospitalization, amputation, loss of an eye, or fatality that occurs as a result of hyperbaric exposures during TBM operations; and in-patient hospitalization, amputation, loss of an eye or fatality that occurs during other operations must also be reported pursuant to 29 CFR 1910.39(a); (2) provide OSHA a copy of the hyperbaric exposures incident investigation report (using OSHA Form 301 Injury and Illness Incident Report) of these events within 24 hours of the incident; (3) include on OSHA Form 301 Injury and Illness Incident Report information on the hyperbaric conditions associated with the recordable injury or illness, the root-cause determination, and preventive and corrective actions identified and implemented; (4) provide the certification that affected workers were informed of the incident and the results of the incident investigation; (5) notify OSHA's Office of Technical Programs and Coordination Activities (OTPCA) and the Baltimore/Washington OSHA Area Office within 15 working days should the applicant need to revise the HOM to accommodate changes in its compressed-air operations that affect CBNA/Halmar's ability to comply with the conditions of the permanent variance; and (6) provide OTPCA and the Baltimore/Washington OSHA Area Office at the end of the project, with a report evaluating the effectiveness of the decompression tables.
It should be noted that the requirement for completing and submitting the hyperbaric exposure-related (recordable) incident investigation report (OSHA 301 Injury and Illness Incident Report) is more restrictive than the current recordkeeping requirement of completing OSHA Form 301 Injury and Illness Incident Report within 7 calendar days of the incident (1904.29(b)(3)). This modified, more stringent incident investigation and reporting requirement is restricted to intervention-related hyperbaric (recordable) incidents only. Providing rapid notification to OSHA is essential because time is a critical element in OSHA's ability to determine the continued effectiveness of the variance conditions in preventing hyperbaric incidents, and the applicant's identification and implementation of appropriate corrective and preventive actions.
Further, these notification requirements also enable the applicant, its employees, and OSHA to assess the effectiveness of the permanent variance in providing the requisite level of safety to the applicant's workers and based on this assessment, whether to revise or revoke the conditions of the permanent variance. Timely notification permits OSHA to take whatever action may be necessary and appropriate to prevent possible further injuries and illnesses. Providing notification to employees informs them of the precautions taken by the applicant to prevent similar incidents in the future.
Additionally, this condition requires the applicant to notify OSHA if it ceases to do business, has a new address or location for the main office, or transfers the operations covered by the permanent variance to a successor company. In addition, the condition specifies that the transfer of the permanent variance to a successor company must be approved by OSHA. These requirements allow OSHA to communicate effectively with the applicant regarding the status of the permanent variance and expedite the agency's administration and enforcement of the permanent variance. Stipulating that the applicant is required to have OSHA's approval to transfer a variance to a successor company provides assurance that the successor company has knowledge of, and will comply with, the conditions specified by the permanent variance, thereby ensuring the safety of workers involved in performing the operations covered by the permanent variance.
As of the effective date of this final order, OSHA is revoking the interim order granted to the employer on July 24, 2024 (90 FR 34902) and replacing it with a permanent variance order. Note that there are not any substantive changes in the conditions between the interim order and this final order.
OSHA issues this final order authorizing CBNA/Halmar to comply with the following conditions instead of complying with the requirements of 29 CFR 1926.803 (f)(1), (g)(1)(iii), and (g)(1)(xvii). These conditions are:
The permanent variance applies only when CBNA/Halmar stops the tunnel-boring work, pressurizes the working chamber, and the CAWs either enter the working chamber to perform an intervention (
The permanent variance applies only to work:
1. That occurs in conjunction with construction of the Potomac River Tunnel Project, a tunnel constructed using advanced shielded mechanical-excavation techniques and involving operation of a TBM;
2. In the TBM's forward section (the working chamber) and associated hyperbaric chambers used to pressurize and decompress employees entering and exiting the working chamber; and
3. Performed in compliance with all applicable provisions of 29 CFR part 1926 except for the requirements specified by 29 CFR 1926.803 (f)(1), (g)(1)(iii), and (g)(1)(xvii).
4. This order will remain in effect until one of the following conditions occurs: (1) completion of the Potomac River Tunnel Project; or (2) OSHA modifies or revokes this final order in accordance with 29 CFR 1905.13.
Abbreviations used throughout this permanent variance include the following:
The following definitions apply to this permanent variance, CBNA/Halmar's project-specific HOM, and all work carried out under the conditions of this permanent variance.
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5.
Health effects associated with hyperbaric intervention, but not considered symptoms of DCI, can include: barotrauma (direct damage to air-containing cavities in the body such as ears, sinuses, and lungs); nitrogen narcosis (reversible alteration in consciousness that may occur in hyperbaric environments and is caused by the anesthetic effect of certain gases at high pressure); and oxygen toxicity (a central nervous system condition resulting from the harmful effects of breathing molecular oxygen (O
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1. CBNA/Halmar must implement the project-specific HOM submitted to OSHA as part of the application (see OSHA-2025-0002-0003). The HOM provides the minimum requirements regarding expected safety and health hazards (including anticipated geological conditions) and hyperbaric exposures during the tunnel-construction project.
2. CBNA/Halmar must demonstrate that the TBM on the project is designed, fabricated, inspected, tested, marked, and stamped in accordance with the most recent requirements of ASME PVHO-1 (
3. CBNA/Halmar must implement the safety and health instructions included in the manufacturer's operations manuals for the TBM, and the safety and health instructions provided by the manufacturer for the operation of decompression equipment.
4. CBNA/Halmar must ensure that there are no exposures to pressures greater than 49.5. p.s.i.g.
5. CBNA/Halmar must ensure that air or oxygen is the only breathing gas in the working chamber.
6. CBNA/Halmar must follow the 1992 French Decompression Tables for air or oxygen decompression as specified in the HOM; specifically, the extracted portions of the 1992 French Decompression tables titled, “French Regulation Air Standard Tables.”
7. CBNA/Halmar must equip man-locks used by employees with an air or oxygen delivery system, as specified by the HOM for the project. CBNA/Halmar is prohibited from storing in the tunnel any oxygen or other compressed gases used in conjunction with hyperbaric work.
8. Workers performing hot work under hyperbaric conditions must use flame-retardant personal protective equipment and clothing.
9. In hyperbaric work areas, CBNA/Halmar must maintain an adequate fire-suppression system approved for hyperbaric work areas.
10. CBNA/Halmar must develop and implement one or more job hazard analysis (JHA) for work in the hyperbaric work areas, and review, periodically and as necessary (
11. CBNA/Halmar must develop a set of checklists to guide compressed-air work and ensure that employees follow the procedures required by the permanent variance (including all procedures required by the HOM approved by OSHA for the project, which this permanent variance incorporates by reference). The checklists must include all steps and equipment functions that the risk assessment indicates are essential to prevent injury or illness during compressed-air work.
12. CBNA/Halmar must ensure that the safety and health provisions of this project-specific HOM adequately protect the workers of all contractors and subcontractors involved in hyperbaric operations for the project to which the HOM applies.
1. Prior to beginning a shift, CBNA/Halmar must implement a system that informs workers exposed to hyperbaric conditions of any hazardous occurrences or conditions that might affect their safety, including hyperbaric incidents, gas releases, equipment failures, earth or rockslides, cave-ins, flooding, fires, or explosions.
2. CBNA/Halmar must provide a power-assisted means of communication among affected workers and support personnel in hyperbaric conditions where unassisted voice communication is inadequate.
(a) CBNA/Halmar must use an independent power supply for powered communication systems, and these systems have to operate such that use or disruption of any one phone or signal location will not disrupt the operation of the system from any other location.
(b) CBNA/Halmar must test communication systems at the start of each shift and as necessary thereafter to ensure proper operation.
CBNA/Halmar must:
1. Ensure that each affected worker receives effective training on how to safely enter, work in, exit from, and undertake emergency evacuation or rescue from, hyperbaric conditions, and document this training.
2. Provide effective instruction on hyperbaric conditions, before beginning
(a) The physics and physiology of hyperbaric work;
(b) Recognition of pressure-related injuries;
(c) Information on the causes and recognition of the signs and symptoms associated with decompression illness, and other hyperbaric intervention-related health effects (
(d) How to avoid discomfort during compression and decompression;
(e) Information the workers can use to contact the appropriate healthcare professionals should the workers have concerns that they may be experiencing adverse health effects from hyperbaric exposure; and
(f) Procedures and requirements applicable to the employee in the project-specific HOM.
3. Repeat the instruction specified in paragraph (G) of this condition periodically and as necessary (
4. When conducting training for its hyperbaric workers, make this training available to OSHA personnel and notify the OTPCA at OSHA's national office and OSHA's Baltimore/Washington Area Office before the training takes place.
1. CBNA/Halmar must initiate and maintain a program of frequent and regular inspections of the TBM's hyperbaric equipment and support systems (such as temperature control, illumination, ventilation, and fire-prevention and fire-suppression systems), and hyperbaric work areas, as required under 29 CFR 1926.20(b)(2), including:
(a) Developing a set of checklists to be used by a competent person in conducting weekly inspections of hyperbaric equipment and work areas; and
(b) Ensuring that a competent person conducts daily visual checks and weekly inspections of the TBM.
2. CBNA/Halmar must remove any equipment that is found to constitute a safety hazard until CBNA/Halmar corrects the hazardous condition and has the correction approved by a qualified person.
3. CBNA/Halmar must maintain records of all tests and inspections of the TBM, as well as associated corrective actions and repairs, at the job site for the duration of the tunneling project and for 90 days after the final project report is submitted to OSHA.
CBNA/Halmar must consult with its attending physician concerning the need for special compression or decompression exposures appropriate for CAWs not acclimated to hyperbaric exposure.
In addition to completing OSHA Form 301 Injury and Illness Incident Report and OSHA Form 300 Log of Work-Related Injuries and Illnesses, CBNA/Halmar must maintain records of:
1. The date, times (
2. The names of all supervisors and DMTs involved for each intervention.
3. The name of each individual worker exposed to hyperbaric pressure and the decompression protocols and results for each worker.
4. The total number of interventions and the amount of hyperbaric work time at each pressure.
5. The results of the post-intervention physical assessment of each CAW for signs and symptoms of decompression illness, barotrauma, nitrogen narcosis, oxygen toxicity or other health effects associated with work in compressed air for each hyperbaric intervention.
1. To assist OSHA in administering the conditions specified herein, CBNA/Halmar must:
(a) Notify the OTPCA and the Baltimore/Washington OSHA Area Office at
(b) Provide certification to OTPCA and the Baltimore/Washington OSHA Area Office within 15 working days of the incident that CBNA/Halmar informed affected workers of the incident and the results of the incident investigation (including the root-cause determination and preventive and corrective actions identified and implemented).
(c) Notify the OTPCA and the Baltimore/Washington OSHA Area Office within 15 working days and in writing, of any change in the compressed-air operations that affects CBNA/Halmar's ability to comply with the conditions specified herein.
(d) Upon completion of the Potomac River Tunnel Project, evaluate the effectiveness of the decompression tables used throughout the project, and provide a written report of this evaluation to the OTPCA and the Baltimore/Washington OSHA Area Office.
The evaluation report must contain summaries of: (1) The number, dates, durations, and pressures of the hyperbaric interventions completed; (2) decompression protocols implemented (including composition of gas mixtures (air and/or oxygen), and the results achieved; (3) the total number of interventions and the number of hyperbaric incidents (decompression illnesses and/or health effects associated with hyperbaric interventions as recorded on OSHA Form 301 Injuries and Illness Incident Report and OSHA Form 300 Log of Work-Related Injuries and Illnesses, and relevant medical diagnoses, and treating physicians' opinions); and (4) root causes of any hyperbaric incidents, and preventive and corrective actions identified and implemented.
(e) To assist OSHA in administering the conditions specified herein, inform the OTPCA and the Baltimore/Washington OSHA Area Office as soon as possible, but no later than seven (7) days, after it has knowledge that it will:
(i) Cease doing business;
(ii) Change the location and address of the main office for managing the tunneling operations specified herein; or
(iii) Transfer the operations specified herein to a successor company.
(f) Notify all affected employees of this permanent variance by the same means required to inform them of its application for a permanent variance.
2. This permanent variance cannot be transferred to a successor company without OSHA approval.
OSHA hereby grants a permanent variance to CBNA/Halmar Joint Venture for the completion of the Potomac River Tunnel Project in Washington, DC.
David Keeling, Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW, Washington, DC 20210, authorized the preparation of this notice. Accordingly, the agency is issuing this notice pursuant to 29 U.S.C. 655(d), Secretary of Labor's Order No. 7-2025 (90 FR 27878, June 30, 2025), and 29 CFR 1905.11.
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
In this notice, OSHA grants a permanent variance to McNally Tunneling Corp./ASI Marine (McNally/ASI Marine) related to work in compressed-air environments.
The permanent variance specified by this notice becomes effective on December 29, 2025 and shall remain in effect until the completion of the Southerly Tunnel and Consolidation project or until modified or revoked by OSHA.
Information regarding this notice is available from the following sources:
On July 16, 2024, OSHA received a variance application submitted by letter from McNally Tunneling Corp./ASI (McNally/ASI Marine or the applicant) submitted under Section 6(d) of the Occupational Safety and Health Act of 1970 (the Act), 29 U.S.C. 655, and 29 CFR 1905.11 (Variances and other relief under Section 6(d)) an application for a permanent variance from several provisions of the OSHA standard that regulates work in compressed air, 1926.803 of 1926 Subpart S—Underground Construction, Caissons, Cofferdams, and Compressed Air, and an interim order allowing it to proceed while OSHA considers the request for a permanent variance This notice addresses McNally/ASI Marine's application for a permanent variance and interim order for construction of Southerly Tunnel and Consolidation Project in Cleveland, Ohio, only and is not applicable to future McNally/ASI Marine tunneling projects.
Specifically, McNally/ASI Marine sought a variance from the provisions of the standard that: (1) prohibit compressed-air worker exposure to pressures exceeding 50 pounds per square inch (p.s.i.) except in an emergency (29 CFR 1926.803(e)(5));
OSHA reviewed McNally/ASI Marine's application for a permanent variance and interim order and determined that it was appropriately submitted in compliance with the applicable variance procedures in Section 6(d) of the Occupational Safety and Health Act of 1970 (OSH Act; 29 U.S.C. 655) and OSHA's regulations at 29 CFR 1905.11 (variances and other relief under section 6(d)).
OSHA reviewed the alternative procedures in McNally/ASI Marine's application and preliminarily determined that the applicant's proposed alternatives on the whole, subject to the conditions in the request and imposed by the interim order, provide measures that are as safe and healthful as those required by the cited OSHA standards. On July 24, 2025, OSHA published a
OSHA did not receive any comments or other information disputing the preliminary determination that the alternatives were at least as safe as OSHA's standard, nor any objections to OSHA granting a permanent variance. Accordingly, through this notice OSHA grants a permanent variance, subject to the conditions set out in this document.
The information that follows about McNally/ASI Marine, its methods, and its project comes from McNally/ASI Marine's variance application.
McNally/ASI Marine is a contractor for the Southerly Tunnel and Consolidation Project (the project), that works on complex tunnel projects using innovations in tunnel-excavation methods. The applicant's workers engage in the construction of tunnels using advanced shielded mechanical excavation techniques in conjunction with an earth pressure balanced micro-tunnel boring machine (TBM). Using shielded mechanical excavation techniques, in conjunction with precast concrete tunnel liners and backfill grout, TBMs provide methods to achieve the face pressures required to maintain a stabilized tunnel face through various geologies and isolate that pressure to the forward section (the working chamber) of the TBM.
McNally/ASI Marine asserts that it bores tunnels using a TBM at levels below the water table through soft soils
The TBM has twin man-locks located between the pressurized working chamber and the non-pressurized portion of the machine. Each man-lock has two compartments. This configuration allows workers to access the man-locks for compression and decompression, and medical personnel to access the man-locks if required in an emergency.
McNally/ASI Marine's Hyberbaric Operations Manual (HOM) for the Southerly Tunnel and Consolidation Project indicates that the maximum pressure to which it is likely to expose workers during project interventions for the Southerly Tunnel and Consolidation Project is 58 p.s.i. Therefore, to work effectively, McNally/ASI Marine must perform hyperbaric interventions in compressed air at pressures nearly 20% higher than the maximum pressure specified by the existing OSHA standard, 29 CFR 1926.803(e)(5), which states: “No employee shall be subjected to pressure exceeding 50 p.s.i. except in emergency” (see footnote 1).
McNally/ASI Marine employs specially trained personnel for the construction of the tunnel. To keep the machinery working effectively, McNally/ASI Marine asserts that these workers must periodically enter the excavation working chamber of the TBM to perform hyperbaric interventions during which workers would be exposed to air pressures up to 58 p.s.i., which exceeds the maximum pressure specified by the existing OSHA standard at 29 CFR 1926.803(e)(5). These interventions consist of conducting inspections or maintenance work on the cutter-head structure and cutting tools of the TBM, such as changing replaceable cutting tools and disposable wear bars, and, in rare cases, repairing structural damage to the cutter head. These interventions are the only time that workers are exposed to compressed air. Interventions in the working chamber (the pressurized portion of the TBM) take place only after halting tunnel excavation and preparing the machine and crew for an intervention.
During interventions, workers enter the working chamber through one of the twin man-locks that open into the staging chamber. To reach the forward part of the working chamber, workers pass through a door in a bulkhead that separates the staging chamber from the forward working chamber. The man-locks and the working chamber are designed to accommodate three people, which is the maximum crew size allowed under the permanent variance. When the required decompression times are greater than work times, the twin man-locks allow for crew rotation. During crew rotation, one crew can be compressing or decompressing while the second crew is working. Therefore, the working crew always has an unoccupied man-lock at its disposal.
McNally/ASI Marine asserts that these innovations in tunnel excavation have greatly reduced worker exposure to hazards of pressurized air work because they have eliminated the need to pressurize the entire tunnel for the project and would thereby reduce the number of workers exposed, as well as the total duration of exposure, to hyperbaric pressure during tunnel construction. These advances in technology substantially modified the methods used by the construction industry to excavate subaqueous tunnels compared to the caisson work regulated by the current OSHA compressed-air standard for construction at 29 CFR 1926.803.
In addition to the reduced exposures resulting from the innovations in tunnel-excavation methods, McNally/ASI Marine asserts that innovations in hyperbaric medicine and technology improve the safety of decompression from hyperbaric exposures. These procedures, however, would deviate from the decompression process that OSHA requires for construction in 29 CFR 1926.803(e)(5) and (f)(1) and the decompression tables in Appendix A of 29 CFR 1926, subpart S. Nevertheless, according to McNally/ASI Marine, their use of decompression protocols incorporating oxygen is more efficient, effective, and safer for tunnel workers than compliance with the decompression tables specified by the existing OSHA standard.
McNally/ASI Marine contends that the alternative safety measures included in the application provide McNally/ASI Maine's workers with a place of employment that is at least as safe under its proposed alternatives as they would be under OSHA's compressed-air standard for construction. McNally/ASI Marine also provided OSHA a project-specific HOM, (OSHA-2025-0004-0003) that requires specialized medical support and hyperbaric supervision to provide assistance to a team of specially trained man-lock attendants and hyperbaric or compressed-air workers to support their assertions of equivalency in worker protection.
OSHA included all of the above information in the
Pursuant to the requirements of OSHA's variance regulations (29 CFR 1905.11), the applicant has certified that it notified its workers
OSHA has previously approved several nearly identical variances involving the same types of tunneling equipment used for similar projects (tunnel construction variances). OSHA notes that it granted several subaqueous tunnel construction permanent variances from the same provisions of OSHA's compressed-air standard (29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii)) that are the subject of the present application: (1) Impregilo, Healy, Parsons, Joint Venture (IHP JV) for the Anacostia River Tunnel in Washington, DC (80 FR 50652, August 20, 2015); (2) Traylor JV for the Blue Plains Tunnel in Washington, DC (80 FR 16440, March 27, 2015); (3) Tully/OHL USA Joint Venture for the New York Economic Development Corporation's New York Siphon Tunnel project (79 FR 29809, May 23, 2014); (4) Salini-Impregilo/Healy Joint Venture for the Northeast Boundary Tunnel in
The applicant states that it may perform hyperbaric interventions at pressures up to 58 p.s.i.g. in the working chamber of the TBM; this pressure exceeds the pressure limit of 50 p.s.i. specified for nonemergency purposes by 29 CFR 1926.803(e)(5). The TBM has twin man-locks, with each man-lock having two compartments. This configuration allows workers to access the man-locks for compression and decompression, and medical personnel to access the man-locks if required in an emergency.
TBMs are capable of maintaining pressure at the tunnel face, and stabilizing existing geological conditions, through the controlled use of a mechanically driven cutter head, bulkheads within the shield, ground-treatment foam, and a screw conveyor that moves excavated material from the working chamber. As noted earlier, the forward-most portion of the TBM is the working chamber, and this chamber is the only pressurized segment of the TBM. Within the shield, the working chamber consists of two sections: the staging chamber and the forward working chamber. The staging chamber is the section of the working chamber between the man-lock door and the entry door to the forward working chamber. The forward working chamber is immediately behind the cutter head and tunnel face.
McNally/ASI Marine will pressurize the working chamber to the level required to maintain a stable tunnel face. Pressure in the staging chamber ranges from atmospheric (no increased pressure) to a maximum pressure equal to the pressure in the working chamber. The applicant asserts that they may have to perform interventions at pressures up to 58 p.s.i.
During interventions, workers enter the working chamber through one of the twin man-locks that open into the staging chamber. To reach the forward part of the working chamber, workers pass through a door in a bulkhead that separates the staging chamber from the forward working chamber. The maximum crew size allowed in the forward working chamber is three. At certain hyperbaric pressures (
Further, McNally/ASI Marine has developed a project-specific HOM (OSHA-2025-0004-0003) that describes in detail the hyperbaric procedures, the required medical examination used during the tunnel-construction project, the standard operating procedures and the emergency and contingency procedures. The procedures include using experienced and knowledgeable man-lock attendants who have the training and experience necessary to recognize and treat decompression illnesses and injuries. The attendants are under the direct supervision of the hyperbaric supervisor (a competent person experienced and trained in hyperbaric operations, procedures and safety) and attending physician. In addition, procedures include medical screening and review of prospective compressed-air workers (CAWs). The purpose of this screening procedure is to vet prospective CAWs with medical conditions (
OSHA comprehensively reviewed the project-specific HOM and determined that the safety and health instructions and measures it specifies are appropriate, conform with the conditions in the variance, and adequately protect the safety and health of the CAWs.
OSHA's compressed-air standard for construction requires decompression in accordance with the decompression tables in Appendix A of 29 CFR 1926, subpart S (29 CFR 1926.803(f)(1)). As an alternative to the OSHA decompression tables, the applicant proposes to use newer decompression schedules (the 1992 French Decompression Tables) that rely on staged decompression and supplement breathing air used during decompression with air or oxygen (as appropriate).
Depending on the maximum working pressure and exposure times, the 1992 French Decompression Tables provide for air decompression with or without oxygen. McNally/ASI Marine asserts that oxygen decompression has many
In addition, the project-specific HOM requires a physician, certified in hyperbaric medicine, to manage the medical condition of CAWs during hyperbaric exposures and decompression. A trained and experienced man-lock attendant also will be present during hyperbaric exposures and decompression. This man-lock attendant will operate the hyperbaric system to ensure compliance with the specified decompression table. A hyperbaric supervisor, trained in hyperbaric operations, procedures, and safety, directly oversees all hyperbaric interventions, and ensures that staff follow the procedures delineated in the HOM or by the attending physician.
McNally/ASI Marine seeks a permanent variance from the OSHA standard at 29 CFR 1926.803(g)(1)(iii), which requires automatic controls to regulate decompression. As noted above, the applicant is committed to conducting the staged decompression according to the 1992 French Decompression Tables under the direct control of the trained man-lock attendant and under the oversight of the hyperbaric supervisor.
Breathing air under hyperbaric conditions increases the amount of nitrogen gas dissolves in a CAW's tissues. The greater the hyperbaric pressure under these conditions and the more time spent under the increased pressure, the greater the amount of nitrogen gas dissolved in the tissues. When the pressure decreases during decompression, tissues release the dissolved nitrogen gas into the blood system, which then carries the nitrogen gas to the lungs for elimination through exhalation. Releasing hyperbaric pressure too rapidly during decompression can increase the size of the bubbles formed by nitrogen gas in the blood system, resulting in decompression illness (DCI), commonly referred to as “the bends.” This description of the etiology of DCI is consistent with current scientific theory and research on the issue (see footnote 16 in this notice discussing a 1985 NIOSH report on DCI).
The 1992 French Decompression Tables proposed for use by the applicant provide for stops during worker decompression (
The OSHA compressed-air standard for construction requires employers to use a special decompression chamber of sufficient size to accommodate all CAWs being decompressed at the end of the shift when total decompression time exceeds 75 minutes (see 29 CFR 1926.803(g)(1)(xvii)). Use of the special decompression chamber enables CAWs to move about and flex their joints to prevent neuromuscular problems during decompression.
Space limitations in the TBM do not allow for the installation and use of an additional special decompression lock or chamber. The applicant proposes that it be permitted to rely on the man-locks and staging chamber in lieu of adding a separate, special decompression chamber. Because only a few workers out of the entire crew are exposed to hyperbaric pressure, the man-locks (which, as noted earlier, connect directly to the working chamber) and the staging chamber are of sufficient size to accommodate all exposed workers during decompression. The applicant uses the existing man-locks, each of which adequately accommodates a three-member crew for this purpose when decompression lasts up to 75 minutes. When decompression exceeds 75 minutes, crews can open the door connecting the two compartments in each man-lock (during decompression stops) or exit the man-lock and move into the staging chamber where additional space is available. The applicant asserts that this alternative arrangement is as effective as a special decompression chamber in that it has sufficient space for all the CAWs at the end of a shift and enables the CAWs to move about and flex their joints to prevent neuromuscular problems.
After reviewing the proposed alternatives, OSHA has determined that the applicant's proposed alternatives on the whole, subject to the conditions in the variance request and imposed by this permanent variance, provide measures that are as safe and healthful as those required by the cited OSHA standards addressed in section IV of this notice.
In addition, OSHA has determined that each of the following alternatives are at least as effective as the specified OSHA requirements:
McNally/ASI Marine has developed, and proposed to implement, effective alternative measures to the prohibition of using compressed air under hyperbaric conditions exceeding 50 p.s.i. The alternative measures include use of engineering and administrative controls of the hazards associated with work performed in compressed-air conditions exceeding 50 p.s.i. while engaged in the construction of a subaqueous tunnel using advance shielded mechanical-excavation techniques in conjunction with the TBM. Prior to conducting interventions
The applicant has proposed to implement equally effective alternative measures to the requirement in 29 CFR 1926.803(f)(1) for compliance with OSHA's decompression tables. The HOM specifies the procedures and personnel qualifications for performing work safely during the compression and decompression phases of interventions. The HOM also specifies the decompression tables the applicant proposes to use (the 1992 French Decompression Tables). Depending on the maximum working pressure and exposure times during the interventions, the tables provide for decompression using air, pure oxygen, or a combination of air and oxygen. The decompression tables also include delays or stops for various time intervals at different pressure levels during the transition to atmospheric pressure (
Prior to granting the previous permanent variances to IHP JV, Traylor JV, Tully JV, Salini-Impregilo Joint Venture, McNally/Kiewit, Traylor-Shea, Traylor-Sundt and Ballard, OSHA conducted a review of the scientific literature and concluded that the alternative decompression method (
Some of the literature indicates that the alternative decompression method may be safer, concluding that decompression performed in accordance with these tables resulted in a lower occurrence of DCI than decompression conducted in accordance with the decompression tables specified by the standard. For example, H. L. Andersen studied the occurrence of DCI at maximum hyperbaric pressures ranging from 4 p.s.i.g. to 43 p.s.i.g. during construction of the Great Belt Tunnel in Denmark (1992-1996).
OSHA found no studies in which the DCI incidence reported for the 1992 French Decompression Tables were higher than the DCI incidence reported for the OSHA decompression tables.
OSHA's experience with the previous variances, which all incorporated nearly identical decompression plans and did not result in safety issues, also provides evidence that the alternative procedure as a whole is at least as effective for this type of tunneling project as compliance with OSHA's decompression tables. The experience of State Plans
The applicant developed, and proposed to implement, an equally effective alternative to 29 CFR 1926.803(g)(1)(iii), which requires the use of automatic controllers that continuously decrease pressure to achieve decompression in accordance with the tables specified by the standard. The applicant's alternative includes using the 1992 French Decompression Tables for guiding staged decompression to achieve lower occurrences of DCI, using a trained and competent attendant for implementing appropriate hyperbaric entry and exit procedures, and providing a competent hyperbaric supervisor and attending physician certified in hyperbaric medicine to oversee all hyperbaric operations.
In reaching this preliminary conclusion, OSHA again notes the experience of previous nearly identical tunneling variances, the experiences of State Plan States, and a review of the literature and other information noted earlier.
The applicant developed, and proposed to implement, an effective alternative to the use of the special decompression chamber required by 29 CFR 1926.803(g)(1)(xvii). The TBM's man-lock and working chamber appear to satisfy all of the conditions of the special decompression chamber, including that they provide sufficient space for the maximum crew of three CAWs to stand up and move around, and safely accommodate decompression times exceeding 75 minutes. Therefore, again noting OSHA's previous experience with nearly identical variances including the same alternative, OSHA preliminarily determined that the TBM's man-lock and working chamber function as effectively as the special decompression chamber required by the standard.
Based on a review of available evidence, the experience of State Plans that either granted variances (Nevada, Oregon, and Washington)
Pursuant to Section 6(d) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 655), and based on the record discussed above, the agency finds that when the McNally/ASI Marine complies with the conditions of the following order, the working conditions of the McNally/ASI Marine's workers are at least as safe and healthful as if it complied with the working conditions specified by paragraphs (e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii) of 29 CFR 1926.803. Therefore, McNally/ASI Marine must: (1) comply with the conditions listed below under “Conditions Specified for the Permanent Variance” for the period between the date of this notice and completion of the Southerly Tunnel and Consolidation Project; (2) comply fully with all other applicable provisions of 29 CFR part 1926; and (3) provide a copy of this
The conditions for the variance are set out in the Order at the end of this document. This section provides additional detail regarding the conditions in the Order.
The scope of the permanent variance limits coverage to the work situations specified under this condition. Clearly defining the scope of the permanent variance provides McNally/ASI Marine, their employees, potential future applicants, other stakeholders, the public and OSHA with necessary information regarding the work situations in which the permanent variance applies. To the extent that McNally/ASI Marine exceeds the defined scope of this variance, it will be required to comply with OSHA's standards. This permanent variance applies only to McNally/ASI Marine, and only to the remainder of construction work on the Southerly Tunnel and Consolidation Project.
Condition B defines a number of abbreviations used in the permanent variance. OSHA believes that defining these abbreviations serves to clarify and standardize their usage, thereby enhancing the applicant's and their employees' understanding of the conditions specified by the permanent variance.
Condition C defines a series of terms, mostly technical terms, used in the permanent variance to standardize and clarify their meaning. Defining these terms serves to enhance the applicant's and their employees' understanding of the conditions specified by the permanent variance.
This condition requires the applicant to develop and submit to OSHA an HOM specific to the Southerly Tunnel and Consolidation Project at least six months before using the TBM for tunneling operations. The applicant must also submit, at least six months before using the TBM, proof that the TBM's hyperbaric chambers have been designed, fabricated, inspected, tested marked, and stamped in accordance with the requirements of the most recent edition of ASME PVHO-1-
The submission of the HOM to OSHA enables OSHA to determine that the specific safety and health instructions and measures it specifies are appropriate to the field conditions of the tunnel (including expected geological conditions), conform to the conditions of the variance, and adequately protect the safety and health of the CAWs. It also facilitates OSHA's ability to ensure that the applicant is complying with these instructions and measures. The requirement for proof of compliance with ASME PVHO-1 is intended to ensure that the equipment is structurally sound and capable of performing to protect the safety of the employees exposed to hyperbaric pressure. The applicant has submitted the HOM and proof of compliance with the most recent edition of ASME PVHO-1.
Additionally, the condition includes a series of related hazard prevention and control requirements and methods (
Condition E requires the applicant to develop and implement an effective system of information sharing and communication. Effective information sharing and communication ensures that affected workers receive updated information regarding any safety-related hazards and incidents, and corrective actions taken, prior to the start of each shift. The condition also requires McNally/ASI Marine to ensure that reliable means of emergency communications are available and maintained for affected workers and support personnel during hyperbaric operations. Availability of such reliable means of communications enables affected workers and support personnel to respond quickly and effectively to hazardous conditions or emergencies that may develop during TBM operations.
This condition requires the applicant to develop and implement an effective qualification and training program for affected workers. The condition specifies the factors that an affected worker must know to perform safely during hyperbaric operations, including how to enter, work in, and exit from hyperbaric conditions under both normal and emergency conditions. Having well-trained and qualified workers performing hyperbaric intervention work ensures that they recognize, and respond appropriately to, hyperbaric safety and health hazards. These qualification and training requirements enable affected workers to cope effectively with emergencies, as well as the discomfort and physiological effects of hyperbaric exposure, thereby preventing worker injury, illness, and fatalities.
Paragraph (2)(e) of this condition also requires the applicant to provide affected workers with information they can use to contact the appropriate healthcare professionals if they believe they are developing hyperbaric-related health effects. This requirement provides for early intervention and treatment of DCI and other health effects resulting from hyperbaric exposure, thereby reducing the potential severity of these effects.
Condition G requires the applicant to develop, implement, and operate a program of frequent and regular inspections of the TBM's hyperbaric equipment and support systems, and associated work areas. This condition helps to ensure the safe operation and physical integrity of the equipment and work areas necessary to conduct hyperbaric operations. The condition also enhances worker safety by reducing the risk of hyperbaric-related emergencies.
Paragraph (3) of this condition requires the applicant to document tests, inspections, corrective actions, and repairs involving the TBM, and maintain these documents at the job site for the duration of the job. This requirement provides the applicant with information needed to schedule tests and inspections to ensure the continued safe operation of the equipment and systems, and to determine that the actions taken to correct defects in hyperbaric equipment and systems were appropriate, prior to returning them to service.
This condition requires the applicant to consult with a designated medical advisor regarding special compression or decompression procedures appropriate for any unacclimated CAW and then implement the procedures recommended by the medical advisor. This provision ensures that the applicant consults with the medical advisor, and involves the medical advisor in the evaluation, development, and implementation of compression or decompression protocols appropriate for any CAW requiring acclimation to the hyperbaric conditions encountered during TBM operations. Accordingly, CAWs requiring acclimation have an opportunity to acclimate prior to exposure to these hyperbaric conditions. OSHA believes this condition will prevent or reduce adverse reactions among CAWs to the effects of compression or decompression associated with the intervention work they perform in the TBM.
Under OSHA's existing recordkeeping requirements in 29 CFR part 1904 regarding Recording and Reporting Occupational Injuries and Illnesses, the employer must maintain a record of any recordable injury, illness, or fatality (as defined by 29 CFR part 1904) resulting from exposure of an employee to hyperbaric conditions by completing the OSHA Form 301 Incident Report and OSHA Form 300 Log of Work-Related Injuries and Illnesses. The applicant did not seek a variance from this standard and therefore McNally/ASI Marine must comply fully with those requirements.
Examples of important information to include on the OSHA Form 301 Injury and Illness Incident Report (along with the corresponding question on the form) are:
• the task performed;
• the composition of the gas mixture (
• an estimate of the CAW's workload;
• the maximum working pressure;
• temperature in the work and decompression environments;
• unusual occurrences, if any, during the task or decompression
• time of symptom onset;
• duration between decompression and onset of symptoms
• type and duration of symptoms;
• a medical summary of the illness or injury
• duration of the hyperbaric intervention;
• possible contributing factors;
• the number of prior interventions completed by the injured or ill CAW; and the pressure to which the CAW was exposed during those interventions.
Condition I adds additional reporting responsibilities, beyond those already required by the OSHA rule. McNally/ASI Marine is required to maintain records of specific factors associated with each hyperbaric intervention. The information gathered and recorded under this provision, in concert with the information provided under Condition J (using OSHA's Form 301 Injury and Illness Incident Report to investigate and record hyperbaric recordable injuries as defined by 29 CFR 1904.4, 1904.7, and 1904.8-.12), enables McNally/ASI Marine and OSHA to assess the effectiveness of the permanent variance in preventing DCI and other hyperbaric-related effects.
Under the notification condition, the applicant is required, within specified periods of time, to notify OSHA of: (1) any recordable injury, illness, in-patient hospitalization, amputation, loss of an eye, or fatality that occurs as a result of hyperbaric exposures during TBM operations; (2) provide OSHA a copy of the hyperbaric exposures incident investigation report (using OSHA Form 301 Injury and Illness Incident Report) of these events within 24 hours of the incident; (3) include on OSHA Form 301 Injury and Illness Incident Report information on the hyperbaric conditions associated with the recordable injury or illness, the root-cause determination, and preventive and corrective actions identified and implemented; (4) provide the certification that affected workers were informed of the incident and the results of the incident investigation; (5) notify OSHA's Office of Technical Programs and Coordination Activities (OTPCA) and the Cleveland Ohio OSHA Area Office within 15 working days should the applicant need to revise the HOM to accommodate changes in its compressed-air operations that affect McNally/ASI Marine's ability to comply with the conditions of the modified permanent variance; and (6) provide OTPCA and the Cleveland Ohio OSHA Area Office, at the end of the project, with a report evaluating the effectiveness of the decompression tables.
It should be noted that the requirement for completing and submitting the hyperbaric exposure-related (recordable) incident investigation report (OSHA 301 Injury and Illness Incident Report) is more restrictive than the current recordkeeping requirement of completing OSHA Form 301 Injury and Illness Incident Report within 7 calendar days of the incident (1904.29(b)(3)). This modified, more stringent incident investigation and reporting requirement is restricted to intervention-related hyperbaric (recordable) incidents only. Providing rapid notification to OSHA is essential because time is a critical element in OSHA's ability to determine the continued effectiveness of the variance conditions in preventing hyperbaric incidents, and the applicant's identification and implementation of appropriate corrective and preventive actions.
Further, these notification requirements also enable the applicant, their employees, and OSHA to assess the effectiveness of the modified permanent variance in providing the requisite level of safety to the applicant's workers and based on this assessment, whether to revise or revoke
Additionally, this condition requires the applicant to notify OSHA if it ceases to do business, has a new address or location for the main office, or transfers the operations covered by the modified permanent variance to a successor company. In addition, the condition specifies that the transfer of the modified permanent variance to a successor company must be approved by OSHA. These requirements allow OSHA to communicate effectively with the applicant regarding the status of the modified permanent variance and expedite the agency's administration and enforcement of the modified permanent variance. Stipulating that an applicant is required to have OSHA's approval to transfer a variance to a successor company provides assurance that the successor company has knowledge of, and will comply with, the conditions specified by modified permanent variance, thereby ensuring the safety of workers involved in performing the operations covered by the modified permanent variance.
As of the effective date of this final order, OSHA is revoking the interim order granted to the applicant on July 24, 2025 (90 FR 34887) and replacing it with a permanent variance order. Note that there are not any substantive changes in the conditions between the interim order and this final order.
OSHA issues this final order authorizing McNally/ASI Marine to comply with the following conditions instead of complying with the requirements of 29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii). These conditions are:
The permanent variance applies only when McNally/ASI Marine stops the tunnel-boring work, pressurizes the working chamber, and the CAWs either enter the working chamber to perform an intervention (
The permanent variance applies only to work:
1. That occurs in conjunction with construction of the Southerly Tunnel and Consolidation Project in Cleveland, Ohio, a subaqueous tunnel constructed using advanced shielded mechanical-excavation techniques and involving operation of a TBM;
2. In the TBM's forward section (the working chamber) and associated hyperbaric chambers used to pressurize and decompress employees entering and exiting the working chamber; and
3. Performed in compliance with all applicable provisions of 29 CFR 1926 except for the requirement specified by 29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii).
4. This order will remain in effect until one of the following conditions occurs: (1) completion of the Southerly Tunnel and Consolidation Project; or (2) OSHA modifies or revokes this final order in accordance with 29 CFR 1905.13.
Abbreviations used throughout this permanent variance include the following:
The following definitions apply to this permanent variance, McNally/ASI Marine's project-specific HOM, and all work carried out under the conditions of this permanent variance.
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Health effects associated with hyperbaric intervention, but not considered symptoms of DCI, can include: barotrauma (direct damage to air-containing cavities in the body such as ears, sinuses, and lungs); nitrogen narcosis (reversible alteration in consciousness that may occur in hyperbaric environments and caused by the anesthetic effect of certain gases at high pressure); and oxygen toxicity (a central nervous system condition resulting from the harmful effects of breathing molecular oxygen (O
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1. McNally/ASI Marine must implement the project-specific HOM submitted to OSHA as part of the variance application (see OSHA-2025-0004-0003). The HOM provides the minimum requirements regarding expected safety and health hazards (including anticipated geological conditions) and hyperbaric exposures during the tunnel-construction project.
2. McNally/ASI Marine must demonstrate that the TBM on the project is designed, fabricated, inspected, tested, marked and stamped in accordance with the requirements of the most recent edition of ASME PVHO-1 (
3. McNally/ASI Marine must implement the safety and health instructions included in the manufacturer's operations manuals for the TBM, and the safety and health instructions provided by the manufacturer for the operation of decompression equipment.
4. McNally/ASI Marine must ensure that there are no exposures to pressures greater than 58 p.s.i.g.
5. McNally/ASI Marine must ensure that air or oxygen is the only breathing gas in the working chamber.
6. McNally/ASI Marine must follow the 1992 French Decompression Tables for air or oxygen decompression as specified in the HOM, specifically the tables titled “French Regulation Air Standard Tables.”
7. McNally/ASI Marine must equip man-locks used by their employees with an oxygen-delivery system as specified by the HOM. McNally/ASI Marine is prohibited from storing in the tunnel any oxygen or other compressed gases used in conjunction with hyperbaric work.
8. Workers performing hot work under hyperbaric conditions must use flame-retardant personal protective equipment and clothing.
9. In hyperbaric work areas, McNally/ASI Marine must maintain an adequate fire-suppression system approved for hyperbaric work areas.
10. McNally/ASI Marine must develop and implement one or more job hazard analysis (JHA) for work in the hyperbaric work areas, and review, periodically and as necessary (
11. McNally/ASI Marine must develop a set of checklists to guide compressed-air work and ensure that employees follow the procedures required by this permanent variance (including all procedures required by the HOM, which this permanent variance incorporates by reference). The checklists must include all steps and equipment functions that the risk assessment indicates are essential to prevent injury or illness during compressed-air work.
12. McNally/ASI Marine must ensure that the safety and health provisions of this project-specific HOM adequately protect the workers of all contractors and subcontractors involved in hyperbaric operations for the project to which the HOM applies.
1. Prior to beginning a shift, McNally/ASI Marine must implement a system that informs workers exposed to hyperbaric conditions of any hazardous occurrences or conditions that might affect their safety, including hyperbaric incidents, gas releases, equipment failures, earth or rockslides, cave-ins, flooding, fires, or explosions.
2. McNally/ASI Marine must provide a power-assisted means of communication among affected workers and support personnel in hyperbaric conditions where unassisted voice communication is inadequate.
(a) McNally/ASI Marine must use an independent power supply for powered communication systems, and these systems must operate such that use or disruption of any one phone or signal location will not disrupt the operation of the system from any other location.
(b) McNally/ASI Marine must test communication systems at the start of each shift and as necessary thereafter to ensure proper operation.
McNally/ASI Marine must:
1. Ensure that each affected worker receives effective training on how to safely enter, work in, exit from, and undertake emergency evacuation or rescue from, hyperbaric conditions, and document this training.
2. Provide effective instruction, before beginning hyperbaric operations, to each worker who performs work, or controls the exposure of others, in hyperbaric conditions, and document this instruction. The instruction must include:
(a) The physics and physiology of hyperbaric work;
(b) Recognition of pressure-related injuries;
(c) Information on the causes and recognition of the signs and symptoms associated with decompression illness, and other hyperbaric intervention-related health effects (
(d) How to avoid discomfort during compression and decompression;
(e) Information the workers can use to contact the appropriate healthcare professionals should the workers have concerns that they may be experiencing adverse health effects from hyperbaric exposure; and
(f) Procedures and requirements applicable to the employee in the project-specific HOM.
3. Repeat the instruction specified in paragraph (2) of this condition periodically and as necessary (
4. When conducting training for their hyperbaric workers, make this training available to OSHA personnel and notify OTPCA at OSHA's national office and the Cleveland, Ohio OSHA Area Office before the training takes place.
1. McNally/ASI Marine must initiate and maintain a program of frequent and regular inspections of the TBM's hyperbaric equipment and support systems (such as temperature control, illumination, ventilation, and fire-prevention and fire-suppression systems), and hyperbaric work areas, as required under 29 CFR 1926.20(b)(2), including:
(a) Developing a set of checklists to be used by a competent person in conducting weekly inspections of hyperbaric equipment and work areas; and
(b) Ensuring that a competent person conducts daily visual checks, as well as weekly inspections of the TBM.
2. McNally/ASI Marine must remove from service any equipment that constitutes a safety hazard until it corrects the hazardous condition and has the correction approved by a qualified person.
3. McNally/ASI Marine must maintain records of all tests and inspections of the TBM, as well as associated corrective actions and repairs, at the job site for the duration of the tunneling project and for 90 days after the final project report is submitted to OSHA.
McNally/ASI Marine must consult with their attending physician concerning the need for special compression or decompression exposures appropriate for CAWs not acclimated to hyperbaric exposure.
In addition to completing OSHA Form 301 Injury and Illness Incident Report and OSHA Form 300 Log of Work-Related Injuries and Illnesses, McNally/ASI Marine must maintain records of:
1. The date, times (
2. The names of all supervisors and DMTs involved for each intervention.
3. The name of each individual worker exposed to hyperbaric pressure and the decompression protocols and results for each worker.
4. The total number of interventions and the amount of hyperbaric work time at each pressure.
5. The results of the post-intervention physical assessment of each CAW for signs and symptoms of decompression illness, barotrauma, nitrogen narcosis, oxygen toxicity or other health effects associated with work in compressed air for each hyperbaric intervention.
1. To assist OSHA in administering the conditions specified herein, McNally/ASI Marine must:
(a) Notify the OTPCA and the Cleveland Ohio OSHA Area Office of any recordable injury, illness, or fatality (by submitting the completed OSHA's Form 301 Injury and Illness Incident Report form)
(b) Provide certification within 15 days of the incident that the employer informed affected workers of the incident and the results of the incident investigation (including the root-cause determination and preventive and corrective actions identified and implemented).
(c) Notify the OTPCA and the Cleveland Ohio OSHA Area Office within 15 working days in writing of any change in the compressed-air operations that affects the employer's ability to comply with the conditions specified herein.
(d) Upon completion of the Southerly Tunnel and Consolidation Project, evaluate the effectiveness of the decompression tables used throughout the project, and provide a written report of this evaluation to the OTPCA and the Cleveland Ohio OSHA Area Office.
The evaluation report is to contain summaries of: (1) the number, dates, durations, and pressures of the hyperbaric interventions completed; (2) decompression protocols implemented (including composition of gas mixtures (air and/or oxygen), and the results achieved; (3) the total number of interventions and the number of hyperbaric incidents (decompression illnesses and/or health effects associated with hyperbaric interventions as recorded on OSHA's Form 301 Injury and Illness Incident Report and OSHA's Form 300 Log of Work-Related Injuries and Illnesses, and relevant medical diagnoses and treating physicians' opinions); and (4) root causes of any hyperbaric incidents, and preventive and corrective actions identified and implemented.
(e) To assist OSHA in administering the conditions specified herein, inform the OTPCA and the Cleveland Ohio OSHA Area Office as soon as possible, but no later than seven (7) days, after it has knowledge that it will:
i. Cease to do business;
ii. Change the location and address of the main office for managing the
tunneling operations specified herein; or
iii. Transfer the operations specified herein to a successor company.
(f) Notify all affected employees of this permanent variance by the same means required to inform them of the application for a variance.
(g) This permanent variance cannot be transferred to a successor company without OSHA approval.
OSHA hereby grants a permanent variance to McNally/ASI Marine to the provisions of 29 CFR 1926.803 outlined in this notice for the completion of the Southerly Tunnel and Consolidation Project in Cleveland, Ohio.
David Keeling, Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW, Washington, DC 20210, authorized the preparation of this notice. Accordingly, the agency is issuing this notice pursuant to 29 U.S.C. 655(d), Secretary of Labor's Order No. 7-2025 (90 FR 27878, June 30, 2025), and 29 CFR 1905.11.
The Members of the National Council on Disability (NCD) will hold a two-day in-person Council meeting on Thursday, January 22, 2026, 9:00 a.m.-3:25 p.m. Eastern Standard Time (EST) and Friday, January 23, 2026, 9:00-12:00 p.m.
This meeting will take place at the Rosen Shingle Creek Orlando, 9939 Universal Blvd., Orlando, Florida 32819. The event will also be streamed live via Zoom videoconference for those not able to attend in person. Details are available on NCD's event page at
es during and safter recent natural disasters, followed by a public comment period for Floridians to provide their experiences in person and by Zoom. After a lunch break, the meeting will resume with a panel discussion on barriers and innovations in accessible transportation in Florida followed by a Council discussion.
For the January 22 Council meeting, NCD will have two public comment periods of 25 minutes each. The first on youth institutionalized in nursing homes, and the second on experiences of disabled Floridians in recent natural disasters. Additional information on specifics of the topic is available on NCD's public comment page at
The Council will receive comments from in-person commenters first, and time allowing, from Florida residents who attend via Zoom for Government livestream. Comments are also always accepted via email.
To provide public comment during an NCD Council Meeting, NCD requires advanced registration by either signing up to present while registering for the meeting or sending an email to
Deadline for public comment registration is January 20, 2026, 8:00 p.m. EST. Please indicate if you are providing the comment in-person or only submitting via email. All individuals desiring to make public comments are encouraged to read NCD's guidelines for public comment in advance of the meeting at:
Comments during this meeting must be specific to youth in nursing homes and experiences in recent natural disasters.
To provide comments by email, please send personal experiences, and/or articles, data, and other research on the following topics to
This project seeks to uncover the drivers of the growing population of youth and younger adults with disabilities living in nursing homes and explore policy solutions that seek to keep youth and younger adults with disabilities in their communities where they can live, learn, and seek
1. What number of people with disabilities ages 21-40 are receiving LTSS in nursing homes? How large is the subset of those under age 21? What are the numbers by state? What are the demographics? What is the average length of stay? What placements were made out of state?
2. What data gaps exist on these questions and how could the Centers for Medicare and Medicaid Services (CMS) improve them? What reporting could HHS or HUD require of federal fund recipients to obtain data on people with disabilities age 40 and under in nursing homes?
3. How many people are estimated to be on waiting lists to transfer out of nursing facilities are ages 21-40 and under 21? What federal and state policies assist in gathering this information and what are the federal and state barriers?
4. Are there existing federal and state policies that have the effect of routing younger people with disabilities into nursing homes? (Please note that NCD is not seeking information on what keeps people with disabilities from leaving nursing facilities as we have well-established research on that topic).
5. What impact has Money Follows the Person had on nursing home diversion for younger people with disabilities? Please provide specific examples to the degree possible. What other programs are successful at diversion of younger people with disabilities from nursing homes?
6. What opportunities are available to younger people with disabilities who reside in nursing homes, for free appropriate public education (FAPE), recreation, community participation? What are the results of unavailability/restricted availability of the activities?
7. How could policymakers specifically address the needs of younger people with disabilities in LTSS and housing policy?
This project focuses on how state and local governments execute their emergency management plans; identifies promising practices; and provides resources and recommendations. Comments on any of the following questions are helpful.
1. What elements are lacking in state and local disaster preparation plans that would mitigate the adverse impact of disaster recovery and response on people with disabilities?
2. How do states encourage local emergency management operators to be inclusive of people with disabilities before, during and after disasters?
3. What is FEMA's role and responsibility to ensure people with disabilities needs are included in disaster preparation at the local level?
4. What states have an infrastructure that promotes the inclusivity of people with disabilities?
Nicholas Sabula, Public Affairs Specialist, NCD, 1331 F Street NW, Suite 850, Washington, DC 20004; 202-272-2004 (V), or
If you require additional accommodations, please notify Stacey Brown by sending an email to
Due to last-minute confirmations or cancellations, NCD may substitute items without advance public notice.
Nuclear Regulatory Commission.
Notice; receipt.
On September 24, 2025, Entergy Operations, Inc. (Entergy), on behalf of System Energy Resources Inc. (SERI), a subsidiary of Entergy Corporation, filed an application with the U.S. Nuclear Regulatory Commission (NRC), to renew the early site permit (ESP) ESP-002 for the Grand Gulf ESP Site for an additional 20 years beyond the period specified in the current license. The application also includes a request for an exemption from the requirement that the application for renewal must contain all information necessary to bring up to date the information and data contained in the previous application. The current ESP license for the Grand Gulf ESP Site expires on April 5, 2027.
The ESP renewal application was available as of October 2, 2025.
Please refer to Docket ID NRC-2025-1864 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
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Carolyn Lauron, telephone 301-415-2736; email:
Pursuant to Section 103 of the Atomic Energy Act, as amended, and part 52 of title 10 of the
In accordance with Subpart A of 10 CFR part 52, an applicant may seek an ESP separate from the filing of an application for a construction permit (CP) or combined license (COL) for a nuclear power facility. The ESP process allows resolution of issues relating to siting, and if an application for a CP or COL references an early site permit, the Commission shall treat as resolved those matters resolved in the proceeding on the application for issuance or renewal of the early site permit, except as provided for in paragraphs (b), (c), and (d) of 10 CFR 52.39.
The Grand Gulf ESP renewal application references and proposes to pilot the alternate ESP renewal method described in Appendix A to NEI 25-06, Rev 0. The NRC is reviewing NEI 25-06, Rev 0 and has not made a final determination on the acceptability of the proposed guidance. The application includes a request for an exemption from the requirement of 10 CFR 52.29 that the application for renewal must contain all information necessary to bring up to date the information and data contained in the previous application.
The NRC will publish subsequent
The following table indicates the ADAMS accession number where the renewal application and related documents are available to interested persons.
For the Nuclear Regulatory Commission.
Postal Service.
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), it filed with the Postal Regulatory Commission the following requests:
Documents are available at
On September 30, 2025, Cboe BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On November 3, 2025, pursuant to Section 19(b)(2) of the Act,
The Commission is publishing this order to solicit comments on the proposed rule change from interested persons and to institute proceedings under Section 19(b)(2)(B) of the Act
As described in more detail in the Notice,
The Funds may invest in over-the-counter swaps referencing the Index (“Russell Swap Agreements”), forward contracts, options contracts, futures contracts (“Russell Futures Contracts”), and other Financial Instruments
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change. In particular, the Commission seeks comment on whether the proposal to list and trade Shares of the Funds, which seek to provide daily investment results that correspond to either 400% or −400% of the daily performance of the Index, is designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest, or raises any new or novel concerns not previously contemplated by the Commission.
The Commission requests that interested persons provide written submissions of their data, views, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission
Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change should be approved or disapproved by January 20, 2026. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by February 2, 2026. The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, in addition to any other comments they may wish to submit about the proposed rule change. 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 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)
This Advance Notice consists of proposed rule changes related its cross-margining arrangement (the “Cross-Margining Arrangement”) with the Chicago Mercantile Exchange Inc. (“CME”, and collectively with FICC, the “Clearing Organizations” or “Parties”). The proposed rule changes consist of (i) a proposed Third Amended and Restated Cross-Margining Agreement (the “Third A&R Agreement”) between FICC and CME, which would replace the Second Amended and Restated Cross-Margining Agreement between the Parties (the “Second A&R Agreement”) in its entirety and would be incorporated into the FICC Government Securities Division (“GSD”) Rulebook (“GSD Rules” or “Rules”), and (ii) a number of related rule changes to the GSD Rules. Together, the proposed changes would extend the availability of the Cross-Margining Arrangement to positions cleared and carried for customers by a dually registered broker-dealer (“BD”) and futures commission merchant (“FCM”) that is a common member of FICC and CME (an “Eligible BD-FCM”).
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements.
FICC has not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on how to submit comments,
FICC reserves the right not to respond to any comments received.
Currently, the Cross-Margining Arrangement allows FICC and CME to recognize for margin purposes the offsetting risk of certain positions in futures on U.S. Treasury securities and other interest rate futures and Treasury market transactions (“Eligible Positions”) maintained by a member of both Clearing Organizations (a “Joint Clearing Member”) for itself or certain eligible affiliates (an “Eligible Affiliate”), or by affiliated members of CME and FICC (each, a “Cross-Margining Affiliate,” and each Joint Clearing Member and each Cross-Margining Affiliate, a “Cross-Margining Participant”), at the two Clearing Organizations in circumstances when the Clearing Organizations can look to all of those positions (and all associated margin) for performance of the Joint Clearing Member's or a pair of Cross-Margining Affiliates' obligations (the “Proprietary Cross-Margining Arrangement”). In particular, the Proprietary Cross-Margining Arrangement allows the Clearing Organizations to consider the net risk of a Joint Clearing Member's and its Eligible Affiliates' Eligible Positions or a pair of Cross-Margining Affiliates' Eligible Positions at FICC and CME when setting margin requirements for such positions.
FICC and CME have submitted to the Securities and Exchange Commission (the “Commission”) and the Commodity Futures Trading Commission (the “CFTC”) petitions for exemptive relief from certain provisions of the Commodity Exchange Act (“CEA”) and Exchange Act that would enable FICC and CME to make cross-margining available to customers (other than an Eligible Affiliate) of an Eligible BD-FCM (“Cross-Margining Customers”).
The Third A&R Agreement would effectuate the Customer Cross-Margining Arrangement via the following features:
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○ A Joint Clearing Member be an Eligible BD-FCM;
○ Each Cross-Margining Customer be a “futures customer” within the meaning of CFTC Regulation 1.3 and a “Sponsored Member” or “Eligible Firm Customer” as defined under the GSD Rules;
○ The Joint Clearing Member enter into a participant agreement with the Clearing Organizations; and
○ The Joint Clearing Member enter into an agreement with each Cross-Margining Customer containing certain terms, including that the Cross-Margining Customer agrees to subordinate its claims under the Securities Investor Protection Act of 1970 (“SIPA”) and subchapter III of Chapter 7 of the U.S. Bankruptcy Code in relation to its cross-margined positions and associated margin (the “Subordination Agreement”).
As discussed in greater detail below, these criteria and requirements for participation are designed to ensure that each participating Cross-Margining Customer and its Joint Clearing Member satisfy certain conditions set forth in the Proposed Orders.
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In addition to replacing the Second A&R Agreement with the Third A&R Agreement, FICC proposes the following changes to the GSD Rules to effectuate the Customer Cross-Margining Arrangement:
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The Third A&R Agreement would also include a number of clarifying and conforming edits, including to make clear that, with respect to both the Proprietary Cross-Margining Arrangement and Customer Cross-Margining Arrangement, FICC and CME would only manage a default of a Joint Clearing Member independently of one another if a joint management or buy-out by one of the Clearing Organizations were not legally permissible or possible or would result in substantially greater losses to each Clearing Organization.
In addition, the Second A&R Agreement is supplemented by a Service Level Agreement (“SLA”) between FICC and CME. FICC and CME will make edits to the SLA as necessary to ensure conformance with the proposed Third A&R Agreement.
As noted above, FICC proposes to enter into the Third A&R Agreement with CME. The proposed changes to the Second A&R Agreement contained in the Third A&R Agreement are designed to make cross-margining available to Cross-Margining Customers consistently with the framework set out in the Proposed Orders. FICC believes that such amendments would promote the maintenance of more balanced portfolios that present lower risk and facilitate the access of indirect participants to central clearing in accordance with Rule 17ad-22 under the Exchange Act.
The Third A&R Agreement would set forth the eligibility criteria for a Cross-Margining Participant to participate in the Customer Cross-Margining Arrangement. To facilitate compliance with the conditions and limitations of the Proposed Orders, Section 2(a) of the Third A&R Agreement would provide that, to become a Cross-Margining Participant for the Customer Cross-Margining Arrangement and establish a Customer Cross-Margining Account, a Clearing Member would need to be a Joint Clearing Member that is both a BD registered with the Commission and an FCM registered with the CFTC (
In addition, the Eligible BD-FCM would be required to enter into a participant agreement with FICC and CME in the form of Appendix C to the Third A&R Agreement (the “Customer Cross-Margining Clearing Member Agreement”), which is further described below.
As a conforming change, Sections 2(a) and (c) and the first sentence of Section 2(a) of the Third A&R Agreement would also be amended to provide that the pre-existing language therein applies to a Cross-Margining Participant for the Proprietary Cross-Margining Arrangement.
The Customer Cross-Margining Arrangement would only be available for the positions carried by an Eligible BD-FCM for “Customers.” To ensure compliance with the limitations under the Proposed Orders of the types of persons eligible to be Cross-Margining Customers, the Third A&R Agreement would define “Customer” as an indirect clearing participant that meets the definition of futures customer set out in CFTC Regulation 1.3 and is a “Sponsored Member” or “Executing Firm Customer” as defined under the GSD Rules.
Because a Cross-Margining Customer's participation in the Customer Cross-Margining Arrangement would be intermediated through the Eligible BD-FCM, Section 2(a) of the Third A&R Agreement would specify that the Clearing Organizations would have no obligation to deal directly with a Cross-Margining Customer, and that a Cross-Margining Customer would have no right to assert a claim against a Clearing Organization with respect to, nor would a Clearing Organization be liable to a Cross-Margining Customer for, any obligations of a Clearing Organization in connection with the Cross-Margining Customer's participation in the Customer Cross-Margining Arrangement pursuant to the Third A&R Agreement.
To effectuate the Customer Cross-Margining Arrangement, the Third A&R Agreement would include changes to enable an Eligible BD-FCM to establish a “Customer Cross-Margining Account” separate from any of its “Proprietary Cross-Margining Accounts.”
A Customer Cross-Margining Account would be defined as, with respect to FICC, an Indirect Participants Account (as defined in the GSD Rules) at FICC maintained for Cross-Margining Customers and identified in FICC's books and records as being subject to the Third A&R Agreement (which, as discussed below, would be the “Cross-Margining Customer Account” under the GSD Rules) and with respect to CME, an account carried on the books and records of CME for an Eligible BD-FCM, which contains only the positions, transactions, and margin of that Eligible BD-FCM's Cross-Margining Customers.
The Third A&R Agreement would also define “Cross-Margining Account” to mean either a Proprietary Cross-Margining Account or a Customer Cross-Margining Account.
The Third A&R Agreement would also specify how potential margin reductions would be calculated for Customer Positions carried in a Customer Cross-Margining Account. As with Proprietary Positions, each Clearing Organization would calculate the margin savings that would result from viewing the “Combined Portfolio” of CME-cleared Customer Positions and FICC-cleared Customer Positions as a single portfolio rather than as separate standalone portfolios. The Clearing Organizations would then compare the respective margin reduction percentages, and each would then reduce the margin required for the Combined Portfolio by the lower percentage (subject to a cap of 80%). For Customer Positions, this process would occur on a Cross-Margining Customer-by-Cross-Margining Customer basis. In other words, each Cross-Margining Customer's Customer Positions would form part of a separate Combined Portfolio. This customer-by-customer approach is consistent both with how futures contracts are required to be margined under the rules of the CFTC, as well as how FICC margins Segregated Indirect Participant positions.
To implement this margin reduction methodology, the Third A&R Agreement would redefine “Combined Portfolio” to mean, in the case of a Pair of Cross-Margining Accounts consisting of Proprietary Cross-Margining Accounts, all Eligible Positions in such Cross-Margining Accounts, and in the case of a Pair of Cross-Margining Accounts consisting of Customer Cross-Margining Accounts, all Eligible Positions of a single Customer in such Cross-Margining Accounts.
In addition to these changes, the Third A&R Agreement would include conforming changes in Section 4 to make clear that the margin calculations are performed on the Combined Portfolio and to provide that Sections 4(c) and 4(e), concerning the ability of the Clearing Organizations to require margin equal to or in excess of the Standalone Margin Requirement, would apply in relation to each Cross-Margining Account.
• Revising the definition of “Cross-Margin Requirement” to refer to the joint amount of Margin required by FICC and CME in connection with a Combined Portfolio as provided for in Section 4(a) of the Third A&R Agreement;
• Revising definitions of “Margin Reduction” and “Variation Margin” to clarify that these terms apply separately with respect to Proprietary Cross-Margining Accounts and Customer Cross-Margining Accounts;
• Further revising the “Variation Margin” definition to reflect that amounts may be owed by or to a Cross-Margining Customer in relation to positions recorded in a Customer Cross-Margining Account;
• Revising the definition of “Stand-Alone Margin Requirement” to provide that it is determined with respect to a particular Cross-Margining Account, and that with regard to a Stand-Alone Margin Requirement of FICC, such requirement is calculated without regard to any netting across positions of multiple Executing Firm Customers in the same Agent Clearing Member Omnibus Account (as such terms are defined in the GSD Rules);
• Revising the definition of “Margin” to include Cross-Margining Customer Margin securing the obligations of a Cross-Margining Customer and to contemplate a Joint Clearing Member having multiple Cross-Margining Accounts; and
• Removing the definition of “Cross-Margin Positions”, which would no longer be used.
Section 6(b) of the Third A&R Agreement would be revised to require FICC and CME to notify each other in the event a material problem arises with respect to a Cross-Margining Customer in the same manner as they are currently required to do with respect to Cross-Margining Participants.
The Third A&R Agreement would include certain adjustments to the default management provisions to describe how the Clearing Organizations would address a default of an Eligible BD-FCM that is carrying Customer Positions for Cross-Margining Customers, elaborate on the steps the Clearing Organizations may take in a joint liquidation, and clarify when the Clearing Organizations may manage the default of a Cross-Margining Participant independently of one another.
The Third A&R Agreement would subject Customer Positions to substantially the same default management process as Proprietary Positions. In particular, under Section 7(b) of the Third A&R Agreement, the Clearing Organizations would attempt in good faith to jointly transfer, liquidate, or close-out the Proprietary Positions or Customer Positions, which may include a joint liquidating auction so that hedged positions can be closed-out simultaneously or, in the case of a transfer of Customer Positions, so that the positions of each Cross-Margining Customer in a Combined Portfolio can, if feasible, be transferred to the same clearing firm. Section 7(b) would further provide that if one Clearing Organization determines that such joint action is not feasible or advisable for any Liquidation Portfolio, then either Clearing Organization could buy-out the Proprietary Positions or Customer
The Third A&R Agreement would also include provisions designed to ensure that Customer Positions and associated margin are not used by either Clearing Organization to satisfy obligations arising from Proprietary Positions. The principal mechanism to achieve this would be a new concept of a “Liquidation Portfolio,” which would be defined as, with respect to a Defaulting Member, all such Defaulting Member's Proprietary Cross-Margining Account(s) or all such Defaulting Member's Customer Cross-Margining Account(s).
In addition, the Third A&R Agreement would revise Sections 7(b) through (g) to clarify that the provisions thereof would apply separately to each Liquidation Portfolio. These changes include replacing certain references to “Cross-Margining Account” with “Liquidation Portfolio,”
By virtue of these changes, upon a default of a Joint Clearing Member, the Proprietary Positions and associated margin of the Joint Clearing Member would be closed-out and netted into a single Net Gain or Net Loss, and the Customer Positions and associated margin would be separately close-out and netted into a separate Net Gain or Net Loss. As a result of these separate calculations, Customer Positions and associated margin could not be used to satisfy obligations arising under any Proprietary Positions. Similarly, variation margin gains in respect of Customer Positions would not be available to address losses on Proprietary Positions. However, the definition of “Other VM Gains” would be modified to make clear that, if there were Cross-Margin VM Gains in relation to Proprietary Positions at a time when the Clearing Organization with those Cross-Margin VM Gains also had losses on account of Customer Positions, the VM Gains may first be applied to satisfy the losses on the Customer Positions before being remitted to the other Clearing Organization.
Although the Clearing Organizations would generally close-out and net the Liquidation Portfolios of a Defaulting Member separately, Section 7(a) of the Third A&R Agreement would provide that the decision as to whether to commence the liquidation process with respect to a Joint Clearing Member would be made based on the Joint Clearing Member itself, rather than a particular Liquidation Portfolio. In accordance with this framework, Section 7(a) of the Third A&R Agreement would provide that if one Clearing Organization decides not to take default action against a Defaulting Member following a Default Event (the “Non-Liquidating CO”), the Non-Liquidating CO shall immediately require the Defaulting Member to pay the Non-Liquidating CO in immediately available funds the sum of (x) its Margin Reduction at the other Clearing Organization for all Combined Portfolios of the Defaulting Member, and (y) its Margin Reduction at the Non-Liquidating CO for all Combined Portfolios of the Defaulting Member, within one hour of demand.
The Third A&R Agreement would also include a number of conforming changes in light of the addition of the Customer Cross-Margining Arrangement. These would include new recitals which describe the purpose of the Third A&R Agreement as to establish the Customer Cross-Margining Arrangement, introduce defined terms for the “Proprietary Cross-Margining Arrangement” and “Customer Cross-Margining Arrangement”, and define the prior versions of the agreement as the “Original Agreement”, the “First A&R Agreement”, and the “Second A&R Agreement.” They would also include non-substantive revisions and movements of defined terms as shown in Exhibit 5 to conform to the addition of the Customer Cross-Margining Arrangement and the provisions described above.
The Third A&R Agreement would also revise Section 3(b), which sets out certain requirements applicable to positions of Eligible Affiliates, to provide that it does not apply to Proprietary Positions of a Joint Clearing Member or to Customer Positions.
In addition, the Third A&R Agreement would revise Section 7(i) to clarify that the requirement for a Defaulting Member to reimburse a Clearing Organization in the event that the Clearing Organization is obligated to make a guaranty payment to the other Clearing Organization in respect of an obligation of such Defaulting Member applies in respect of the obligations of any Cross-Margining Customer.
The Third A&R Agreement would also include a number of clarifying edits not specifically related to the Customer Cross-Margining Arrangement. Specifically, Section 2(f) of the Third A&R Agreement would specify that FICC or CME may terminate the participation of a particular Cross-Margining Participant with respect to some or all Cross-Margining Accounts of the Cross-Margining Participant upon two business days' prior written notice to the other Clearing Organization, provided that no such termination would be effective with respect to any reimbursement obligation or guaranty with respect to such Cross-Margining Participant that was incurred prior to such termination, or with respect to Section 7 of the Third A&R Agreement until the Stand-Alone Margin Requirement with respect to each Cross-Margining Account subject to such termination has been fully satisfied.
The Third A&R Agreement would also include a new Section 5 to make clear that, as is currently the case, the collateral acceptable to satisfy the Cross-Margin Requirement must meet the respective eligibility requirements of the Clearing Organization to which the collateral is posted.
In addition, the titles of the Proprietary Cross-Margining Agreements in Appendix A and Appendix B of the Third A&R Agreement would be amended to specify that they are for use in connection with the Proprietary Cross-Margining Arrangement.
As described above, an Eligible BD-FCM would be required to enter into the Customer Cross-Margining Clearing Member Agreement in order to participate in the Customer Cross-Margining Agreement. The Customer Cross-Margining Clearing Member Agreement would be set forth in Appendix C to the Third A&R Agreement.
The Customer Cross-Margining Clearing Member Agreement would be modeled on the Proprietary Clearing Member Agreement in Appendix A of the Second A&R Agreement (the “Existing Joint Clearing Member Proprietary Clearing Member Agreement”), with changes designed to facilitate compliance with the conditions in the Proposed Orders and to clarify the rights and obligations of the Clearing Organizations, the Eligible BD-FCM, and the Cross-Margining Customers.
The first three paragraphs of the Customer Cross-Margining Clearing Member Agreement would be substantially identical to those of the Existing Joint Clearing Member Proprietary Clearing Member Agreement, except that the first paragraph would note that the Eligible BD-FCM is electing to become a Cross-Margining Participant for purposes of the Customer Cross-Margining Arrangement, rather than the Cross-Margining Arrangement generally, and the third paragraph (concerning the Eligible BD-FCM's payment obligations) would reference the payment obligations arising in respect of Customer Cross-Margining Accounts.
The Customer Cross-Margining Clearing Member Agreement would provide that the Eligible BD-FCM makes application to the Clearing Organizations to establish a Customer Cross-Margining Account at CME and one or more Customer Cross-Margining Accounts at FICC in the name of the Eligible BD-FCM, and clarify that each such account would be in addition to any Proprietary Cross-Margining Account of the Eligible BD-FCM established pursuant to the Third A&R Agreement. The Customer Cross-Margining Clearing Member Agreement would provide that each Customer Cross-Margining Account shall be limited to transactions and positions carried by the Eligible BD-FCM for Cross-Margining Customers who have signed a Customer Agreement. The Eligible BD-FCM would be required to agree that it shall not commence clearing transactions through or carrying positions in a Customer Cross-Margining Account for any Cross-Margining Customer until such Cross-Margining Customer has executed a Customer Agreement.
The Eligible BD-FCM would be required under the Customer Cross-Margining Clearing Member Agreement to indemnify and hold harmless the Clearing Organizations, their respective directors, officers and employees and each person, if any, who controls either of the Clearing Organizations against any claims, losses, liabilities and expenses, including, without limitation, reasonable legal fees and expenses and amounts paid or payable in settlement of any action, proceeding or investigation arising from any claim by any party resulting from the carrying of positions in a Customer Cross-Margining Account that belong to any person other than a Cross-Margining Customer for whom a Customer Agreement is in effect.
The Customer Cross-Margining Clearing Member Agreement would provide that the Eligible BD-FCM, as agent for each of its Cross-Margining Customers, (i) unconditionally promises immediate payment of any payment or reimbursement obligations to a Clearing Organization arising under the Third A&R Agreement or the GSD Rules or rules of CME in respect of a Cross-Margining Customer's positions in a Customer Cross-Margining Account, and (ii) agrees that each Cross-Margining Customer is bound by the GSD Rules and the rules of CME as applicable to them and by the provisions of the Customer Cross-Margining Clearing Member Agreement and the Third A&R Agreement. The Eligible BD-FCM would also be required to represent and warrant to the Clearing Organizations that it has full power and authority to bind each of its Cross-Margining Customers to the terms in the foregoing sentence.
The Customer Cross-Margining Clearing Member Agreement would also provide for the Eligible BD-FCM to
The Eligible BD-FCM would also provide for the Eligible BD-FCM to agree that (i) the rights of each Clearing Organization set forth in the preceding paragraph are in addition to any other rights arising out of the NYUCC or other statute, common law, or governmental regulation, or under their respective rules, (ii) the Eligible BD-FCM will execute, deliver, file and record any financing statement, specific assignment or other document and take any other action necessary or desirable and reasonably requested by FICC or CME to create, preserve, perfect or validate the security interest or lien granted in this paragraph, to enable such Clearing Organization to exercise or enforce its rights, (iii) the Eligible BD-FCM will promptly give notice to the Clearing Organizations of, and defend against, any suit, action, proceeding or lien that involves or could adversely affect the security interest and lien granted by the Eligible BD-FCM, and (iv) the Eligible BD-FCM authorizes FICC to comply with CME's entitlement orders with respect to any Cross-Margining Customer Margin pursuant to the Third A&R Agreement without further consent of the Eligible BD-FCM or Cross-Margining Customer for whom such Cross-Margining Customer Margin is held. Clauses (i) through (iii) broadly align with the Existing Joint Clearing Member Proprietary Clearing Member Agreement, while clause (iv) would be designed to facilitate the perfection of CME's security interest in the Cross-Margining Customer Margin and help ensure that Cross-Margining Customer Margin is treated as “customer property” under Part 190 of the CFTC's regulations, as described in the Petitions.
The Customer Cross-Margining Clearing Member Agreement would contain the same provision regarding the disclosure of Clearing Data as in the Existing Joint Clearing Member Proprietary Clearing Member Agreement. Consistently with the Existing Joint Clearing Member Proprietary Clearing Member Agreement, it would also provide that neither FICC nor CME guarantees to the Eligible BD-FCM that the calculation of the margin reduction for a Combined Portfolio pursuant to the Third A&R Agreement will yield any, or the highest possible, margin reduction for the Combined Portfolio. The Customer Cross-Margining Clearing Member Agreement would also, as in the Existing Joint Clearing Member Proprietary Clearing Member Agreement, provide that, without limiting any provision of the GSD Rules, the rules of CME or any other agreement between the Eligible BD-FCM and FICC or CME, any transfer by the Eligible BD-FCM or any Cross-Margining Customer of any rights it may have in the Net Gain (or any component thereof) shall be null and void and, in any event, subject to the prior payment in full of all payment and reimbursement obligations under the Third A&R Agreement. The Customer Cross-Margining Clearing Member Agreement would contain the same representations as the Existing Joint Clearing Member Proprietary Clearing Member Agreement, except those concerning the proprietary nature of the positions and Eligible Affiliates.
The Customer Cross-Margining Clearing Member Agreement would specify that the Eligible BD-FCM may terminate the Customer Cross-Margining Clearing Member Agreement upon two business day's written notice to FICC and CME, and that such termination shall be effective upon written acknowledgement by both FICC and CME provided that (i) all positions in the Customer Cross-Margining Accounts have been closed-out or transferred to other accounts in accordance with the GSD Rules or the rules of CME, and (ii) all Stand-alone Margin Requirement in respect of any such transferred positions and all obligations of the Eligible BD-FCM to the Clearing Organizations in respect of the Customer Cross-Margining Accounts have been fully satisfied.
The Customer Cross-Margining Clearing Member Agreement would also specify that either Clearing Organization may terminate the Eligible BD-FCM's participation with respect to any Customer Cross-Margining Account (defined as an “Affected Customer Cross-Margining Account”) of the Eligible BD-FCM at any time upon written notice to the other Clearing Organization pursuant to the Third A&R Agreement and to the Eligible BD-FCM. In connection with such termination, the Clearing Organizations would be permitted to require the Eligible BD-FCM to close-out or transfer all positions in the Affected Customer Cross-Margining Accounts in accordance with the GSD Rules or the rules of CME, and the Customer Cross-Margining Clearing Member Agreement would thereupon terminate with respect to Affected Customer Cross-Margining Accounts, provided that the Stand-alone Margin Requirement in respect of the transferred positions and all obligations of the Eligible BD-FCM to the Clearing Organizations in respect of the Affected Customer Cross-Margining Accounts have been fully satisfied.
The Customer Cross-Margining Clearing Member Agreement would also include the same governing law, choice-of-jurisdiction, and execution in counterparts provisions as the Existing Joint Clearing Member Proprietary Clearing Member Agreement. The Customer Cross-Margining Clearing Member Agreement would also provide that it would become effective upon the later of execution of the Customer Cross-Margining Clearing Member Agreement, or on the receipt of all necessary regulatory approvals from the Commission and the CFTC.
The Customer Agreement would include the terms of the Subordination Agreement and acknowledgements corresponding to the disclosures required by the Proposed Orders.
• it agrees to the terms of the Subordination Agreement, under which the Cross-Margining Customer agrees that all of its Customer Positions and Customer Property (including any margin at FICC) (i) will not receive customer treatment under the Exchange Act or SIPA or be treated as “customer property” as defined in 11 U.S.C. 741 in a liquidation of Clearing Member, and (ii) will be subject to any applicable protections under Subchapter IV of Chapter 7 of the U.S. Bankruptcy Code and rules and regulations thereunder including Part 190 of the CFTC's Regulations (“Part 190”), and that the Cross-Margining Customer's claims to “customer property” as defined in SIPA or 11 U.S.C. 741 against the Eligible BD-FCM with respect to its Customer Positions and Customer Property (including any margin held at FICC) will
• all money, securities and property deposited with the Eligible BD-FCM by the Cross-Margining Customer to margin, guarantee or secure Customer Positions (the “Customer Property”) will be held in a “futures account” as defined in CFTC Regulation 1.3 and subject to CEA Section 4d(a) and (b);
• its Customer Positions and associated margin may be commingled with the positions and property of other customers of the Eligible BD-FCM and may be used by the Eligible BD-FCM to purchase, margin, secure, settle, or otherwise carry positions on behalf of the Cross-Margining Customer or other futures customers of the Eligible BD-FCM;
• property held in connection with Customer Positions will be treated in a manner consistent with the CFTC Order and that such property held on the Cross-Margining Customer's behalf by the Eligible BD-FCM will be customer property received by an FCM to be accounted for, treated and dealt with by such FCM in a manner consistent with Section 4d of the CEA;
• in the event a Clearing Organization suspends or ceases to act for Clearing Member, it shall be within the sole discretion of the Clearing Organizations to determine whether to transfer, liquidate, or settle Customer Positions in the relevant Customer Cross-Margining Account;
• its participation in the Customer Cross-Margining Arrangement is subject to the terms of (i) the Third A&R Agreement, (ii) the Customer Cross-Margining Clearing Member Agreement, and (iii) the GSD Rules and the rules of CME;
• if CME determines at any time that any Eligible Positions of the Cross-Margining Customer cleared through the Customer Cross-Margining Account at CME are non-risk reducing, CME may either restrict the Cross-Margining Customer from adding positions or require the Cross-Margining Customer to move or liquidate Eligible Positions in the Customer Cross-Margining Account at CME;
The Customer Agreement would also require the Cross-Margining Customer to pledge, as security for the Cross-Margining Customer's present and future payment and delivery obligations in respect of its Customer Positions (including, without limitation, any obligation of the Cross-Margining Customer to reimburse the Eligible BD-FCM as a result of the Eligible BD-FCM's performance of such obligations), and grant to the Eligible BD-FCM a continuing security interest in, lien on and right of set-off against its right, entitlement, and interest in all of positions in each Customer Cross-Margining Account, all margin posted by the Cross-Margining Customer in connection with such positions, and the proceeds in respect thereof.
FICC is proposing to make a number of changes to the GSD Rules to effectuate the Customer Cross-Margining Arrangement.
First, FICC proposes to create a new position Account type, the “Cross-Margining Customer Account,” in which Customer Positions would be recorded. The Cross-Margining Customer Account would constitute an “Indirect Participants Account.” A Netting Member that is an Eligible BD-FCM and approved participant in the Customer Cross-Margining Arrangement would be permitted to designate an Indirect Participants Account (other than a Segregated Indirect Participants Account) as a Cross-Margining Customer Account.
Second, FICC proposes to adopt rule changes to set forth how FICC would calculate, collect, and hold margin for positions recorded in a Cross-Margining Customer Account. As noted above, FICC proposes to collect and hold Cross-Margining Customer Margin pursuant to substantially similar provisions as apply to Segregated Customer Margin, with certain modifications to satisfy the requirements of the Proposed Orders and align with the treatment of futures margin. Specifically:
• Consistent with Segregated Customer Margin and in accordance with the Proposed Orders, FICC would credit all Cross-Margining Customer Margin deposited by a Netting Member to a “securities account”, as defined in the NYUCC,
• In accordance with the Proposed Orders, FICC would hold Cross-Margining Customer Margin in (i) an account of FICC at a bank insured by the Federal Deposit Insurance Corporation
• The same requirements applicable to Segregated Customer Margin with respect to the form and composition of eligible collateral, the minimum amounts of cash and Eligible Clearing Fund Treasury Securities, substitution and withdrawal, and treatment of excess margin would be applicable to Cross-Margining Customer Margin, except that (i) a Netting Member's rights or FICC's obligation with respect to any excess Cross-Margining Customer Margin would be subject to the Third A&R Agreement and the Customer Cross-Margining Clearing Member Agreement, and (ii) FICC would be permitted to retain the excess Cross-Margining Customer Margin deposited by a Netting Member with respect to a Cross-Margining Customer when the Netting Member has any outstanding payment or margin obligation arising from any Customer Positions, including those of another Cross-Margining Customer.
With regard to calculation, FICC proposes that, as with Segregated Customer Margin and in accordance with the requirements of the Proposed Orders, FICC would calculate the margin requirement in respect of each Cross-Margining Customer Account (the “Cross-Margining Customer Margin Requirement”) on a gross (
Third, FICC proposes to provide that Cross-Margining Customer Margin would be pledged to FICC to secure all obligations of the Netting Member and its Cross-Margining Customers arising under Customer Positions.
Fourth, FICC proposes to remove the existing Section 10(e) of Rule 3A, which currently prohibits Sponsored Members from participating in the Cross-Margining Arrangement.
Fifth, FICC proposes to make conforming changes to Rule 43, which sets out the terms related to Cross-Margining Arrangements, so that the Rule encompasses the Customer Cross-Margining Arrangement. In particular, FICC proposes to specify in Rule 43 that a Netting Member that is an Eligible BD-FCM may become a Cross-Margining Participant in connection with the Customer Cross-Margining Arrangement with the consent of FICC and CME. An Eligible BD-FCM would become such a Cross-Margining Participant and be permitted to establish a Cross-Margining Customer Account upon acceptance by FICC and CME of an executed Customer Cross-Margining Clearing Member Agreement. FICC further proposes to make clear that if FICC becomes obligated to make a payment to CME pursuant to the cross-guaranty under the Third A&R Agreement in relation to the obligations of a Cross-Margining Customer, both the Cross-Margining Customer and the relevant Eligible BD-FCM would be responsible for the reimbursement obligation that is owed to FICC as a result. If FICC receives a payment from CME pursuant to the Third A&R Agreement in connection with the Customer Cross-Margining Arrangement, FICC would not be permitted to apply such payment to any obligation other than the obligations of Cross-Margining Customers (whether or not arising in connection with any Eligible Positions).
Lastly, FICC proposes to remove provisions relating to “Market Professional” and “Market Professional Agreement for Cross-Margining” from the GSD Rules. Those provisions were adopted in connection with a “market professional” cross-margining program between FICC and New York Portfolio Clearing, LLC.
To effectuate the proposed changes described above, FICC proposes to make the following amendments to its Rules.
The term “Cross-Margining Customer” would mean a Sponsored Member or Executing Firm Customer whose Transactions are recorded in a Cross-Margining Customer Account.
The term “Cross-Margining Customer Account” would mean an Indirect Participants Account maintained by FICC for a Sponsoring Member or an Agent Clearing Member that has been designated pursuant to Rule 2B for purposes of recording Transactions of Cross-Margining Customers.
The term “Cross-Margining Customer Margin Custody Account” would mean a securities account within the meaning of the NYUCC maintained by FICC, in its capacity as securities intermediary as such term is used in the NYUCC, for an Agent Clearing Member or Sponsoring Member for the benefit of such Member's Cross-Margining Customers.
The term “Cross-Margining Customer Margin” would mean all securities and funds deposited by a Sponsoring Member or an Agent Clearing Member with FICC to satisfy its Cross-Margining Customer Margin Requirement.
The term “Cross-Margining Customer Margin Requirement” would mean the amount of cash or Eligible Clearing Fund Securities that an Agent Clearing Member or Sponsoring Member is required to deposit with FICC to support the obligations arising from Transactions recorded in its Cross-Margining Customer Accounts. Specifically, a Netting Member's Cross-Margining Customer Margin Requirement would be the amount of the item listed in Section 2(a)(vii) of Rule 4 (as described below). This definition would specify that references to the Cross-Margining Customer Margin Requirement “for” or “with respect to” a particular Cross-Margining Customer Account or Cross-Margining Customer (or similar language) would mean the portion of a Netting Member's Cross-Margining Customer Margin
The term “Customer Cross-Margining Arrangement” would mean a Cross-Margining Arrangement pursuant to which a Cross-Margining Participant, at the discretion of FICC and in accordance with the provisions of Rule 43, may elect to have any of its Cross-Margining Customers' margin requirement in respect of Eligible Positions at FICC and such Cross-Margining Customer's margin requirements in respect of Eligible Positions at a clearing organization for a board of trade designated as a contract market under Section 5 of the CEA that has entered into a Cross-Margining Agreement with FICC (an “FCO”) calculated by taking into consideration the net risk of such Eligible Positions at each of the clearing organizations.
FICC proposes to amend the definition to “Cross-Margining Affiliate” to remove existing prong (ii), which relates to the “market professional” cross-margining program.
FICC proposes to amend the definition to “Cross-Margining Agreement” to encompass the Customer Cross-Margining Arrangement by specifying that the applicable Cross-Margining Participant may have any of its Cross-Margining Customers' margin requirement in respect of Eligible Positions at FICC and such Cross-Margining Customer's margin requirements in respect of Eligible Positions at a relevant FCO calculated by taking into consideration the net risk of such Eligible Positions at each of the clearing organizations. FICC also proposes to remove the last sentence of this definition, which relates to the “market professional” cross-margining program.
FICC proposes to make conforming edits to the definition of “Current Net Settlement Positions” to add references to “Cross-Margining Customer,” “Cross-Margining Customer Account,” and “Cross-Margining Customer Margin Requirement” after each reference to “Segregated Indirect Participant,” “Segregated Indirect Participants Account,” and “Segregated Customer Margin Requirement,” respectively.
FICC proposes to amend the definitions of “Indirect Participants Account,” “Type of Account” and “Type” to include a Cross-Margining Customer Account.
In addition, FICC proposes to add a new Section 3a of Rule 2B to provide that (i) a Netting Member that is an Eligible BD-FCM and has been approved to become a Cross-Margining Participant in a Customer Cross-Margining Arrangement pursuant to a Cross-Margining Agreement may designate any of its Indirect Participants Accounts (other than a Segregated Indirect Participants Account) as a Cross-Margining Customer Account; (ii) any such designation of an Account shall constitute a representation to FICC by the Netting Member that the Netting Member has complied with all regulatory requirements applicable to it in connection with its participation in the Customer Cross-Margining Arrangement, including the conditions in the Proposed Orders; and (iii) the Netting Member shall be deemed to repeat this representation each time it deposits Cross-Margining Customer Margin.
FICC proposes to amend Section 1a of Rule 4 to make clear that FICC's account at the FRBNY that is currently used to hold Segregated Customer Margin would also hold Cross-Margining Customer Margin.
FICC proposes to renumber current Section 1b of Rule 4 to Section 1c and add a new Section 1b. The new Section 1b would provide that:
• Each Netting Member shall deposit Cross-Margining Customer Margin with FICC in an amount equal to its Cross-Margining Customer Margin Requirement, which requirement shall be determined in accordance with Rule 4 and the Margin Component Schedule. The timing of the satisfaction of the Cross-Margining Customer Margin Requirement shall be determined in accordance with the provisions of Section 9 of Rule 4.
• FICC shall establish and maintain on its books and records a Cross-Margining Customer Margin Custody Account to which all Cross-Margining Customer Margin deposited with FICC shall be credited. The Cross-Margining Customer Margin credited to a Cross-Margining Customer Margin Custody Account shall be used exclusively to secure the present and future payment and reimbursement obligations of the Netting Member and its Cross-Margining Customers in relation to Eligible Positions of the Netting Member's Cross-Margining Customers at FICC and CME.
• All assets credited to each Cross-Margining Customer Margin Custody Account shall be treated as “financial assets” within the meaning of Article 8 of the NYUCC. New York is the “securities intermediary's jurisdiction” for purposes of the NYUCC and New York law shall govern all issues specified in Article 2(1) of the Hague Securities Convention.
• FICC shall hold all Cross-Margining Customer Margin in an account of FICC at an FDIC-insured bank within the meaning of the Exchange Act that is a qualified custodian under the Investment Company Act of 1940, as amended, or at the FRBNY. Any account at an FDIC-insured bank shall be segregated from any other account of FICC and shall be used exclusively to hold Cross-Margining Customer Margin, and shall be subject to a written notice of the bank provided to and retained by FICC consistent with the Proposed Orders. The account at the FRBNY shall be segregated from any other account of FICC and shall be used exclusively to hold Cross-Margining Customer Margin and Segregated Customer Margin (the account at the FRBNY would not be subject to a written notice).
FICC proposes to amend current Section 1b (to be renumbered as Section 1c) of Rule 4 to (i) add references to “Cross-Margining Customer Accounts” after references to “Segregated Indirect Participants Accounts” in current Section 1b(a), and (ii) add a new sentence at the end of current Section 1b(b) to provide that FICC would calculate the Cross-Margining Customer Margin Requirement for a Cross-Margining Customer Account as the sum of the requirements applicable to each Cross-Margining Customer whose Transactions are recorded in such Account, as though each such Cross-Margining Customer were a separate Netting Member with a single Margin Portfolio consisting of such Transactions, in accordance with the Margin Component Schedule.
FICC proposes to amend Section 2 of Rule 4 by (i) adding references to
FICC proposes to add a new Section 2c of Rule 4 entitled “Cross-Margining Customer Margin Requirement” to provide that (i) each Netting Member shall deposit any Cross-Margining Customer Margin with FICC by the Required Fund Deposit Deadline through a separate Deposit ID established by the Netting Member for each Cross-Margining Customer Account, and (ii) FICC shall report the Cross-Margining Customer Margin Requirements to each Netting Member twice daily in a Report which shall specify the Cross-Margining Customer Margin Requirement for each Cross-Margining Customer Account.
FICC proposes to add a new Section 3(d) of Rule 4 and insert it before the last sentence of Section 3. The new Section 3(d) would provide that each Cross-Margining Customer Margin Requirement for a particular Cross-Margining Customer Account would be subject to the requirements that (i) a minimum of 40 percent of the Cross-Margining Customer Margin Requirement for such Account shall be satisfied with cash and/or Eligible Clearing Fund Treasury Securities, and (ii) a minimum of the product of $1 million and the number of Cross-Margining Customers whose Transactions are recorded in such Cross-Margining Account must be made and maintained in cash. In addition, FICC proposes to amend the last sentence of Section 3 by adding a reference to “Cross-Margining Customer Margin Requirement” after the reference to “Segregated Indirect Participants Requirement.”
FICC proposes to amend Section 3a of Rule 4 to add a reference to “Cross-Margining Customers” after the reference to “Segregated Indirect Participants.” FICC also proposes to amend Section 3b of Rule 4 to add a reference to “Cross-Margining Customer Margin Custody Account” after the reference to “Segregated Customer Margin Custody Account.”
FICC proposes to amend Sections 3a, 3b, and 9 of Rule 4 to add references to “Cross-Margining Customer Margin,” after each reference to “Segregated Customer Margin.” FICC also proposes to amend Sections 3b and 9 of Rule 4 to add references to “Cross-Margining Customer Margin Requirement,” after each reference to “Segregated Customer Margin Requirement.”
FICC proposes to add a new Section 4(c) of Rule 4 to provide that (i) as security for any and all obligations and liabilities of a Netting Member and any of its Cross-Margining Customers to FICC arising out of or in connection with any Cross-Margining Customer Accounts of such Netting Member or Transactions recorded therein, each such Netting Member on behalf of itself and its Cross-Margining Customers grants to FICC a first priority perfected security interest in its right, title and interest in and to all Cross-Margining Customer Margin, each Cross-Margining Customer Margin Custody Account, and all distributions thereon and proceeds thereof, and (ii) FICC shall be entitled to exercise the rights of a pledgee under common law and a secured party under Articles 8 and 9 of the NYUCC with respect to such assets.
FICC proposes to amend Section 5 of Rule 4 by (i) adding a reference to “Cross-Margining Customer Margin” after the reference to “Segregated Customer Margin” in the title of Section 5, and (ii) adding a new paragraph at the end of Section 5 to provide that FICC shall only use Cross-Margining Customer Margin deposited by a Netting Member to (A) secure the Transactions of Cross-Margining Customers of such Netting Member recorded in any Cross-Margining Customer Account and satisfy payment and delivery obligations owing to FICC (including liquidating or otherwise using such Cross-Margining Customer Margin to obtain relevant cash or securities) in connection with a default in respect of such Transactions; and (B) for investment in U.S. Treasury securities with a maturity of one year or less.
FICC proposes to amend Section 10 of Rule 4 by (i) adding a reference to “Cross-Margining Customer Margin” after the reference to “Segregated Customer Margin” in the title of Section 10, (ii) amending the first paragraph of Section 10 to require FICC to separately determine whether the amount of Cross-Margining Customer Margin supporting a Cross-Margining Customer's Transactions is in excess of the Cross-Margining Customer Margin Requirement for such Cross-Margining Customer (“Excess Cross-Margining Customer Margin”), and (iii) adding a new Section 10(c) to provide that upon a Member's request, and in accordance with such procedures as FICC may set forth from time to time, the Corporation shall return to the Member its Excess Cross-Margining Customer Margin, subject to the minimum amount of cash or Eligible Clearing Fund Securities required to be maintained pursuant to the GSD Rules (valued at their collateral value on the day of such withdrawal) and the terms of the Third A&R Agreement and Customer Cross-Margining Clearing Member Agreement, as the Member requests, provided that, subject to the Third A&R Agreement and the Customer Cross-Margining Clearing Member Agreement, and except to the extent required by applicable law or authorized by the Commission, FICC shall not retain Excess Cross-Margining Customer Margin due to any obligations of the Member unrelated to a Cross-Margining Customer Account of such Member. Section 10(c) of Rule 4 would further provide that FICC may, at its discretion, retain some or all of the Excess Cross-Margining Customer Margin if the Member has an outstanding payment or margin obligation to the Corporation with respect to the Transactions of any Cross-Margining Customer.
FICC proposes to amend the Margin Component Schedule to set out how Cross-Margining Customer Margin Requirements would be determined. Specifically, FICC proposes to insert a new paragraph at the end of Section 1 to provide that (i) on each Business Day, each Netting Member for which FICC maintains a Cross-Margining Customer Account shall be required to deposit with FICC Cross-Margining Customer Margin equal to the sum of all Cross-Margining Customer Margin Requirements for all such Accounts, (ii) each Cross-Margining Customer Margin Requirement shall equal the sum of the amounts calculated pursuant to Section 3a of the Margin Component Schedule for each Cross-Margining Customer whose Transactions are recorded in the relevant Cross-Margining Customer Account, and (iii) each such calculation shall be performed twice daily or on a more frequent basis if FICC deems it appropriate pursuant to the Margin Component Schedule and subject to the provisions of Rule 4. Further, FICC proposes to add a new Section 3a to the Margin Component Schedule titled “Cross-Margining Customer Margin Requirement Calculations” to set out how specifically such requirement would be calculated, which would be substantially identical to how Segregated Customer Margin Requirement is calculated as set out in Section 3 of the Margin Component Schedule. Finally, FICC proposes to amend Section 5 to add references to “Cross-Margining Customer,” “Cross-Margining Customer Account,” and
FICC proposes to add a new Section 2(c) of Rule 43 to provide that (i) a Netting Member that is an Eligible BD-FCM may become a Cross-Margining Participant in connection with the Customer Cross-Margining Arrangement with the consent of FICC and CME, and (ii) an Eligible BD-FCM that would become such a Cross-Margining Participant shall be permitted to establish a Cross-Margining Customer Account upon acceptance by FICC and CME of an executed Customer Cross-Margining Clearing MSD Member Agreement.
FICC proposes to amend Section 3 of Rule 43 to provide that, if FICC becomes obligated to make a payment to CME pursuant to the cross-guaranty under the Third A&R Agreement in relation to the obligations of a Cross-Margining Participant, its Cross-Margining Affiliate, or its Cross-Margining Customer, the Cross-Margining Participant (and, if FICC becomes obligated to make such a payment in respect of the obligations of a Cross-Margining Customer, the Cross-Margining Customer) shall thereupon immediately be obligated, whether or not FICC has then made payment to CME, to pay to FICC the amount of the reimbursement obligation that is owed to FICC as a result.
FICC proposes to add a new sentence at the end of Section 5 of Rule 43 to provide that, if FICC receives a payment from CME pursuant to the Third A&R Agreement in connection with the Customer Cross-Margining Arrangement, FICC would not be permitted to apply such payment to any obligation other than the obligations of Cross-Margining Customers (whether or not arising in connection with any Eligible Positions).
FICC proposes to amend Section 4(b)(i) of Rule 2A to make clear that an applicant to become a Netting Member must have sufficient financial ability to make anticipated required deposits to not only Clearing Fund and Segregated Customer Margin, but also any Cross-Margining Customer Margin.
FICC proposes to remove Section 10(e) of Rule 3A to remove the current prohibition of Sponsored Members from participating in any Cross-Margining Arrangements, and accordingly renumber current Section 10(f) of Rule 3A to Section 10(e).
FICC proposes to remove (i) the language in parentheticals in the first sentence of Section 1 of Rule 13, (ii) the second sentence in Section 2(b) of Rule 22A, and (iii) the portions of Sections 2(a) and 2(b) of Rule 43 that are crossed out in Exhibit 5, because those provisions relate to the “market professional” cross-margining program, which is no longer active and would not be used if the Customer Cross-Margining Arrangement becomes available.
The proposed Third A&R Agreement would not become effective and replace the Second A&R Agreement until the latest of (i) the date on which all necessary regulatory approvals of the proposed Third A&R Agreement have been received by FICC and CME and (ii) a date agreed by FICC and CME.
FICC believes that the proposed rule changes to extend the availability of the Cross-Margining Arrangement to positions cleared and carried for Cross-Margining Customers by an Eligible BD-FCM would enhance FICC's and its Netting Members' risk management.
First, the Customer Cross-Margining Arrangement would produce margin levels commensurate with the risks and particular attributes of the Eligible Positions. This is because FICC would first calculate initial margin requirements for Customer Positions using the same methodology as applies to Segregated Indirect Participant positions and then determine possible margin reductions using the same methodology as is used under the Proprietary Cross-Margining Arrangement, with each Cross-Margining Customer treated effectively as an independent Netting Member. The Commission recently approved each of these methodologies in connection with other FICC rule filings, confirming in particular that they satisfied the requirements of Rule 17ad-22(e)(6) under the Exchange Act.
Second, by applying the same margin reduction methodology that is utilized under the Proprietary Cross-Margining Arrangement, FICC would continue to recognize risk offsets that arise from Eligible Positions cleared at CME. This would help ensure that the margin requirements are not overstated or understated and are calibrated based on the particular risk the Cross-Margining Customer's portfolio presents to FICC and CME. This would provide FICC with robust protection against a default, and incentivize Cross-Margining Customers to maintain portfolios that present lower risk. Such lower risk portfolios would, in turn, reduce the risk of a default in the first place.
Third, the proposed changes would require Eligible BD-FCMs to collect from Cross-Margining Customers the initial margin calculated for the Customer Positions. The collateral posted by the Cross-Margining Customers would serve to reduce the exposure of an Eligible BD-FCM to its Cross-Margining Customers and thus reduce the risk of a default by the Eligible BD-FCM to FICC.
Finally, the proposed rule changes would require an Eligible BD-FCM to enter into a Customer Cross-Margining Clearing Member Agreement with FICC and CME, under which the Eligible BD-FCM would pledge to FICC, on behalf of itself and each Cross-Margining Customer, the positions and margin subject to the Customer Cross-Margining Arrangement at both FICC and CME. This pledge, coupled with the cross-guaranty between FICC and CME set forth in the Third A&R Agreement, would help to ensure that FICC is able to look to the full portfolio of Customer Positions and associated margin at FICC
FICC believes the proposed rule changes are consistent with Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing Supervision Act.
Section 805(b) of the Clearing Supervision Act provides that “[t]he objectives and principles for the risk management standards prescribed under subsection (a) shall be to (1) promote robust risk management; (2) promote safety and soundness; (3) reduce systemic risks; and (4) support the stability of the broader financial system.”
The reduced margin requirements which would result from the proposed rule changes would also incentivize Cross-Margining Customers to post initial margin in respect of their Eligible Positions, rather than rely on their Eligible BD-FCM to do so. Currently, FICC understands that it is common practice for Sponsoring Members and Agent Clearing Members to use their own assets to satisfy the FICC initial margin requirements associated with FICC-cleared positions that Eligible BD-FCMs carry for their customers. This increases the costs to Sponsoring Members and Agent Clearing Members of offering customer clearing services and limits their capacity to do so. As a result of the proposed rule changes, a Cross-Margining Customer's Eligible Positions at FICC would be eligible for a possible margin reduction with respect to offsetting futures positions at CME if the Cross-Margining Customer posts the initial margin instead of its Eligible BD-FCM doing so. It would thus incentivize indirect participants to post margin, which would likely result in an associated cost reduction from their Eligible BD-FCMs. Such posting would, in turn, serve to reduce Eligible BD-FCMs' risk to their Cross-Margining Customers.
The reduced costs to Eligible BD-FCMs would also enhance their ability to provide access to FICC's clearance and settlement services to a greater number of indirect participants, and thereby increase the diversity and scope of market participants able to utilize FICC's U.S. Treasury clearing services. These services can reduce systemic risk through FICC's multilateral netting, support the stability of the financial system through FICC's trade guaranty and centralized default management, and promote safety and soundness through FICC's counterparty risk management.
The proposed rule changes would also allow Cross-Margining Customers to benefit from the margin offsets that are currently only available to Cross-Margining Participants and their Eligible Affiliates under the Proprietary Cross-Margining Arrangement, thereby facilitating increased access to clearing for indirect participants and promoting the maintenance of more balanced portfolios that present lower risk. The proposed rule changes would consequently serve to enhance liquidity in, and otherwise promote the resilience and robustness of, the U.S. Treasury market.
As a result, FICC believes the proposed rule changes will advance Section 805(b)'s objectives and principles of promoting robust risk management, promoting safety and soundness, reducing systemic risks, and supporting the stability of the broader financial system.
Section 805(a)(2) of the Clearing Supervision Act authorizes the Commission to prescribe risk management standards for the payment, clearing, and settlement activities of designated clearing entities, like FICC.
Rule 17ad-22(e)(4)(i) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes by maintaining sufficient financial resources to cover its credit exposure to each participant fully with a high degree of confidence.
In addition, the proposed rule changes would require each Eligible BD-FCM for whom FICC maintains one or more Cross-Margining Customer Account(s) to deposit to FICC cash or eligible securities to meet the Cross-Margining Customer Margin
Rule 17ad-22(e)(6)(i) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to cover its credit exposures to its participants by establishing a risk-based margin system that, at a minimum, considers, and produces margin levels commensurate with, the risks and particular attributes of each relevant product, portfolio, and market, and, if the covered clearing agency provides central counterparty services for U.S. Treasury securities, calculates, collects, and holds margin amounts from a direct participant for its proprietary positions in Treasury securities separately and independently from margin calculated and collected from that direct participant in connection with U.S. Treasury securities transactions by an indirect participant that relies on the services provided by the direct participant to access the covered clearing agency's payment, clearing, or settlement facilities.
FICC believes that the proposed rule changes would satisfy these requirements. The Customer Cross-Margining Arrangement would produce margin levels commensurate with the risks and particular attributes of the Eligible Positions, as FICC would calculate initial margin requirements for each Cross-Margining Customer using the same methodology that FICC applies to Segregated Indirect Participants, with potential margin offsets for Customer Positions calculated using the same methodology as is used under the Proprietary Cross-Margining Arrangement. The Commission recently confirmed that such methodologies satisfied the requirements of Rule 17ad-22(e)(6) in connection with other FICC rule filings.
In addition, the proposed rule changes would provide that margin applicable to Customer Positions would be calculated separately and independently of the margin for any positions recorded in any Proprietary Account of a Cross-Margining Participant. The proposed rule changes would also provide for Cross-Margining Customer Margin to be collected and held in substantially a similar manner to Segregated Customer Margin. The Commission recently approved FICC's arrangements for Segregated Customer Margin, finding in particular that they “should ensure that a Netting Member's proprietary transactions are not netted with indirect participant transactions for margin calculations and that margin for indirect participant transactions is collected and held separately and independently from margin for a Netting Member's proprietary transactions.”
Rule 17ad-22(e)(18)(iv)(C) under the Exchange Act requires, among other things, that a covered clearing agency that provides central counterparty services for transactions in U.S. Treasury securities ensure that it has appropriate means to facilitate access to clearance and settlement services of all eligible secondary market transactions in U.S. Treasury securities, including those of indirect participants.
Furthermore, by creating an incentive for Cross-Margining Customers to post margin for their positions, the proposed rule changes would serve to reduce the need for Eligible BD-FCMs to use their own liquidity resources to cover such margin obligations. As a result, it would reduce the costs and increase the capacity of Eligible BD-FCMs to provide clearing services, which would in turn allow Eligible BD-FCMs to increase the volume of transactions they submit to FICC for clearing. Moreover, by creating significant cost savings and efficiencies for Cross-Margining Customers that maintain offsetting futures positions at CME, the proposed rule changes would create an incentive for Eligible BD-FCMs to offer done-away clearing services. For Eligible BD-FCMs, clearing U.S. Treasury securities positions entered into by a customer with other trading counterparties would provide a potential opportunity to reduce overall financial risk without the cost of funding the customer's margin obligations at FICC. Therefore, the proposed rule changes would facilitate enhanced access to clearance and settlement services of all eligible secondary market transactions in U.S. Treasury securities, including those of indirect participants.
The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date that the proposed change was filed with the Commission or (ii) the date that any additional information requested by the Commission is received. The clearing agency shall not implement the proposed change if the Commission has any objection to the proposed change.
The Commission may extend the period for review by an additional 60 days if the proposed change raises novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. A proposed change may be implemented in less than 60 days from the date the advance notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.
The clearing agency shall post notice on its website of proposed changes that are implemented.
The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the Advance Notice is consistent with the Clearing Supervision 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.
Section 806(e)(1)(G) of the Clearing Supervision Act provides that FICC may implement the changes if it has not received an objection to the proposed changes within 60 days of the later of (i) the date that the Commission receives the Advance Notice or (ii) the date that any additional information requested by the Commission is received,
Pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act, the Commission may extend the review period of an advance notice for an additional 60 days, if the changes proposed in the advance notice raise novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension.
Here, as the Commission has not requested any additional information, the date that is 60 days after FICC filed the Advance Notice with the Commission is February 10, 2026. However, the Commission finds that the changes proposed in the Advance Notice raise novel and complex issues. The Commission finds the issues novel because FICC proposes to extend the availability of its Cross-Margining Arrangement with CME to customers of an Eligible BD-FCM to allow Cross-Margining Customers to benefit from the margin reductions that are currently only available to Cross-Margining Participants and their Eligible Affiliates. The Commission also finds the issues raised by the Advance Notice complex because the proposed changes to the Cross-Margining Agreement between FICC and CME and the GSD Rules entail new provisions including criteria and requirements for participation in the Customer Cross-Margining Arrangement, as well as consistency with the Petitions. Therefore, the Commission finds it appropriate to extend the review period of the Advance Notice for an additional 60 days under Section 806(e)(1)(H) of the Clearing Supervision Act.
Accordingly, the Commission, pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend Phlx's Pricing Schedule at Options 7, Section 9, B, Port Fees.
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on January 1, 2026.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Phlx recently completed a technology migration to a new platform on December 8, 2025. As part of the technology migration, Phlx members and member organizations acquired new ports to connect to the new technology platform to accommodate the symbol migration plan. Specifically, members and member organizations utilized both existing or “legacy”
SR-Phlx-2025-32 also discussed fees for FIX Ports during the Transition Period
At this time, the Exchange proposes to expedite the sunset date for SQF Ports, SQF Purge Ports, and CTI Ports from February 27, 2026 to January 1, 2026. The Phlx migration was complete on December 8, 2025. The Exchange believes that Phlx market participants have enough time to return their SQF Ports, SQF Purge Ports, and CTI Ports in December 2025 to allow the Exchange to sunset these ports.
This proposal does not impact FIX Ports which would sunset on February 27, 2026. As of January 1, 2026, Phlx will assess a FIX Port Fee based on each mnemonic associated with new and legacy FIX Ports. Phlx members and member organizations may return legacy FIX Ports in December 2025 to avoid any fees or opt to return them any time prior to February 27, 2026.
The Exchange notes that legacy FIX Ports currently provide data from the new platform while legacy SQF Ports, SQF Purge Ports, and CTI Ports do not currently provide any data.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
Phlx's proposal to expedite the sunset date for SQF Ports, SQF Purge Ports,
Phlx's proposal to expedite the sunset date for SQF Ports, SQF Purge Ports, and CTI Ports from February 27, 2026 to January 1, 2026 is equitable and not unfairly discriminatory because no Phlx member or member organization is able to utilize SQF Ports, SQF Purge Ports, and CTI Ports today because they are not connected to a platform that is active. Also, no Phlx member or member organization would be able to log into their SQF Ports, SQF Purge Ports or CTI Ports after the sunset date.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes its proposal remains competitive with other options markets, and will offer market participants with another choice of venue to transact options. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
Phlx's proposal to expedite the sunset date for SQF Ports, SQF Purge Ports, and CTI Ports from February 27, 2026 to January 1, 2026 does not impose an undue burden on competition because no Phlx member or member organization is able to utilize SQF Ports, SQF Purge Ports or CTI Ports today because they are not connected to a platform that is active. Also, no Phlx member or member organization would be able to log into their SQF Ports, SQF Purge Ports or CTI Ports after the sunset date.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 30, 2025, Cboe EDGX Exchange, Inc. (“EDGX” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Commission is publishing this order to institute proceedings under Section 19(b)(2)(B) of the Act
As described in more detail in the Notice,
According to the Exchange, its proposed Retail Price Improvement Program, designed to provide price improvement to Retail Orders,
The Exchange also proposes to amend Rule 11.6(e)(2) and Rule 11.10(a)(4)(C)-(D) in order to describe the price at which a Non-Displayed Order is posted and ranked to the EDGX Book and at what price a Non-Displayed Order may execute in certain situations.
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act
Pursuant to Section 19(b)(2)(B) of the Act,
The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, in addition to any other comments they may wish to submit about the proposed rule change. In particular, the Commission seeks comment on whether the proposal, which would add a Retail Price Improvement Program and modify rules relating to Non-Displayed order instructions: would protect investors and the public interest, is not designed to permit unfair discrimination, or raises any new or novel concerns not previously contemplated by the Commission.
The Commission requests that interested persons provide written submissions of their data, views, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposed rule change is consistent with Section 6(b)(5) or any other provision of the Act, and the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of data, views, and arguments, the Commission will consider, pursuant to Rule 19b-4 under the Act,
Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change should be approved or disapproved by January 20, 2026. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by February 2, 2026.
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. § 3501
Paragraph (g) of Rule 17f-1, 17 CFR 240.17f-1(g), requires that all reporting institutions (
Reporting institutions utilize these records and reports (a) to report missing, lost, stolen or counterfeit securities to the database; (b) to confirm inquiry of the database; and (c) to demonstrate compliance with Rule 17f-1. The Commission and the reporting institutions' examining authorities utilize these records to monitor the incidence of thefts and losses incurred by reporting institutions and to determine compliance with Rule 17f-1. If such records were not retained by reporting institutions, compliance with Rule 17f-1 could not be monitored effectively.
The Commission estimates that there are approximately 10,018 reporting institutions (respondents) and, on average, each respondent would need to retain 33 records annually, with each retention requiring approximately 1 minute (a total of 33 minutes or 0.5511 hours per respondent per year). Thus, the total estimated annual time burden for all respondents is 5,521 hours (10,018 × 0.5511 hours = 5,521). Assuming an average hourly cost for clerical work of $50.00, the average total yearly record retention internal cost of compliance for each respondent would be $31.35 ($57 × 0.55 hours). Based on these estimates, the total annual internal compliance cost for the estimated 10,018 reporting institutions would be approximately $314,064.3 (10,018 × $31.35).
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.
Please direct your written comments on this 60-Day Collection Notice to Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg via email to
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 schedules to establish new fees for its 10 gigabit per second (“Gb”) physical port connection to the Exchange. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Commission's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its fee schedule relating to physical port connectivity to the Exchange.
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.7 [sic] Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)8 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)9 [sic] requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4)10 [sic] of the Act, which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Members and other persons using its facilities. This belief is based on various factors as described below.
The Exchange believes the proposed fee is reasonable as it is lower than the amounts assessed by other exchanges for analogous market access connections and which were similarly adopted via the rule filing process and filed with the Commission. For instance, the Exchange notes that Nasdaq PHLX LLC (“PHLX”) currently charges its members a $1,650 installation fee and an ongoing $18,500 monthly fee for its 10Gb Ulta fiber connection.
The Exchange also believes the proposed fee change is reasonable as it will better align the price of this connectivity option to the value it offers to the market participants that utilize it. It will also better enable the Exchange to maintain and improve its connectivity services and facilities. Finally, the proposed fee change is reasonable as the resulting 10 Gb physical port fee will be lower than the amounts assessed by PHLX for similar market access connections. Additionally, the Exchange believes that the proposal will be an equitable allocation of fees and will not discriminate unfairly against market participants. The proposed fee change is an equitable allocation of fees because it reflects the substantial value that the 10Gb circuit provides to TPHs and non-TPHs. This connectivity option is particularly attractive to TPHs and non-TPHs that desire low latency connectivity to the Exchange because it provides sufficient capacity to support most of their activities on the Exchange and does so at a reasonable comparative price point. The proposal is not unfairly discriminatory because 10 Gb physical port connectivity will be available to all customers at the same price. Furthermore, 10 Gb physical port connectivity is an optional connectivity product, and TPHs and non-TPHs are not required to purchase a 10 Gb physical port in order to access the Exchange. Indeed, TPHs and non-TPHs have a variety of options to connect to the Exchange, including amongst others, the 1 Gb physical port, the pricing for which is less expensive and remains unchanged. While the proposed price increase will impact users of the 10 Gb physical port connection, the Exchange believes this is fair because users of a 10 Gb physical port connection generally consume more resources from the Exchange than do other participants.
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 proposed fee change will not impact intramarket competition because it will apply to all similarly situated TPS and non-TPHs equally (
The proposed fee change also does not impose a burden on competition or on other Self-Regulatory Organizations that is not necessary or appropriate. As described above, in establishing its proposed fee change the Exchange compared its proposed fee increase to that of a competitor exchange's analogous offering. As noted above, the proposed fee of $8,000 is $10,500 less than the ongoing monthly fee PHLX charges its members for its 10Gb ultra fiber connection, and $3,000 less than the fee PHLX charges its members for its 10Gb fiber connection. Moreover, unlike PHLX, the Exchange does not charge its TPHs and non-TPHs an installation fee for its 10 Gb physical port connection.
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. 3501
Form S-4 (17 CFR 239.25) is the form used for registration under the Securities Act of 1933 (15 U.S.C. 77a
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 this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by 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.
Please direct your written comments on this 60-Day Collection Notice to Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg via email to
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its Specialized Quote Feed
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on January 1, 2026.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Phlx proposes to amend its SQF Port pricing at Options 7, Section 9, B, “Port Fees” by offering an incentive to Market Makers
Pursuant to a prior rule change, as of January 1, 2026, Phlx will assess an SQF Port Fee of $1,185 per port, per month.
With this proposal, a Market Maker that transacted less than 0.10% of Total National Volume in the prior month would not receive a discount on SQF Port Fees. A Market Maker that transacted greater than or equal to 0.10% and less than 0.25% of Total National Volume in the prior month will be afforded a discount of 10% on their SQF Port Fees. A Market Maker that transacted greater than or equal to 0.25% and less than 0.40% of Total National Volume in the prior month will be afforded a discount of 30% on their SQF Port Fees. Finally, a Market Maker that transacted greater than or equal to 0.40% of Total National Volume in the prior month will be afforded a discount of 50% on their SQF Port Fees. By way of example, a Market Maker that executed 3,000,000 in Penny Volume and 200,000 in Non-Penny Volume in a given month on the Exchange, where the Total National Volume was 1,000,000,000, would qualify for a discount of 50% on their SQF Port Fees ((200,000 × 5= 1,000,000) + 3,000,000 = 4,000,000 which is 0.40% of 1,000,000,000).
The Exchange proposes to calculate Market Maker Non-Penny Symbol volume at five times the weight as compared to Market Maker Penny Symbol volume because Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Non-Penny Symbols. Overall, the proposed discounts should encourage Market Makers to transact additional order flow on Phlx with which other market participants may interact, for an opportunity to lower SQF Port Fees. The Exchange proposes to exclude index options as index options are generally not multiply listed.
The Exchange also proposes to add back the text which provided, “A Market Maker may not subscribe to more than 250 SQF Ports per month.” This rule text was inadvertently omitted in the rule text to SR-Phlx-2025-40 which did not indicate that rule text was to be removed. Additionally, the Exchange proposes to remove the text that states, “for ports that receive inbound quotes at any time within that month (“active port”).” SR-Phlx-2025-40 replaced Phlx's SQF Port Fee with an SQF Port Fee that was identical to Nasdaq ISE, LLC (“ISE”).
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Likewise, in
Further, “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers' . . . .”
The proposed fee discounts for Phlx SQF Ports are reasonable because they will attract a greater amount of order flow to Phlx with which other market participants may interact while also lowering costs for certain Market Makers that are able to transact greater than 0.10% of Total National Volume in the prior month. The Exchange believes it is reasonable to lower costs for certain Market Makers that transact greater than 0.10% of Total National Volume on Phlx because those Market Makers are affording other Phlx members and member organizations an opportunity to interact with that order flow. The proposal provides an incremental incentive for Market Makers that transact at least 0.10% of Total National Volume, which provides a higher
Phlx believes it is reasonable to offer fee discounts to those Market Makers that primarily provide and post liquidity to the Exchange, as it should encourage Market Makers to continue to participate on the Exchange and add liquidity. Greater liquidity benefits all market participants by providing more trading opportunities and tighter spreads. The proposal would also mitigate the costs incurred by Market Makers on Phlx.
Calculating Market Maker Non-Penny Symbol volume at five times the weight as compared to Penny Symbol volume is reasonable, equitable and not unfairly discriminatory as Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Market Maker Non-Penny Symbols.
A Phlx Market Maker requires only one SQF Port to submit quotes in its assigned options series into Phlx. A Phlx Market Maker may submit all quotes through one SQF Port. While a Phlx Market Maker may elect to obtain multiple SQF Ports to organize its business,
The proposed fee discounts for Phlx SQF Ports are equitable and not unfairly discriminatory as they would apply uniformly to each Phlx Market Maker. The Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to add back the text which provided, “A Market Maker may not subscribe to more than 250 SQF Ports per month” is reasonable, equitable and not unfairly discriminatory as that rule text was inadvertently not displayed in the rule text to SR-Phlx-2025-40 and was not intended to be removed. There was no mention of its removal in SR-Phlx-2025-40. The Exchange's proposal to remove the words “for ports that receive inbound quotes at any time within that month (“active port”)” is reasonable, equitable and not unfairly discriminatory as SR-Phlx-2025-40 replaced Phlx's SQF Port Fee with an SQF Port Fee that was identical to ISE. Other rule text that mentioned active SQF Ports was removed in SR-Phlx-2025-40.
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.
In terms of intra-market competition, the proposed fee discounts for Phlx SQF Ports do not impose a burden on competition because they would apply uniformly to each Phlx Market Maker and the Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to add back the text which provided, “A Market Maker may not subscribe to more than 250 SQF Ports per month” does not impose an undue burden on competition as that rule text was inadvertently not displayed in the rule text to SR-Phlx-2025-40 and was not intended to be removed. There was no mention of its removal in SR-Phlx-2025-40. Also, the Exchange's proposal to remove the words “for ports that receive inbound quotes at any time within that month (“active port”)” does not impose an undue burden on competition as SR-Phlx-2025-40 replaced Phlx's SQF Port Fee with an SQF Port Fee that was identical to ISE. Other rule text that mentioned active SQF Ports was removed in SR-Phlx-2025-40.
In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other options exchanges. In addition to the Exchange, market participants have alternative options exchanges that they may participate on and direct their order flow. In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing options exchanges to maintain their competitive standing in the financial markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”)
FICC is proposing a rule change related to its cross-margining arrangement (the “Cross-Margining Arrangement”) with the Chicago Mercantile Exchange Inc. (“CME,” and collectively with FICC, the “Clearing Organizations” or “Parties”). The proposed rule change consists of (i) a proposed Third Amended and Restated Cross-Margining Agreement (the “Third A&R Agreement”) between FICC and CME, which would replace the Second Amended and Restated Cross-Margining Agreement between the Parties (the “Second A&R Agreement”) in its entirety and would be incorporated into the FICC Government Securities Division (“GSD”) Rulebook (“GSD Rules”), and (ii) a number of related rule changes to the GSD Rules. Together, the proposed changes would extend the availability of the Cross-Margining Arrangement to positions cleared and carried for customers by a dually registered broker-dealer (“BD”) and futures commission merchant (“FCM”) that is a common member of FICC and CME (an “Eligible BD-FCM”).
In its filing with the Commission, the clearing agency 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 clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Currently, the Cross-Margining Arrangement allows FICC and CME to recognize for margin purposes the offsetting risk of certain positions in futures on U.S. Treasury securities and other interest rate futures and Treasury market transactions (“Eligible Positions”) maintained by a member of both Clearing Organizations (a “Joint Clearing Member”) for itself or certain eligible affiliates (an “Eligible Affiliate”), or by affiliated members of CME and FICC (each, a “Cross-Margining Affiliate,” and each Joint Clearing Member and each Cross-Margining Affiliate, a “Cross-Margining Participant”), at the two Clearing Organizations in circumstances when the Clearing Organizations can look to all of those positions (and all associated margin) for performance of the Joint Clearing Member's or a pair of Cross-Margining Affiliates' obligations (the “Proprietary Cross-Margining Arrangement”). In particular, the Proprietary Cross-Margining Arrangement allows the Clearing Organizations to consider the net risk of a Joint Clearing Member's and its Eligible Affiliates' Eligible Positions or a pair of Cross-Margining Affiliates' Eligible Positions at FICC and CME when setting margin requirements for such positions.
FICC and CME have submitted to the Commission and the Commodity Futures Trading Commission (the “CFTC”) petitions for exemptive relief from certain provisions of the Commodity Exchange Act (“CEA”) and Exchange Act that would enable FICC and CME to make cross-margining available to customers (other than an Eligible Affiliate) of an Eligible BD-FCM (“Cross-Margining Customers”).
The Third A&R Agreement would effectuate the Customer Cross-Margining Arrangement via the following features:
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○ A Joint Clearing Member be an Eligible BD-FCM;
○ Each Cross-Margining Customer be a “futures customer” within the meaning of CFTC Regulation 1.3 and a “Sponsored Member” or “Executing Firm Customer” as defined under the GSD Rules;
○ The Joint Clearing Member enter into a participant agreement with the Clearing Organizations; and
○ The Joint Clearing Member enter into an agreement with each Cross-Margining Customer containing certain terms, including that the Cross-Margining Customer agrees to subordinate its claims under the Securities Investor Protection Act of 1970 (“SIPA”) and Subchapter III of Chapter 7 of the U.S. Bankruptcy Code in relation to its cross-margined positions and associated margin (the “Subordination Agreement”).
As discussed in greater detail below, these criteria and requirements for participation are designed to ensure that each participating Cross-Margining Customer and its Joint Clearing Member satisfy certain conditions set forth in the Proposed Orders.
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In addition to replacing the Second A&R Agreement with the Third A&R Agreement, FICC proposes the following changes to the GSD Rules to effectuate the Customer Cross-Margining Arrangement:
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The Third A&R Agreement would also include a number of clarifying and conforming edits, including to make clear that, with respect to both the Proprietary Cross-Margining Arrangement and Customer Cross-Margining Arrangement, FICC and CME would only manage a default of a Joint Clearing Member independently of one another if a joint management or buy-out by one of the Clearing Organizations were not legally permissible or possible or would result in substantially greater losses to each Clearing Organization.
In addition, the Second A&R Agreement is supplemented by a Service Level Agreement (“SLA”) between FICC and CME. FICC and CME will make edits to the SLA as necessary to ensure conformance with the proposed Third A&R Agreement.
As noted above, FICC proposes to enter into the Third A&R Agreement with CME. The proposed changes to the Second A&R Agreement contained in the Third A&R Agreement are designed to make cross-margining available to Cross-Margining Customers consistently with the framework set out in the Proposed Orders. FICC believes that such amendments would promote the maintenance of more balanced portfolios that present lower risk and facilitate the access of indirect participants to central clearing in accordance with Rule 17ad-22 under the Exchange Act.
The Third A&R Agreement would set forth the eligibility criteria for a Cross-Margining Participant to participate in the Customer Cross-Margining Arrangement. To facilitate compliance with the conditions and limitations of the Proposed Orders, Section 2(a) of the Third A&R Agreement would provide that, to become a Cross-Margining Participant for the Customer Cross-Margining Arrangement and establish a Customer Cross-Margining Account, a Clearing Member would need to be a Joint Clearing Member that is both a BD registered with the Commission and an FCM registered with the CFTC (
In addition, the Eligible BD-FCM would be required to enter into a participant agreement with FICC and CME in the form of Appendix C to the Third A&R Agreement (the “Customer Cross-Margining Clearing Member Agreement”), which is further described below.
As a conforming change, Sections 2(a) and (c) and the first sentence of Section 2(a) of the Third A&R Agreement would also be amended to provide that the pre-existing language therein applies to a Cross-Margining Participant for the Proprietary Cross-Margining Arrangement.
The Customer Cross-Margining Arrangement would only be available for the positions carried by an Eligible BD-FCM for “Customers.” To ensure compliance with the limitations under the Proposed Orders of the types of persons eligible to be Cross-Margining Customers, the Third A&R Agreement would define “Customer” as an indirect clearing participant that meets the definition of futures customer set out in CFTC Regulation 1.3 and is a “Sponsored Member” or “Executing Firm Customer” as defined under the GSD Rules.
Because a Cross-Margining Customer's participation in the Customer Cross-Margining Arrangement would be intermediated through the Eligible BD-FCM, Section 2(a) of the Third A&R Agreement would specify that the Clearing Organizations would have no obligation to deal directly with a Cross-Margining Customer, and that a Cross-Margining Customer would have no right to assert a claim against a Clearing Organization with respect to, nor would a Clearing Organization be liable to a Cross-Margining Customer for, any obligations of a Clearing Organization in connection with the Cross-Margining Customer's participation in the Customer Cross-Margining Arrangement pursuant to the Third A&R Agreement.
To effectuate the Customer Cross-Margining Arrangement, the Third A&R Agreement would include changes to enable an Eligible BD-FCM to establish a “Customer Cross-Margining Account” separate from any of its “Proprietary Cross-Margining Accounts.”
A Customer Cross-Margining Account would be defined as, with respect to FICC, an Indirect Participants Account (as defined in the GSD Rules) at FICC maintained for Cross-Margining Customers and identified in FICC's books and records as being subject to the Third A&R Agreement (which, as discussed below, would be the “Cross-Margining Customer Account” under the GSD Rules) and with respect to
The Third A&R Agreement would also define “Cross-Margining Account” to mean either a Proprietary Cross-Margining Account or a Customer Cross-Margining Account.
The Third A&R Agreement would also specify how potential margin reductions would be calculated for Customer Positions carried in a Customer Cross-Margining Account. As with Proprietary Positions, each Clearing Organization would calculate the margin savings that would result from viewing the “Combined Portfolio” of CME-cleared Customer Positions and FICC-cleared Customer Positions as a single portfolio rather than as separate standalone portfolios. The Clearing Organizations would then compare the respective margin reduction percentages, and each would then reduce the margin required for the Combined Portfolio by the lower percentage (subject to a cap of 80%). For Customer Positions, this process would occur on a Cross-Margining Customer-by-Cross-Margining Customer basis. In other words, each Cross-Margining Customer's Customer Positions would form part of a separate Combined Portfolio. This customer-by-customer approach is consistent both with how futures contracts are required to be margined under the rules of the CFTC, as well as how FICC margins Segregated Indirect Participant positions.
To implement this margin reduction methodology, the Third A&R Agreement would redefine “Combined Portfolio” to mean, in the case of a Pair of Cross-Margining Accounts consisting of Proprietary Cross-Margining Accounts, all Eligible Positions in such Cross-Margining Accounts, and in the case of a Pair of Cross-Margining Accounts consisting of Customer Cross-Margining Accounts, all Eligible Positions of a single Customer in such Cross-Margining Accounts.
In addition to these changes, the Third A&R Agreement would include conforming changes in Section 4 to make clear that the margin calculations are performed on the Combined Portfolio and to provide that Sections 4(c) and 4(e), concerning the ability of the Clearing Organizations to require margin equal to or in excess of the Standalone Margin Requirement, would apply in relation to each Cross-Margining Account.
• Revising the definition of “Cross-Margin Requirement” to refer to the joint amount of Margin required by FICC and CME in connection with a Combined Portfolio as provided for in Section 4(a) of the Third A&R Agreement;
• Revising definitions of “Margin Reduction” and “Variation Margin” to clarify that these terms apply separately with respect to Proprietary Cross-Margining Accounts and Customer Cross-Margining Accounts;
• Further revising the “Variation Margin” definition to reflect that amounts may be owed by or to a Cross-Margining Customer in relation to positions recorded in a Customer Cross-Margining Account;
• Revising the definition of “Stand-Alone Margin Requirement” to provide that it is determined with respect to a particular Cross-Margining Account, and that with regard to a Stand-Alone Margin Requirement of FICC, such requirement is calculated without regard to any netting across positions of multiple Executing Firm Customers in the same Agent Clearing Member Omnibus Account (as such terms are defined in the GSD Rules);
• Revising the definition of “Margin” to include Cross-Margining Customer Margin securing the obligations of a Cross-Margining Customer and to contemplate a Joint Clearing Member having multiple Cross-Margining Accounts; and
• Removing the definition of “Cross-Margin Positions,” which would no longer be used.
Section 6(b) of the Third A&R Agreement would be revised to require FICC and CME to notify each other in the event a material problem arises with respect to a Cross-Margining Customer in the same manner as they are currently required to do with respect to Cross-Margining Participants.
The Third A&R Agreement would include certain adjustments to the default management provisions to describe how the Clearing Organizations would address a default of an Eligible BD-FCM that is carrying Customer Positions for Cross-Margining Customers, elaborate on the steps the Clearing Organizations may take in a joint liquidation, and clarify when the Clearing Organizations may manage the default of a Cross-Margining Participant independently of one another.
The Third A&R Agreement would subject Customer Positions to substantially the same default management process as Proprietary Positions. In particular, under Section
The Third A&R Agreement would also include provisions designed to ensure that Customer Positions and associated margin are not used by either Clearing Organization to satisfy obligations arising from Proprietary Positions. The principal mechanism to achieve this would be a new concept of a “Liquidation Portfolio,” which would be defined as, with respect to a Defaulting Member, all such Defaulting Member's Proprietary Cross-Margining Account(s) or all such Defaulting Member's Customer Cross-Margining Account(s).
In addition, the Third A&R Agreement would revise Sections 7(b) through (g) to clarify that the provisions thereof would apply separately to each Liquidation Portfolio. These changes include replacing certain references to “Cross-Margining Account” with “Liquidation Portfolio,”
By virtue of these changes, upon a default of a Joint Clearing Member, the Proprietary Positions and associated margin of the Joint Clearing Member would be closed-out and netted into a single Net Gain or Net Loss, and the Customer Positions and associated margin would be separately close-out and netted into a separate Net Gain or Net Loss. As a result of these separate calculations, Customer Positions and associated margin could not be used to satisfy obligations arising under any Proprietary Positions. Similarly, variation margin gains in respect of Customer Positions would not be available to address losses on Proprietary Positions. However, the definition of “Other VM Gains” would be modified to make clear that, if there were Cross-Margin VM Gains in relation to Proprietary Positions at a time when the Clearing Organization with those Cross-Margin VM Gains also had losses on account of Customer Positions, the VM Gains may first be applied to satisfy the losses on the Customer Positions before being remitted to the other Clearing Organization.
Although the Clearing Organizations would generally close-out and net the Liquidation Portfolios of a Defaulting Member separately, Section 7(a) of the Third A&R Agreement would provide that the decision as to whether to commence the liquidation process with respect to a Joint Clearing Member would be made based on the Joint Clearing Member itself, rather than a particular Liquidation Portfolio. In accordance with this framework, Section 7(a) of the Third A&R Agreement would provide that if one Clearing Organization decides not to take default action against a Defaulting Member following a Default Event (the “Non-Liquidating CO”), the Non-Liquidating CO shall immediately require the Defaulting Member to pay the Non-Liquidating CO in immediately available funds the sum of (x) its Margin Reduction at the other Clearing Organization for all Combined Portfolios of the Defaulting Member, and (y) its Margin Reduction at the Non-Liquidating CO for all Combined Portfolios of the Defaulting Member, within one hour of demand.
The Third A&R Agreement would also include a number of conforming changes in light of the addition of the Customer Cross-Margining Arrangement. These would include new recitals which describe the purpose of the Third A&R Agreement as to establish the Customer Cross-Margining Arrangement, introduce defined terms
The Third A&R Agreement would also revise Section 3(b), which sets out certain requirements applicable to positions of Eligible Affiliates, to provide that it does not apply to Proprietary Positions of a Joint Clearing Member or to Customer Positions.
In addition, the Third A&R Agreement would revise Section 7(i) to clarify that the requirement for a Defaulting Member to reimburse a Clearing Organization in the event that the Clearing Organization is obligated to make a guaranty payment to the other Clearing Organization in respect of an obligation of such Defaulting Member applies in respect of the obligations of any Cross-Margining Customer.
The Third A&R Agreement would also include a number of clarifying edits not specifically related to the Customer Cross-Margining Arrangement. Specifically, Section 2(f) of the Third A&R Agreement would specify that FICC or CME may terminate the participation of a particular Cross-Margining Participant with respect to some or all Cross-Margining Accounts of the Cross-Margining Participant upon two business days' prior written notice to the other Clearing Organization, provided that no such termination would be effective with respect to any reimbursement obligation or guaranty with respect to such Cross-Margining Participant that was incurred prior to such termination, or with respect to Section 7 of the Third A&R Agreement until the Stand-Alone Margin Requirement with respect to each Cross-Margining Account subject to such termination has been fully satisfied.
The Third A&R Agreement would also include a new Section 5 to make clear that, as is currently the case, the collateral acceptable to satisfy the Cross-Margin Requirement must meet the respective eligibility requirements of the Clearing Organization to which the collateral is posted.
In addition, the titles of the Proprietary Cross-Margining Agreements in Appendix A and Appendix B of the Third A&R Agreement would be amended to specify that they are for use in connection with the Proprietary Cross-Margining Arrangement.
As described above, an Eligible BD-FCM would be required to enter into the Customer Cross-Margining Clearing Member Agreement in order to participate in the Customer Cross-Margining Agreement. The Customer Cross-Margining Clearing Member Agreement would be set forth in Appendix C to the Third A&R Agreement.
The Customer Cross-Margining Clearing Member Agreement would be modeled on the Proprietary Clearing Member Agreement in Appendix A of the Second A&R Agreement (the “Existing Joint Clearing Member Proprietary Clearing Member Agreement”), with changes designed to facilitate compliance with the conditions in the Proposed Orders and to clarify the rights and obligations of the Clearing Organizations, the Eligible BD-FCM, and the Cross-Margining Customers.
The first three paragraphs of the Customer Cross-Margining Clearing Member Agreement would be substantially identical to those of the Existing Joint Clearing Member Proprietary Clearing Member Agreement, except that the first paragraph would note that the Eligible BD-FCM is electing to become a Cross-Margining Participant for purposes of the Customer Cross-Margining Arrangement, rather than the Cross-Margining Arrangement generally, and the third paragraph (concerning the Eligible BD-FCM's payment obligations) would reference the payment obligations arising in respect of Customer Cross-Margining Accounts.
The Customer Cross-Margining Clearing Member Agreement would provide that the Eligible BD-FCM makes application to the Clearing Organizations to establish a Customer Cross-Margining Account at CME and one or more Customer Cross-Margining Accounts at FICC in the name of the Eligible BD-FCM, and clarify that each such account would be in addition to any Proprietary Cross-Margining Account of the Eligible BD-FCM established pursuant to the Third A&R Agreement. The Customer Cross-Margining Clearing Member Agreement would provide that each Customer Cross-Margining Account shall be limited to transactions and positions carried by the Eligible BD-FCM for Cross-Margining Customers who have signed a Customer Agreement. The Eligible BD-FCM would be required to agree that it shall not commence clearing transactions through or carrying positions in a Customer Cross-Margining Account for any Cross-Margining Customer until such Cross-Margining Customer has executed a Customer Agreement.
The Eligible BD-FCM would be required under the Customer Cross-Margining Clearing Member Agreement to indemnify and hold harmless the Clearing Organizations, their respective directors, officers and employees and each person, if any, who controls either of the Clearing Organizations against any claims, losses, liabilities and expenses, including, without limitation, reasonable legal fees and expenses and amounts paid or payable in settlement of any action, proceeding or investigation arising from any claim by any party resulting from the carrying of positions in a Customer Cross-Margining Account that belong to any person other than a Cross-Margining Customer for whom a Customer Agreement is in effect.
The Customer Cross-Margining Clearing Member Agreement would provide that the Eligible BD-FCM, as agent for each of its Cross-Margining Customers, (i) unconditionally promises immediate payment of any payment or reimbursement obligations to a Clearing Organization arising under the Third
The Customer Cross-Margining Clearing Member Agreement would also provide for the Eligible BD-FCM to pledge, as security for its and its Cross-Margining Customers' present and future payment and reimbursement obligations to FICC and CME arising from its Customer Cross-Margining Accounts or otherwise under the Customer Cross-Margining Clearing Member Agreement on behalf of itself and each Cross-Margining Customer, and grant to each Clearing Organization a first priority continuing security interest in, lien on and right of set-off against all of the positions, margin deposits or other property held by or subject to the control of or owing from either Clearing Organization including any and all Net Gains in respect of the Eligible BD-FCM's Customer Cross-Margining Accounts and the proceeds in respect thereof.
The Eligible BD-FCM would also provide for the Eligible BD-FCM to agree that (i) the rights of each Clearing Organization set forth in the preceding paragraph are in addition to any other rights arising out of the NYUCC or other statute, common law, or governmental regulation, or under their respective rules, (ii) the Eligible BD-FCM will execute, deliver, file and record any financing statement, specific assignment or other document and take any other action necessary or desirable and reasonably requested by FICC or CME to create, preserve, perfect or validate the security interest or lien granted in this paragraph, to enable such Clearing Organization to exercise or enforce its rights, (iii) the Eligible BD-FCM will promptly give notice to the Clearing Organizations of, and defend against, any suit, action, proceeding or lien that involves or could adversely affect the security interest and lien granted by the Eligible BD-FCM, and (iv) the Eligible BD-FCM authorizes FICC to comply with CME's entitlement orders with respect to any Cross-Margining Customer Margin pursuant to the Third A&R Agreement without further consent of the Eligible BD-FCM or Cross-Margining Customer for whom such Cross-Margining Customer Margin is held. Clauses (i) through (iii) broadly align with the Existing Joint Clearing Member Proprietary Clearing Member Agreement, while clause (iv) would be designed to facilitate the perfection of CME's security interest in the Cross-Margining Customer Margin and help ensure that Cross-Margining Customer Margin is treated as “customer property” under Part 190 of the CFTC's regulations, as described in the Petitions.
The Customer Cross-Margining Clearing Member Agreement would contain the same provision regarding the disclosure of Clearing Data as in the Existing Joint Clearing Member Proprietary Clearing Member Agreement. Consistently with the Existing Joint Clearing Member Proprietary Clearing Member Agreement, it would also provide that neither FICC nor CME guarantees to the Eligible BD-FCM that the calculation of the margin reduction for a Combined Portfolio pursuant to the Third A&R Agreement will yield any, or the highest possible, margin reduction for the Combined Portfolio. The Customer Cross-Margining Clearing Member Agreement would also, as in the Existing Joint Clearing Member Proprietary Clearing Member Agreement, provide that, without limiting any provision of the GSD Rules, the rules of CME or any other agreement between the Eligible BD-FCM and FICC or CME, any transfer by the Eligible BD-FCM or any Cross-Margining Customer of any rights it may have in the Net Gain (or any component thereof) shall be null and void and, in any event, subject to the prior payment in full of all payment and reimbursement obligations under the Third A&R Agreement. The Customer Cross-Margining Clearing Member Agreement would contain the same representations as the Existing Joint Clearing Member Proprietary Clearing Member Agreement, except those concerning the proprietary nature of the positions and Eligible Affiliates.
The Customer Cross-Margining Clearing Member Agreement would specify that the Eligible BD-FCM may terminate the Customer Cross-Margining Clearing Member Agreement upon two business day's written notice to FICC and CME, and that such termination shall be effective upon written acknowledgement by both FICC and CME provided that (i) all positions in the Customer Cross-Margining Accounts have been closed-out or transferred to other accounts in accordance with the GSD Rules or the rules of CME, and (ii) all Stand-alone Margin Requirement in respect of any such transferred positions and all obligations of the Eligible BD-FCM to the Clearing Organizations in respect of the Customer Cross-Margining Accounts have been fully satisfied.
The Customer Cross-Margining Clearing Member Agreement would also specify that either Clearing Organization may terminate the Eligible BD-FCM's participation with respect to any Customer Cross-Margining Account (defined as an “Affected Customer Cross-Margining Account”) of the Eligible BD-FCM at any time upon written notice to the other Clearing Organization pursuant to the Third A&R Agreement and to the Eligible BD-FCM. In connection with such termination, the Clearing Organizations would be permitted to require the Eligible BD-FCM to close-out or transfer all positions in the Affected Customer Cross-Margining Accounts in accordance with the GSD Rules or the rules of CME, and the Customer Cross-Margining Clearing Member Agreement would thereupon terminate with respect to Affected Customer Cross-Margining Accounts, provided that the Stand-alone Margin Requirement in respect of the transferred positions and all obligations of the Eligible BD-FCM to the Clearing Organizations in respect of the Affected Customer Cross-Margining Accounts have been fully satisfied.
The Customer Cross-Margining Clearing Member Agreement would also include the same governing law, choice-of-jurisdiction, and execution in counterparts provisions as the Existing Joint Clearing Member Proprietary Clearing Member Agreement. The Customer Cross-Margining Clearing Member Agreement would also provide that it would become effective upon the later of execution of the Customer Cross-Margining Clearing Member Agreement, or on the receipt of all necessary regulatory approvals from the Commission and the CFTC.
The Customer Agreement would include the terms of the Subordination Agreement and acknowledgements corresponding to the disclosures required by the Proposed Orders.
• it agrees to the terms of the Subordination Agreement, under which
• all money, securities and property deposited with the Eligible BD-FCM by the Cross-Margining Customer to margin, guarantee or secure Customer Positions (the “Customer Property”) will be held in a “futures account” as defined in CFTC Regulation 1.3 and subject to CEA Section 4d(a) and (b);
• its Customer Positions and associated margin may be commingled with the positions and property of other customers of the Eligible BD-FCM and may be used by the Eligible BD-FCM to purchase, margin, secure, settle, or otherwise carry positions on behalf of the Cross-Margining Customer or other futures customers of the Eligible BD-FCM;
• property held in connection with Customer Positions will be treated in a manner consistent with the CFTC Order and that such property held on the Cross-Margining Customer's behalf by the Eligible BD-FCM will be customer property received by an FCM to be accounted for, treated and dealt with by such FCM in a manner consistent with Section 4d of the CEA;
• in the event a Clearing Organization suspends or ceases to act for Clearing Member, it shall be within the sole discretion of the Clearing Organizations to determine whether to transfer, liquidate, or settle Customer Positions in the relevant Customer Cross-Margining Account;
• its participation in the Customer Cross-Margining Arrangement is subject to the terms of (i) the Third A&R Agreement, (ii) the Customer Cross-Margining Clearing Member Agreement, and (iii) the GSD Rules and the rules of CME;
• if CME determines at any time that any Eligible Positions of the Cross-Margining Customer cleared through the Customer Cross-Margining Account at CME are non-risk reducing, CME may either restrict the Cross-Margining Customer from adding positions or require the Cross-Margining Customer to move or liquidate Eligible Positions in the Customer Cross-Margining Account at CME;
The Customer Agreement would also require the Cross-Margining Customer to pledge, as security for the Cross-Margining Customer's present and future payment and delivery obligations in respect of its Customer Positions (including, without limitation, any obligation of the Cross-Margining Customer to reimburse the Eligible BD-FCM as a result of the Eligible BD-FCM's performance of such obligations), and grant to the Eligible BD-FCM a continuing security interest in, lien on and right of set-off against its right, entitlement, and interest in all of positions in each Customer Cross-Margining Account, all margin posted by the Cross-Margining Customer in connection with such positions, and the proceeds in respect thereof.
FICC is proposing to make a number of changes to the GSD Rules to effectuate the Customer Cross-Margining Arrangement.
First, FICC proposes to create a new position Account type, the “Cross-Margining Customer Account,” in which Customer Positions would be recorded. The Cross-Margining Customer Account would constitute an “Indirect Participants Account.” A Netting Member that is an Eligible BD-FCM and approved participant in the Customer Cross-Margining Arrangement would be permitted to designate an Indirect Participants Account (other than a Segregated Indirect Participants Account) as a Cross-Margining Customer Account.
Second, FICC proposes to adopt rule changes to set forth how FICC would calculate, collect, and hold margin for positions recorded in a Cross-Margining Customer Account. As noted above, FICC proposes to collect and hold Cross-Margining Customer Margin pursuant to substantially similar provisions as apply to Segregated Customer Margin, with certain modifications to satisfy the requirements of the Proposed Orders and align with the treatment of futures margin. Specifically:
• Consistent with Segregated Customer Margin and in accordance with the Proposed Orders, FICC would credit all Cross-Margining Customer Margin deposited by a Netting Member to a “securities account,” as defined in the NYUCC,
• In accordance with the Proposed Orders, FICC would hold Cross-Margining Customer Margin in (i) an account of FICC at a bank insured by the Federal Deposit Insurance Corporation (“FDIC”) that is segregated from any other account of FICC and used exclusively to hold Cross-Margining Customer Margin, and (ii) an account at the FRBNY that is segregated from any other account of FICC and used exclusively to hold Segregated Customer Margin and Cross-Margining Customer Margin. The GSD Rules would provide that any such account (other than one at the FRBNY) would need to be subject to a written notice consistent with the Proposed Orders.
• The same requirements applicable to Segregated Customer Margin with respect to the form and composition of eligible collateral, the minimum amounts of cash and Eligible Clearing Fund Treasury Securities, substitution and withdrawal, and treatment of excess margin would be applicable to Cross-Margining Customer Margin, except that (i) a Netting Member's rights or FICC's obligation with respect to any excess Cross-Margining Customer Margin would be subject to the Third A&R Agreement and the Customer Cross-Margining Clearing Member Agreement, and (ii) FICC would be permitted to retain the excess Cross-Margining Customer Margin deposited by a Netting Member with respect to a Cross-Margining Customer when the Netting Member has any outstanding payment or margin obligation arising from any Customer Positions, including those of another Cross-Margining Customer.
With regard to calculation, FICC proposes that, as with Segregated Customer Margin and in accordance with the requirements of the Proposed Orders, FICC would calculate the margin requirement in respect of each Cross-Margining Customer Account (the “Cross-Margining Customer Margin Requirement”) on a gross (
Third, FICC proposes to provide that Cross-Margining Customer Margin would be pledged to FICC to secure all obligations of the Netting Member and its Cross-Margining Customers arising under Customer Positions.
Fourth, FICC proposes to remove the existing Section 10(e) of Rule 3A, which currently prohibits Sponsored Members from participating in the Cross-Margining Arrangement.
Fifth, FICC proposes to make conforming changes to Rule 43, which sets out the terms related to Cross-Margining Arrangements, so that the Rule encompasses the Customer Cross-Margining Arrangement. In particular, FICC proposes to specify in Rule 43 that a Netting Member that is an Eligible BD-FCM may become a Cross-Margining Participant in connection with the Customer Cross-Margining Arrangement with the consent of FICC and CME. An Eligible BD-FCM would become such a Cross-Margining Participant and be permitted to establish a Cross-Margining Customer Account upon acceptance by FICC and CME of an executed Customer Cross-Margining Clearing Member Agreement. FICC further proposes to make clear that if FICC becomes obligated to make a payment to CME pursuant to the cross-guaranty under the Third A&R Agreement in relation to the obligations of a Cross-Margining Customer, both the Cross-Margining Customer and the relevant Eligible BD-FCM would be responsible for the reimbursement obligation that is owed to FICC as a result. If FICC receives a payment from CME pursuant to the Third A&R Agreement in connection with the Customer Cross-Margining Arrangement, FICC would not be permitted to apply such payment to any obligation other than the obligations of Cross-Margining Customers (whether or not arising in connection with any Eligible Positions).
Lastly, FICC proposes to remove provisions relating to “Market Professional” and “Market Professional Agreement for Cross-Margining” from the GSD Rules. Those provisions were adopted in connection with a “market professional” cross-margining program between FICC and New York Portfolio Clearing, LLC.
To effectuate the proposed changes described above, FICC proposes to make the following amendments to its Rules.
The term “Cross-Margining Customer” would mean a Sponsored Member or Executing Firm Customer whose Transactions are recorded in a Cross-Margining Customer Account.
The term “Cross-Margining Customer Account” would mean an Indirect Participants Account maintained by FICC for a Sponsoring Member or an Agent Clearing Member that has been designated pursuant to Rule 2B for purposes of recording Transactions of Cross-Margining Customers.
The term “Cross-Margining Customer Margin Custody Account” would mean a securities account within the meaning of the NYUCC maintained by FICC, in its capacity as securities intermediary as such term is used in the NYUCC, for an Agent Clearing Member or Sponsoring Member for the benefit of such Member's Cross-Margining Customers.
The term “Cross-Margining Customer Margin” would mean all securities and funds deposited by a Sponsoring Member or an Agent Clearing Member with FICC to satisfy its Cross-Margining Customer Margin Requirement.
The term “Cross-Margining Customer Margin Requirement” would mean the amount of cash or Eligible Clearing Fund Securities that an Agent Clearing Member or Sponsoring Member is required to deposit with FICC to support the obligations arising from Transactions recorded in its Cross-
The term “Customer Cross-Margining Arrangement” would mean a Cross-Margining Arrangement pursuant to which a Cross-Margining Participant, at the discretion of FICC and in accordance with the provisions of Rule 43, may elect to have any of its Cross-Margining Customers' margin requirement in respect of Eligible Positions at FICC and such Cross-Margining Customer's margin requirements in respect of Eligible Positions at a clearing organization for a board of trade designated as a contract market under Section 5 of the CEA that has entered into a Cross-Margining Agreement with FICC (an “FCO”) calculated by taking into consideration the net risk of such Eligible Positions at each of the clearing organizations.
FICC proposes to amend the definition to “Cross-Margining Affiliate” to remove existing prong (ii), which relates to the “market professional” cross-margining program.
FICC proposes to amend the definition to “Cross-Margining Agreement” to encompass the Customer Cross-Margining Arrangement by specifying that the applicable Cross-Margining Participant may have any of its Cross-Margining Customers' margin requirement in respect of Eligible Positions at FICC and such Cross-Margining Customer's margin requirements in respect of Eligible Positions at a relevant FCO calculated by taking into consideration the net risk of such Eligible Positions at each of the clearing organizations. FICC also proposes to remove the last sentence of this definition, which relates to the “market professional” cross-margining program.
FICC proposes to make conforming edits to the definition of “Current Net Settlement Positions” to add references to “Cross-Margining Customer,” “Cross-Margining Customer Account,” and “Cross-Margining Customer Margin Requirement” after each reference to “Segregated Indirect Participant,” “Segregated Indirect Participants Account,” and “Segregated Customer Margin Requirement,” respectively.
FICC proposes to amend the definitions of “Indirect Participants Account,” “Type of Account” and “Type” to include a Cross-Margining Customer Account.
In addition, FICC proposes to add a new Section 3a of Rule 2B to provide that (i) a Netting Member that is an Eligible BD-FCM and has been approved to become a Cross-Margining Participant in a Customer Cross-Margining Arrangement pursuant to a Cross-Margining Agreement may designate any of its Indirect Participants Accounts (other than a Segregated Indirect Participants Account) as a Cross-Margining Customer Account; (ii) any such designation of an Account shall constitute a representation to FICC by the Netting Member that the Netting Member has complied with all regulatory requirements applicable to it in connection with its participation in the Customer Cross-Margining Arrangement, including the conditions in the Proposed Orders; and (iii) the Netting Member shall be deemed to repeat this representation each time it deposits Cross-Margining Customer Margin.
FICC proposes to amend Section 1a of Rule 4 to make clear that FICC's account at the FRBNY that is currently used to hold Segregated Customer Margin would also hold Cross-Margining Customer Margin.
FICC proposes to renumber current Section 1b of Rule 4 to Section 1c and add a new Section 1b. The new Section 1b would provide that:
• Each Netting Member shall deposit Cross-Margining Customer Margin with FICC in an amount equal to its Cross-Margining Customer Margin Requirement, which requirement shall be determined in accordance with Rule 4 and the Margin Component Schedule. The timing of the satisfaction of the Cross-Margining Customer Margin Requirement shall be determined in accordance with the provisions of Section 9 of Rule 4.
• FICC shall establish and maintain on its books and records a Cross-Margining Customer Margin Custody Account to which all Cross-Margining Customer Margin deposited with FICC shall be credited. The Cross-Margining Customer Margin credited to a Cross-Margining Customer Margin Custody Account shall be used exclusively to secure the present and future payment and reimbursement obligations of the Netting Member and its Cross-Margining Customers in relation to Eligible Positions of the Netting Member's Cross-Margining Customers at FICC and CME.
• All assets credited to each Cross-Margining Customer Margin Custody Account shall be treated as “financial assets” within the meaning of Article 8 of the NYUCC. New York is the “securities intermediary's jurisdiction” for purposes of the NYUCC and New York law shall govern all issues specified in Article 2(1) of the Hague Securities Convention.
• FICC shall hold all Cross-Margining Customer Margin in an account of FICC at an FDIC-insured bank within the meaning of the Exchange Act that is a qualified custodian under the Investment Company Act of 1940, as amended, or at the FRBNY. Any account at an FDIC-insured bank shall be segregated from any other account of FICC and shall be used exclusively to hold Cross-Margining Customer Margin, and shall be subject to a written notice of the bank provided to and retained by FICC consistent with the Proposed Orders. The account at the FRBNY shall be segregated from any other account of FICC and shall be used exclusively to hold Cross-Margining Customer Margin and Segregated Customer Margin (the account at the FRBNY would not be subject to a written notice).
FICC proposes to amend current Section 1b (to be renumbered as Section 1c) of Rule 4 to (i) add references to “Cross-Margining Customer Accounts” after references to “Segregated Indirect Participants Accounts” in current Section 1b(a), and (ii) add a new sentence at the end of current Section 1b(b) to provide that FICC would
FICC proposes to amend Section 2 of Rule 4 by (i) adding references to “Cross-Margining Customer Margin Requirement” after references to “Segregated Customer Margin Requirement” in the title of Section 2 and Section 2(a), and (ii) adding a new clause (vii) of Section 2(a) to specify that the Cross-Margining Customer Margin Requirement would be an amount calculated with respect to the Netting Member's Cross-Margining Customer Accounts.
FICC proposes to add a new Section 2c of Rule 4 entitled “Cross-Margining Customer Margin Requirement” to provide that (i) each Netting Member shall deposit any Cross-Margining Customer Margin with FICC by the Required Fund Deposit Deadline through a separate Deposit ID established by the Netting Member for each Cross-Margining Customer Account, and (ii) FICC shall report the Cross-Margining Customer Margin Requirements to each Netting Member twice daily in a Report which shall specify the Cross-Margining Customer Margin Requirement for each Cross-Margining Customer Account.
FICC proposes to add a new Section 3(d) of Rule 4 and insert it before the last sentence of Section 3. The new Section 3(d) would provide that each Cross-Margining Customer Margin Requirement for a particular Cross-Margining Customer Account would be subject to the requirements that (i) a minimum of 40 percent of the Cross-Margining Customer Margin Requirement for such Account shall be satisfied with cash and/or Eligible Clearing Fund Treasury Securities, and (ii) a minimum of the product of $1 million and the number of Cross-Margining Customers whose Transactions are recorded in such Cross-Margining Account must be made and maintained in cash. In addition, FICC proposes to amend the last sentence of Section 3 by adding a reference to “Cross-Margining Customer Margin Requirement” after the reference to “Segregated Indirect Participants Requirement.”
FICC proposes to amend Section 3a of Rule 4 to add a reference to “Cross-Margining Customers” after the reference to “Segregated Indirect Participants.” FICC also proposes to amend Section 3b of Rule 4 to add a reference to “Cross-Margining Customer Margin Custody Account” after the reference to “Segregated Customer Margin Custody Account.”
FICC proposes to amend Sections 3a, 3b, and 9 of Rule 4 to add references to “Cross-Margining Customer Margin,” after each reference to “Segregated Customer Margin.” FICC also proposes to amend Sections 3b and 9 of Rule 4 to add references to “Cross-Margining Customer Margin Requirement,” after each reference to “Segregated Customer Margin Requirement.”
FICC proposes to add a new Section 4(c) of Rule 4 to provide that (i) as security for any and all obligations and liabilities of a Netting Member and any of its Cross-Margining Customers to FICC arising out of or in connection with any Cross-Margining Customer Accounts of such Netting Member or Transactions recorded therein, each such Netting Member on behalf of itself and its Cross-Margining Customers grants to FICC a first priority perfected security interest in its right, title and interest in and to all Cross-Margining Customer Margin, each Cross-Margining Customer Margin Custody Account, and all distributions thereon and proceeds thereof, and (ii) FICC shall be entitled to exercise the rights of a pledgee under common law and a secured party under Articles 8 and 9 of the NYUCC with respect to such assets.
FICC proposes to amend Section 5 of Rule 4 by (i) adding a reference to “Cross-Margining Customer Margin” after the reference to “Segregated Customer Margin” in the title of Section 5, and (ii) adding a new paragraph at the end of Section 5 to provide that FICC shall only use Cross-Margining Customer Margin deposited by a Netting Member to (A) secure the Transactions of Cross-Margining Customers of such Netting Member recorded in any Cross-Margining Customer Account and satisfy payment and delivery obligations owing to FICC (including liquidating or otherwise using such Cross-Margining Customer Margin to obtain relevant cash or securities) in connection with a default in respect of such Transactions; and (B) for investment in U.S. Treasury securities with a maturity of one year or less.
FICC proposes to amend Section 10 of Rule 4 by (i) adding a reference to “Cross-Margining Customer Margin” after the reference to “Segregated Customer Margin” in the title of Section 10, (ii) amending the first paragraph of Section 10 to require FICC to separately determine whether the amount of Cross-Margining Customer Margin supporting a Cross-Margining Customer's Transactions is in excess of the Cross-Margining Customer Margin Requirement for such Cross-Margining Customer (“Excess Cross-Margining Customer Margin”), and (iii) adding a new Section 10(c) to provide that upon a Member's request, and in accordance with such procedures as FICC may set forth from time to time, the Corporation shall return to the Member its Excess Cross-Margining Customer Margin, subject to the minimum amount of cash or Eligible Clearing Fund Securities required to be maintained pursuant to the GSD Rules (valued at their collateral value on the day of such withdrawal) and the terms of the Third A&R Agreement and Customer Cross-Margining Clearing Member Agreement, as the Member requests, provided that, subject to the Third A&R Agreement and the Customer Cross-Margining Clearing Member Agreement, and except to the extent required by applicable law or authorized by the Commission, FICC shall not retain Excess Cross-Margining Customer Margin due to any obligations of the Member unrelated to a Cross-Margining Customer Account of such Member. Section 10(c) of Rule 4 would further provide that FICC may, at its discretion, retain some or all of the Excess Cross-Margining Customer Margin if the Member has an outstanding payment or margin obligation to the Corporation with respect to the Transactions of any Cross-Margining Customer.
FICC proposes to amend the Margin Component Schedule to set out how Cross-Margining Customer Margin Requirements would be determined. Specifically, FICC proposes to insert a new paragraph at the end of Section 1 to provide that (i) on each Business Day, each Netting Member for which FICC maintains a Cross-Margining Customer Account shall be required to deposit with FICC Cross-Margining Customer Margin equal to the sum of all Cross-Margining Customer Margin Requirements for all such Accounts, (ii) each Cross-Margining Customer Margin Requirement shall equal the sum of the amounts calculated pursuant to Section 3a of the Margin Component Schedule for each Cross-Margining Customer whose Transactions are recorded in the relevant Cross-Margining Customer Account, and (iii) each such calculation shall be performed twice daily or on a more frequent basis if FICC deems it appropriate pursuant to the Margin Component Schedule and subject to the provisions of Rule 4. Further, FICC
FICC proposes to add a new Section 2(c) of Rule 43 to provide that (i) a Netting Member that is an Eligible BD-FCM may become a Cross-Margining Participant in connection with the Customer Cross-Margining Arrangement with the consent of FICC and CME, and (ii) an Eligible BD-FCM that would become such a Cross-Margining Participant shall be permitted to establish a Cross-Margining Customer Account upon acceptance by FICC and CME of an executed Customer Cross-Margining Clearing Member Agreement.
FICC proposes to amend Section 3 of Rule 43 to provide that, if FICC becomes obligated to make a payment to CME pursuant to the cross-guaranty under the Third A&R Agreement in relation to the obligations of a Cross-Margining Participant, its Cross-Margining Affiliate, or its Cross-Margining Customer, the Cross-Margining Participant (and, if FICC becomes obligated to make such a payment in respect of the obligations of a Cross-Margining Customer, the Cross-Margining Customer) shall thereupon immediately be obligated, whether or not FICC has then made payment to CME, to pay to FICC the amount of the reimbursement obligation that is owed to FICC as a result.
FICC proposes to add a new sentence at the end of Section 5 of Rule 43 to provide that, if FICC receives a payment from CME pursuant to the Third A&R Agreement in connection with the Customer Cross-Margining Arrangement, FICC would not be permitted to apply such payment to any obligation other than the obligations of Cross-Margining Customers (whether or not arising in connection with any Eligible Positions).
FICC proposes to amend Section 4(b)(i) of Rule 2A to make clear that an applicant to become a Netting Member must have sufficient financial ability to make anticipated required deposits to not only Clearing Fund and Segregated Customer Margin, but also any Cross-Margining Customer Margin.
FICC proposes to remove Section 10(e) of Rule 3A to remove the current prohibition of Sponsored Members from participating in any Cross-Margining Arrangements, and accordingly renumber current Section 10(f) of Rule 3A to Section 10(e).
FICC proposes to remove (i) the language in parentheticals in the first sentence of Section 1 of Rule 13, (ii) the second sentence in Section 2(b) of Rule 22A, and (iii) the portions of Sections 2(a) and 2(b) of Rule 43 that are crossed out in Exhibit 5, because those provisions relate to the “market professional” cross-margining program, which is no longer active and would not be used if the Customer Cross-Margining Arrangement becomes available.
The proposed Third A&R Agreement would not become effective and replace the Second A&R Agreement until the latest of (i) the date on which all necessary regulatory approvals of the proposed Third A&R Agreement have been received by FICC and CME and (ii) a date agreed by FICC and CME.
FICC believes that the proposed rule change is consistent with Section 17A of the Exchange Act
Section 17A(b)(3)(F) of the Exchange Act, requires, in part, that the rules of a clearing agency be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
First, the proposed Third A&R Agreement and the proposed changes to the GSD Rules would provide for funds and securities posted by Cross-Margining Participants in respect of Customer Positions,
Second, the proposed changes adopting and implementing the Customer Cross-Margining Arrangement would reduce the likelihood of FICC, each Netting Member, and indirect participants incurring a loss on account of a default by aligning each Cross-Margining Customer's margin requirements with the risk of such Cross-Margining Customer's Eligible Positions. Such alignment would serve to incentivize a Cross-Margining Customer to maintain portfolios that present lower because such lower risk would generally lead to lower margin requirements. Lower risk portfolios, in turn, would serve to reduce the risk of such Cross-Margining Customer's default and the Cross-Margining Participant's and FICC's exposure thereto. Accordingly, by allowing a Cross-Margining Customer to engage in cross-margining activity, the proposed changes would serve to promote the risk-reducing effects of cross-margining that are currently only available to Cross-Margining Participants and their Eligible Affiliates. They would thus serve to enhance FICC's ability to safeguard the securities and funds in its control or for which it is responsible.
The lower margin requirements which would result from these changes would also incentivize Cross-Margining Customers to post initial margin in respect of their Eligible Positions, rather than rely on their Eligible BD-FCM to do so. Currently, FICC understands that it is common practice for Sponsoring Members and Agent Clearing Members to use their own assets to satisfy the FICC initial margin requirements associated with FICC-cleared positions that Eligible BD-FCMs carry for their customers.
The proposed changes adopting and implementing the Customer Cross-Margining Arrangement would also promote the safeguarding of funds and securities for which FICC is responsible by ensuring that Customer Positions and Cross-Margining Customer Margin benefit from the customer protection regime applicable to futures contracts and associated margin. They would do this by requiring that Customer Positions and Cross-Margining Customer Margin be carried by the Cross-Margining Participant in a futures account and by satisfying the conditions necessary under the Proposed Orders to allow the Cross-Margining Participant to do that. Because the Customer Positions and Cross-Margining Customer Margin would be carried in a futures account, an Eligible BD-FCM would generally be required to safeguard Customer Positions and Cross-Margining Customer Positions to a substantially similar extent as is required for futures and associated margin. Furthermore, by requiring that Customer Positions and Cross-Margining Customer Margin be carried in a futures account and satisfying the other conditions of the Proposed Orders, the proposed changes would help to ensure that Customer Positions and Cross-Margining Customer Margin constitute “customer property” for purposes of Part 190 and that Cross-Margining Customer claims therefor constitute the claims of “customers” on account of their “net equity” within the meaning of Part 190.
In addition, the proposed changes would promote the safeguarding of funds and securities for which FICC is responsible by ensuring that customers of an Eligible BD-FCM that do not participate in cross-margining under the Customer Cross-Margining Arrangement (as well as Cross-Margining Customers in relation to positions and margin not subject to the arrangement) remain entitled to the full suite of protections under Section 15(c)(3) of the Exchange Act, Rule 15c3-3 under the Exchange Act, and SIPA. The proposed changes are designed to ensure this protection by requiring that Cross-Margining Customers enter into a Customer Agreement that includes the terms of the Subordination Agreement. Pursuant to such terms, each Cross-Margining Customer would agree that its claims to “customer property” as defined in SIPA or 11 U.S.C. 741 against the Cross-Margining Participant with respect to its Customer Positions at FICC and associated Cross-Margining Customer Margin will be subordinated to the claims of all other customers.
Section 17A(b)(3)(F) of the Exchange Act requires, among other things, that the rules of a clearing agency be designed to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and settlement of securities transactions.
The proposed changes would extend the existing cross-margining arrangement to Customer Positions, which is currently only available for clearing members (and certain Eligible Affiliates) at FICC and CME with respect to proprietary positions. By doing so, the proposed changes would serve to eliminate impediments to Cross-Margining Customers submitting transactions for central clearing. Specifically, the proposed rule change would serve to align the margin requirements for Customer Positions with the risk the positions present. As a result, they would eliminate impediments to clearing that can arise from unduly high margin requirements. Furthermore, by aligning margin requirements with risk, the proposed changes would incentivize market participants to submit more Treasury securities transactions eligible to be cross-margined to be cleared at FICC. The maintenance of such incentives to submit transactions for clearance and settlement at FICC would promote the diversity and scope of market participants able to utilize FICC's multilateral netting, trade guaranty and centralized default management services. Therefore, the proposed rule change would also serve to promote prompt and accurate clearance and settlement of securities transactions.
Rule 17ad-22(e)(6)(i) under the Exchange Act requires that a covered clearing agency establish a risk-based margin system that, at a minimum, considers, and produces margin levels commensurate with, the risks and particular attributes of each relevant product, portfolio, and market and, if the covered clearing agency provides central counterparty services for U.S. Treasury securities, calculates, collects, and holds margin amounts from a direct participant for its proprietary positions in Treasury securities separately and independently from margin calculated and collected from that direct participant in connection with U.S. Treasury securities transactions by an indirect participant that relies on the services provided by the direct participant to access the covered clearing agency's payment, clearing, or settlement facilities.
First, the Customer Cross-Margining Arrangement would produce margin levels commensurate with the risks and particular attributes of the Eligible Positions. This is because FICC would calculate initial margin requirements for Customer Positions using the same methodology as under the Proprietary Cross-Margining Arrangement, with each Cross-Margining Customer treated effectively as an independent Netting Member. The Commission recently approved this methodology, finding in particular that it satisfied the requirements of Rule 17ad-22(e)(6).
Second, the proposed changes would provide that FICC-cleared Customer Positions of a Cross-Margining Customer would be recorded in a Cross-Margining Customer Account, which account would be a separate Type of Account for purposes of the GSD Rules.
Rule 17ad-22(e)(4)(i) under the Exchange Act requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes by maintaining sufficient financial resources to cover its credit exposure to each participant fully with a high degree of confidence.
Rule 17ad-22(e)(18)(iv)(C) under the Exchange Act requires, among other things, that a covered clearing agency that provides central counterparty services for transactions in U.S. Treasury securities ensure that it has appropriate means to facilitate access to clearance and settlement services of all eligible secondary market transactions in U.S. Treasury securities, including those of indirect participants. As described above, the proposed changes would expand the Cross-Margining Arrangement, which currently is only available for proprietary positions of Cross-Margining Participants and those of their Eligible Affiliates, to Customer Positions. This expansion would serve to facilitate access for indirect participants to FICC's clearance and settlement services for Treasury transactions by aligning the margin requirements applicable to such participants' positions with the risk those positions present. Such alignment would serve to eliminate impediments to access that can arise when there is a mismatch between margin and risk. Furthermore, by creating an incentive for Cross-Margining Customers to cover the margin requirements for their own positions, the proposed rule change would serve to reduce the need for Netting Members to use their own resources to cover such margin obligations. As a result, it would reduce the costs and increase the capacity of Netting Members to provide clearing services, which would in turn allow Netting Members to increase the volume of transactions they clear and reduce the prices at which they provide such clearing services. Moreover, by creating significant cost savings and efficiencies for Cross-Margining Customers that consolidate offsetting positions into a single clearing member regardless of execution counterparty, the proposed changes would create a natural incentive for Netting Members to offer done-away clearing services. For such Netting Members, carrying Treasury securities positions entered into by a customer with other parties would provide a potential opportunity to reduce the risk of the customer's futures positions and earn clearing revenue without the cost of funding the customer's margin obligations, and such clearing services could create opportunities to increase the Netting Member's scope of customers. Therefore, the proposed changes would facilitate access to clearance and settlement services of all eligible secondary market transactions in U.S. Treasury securities, including those of indirect participants.
FICC believes that the proposed changes to the GSD Rules and the Third A&R Agreement would promote competition by enabling customers of Eligible BD-FCMs to benefit from cross-margining.
As described above, under the Existing Agreement, cross-margining is currently only available for a Cross-Margining Participant's proprietary positions and those of an Eligible Affiliate. Accordingly, customers of Cross-Margining Participants are not able to benefit from cross-margining; they must continue to have their Eligible Securities Positions margined without regard to potential risk offsets involving other Eligible Futures Positions. By extending availability of cross-margining to Customer Positions, the proposed rule change would serve to place customers of Eligible BD-FCMs on a more level playing field with Cross-Margining Participants and Eligible Affiliates. It would ensure that such customers have the ability to achieve similar margin efficiencies and pursue similar trading strategies on similar terms as Cross-Margining Participants and Eligible Affiliates. As a result, the proposed changes would improve competitive parity in the U.S. Treasury market between direct participants and indirect participants at FICC.
The proposed rule change would also promote competition by allowing all customers of Eligible BD-FCMs, rather than only market professionals or a similar subset, to access central clearing. As a result, the propose rule change would ensure that introducing cross-margining maintains competitive parity among customers of Eligible BD-FCMs.
FICC believes that the proposed rule change would introduce a burden of competition as between Eligible BD-FCMs and other Netting Members because the Customer Cross-Margining Arrangement would only be available for Customer Positions carried by Eligible BD-FCMs. However, FICC believes that this burden on competition is necessary in order to ensure that Customer Positions and associated Cross-Margining Customer Margin are safeguarded pursuant to robust customer protections. In particular, the dual registration of an Eligible BD-FCM as a broker-dealer and FCM is necessary to ensure that the Customer Positions and associated margin can be carried in a futures account under the CEA and applicable CFTC regulations and that they benefit from the Part 190 distributional rules in the event of the clearing member's failure. FICC has concluded that it would not be feasible to achieve similar customer protections if Customer Positions were carried at a Netting Member not registered as a BD and FCM. Indeed, FICC has observed that other U.S. cross-margining arrangements involving customers similarly require such dual registration as a condition to participation in the arrangement.
In addition, the proposed rule change would promote competition by providing market participants with greater flexibility in the methods through which transactions in U.S. Treasury securities can be cleared. With the introduction of the Customer Cross-Margining Arrangement, clearing members will be able to offer a wider variety of clearing methods to their indirect participant customers. Such indirect participants will accordingly be able to participate in a wider variety of clearing methods, and will be able to choose whether to clear transactions under the Customer Cross-Margining Arrangement or whether to clear transactions at FICC without engaging in cross-margining.
Accordingly, the proposed rule change would promote competition by allowing Cross-Margining Customers to obtain the benefits associated with cross-margining, ensuring that Cross-Margining Customers are not at an undue competitive disadvantage relative to clearing members and certain Eligible Affiliates who are currently able to access such benefits under the Proprietary Cross-Margining Arrangement, and providing market participants with greater flexibility in the access models available for the clearing of transactions in U.S. treasury securities.
FICC has not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on how to submit comments,
FICC reserves the right to not respond to any comments received.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Exchange Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend subparagraph (c)(2) of Exchange Rule 2614, Orders and Order Instructions, to allow the Post Only order instruction to be applied to orders in securities priced below $1.00 on its equity trading platform (referred to herein as “MIAX Pearl Equities”).
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, MIAX Pearl 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. MIAX Pearl has prepared summaries, set forth in sections A, B, and C below, of the
Currently, with the exception of the Post Only instruction (described below), all order types and order instructions are available to orders in all securities regardless of price. Only the Post Only instruction is currently limited to securities priced at or above $1.00. The Exchange proposes to remove this exception and amend subparagraph (c)(2) of Exchange Rule 2614, Orders and Order Instructions, to allow the Post Only order instruction to be applied to orders in securities priced below $1.00 on MIAX Pearl Equities. As explained below, this portion of the proposal is currently available on other equities exchanges. This proposal is, therefore, designed to increase competition among exchanges for order flow in securities priced below $1.00 and to make all order types and order instructions available equally to orders in all securities regardless of the order's price.
This proposal is not intended to encourage an increase in the overall volume or order flow in sub-dollar securities. Trading in sub-dollar securities both on- and off-exchange has grown significantly since the Exchange adopted Exchange Rule 2614(c)(2) and launched operations in September 2020. For example, average daily sub-dollar trading volume comprised approximately 9% of the overall daily volume in September 2025. In fact, the Exchange found that overall volume in sub-dollar securities has been slowly decreasing since June 2025 from approximately 14% to 9% in September 2025. Meanwhile, off-exchange market share in sub-dollar securities remained high averaging over 60%.
There are numerous other factors that contribute to sub-dollar trading volumes, the majority of which occurs off-exchange.
The Exchange notes that differences exist between the market structures for securities priced at or above $1.00 and those below $1.00 that impact how the Post Only order instruction may function. This includes different fee levels and minimum price increments which allow for both an internally locked or crossed market to be caused by an order with a Post Only instruction priced below $1.00. Meanwhile, these different fee levels and minimum price increments allow for only an internally locked market to be caused by an order with a Post Only instruction priced at or above $1.00.
The Exchange reviewed its data and found that internally locked and crossed markets are rare events and should continue to be rare under this proposal. Based on the Exchange's data for securities priced at or above $1.00, an internally non-displayed locked or crossed market caused by an order that includes a Minimum Execution Quantity (“MEQ”) instruction (described below) or an internally non-displayed locked market caused by an order with a Post Only instruction (also described below) is extremely rare.
The Exchange conducted a similar review for securities priced below $1.00 but focused on a sampling of data that included high volume sub-dollar securities on active trading days that experienced an increased usage of the MEQ instruction. Unlike the above review of securities priced at or above $1.00, the Exchange could not review securities priced below $1.00 with a Post Only instruction because the Exchange does not currently offer such functionality and proposes to do so herein. Based on this review, the Exchange found that an internally non-displayed locked or crossed book in sub-dollar securities caused by an order that includes an MEQ instruction did not occur during a sampling of active trading days in any of the high volume sub-dollar securities the Exchange observed.
Nonetheless, the Exchange has mechanisms to both avoid an internally crossed market and to alleviate an internally locked or crossed market, in the rare event they occur. First, the Exchange proposes to adopt Exchange Rule 2614(c)(2)(i)(A) to reprice non-displayed orders in securities priced below $1.00 to the locking price of the displayed order resting on the MIAX Pearl Equities Book to help reduce the occurrence of an internally crossed
In addition, should an internally locked or crossed market occur, the Exchange has a current mechanism under Exchange Rule 2617(a)(4)(iv) to alleviate those occurrences while honoring intra-market price priority. Specifically, Exchange Rule 2617(a)(4)(iv) provides that, for securities priced equal to or greater than $1.00, in the case where a non-displayed order to sell (buy) is posted on the MIAX Pearl Equities Book at a price that locks or crosses a displayed order to buy (sell), an Aggressing Order
The Exchange proposes to expand this mechanism under Exchange Rule 2617(a)(4)(iv) to securities priced below $1.00, which would allow for consistent treatment of all securities during an internally locked or crossed market, regardless of price. Expanding the re-pricing mechanism described in Exchange Rule 2617(a)(4)(iv) would allow the Exchange to treat orders in securities priced below $1.00 in the same manner as orders in securities priced at or above $1.00. This change would also ensure that intra-market price priority continues to be honored by treating all orders with a Post Only instruction in a similar manner regardless of price. Therefore, this portion of the proposal would facilitate transactions in securities as well as remove impediments to and perfect the mechanism of a free and open market and a national market system in accordance with the Act. This functionality has also been considered by the Commission numerous times and does not raise any new or novel issues.
Each of these changes proposed herein are described in more detail below.
Exchange Rule 2614(c)(2) describes the Post Only order instruction and provides that an order designated as Post Only is a non-routable order that is ranked and executed on the MIAX Pearl Equities Book pursuant to Exchange Rule 2616 and Exchange Rule 2617(a)(4). Exchange Rule 2614(c)(2) further provides that an order designated as Post Only will only remove liquidity from the MIAX Pearl Equities Book when: (A)
The Exchange now proposes to provide the Post Only instruction to orders in securities priced below $1.00. To effectuate this change, the Exchange proposes to delete subparagraph (2)(i)(A) of Exchange Rule 2614(c) that limits the availability of the Post Only instruction to securities priced at or above $1.00. As a result, Exchange Rule 2614(c)(2) would provide that an order designated as Post Only will only remove liquidity from the MIAX Pearl Equities Book when the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the MIAX Pearl Equities Book and subsequently provided liquidity including the applicable fees charged or rebates paid.
In sum, the Post Only instruction provides Equity Members with the ability to increase the likelihood that their order will add liquidity to the order book and will not remove liquidity unless certain price improvement requirements are satisfied. This effectively guarantees that the order will only trade at a price better than its limit price when removing liquidity, while potentially receiving rebates for adding liquidity to the
The Exchange believes this proposed rule change to expand Post Only functionality to orders in sub-dollar securities would provide an additional exchange-level pool of liquidity for market participants that utilize Post Only functionality for sub-dollar securities. As such, the proposed rule change may encourage market participants to send additional sub-dollar trading volume to an exchange, rather than off-exchange marketplaces (
The Exchange initially adopted its Post Only order instruction behavior as part of its broader proposal to adopt rules governing trading of equity securities, in which it sought to operate its equity market in a manner similar to that of other equity exchanges that it based its rules and functionality upon several years ago. This included adopting functionality that limited the functionality of the Post Only instruction to orders in securities priced at or above $1.00. The Exchange did not adopt this limitation due to fear of some potential nefarious activity in sub-dollar securities trading, but rather due to lack of interest by market participants in such functionality at the time MIAX Pearl Equities was being developed and had filed its initial rule set with the Commission for approval.
Applying Post Only treatment to sub-dollar securities is also not unique. Today, a number of other equities exchanges allow securities priced below $1.00 to be treated as “post only.” For example, The Nasdaq Stock Market LLC (“Nasdaq”) provides a Post Only Order, which offers market participants the ability to submit an order that is not eligible for routing to away markets and posts to the Nasdaq book at prices below $1.00.
As mentioned above, differences exist between the market structures for securities priced at or above $1.00 and those below $1.00, such as differing fee levels and minimum price increments. Due to these differences, orders in securities priced at or above $1.00 that contain a Post Only instruction do not result in an internally crossed market because the minimum tick increments allows the order to receive the required amount of price improvement to execute against a contra-side order. On the contrary, the minimum price increments and different fee levels for securities priced below $1.00 would not always ensure that an order with a Post Only instruction would receive the necessary price improvement to execute. As a result, unlike an order in a security priced at or above $1.00, an order in a security priced below $1.00 with a Post Only instruction may post at a price that results in an internally crossed market. According to the data discussed above, the Exchange does not expect a material increase in internally locked and crossed markets due to this proposal. However, should they occur, the Exchange has mechanisms in place today to avoid or alleviate an internally locked and crossed market that it proposes to expand to locked or crossed markets that may result from an order priced below $1.00 with a Post Only instruction.
First, the Exchange proposes to adopt Exchange Rule 2614(c)(2)(i)(A) to reprice non-displayed orders in securities priced below $1.00 to the locking price of the displayed order to help reduce the occurrence of an internally crossed book.
Second, the Exchange proposes to make a related change to Exchange Rule 2617(a)(4)(iv) to treat securities priced below $1.00 in the same manner as it currently treats securities priced at or above $1.00 during an internally locked or crossed market. Expanding Exchange Rule 2617(a)(4)(iv) as proposed herein
Both of these proposals are an expansion of existing functionality and Exchange Rules, and, therefore, do not raise any new or novel issues. Each of these changes are described separately below.
As discussed above, if this proposal is approved, an order designated as Post Only in a security priced below $1.00 may post to the MIAX Pearl Equities Book at a price that results in an internally crossed market.
In keeping with this principle, the Exchange proposes to reprice non-displayed orders in securities priced below $1.00 in a similar scenario to help reduce the occurrence of an internally crossed book.
The Exchange notes that this portion of the proposal is consistent with how it currently re-prices orders with an MEQ instruction in the same circumstances. Specifically, for orders with an MEQ instruction, Exchange Rule 2614(c)(7)(B)(ii) provides that where there is insufficient size to satisfy the minimum quantity condition of an incoming order to buy (sell) and that incoming order, if posted at its limit price, would cross a displayed order to sell (buy) resting on the MIAX Pearl Equities Book, the order to buy (sell) with the MEQ instruction will have a working price equal to the price of the displayed order to sell (buy). The Exchange proposes to apply the same behavior to other non-displayed orders as described herein.
Not only is proposed Exchange Rule 2614(c)(2)(i)(A) similar to how the Exchange re-prices orders with an MEQ instruction under Exchange Rule 2614(c)(7)(B)(ii), it is also similar to how the Exchange currently reprices non-displayed orders that cross the Protected Quotation of an external market.
The Exchange believes that this portion of the proposal is consistent with the Act because it enables the Exchange to avoid an internally crossed book. Proposed Exchange Rule 2614(c)(2)(i)(A) is also not new or novel as it is based on existing functionality in place on the Exchange and other equity exchanges to avoid internally crossed markets. The Exchange also believes re-pricing a non-displayed order as proposed herein is not unfairly discriminatory because it seeks to avoid an abnormal market condition,
The following examples illustrate this proposed functionality.
A non-displayed order with a Post Only instruction to buy at $0.8009 (“Order 1”) is entered and there is a displayed order resting on the MIAX Pearl Equities Book to sell at $0.8008 (“Order 2”). Order 1 does not remove liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2) because it would not receive the requisite price improvement. The price of Order 1, if posted to the MIAX Pearl Equities Book, would cross the price of Order 2. In such case, to avoid an internally crossed book, the System will re-price Order 1 to $0.8008, the locking price of the displayed order resting on the MIAX Pearl Equities Book.
A non-displayed order to buy at $0.8009 is resting on the MIAX Pearl Equities Book (“Order 1”). A displayed order with a Post Only instruction to sell at $0.8008 is entered (“Order 2”). Order 2 does not remove liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2) because it would not receive the requisite price improvement. The price of Order 2, if
The following example describes when an incoming non-displayed order with a Post Only instruction is re-priced to the locking price pursuant to proposed Exchange Rule 2614(c)(2)(i)(A). Assume the PBBO is $0.50 by $0.53. A non-displayed Limit Order to buy at $0.5003 is entered and placed on the MIAX Pearl Equities Book (“Order 1”). Then, a non-displayed Limit Order to sell with a Post Only instruction at $0.5001 (“Order 2”) is entered. Order 2 cannot execute against Order 1 and remove liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2) because it would not receive the requisite price improvement.
By way of background, Exchange Rules 2617(a)(4)(i) and (ii) describe the process for matching incoming and Aggressing Orders for execution against contra-side orders resting on the MIAX Pearl Equities Book.
Exchange Rule 2617(a)(4)(iii) provides that certain orders, based on their operation and User instructions, are permitted to post and rest on the MIAX Pearl Equities Book at prices that lock or cross contra-side liquidity, provided, however, that the System
Again, one byproduct of the Post Only order instruction, and the MEQ instruction discussed above, is that they may result in the order posting to the MIAX Pearl Equities Book at a price that results in an internally locked or crossed market on the Exchange where one or both of the locking or crossing orders are non-displayed.
As discussed above, based on the Exchange's expertise, experience and data set forth above, the Exchange does not anticipate that expanding the Post Only instruction to sub-dollar securities would cause anything other a potential de minimis increase, if any, of internally non-displayed locked or crossed markets on the Exchange. Based on the Exchange's observations and experience, in the rare event that an internally non-displayed locked or crossed book on Exchange does occur, such instances are typically alleviated almost immediately or within extremely short period of time of their initial occurrence.
In the rare occurrence an internally non-displayed locked or crossed market does occur, the Exchange has method to resolve such instances in a manner that honors intra-market price priority. This mechanism is set forth under Exchange Rule 2617(a)(4)(iv), which governs the price at which a non-displayed order is executable when there is a contra-side displayed order at a price that results in an internally locked or crossed book. Today, for securities priced equal to or greater than $1.00 per share, in the case where a non-displayed order to sell (buy) is posted on the MIAX Pearl Equities Book at a price that locks a displayed order to buy (sell) pursuant to Exchange Rule 2617(a)(4)(iii) described above, an Aggressing Order or an incoming order to buy (sell) described in Exchange Rules 2617(a)(4)(i) and (ii) that is a Market Order or a Limit Order priced more aggressively than the order to buy (sell) displayed on the MIAX Pearl Equities Book, that Aggressing Order or incoming order will execute against the non-displayed order to sell (buy) resting on the MIAX Pearl Equities Book at one-half minimum price variation
Exchange Rule 2616 sets forth the priority among orders resting on the MIAX Pearl Equities Book and there is no priority relationship between an incoming order and a same side resting order up to and until each order is resting on the MIAX Pearl Equities Book.
In keeping with the above principles, the Exchange would apply the same standards to securities priced below $1.00 as it does today for securities priced at or above $1.00 under Exchange Rule 2617(a)(4)(iv). In doing so, the Exchange would honor intra-market price priority by preventing an incoming or Aggressing Order from executing at the same price as a same-side displayed order on the MIAX Pearl Equities Book.
This portion of the proposal is an expansion of existing rules and functionality available to securities priced at or above $1.00, and therefore, does not raise any new or novel issues not already considered by the Commission.
The following examples illustrate: (i) how the Exchange currently handles securities priced at or above $1.00 pursuant to Exchange Rule 2617(a)(4)(iv); and (ii) how the Exchange would handle securities priced below $1.00 pursuant to expanded Exchange Rule 2617(a)(4)(iv), as proposed to be amended herein. For each example, assume there are no orders resting on the MIAX Pearl Equities book.
The following examples illustrate how the Exchange handles securities priced at or above $1.00 pursuant to Exchange Rule 2617(a)(4)(iv) for both incoming orders as well as when the Exchange reevaluates the MIAX Pearl Equities Book due to an external event, such as a change to the Limit Up-Limit Down (“LULD”) Price Bands and an Aggressing Order executes against contra-side interest.
Assume the PBBO was $16.10 by $16.11 resulting in a midpoint of $16.105. An order to buy at $16.11 is resting non-displayed on the MIAX Pearl Equities Book (“Order 1”). A displayed Limit Order to sell at $16.11 designated as Post Only is subsequently entered (“Order 2”). Assume that Order 2 will not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2), and will post to the MIAX Pearl Equities Book and be displayed at $16.11. The display of Order 2 will, in turn, make the resting Order 1 not executable at $16.11. An incoming order to sell at $16.10 is then entered (“Order 3”). Order 3 will execute against Order 1 at $16.105 per share upon entry, thus providing a half-penny of price improvement as compared to the Order 1's limit price of $16.11.
The following example describes where the execution occurs at a sub-penny price that is not at the midpoint of the PBBO. Assume the PBBO is $16.08 by $16.10 resulting in a midpoint of $16.09. An order to sell at $16.08 is resting non-displayed on the MIAX Pearl Equities Book (“Order 1”). A displayed Limit Order to buy at $16.08 designated as Post Only is subsequently entered (“Order 2”). Assume that Order 2 will not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2), and will post to the MIAX Pearl Equities Book and be displayed at $16.08. The display of Order 2 will, in turn, make Order 1 not executable at $16.08. An incoming order to buy at $16.09 is entered (“Order 3”). Order 1 will execute against Order 3 at $16.085 per share, thus providing a half-penny of price improvement as compared to the Order 1's limit price of $16.08.
Assume the PBBO is $50.00 by $53.00, and the LULD Price Bands disseminated by the applicable SIP are $49.00 by $50.00. A non-displayed Limit Order to sell at $50.07 is entered and placed on the MIAX Pearl Equities Book (“Order 1”). Then, a displayed Limit Order to buy at $50.07 with a Post Only instruction is entered (“Order 2”). Order 2 cannot execute against Order 1 and remove liquidity upon entry because of the LULD Price Bands, which result in Order 2 being posted to the MIAX Pearl Equities Book and re-priced to $50.00, the upper LULD Price Band pursuant to Exchange Rule 2622(h)(2)(A)5.b. The Exchange BBO is now $50.00 by $50.07. Then, a displayed Limit Order to buy at $50.08 is entered and is also re-priced to $50.00, the upper LULD Price Band pursuant to Exchange Rule 2622(h)(2)(A)5.b (“Order 3”). The LULD Price Bands disseminated by the applicable SIP are then updated to $48.00 by $51.00, causing the Exchange to evaluate its book for potential executions. First, Order 2 is re-priced to $50.07, resulting in an internally non-displayed locked book. Order 2, the Aggressing Order, cannot execute against Order 1 and remove liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2). Order 3 is then evaluated and executes against Order 1 at $50.075, providing one-half minimum price increment of price
As stated above, the Exchange proposes to treat all securities the same pursuant to Exchange Rule 2617(a)(4)(iv) regardless of price. The following example illustrates this behavior and describes how the Exchange would handle securities priced below $1.00 in the same manner as securities priced at or above $1.00 pursuant to amended Exchange Rule 2617(a)(4)(iv) for both incoming orders as well as how an Aggressing Order would behave when the Exchange reevaluates the MIAX Pearl Equities Book due to an external event, such as a change to the Limit Up-Limit Down Price Bands.
The following examples illustrates how the Exchange handles securities priced below $1.00 pursuant to Exchange Rule 2617(a)(4)(iv).
Assume the PBBO is $0.500 by $0.502 resulting in a midpoint of $0.501. A Midpoint Peg Order to sell at $0.501 is resting non-displayed on the MIAX Pearl Equities Book at $0.501, which is also the midpoint of the PBBO (“Order 1”). A displayed Limit Order to buy 50 shares at $0.501 designated as Post Only is subsequently entered (“Order 2”). Order 2 is an odd lot size and does not result in an update to the PBBO. Order 2 will not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2) because it would not receive the requisite price improvement, and will post to the MIAX Pearl Equities Book and be displayed at $0.501. The display of this order will, in turn, result in an internally locked book and make Order 1 not executable at $0.501. If an incoming order to buy is entered into the MIAX Pearl Equities Book at a price of $0.5011 (“Order 3”), Order 1, originally priced at $0.501, will execute against Order 3 at $0.50105 per share, thus providing one-half minimum price increment of price improvement as compared to the order's pegged price (
The following example is a variation of the above example. Assume the PBBO is $0.50 by $0.53. A non-displayed Limit Order to sell at $0.5003 is entered and placed on the MIAX Pearl Equities Book (“Order 1”). Then, a displayed Limit Order to buy with a Post Only instruction at $0.5007 (“Order 2”) is entered. Order 2 cannot execute against Order 1 and remove liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2) because it would not receive the requisite price improvement.
The following example describes when the execution occurs at a sub-penny price that is not at the midpoint of the PBBO. Assume the PBBO is $0.5000 by $0.5030 resulting in a midpoint of $0.5015. An order to sell at $0.5020 is resting non-displayed on the MIAX Pearl Equities Book. A displayed Limit Order to buy at $0.5020 designated as Post Only is subsequently entered. Assume that the displayed order to buy designated as Post Only will not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2), and will post to the MIAX Pearl Equities Book and be displayed at $0.5020. The display of this order will, in turn, result in an internally non-displayed locked book and make the resting non-displayed order to sell not executable at $0.5020. If an incoming order to buy is entered into the MIAX Pearl Equities Book at a price equal to or greater than $0.5021, the resting non-displayed order to sell originally priced at $0.5020 will execute against the incoming order to buy at $0.50205 per share, thus providing one-half minimum price increment of price improvement as compared to the order's limit price of $0.5020.
The following example describes when the execution occurs when the Exchange is experiencing an internally crossed market due to two contra-side non-displayed orders. Assume the PBBO is $0.5000 by $0.5030 resulting in a midpoint of $0.5015. An order to buy at $0.5003 is resting non-displayed on the MIAX Pearl Equities Book (“Order 1”). A non-displayed Limit Order to sell at $0.5000 designated as Post Only is subsequently entered (“Order 2”). Assume Order 2 will not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2), and will post to the MIAX Pearl Equities Book non-displayed at $0.5000. This will, in turn, result in an internally non-displayed crossed book of $0.5003 by $0.5000. An incoming order to sell is entered into the MIAX Pearl Equities Book at a price equal to or less than $0.5000 will execute against Order 1 at $0.5003.
Assume the PBBO is $0.50 by $0.53, and the LULD Price Bands disseminated by the applicable SIP are $0.49 by $0.50. A non-displayed Limit Order to sell at $0.5003 is entered and placed on the MIAX Pearl Equities Book (“Order 1”). Then, a displayed Limit Order to buy with a Post Only instruction to buy at $0.5007 (“Order 2”). Order 2 cannot execute against Order 1 due to the LULD Price Bands which cause Order 2 to be posted to the MIAX Pearl Equities Book and re-priced to $0.50, the upper LULD Price Band pursuant to Exchange Rule 2622(h)(2)(A)5.b. The Exchange BBO is now $0.50 by $0.5003. Then, a displayed Limit Order to buy at $0.5008 is entered and is also re-priced to $0.50, the upper LULD Price Band pursuant to Exchange Rule 2622(h)(2)(A)5.b (“Order 3”). The LULD Price Bands disseminated by the applicable SIP are then updated to $0.48 by $0.51, causing the Exchange to evaluate its book for potential executions. First, Order 2 is re-priced to $0.5007 and cannot execute against Order 1 and remove liquidity pursuant to the Exchange's economic best interest functionality under Exchange Rule 2614(c)(2). As a result, Order 1 will be re-priced to $0.5007, the price of the displayed contra-side order, Order 2 pursuant to proposed Exchange Rule 2614(c)(2)(1)(A) discussed above, resulting in an internally non-displayed locked book. Order 2, the Aggressing Order, cannot execute against Order 1 and remove liquidity upon entry pursuant to the Exchange's economic
Should the Commission approve this proposal, the Exchange will issue a trading alert publicly announcing the implementation date of the proposed amendments.
The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act,
In sum, the Exchange believes the proposed amendments to Exchange Rule 2614(c)(2) to extend the Post Only instruction to securities priced below $1.00 will remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide for similar treatment to all orders in all securities regardless of price. This portion of the proposal also promotes just and equitable principles of trade because it will allow Equity Members to utilize the Post Only instruction on an order for a security at any price, rather than being limited to securities priced at or above $1.00. The Post Only instruction is an important tool in U.S. equities markets because it allows Equity Members to post aggressively priced liquidity, and provides certainty as to the fee or rebate that will be applied by the Exchange if their order is executed. Without such ability, the Exchange believes that certain Equity Members would simply post less aggressively priced liquidity, and prices available for market participants, including retail investors, may be adversely impacted. Orders with a Post Only instruction contribute to improved liquidity, market depth and, if displayed, price transparency. Expanding Post Only functionality to orders in sub-dollar securities would provide an additional exchange-level pool of liquidity for market participants that utilize Post Only functionality for sub-dollar securities. As such, the proposed rule change may encourage market participants to send additional sub-dollar trading volume to the Exchange, rather than the off-exchange marketplace, and, therefore, serve to improve on-exchange liquidity and price transparency in sub-dollar securities. Orders with a Post Only instruction entered on the Exchange could improve price transparency if the entering firm elected such order to be displayed and made available via an Exchange's data feeds and disseminated by the applicable SIP. Allowing an order in a security priced below $1.00 to contain a Post Only instruction would also deepen the Exchange's pool of available liquidity in sub-dollar securities, which is a growing area of trading, particularly for retail investors. A deeper and more liquid market supports the quality of price discovery, promotes market transparency, and improves market quality for all investors.
As noted above, the Exchange adopted its current Post Only behavior as part of its broader proposal to adopt rules governing trading of equity securities, in which it sought to operate its equity market in a manner similar to that of other equity exchanges that it based its rules and functionality upon several years ago. This included adopting functionality that limited the availability of the Post Only instruction to orders in securities priced at or above $1.00. Again, and importantly, the Exchange did not adopt this limitation due to fear of some potential nefarious activity in sub-dollar securities trading, but rather due to lack of interest by market participants in such functionality at the time MIAX Pearl Equities was being developed and filing its initial rule set with the Commission for approval.
This portion of the proposal also does not raise any new or novel issues as identical functionality is available on other equities exchanges. As discussed above, Nasdaq and their affiliated markets provide Post Only Orders to all securities regardless of price, which are posted, ranked, and displayed or posted non-displayed, as applicable, at their limit price upon entry. However, Nasdaq permits a Post-Only Order to execute upon entry if “the value of price improvement associated with executing against an Order on the Nasdaq Book (as measured against the original limit price of the Order) equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the Order posted to the Nasdaq Book and subsequently provided liquidity”.
This proposal is designed to facilitate transactions in securities by increasing competition among exchanges for the currently available order flow in securities priced below $1.00 by ensuring that all order types and order instructions are available equally to all securities regardless of the order's price. As explained above, providing “post only” treatment in securities priced below $1.00 should not increase the overall volume or order flow in sub-dollar securities but could encourage more aggressively priced liquidity, improve liquidity, market depth and, if displayed, price transparency in such securities. The Exchange believes this proposal will facilitate transactions in sub-dollar securities by increasing exchange competition by allowing the Exchange to provide functionality that would allow it to attract a greater slice of the current volume in sub-dollar securities, while also encouraging market participants to send their sub-dollar trading volume to an exchange-level pool of liquidity, rather than opaque off-exchange trading venues (
This proposal is not intended to encourage an increase in the overall volume or order flow in sub-dollar securities. Trading in sub-dollar securities both on- and off-exchange has grown significantly since the Exchange adopted Exchange Rule 2614(c)(2) and launched operations in September 2020. For example, average daily sub-dollar trading volume comprised approximately 9% of the overall daily volume in September 2025. In fact, the Exchange found that overall volume in sub-dollar securities has been slowly decreasing since June 2025 from approximately 14% to 9% in September 2025. Meanwhile, off-exchange market share in sub-dollar securities remained high averaging over 60%.
As mentioned above, there are numerous factors that have contributed to the increase in sub-dollar trading volumes and approval of this proposal, alone, would not further encourage or contribute to an increase in sub-dollar trading volumes. Rather, the Exchange believes this proposal will remove impediments to a free and open market by increasing inter-market competition. The proposed changes will allow the Exchange to provide functionality to attract a greater slice of the current volume in sub-dollar securities by encouraging market participants to send their sub-dollar trading volume to another exchange-level pool of liquidity, rather than the opaque off-exchange trading venues (
In addition, amended Exchange Rule 2614(c)(2) is not unfairly discriminatory, but rather promotes equal treatment of all Equity Members, as it will permit the Post Only instruction to be used by all Equity Members that submit orders for securities at any price and the order instruction will no longer be limited to securities priced at or above $1.00.
As discussed above, differences exist between the market structures for securities priced at or above $1.00 and those below $1.00 that impact how the Post Only order instruction may function. This includes different fee levels and minimum price increments which could allow an order with a Post Only instruction to only result in an internally locked market in securities priced at or above $1.00 and both an internally locked or crossed market in securities priced below $1.00. Also, as discussed above, the Exchange reviewed its own data and found that internally locked and crossed markets are rare events and should continue to be rare under this proposal. Based on the Exchange's expertise and experience, the Exchange anticipates that expanding the Post Only instruction to sub-dollar securities would cause at most, a potential de minimis, if any, increase of internally non-displayed locked or crossed markets on the Exchange. Also, based on the Exchange's observations and experience, in the rare event such instances do occur, an internally non-displayed locked or crossed book is typically alleviated almost immediately or within extremely short period of time of their initial occurrence.
Nonetheless, in the rare event they do occur, the Exchange has well established mechanisms to both avoid an internally locked or crossed market and to alleviate an internally locked or crossed market. This includes expanding current re-pricing functionality by adopting Exchange Rule 2614(c)(2)(i)(A) to reprice non-displayed orders in securities priced below $1.00 to the locking price of the displayed order resting on the MIAX Pearl Equities Book to help reduce the occurrence of an internally crossed book.
The Exchange believes proposed Exchange Rule 2614(c)(2)(i)(A) to re-price non-displayed orders to the locking price, including those with a Post Only instruction that would cross a contra-side displayed order promotes just and equitable principles of trade because it would serve to decrease the occurrence of the Exchange experiencing an abnormal market condition in the form of a non-displayed internally crossed book. The Exchange will never post a displayed or non-displayed order to the MIAX Pearl Equities Book at a price that would cross a contra-side displayed order.
In addition, proposed Exchange Rule 2614(c)(2)(i)(A) is analogous to how the Exchange currently reprices orders with an MEQ instruction pursuant to Exchange Rule 2614(c)(7)(B)(ii).
This is also analogous to the Exchange's current Non-Displayed Price Sliding Process set forth under Exchange Rule 2614(g)(2) where the Exchange would also reprice a non-displayed order to the locking price. Pursuant to Exchange Rule 2614(g)(2), to avoid potentially trading through Protected Quotations of an away Trading Center, a non-displayed, non-routable order to buy (sell) that, upon entry or due to a change in the PBO (PBB), would cross the PBO (PBB) of an away Trading Center will be assigned a working price by the System equal to the PBO (PBB). Both IEX and Nasdaq re-price non-displayed orders to avoid an internally crossed market. In certain circumstances, Nasdaq re-prices non-displayed orders to buy (sell) to one minimum price increment below (above) the lowest (highest) price of resting orders to avoid an internally crossed market.
The Exchange believes it is appropriate and not unfairly discriminatory to reprice the non-displayed order as proposed above, and consistent with how it currently reprices orders with a MEQ instruction, which has previously been considered by the Commission.
The occurrence of a non-displayed internally locked or crossed market on the Exchange is an extremely rare occurrence, and the Exchange does not anticipate that this proposal would cause anything more than a potential de minimis increase, if any. Should they occur, the Exchange has an effective mechanism in place today for securities priced at or above $1.00 that it simply seeks to expand to securities priced below $1.00 to alleviate an internally locked or crossed book. Specifically, expanding Exchange Rule 2617(a)(4)(iv) to securities priced below $1.00 would facilitate transactions in securities during the extremely rare occurrence of a non-displayed internally locked or crossed market where a resting contra-side displayed order would otherwise prohibit such order from execution against an incoming or Aggressing Order by allowing an execution at one-half minimum price variation greater (less) than the price of the resting displayed order to buy (sell), as set forth in the Rule. In doing so, the proposal would also provide that all orders, regardless of price, are executable at the applicable one-half minimum price increment during a non-displayed internally locked or crossed market, while also ensuring that the Exchange continues to honor the intra-market price priority of all orders in such circumstances.
As discussed above, the principle of intra-market price priority provides that, in the case of both an incoming order or between resting orders that a resting order to buy (sell) will not be eligible to trade: (1) at a price equal to or above (below) any sell (buy) displayed orders that have a ranked price equal to or below (above) the price of such resting buy (sell) order; or (2) at a price above (below) any sell (buy) non-displayed order that has a ranked price below (above) the price of such resting buy (sell) order.
This portion of the proposal would allow the Exchange to treat orders in securities below $1.00 in a similar manner as securities priced at or above $1.00, thereby providing market participants with consistent handing of all orders regardless of price. This order handling is necessary in order to address specific conditions that are present on the MIAX Pearl Equities Book when an order containing a Post Only instruction is displayed opposite the ranked price of a non-displayed order resulting in an internally locked or crossed book. The proposal would also facilitate transactions in securities by making orders eligible for execution where a resting contra-side displayed order would otherwise prohibit such order from execution against an incoming or Aggressing Order.
In sum, this would allow all orders to be treated in a similar manner, regardless of price by providing, under limited circumstances, a resting order priced below $1.00 that would otherwise be non-executable due to the presence of a displayed order, including a displayed order containing a Post Only instruction. Pursuant to Exchange Rule 2617(a)(4)(iv) an order that is currently unable to execute at the locking price due to the presence of a contra-side displayed order would be eligible to execute against an incoming order priced more aggressively than the contra-side displayed order at one-half minimum price increment above (below) the locking price.
For the reasons set forth above, the Exchange believes amended Exchange Rule 2617(a)(4)(iv) is consistent with the Act because it would allow the Exchange to facilitate transactions in securities, honor intra-market price priority, and alleviate an internally non-displayed locked or crossed book that may occur due to expanding the availability of the Post Only instruction to securities priced below $1.00. The current one-half minimum price increment functionality for securities priced at or above $1.00 under Exchange Rule 2617(a)(4)(iv) has in fact been approved repeatedly by the Commission in the past and that identical functionality should be expanded to cover securities priced below $1.00.
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 does not believe that the proposed rule change will impose any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed changes to Exchange Rule 2614(c)(2) will apply equally to all Equity Members and all Equity Members will be eligible to utilize the Post Only instruction for securities priced below $1.00, just as they do today for securities priced at or above $1.00.
Similarly, the proposed change to Exchange Rule 2617(a)(4)(iv) applies similarly to all Equity Members because the proposed order handling behavior changes abide by the principles of intra-market price priority and will treat all securities in a similar fashion, regardless of price. Each proposed change is designed to expand an existing Exchange order instruction and existing order handling behavior to securities priced below $1.00, with no change, due to the growth in sub-dollar trading volumes that the Exchange has experienced since in launched operations in September 2020.
Proposed Exchange Rule 2614(c)(2)(i)(A) to re-price to the locking price of non-displayed orders, including those with a Post Only instruction, that would cross a contra-side displayed order is similar to how the Exchange currently reprices orders with a MEQ instruction pursuant to Exchange Rule 2614(c)(7)(B)(ii). This portion of the proposal simply seeks to provide consistent treatment of similarly situated orders and should not impose any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Overall, the Exchange believes its proposal will not impose any burden on intra-market competition because the proposed functionality would be available to all Equity Members who may choose to utilize the proposed change based on their own business decisions and trading behaviors.
The Exchange similarly does not believe that the proposed rule change will impose any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. In fact, the Exchange notes other national equities exchanges already offer identical “post only” treatment of orders priced below $1.00.
The Exchange similarly believes that its proposal to amend Exchange Rule 2617(a)(4)(iv) does not impose a burden on inter-market competition as the change is not designed to address any competitive issue, but rather to address order handling behavior in a similar manner to how the Exchange treats orders priced at or above $1.00 while continuing to abide by the above stated principles of intra-market price priority.
Proposed Exchange Rule 2614(c)(2)(i)(A) to re-price to the locking price of a non-displayed orders, including those with a Post Only instruction, that would cross a contra-side is similar to how the Exchange currently reprices orders with a Minimum Execution Quantity instruction pursuant to Exchange Rule 2614(c)(7)(B)(ii). This portion of the proposal simply seeks to provide consistent treatment of similarly situated orders and should not impose any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BYX Exchange, Inc. (“BYX” or the “Exchange”) is filing with the Securities and Exchange Commission (the “Commission”) a proposed rule change to amend Rule 11.9(c)(8) to clarify Pegged Order operation and to align BYX Rule 11.9(c)(8) with the corresponding rule of its affiliate exchanges, Cboe EDGA Exchange, Inc. (“EDGA”) and Cboe EDGX Exchange, Inc. (“EDGX”). The text of the proposed rule changes is in Exhibit 5.
The text of the proposed rule change is also available on the Commission's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 11.9(c)(8) to clarify Pegged Order operation and to align BYX Rules with the rules of its affiliate exchanges in order to provide consistency amongst the Exchange and its affiliates. The Exchange notes that the proposed rule text is based on EDGA/EDGX Rule 11.6(j) and is different only to the extent necessary to conform to the Exchange's current rules.
By way of background, Exchange Rule 11.9, Orders and Modifiers, lists and describes the types of orders Users
A Pegged Order may be a Primary Pegged Order or a Market Pegged Order.
A Market Pegged Order has its price pegged by the System to the NBB, for a sell order, or the NBO, for a buy order.
Now, the Exchange proposes to amend the description of a Pegged Order under Rule 11.9(c)(8) to align with EDGA/EDGX Rule 11.6(j) and to clarify that a Pegged Order will not be eligible for execution where the NBB or NBO, as applicable, is no longer available. Further, the proposed rule text will provide that a new timestamp is created for an order that has been ineligible for execution and again becomes eligible for execution because the NBB or NBO it is pegged to becomes unavailable [sic].
Currently, when the NBB or NBO becomes unavailable, a Pegged Order is cancelled back to the User. As proposed, instead of being cancelled back to the User, a Pegged Order will remain on the BYX Book. When the NBB or NBO that the Pegged Order is pegged to becomes available again, the order will receive a new time stamp and be eligible for execution. The proposed rule change provides additional detail with regard to the operation of Pegged Orders when the NBB or NBO, as applicable, is unavailable, that is currently not included in Exchange Rule 11.9(c). This proposed rule change does not propose to implement new or unique functionality that has not been previously filed with the Commission or is not available on EDGA or EDGX.
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.
The proposed rule change is intended to more thoroughly describe Pegged Order operation and to align BYX Rules with the rules of its affiliate exchanges in order to provide consistent offerings amongst the Exchange and its affiliates, which the Exchange believes is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, thereby protecting investors and the public interest. Consistency amongst the rules of the Exchange and its affiliates, in turn, will promote rule compliance for Users of the Exchange that are also participants on EDGA and/or EDGX. The proposed rule change does not propose to implement new or unique functionality that has not been previously filed with the Commission or is not described in the rules of its affiliate exchanges. By aligning BYX Rules with the rules of EDGA and EDGX, the Exchange believes the proposed rule change will remove impediments to the mechanism of a free and open market and protect investors by providing investors with increased transparency regarding rules that reflect the behavior of Pegged Order on the Exchange when the NBB or NBO, as applicable, becomes unavailable. As a result, the Exchange's proposal will 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. Additionally, the proposal does not permit unfair discrimination among customers, brokers, or dealers because the proposed Pegged Order behavior will apply to all Users equally in that any User's Pegged Order will become non-executable in the event that the NBB or NBO, as applicable, becomes unavailable and a Pegged Order will receive a new timestamp when the NBB or NBO becomes available and the order again becomes eligible for execution.
As described above, the proposed amendment is designed to ensure clarity in the Exchange's rulebook with respect to the operation of Pegged Orders in the event that the NBB or NBO, as applicable, becomes unavailable. The Exchange notes that the proposed amendment is based on EDGA/EDGX Rule 11.6(j) and is different only to the extent necessary to conform to the Exchange's current rules. Thus, the proposed amendment to Rule 11.9(c)(8) is directly targeted at removing impediments to and perfecting the mechanism of a free and open market and national market system, as well as to assure fair competition among brokers and dealers and among exchange markets.
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 amendment to clarify Pegged Order behavior will provide consistent offerings amongst the Exchange and its affiliates. The Exchange does not believe the proposed change will have any impact on intermarket competition as the proposal is not being made for competitive reasons, but rather to align the text of BYX Rule 11.9(c)(8) with the corresponding rule text of its affiliate exchanges. In addition, the Exchange believes the proposed rule change will benefit all Users in that Users will have a more complete understanding of Pegged Order behavior when the NBB or NBO, as applicable, becomes unavailable. The proposed rule change will apply equally to all Users of Pegged Orders.
The Exchange does not believe that the proposed amendments will impose any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange provides services in a highly competitive market in which participants may avail themselves of a wide variety of order types and order operations offered by self-regulatory organizations, other broker-dealers, market participants' own proprietary routing systems, and service bureaus. In such an environment, more detailed descriptions of the types of orders Users may enter into the System, such as the changes proposed in this rule filing do not burden competition, because they can succeed in attracting order flow to the Exchange only if they offer investors higher quality and better value than services offered by others. The Exchange reiterates that the proposed rule change to clarify Pegged Order behavior is being proposed in an effort to add consistency to offerings across the Exchange and its affiliates.
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not:
A. significantly affect the protection of investors or the public interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it 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.
On September 30, 2025, the Municipal Securities Rulemaking Board (“MSRB”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
The MSRB requested that the proposed rule change be approved with an effective date of January 1, 2026, provided that if approved by the Commission after January 1, 2026, the proposed rule change be made effective as of the first day of the month following Commission approval.
The proposed rule change was published for comment in the
The MSRB established its annual rate card model in 2022.
Since withdrawing the 2024 Rate Card Proposal, the MSRB has reported that it has held outreach meetings with industry groups representing regulated entities and other stakeholders to discuss the MSRB's budget and rate card process.
As discussed below and in the Notice, the proposed rule change would amend Rules A-11 and A-13 to establish new rates of certain assessments on municipal advisors under Rule A-11 and dealers under Rule A-13 pursuant to the new Multi-Year Rate Card Process, as well as to make certain related technical amendments.
The proposed rule change would establish Rate Card Fees for the next four calendar years: 2026, 2027, 2028, and 2029 (the “proposed Multi-Year Rate Card”).
Additionally, the proposed rule change would establish credits (“Temporary Credits”) of 45% applied to Market Activity Fees in 2026 and 2027, which would result in a reduction in the amounts to be assessed to and paid by dealers for Market Activity Fees during such years.
As part of the new Multi-Year Rate Card Process, the proposed rule change would also establish a maximum annual increase or decrease in any baseline Rate Card Fee of 15% (the “Annual Rate Change Limit”) within a multi-year rate card period (as compared to the annual 25% cap on increases and no cap on decreases that are currently in effect),
The MSRB states that under the Rate Card Fees proposed in the proposed rule change, the baseline rates of the Market Activity Fees would remain unchanged both from the rates currently in effect under the prior rate card and throughout the course of the proposed Multi-Year Rate Card.
The proposed rule change would include certain technical language changes. For example, references to the current “annual” process would be eliminated throughout Rules A-11 and A-13 and instead would reflect the four-year term of the proposed Multi-Year Rate Card in the proposed rule change.
The Commission received four comment letters
One commenter expressed support for the proposed shift to a multi-year rate card, opining that it will improve the stability and predictability of rate card fees for regulated entities.
One commenter expressed support for the proposed shift to a multi-year rate card but stated that it believes that a four-year fee window is probably too long to accurately predict market trends in issuance and trade volume as well as demands on MSRB resources, and a two-year window may be more appropriate.
One commenter expressed support for the lowered operational reserves target presented in the MSRB's fiscal year 2026 budget and the proposed shift to a multi-year rate card as reducing fee volatility and ensuring more predictability.
One commenter stated that it did not oppose the proposed rule change and that the MSRB should not change its current approach of collecting fees from municipal advisors on a per-municipal advisor basis.
The MSRB stated that it believes that it has undertaken a meaningful review
The Commission has carefully considered the proposed rule change, the comment letters received, and the MSRB's response thereto. The Commission has also considered supplemental, non-public information regarding the MSRB's expenses that the MSRB provided to the Commission at the Commission's request. The Commission finds that the proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to the MSRB. In particular, the Commission finds that the proposed rule change is consistent with the provisions of Sections 15B(b)(2)(J),
For the reasons outlined below, and in particular the MSRB's commitment to the continued stakeholder outreach described below, the Commission finds that the proposed rule change is consistent with the provisions of Section 15B(b)(2)(J) of the Exchange Act.
As noted by the MSRB, the proposed rule change is designed to fund the operation and administration of the MSRB through the establishment of a fee structure that: (i) improves the stability and predictability of Rate Card Fees over time; (ii) maintains an appropriate balance of assessments on regulated entities; and (iii) improves the MSRB's ability to manage organizational reserves responsibly while minimizing fee volatility and other operational disruptions to regulated entities.
With respect to the proposed Multi-Year Rate Card, the Commission finds that the proposed Rate Card Fees are appropriate to defray the anticipated costs and expenses of operating and administering the MSRB over the next four years. The MSRB's 2026 budgeted expenses total $46.2 million (a 5.2% decrease in expenses compared to its fiscal year 2025 budgeted expenses)
Finally, the MSRB stated that it developed its fiscal year 2026 budget, its Revised Funding Policy, and the proposed rule change after considering the RFI responses and feedback received from the MSRB's outreach to stakeholders.
For these reasons, the Commission finds that the proposed rule change establishes reasonable fees and charges to be paid by regulated entities consistent with Section 15B(b)(2)(J) of the Exchange Act.
In approving the proposed rule change, the Commission has also considered the proposed rule change's impact on efficiency, competition, and capital formation under Section 3(f) of the Exchange Act.
The Commission also finds that the proposed rule change is consistent with the provisions of Section 15B(b)(2)(C) of the Exchange Act.
The Commission further finds that the proposed rule change is consistent with the provisions of Section 15B(b)(2)(L)(iv) of the Exchange Act.
For the reasons noted above, the Commission finds that the proposed rule change is consistent with the Exchange Act.
For the Commission, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change consists of amendments to FICC's Government Securities Division (“GSD”) Rulebook (“Rules”)
In its filing with the Commission, the clearing agency 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 clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
FICC is proposing changes to the Rules that would update a definition and certain provisions related to the components of GSD's funds-only settlement, or “FOS.” Specifically, the proposed changes would update and clarify the definition of Overnight Investment Rate, which is the interest rate used in the calculation of two components of FOS, the GCF Interest Adjustment Payment and the Interest Adjustment Payment. The proposed changes would also update the frequency of GCF Interest Adjustment Payments and Interest Adjustment Payments to monthly, rather than daily, in certain circumstances. Finally, the proposed changes would remove an outdated reference from a statement in Rule 13, which was retained in the Rules in error. These proposed changes would update, clarify and correct the Rules related to FOS, providing Netting Members with a clearer understanding of these provisions and their rights thereunder.
FOS is a twice-daily process of generating a net credit or debit cash amount for each Netting Member and settling those cash amounts between Netting Members and FICC. FOS is described in Rule 13 and is a cash pass-through process, meaning Netting Members who are in a debit position submit payments that are then used to pay Netting Members in a credit position.
Twice each Business Day, each Netting Member must pay (or is entitled to collect) an aggregate Funds-Only Settlement Amount across all CUSIPs in which it has outstanding positions. The main components of this amount include, among other payments, a mark-to-market amount for every Net Settlement Position, a mark-to-market amount for every Forward Net Settlement Position, fail marks for obligations that were scheduled to settle and have not yet settled, coupon payments and other adjustments.
The settlement ultimately occurs through the National Settlement Service (“NSS”), a payment system operated by the Federal Reserve System (“FRS”).
The Rules define Overnight Investment Rate as the interest rate earned by FICC on the investment of the portion of the cash deposited to its Clearing Fund that is invested overnight. However, this term is currently only used in the definitions of two components of FOS—the GCF Interest Adjustment Payment and the Interest Adjustment Payment—and is not used in reference to FICC's deposits
Therefore, FICC is proposing to correct and clarify the definition of Overnight Investment Rate to mean the interest rate earned by FICC on the investment of cash held by FICC in connection with certain FOS debits that are invested overnight. The proposed change would correct the definition of this term, making the Rules clearer in describing the related components of FOS.
The components of FOS credit and debit payments are described in Section 1 of Rule 13, and Netting Members are required to make such credit and debit payments “one or more times each Business Day”.
Because FOS is a pass-through process, if FICC debits a Netting Member for one component of FOS but does not have an equivalent credit to pay to another Netting Member, then FICC must hold and invest the cash amount it has debited overnight, until it can pay that amount to a Netting Member the next Business Day. This may occur in connection with the credit and debit payments of the Debit Forward Mark Adjustment Payments and the corresponding Credit Forward Mark Adjustment Payment, or with the Debit GCF Forward Mark Adjustment Payments and the corresponding Credit GCF Forward Mark Adjustment Payment.
The interest rate that FICC earns on such investments is the Overnight Investment Rate. The Interest Adjustment Payment and GCF Interest Adjustment Payment are components of FOS related to the overnight interest earned on such investments and, as noted above, may be assessed by FICC on the Debit Forward Mark Adjustment Payment, Credit Forward Mark Adjustment Payment, Debit GCF Forward Mark Adjustment Payment, and Credit GCF Forward Mark Adjustment Payment amounts.
Historically, FICC has deposited amounts related to these FOS components at commercial banks that have paid interest on a daily basis, allowing FICC to pay its portion of the GCF Interest Adjustment Payment and the Interest Adjustment Payment components of FOS on a daily basis, within the timeframes specified in Rule 13.
However, fewer investment counterparties pay interest on deposits on a daily basis, and those that do offer daily interest payments do so at an interest rate that is not aligned with prevailing market rates.
In order for FICC to earn an interest rate on its investments related to FOS debits that is more aligned with the market, FICC would begin depositing these amounts with investment counterparties that do not pay interest on a daily basis. Therefore, FICC is proposing to amend Rule 13 to reflect a less frequent payment of the accrued GCF Interest Adjustment Payment and Interest Adjustment Payment components of FOS, to a monthly basis.
In order to reflect this change, FICC would amend Section 1 of Rule 13 to describe the circumstances in which it would pay the Credit Interest Adjustment Payment and the GCF Interest Adjustment Payment components of FOS on a less frequent basis than other components of FOS. Specifically, FICC would add a subsection (i) to Section 1(d) of Rule 13 to provide that, when a Debit Forward Mark Adjustment Payment is collected, for which FICC does not have an equivalent Credit Forward Mark Adjustment Payment to pay to another Netting Member, the related Credit Interest Adjustment Payment would be paid on a monthly basis. FICC would also add a subsection (i) to Section 1(l) of Rule 13 to similarly provide that, when a Debit GCF Forward Mark Adjustment Payment is collected, for which FICC does not have an equivalent Credit GCF Forward Mark Adjustment Payment to pay to another Netting Member, the related Credit GCF Interest Adjustment Payment would be paid on a monthly basis.
FICC is proposing to delete a reference to Section 3 of Rule 13 from a statement in Section 1 of Rule 13 because Section 3 of Rule 13 was removed from the Rules in a prior proposed rule change. This reference to Section 3 was retained in the Rule in error.
The relevant statement currently provides that, other than as provided for in Section 3, all payment obligations and collection rights with respect to the FOS components must be satisfied each Business Day on a net total basis through payment or collection, as set forth in Section 2 of Rule 13, of the Funds-Only Settlement Amount. The proposed rule change would correct this statement by replacing the reference to Section 3 of Rule 13 in this statement with a more general reference to “this Rule”.
FICC would implement the proposed rule change by no later than February 28, 2026 and would announce the implementation date of the proposed changes by an Important Notice posted to FICC's website.
FICC believes the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. In particular, FICC believes the proposed rule changes are consistent with Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
The proposed rule changes would also update the defined term for
Rule 17ad-22(e)(23)(ii) under the Act requires that FICC establish, implement, maintain and enforce written policies and procedures reasonably designed to provide sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in the covered clearing agency.
FICC does not believe the proposed rule changes would have any impact on competition. First, the proposed changes regarding the timing of certain FOS payments would apply equally to all Netting Members. Further, the proposed changes to the definition of Overnight Investment Rate and the correction to Rule 13 are designed to improve market participants' understanding of the provisions in the Rules governing FOS. As such, FICC does not believe such proposed amendments would have any effect on participants' respective competitive positions.
FICC has not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on how to submit comments, available at
FICC reserves the right to not respond to any comments received.
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.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to provide Nasdaq with limited discretion to deny initial listing to companies, even where the applicant meets all stated listing requirements.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Recently, Nasdaq has observed problematic or unusual trading in certain listed companies. Further, the Commission has imposed temporary trading suspensions pursuant to Section 12(k) of the Act on several listed securities based, generally, on concerns about potential manipulation in the securities effectuated through recommendations made to investors by unknown persons via social media to purchase, hold, and/or sell the securities. The Commission stated its belief that these recommendations appear to be designed to artificially inflate the price and volume of the securities and that the public interest and the protection of investors require a suspension of trading in the securities.
The Commission Suspension Orders generally appear to be based on activities of third parties, and there are no specific allegations in the Commission Suspension Orders against the companies, or persons associated with the companies, as being involved in the potentially manipulative trading activity. Nasdaq's listing requirements, which these companies satisfied both at the time of listing and on an ongoing basis, are based on the characteristics of the company itself and the securities it seeks to list. Likewise, Nasdaq Rule 5101, in conjunction with IM-5101-1, provides some discretion to deny listing where the company itself has engaged in misconduct or where an individual with a history of regulatory misconduct is associated with the company.
Nasdaq is concerned about the allegedly manipulative trading taking place in listed securities and that pending applicants, despite meeting all listing requirements, have characteristics similar to those subject to the Commission's trading suspensions and therefore may be susceptible to similar manipulation. While Nasdaq proposed certain changes to the listing requirements in September 2025,
The proposed rule change includes a series of non-exclusive factors that Nasdaq will consider in determining whether to apply this discretion. These factors include the following:
• where the company is located, including the availability of legal remedies to U.S. shareholders in that jurisdiction, the existence of blocking
• whether a person or entity exercises substantial influence over the company
• whether the expected public float and dissemination of the share distribution, based on a review of underwriter, broker and clearing allocations and consideration of prior deals involving those service providers, at the time of the IPO and post offering, raises concerns about adequate liquidity and potential concentration;
• whether there are issues concerning the company's advisors (including auditors, underwriters, law firms, brokers, clearing firms, or other professional service providers), based on factors including, but not limited to, whether the advisor has been reviewed by applicable regulators and, if so, what were the results of those reviews;
○ if the company's advisor is a new entity, whether the advisor's principals were involved with other firms with a regulatory history;
• whether any of the company's advisors were involved in prior transactions where the securities became subject to a pattern of concerning or volatile trading;
• whether the company's management and Board has experience or familiarity with U.S. public company requirements, including regulatory and reporting requirements under Nasdaq rules and federal securities laws;
• whether there are any FINRA, SEC or other regulatory referrals related to the company or its advisors, which can be included in the record of the matter and, if applicable, the results of those referrals;
• whether the company currently has, or recently has had, a going concern audit opinion and, if so, what is the Company's plan to continue as a going concern; and
• whether there are other factors that raise concerns about the integrity of the Company's board, management, significant shareholders, or advisors.
By giving Nasdaq the authority to exercise discretion in this manner, Nasdaq believes it can better address situations where a company satisfies Nasdaq's listing requirements, but has characteristics similar to other companies' securities where trading problems were observed and could make the company susceptible to manipulation. While Nasdaq may not otherwise have access to the facts underlying problematic or unusual trading that takes place across multiple U.S. exchanges as well as off-exchange, the factors will help identify situations where similar characteristics exist that are likely to create conditions that could allow problematic or unusual trading to also occur in the applicant's securities. Moreover, the proposed rule change will also give Nasdaq the authority to consider the involvement of advisors to the company and gatekeepers in other transactions that had problematic or unusual trading, and to take action to deny initial listing to a company involved with these entities.
When Nasdaq uses its authority to exercise discretion to deny listing, Nasdaq Staff will issue a written determination describing the basis for its decision. A Company must, within four business days from the date of Staff's written determination, make a public announcement in a press release or other Regulation FD compliant manner about the receipt of the determination and the Rule(s) upon which the determination is based, describing each specific basis and concern identified by Nasdaq in reaching its determination.
This proposed rule change is immediately effective, and Nasdaq proposes to apply the proposed rule to all companies currently in the application process.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission has previously opined on the importance of meaningful listing standards for the protection of investors and the public interest.
The development and enforcement of meaningful listing standards for an exchange is of critical importance to financial markets and the investing public. Among other things, such listing standards help ensure that exchange-listed companies will have sufficient public float, investor base, and trading interest to provide the depth and liquidity to promote fair and orderly markets.
Nasdaq believes that granting limited additional discretion to deny initial listing to companies, even when an applicant meets all stated listing requirements, is consistent with the requirements in Section 6(b)(5) of the Exchange Act. As noted, Nasdaq has observed trading patterns in certain securities—such as price swings unrelated to company news—and the Commission has issued multiple suspension orders alleging market manipulation in similar circumstances. The proposed factors will help provide transparency to situations where Nasdaq believes an applicant's securities may be more susceptible to manipulation, based on comparable characteristics or the involvement of similar advisors. Accordingly, Nasdaq believes that adopting this additional authority is consistent with the requirements to protect investors and the public interest. Further, while Nasdaq's use of this discretion may prevent some companies that otherwise meet the stated listing requirements from listing, such distinction between companies is not unfair because the affected companies will exhibit traits that increase their susceptibility to manipulation or share advisors with companies that previously demonstrated problematic or unusual trading patterns. Therefore the proposed
Nasdaq also believes that any impact on competition among companies as a result of the proposed rule change is necessary in furtherance of the investor protection goals of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will not impose any burden on competition among exchanges, since other exchanges either already have, or are able to adopt, similar rules providing them with discretion to deny initial listing. The proposed rule change may impose a burden on companies that are denied listing, but this burden is necessary to protect investors and the public interest, which is a primary purpose of the Act.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BZX Exchange, Inc. (“BZX” or the “Exchange”) is filing with the Securities and Exchange Commission (“Commission” or “SEC”) a proposed rule change to modify the Minimum Performance Standards applicable to the Exchange's Lead Market Maker (“LMM”) program in BZX-listed exchange-traded product (“ETP”) securities as provided in footnote 14 of the Exchange's fee schedule and to remove Closed-End Funds (“CEFs”) from the ETP LMM program. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Commission's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (“BZX Equities”) to (1) modify the Minimum Performance Standards
The Exchange first notes that its listings business operates in a highly-competitive market in which market participants, which includes issuers of securities, LMMs, and other liquidity providers, can readily transfer their listings, opt not to participate, or direct order flow to competing venues if they deem fee levels, liquidity provision incentive programs, or any other factor at a particular venue to be insufficient or excessive. The proposed rule changes reflect a competitive pricing structure designed to incentivize market participants to participate as LMMs in the Exchange's LMM Program, which the Exchange believes will enhance market quality in all securities listed on the Exchange and encourage issuers to list new products and transfer existing products to the Exchange.
The Exchange currently offers daily incentives for LMMs in ETPs and CEFs and listed on the Exchange for which the LMM meets certain “Base” or “Enhanced” Minimum Performance Standards.
The Exchange first proposes to eliminate CEFs from the ETP LMM Program provided under footnote 14(B) of the fee schedule. To effect this change, the Exchange proposes to remove CEFs from the definition of “Qualified ETP LMM” and adopt a new term “Qualified CEF LMM” in the fee schedule. The Exchange proposes to define “Qualified CEF LMM” to mean an LMM in a BZX-listed CEF security that meets the LMM performance standards set forth in Rule 11.8(e)(1)(E)(ii). The Exchange proposes to modify the existing definition of “Qualified ETP LMM” to mean an LMM in a BZX-listed ETP that is registered as a market maker in good standing on the Exchange that meets the Base or Enhanced Minimum Performance Standards set forth in footnote 14(B). The Exchange also proposes to eliminate all references to CEFs in footnote 14(B) of the fee schedule. The Exchange proposes to adopt a new definition for the term “ETP Minimum Performance Standards” which would mean the “Base” or “Enhanced” standards set forth in footnote 14(B) of the fee schedule. The Exchange also proposes to modify references to Standard Rates in footnote 14(B) to Base Rates.
The Exchange also proposes to amend both the Base and Enhanced Minimum Performance Standards under which an ETP LMM would qualify for the daily incentive. The Exchange proposes no changes to the amount of the daily incentives currently provided in the fee schedule.
The Original Filing provided that the Exchange expects the Minimum Performance Standards to include the below, and before diverging significantly from those ranges, the Exchange would submit a rule filing to the Commission describing such proposed changes. Specifically, the Minimum Performance Standards included in Original Filing required:
(i) registration as a market maker in good standing with the Exchange;
(ii) time at the inside requirements (generally between 3% and 15% of Regular Trading Hours for Base Minimum Performance Standards and between 5% to 50% for Enhanced Minimum Performance Standards, depending on the average daily volume of the applicable LMM Security);
(iii) auction participation requirements (generally requiring that the auction price is between 3% and 5% of the last Reference Price, as defined in Rule 11.23(a)(19), for Base Minimum Performance Standards and 1%-3% for Enhanced Minimum Performance Standards);
(iv) market-wide NBB and NBO spread and size requirements (generally requiring between 200 and 750 shares at both the NBB and NBO for both Base and Enhanced Minimum Performance Standards with an NBBO spread between 1% and 10% for Base
(v) depth of book requirements (generally requiring between $25,000 and $250,000 of displayed posted liquidity for both Base and Enhanced Minimum Performance Standards within 1% to 10% of both the NBB and NBO for Base Minimum Performance Standards and 0.25% and 5% for Enhanced Minimum Performance Standards, depending on price of the ETP and underlying asset class).
Now, the Exchange proposes to modify the Base and Enhanced Minimum Performance Standards and memorialize those Minimum Performance Standards in the fee schedule.
First, the Exchange proposes to provide under footnote 14(B) introductory language related to a Qualified ETP LMM. Specifically, the Exchange proposes to provide that Qualified ETP LMMs that meet the Base or Enhanced Minimum Performance Standards below are entitled to the Qualified ETP LMM daily incentive. Each assigned ETP is grouped based on an asset class categorization.
(1)
(2)
As provided above, the ETP LMM must maintain bid(s) and offer(s) at the NBB or NBO, respectively, at least 5% of the time the security is in a trading state during RTH for ETP LMM Securities with a CADV equal than or greater than 500,000 shares across all six asset categories to meet the Base Minimum Performance Standard. For ETP LMM Securities with a CADV less than 500,000 shares, the ETP LMM must maintain bid(s) and offer(s) at the NBB or NBO, respectively, at least 20% of the time the security is in a trading state during RTH for ETP LMM Securities with a CADV equal than or greater than 500,000 shares across all six asset categories to meet the Base Minimum Performance Standard.
The Enhanced Minimum Performance Standard requires the ETP LMM must maintain bid(s) and offer(s) at the NBB or NBO, respectively, at least 15% of the time the security is in a trading state during RTH for ETP LMM Securities with a CADV equal than or greater than 500,000 shares across all six asset categories. For ETP LMM Securities with a CADV less than 500,000 shares, the ETP LMM must maintain bid(s) and offer(s) at the NBB or NBO, respectively, at least 60% of the time the security is in a trading state during RTH for ETP LMM Securities with a CADV less than 500,000 shares across all six asset categories.
(3)
Based on the above, for the Base Minimum Performance Standard the ETP LMM must maintain a notional value of $150,000 on both the bid and the offer within at least 1-2% (dependent on the asset category) of the NBB and NBO, respectively, across the six asset categories. The Enhanced Minimum Performance Standard requires the LMM maintain a notional value ranging from $150,000 to $175,000 on both the bid and offer within at least 0.25-0.50% of the NBB and NBO, respectively, across the six asset categories.
(4)
As indicated above, the Base Minimum Performance Standard requires 300 to 500 shares available at the NBB and NBO across all market centers for at least 50% of the trading day based on the asset categorization of the LMM ETP Security. The Enhanced Minimum Performance Standard requires 1,000 to 1,300 shares available at the NBB and NBO across all market centers for at least 50% of the trading day based on the asset categorization of the LMM ETP Security.
(5)
As indicated above, the Base Minimum Performance Standard requires the NBBO spread across all market centers be within 0.50-1% for at least 95% of the trading day based on the asset categorization of the LMM ETP Security. The Enhanced Minimum Performance Standard requires the NBBO spread across all market centers be within 0.25-0.50% for at least 95% of the trading day based on the asset categorization of the LMM ETP Security.
(6)
As provided above, the Base Minimum Performance Standard requires that the BZX Official Opening Price be within 2% of the last Reference Price across all six asset categories, and the BZX Official Closing Price be within 1.50% of the last Reference Price across all six asset categories. The Enhanced Minimum Performance Standard requires that the BZX Official Opening Price be within 0.50% of the last Reference Price across all six asset categories, and the BZX Official Closing Price be within 0.25% of the last Reference Price across all six asset categories.
The Exchange believes the proposed amendments to the ETP LMM Program, including the removal of CEFs, memorialization of Minimum Performance Standards, and adoption of asset class-based requirements, are
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange believes that the proposed changes to the ETP LMM Program are consistent with Section 6(b)(5) of the Act because they are designed to enhance market quality and liquidity in Exchange-listed securities. Specifically, the proposed rule change memorializes the Minimum Performance Standards applicable to ETP LMMs in the fee schedule, providing greater transparency and clarity to market participants regarding the obligations and expectations for LMMs participating in the program. The Exchange notes that it is appropriate to memorialize the ETP Minimum Performance Standards in the Fee Schedule rather than the rule book, as this approach is consistent with NYSE Arca's treatment of similar standards.
The Exchange believes that segmenting the Minimum Performance Standards into asset classes is consistent with Section 6(b)(5) of the Act and is in line with how the Exchange understands market makers to take on and quote ETP assignments. Different asset classes—including US Equity, Single Stock, Outcome Based, Fixed Income, International Equity, and Other—have distinct trading characteristics, liquidity profiles, and market dynamics that affect how market makers can effectively provide liquidity. By tailoring the performance standards to reflect these differences, the Exchange believes that aligning asset classes with respective quoting obligations will result in more correlated market making support to the tickers that fall in each asset class. This approach promotes just and equitable principles of trade by establishing performance standards that are appropriately calibrated to the unique characteristics of each asset class, which in turn enhances liquidity provision and market quality for investors trading in these securities.
The proposed asset class-based structure benefits investors and protects the public interest by ensuring that LMMs are held to standards that reflect the realities of providing liquidity in different types of ETPs. For example, Fixed Income ETPs may have different spread and depth characteristics than US Equity ETPs, and International Equity ETPs may face different pricing dynamics than Single Stock ETPs. By recognizing these differences in the Minimum Performance Standards, the Exchange creates incentives for LMMs to provide high-quality, consistent liquidity that is appropriate for each product type. This tailored approach removes impediments to and perfects the mechanism of a free and open market by encouraging market making activity that is well-suited to the specific needs of each asset class.
The Exchange also believes that removing CEFs from the ETP LMM Program and establishing a separate “Qualified CEF LMM” definition is consistent with Section 6(b)(5) of the Act. This change recognizes the distinct trading characteristics and liquidity profiles of CEFs compared to ETPs and allows the Exchange to tailor its LMM programs appropriately to each product type. By applying the LMM performance standards set forth in Rule 11.8(e)(1)(E)(ii) to CEFs, the Exchange ensures that CEF LMMs are subject to appropriate standards while focusing the proposed ETP LMM Program standards on ETPs, where such standards are better suited to the product characteristics. This tailored approach promotes just and equitable principles of trade and protects investors by ensuring that LMM obligations are appropriately calibrated to the securities for which they are responsible.
Furthermore, the proposed rule change is consistent with Section 6(b)(5) because it operates in a competitive environment where market participants can readily choose among competing venues. The Exchange's LMM Program is designed to attract and retain LMMs by offering competitive incentives in exchange for meeting rigorous performance standards. This competitive structure ensures that the Exchange's fees and incentive programs remain fair and reasonable, as LMMs and issuers can direct their business elsewhere if they find the Exchange's terms to be insufficient or excessive. The proposed changes reflect the Exchange's efforts to balance the need for high-quality market making with appropriate incentives, which ultimately benefits all market participants and promotes the public interest.
Finally, the Exchange believes that memorializing the specific Minimum Performance Standards in the fee schedule, including the detailed requirements across different asset class categories and CADV thresholds, enhances transparency and removes impediments to a free and open market. Market participants will have clear, accessible information about the standards applicable to the ETP LMM Program, enabling them to make informed decisions about participation and allowing for more effective monitoring and compliance. This transparency is consistent with the Act's objectives of promoting just and equitable principles of trade and protecting investors.
For these reasons, the Exchange believes the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
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 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. Rather, the
The Exchange does not believe the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed Minimum Performance Standards apply equally to all ETP LMMs that choose to participate in the ETP LMM Program. All ETP LMMs have the opportunity to qualify for the daily incentives by meeting either the Base or Enhanced Minimum Performance Standards, and the standards are transparent and objective. The Exchange notes that participation in the ETP LMM Program is voluntary, and market makers can choose whether to participate based on their assessment of whether they can meet the performance standards and whether the incentives are attractive relative to their costs.
The proposed asset class-based structure does not impose a burden on intramarket competition because it reflects the different characteristics and trading dynamics of various ETP types. Market makers specializing in different asset classes face different operational requirements and market conditions, and the tailored standards recognize these differences rather than creating competitive advantages or disadvantages. An ETP LMM's ability to meet the standards for any particular asset class depends on its operational capabilities and market making strategies, which are within the control of each market participant.
Additionally, the removal of CEFs from the ETP LMM Program does not burden intramarket competition. CEF LMMs will continue to be subject to the LMM performance standards set forth in Rule 11.8(e)(1)(E)(ii), ensuring that all CEF LMMs are treated equally. The separation of CEFs from ETPs in the LMM Program structure simply recognizes the distinct nature of these products and allows the Exchange to apply appropriate standards to each product type.
The Exchange does not believe the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive market in which market participants can readily direct their business to competing venues if they deem fee levels, incentive programs, or other factors at a particular venue to be insufficient or excessive. The proposed changes to the ETP LMM Program are designed to attract and retain LMMs by offering competitive incentives in exchange for meeting performance standards that enhance market quality.
To the extent the proposed rule change makes the Exchange's LMM Program more attractive to market makers or issuers, any resulting competitive impact would be the result of the Exchange's competitive pricing and program design, which is appropriate and consistent with the Act. Other exchanges are free to adopt similar or different LMM programs and incentive structures to compete for market maker participation and issuer listings. The Exchange believes that competition among venues for LMM participation and listings benefits investors by encouraging exchanges to develop programs that promote liquidity and market quality.
Furthermore, the proposed rule change may enhance intermarket competition by encouraging other exchanges to evaluate and potentially improve their own LMM programs. This type of competitive dynamic promotes innovation and improvement in market structure, which ultimately benefits investors and the broader market ecosystem.
The Exchange also notes that the proposed Minimum Performance Standards are designed to enhance liquidity in Exchange-listed ETPs, which benefits all market participants regardless of where they choose to trade. Improved liquidity and tighter spreads resulting from the enhanced LMM Program contribute to better price discovery and more efficient markets across all trading venues, as the benefits of improved market quality are not limited to the Exchange's platform.
For these reasons, the Exchange does not believe 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 neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its Specialized Quote Feed
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on January 1, 2026.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
BX proposes to amend its SQF Port and SQF Purge Port pricing at Options 7, Section 3, BX Options Market—Ports and other Services by offering an incentive to Market Makers
Pursuant to a prior rule change,
Additionally, at this time, the Exchange proposes to offer an opportunity to lower SQF Port and SQF Purge Port Fees. Specifically, the Exchange proposes to offer certain discounts to Market Makers that have transacted a certain percentage of Total National Volume in the prior month. For purposes of this proposal, the percentage of Total National Volume is calculated by taking the total Market Maker Penny Symbol and Market Maker Non-Penny Symbol volume (excluding index options) executed on the Exchange in the prior month and attributing a multiple of five times to that Non-Penny Symbol volume (numerator) and dividing that by Market Maker volume (“M” capacity at The Options Clearing Corporation (“OCC”)) in multiply listed options across all options exchanges (denominator or Total National Volume).
With this proposal, a Market Maker that transacted less than 0.10% of Total National Volume in the prior month would not receive a discount on SQF Port and SQF Purge Port Fees. A Market Maker that transacted greater than or equal to 0.10% and less than 0.25% of Total National Volume in the prior month will be afforded a discount of 10% on their SQF Port and SQF Purge Port Fees. A Market Maker that transacted greater than or equal to 0.25% and less than 0.40% of Total National Volume in the prior month will be afforded a discount of 30% on their SQF Port and SQF Purge Port Fees. Finally, a Market Maker that transacted greater than or equal to 0.40% of Total National Volume in the prior month will be afforded a discount of 50% on their SQF Port and SQF Purge Port Fees. By way of example, a Market Maker that executed 3,000,000 in Penny Volume and 200,000 in Non-Penny Volume in a given month on the Exchange, where the Total National Volume was 1,000,000,000, would qualify for a discount of 50% on their SQF Port and SQF Purge Port Fees ((200,000 × 5 = 1,000,000) + 3,000,000 = 4,000,000 which is 0.40% of 1,000,000,000).
The Exchange proposes to calculate Market Maker Non-Penny Symbol volume at five times the weight as compared to Market Maker Penny Symbol volume because Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Non-Penny Symbols. Overall, the proposed discounts should encourage Market Makers to transact additional order flow on BX with which other market participants may interact, for an opportunity to lower SQF Port and SQF Purge Port Fees. The Exchange proposes to exclude index options as index options are generally not multiply listed.
The Exchange proposes to remove note 4 of Options 7, Section 2 which states,
Participants that increase their executed Customer volume which removes liquidity in a given month by at least 70% above their September 2024 volume as measured by a percentage of TCV will receive a Taker Fee discount of $0.05 per contract in Penny Symbols excluding AAPL, SPY, QQQ, and IWM. Participants with no Customer volume in the remove liquidity segment for the month of September 2024 may qualify for the Taker Fee discount by having any new volume considered as added volume. This note 4 incentive will be available through April 30, 2025.
The incentive located at note 4 of Options 7, Section 2 was available through April 30, 2025 and is now outdated.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Likewise, in
Further, “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers'. . . .”
The proposed fee discounts for SQF Ports and SQF Purge Ports are reasonable because they will attract a greater amount of order flow to BX with which other market participants may interact while also lowering costs for certain Market Makers that are able to transact greater than 0.10% of Total National Volume in the prior month. The Exchange believes it is reasonable to lower costs for certain Market Makers that transact greater than 0.10% of Total National Volume on BX because those Market Makers are affording other BX Participants an opportunity to interact with that order flow. The proposal provides an incremental incentive for Market Makers that transact at least 0.10% of Total National Volume, which provides a higher benefit for satisfying increasingly more stringent criteria. The Exchange believes that the value of the proposed discounts is commensurate with the difficulty to achieve the corresponding threshold. Additionally, the discounts may incentivize and attract more volume and liquidity to the Exchange, which will benefit all Exchange participants through increased opportunities to trade as well as enhancing price discovery. The Exchange's proposed discounts are substantially similar to Cboe Exchange, Inc.'s (“Cboe”) credit for their BOE Bulk Port Fees.
BX believes it is reasonable to offer fee discounts to those Market Makers that primarily provide and post liquidity to the Exchange, as it should encourage Market Makers to continue to participate on the Exchange and add liquidity. Greater liquidity benefits all market participants by providing more trading opportunities and tighter spreads. The proposal would also mitigate the costs incurred by Market Makers on BX.
Calculating Market Maker Non-Penny Symbol volume at five times the weight as compared to Penny Symbol volume is reasonable, equitable and not unfairly discriminatory as Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Market Maker Non-Penny Symbols.
A BX Market Maker requires only one SQF Port to submit quotes in its assigned options series into BX. A Market Maker may submit all quotes through one SQF Port. This is also the case for an SQF Purge Port. While a Market Maker may elect to obtain multiple SQF Ports and SQF Purge Ports to organize its business,
The proposed fee discounts for SQF Ports and SQF Purge Ports are equitable and not unfairly discriminatory as they would apply uniformly to each BX Market Maker. The Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to note that, “The SQF Port Fee and the SQF Purge Port Fee are aggregated for the below incremental tiers as follows” and to relocate the tier qualifications to one table instead of two separate tables is reasonable, equitable and not unfairly discriminatory as it will reflect that BX intends to calculate the SQF Port Fee and the SQF Purge Port Fees by aggregating them for purposes of the tier calculation. This reflects the intent of SR-BX-2025-016, which stated that the BX SQF Port Fee and the SQF Purge Port Fees would be identical to the NOM SQF Port Fee and the SQF Purge Port Fees.
The Exchange's proposal to remove note 4 of Options 7, Section 2 is reasonable because the incentive was available through April 30, 2025 and is now outdated. The Exchange's proposal to remove note 4 of Options 7, Section 2 is equitable and not unfairly discriminatory because no Participant would be eligible for this incentive.
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.
In terms of intra-market competition, the proposed fee discounts for SQF Ports and SQF Purge Ports do not impose a burden on competition because they would apply uniformly to each Market Maker and the Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to note that, “The SQF Port Fee and the SQF Purge Port Fee are aggregated for the below incremental tiers as follows” and to relocate the tier qualifications to one table instead of two separate tables does not impose an undue burden on competition as it will reflect that BX intends to calculate the SQF Port Fee and the SQF Purge Port Fees by aggregating them for purposes of the tier calculation. This reflects the intent of SR-BX-2025-016, which stated that the BX SQF Port Fee and the SQF Purge Port Fees would be identical to the NOM SQF Port Fee and the SQF Purge Port Fees.
The Exchange's proposal to remove note 4 of Options 7, Section 2 does not impose an undue burden on competition because no Participant would be eligible for this incentive.
In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend The Nasdaq Options Market LLC (“NOM”) Specialized Quote Feed
While the changes proposed herein are effective upon filing, the Exchange has designated the amendments become operative on January 1, 2026.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
NOM proposes to amend its SQF Port and SQF Purge Port pricing at Options 7, Section 3, Nasdaq Options Market—Ports and other Services by offering an incentive to Market Makers
NOM currently assess an SQF Port Fee and an SQF Purge Port Fee as follows: The first 5 ports (1-5) would be assessed $1,620 per port, per month; the next 15 ports (6-20) would be assessed $1,080 per port, per month; and all ports over 20 ports (21 and above) would be assessed $540 per port, per month. Today, NOM aggregates the SQF Port and SQF Purge Ports for purposes of determining the applicable tier qualification.
At this time, the Exchange proposes to amend the rule text to state, “The SQF Port Fee and the SQF Purge Port Fee are aggregated for the below incremental tiers as follows.” The addition of this language will add clarity to the current billing of these port.
Additionally, at this time, the Exchange proposes to offer an opportunity to lower SQF Port and SQF Purge Port Fees. Specifically, the Exchange proposes to offer certain discounts to Market Makers that have transacted a certain percentage of Total National Volume in the prior month. For purposes of this proposal, the percentage of Total National Volume is calculated by taking the total Market Maker Penny Symbol and Market Maker Non-Penny Symbol volume (excluding index options) executed on the Exchange in the prior month and attributing a multiple of five times to that Non-Penny Symbol volume (numerator) and dividing that by Market Maker volume (“M” capacity at The Options Clearing Corporation (“OCC”)) in multiply listed options across all options exchanges (denominator or Total National Volume).
With this proposal, a Market Maker that transacted less than 0.10% of Total National Volume in the prior month would not receive a discount on SQF Port and SQF Purge Port Fees. A Market Maker that transacted greater than or equal to 0.10% and less than 0.25% of Total National Volume in the prior month will be afforded a discount of 10% on their SQF Port and SQF Purge Port Fees. A Market Maker that transacted greater than or equal to 0.25% and less than 0.40% of Total National Volume in the prior month will be afforded a discount of 30% on their SQF Port and SQF Purge Port Fees. Finally, a Market Maker that transacted greater than or equal to 0.40% of Total National Volume in the prior month will be afforded a discount of 50% on their SQF Port and SQF Purge Port Fees. By way of example, a Market Maker that executed 3,000,000 in Penny Volume and 200,000 in Non-Penny Volume in a given month on the Exchange, where the Total National Volume was 1,000,000,000, would qualify for a discount of 50% on their SQF Port and SQF Purge Port Fees ((200,000 × 5 = 1,000,000) + 3,000,000 = 4,000,000 which is 0.40% of 1,000,000,000).
The Exchange proposes to calculate Market Maker Non-Penny Symbol volume at five times the weight as compared to Market Maker Penny Symbol volume because Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Non-Penny Symbols. Overall, the proposed discounts should encourage Market Makers to transact additional order flow on NOM with which other market participants may interact, for an opportunity to lower SQF Port and SQF Purge Port Fees. The Exchange proposes to exclude index options as index options are generally not multiply listed.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Likewise, in
Further, “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers'. . . .”
The proposed fee discounts for SQF Ports and SQF Purge Ports are reasonable because they will attract a greater amount of order flow to NOM with which other market participants
NOM believes it is reasonable to offer fee discounts to those Market Makers that primarily provide and post liquidity to the Exchange, as it should encourage Market Makers to continue to participate on the Exchange and add liquidity. Greater liquidity benefits all market participants by providing more trading opportunities and tighter spreads. The proposal would also mitigate the costs incurred by Market Makers on NOM.
Calculating Market Maker Non-Penny Symbol volume at five times the weight as compared to Penny Symbol volume is reasonable, equitable and not unfairly discriminatory as Non-Penny Symbols tend to have lower volumes and this incentive should encourage a greater amount of volume in Market Maker Non-Penny Symbols.
A NOM Market Maker requires only one SQF Port to submit quotes in its assigned options series into NOM. A Market Maker may submit all quotes through one SQF Port. This is also the case for an SQF Purge Port. While a Market Maker may elect to obtain multiple SQF Ports and SQF Purge Ports to organize its business,
The proposed fee discounts for SQF Ports and SQF Purge Ports are equitable and not unfairly discriminatory as they would apply uniformly to each NOM Market Maker. The Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to amend the rule text to state, “The SQF Port Fee and the SQF Purge Port Fee are aggregated for the below incremental tiers as follows” is reasonable, equitable and not unfairly discriminatory. The addition of this language will add clarity to the current billing of these port.
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.
In terms of intra-market competition, the proposed fee discounts for SQF Ports and SQF Purge Ports do not impose a burden on competition because they would apply uniformly to each Market Maker and the Exchange would uniformly calculate the Market Maker's percentage each month. Although only Market Makers may receive the proposed discounts, the Exchange notes that Market Makers are valuable market participants that provide liquidity in the marketplace and incur costs that other market participants do not incur. Unlike other market participants, Market Makers are required to provide continuous two-sided quotes on a daily basis,
The Exchange's proposal to amend the rule text to state, “The SQF Port Fee and the SQF Purge Port Fee are aggregated for the below incremental tiers as follows” does not impose an undue burden on competition because the addition of this language will add clarity to the current billing of these port.
In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other options exchanges. In addition to the Exchange, market participants have alternative options exchanges that they may participate on and direct their order flow. In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing options exchanges to maintain their competitive standing in the financial markets.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2025-107 and should be submitted on or before January 20, 2026.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Securities and Exchange Commission (“Commission”) a proposed rule change to amend Exchange Rules 11.180 and Rule 14.002 to conform with a recent amendment to the definition of Round Lot under Rule 600 of Regulation NMS recently approved by the Commission.
The text of the proposed rule change is available at 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 self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Exchange Rules 11.180 and 14.002 to conform with a recent amendment to the definition of Round Lot under Rule 600 of Regulation NMS recently approved by the Commission.
In 2020, the Commission adopted amendments to Regulation NMS to modernize the NMS information provided within the national market system for the benefit of market participants and to better achieve Section 11A's goals of assuring “the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities that is prompt, accurate, reliable, and fair” (“MDI Rules”).
In light of delays in the implementation of the MDI Rules, including the definition of round lot, on September 18, 2024, the Commission, among other things, accelerated the implementation of the round lot definition. The Commission also revised the round lot definition as set forth below.
The implementation of the Commission's revised definition was required to be completed on November 3, 2025, and the Commission provided temporary exemptive relief to exchanges from the requirement to file proposed rule changes to amend their rules to reflect the round lot definition in Rule 600(b)(93) of Regulation NMS until 30 calendar days following the end of the lapse of appropriations.
Exchange Rule 11.180(q)(1) provides that “[o]ne hundred (100) shares or any multiple thereof shall constitute a Round Lot, unless an alternative number of shares is established as a Round Lot by the listing exchange for the security.” The Exchange proposes to replace this definition with a sentence that explicitly refers to the definition of round lots under Rule 600 of Regulation NMS. As a result, the above sentence will be deleted and replaced with the following, “For any NMS stock, the “Round Lot” shall be the size assigned by the primary listing market pursuant to Rule 600 of Regulation NMS under the Exchange Act.”
Similarly, Exchange Rule 14.002(a)(1) provides “ “Round Lot” or “Normal Unit of Trading” means 100 shares of a security[,]” and provides that the Exchange may determine when a “Round Lot” would not mean 100 shares. The Exchange now proposes to also amend Exchange Rule 14.002(a)(1) to explicitly refer to the definition of a round lot under Rule 600 of Regulation NMS. Again, the Exchange proposes these changes solely to conform the Exchange's definition of Round Lot under Exchange Rule 11.180(q)(1) and Exchange Rule 14.002(a)(1) to the new definition of Round Lot under Rule 600 of Regulation NMS.
The Exchange also proposes to make conforming non-substantive changes to Exchange Rule 11.151(a)(1), Two-Sided Quote Obligation. Exchange Rule 11.151(a)(1) currently provides that “[u]nless otherwise designated, a `normal unit of trading' shall be 100 shares.” The Exchange proposes to replace the aforementioned sentence with a sentence that conforms to the newly adopted definition of Round Lot in the Exchange's Rulebook. As a result, the above sentence will be removed and replaced with the following: “[u]nless otherwise designated, a `normal unit of trading' shall be a Round Lot as defined in Exchange Rule 11.180.” The Exchange also proposes to make conforming non-substantive changes to Exchange Rules 11.220, Priority of Orders and 14.310, Initial Listing Requirements for Primary Equity Securities. The Exchange proposes to capitalize the term Round Lot in each of these rules. The purpose of these changes is to provide greater clarity to exchange members and the public regarding the Rulebook. The Exchange does not propose any additional changes to these rules.
The proposed rule changes will be implemented on December 12, 2025.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange proposes to amend Exchange Rules 11.180 and 14.002 to conform with the definition of Round Lot under Rule 600 of the Regulation NMS that is to be implemented in November 2025.
The proposed rule changes would reduce potential investor and market participant confusion and therefore remove impediments to and perfect the mechanism of a free and open market and a national market system by ensuring that the Exchange's rules properly reflect the requirements of Rule 600 of Regulation NMS. The Exchange also believes that the proposed rule changes would remove impediments to and perfects the mechanism of a free and open market by ensuring that persons subject to the Exchange's jurisdiction, regulators, and the investing public can more easily navigate and understand the Exchange's rules. The proposed rule changes would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the increased transparency and clarity, thereby reducing potential confusion.
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 the proposed rule changes do not impose any burden on intramarket or intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule changes to amend the definition of Round Lot are not intended to address competitive issues but rather are concerned solely with amending the Exchange's Rules to conform with the amended definition of Round Lot under Rule 600 of the Regulation NMS.
The Exchange neither solicited nor received comments on the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6)
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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Minnesota dated December 22, 2025.
Issued on December 22, 2025.
Sharon Henderson, 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 disaster 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 physical damage is 213865 and for economic injury is 213870.
The State which received a disaster Declaration is Minnesota.
60-Day notice and request for comments.
The Small Business Administration (SBA) intends to request approval from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) requires federal agencies to publish a notice in the
Submit comments on or before February 27, 2026.
Send all comments to the Office of Communications and Public Liaison, Office of Strategic Alliances, Kelly LoTempio, Program Analyst,
Office of Communications and Public Liaison, Office of Strategic Alliances, Kelly LoTempio, Program Analyst,
Small business owners or advocates who have been nominated for an SBA recognition award submit this information for use in evaluating nominee's eligibility for an award: Verifying accuracy of information submitted and determining whether there are any actual or potential conflicts of interest. Awards are presented to winners during the Presidentially declared Small Business Week.
SBA is requesting comments on (a) Whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information.
Office of the United States Trade Representative.
Notice of action.
The United States Trade Representative (U.S. Trade Representative) has determined that China's acts, policies, and practices are actionable under Section 301 of the Trade Act of 1974 and that appropriate responsive action includes taking tariff action now on semiconductors from China, with an initial tariff level of 0 percent, increasing in 18 months on June 23, 2027, to a rate to be announced not fewer than 30 days prior to that date, as described below.
Philip Butler, Chair of the Section 301 Committee or Nathaniel Halvorson, Deputy Assistant U.S. Trade Representative for Monitoring & Enforcement at (202) 395-5725.
On December 23, 2024, the U.S. Trade Representative initiated a section 301 investigation of China's acts, policies, and practices related to targeting of the semiconductor industry for dominance, including to the extent that China's semiconductors are incorporated as components into downstream products for critical industries like defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid.
• China's acts, policies, and practices related to its targeting of the semiconductor industry for dominance.
• Anticompetitive and non-market means employed by the PRC in pursuit of its semiconductor industry targeting objectives, including political guidance, directives, and control within state and private enterprises, activities of state-owned or state-controlled enterprises, market access restrictions, opaque regulatory preferences and discrimination, wage-suppressing labor practices, massive state support of industry (including government guidance funds), and forced technology transfer (including state-directed cyber intrusions and cybertheft of intellectual property).
• Whether China's acts, policies, and practices are unreasonable or discriminatory.
• Whether China's acts, policies, and practices burden or restrict U.S. commerce, and if so, the nature and level of the burden or restriction. This would include economic assessments of the burden or restriction on semiconductors, semiconductor manufacturing including foundries, silicon carbide substrates or other wafers, and downstream products, with a particular focus on critical industries, such as defense, automotive, medical devices, aerospace, telecommunications, and power generation and the electrical grid.
• Whether China's acts, policies, and practices are actionable under section 301(b) of the Trade Act, and what action, if any, should be taken, including tariff and non-tariff actions.
Interested persons filed 26 comments. In addition, USTR and the Section 301 Committee convened a public hearing on March 11, 2025, during which witnesses provided testimony and responded to questions. The public submissions are available at:
Based on information obtained during the investigation, and in consultation with the Section 301 Committee, China's targeting of the semiconductor industry for dominance is unreasonable and burdens or restricts U.S. commerce and thus is actionable.
For decades, China has targeted the semiconductor industry for dominance and has employed increasingly aggressive and sweeping non-market policies and practices in pursuing dominance of the sector. China's pursuit of its dominance goals has severely disadvantaged U.S. companies, workers, and the U.S. economy generally through lessened competition and commercial opportunities and through the creation of economic security risks from dependencies and vulnerabilities.
Top-down industrial planning is a critical feature of China's state-led, non-market economic system. China organizes the development of its economy through broad, national-level five-year economic and social development plans. It then employs industry-specific plans and local plans at central and sub-central levels of government that typically align chronologically with the national five-year plans. These plans often contain detailed quantitative and qualitative targets, including for production, domestic content, domestic and international market shares, and outline the non-market policies and practices China should use to achieve these targets.
Over the last 25 years, China has promulgated over 100 central and sub-central industrial plans that address the semiconductor industry, articulating over 300 qualitative and 170 quantitative targets that seek to capture global and domestic market share, transfer technology, and indigenize the equipment needed to manufacture semiconductors. In its last publicly-released market share target for the semiconductor sector, China aimed to capture 56 percent of sales in the international market and 80 percent in the domestic market, according to industrial plans. Market share targets necessitate substitution by Chinese companies at the expense of foreign competitors—for Chinese companies to gain market share, they must displace foreign companies in existing markets and take new markets as they develop in the future. Across both qualitative and quantitative targets, China's industrial plans target every major segment of the semiconductor supply chain, including fabrication; design; assembly, testing, and packaging (ATP); and materials & equipment.
In particular, the U.S. Trade Representative has determined that China's targeting of the semiconductor industry for dominance is unreasonable, including for the following reasons:
First, China's targeting of the semiconductor industry is unreasonable because China exerts extraordinary control over the semiconductor industry, and other economic actors, in order to achieve its targeted dominance, including through political guidance, directives, and control within state and private enterprises, activities of state-owned or state-controlled enterprises. Adherence to the objectives of China's industrial plans is effectively mandatory. Both state actors and Chinese companies move toward the goals set by the central government and have little discretion to ignore China's
Through its control of economic actors and sectors, China directs non-market advantages to China's semiconductor industry across every major segment of the semiconductor supply chain, including fabrication, design, ATP, materials, critical minerals, chemicals, photoresists, and manufacturing equipment. These non-market advantages include massive and persistent state financial support of industry, including market access restrictions and direction; government guidance funds; forced technology transfer and intellectual property theft; opaque regulatory preferences and discrimination; and wage-suppressing labor practices. Thus, China's targeting of the semiconductor industry for dominance is unreasonable because of China's extraordinary control over its economic actors and ability to direct non-market advantages to its semiconductor industry.
Second, China's targeting of the semiconductor industry for dominance is unreasonable because it is does not reflect market competition and is unconstrained by market forces. China's targeting, both by design and in effect, displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition. China's plans, including as demonstrated by specific market share targets, are to achieve a long-term dominant position in these economic sectors. Its targeting of the industry for dominance necessarily means displacing foreign firms from existing markets, and taking new markets as they arise, diminishing competition. Foreign firms are increasingly unable to compete with the resources of the Chinese state, resulting in lost sales, under-investment in capacity, diminished ability to attract financing, and lost jobs and lower wages. The dominant positions China seeks, and increasingly achieves, in numerous segments of the semiconductor industry give it market power over global supply, pricing, and access.
Third, China's targeting of the semiconductor industry for dominance harms foreign competitors and purchasers by creating and exploiting dependencies. China's objective is to ultimately displace foreign competitors throughout the semiconductor value chain in domestic and foreign markets, which increases the world's dependence on its companies, products, services, and technology. The creation of dependencies also increases risk for individual firms and their workers, for economic sectors (including workers' communities), and for supply chain resilience. China has demonstrated in the past its willingness to weaponize dependencies for purposes of economic coercion, including in this sector through export restrictions on gallium, germanium, antimony, and other critical minerals. China has applied these export restrictions broadly without regard to end-use or end-users. China's targeting of this sector for dominance is therefore unreasonable also due to the creation of dependencies and resulting vulnerabilities and risks.
Furthermore, the U.S. Trade Representative determined that China's targeting of the semiconductor industry for dominance burdens or restricts U.S. commerce, including for the following reasons:
First, China's targeted dominance burdens or restricts U.S. commerce because it undercuts business opportunities for and investments in the U.S. semiconductor industry. China has targeted the semiconductor industry for dominance for decades and increasingly dominates segments of the semiconductor value chain. Indeed, China continues to build upon its dominance and seeks to expand into new segments of the value chain. China's targeting for dominance contributes to lost sales, chronic underinvestment in numerous segments, and a diminished U.S. industry, constituting a burden and restriction on U.S. commerce.
Second, China's targeting for dominance burdens or restricts U.S. commerce because it creates economic security risks from dependence and vulnerabilities in sectors critical to the functioning of the U.S. economy. China's targeting for dominance has created, and will continue to accelerate, dependencies for the U.S. semiconductor industry and for purchasers of semiconductors, creating vulnerabilities across the U.S. economy. China has also revealed the capacity and willingness to weaponize dependencies and vulnerabilities through economic coercion. Over-reliance on a single economy for semiconductors and related technology or products increases the cost of any disruption. The economic security risks U.S. firms and the U.S. economy bear from these dependencies and vulnerabilities, through their potential for disruption and coercion, burden or restrict U.S. commerce.
Section 301(b) provides that upon determining that the acts, policies, and practices under investigation are actionable and that action is appropriate, the U.S. Trade Representative shall take all appropriate and feasible action authorized under Section 301(c), subject to the specific direction, if any, of the President regarding such action, and all other appropriate and feasible action within the power of the President that the President may direct the U.S. Trade Representative to take under Section 301(b), to obtain the elimination of that act, policy, or practice. Section 301(c) of the Trade Act authorizes the U.S. Trade Representative to take certain actions for purposes of carrying out the provisions of Section 301(b). For example, Section 301(c)(1)(B) authorizes the U.S. Trade Representative to “impose duties or other import restrictions on the goods of [the foreign country subject to the investigation] and, notwithstanding any other provision of law, fees or restrictions on the services of, such foreign country for such time as the Trade Representative determines appropriate.” Section 301(c)(3)(A) provides that actions that the U.S. Trade Representative is authorized to take may be taken against any good or economic sector on a non-discriminatory basis or solely against the foreign country concerned.
Pursuant to Sections 301(b) and (c), the U.S. Trade Representative has determined that responsive action is appropriate and that appropriate responsive action includes taking tariff action now on semiconductors from China, with an initial tariff level of 0 percent, increasing in 18 months on June 23, 2027, to a rate to be announced not fewer than 30 days prior to that date. These new Section 301 tariffs would be additional to the existing 50 percent Section 301 tariff on semiconductors from China imposed pursuant to the Section 301 investigation related to forced technology transfer. The U.S. Trade Representative will continue to monitor the efficacy of this action, the progress made toward resolution of this matter, and the need for any additional action.
This action applies to the following 8-digit subheadings:
In order to implement the Trade Representative's determination, subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) is modified by the Annex of this notice, effective December 23, 2025.
Products of China that are provided for in HTSUS heading 9903.91.05 and described in subdivision (f)(ii) of note 31 to subchapter III of chapter 99 of the HTSUS, as established by the Annex of this notice, shall continue to be subject to antidumping, countervailing, or other duties, fees, exactions and charges that apply to such products. Any product covered by the Annex to this notice, except any product that is eligible for admission under `domestic status' as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and is admitted into a U.S. foreign trade zone on or after the effective date of the additional duties only may be admitted as `privileged foreign status' as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
Subdivision (f) of U.S. note 31 to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States is amended:
1. by deleting “Heading 9903.91.05” and by inserting “(i) Heading 9903.91.05” in lieu thereof; and
2. by inserting the following in numerical order:
“(ii) The additional rate of duty under heading 9903.91.05 shall be increased on June 23, 2027. The U.S. Trade Representative will announce the amount of the increase in a
Office of the United States Trade Representative.
Notice of implementation of action.
Pursuant to Section 305(a) of the Trade Act (19 U.S.C. 2415(a)(1)), this notice implements action determined by the United States Trade Representative (U.S. Trade Representative) in this investigation and announced on December 10, 2025.
As set out in the Annex to this notice, tariff increases in 2026, 2027, and 2028 are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after January 1 of the corresponding year.
Philip Butler, Chair of the Section 301 Committee, Leigh Bacon, Chief Counsel for Negotiations, Legislation, and Administrative Law, or Nathaniel Halvorson, Deputy Assistant U.S. Trade Representative for Monitoring & Enforcement, at (202) 395-5725.
On December 10, 2024, the U.S. Trade Representative initiated an investigation regarding Nicaragua's acts, policies, and practices related to labor rights, human rights, and the rule of law pursuant to 302(b)(1) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C. 2412(b)(1)).
On October 20, 2025, USTR announced the U.S. Trade Representative's determination that Nicaragua's acts, policies, and practices under investigation are unreasonable and burden or restrict U.S. commerce, and are thus actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a)).
In the October 23 notice, the U.S. Trade Representative proposed a range of actions including the suspension, withdrawal, or prevention of application of benefits of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) benefits to Nicaragua, and additional duties of up to 100 percent on some or all products of Nicaragua.
On December 10, 2025, USTR announced the U.S. Trade Representative's determination that action is appropriate, and that appropriate and feasible action in this investigation includes the imposition of a tariff that is phased-in over two years on all imported Nicaraguan goods that are not originating under CAFTA-DR.
In order to implement the U.S. Trade Representative's determination, subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) is modified by the Annex of this notice, effective January 1, 2026.
Products of Nicaragua that are provided for in the new HTSUS heading 9903.89.01, as established by the Annex of this notice, shall continue to be subject to antidumping, countervailing, or other duties, fees, exactions and charges that apply to such products. Any product covered by the Annex to this notice, except any product that is eligible for admission under `domestic status,' as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and is admitted into a U.S. foreign trade zone on or after the effective date of the additional duties, only may be admitted as `privileged foreign status,' as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any
As provided in the December 12 notice, the U.S. Trade Representative will continue to monitor the effects of the trade action and the progress made toward resolution of this matter. Additionally, the U.S. Trade Representative will continue to examine the efficacy of these actions. If it is determined that additional leverage is needed to encourage Nicaragua to eliminate the investigated acts, policies, and practices, the U.S. Trade Representative will consider taking additional action.
A. Effective with respect to articles of Nicaragua entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on January 1, 2026, subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) is modified:
1. by inserting new heading 9903.89.01 in numerical sequence, with the material in the new heading inserted in the columns of the HTSUS labeled “Heading/Subheading”, “Article Description”, “Rates of Duty 1-General”, “Rates of Duty 1-Special” and “Rates of Duty 2”, respectively:
2. by inserting new additional U.S. note 29 in numerical sequence:
“29. (a) Heading 9903.89.01 imposes additional duties on imports of articles the product of Nicaragua, as provided in this note. The additional duties apply to products of Nicaragua that are subject to the rates of duty provided for in column 1-general. The additional duties do not apply to originating goods of Nicaragua under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), as defined in general note 29 to the HTSUS. Notwithstanding U.S. note 1 to subchapter III of chapter 99 of the HTSUS, the articles of Nicaragua that are subject to the additional duties imposed by heading 9903.89.01 shall also be subject to the additional duties imposed on articles the product of Nicaragua by heading 9903.02.47.
The additional duties imposed by heading 9903.89.01 do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under subheadings 9802.00.40, 9802.00.50, and 9802.00.60, and heading 9802.00.80. For subheadings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed abroad, as described in the applicable subheading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80.
Products of Nicaragua that are provided for in heading 9903.89.01 shall continue to be subject to antidumping, countervailing, or other duties, fees, exactions and charges that apply to such products.
(b) The additional rates of duty that apply to articles the product of Nicaragua under column 1-general of heading 9903.89.01 shall be phased-in as follows:
If entered during the period from January 1, 2026, though December 31, 2026, . . . 0%
If entered during the period from January 1, 2027, though December 31, 2027, . . . 10%
If entered on or after January 1, 2028, . . . 15%”.
B. Effective with respect to articles of Nicaragua entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on January 1, 2027, the rate of duty 1-general column of heading 9903.89.01 is modified by deleting “0%” and by inserting “10%” in lieu thereof.
C. Effective with respect to articles of Nicaragua entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern time on January 1, 2028, the rate of duty 1-general column of heading 9903.89.01 is modified by deleting “10%” and by inserting “15%” in lieu thereof.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion nor omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before January 20, 2026.
Send comments identified by docket number FAA-2025-0001 using any of the following methods:
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Mickenzie Roby, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591, at 202-267-9677.
This notice is published pursuant to 14 CFR 11.85.
Issued in Washington, DC.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request Office of Management and Budget (OMB) approval for a new information collection. The collection includes a voluntary survey for pilots evaluated by private citizens who have been granted examination authority by the FAA.
Written comments should be submitted by February 27, 2026.
Please send written comments:
AFG-970 Delegation and Resource Branch by email at:
The FAA will ask pilots to complete a survey following practical examinations conducted by DPEs. The survey will consist of approximately twelve yes-or-no questions regarding DPEs' level of professionalism; the suitability of the exam environment; the content of the exam; and the duration of the ground portion and the flight portion of the exam. The FAA will use the information collected to track the performance and merit of DPEs.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion nor omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before January 20, 2026.
Send comments identified by docket number FAA-2025-5013 using any of the following methods:
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Nia Daniels, (202) 267-7626, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591, at 202-267-9677.
This notice is published pursuant to 14 CFR 11.85.
Issued in Washington, DC.
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Notice.
This notice contains a summary of a petition seeking relief from specified requirements of Federal Aviation Regulations. The purpose of this notice is to improve the public's awareness of, and participation in, the FAA's exemption process. Neither publication of this notice nor the inclusion nor omission of information in the summary is intended to affect the legal status of the petition or its final disposition.
Comments on this petition must identify the petition docket number and must be received on or before January 20, 2026.
Send comments identified by docket number FAA-2025-5010 using any of the following methods:
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Kara White, Office of Rulemaking, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591, at 202-267-9677.
This notice is published pursuant to 14 CFR 11.85.
Issued in Washington, DC.
Federal Aviation Administration (FAA), DOT
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget's (OMB) approval to renew an information collection. The
Written comments should be submitted by January 22, 2026.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Dr. Katrina Avers by email at:
The survey of Airman Satisfaction with Aeromedical Certification Services assesses airman opinion of key dimensions of service quality. These dimensions, identified by the OMB Statistical Policy Office in the 1993 “Resource Manual for Customer Surveys,” are courtesy, competence, reliability, and communication. The survey also provides airmen with the opportunity to provide feedback on the services and a medical certificate application tool they use. This information is used to inform improvements in Aeromedical Certification Services.
The survey was initially collected in 2004 and collected approximately every 2 years, most recently in 2023 (OMB Control No. 2120-0707). Across collections, minor revisions have been made to the survey items and response options to reflect changes in operational services and survey technology. To reduce the burden on the individual respondent and potentially improve the response rate, this information collection will be electronic.
Office of the Secretary (OST), U.S. Department of Transportation (DOT).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, and Office of Management and Budget (OMB) regulations, the Department of Transportation (DOT) invites public comments on currently approved Transportation Acquisition Regulation (TAR) part 1239 information collection requests (ICRs) and our intention to request OMB approval to renew the ICRs on an interim basis as abstracted below while DOT undertakes further review to streamline its regulations. The public will be afforded another opportunity to review revised
Interested persons are invited to submit comments on or before January 28, 2026.
DOT invites interested persons to submit comments identified by Docket No. DOT-OST-2025-1921 through one of the following methods:
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Comments received generally will be posted without change to
LaWanda Morton-Chunn, Procurement Analyst, Office of the Secretary, 1200 New Jersey Avenue SE, Washington, DC 20590, telephone: (202) 366-2267 or
DOT invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of the functions of DOT acquisitions, including whether the information will have practical utility; (2) the accuracy of the estimate of the burden of the proposed information collection; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology. OMB has approved this information collection for use through December 31, 2025. DOT proposes that OMB extend its approval for use for three additional years beyond the current expiration date. On October 27, 2025, OST published a 60-day notice in the
Before OMB decides whether to approve the proposed collection of information, it must provide 30 days for public comment. Federal law requires OMB to approve or disapprove paperwork packages between 30 and 60 days after the 30-day notice is published. 44 U.S.C. 3507(b)-(c); 5 CFR 1320.12(d); see also 60 FR 44978, 44983, Aug. 29, 1995. OMB believes the 30 day notice informs the regulated community to file relevant comments and affords the agency adequate time to digest public comments before it renders a decision. 60 FR 44983, Aug. 29, 1995. Therefore, respondents should submit their respective comments to OMB within 30 days of publication to best ensure having their full effect.
As a result of the Revolutionary Federal Acquisition Regulation (FAR) (RFO) Initiative, the Transportation Acquisition Regulation (TAR) is also under review. The TAR must align with on-going interim class deviations to the FAR issued by DOT, as well as a later planned FAR proposed rule to be published in the
DOT requires an extension of the current information collection requirements currently in the TAR at 48 CFR chapter 12 until this analysis is completed, and a proposed TAR rule is developed and published in the
The summary below describes the ICRs that DOT will submit for OMB clearance as the PRA requires:
Average Number of Respondents: 311.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, “General Reporting and Recordkeeping Requirements by Savings Associations,” which is applicable only to Federal savings associations.
Comments must be received by February 27, 2026.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
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Following the close of this notice's 60-day comment period, the OCC will publish a second notice with a 30-day comment period. You may review comments and other related materials that pertain to this information collection beginning on the date of publication of the second notice for this collection by the method set forth in the next bullet.
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• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501
• 12 CFR 144.8 (communications between members of a Federal mutual savings association);
• 12 CFR 163.47(e) (pension plans—records); and
• 12 CFR 163.76(c) (offers and sales of securities of a Federal savings association or its affiliates in any office of the savings association—form of certification).
Federal savings associations use the reports and records that the regulations require for internal management control purposes, and examiners use them to determine whether savings associations are being operated safely, soundly, and in compliance with regulations. Without these reporting and recordkeeping requirements, it would be difficult for institutions to establish prudent internal controls and would limit the ability of examiners to determine the accurate performance and condition of Federal savings associations.
Comments submitted in response to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, “Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery.”
Comments must be received by February 27, 2026.
Commenters are encouraged to submit comments by email, if possible. You may submit comments by any of the following methods:
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Following the close of this notice's 60-day comment period, the OCC will publish a second notice with a 30-day comment period. You may review comments and other related materials that pertain to this information collection beginning on the date of publication of the second notice for this collection by the method set forth in the next bullet.
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• For assistance in navigating
Shaquita Merritt, Clearance Officer, (202) 649-5490, Chief Counsel's Office, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
Under the PRA (44 U.S.C. 3501
The OCC's solicitations for feedback target areas such as timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues related to service delivery. The OCC uses the responses to inform and plan efforts to improve or maintain the quality of service offered to the public. If the OCC does not collect this information, it will not have access to vital feedback from stakeholders.
Under this generic ICR, the OCC will submit a specific information collection for approval only if the collection meets the following conditions:
• It is voluntary;
• It imposes a low burden on respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and a low cost on both respondents and the Federal government;
• It is non-controversial and does not raise issues of concern to other Federal agencies;
• It is targeted to solicit opinions from respondents who have experience with the program or will have experience with the program in the near future;
• It includes personally identifiable information (PII) only to the extent necessary, and the OCC does not retain the PII;
• It gathers information intended to be used internally only for general service improvement and program management purposes and is not intended for release outside of the OCC;
• It does not gather information to be used for the purpose of substantially informing influential policy decisions;
• It gathers information that will yield qualitative information and will not be designed or expected to yield statistically reliable results or used to reach general conclusions about the surveyed population; and
• Feedback collected provides useful information but does not yield data that can be attributed to the overall population.
If these conditions are not met, the OCC will submit an information collection request to OMB for approval through the normal PRA process.
The OCC will not use this type of generic clearance for the collection of qualitative feedback for any quantitative information collection.
As a general matter, these information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature.
Comments submitted in response to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the collection of information;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on December 19, 2025. See
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Sanctions Compliance, 202-622-2490; or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On December 19, 2025, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
1. FLORES DE MALPICA, Eloisa, Venezuela; DOB 01 Dec 1948; POB Tinaquillo, Venezuela; nationality Venezuela; Gender Female; Cedula No. 3989591 (Venezuela) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of Executive Order 13850 of November
2. HURTADO PEREZ, Damaris del Carmen, Venezuela; DOB 03 Jul 1975; POB Barinas, Venezuela; nationality Venezuela; Gender Female; Cedula No. 12207076 (Venezuela) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
3. MALPICA FLORES, Iriamni, Venezuela; DOB 15 Oct 1975; POB Caracas, Venezuela; nationality Venezuela; Gender Female; Cedula No. 12761280 (Venezuela) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
4. MALPICA HURTADO, Erica Patricia, Venezuela; DOB 14 Jun 2001; POB Valencia, Venezuela; nationality Venezuela; Gender Female; Cedula No. 28331171 (Venezuela) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
5. MALPICA TORREALBA, Carlos Evelio, Venezuela; DOB 20 Feb 1947; POB Tinaquillo, Venezuela; nationality Venezuela; Gender Male; Cedula No. 3056173 (Venezuela) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
6. CARRETERO NAPOLITANO, Roberto, Panama; DOB 20 Aug 1976; POB Colon, Panama; nationality Panama; Gender Male; Cedula No. 3701218 (Panama) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
7. CARRETERO NAPOLITANO, Vicente Luis, Panama; DOB 06 Oct 1966; POB Colon, Panama; nationality Panama; Gender Male; Cedula No. 3901065 (Panama) (individual) [VENEZUELA-EO13850].
Designated pursuant to section l(a)(ii) of E.O. 13850 for being responsible for or complicit in, or having directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person.
Department of Veterans Affairs.
Notice of Advisory Committee Charter Renewals.
In accordance with the provisions of the Federal Advisory Committee Act (FACA) and after consultation with the General Services Administration, the Secretary of Veterans Affairs has determined that the following Federal advisory committee is vital to the mission of the Department of Veterans Affairs (VA) and renewing its charter would be in public interest. Consequently, the charter for the following Federal advisory committee is renewed for a two-year period, beginning on the dates listed below:
The Secretary also determined that the following Federal advisory committee is vital to VA and reestablished its charter:
The Secretary has also renewed the charter for the following statutorily authorized Federal advisory committee for a two-year period, beginning on the date listed below:
Jeffrey Moragne, Committee Management Officer, Department of Veterans Affairs, Advisory Committee Management Office (00AC), 810 Vermont Avenue NW, Washington, DC 20420; telephone (202) 714-1578; or email at
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. Ch. 10., that the Advisory Committee on the Readjustment of Veterans will meet in-person on January 27, 2026-January 28, 2026. The sessions will begin and end as follows:
The meeting sessions are open to the public, except during the time the Committee is participating in focus group discussions or conducting tours of VA facilities. Tours of VA facilities, clinical discussions, and personal
The purpose of the Committee is to advise the VA regarding the provision by VA of benefits and services to assist Veterans in the readjustment to civilian life. The Committee, comprised of 13 subject matter experts, advises the Secretary through the VA Readjustment Counseling Service. In carrying out this duty, the Committee shall take into account the needs of Veterans who served in combat theaters of operation.
On January 27, 2026, and January 28, 2026, the Committee will meet to assemble, review, and assess information relating to the needs of Veterans readjusting to civilian life and the effectiveness of VA services in assisting Veterans in that readjustment. On January 27, 2026, the meeting will take place at the Tulsa Vet Center, located at 6130 E 81st Street, Suite 200, Tulsa, Oklahoma 74137, and will be closed to the public. The meeting will include a tour of the clinical space, and the duration of the meeting, including clinical discussions and personal testimonies, will take place on-site at the Tulsa Vet Center. Tours of VA facilities, clinical discussions, and personal testimonies are closed to protect the Veterans' privacy in accordance with 5 U.S.C 552b(c)(6).
On January 28, 2026, the meeting will take place at the Muscogee Creek Nation Veterans Office, located at 1006 Bear Lane, Okmulgee, Oklahoma 74447, and will be open to the public. The agenda will consist of presentations and discussions with Muscogee Nation leadership, Native Veterans, representatives from the local VA Medical Center, the Oklahoma Governor's Challenge, as well as a committee discussion and public comment.
Time will be allotted for the public to provide comments starting at 4:00 p.m. CDT and ending no later than 4:30 p.m. CDT on January 28, 2026. The comment period may end sooner if no comments are presented or they are exhausted before the end time. Individuals interested in providing comments during the public comment period are allowed no more than three minutes for their statements. Additionally, the Committee will accept written comments from interested parties on issues outlined in the meeting agenda or other issues regarding the readjustment of Veterans. Parties should contact Mr. Joshua Mathis via email at
Any member of the public seeking additional information should contact Mr. Mathis at the email address noted above.
U.S. Citizenship and Immigration Services, DHS.
Final rule.
The U.S. Department of Homeland Security (DHS) is amending its regulations governing the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for unique beneficiaries for filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement is suspended). Through this rule, DHS is implementing a weighted selection process that will generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels, to better serve the congressional intent for the H-1B program. This rule will be effective in time for the FY 2027 registration season.
This final rule is effective February 27, 2026.
Business and Foreign Workers Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, U.S. Department of Homeland Security, 5900 Capital Gateway Drive, Camp Springs, MD 20746; telephone (240) 721-3000 (not a toll-free call).
DHS is amending its regulations governing the H-1B cap selection process. This final rule implements a weighted selection process that will generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels. This final rule follows a notice of proposed rulemaking (NPRM) issued on this topic on September 24, 2025, “Weighted Selection Process for Registrants and Petitioners Seeking to File Cap-Subject H-1B Petitions,” 90 FR 45986 (Sept. 24, 2025).
The purpose of this rule is to allow DHS to implement the numerical cap in a way that incentivizes employers to offer higher wages, or to petition for positions requiring higher skills and higher-skilled aliens, that are commensurate with higher wage levels. This weighted selection process will generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels, to better serve the congressional intent for the H-1B program. Moreover, it will disincentivize abuse of the H-1B program to fill relatively lower-paid, lower-skilled positions, which is a significant problem under the present H-1B program.
Through this rule, DHS is amending the process by which USCIS selects H-1B registrations for unique beneficiaries for filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement is suspended) to implement a weighted selection process generally based on each beneficiary's equivalent wage level. When random selection is required because USCIS receives more registrations (or petitions) than USCIS projects to be needed to meet the numerical allocations, USCIS will conduct a weighted selection among the registrations for unique beneficiaries (or petitions) received generally based on the highest Occupational Employment and Wage Statistics (OEWS) wage level that the beneficiary's proffered wage will equal or exceed for the relevant Standard Occupational Classification (SOC) code in the area(s) of intended employment. Under this process, registrations for unique beneficiaries or petitions will be assigned to the relevant OEWS wage level and entered into the selection pool as follows: registrations for unique beneficiaries or petitions assigned wage level IV will be entered into the selection pool four times, those assigned wage level III will be entered into the selection pool three times, those assigned wage level II would be entered into the selection pool two times, and those assigned wage level I will be entered into the selection pool one time. Each unique beneficiary will only be counted once toward the numerical allocation projections, regardless of how many registrations were submitted for that beneficiary or how many times the beneficiary is entered in the selection pool.
As noted in the NPRM, although DHS is not codifying a severability clause in the regulatory text, DHS intends for the provisions of this rule to be severable from one another as well as severable from the registration requirement more broadly and the beneficiary-centric selection methodology. The absence of codified severability language is solely to avoid potential confusion within 8 CFR 214.2, which governs a wide range of nonimmigrant classifications beyond the H-1B program and already contains multiple other severability provisions.
Following consideration of all public comments received on the NPRM, DHS is issuing this final rule as proposed in the NPRM, without modifications to the regulatory text.
This rule will be effective in time for the FY 2027 registration season. The changes in this final rule will apply to all registrations (or petitions, in the event that registration is suspended), including those for the advanced degree exemption, submitted on or after the effective date of the final rule. The treatment of registrations and petitions filed prior to the effective date of this final rule will be based on the regulatory requirements in place at the time the registration or petition, as applicable, is properly submitted. DHS has determined that this manner of implementation best balances operational considerations with fairness to the public.
The Secretary of Homeland Security (Secretary)'s authority for these regulatory amendments is found in various sections of the Immigration and Nationality Act (INA or the Act), 8 U.S.C. 1101
• Section 101(a)(15)(H)(i)(b) of the INA, 8 U.S.C. 1101(a)(15)(H)(i)(b), which establishes the H-1B nonimmigrant classification;
• Section 214(a)(1) of the INA, 8 U.S.C. 1184(a)(1), which authorizes the Secretary to prescribe, by regulation, the time and conditions of the admission of nonimmigrants;
• Section 214(c)(1) of the INA, 8 U.S.C. 1184(c)(1), which,
• Section 214(g) of the INA, 8 U.S.C. 1184(g), which,
• Section 214(i) of the INA, 8 U.S.C. 1184(i), which sets forth the definition and requirements of a “specialty occupation”;
• Section 235(d)(3) of the INA, 8 U.S.C. 1225(d)(3), which authorizes “any immigration officer . . . to administer oaths and to take and consider evidence of or from any person touching the privilege of any alien or person he believes or suspects to be an alien to enter, reenter, transit through, or reside in the United States or concerning any matter which is material and relevant to the enforcement of [the INA] and the administration of [DHS]”;
• Section 287(b) of the INA, 8 U.S.C. 1357(b), which authorizes the taking and consideration of evidence “concerning any matter which is material or relevant to the enforcement of [the INA] and the administration of [DHS]”;
• Section 101(b)(1)(F) of the HSA, 6 U.S.C. 111(b)(1)(F), which provides that a primary mission of DHS is to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland”;
• Section 402 of the HSA, 6 U.S.C. 202, which charges the Secretary with “[e]stablishing and administering rules
• Section 451(a)(3) and (b) of the HSA, 6 U.S.C. 271(a)(3) and (b), transferring to USCIS the authority to adjudicate petitions for nonimmigrant status, establish policies for performing that function, and set national immigration services policies and priorities.
The H-1B visa program allows U.S. employers to temporarily hire foreign workers to perform services in a specialty occupation, services related to a U.S. Department of War (DOW) cooperative research and development project or coproduction project, or services of distinguished merit and ability in the field of fashion modeling.
Congress has established limits on the number of foreign workers who may be granted initial H-1B nonimmigrant visas or status each fiscal year (FY) (commonly known as the “cap”).
To manage the annual cap, USCIS used a random selection process in years of high demand to determine which petitions were selected toward the projected number of petitions needed to reach the annual H-1B numerical allocations. In order to better manage the selection process, DHS created a registration requirement for H-1B cap-subject petitions, which was first implemented in 2020 for the FY 2021 cap season. Through issuance of a final rule in 2019, “Registration Requirement for Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens,” DHS developed a new way to administer the H-1B cap selection process to streamline processing and provide overall cost savings to employers seeking to file H-1B cap-subject petitions.
In February 2024, DHS implemented a beneficiary-centric selection process for H-1B registrations to better ensure each beneficiary will have the same chance of being selected, regardless of the number of registrations submitted on his or her behalf, among other integrity measures. 89 FR 7456 (Feb. 2, 2024). Under this beneficiary-centric selection process, registrations are counted based on the number of unique beneficiaries who are registered. 8 CFR 214.2(h)(8)(iii)(A)(
Congress provided DHS with the authority to better ensure a fair, orderly, and efficient allocation of H-1B cap numbers based on reasoned decision making, including consideration of the overall statutory scheme and purpose of the classification: the selection of highly skilled and highly paid nonimmigrants in the United States while protecting the wages, working conditions, and job opportunities of U.S. workers. Congressional intent behind creating the H-1B program was, in part, to help U.S. employers fill labor shortages in positions requiring highly skilled or highly educated workers.
As noted above, USCIS has used a random selection process in years of high demand to determine which registrations (or petitions, as applicable) are selected toward the projected number needed to reach the annual H-1B numerical allocations. While the current random selection of petitions or registrations is reasonable, DHS believes it is neither the optimal, nor the exclusive method of selecting registrations or petitions toward the numerical allocations when more registrations or petitions, as applicable, are simultaneously submitted than projected as needed to reach the numerical allocations. Pure randomization does not serve the ends of the H-1B program or congressional intent to help U.S. employers fill labor shortages in positions requiring highly skilled workers.
DHS believes a better reasoned policy, consistent with the intent of the H-1B statutory scheme, is to utilize the numerical cap in a way that incentivizes a U.S. employer's recruitment of beneficiaries for positions requiring the highest skill levels within the visa classification or otherwise earning the highest wages in an occupational classification and area of intended employment, which generally correlate with higher skill levels. Put simply, because demand for H-1B visas has exceeded the annual supply for more than a decade,
While DHS prefers that cap-subject H-1B visas be allocated in a manner that favors beneficiaries earning the highest wages, DHS also recognizes the value in maintaining the opportunity for employers to secure H-1B workers at all wage levels. In this respect, this final rule differs from the wage-based selection rule that DHS proposed and finalized in 2020 and 2021, respectively.
By engaging in a wage-level based weighting of registrations for unique beneficiaries, DHS will better ensure that the H-1B cap selection process favors relatively higher-skilled, higher-valued, or higher-paid foreign workers rather than continuing to allow numerically-limited cap numbers to be allocated predominantly to workers in lower skilled or lower paid positions.
This rule is consistent with the Presidential Proclamation 10973 of September 19, 2025, “Restriction on Entry of Certain Nonimmigrant Workers” (“H-1B Proclamation”), which directed the Secretary of Homeland Security to initiate a rulemaking to prioritize the admission as nonimmigrants of high-skilled and high-paid aliens, consistent with INA sections 101, 212, and 214 of the INA, 8 U.S.C. 1101, 1182, and 1184. 90 FR 46027 (Sept. 24, 2025). As noted in the H-1B Proclamation, the H-1B nonimmigrant visa program was created to bring highly skilled temporary workers into the United States, but the program has been deliberately exploited to bring in lower-paid, lower-skilled workers to the detriment of U.S. workers.
DHS believes that the current random selection of registrations (or petitions, as applicable) has contributed to the systematic abuse of the H-1B program as described in the H-1B Proclamation. Despite improvements DHS has made over the years to improve the integrity of the H-1B registration process and the H-1B program overall, companies continue to exploit the current legal framework to obtain a pool of relatively low-wage workers that are detrimental to U.S. workers' wages, working conditions, and job opportunities. This final rule will help reverse this trend and help the program meet its original goals of attracting highly skilled foreign workers while better protecting the wages, working conditions, and job opportunities of U.S. workers.
In response to the proposed rule, DHS received 2,731 comments during the 30-day period for public comments on the NPRM. DHS received additional comments related to the associated information collections during the remainder of the 60-day period for public comments in accordance with the Paperwork Reduction Act.
Commenters included individuals (including U.S. workers), companies, law firms, professional organizations, advocacy groups, nonprofit organizations, universities, healthcare providers, and trade and business associations. Some commenters expressed support for the rule or offered suggestions for improvement. Some expressed general opposition to the rule and some offered alternatives. For some of the public comments, DHS could not ascertain whether the commenter supported or opposed the proposed rule.
DHS has reviewed all of the public comments received in response to the NPRM that were submitted in accordance with the instructions contained in the NPRM during the comment period. In this final rule, DHS has responded to public comments relevant to the NPRM and has addressed the significant issues raised therein. DHS's responses are grouped by subject area, with a focus on the most common issues and suggestions raised by commenters.
Some commenters said the proposed approach would better align with the H-1B program's purpose by attracting top global talent and/or supporting innovation and economic growth in the United States while also reducing wage-based exploitation. Commenters predicted the new selection process would strengthen the U.S. economy and enhance the United States' competitiveness.
Multiple commenters stated that the new selection process would improve program integrity. Commenters generally noted that the wage-based selection process would improve both the integrity of the registration program and the H-1B program overall. Some commenters praised DHS's efforts to protect the registration selection process against gaming by employers.
Multiple commenters predicted that the new H-1B selection process would benefit U.S. workers. Commenters emphasized that the skill- and wage-based selection criteria would promote fairness; discourage fraudulent practices; encourage prospective beneficiaries to pursue higher-paying, legitimate employment opportunities; and better complement the U.S. labor market. Commenters remarked that the new system would raise wages to more accurately reflect market demand for needed skills. Another noted the rise of artificial intelligence (AI) and the need to protect job opportunities for U.S. workers and graduates. Some commenters remarked that this rule would not only help U.S. citizens, but also lawful permanent residents and legal immigrant workers whose job opportunities have been negatively impacted by low-skill, low-wage H-1B workers.
Many commenters predicted that the new selection process would encourage the hiring of U.S. workers by disincentivizing information technology (IT) staffing companies from hiring cheap, foreign labor. Many commenters said they support efforts to reform the H-1B registration process and expressed concern about IT consulting companies that hire lower-skilled, lower-paid foreign workers who displace U.S. workers. Commenters expressed criticism of the way some IT staffing companies can misuse or abuse the system, whether through loopholes or illegal practices. Some commenters cited data showing that currently 80% of H-1B visas are for workers in wage levels I and II, a statistic they tied to lower wages in affected industries.
DHS agrees that a decrease in the hiring of lower-paid foreign labor will encourage U.S. employers to hire available and qualified U.S. workers, potentially improving the wages, working conditions, and job opportunities for U.S. workers, particularly for certain positions and industries that have seen wage suppression or stagnation due to lower-paid H-1B workers. The weighted selection process finalized in this rule is expected to result in a marked decrease in registrations (or petitions, as applicable) being selected for workers who will be paid a level I corresponding wage, with a greater percentage of total selected registrations or petitions being for beneficiaries who will be paid a level III or level IV corresponding wage.
DHS also agrees this rule will benefit lawful permanent residents and other legal immigrant workers who have been similarly harmed by lower-paid H-1B workers.
Many commenters remarked that this rule would help U.S. college students and other recent graduates, reasoning that the new selection process will help increase their chances of gainful employment and decrease competition against lower-paid foreign workers. Commenters also specifically noted that the proposed weighted selection process would offer some improvements for U.S. graduates in science, technology, engineering, and math (STEM) fields and other U.S. workers who are just starting out their IT careers. Some commenters noted the significant challenges faced by current U.S. graduates seeking work in the IT or STEM fields and stated that this rule would encourage U.S. students to pursue STEM training and positions.
Some commenters mentioned ways this rule would help certain types of employers. For instance, a few commenters stated that the proposed rule would help start-ups hire and retain aliens with needed skills, while the current random selection process results in startups losing critical employees because most registrations go to other companies like consulting companies or outsourcing firms. A commenter stated that high-wage positions typically correspond to roles in cutting-edge sectors, such as AI, cybersecurity, semiconductor design, and advanced manufacturing, and stated that this rule would help companies attract and retain top global talent in these fields. A few commenters said the new weighted selection process would promote hiring of U.S. workers in industries key to national security. Another commenter praised the rule for supporting U.S. workers and said the United States should focus on educating and developing doctors from within its own population rather than recruiting doctors from other countries.
DHS does not view the weighted selection process as a “pay-to-play” system, but rather a process that attracts the best and the brightest, increases the chance of selection for those who will be paid wages at higher corresponding wage levels, and disincentives petitioning employers from offering wages at the lower corresponding wage levels. As stated throughout the NPRM, DHS believes that salary generally is a reasonable proxy for skill level.
While the final rule retains some degree of uncertainty because it retains an element of randomness, DHS believes it is important to retain these aspects of the lottery. As stated in the NPRM, DHS believes it is optimal to increase the chances of selection for highly skilled aliens while maintaining the opportunity for employers to secure H-1B workers at all wage levels.
DHS disagrees that the weighted selection process finalized in this rule will complicate the H-1B registration selection process or make outcomes harder to understand. USCIS is fully prepared to implement the weighted selection process from an operational and technical perspective in time for the upcoming H-1B cap season. DHS believes that the public has received sufficient notice of the weighted selection process and that the parameters of the process have been made clear.
Finally, DHS disagrees that the weighted selection process undermines trust in the H-1B cap selection process. As previously described, the prevalent and systematic abuse of the current H-1B program undermines public trust. DHS believes that the new weighted selection process will restore trust in the H-1B program by returning the program to its original intended purpose of helping U.S. employers fill labor
Additionally, this rule does not treat people who work for startups or small-sized entities differently than those who work for other larger companies. While DHS recognizes that some startups and small businesses may operate on smaller margins compared to other companies, if an employer values a beneficiary's work and the unique qualities the beneficiary possesses, the employer could offer a higher wage than required by the prevailing wage level to reflect that value. DHS recognizes that this could result in increased costs for a business, however, DHS believes that the tradeoff of having a greater chance to recruit or retain talented employees may offset these increased costs. If a company is unable to pay an employee a higher wage for a greater chance of selection, they could then try to find a substitute U.S. worker. This rule, by weighting selection, allows employers seeking workers at any wage level to have an opportunity for selection, such that they are not precluded from participating in the program solely because they are unable to pay a wage that corresponds to a higher wage level.
DHS is not persuaded that U.S. companies would rather incur the time and expense to move their operations abroad instead of increasing their hiring of U.S. workers, particularly for entry level positions where U.S. workers have been replaced with lower-paid, lower-skilled foreign labor. DHS believes that U.S. employers are more likely to change their hiring practices in the United States, rather than offshoring work abroad, as evidenced by news articles highlighting how more and more companies have signaled their intent to increase their investment in America and hire more U.S. workers rather than to rely on foreign workers.
In addition to benefitting large outsourcing companies, a commenter said that the proposed system would also benefit other H-1B-dependent employers, even though they pay less than other companies. The commenter explained that large outsourcers and other H-1B-dependent employers pay less than other H-1B employers, but they get certified at higher wage levels because they use H-1Bs for workers in lower-skilled, lower-paid occupations, and provided an analysis to support this contention.
DHS acknowledges the analysis cited by some commenters that this rule will likely increase the share of selected registrations from large IT outsourcers and, to a lesser extent, H-1B dependent employers. However, this analysis appears to misunderstand the nature of the weighting process which is generally based on the highest wage level that
A few commenters remarked that new or growing companies, which often hire foreign talent and would be disadvantaged by this rule, create most new U.S. jobs. One commenter asserted that in the technology industry, each H-1B request is associated with an increase of approximately five jobs, while another said that unemployment in technology fields declined from 3.4 percent to 3 percent over the past year, even as the number of H-1B workers remained significant. A commenter pointed out that studies have shown that “high-skilled immigration causes large increases in productivity and economic growth in the United States” and that U.S. firms employing highly skilled international graduates are more likely to expand business, research, and development. Other commenters suggested that high-skilled immigration generates additional domestic employment opportunities, reduces unemployment in certain occupations, and complements U.S. workers rather than replacing them.
Some commenters stated that by making it difficult to hire recent graduates, the rules would interfere with investment and innovation in industries that rely on highly skilled entry-level workers to fill critical roles that cannot be met by the U.S. labor market alone. Similarly, a commenter said that limiting access to H-1B visas for early-career professionals would reduce the flow of new ideas, constrain entrepreneurship, and slow wage growth in high-productivity sectors. Another commenter stated that the proposed rule would reduce the diversity of specialty occupations in the U.S. workforce and weaken innovation. A commenter wrote that instead of benefiting U.S. workers, the rule would “hit entry- and mid-level workers the hardest, blocking young Americans” from certain jobs.
Regarding the studies and benefits of high-skilled immigration mentioned by some commenters, DHS acknowledges that high-skilled immigration
With respect to the commenter's assertion that the asserted economic costs of the rule outweigh the benefits, DHS disagrees with this commenter. The commenter did not provide data to support the claimed costs of this rule on the U.S. economy. In addition, this commenter did not consider the costs to U.S. workers who have been displaced or denied employment opportunities, or whose wages have been suppressed, due to the abuse of the H-1B program. Incentivizing employers to proffer higher wages to aliens seeking H-1B status to increase their chance of selection would indirectly benefit the wages, working conditions, and job opportunities of U.S. workers and mitigate the claimed costs to the U.S. economy that the commenter described.
DHS disagrees with the claims that this rule will diminish the country's economic security and is contrary to DHS's statutory mission under the Homeland Security Act. As already discussed earlier in this preamble, the large-scale replacement of U.S. workers through systemic abuse of the program has undermined both the United States' economic and national security. By addressing these abuses, this rule supports the nation's economic and national security and is consistent with DHS's statutory mission under the Homeland Security Act to “ensure that the overall economic security of the United States is not diminished by efforts, activities, and programs aimed at securing the homeland.” HSA sec. 101(b)(1)(F), 6 U.S.C. 111(b)(1)(F).
Further, as noted in the H-1B Proclamation, abuses of the H-1B program present a national security threat by discouraging Americans from pursuing careers in science and technology, risking American leadership in these fields. 90 FR 46027 (Sept. 24, 2025). This rule will help reverse this trend of abuse and help strengthen national security.
Other commenters wrote that entry-level positions are important and legitimate roles, not examples of program abuse, and represent the natural starting point for professional growth. Commenters reasoned that “blocking” level I beneficiaries from the H-1B program undermines upward mobility and creates an artificial barrier to career development. Some commenters stated that under the current system, level I applicants already face low selection odds of approximately 10-15%, and the proposed weighted system would reduce these chances to “nearly zero,” effectively creating what some described as a “de facto ban” on early-career professionals. One commenter said that the probability of a level I applicant being selected would be reduced by 48 percent, and another commenter said the probability of a level I or II applicant being selected could decrease to 15 percent.
Some commenters stated that while their companies' starting salaries for recent graduates are competitive, they cannot compare to big corporations that can offer high salaries. A commenter stated that certain industries generate essential public and economic benefits, but tend to pay less, which does not reflect a lack of skill or potential. Commenters said that the emphasis on wage-based selection could harm the
DHS acknowledges that, under this rule, in years of excess demand, relatively lower-paid or lower-skilled positions will have a reduced chance of selection. However, this rule maintains the opportunity for employers to secure H-1B workers at all levels, including recent graduates or those who are just starting out in their professions. Additionally, if an employer chooses to offer a recent foreign graduate a wage that equals or exceeds a particular wage level, the registration will be weighted accordingly, regardless of the beneficiary's experience level or the requirements of the position. In fact, this rule will benefit talented international graduates who are offered wages at higher levels, as they will have a higher chance of selection compared to the current random selection process. DHS notes that this rule does not require any employer to offer higher wages. Rational employers will not offer wages exceeding the expected value of the employee's work. To the extent an employer chooses to offer a higher wage, they are doing so because that higher wage is a clear reflection of the beneficiary's value to the employer.
With respect to the analysis provided by a commenter about the “wage level mirage,” this article appears to misunderstand the nature of the weighted selection process. The weighting process is generally based on the beneficiary's
To the extent that this rule may disadvantage recent graduates and entry level alien workers seeking positions corresponding to a lower wage level, these positions may instead be made available to U.S. graduates and workers starting out in their careers. This result would be consistent with the purpose of the H-1B program, which is to help employers fill labor shortages with highly skilled workers, rather than as a program for employers to use to replace U.S. workers with lower-paid, lower-skilled labor. As noted in the H-1B Proclamation, exploitation of the H-1B program to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor has resulted in a disadvantageous labor market for U.S. citizens and especially for U.S. college graduates who are facing higher unemployment rates.
Lastly, DHS disagrees that the rule is not sound economic policy. This rule will help the United States attract the best and brightest workers by increasing the chance of selection for highly skilled, highly paid aliens who are more likely to make significant contributions to their employers and industry, while also better protecting the wages, working conditions, and job opportunities of U.S. workers.
Further, this rule has no impact on OPT. To the extent that F-1 students are talented and obtain job offers corresponding to high wage levels, this rule may facilitate their ability to transition to the H-1B program.
DHS disagrees with the analysis cited by some commenters about the impact on international students because this article misunderstands the nature of the weighted selection process that generally weights registrations (or petitions, if applicable) based on the highest wage level that the proffered wage will equal or exceed. For example, one commenter cites to data showing that “F-1 students entering the H-1B process earned higher salaries on average than non-F-1 workers, but they were far more likely to be placed at the lowest Wage Levels.”
Finally, to the extent that this rule does make it more difficult for some F-1 students seeking lower-skilled, lower-paid positions to transition to an H-1B visa, it is important to note that the purpose of the H-1B visa program is not to serve as an early career transition program for foreign students. Instead, the H-1B program was created to help U.S. employers fill labor shortages in positions requiring highly skilled or highly educated workers while protecting the wages, working conditions, and job opportunities of U.S. workers. The entry-level or other lower-skilled, lower-paid positions that these F-1 students may have filled could instead be made available to American students and recent graduates. DHS believes that this rule appropriately balances the interests of U.S. workers with the interests of petitioning employers and the alien workers they seek to employ as H-1B nonimmigrants.
Many commenters stated that the proposed rule may cause international graduates who studied in the United States to relocate to other countries that actively welcome skilled workers, ultimately harming the U.S. economy and innovation. Some commenters remarked that this rule sends a
Another commenter said that tighter H-1B policies will cause the academic profile of international applicants to U.S. schools to worsen, in that the best students are the ones most likely to be discouraged from coming to the United States. This commenter also noted that despite being disproportionately at relatively low wage levels, international students currently appear to have higher average salaries than other H-1B visa holders. The commenter noted that the difference reflects, at least in part, the concentration of petitions for international students in relatively high-wage occupations and areas.
DHS disagrees that this rule will lead U.S.-educated international students to relocate to other countries. On the contrary, DHS believes this rule will incentivize and facilitate the admission and retention of the best and brightest international students. Facilitating the admission of higher-skilled foreign workers, as indicated by their earning of wages that equal or exceed higher prevailing wage levels, will increase the United States' competitive edge in attracting the “best and the brightest” students in the global labor market, consistent with the goals of the H-1B program. DHS also reiterates that recent graduates with master's or higher degrees from U.S. institutions of higher education already benefit from the existing advanced degree exemption and cap selection order.
A commenter said that new international graduates also support the local economies by paying rent, shopping in local stores, and volunteering. A different commenter remarked that the proposed rule will remove the ability of international graduates of U.S. universities to transition into the workforce, and asserted that the resulting loss in innovation output, startup formation, and tax generation would be staggering. The commenter suggested that the cumulative impact could exceed $1-2 trillion in lost economic productivity. The commenter expressed that declining international enrollment would create a chain reaction, causing a collapse in university revenues, layoffs and program closures, local economic contraction, reduced tax bases, and weakened national
Further, this rule will facilitate the admission of higher-skilled workers. Facilitating the admission of higher-skilled foreign workers, as indicated by their earning of wages that equal or exceed higher prevailing wage levels, is expected to increase the United States' competitive edge in attracting the “best and the brightest” in the global labor market and benefit the economy. H-1B workers earning higher wages as a direct result of this rule are likely to increase, not decrease, many of the economic impacts that were described by commenters, such as housing or shopping in local stores.
Comments citing Open Doors data and NAFSA analysis provided no evidence or rationale for their own beliefs that the rule would result in reduced enrollment and dire cascading effects. DHS again emphasizes that the weighted-selection mechanism preserves the possibility that level I registrations will be selected. Open Doors' data on enrollment trends show total number of international students has grown every year since 2004/2005 with the exception of temporary declines in 2019/2020 and 2020/2021 due to COVID-19.
Commenters also specifically addressed the proposed rule's negative impact on science and technology more generally, including in AI, robotics, machine learning, quantum computing, cybersecurity, electronics design and manufacturing, semiconductor manufacturing, biotechnology, digital health, automation, and data analytics fields or industries.
The commenters expressed that their companies and industries rely on access to global talent through the H-1B program, and that they will be harmed without access to this talent. Some commenters claimed that there is not sufficient domestic talent in STEM fields, which is why they need continued access to the H-1B program. A commenter claimed that this rule would go against President Trump's efforts to increase investments in the U.S. semiconductor industry.
To the extent that this rule will disincentivize U.S. companies to hire fewer low-skilled, low-wage foreign STEM workers, DHS views this as an overall benefit to U.S. workers. First, these companies could instead be incentivized to hire qualified U.S. workers to fill STEM positions, including those U.S. workers who have STEM degrees but are currently unemployed or underemployed.
Second, companies that have historically relied on a steady pool of lower-skilled, lower-wage foreign STEM workers could instead be incentivized to hire highly skilled foreign workers who would be more likely to supplement, rather than replace, U.S. workers. Many of these companies are the same companies that have laid off their U.S. workers and replaced them with low-paid H-1B workers. Again, as highlighted in the H-1B Proclamation, reports indicate that many U.S. tech companies have laid off their qualified and highly skilled U.S. workers and simultaneously hired thousands of H-1B workers.
A commenter referenced a survey conducted by NAFSA estimating a possible 30 to 40 percent drop in foreign student enrollment for the 2025-2026 academic year, which could have a significant impact on the U.S. economy.
Also, many petitions for U.S. universities and other academic institutions of higher learning will likely not be affected by this rule. Congress already exempted from the annual H-1B cap aliens who are employed by, or have received offers of employment at, U.S. institutions of higher education, nonprofit entities
Numerous commenters remarked that critical fields, such as healthcare, may offer lower starting salaries compared to other sectors and said that the proposed rule would “restrict access to international experts” who rely on H-1B visas to work in these sectors. Another commenter, expressing concern about eliminating a healthcare talent pipeline, wrote that healthcare professionals in their required training period are in level I or level II positions and that level I wages reflect the cost structure of supervised practice. Another commenter, using the healthcare industry as an example of industries whose wage structures are incompatible with the proposed rule, wrote that medical residents and fellows, despite being some of the most highly educated workers in the United States, earn wages that would typically be categorized as level I, leading to a reduced probability of being granted H-1B status and an exacerbation of the physician shortage.
More than one commenter wrote that hospitals and healthcare systems cannot easily meet higher wage levels or absorb compliance costs, particularly small to mid-sized healthcare providers. Another commenter remarked that the OEWS system under the proposed rule does not reflect healthcare compensation schemes, which often use standardized pay scales determined by facility budgets and Medicare reimbursement. One commenter predicted that adoption of the final rule would lead to consolidation in the healthcare field and higher costs for patients. Another commenter suggested that non-profit hospitals, even in urban areas, would be at a disadvantage compared to for-profit corporations, creating disparities within the same city.
A commenter noted that wages for physicians vary by medical specialty. The commenter expressed concern about the impacts of the rule on primary care physicians, stating that primary care physicians' wages tend to be lower than the wages of procedure-oriented specialists. The commenter stated the rule could incentivize IMGs to apply for higher paying subspecialty positions to increase their chance of selection, which would further exacerbate shortages in lower paying specialties. The commenter stated that the rule will exacerbate shortages in nephrologists and thus lead to an increase in mortality for people burdened by kidney disease.
Similarly, another commenter expressed concern that the new rule would disproportionately disadvantage dentists serving in community health centers and public hospitals and could worsen access to dental care for vulnerable populations, including in underserved and rural areas. The commenter stated that many federally qualified health centers that employ H-1B dentists operate on fixed budgets and cannot match salaries offered by private or technology sectors.
In the scenarios where they are not cap-exempt, DHS believes this rule may have a positive impact for some highly skilled, highly paid aliens. DHS notes that shortages of medical professionals are multi-causal and beyond the scope of one visa category to address. With respect to the ability to offer increased wages generally, DHS acknowledges that healthcare institutions, like employers in all industries, are impacted by a variety of factors in determining employee salary. For employers unable to proffer wages that equal or exceed prevailing wage levels with greater chances of selection, they may be able to find available and qualified workers outside of the H-1B program, including U.S. workers. Additionally, it is possible that aliens filling the positions described by these commenters would be eligible for alternate immigrant or nonimmigrant classifications offering employment authorization.
Further, DHS disagrees with the comment that this rule may unfairly discriminate against primary care physicians who typically have lower annual salaries than certain specialty physicians. In general, family physicians or other primary care physicians have different SOC codes than specialty physicians. As DOL prevailing wage level calculations generally differ by SOC codes, when wage data is available, the corresponding wage level would necessarily account for the different occupational classification for primary care physicians as opposed to other types of physicians. When such wage level data is unavailable, wage level weighting will be based on the skill, education, and experience requirements for the position, again taking into account the particulars of the relevant occupational classification, such that registrations or petitions for primary care physicians will be weighted in comparison to the normal requirements for primary care physicians and not in comparison to other types of physicians. As such, DHS does not believe that this rule will disadvantage registrations or petitions for primary care physicians or any other subset of physicians.
As noted previously, physicians whose nonimmigrant status is changed to H-1B through their participation in any of the three waiver programs in INA sec. 214(l), 8 U.S.C. 1184(l), are not subject to the annual H-1B caps. The Conrad 30 program (relating to waivers based on requests from a state agency of public health or its equivalent for service in an HHS-designated shortage area) is limited to 30 participants per eligible jurisdiction annually.
Congress has established a similar statute in the immigrant context, which also channels physicians to serve in HHS-designated shortage areas, commonly known as the Physician National Interest Waiver Program.
DHS acknowledges that some alien physicians seeking to serve in rural or underserved areas would be subject to H-1B numerical limitations. DHS is aware that medical institutions in rural or underserved areas may not be U.S. institutions of higher education, related or affiliated non-profit entities, or non-profit research organizations or governmental research organizations and, as a result, aliens who are employed by or who have received an offer of employment from such medical institutions may not be exempt from the annual H-1B numerical limitations under INA sec. 214(g)(5), 8 U.S.C. 1184(g)(5). DHS also acknowledges that not all alien physicians who serve in rural or underserved areas as H-1B nonimmigrants are participating in the waiver programs of INA sec. 214(l), 8 U.S.C. 1184(l). However, some medical institutions in rural or underserved areas do meet the requirements to be cap-exempt, and their employees will not be subject to the numerical limitations.
Further, as with all other registrations, DHS will weigh and select registrations for these positions generally according to the highest OEWS prevailing wage level that the proffered wage equals or exceeds, which necessarily takes into account the area of intended employment when such wage level data is available. Where there is no current OEWS prevailing wage information for the proffered position, which DHS recognizes is the case for some physician positions based on limitations in OEWS data, the registrant would follow DOL guidance on prevailing wage determinations to determine which OEWS wage level to select on the registration. The determination of the appropriate wage level in those instances would be based on the skill, education, and experience requirements of the position, and generally does not take into consideration the area of intended employment. Therefore, DHS does not believe that this rule necessarily will disadvantage rural and/or underserved communities relative to registrations or petitions based on offers of employment in other areas.
A few commenters specified that the burden of increased compliance, including documenting wage levels, SOC codes, and matching registration and petition data, may disproportionately strain small companies with fewer resources and often without in-house legal or human resources (HR) compliance teams.
One commenter remarked that the proposed rule may deter talented workers who are seeking opportunities at small businesses or startups that typically offer lower wages. Another commenter stated that although the proposed weighted selection process will disadvantage all U.S. companies that have talent needs that are not met by the domestic labor market, the problem will be worse for smaller-sized employers, and especially for small non-profit employers that are not cap-
DHS acknowledges that this final rule will have an economic impact on small businesses, startups, or other small-sized entities that can only offer a level I wage, as those registrations will have a lesser chance of selection than under the current random selection process. However, as explained in the NPRM, DHS conducted an initial regulatory flexibility analysis and found no other alternatives that achieved the stated objectives with less burden to small entities. 90 FR 45986, 46016 (Sept. 24, 2025). Given that 76 percent of unique cap-subject H-1B filers are small entities, and 47 percent of H-1B cap petitions in FY 2024 were filed by small entities, any alternative process that provides a different, preferential weighting scheme for small entities would undermine the overall utility of this rule, which is to generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens. And as mentioned previously, it is possible that any alternative that imposes a lower burden on small entities generally could also reduce those employers' chance of selection for higher wage level workers.
DHS also disagrees that the burden of complying with the rule will disproportionately affect smaller employers. As stated in the NPRM, DHS estimates that the changes implemented in this rule would increase the time burden by 20 minutes for each registration and by 15 minutes for each petition, whether completed by an HR specialist, in-house lawyer, or outsourced lawyer. If a smaller employer is using an outsourced specialist for H-1B work in general, the additional paperwork burden associated with this rule is unlikely to be substantial in most cases.
Finally, DHS does not believe this rule will have a significant negative impact on nonprofit organizations. Congress already exempted from the H-1B cap any alien who is employed or has received an offer of employment at a U.S. institution of higher education, a non-profit entity related or affiliated with a U.S. institution of higher education, or a non-profit research organization or a governmental research organization.
Other commenters asserted that the rule would put some industries at a competitive disadvantage. Many commenters said that wage-based selection would privilege existing high-income sectors and reinforce barriers for professionals working in critical lower-paying fields, positions that are often hard to fill and vital to U.S. long-term competitiveness. Some commenters remarked that the proposed rule may have a negative effect on the arts and other creative and recreational endeavors in the United States. One commenter said that the rule will harm educators, health care workers, and nonprofit professionals. A commenter said that a wage-based selection system is biased against certain professions, particularly lower-paying professions like research, healthcare, urban planning, and civil engineering. This commenter asserted that the additional financial burden of offering higher wages would eliminate some industries' abilities to use the H-1B program. Other commenters wrote that the rule creates a significant bias towards large multinational technology corporations and disfavors the engineering industry, which is already facing a critical labor shortage. One commenter said that architecture, engineering, and construction industries would be disadvantaged under the proposed rule's weighting system, and another commenter suggested that every engineering hire should be in a bracket based on the specific industry, rather than all competing against software engineers. A few other commenters discussed the rule's perceived disproportionate harm on manufacturers, particularly on small- and medium-sized manufacturers and manufacturers in the electro-industry, stating that many jobs in the manufacturing industry fall into lower wage levels. A different commenter suggested that employers, such as universities, hospitals, regional service firms, and manufacturers that maintain distributed or hybrid operations would be penalized. A commenter said that the proposed rule unfairly disadvantages essential infrastructure and public-interest professions—such as civil, structural, environmental, and transportation engineering—whose wages are tied to public-sector pay scales and regional cost-of-living differences rather than individual skill or value to the nation. Citing data on median salaries per wage level, another commenter stated that the proposed H-1B cap selection process disadvantages innovative technology companies that pay significantly higher wages even at lower wage levels, and remarked that the proposed rule fails to fulfill President Trump's directive to prioritize high-paid nonimmigrants, as it does not account for the substantial wage differences between industries and employers at the same wage level.
Other commenters expressed concern that the wage-based weighting system would create a system that prioritizes “roles less important to U.S. interests.” The commenters stated that, due to the complex nature of wage level
Response: This rule does not, and is not intended to, treat any industries better or worse than others. Nor does this rule seek to prioritize “roles less important to U.S. interests.” DHS acknowledges that, as stated in the NPRM, this rule will likely impact the number of selected registrations for certain SOC codes, with some occupations possibly seeing a decrease in selected H-1B registrations while others seeing an increase. 90 FR 45986, 46008-09 (Sept. 24, 2025). However, the goal of this rule is to implement a weighted selection process that would generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while ensuring meaningful opportunities for selection regardless of industry or profession. An employer could offer a higher wage than required by the prevailing wage level to reflect the value of the prospective employee; an employer that chooses not to do so, or cannot do so, may still enter a registration that would potentially be selected. DHS believes this rule will benefit the best and brightest workers in all professions and industries.
Some commenters wrote that the rule would exacerbate existing regional economic imbalances by concentrating talent in a few major metropolitan areas and leaving rural areas with talent shortages. Multiple commenters said companies in rural areas providing competitive wages for their location are disadvantaged against employers in high-cost metropolitan areas that can offer higher wages. Some commenters also remarked that the proposed rule would leave rural areas underserved and exacerbate economic inequality. A commenter wrote that the proposed rule would undermine the “billions of dollars” the United States has invested into encouraging regional development in smaller cities. Another commenter said that the proposed rule would create severe economic disruptions in regions that have built their economies around industries that depend on international talent by restricting the flow of such talent.
Commenters wrote that an employee's pay can go beyond base pay and can include: bonuses, equity, benefits, commission, cost-of-living allowance, deadheading pay, guaranteed pay, hazard pay, incentive pay, longevity pay, over-the-road pay, piece rate, portal-to-portal pay, production bonus, and tips, with some commenters noting that such incentives may vary by industry. Other commenters expressed concern that small businesses and startups, which often rely on equity compensation, future profit participation, or stock options rather than high salaries, would be particularly disadvantaged. Some commenters said that if only base salary is considered, it would not provide a standardized comparison and could distort the H-1B selection process.
Some commenters remarked that employers relying on equity-based pay may appear to offer lower wages despite competitive packages and cautioned that these employers could inflate base salaries without improving total compensation, potentially distorting the system. Similarly, a commenter remarked that the proposed rule would overlook the challenge of adjudicating disputes about compensation packages that include bonuses, equity, or other non-cash benefits. The commenter stated that because the system privileges base salary alone, employers will be incentivized to overstate base pay on paper while cutting back on other components of total compensation. The commenter expressed concern that this creates enforcement disputes that USCIS is ill-equipped to resolve at scale.
Some commenters suggested that DHS could improve the system by incorporating total compensation, including the cash value of stock and bonuses. A commenter suggested that if wages are considered, it would make sense to consider past Internal Revenue Service (IRS) transcripts of candidates to get a more complete picture of compensation.
DHS also does not believe that this rule will disadvantage particular industries or employers based on geography, size, or other factors. Wage levels already account for these factors by taking into account the area of intended employment and SOC code. While the weighted selection process may not account for every scenario, such as a laid-off worker taking a temporary lower paying job, DHS believes that this is a rare scenario and is unable to provide for every possible scenario when implementing a weighting process that is uncomplicated and predictable for prospective petitioners. Further, DHS believes that the advantages of the new selection process and the benefits it will bring to the economy overall outweigh any possible disadvantages that may occur in rare cases.
A commenter also expressed concern with wage inflation, noting that it reflects market conditions rather than skill increases. The commenter noted that some areas, such as technology, finance, and law have seen wage inflation in recent years, where compensation has escalated due to market competition rather than measurable increases in skill and the proposed weighted selection process would reward industries that can inflate salaries fastest, not those that develop or employ the most capable workers. Other commenters stated that the selection process artificially inflates the chances of roles requiring less training, experience, or responsibility.
Further, this rule does not represent “government intervention” in the labor market nor a “fundamental departure from how the United States has historically approached labor markets,” as the commenter claimed. In order to participate in the H-1B program, employers have always had to meet certain wage requirements, including prevailing wage requirements as determined by DOL and other generally applicable Federal and state wage requirements.
A commenter said the rule is ultra vires because it improperly changes the process and adds new requirements to the selection order for H-1B cap subject petitions that exceed what is clearly stated in the INA. The commenter cited INA sec. 214(g)(3), which states: Individuals subject to H-1B numerical limitations “. . . shall be issued visas (or otherwise provided nonimmigrant status) in the order in which petitions are filed for such visas or status.” Pointing out that Congress did not change this section when it amended it through the H-1B Visa Reform Act of 2004, the commenter asserted that the proposal to add the wage level element violates clear congressional intent. The commenter added that the well-established principle of law remains that an agency cannot modify a statute by regulation, and that since the statute is neither ambiguous nor silent, Congress did not leave a gap for USCIS interpretation via regulation. The commenter added that it is particularly telling that the agency previously evaluated this very issue in January 2019 and concluded that the INA is clear and does not permit the type of prioritization it proposes here.
Several other commenters also noted that DHS previously determined in its 2019 rule, Registration Requirement for Petitioners Seeking to File H-1B Petitions on Behalf of Cap-Subject Aliens, that prioritization based on salary would require statutory changes. Some commenters said that senators introduced bipartisan legislation four days after the publication of this proposed rule to authorize DHS to process H-1B petitions on proffered wages, and commented that Congress would not be legislating on this exact issue if it thought DHS could implement these changes to the H-1B program on its own.
Some commenters wrote that the Supreme Court's 2024 overruling of the
Excess demand for numerically limited H-1B cap numbers created a rush of simultaneous submissions at the beginning of each H-1B cap petition period, preventing application of the numerical limitations based solely on the order in which the petitions are received by USCIS.
DHS acknowledges that Congress directed DHS to process earlier-filed petitions before later-filed petitions,
The Secretary has broad authority to administer and enforce the INA, establish such regulations as the Secretary deems necessary for carrying out such authority, and to prescribe the time and conditions under which an alien may be admitted to the United States as a nonimmigrant and how an importing employer may petition for nonimmigrant workers.
DHS has leveraged these authorities to make significant improvements to the H-1B selection process over the years in response to the high demand, consistent with the purpose and structure of the annual numerical limitations. The registration process, for instance, selects among “registrations submitted electronically over a designated period of time to ensure the fair and orderly administration of the numerical allocations.” 84 FR 896 (Jan. 31, 2019).
DHS's random selection process is a similar type of gap-filling measure. When this process was previously challenged, DHS prevailed.
DHS acknowledges that it has implemented regulations over the years that provide for a random selection from all petitions or registrations that occur within a certain timeframe.
Regarding the comments that referenced recently proposed legislation to support assertions that this rule exceeds DHS's authority, DHS notes that proposed legislation that is not enacted is not a reliable indicator of congressional intent, particularly as it pertains to previously enacted legislation.
Regarding commenters' assertions that the statute is neither ambiguous nor silent on allocation methods beyond random selection, DHS observes that the statute does not expressly refer to allocation by random selection or address how the numerical allocations should be administered when demand exceeds the available supply of H-1B visa numbers. Rather, that is the silence that DHS permissibly filled in prior rules providing for random selection, and is the same silence that DHS is permissibly filling in this final rule by implementing a reasonable selection process, consistent with a key goal of the program: protecting the wages, working conditions, and job opportunities of U.S. workers.
DHS recognizes that it considered the issue of cap selection by wage level in 2019 and concluded at that time that prioritization by wage level or other bases would require statutory change. DHS acknowledged that prior statement in footnote 20 in the preamble to the proposed rule. 90 FR 45986, 45990 (Sept. 24, 2025). DHS reconsidered the analysis as far back as 2020, and again
Some commenters wrote that Congress designed the H-1B program to be accessible across wage levels, and that the current random lottery reflects congressional intent for fairness and equal opportunity. A comment from multiple organizations stated that Congress and DOL designed the system to ensure wage parity within an occupation and within a local labor market, not to stack-rank different workers. Some commenters said that the H-1B program was created to give U.S. employers access to specialized workers across all experience levels, and that the NPRM would undermine that purpose. Another commenter wrote that the INA requires USCIS to implement a “fair” selection process when petitions exceed the visa cap, and suggested that the proposed selection process would fail to meet this requirement by disproportionately disfavoring early-career workers. A commenter wrote that the H-1B program has “drifted far from its congressional intent” and fundamental reforms are needed to ensure the visa holders are not used to replace U.S. workers with “cheaper foreign labor.”
Some commenters wrote that DHS's proposed weighting toward more skilled workers directly conflicts with the statutory definition of “specialty occupation,” which is defined in terms of a minimum requirement of a bachelor's degree for entry into the occupation, and does not depend on an experience requirement. One of the commenters said that DHS has no authority to enact its policy preference for admitting H-1B workers based on their experience as a deciding factor in selecting their registrations as it is contrary to the statutory definition.
Another commenter wrote that the NPRM is “unjustified” in its citation to 6 U.S.C. 111(b)(1)(E) as one of its legal bases. The commenter asserted that this provision was intended as a constraint on DHS's regulatory power, and that it obligates DHS “to avoid initiatives that would weaken economic stability or burden lawful sectors of American commerce.” The commenter suggested that the proposed rule conflicts with this limitation by diminishing, rather than safeguarding, the nation's overall economic security. The commenter stated that because the rule “constrains U.S. employers' ability to access specialized talent,” it undermines the statutory mission Congress assigned to DHS.
While the current random selection of petitions or registrations is reasonable, DHS believes it is neither the optimal, nor the exclusive method of selecting registrations or petitions toward the numerical allocations when more registrations or petitions, as applicable, are simultaneously submitted than projected as needed to reach the numerical allocations. Pure randomization does not serve the ends of the H-1B program or congressional intent to help U.S. employers fill labor shortages in positions requiring highly skilled workers.
Contrary to commenters' assertions, the weighted selection process does not preclude access to skilled workers at the lower wage levels or diminish, rather than safeguard, the nation's overall economic security. Congress imposed an annual numerical limitation on the number of foreign workers who may be issued an initial H-1B visa or otherwise provided initial H-1B status.
Some commenters wrote that while the
One commenter asserted that this rulemaking represents a “premature departure” from the 2024 final rule. 89 FR 7456 (Feb. 2, 2024). The commenter noted that the 2024 final rule was designed to reduce “gaming” the system to ensure that each beneficiary has the same chance of selection and said that it is premature to change that framework before evaluating outcomes across the FY 2025 and FY 2026 cycles.
DHS also disagrees with the commenters' assertions that the weighted selection process would violate the INA or that DHS lacks the statutory authority to implement a weighted selection process. The statute is silent as to how USCIS must select H-1B petitions, or registrations, to be filed toward the numerical allocations in years of excess demand; the term “filed” as used in INA sec. 214(g)(3), 8 U.S.C. 1184(g)(3), is ambiguous;
The Secretary has broad authority to administer and enforce the INA, establish such regulations as the Secretary deems necessary for carrying out such authority, and to prescribe the time and conditions under which an alien may be admitted to the United States as a nonimmigrant and how an importing employer may petition for nonimmigrant workers.
DHS disagrees with the commenters' assertion that
DHS also disagrees with the commenter's assertion that it is premature to implement a new selection process before at least a couple of years have passed since the implementation of the beneficiary-centric selection process. DHS notes that this final rule builds on, and does not replace, the changes made by the final rule implementing the beneficiary-centric selection process.
However, the H-1B program is not functioning as intended. Instead, it is being exploited on a large scale to bring in lower-paid, lower-skilled workers. As noted in the H-1B Proclamation the H-1B program has been deliberately exploited to replace, rather than supplement, U.S. workers with lower-paid, lower-skilled labor. 90 FR 46027 (Sept. 24, 2025). The H-1B Proclamation also indicated that many U.S. tech companies have laid off their qualified and highly skilled U.S. workers and simultaneously hired thousands of H-1B workers, and some even forced their U.S. workers to train the foreign workers. 90 FR 46027 (Sept. 24, 2025). Further, unemployment among recent computer science and computer engineering graduates has reached some of the highest levels in the country and has been exacerbated by abuse of the H-1B visa program. 90 FR 46027 (Sept. 24, 2025). This rule is an important step to reversing the abuse of the H-1B program. This rule will disincentivize the existing widespread use of the H-1B program to fill lower paid or lower skilled positions. Instead, U.S. employers that might have petitioned for cap-subject H-1B workers to fill relatively lower-paid, lower-skilled positions, may be incentivized to hire available and qualified U.S. workers for those positions.
A commenter said level I reflects standard entry-level positions and that removing the level would contradict “the government's own system and unfairly redefines “specialty occupation” as something only senior employees can fill.” Another commenter voiced concern that the proposed rule would significantly skew H-1B lottery outcomes and urged DHS to reconsider its impact on lower-wage applicants.
DHS acknowledges that aliens may be offered salaries at level I prevailing wages to work in specialty occupations and may be eligible for H-1B status. DHS is not removing the possibility of selection for registrations for positions paid at level I wages through this rulemaking. However, DHS also believes that, in years of demand exceeding the annual limits for initial H-1B visas or status grants subject to the numerical allocations, the current process of purely random selection does not optimally serve Congress' purpose for the H-1B program. Instead, in years of excess demand, selection of H-1B cap-subject petitions generally on the basis of the OEWS prevailing wage level that the proffered wage equals or exceeds, which generally correlates to higher skills, is more consistent with the purpose of the H-1B program and with the administration's goal of improving policies such that H-1B classification is more likely to be awarded to petitioners seeking to employ higher-skilled and higher-paid beneficiaries. The purpose of this rule is to implement a weighted selection process that will generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels.
Some commenters stated opposition to the rule, reasoning that it would favor lower-skilled and lower-paid positions, contrary to its stated goal of prioritizing higher-skilled, higher-paid workers. A commenter referenced how prevailing wage levels are calculated based on the average wage for similarly employed workers in a specific occupation and location, which could advantage occupations with lower entry-level requirements. Similarly, a commenter stated that the use of wage levels would prioritize lower-skilled, lower-paid workers, undermining the purpose of the rule, which is to prioritize top talent with scarce and in-demand skills. Additionally, the commenter stated that while wage levels correlate well with wages within a specific occupation, wages between occupations can vary significantly, which was not taken into account in the proposed rule, and provided several examples to illustrate this point. Some commenters stated the proposed selection process could favor seniority in lower-paid occupations over high-wage, high-skill roles in other fields, and is not supported by underlying statute, DOL regulations, guidance, or “the government's own data.”
While voicing concern about the use of prevailing wage levels in the proposed weighted selection process, a commenter stated that applying wage levels across industries was “inappropriate,” as DOL's prevailing wage system accounts for factors, such as job duties, education, experience, and location, which vary significantly by occupation. The commenter remarked that high-skilled roles—such as physicians, lawyers, and professors—may still fall under level I wages due to standard entry requirements, while other occupations with lower educational thresholds could qualify for higher wage levels. The commenter reasoned that this mismatch could lead to inequitable outcomes, where individuals in lower-paid occupations might receive more chances in the lottery than those in higher-skilled, higher-paid roles.
Multiple commenters discussed concerns in associating lower wage levels with low skill work, noting that more advanced occupations with more rigorous job requirements may be assigned lower wage levels compared to less advanced occupations with lower job requirements. For example, some commenters said that a specialized surgeon earning $300,000 would be certified as a level I and a Ph.D. working at a high tech company earning $280,000 would be certified at a level II, whereas an acupuncturist earning $41,600 is considered level III and a landscape architect with a $36,000 salary is certified as level IV. Another commenter noted that a Master's degree requirement for a Job Zone 4 occupation can result in a level II wage while the same requirement for a Job Zone 5 occupation can result in a level I wage, despite the Job Zone 5 position being more advanced. Another commenter similarly noted that employees in occupations with a higher Specific Vocational Preparation (SVP) and higher levels of compensation may be assigned lower prevailing wage levels than occupations with a lower SVP and said that a position requiring a doctorate and 2-4 years of experience may have a prevailing wage level I that is set at $200,000 per year, whereas a position in an occupation that has an entry level requirement of a Bachelor's degree and 0-2 years of experience may yield a salary of $150,000 per year at prevailing wage level 3. Another commented noted the different wage levels resulting from differing job requirements of cardiologists as compared to civil engineers.
As noted in the NPRM, DHS believes that salary generally is a reasonable proxy for skill level.
Regarding the occupational examples provided by commenters, DHS notes that the purpose of this rule is not to prioritize certain occupations or industries over others. The purpose of this rule is to implement the numerical cap in a manner that generally favors the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels and in all eligible occupations.
One commenter said that the proposed rule is arbitrary and capricious because it overlooks the impact on H-1B petitions for essential roles in healthcare, education, and other sectors reliant on early-career professionals. Citing
DHS recognizes that some employers may have relied on a random selection process to prepare for the possibility that the beneficiary(ies) the employer registered for might be selected. DHS, however, disagrees with any assertion that a purely random selection process engenders strong reliance interests or that such reliance interests outweigh the benefit of a weighted selection process that better protects the wages, working conditions, and job opportunities of U.S. workers.
DHS disagrees with the assertion that it did not provide a rational basis for the rule. As explained in the preamble to the proposed rule, while the current random selection of petitions or registrations is reasonable, DHS believes it is neither the optimal, nor the exclusive method of selecting registrations or petitions toward the numerical allocations when more registrations or petitions, as applicable, are simultaneously submitted than projected as needed to reach the numerical allocations.
As DHS explained in the preamble to the proposed rule, by engaging in a wage-level-based weighting of registrations for unique beneficiaries, DHS will better ensure that initial H-1B visas and status grants would more likely go to the highest skilled or highest paid beneficiaries, while not effectively precluding those at lower wage levels.
As DHS explained in the preamble to the proposed rule, by engaging in a wage-level-based weighting of registrations for unique beneficiaries, DHS will better ensure that initial H-1B visas and status grants would more likely go to the highest skilled or highest paid beneficiaries, while not effectively precluding those at lower wage levels.
This rule deals with the Secretary's administration and enforcement of the H-1B numerical allocations—a topic that DHS has long regulated, including
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While the wage-based H-1B selection process is economically significant under Executive Order (E.O.) 12866, it does not rise to the level of “vast economic and political significance” required to trigger the major questions doctrine. The threshold for economic significance under E.O. 12866 is relatively low ($100 million annual impact), whereas the major questions doctrine requires a much higher level of economic and political impact. In
Some commenters expressed concern that the proposed rule could make the program more susceptible to legal challenges. One commenter stated that legal challenges regarding statutory authority for the weighted selection approach would be likely, and litigation would leave employers with lingering uncertainty about whether the process might “change midstream.” The commenter wrote that “[e]mployers begin planning months in advance of the H-1B registration window, and it is critical for businesses to be able to fulfill talent needs in their operations with confidence that the rules will not change midstream. Expected litigation could cause companies to lose global talent to other countries, especially in the midst of competition for dominance in AI and other critical technologies.”
DHS disagrees with the commenter's assertion that DHS should not finalize the rule because it may lead to litigation challenging the rule and uncertainty as to the cap selection process while litigation is pending. DHS does not believe that the threat of future litigation, and speculation as to the ultimate outcome of any future litigation pertaining to the final rule, is a reasonable basis not to finalize a rule that will improve the administration of the H-1B cap selection process and better protect the wages, working conditions, and job opportunities of U.S. workers.
A few commenters expressed concerns about potential consequences if OEWS prevailing wage data were to change in between the time of registration submission and petition filing. A commenter stated that OEWS updates can lag, which could result in identical job offers that straddle release cycles to receive different weights for reasons unrelated to skill, producing arbitrary outcomes. Another commenter discussed annual wage appreciation that is effective for their position each May, which could affect the wage level selected, but would not be anticipated or reflected in their March petition. The commenter expressed concerns about being penalized if they submit lower or higher wage estimate of their future wage. The commenter suggested more flexible prevailing wage levels, rather than a fixed wage level. A commenter expressed that requiring employers to commit to specific wage levels during registration, then verifying that petition wages match registration wages months
Specifically, as finalized, the revisions to Form I-129 direct petitioners to follow the form instructions to select the appropriate wage level box in response to question 2, Section 3.
Regarding the commenters' concerns about committing to the OEWS wage level at the time of registration and the suggestion for more flexible prevailing wage levels, DHS must collect the wage information at the time of registration, prior to petition filing in April, in order to weight and select registrations. DHS does not see another viable solution for collecting wage information at a later date or allowing flexible wage levels. Additionally, under the current registration process, registrants must attest that the registration reflects a legitimate job offer. Through this rule making, DHS is modifying this language to require registrants certify that the registration reflects a bona fide job offer and codifying that “a valid registration must represent a bona fide job offer” at new 8 CFR 214.2(h)(10)(ii).
The wage level selected on the LCA may differ from the appropriate wage level selected on the registration as a result of this rule allowing registrants to choose the highest OEWS wage level that the beneficiary's proffered wage generally equals or exceeds for the relevant SOC code in the area(s) of intended employment. It is important to distinguish the appropriate wage level selected for purposes of the registration with the wage level selected for purposes of the LCA. The wage level and prevailing wage requirements are part of the LCA process regulated by DOL. A petitioner is required to file an LCA with DOL attesting that H-1B nonimmigrants will be paid either the actual wage paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question or the prevailing wage for the occupational classification in the area of intended employment, whichever is greater.
DHS agrees with the need for stronger back-end enforcement. This rule finalizes new integrity measures to guard against petitioners intentionally misclassifying the occupation, for example, by requiring the H-1B petition filed after registration selection to contain and be supported by the same position information and contain a proffered wage that equals or exceeds the prevailing wage for the corresponding OEWS wage level in the registration for the SOC code in the area(s) of intended employment.
OEWS prevailing wage level data is publicly available through DOL's Foreign Labor Application Gateway (FLAG) system. Wages based on alternate sources, such as private wage surveys, collective bargaining agreements, and SCA wage determinations, are not always publicly available and do not always have four wage levels.
DHS disagrees with the assertions that petitioners that use non-OEWS wage sources would be disadvantaged by the rule. Petitioners may continue to use private wage surveys and other alternative wage sources, if they choose to do so, to establish that they will be paying the beneficiary a required wage. This rule, however, will weight registrations (or petitions, as applicable) generally based on the highest OEWS wage level that the proffered wage equals or exceeds as OEWS wage data is the most comprehensive and objective source for comparing wages.
To help avoid disadvantaging prospective petitioners that rely on a private wage survey or other alternative sources to determine the required wage level for the proffered position for registration purposes, new 8 CFR 214.2(h)(8)(iii)(A)(
Conversely, a commenter stated that the proposal for USCIS to assign a wage level to a beneficiary based on the lowest OEWS wage level among all registrations for a beneficiary will erase legitimate higher wage offers and give controlling significance to the lowest bid. Another commenter said that this approach would penalize a legitimate employer with a level IV wage, and requested that DHS consider the highest OEWS wage level among the registrations to avoid the “cascading effect that would otherwise allow one lower-wage registration to dilute the merit-based weighting for all employers associated with the same worker.” Another commenter discussed the situation where multiple entries are created for registrants who file H-1B petitions at wage level II and the resulting dilution of any advantage of higher wage level registrants. Further, the commenter discussed handling of beneficiaries with multiple offers and where the lower-level offer will determine the lottery positioning of all of that beneficiary's petitions. Another commenter said that the rule creates inequity for multi-location employers, pointing to proposed 8 CFR 214.2(h)(8)(iii)(A)(
DHS is aware of the potential that a registration with a wage corresponding to a lower wage level would negatively impact other registrations for the same beneficiary at higher wage levels, including a legitimate employer's registration for a beneficiary with a level IV wage. However, it is expected that
Regarding multi-location employers, DHS does not agree that this rule will generally penalize the list of employer types that the commenter indicated. Employers should be aware that, if they are placing beneficiaries at multiple locations, DHS will assign the registration the lowest corresponding wage level for selection purposes. DHS does not believe that this is a common enough scenario that it is worth leaving open a loophole for unscrupulous employers to try to game the system.
Another commenter wrote that there are significant ambiguities in choosing SOC codes, as many positions fall between two or three SOC codes, and beneficiaries often have interdisciplinary educational backgrounds, which could create inconsistencies in how wage levels and lottery weights are applied. Similarly, a commenter stated that because multiple roles can map to multiple plausible SOC codes with different wage ladders, the SOC choice will directly affect selection odds, which increases the stakes and the chance of misclassification disputes. A couple of commenters discussed inconsistencies between how employers classify occupations using SOC codes. A commenter stated that the proposed wage level construct is misleading because it does not allow for effective comparison or ordering for, or among, specific or detailed occupations.
Some commenters claimed that the proposed rule would disproportionately disadvantage applicants in high-cost areas, even when their compensation and skill level are equivalent to those in lower-cost regions. Some commenters said that cost-of-living differences across regions create structural bias where employers in high-cost metropolitan areas struggle to meet wage thresholds while those in lower-cost regions can more easily offer higher wage levels for similar roles. Similarly, a commenter stated that a salary-based weighting system would benefit outsourcing firms in lower-cost areas while hurting start-ups and other tech companies in high-cost hubs like Silicon Valley. One commenter stated that the proposed wage weighting would punish “agglomeration centers” and reward lower-cost regions, “skewing outcomes away from where spillovers and mentorship are largest.” Another commenter suggested that the proposed weighting could penalize applicants in “innovation-driven regions,” such as San Francisco and Seattle where employees earn higher wages due to living costs and competitive markets.
In contrast, a few commenters stated that the proposed rule would favor companies in high-cost areas, where
Petitioners are also required to submit evidence of the passport or travel document used at the time of registration to identify the beneficiary at the time of filing.
If USCIS has reason to believe that the certifications made during registration are not true and correct, it will investigate the parties in question, including examining evidence of collusion and patterns of non-filing of petitions. If USCIS finds that a certification was not true and correct, USCIS will find the registration to not be properly submitted. The prospective petitioner would not be eligible to file a petition based on that registration, and USCIS may deny a petition, or revoke a petition approval, based on an invalid registration that contained a false certification. New 8 CFR 214.2(h)(10)(ii). USCIS may make findings of fraud or willful material misrepresentation against petitioners, if
Some commenters discussed how companies could engage in fraudulent payroll practices by inflating paychecks to increase chances in the lottery. Commenters stated that companies may issue inflated paychecks to meet wage requirements on paper, but in reality pay employees much less. A commenter characterized the rule as a “half-measure,” writing that employers will inflate proffered wages on paper, then bench workers or dodge pay via loopholes like phantom bonuses—fueling abuse by outsourcers who undercut U.S. wage rates. One commenter discussed that small companies could inflate paychecks to meet wage requirements, sometimes reclaiming the excess amount from employees through unofficial means, even when there is no actual job. Another commenter suggested that companies could collude in determining which level of wage to offer to increase the chance of selection.
A commenter said the rule may inadvertently encourage wage manipulation, such as by employers: artificially increasing wages to reach higher tiers without genuine job changes; cutting benefits or other compensation to offset inflated base pay; clustering wages just above OEWS thresholds (“bunching”); or narrowing job roles to maintain appearance of high pay. Other commenters suggested that a self-sponsored H-1B could claim they make a salary that would allow them to gain an advantage in the lottery.
A commenter also raised concerns about employers manipulating salary timing to meet H-1B requirements, such as paying low wages for most of the year and increasing pay shortly before submitting a petition, thereby USCIS only seeing the higher recent pay on submitted paystubs. The commenter recommended requiring all paystubs or income tax records to verify consistent compensation. The commenter further cautioned that advances in AI could make it easier to falsify documents, urging USCIS to take greater care in validating submitted materials.
Some commenters also expressed doubts about USCIS' ability to enforce the proposed wage-based selection process and verify that employers pay the wages promised. A commenter said that the proposed rule does not address how companies will be prevented from inflating wages for the lottery and reducing them later. Another commenter recommended that employers report any changes to wage or position in real-time to USCIS, and that penalties for violations be significant enough to deter gaming the system, including fines and potential disqualification from future H-1B filings. Some commenters provided suggestions to detect and deter employer wage manipulation, including ensuring:
• Employers provide supporting documentation that demonstrates the offered wage is appropriate for the position and location, such as internal compensation policies or comparable industry data.
• Companies demonstrate real ability to pay the stated wage;
• The occupational classification aligns with actual job duties;
• The selected wage be paid for a minimum of 12 months after the H-1B start date;
• Payroll records verify consistent compensation;
• The employer provides a signed attestation confirming the wage commitment;
• Penalties for violations or misclassification, including repayment of the difference and potential bans on future H-1B filings;
• Tie the wage level used for weighting to the certified LCA at filing;
• Require attestations under penalty of perjury;
• Run post-selection audits against DOL OEWS and LCA data; and
• Set meaningful penalties for misclassification.
These new requirements will work in conjunction with existing H-1B regulations to prevent unscrupulous actors from entering information at the registration stage to increase their chance of selection without intending to employ the beneficiary under the same terms indicated at registration. Both the submitted registrations and filed petitions are signed under penalty of perjury that the information on the registration or petition is true and correct and that both the registration and petition represent the offer of a legitimate or bona fide job. USCIS may deny a petition or, if approved, revoke the approval of a petition, if the statement of facts contained on the registration form is inaccurate, fraudulent, misrepresents any material fact, or is not true and correct.
DHS likewise agrees that petitioners misrepresenting the salary (including salary timing) in order to inflate the odds of selection, while not actually paying the beneficiary that salary, is an important integrity concern. DHS acknowledges these concerns but does not agree that the weighted selection framework will produce the harm described. Existing DHS and DOL regulations clearly require the petitioner to meet the obligations of the LCA and the petition, including the proffered wage requirements.
Additionally, DHS
DHS notes that these regulations apply to all registrations, including those submitted by beneficiary owners. If a beneficiary owner submits a registration with a wage level that is higher than that which corresponds to what the offered position actually pays, the petition would be denied. If the beneficiary owner instead misrepresents the salary on the LCA or petition, the petition will be denied or the approval revoked because the information contained in the LCA or petition was not true and correct.
DHS declines to add additional evidentiary requirements to verify salary at the registration stage through this rulemaking, such as requiring all paystubs or income tax records, as USCIS does not adjudicate registrations. Further, requiring such documents as initial evidence during the petition stage may not be feasible, as many registrations are for prospective jobs such that this evidence would not be available at the time of filing. Moreover, USCIS already requires such evidence to determine whether the beneficiary maintained status when adjudicating an extension petition. USCIS also uses a compliance review program as an additional way to verify information in certain visa petitions.
Concerning the comments on existing integrity issues, such as bad actors claiming to employ or pay beneficiaries when in reality the job does not actually exist and the beneficiary is then paying their “wage” back to the company, DHS continues to explore ways to improve the integrity of the H-1B petition process. However, as this concern is not a result of the proposed weighted selection process, it is beyond the scope of this narrowly tailored rule. Similarly, the suggestions that DHS pursue additional enforcement mechanisms, such as “penalties” for violations or misclassification, or potential bans from the registration, are also out of scope of this rulemaking. USCIS may, however, refer an individual or entity who submitted a false certification to appropriate Federal law enforcement agencies for investigation and further action, as appropriate.
One commenter provided an example of how two managerial roles could be classified under the Industrial Engineer SOC code (primary duties include technical process improvement, metrics analysis, and workflow optimization) to achieve a higher wage level, even though the position is effectively a managerial role. Some commenters also remarked that job titles or descriptions for a beneficiary could be manipulated to support selection of an SOC code where the proffered wage would place the beneficiary into a higher wage level rather than the true SOC code, which would put the beneficiary in a lower wage level, thereby inflating the beneficiary's selection chances.
Commenters also stated that lower-skilled job codes could be selected that have higher prevailing wages because the SOC framework permits multiple plausible classifications for a given role and not all specialized occupations have a perfectly matching SOC code.
The final rule will also allow USCIS to deny a subsequent new or amended petition filed by the petitioner, or a related entity, on behalf of the same beneficiary if USCIS were to determine that the filing of the new or amended petition was part of the petitioner's attempt to unfairly increase the odds of selection during the registration (or petition, if applicable) selection process, such as by reducing the proffered wage to an amount that would be equivalent to a lower wage level than that indicated on the original registration or petition.
This rule does not prevent employers from making business decisions about the location or relocation of their operations and the terms of employment for their employees. If an employer chooses to move a position to a low-cost area while retaining a salary commensurate with a high-cost location, such that the salary would result in a higher wage level designation in the low-cost area, that is in the purview of the business. This would be permissible under this rule as long as the employer is offering a bona fide position at that location and the beneficiary will in fact work in that location. However, attempts to then move the beneficiary back to a high-cost location would be heavily scrutinized and the petition could be denied if USCIS finds that the employer did not meet its burden of proof to show that the move was not made to unfairly increase the chances of selection.
In regard to questions about how USCIS will distinguish between legitimate multiple locations and impermissible gaming, the proposed rule makes clear that the position, as described on the LCA and registration, must be bona fide and if the offered position involved work in multiple locations, the employer must submit a registration corresponding to the lowest wage level associated with the locations.
The rule also allows USCIS to deny a subsequent new or amended petition filed by the petitioner, or a related entity, on behalf of the same beneficiary if USCIS were to determine that the filing of the new or amended petition was part of the petitioner's attempt to unfairly increase the odds of selection during the registration selection process, such as by reducing the proffered wage to an amount that would be equivalent to a lower wage level than that indicated on the original registration or petition.
As explained in the proposed rule, the petition must contain and be supported by the same identifying information and position information, including SOC code, provided in the selected registration and indicated on the LCA used to support the petition.
For changes between an initial petition and subsequent new or amended petitions filed by the petitioner or a related entity, if the petition would lower the wage level that would have been selected in registration, USCIS would scrutinize
A commenter stated that USCIS has already established mechanisms for guarding against fraud and misrepresentation, and that the proposed rule would provide minimal benefit regarding program integrity, while disproportionately increasing the risk of penalizing employers for unavoidable discrepancies. Another commenter voiced opposition to the proposed rule and expressed that the proposed rule is a “half measure” to fix a system that harms U.S workers' careers by prioritizing foreign labor. Another commenter suggested that without modernizing the visa cap and improving administrative efficiency, a wage-based selection process will only deepen existing challenges.
A commenter voiced concern about whether the proposed rule would adequately address fraud and enforcement, stating that vague provisions around wage calculation and job tracking could enable manipulation. Another commenter questioned whether the rule provides sufficient procedural clarity, remarking on the lack of detail on wage enforcement, worksite transfers, and post-approval wage amendments. A commenter expressed general concern about fraud in the H-1B program and questioned whether USCIS could effectively manage this issue. Similarly, another commenter said that USCIS and DOL lack the capacity to verify beneficiary qualifications and that the proposed rule could increase financial incentives to exploit the program through falsified credentials and kickback schemes.
Regarding the commenters' suggestions to entirely exclude lower wage levels from the selection process, DHS prefers a weighted selection process that does not effectively eliminate the odds of selection for wage levels I and II. DHS reiterates that this rule strikes an appropriate balance between prioritizing high wage levels while also recognizing the value in maintaining the opportunity for employers to secure H-1B workers at all wage levels. This rule also preserves the opportunity for employers utilizing non-OEWS wage sources to be selected. DHS recognizes that there may be some occupations or geographic areas for which OEWS wage data is not available, or positions for which a private wage survey or CBA may be used to determine the required wage. In these cases, the registration might be assigned a level I wage and as such would be effectively precluded if registrations at lower wage levels were excluded. DHS believes that the weighted selection process finalized in this rule is optimal because it increases the chance of selection for those with wages that correspond to higher wage levels but does not effectively preclude beneficiaries from being selected solely because of variables, including OEWS data limitations. DHS believes that this rule appropriately balances the interests of U.S. workers with the interests of petitioning employers and the alien workers they seek to employ as H-1B nonimmigrants.
Conversely, another commenter expressed opposition to other commenters' proposals for a selection method based solely on salary. The commenter stated that under the pure salary-based allocation system, they would expect a greater share of H-1B visas being allocated to computer and engineering occupations in high cost-of-living urban and coastal areas. The commenter reasoned that this would undermine the H-1B program's goals, since such occupations are not experiencing labor shortages. Furthermore, the commenter remarked that this kind of salary-based allocation system would be clearly inconsistent with the statute, and that since all occupations have value, the H-1B program should not use an allocation system that would mostly award visas to tech companies
DHS is also concerned about miscoding or misclassifying through SOC code manipulation but believes it has sufficient enforcement mechanisms in place to deter and penalize such behavior. DHS must also balance the concerns for SOC code manipulation with the concerns of potentially shutting out entire professions, industries, or geographic locations that happen to be lower paying.
Regarding the comments that this rule would not sufficiently increase the median H-1B salary, DHS appreciates these concerns but notes that the primary goal of this rule is to generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens, while maintaining the opportunity for employers to secure H-1B workers at all wage levels, to better serve the congressional intent for the H-1B program. Moving to a weighted selection process is expected to increase the number and share of equivalent level IV wage selections, resulting in higher average offered wages among selected H-1B cap-subject workers. While the expected increase to average H-1B wages may not be as much as the increase that might result from the compensation-based selection system advocated by these commenters, DHS considered the disadvantages of such an alternative,
DHS also believes that combining and weighing multiple factors is not feasible, as such an approach could be overly complicated, unpredictable, and subjective. DHS believes that incorporating adjustments based on multiple factors, such as the geographic area, cost of living, the beneficiary's age, projected earnings over a lifetime, and inflation would add unnecessary complexity into the process and frustrate the goal of administering the cap selection process in an efficient and effective manner. Some of these factors could change over time or may be subjective, which increases the chance of unpredictability and undermines some of the commenters' concerns about the need for predictability. Therefore, DHS prefers to use the OEWS wage level system that is already used in the H-1B program, publicly accessible, and updated annually by DOL. DHS further notes that the OEWS prevailing wage already takes into consideration variations in wages due to different occupations and geographic locations.
Regarding the suggestion to reserve visas or otherwise adjust weighting for critical shortage occupations in the healthcare industry, DHS believes that employers should be able to utilize the H-1B program within a broad range of occupations and industries. Further, DHS reiterates that H-1B petitions for aliens who are employed by, or have received offers of employment at, U.S institutions of higher education, nonprofit entities related to or affiliated with U.S. institutions of higher education, or nonprofit research organizations or governmental research organizations are exempt from the H-1B cap.
Some commenters recommended exempting registrations towards the master's degree cap from the proposed wage-based weighting. Other commenters wrote that only beneficiaries with Ph.D.s should be admitted, or that beneficiaries with Ph.D.s should automatically be assigned to level IV in the registration. A commenter proposed a qualification-based allocation system that would assign higher selection priority to Ph.D. holders, followed by master's degree holders, and then bachelor's degree holders.
Some commenters suggested prioritizing applicants with U.S. degrees in STEM fields. A commenter recommended, as one potential alternative to the proposed wage-weighted selection process, that DHS apply weighting by education level with higher weights for advanced degrees, particularly in STEM fields, to prioritize beneficiaries whose skills most closely align with U.S. economic needs, reasoning that this would avoid distortions inherent to a percentile-based OEWS wage level weighting. More specifically, another commenter recommended awarding one additional registration chance to U.S.-educated applicants who submit a registration within 12 months of graduation, with a second additional chance for graduates in critical STEM fields identified by the administration. Some commenters recommended exempting or otherwise prioritizing STEM Ph.D.s, to ensure intelligent individuals, invested in the U.S. education system, are able to contribute to the United States, even if they have low wages.
DHS declines to adopt the suggestion to give every F-1 graduate an equal entry-level opportunity, as this goes against the stated goal of the rule, which is to generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens. DHS also declines to ensure that U.S.-educated recent graduates, including those in critical fields, are given increased weighting in the selection process. The weighted selection process discussed in the NPRM is intended to incentivize employers to pay a higher proffered wage to a certain beneficiary to be more competitive in the H-1B selection process. 90 FR 45986, 45990 (Sept. 24, 2025). This process also maintains the opportunity for employers to secure H-1B workers at all wage levels, thus it will not completely leave out aliens in entry-level positions. Similarly, DHS declines to give priority to aliens who completed OPT in the United States.
DHS believes that prioritizing an alien based on their degree field, including whether their degree is from a STEM field, is not necessary. The purpose of this rule is not to prioritize the admission of foreign STEM workers. Further, DHS generally notes that prioritizing registrations on multiple
Some commenters requested alternatives specific to the tech industry. For example, a commenter said the proposed weighting approach should only apply to the tech industry where employers can afford high wages, while registrations from all other industries should be weighted as level IV by default. Other commenters recommended disallowing level I or II registrations from tech industry companies, and some commenters recommended revising the rule to ensure that it does not unfairly favor the IT industry.
Several commenters noted that certain industries like manufacturing or some engineering fields generally pay lower salaries compared to other industries, such as the tech industry, and recommended that H-1B visa slots be allocated by industry, rather than through a general pool. A commenter urged USCIS to adapt the proposed rule to mitigate negative effects on the manufacturing sector, particularly by reserving a portion of the cap or enhancing selection odds for lottery registrations for small and medium-sized manufacturers applying for H-1B visas for engineering and similar roles.
Other commenters expressed concern that the proposed rule disadvantages employers in lower paying, non-tech sectors, and recommended various measures, such as bonus weighting or special carve-outs. Commenters said the proposed approach may unfairly disadvantage public sector and local government functions where wages are typically lower. A commenter expressed concern about the proposed rule's effect on school districts' ability to address staffing shortages amid a national teacher shortage and recommended DHS prioritize K-12 teaching as a priority occupation eligible for additional weighting. A commenter suggested prioritizing teachers, especially in areas of shortage, such as math and science. Other commenters suggested various alternatives for universities, nonprofits, and research institutions, as well as for small employers and startups. These commenters indicated that these alternative weighting methods would help ensure employers are not disadvantaged solely because they are unable to pay high salaries compared to other employers.
Commenters suggested exceptions for their industry, such as exempting all alien physicians from the rule's weighted selection process, or weighting all healthcare workers at wage level IV. Another commenter generally recommended exempting all doctors and nurses from the proposed rule. Several commenters requested special consideration for healthcare professionals in underserved and rural areas. For example, a commenter recommended implementing exceptions for physicians practicing in shortage areas and in lower-paying but needed specialties like primary care. Another commenter suggested that DHS consider special weighting or exemption for healthcare occupations designated by DOL as shortage occupations or listed on Schedule A. A different commenter recommended adjusting the weighting formula for occupations where supervised clinical training is required, including for occupational and physical therapists, noting that the healthcare field depends on a structured, supervised clinical hierarchy that by definition are wage levels I or II. Another commenter recommended that the rule exclude the legal industry, stating that big law firms already pay high salaries and thus would be unfairly advantaged in the weighted lottery.
Furthermore, the goal of this rulemaking is not to favor employers with certain characteristics in the allocation of H-1B visas. Rather, the goal of this rule is to efficiently and effectively implement a weighted selection process that would generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens.
Some commenters suggested giving higher weight to beneficiaries based on the number of prior H-1B registration attempts, such that a person in their second or third attempt would get a higher priority. Another commenter made a similar recommendation, but added that for candidates that are selected but do not apply, their chances should be reduced if they enter the lottery again. Other commenters suggested providing “last-chance” priority (
Regarding the suggestions to specifically consider a beneficiary's prior H-1B registration attempts or time left in F-1 status, DHS does not believe these factors are relevant to a beneficiary's skill level. As explained in the NPRM, the purpose of the weighted selection process is to generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens. Facilitating the admission of higher-skilled workers would benefit the U.S. economy and increase the United States' competitive edge in attracting the “best and the brightest.” 90 FR 45986, 46011 (Sept. 24, 2025). Giving priority to F-1 students or beneficiaries solely because they have made several unsuccessful attempts to obtain an H-1B visa would not achieve this purpose.
• Increased targeted audits and compliance checks, background checks;
• Post-approval and post-activation audits to verify that employers follow through on wage and job commitments;
• Run post-selection audits against DOL OEWS and LCA data;
• Annual compliance reporting to monitor whether wage commitments are being honored;
• Mandatory post-selection wage verification to confirm that promised wages are actually paid;
• Verified reporting of work hours and actual worksite locations to ensure compliance with labor conditions;
• Stricter oversight of remote work arrangements to prevent misrepresentation of job locations;
• Upfront scrutiny of SOC code classifications to reduce manipulation of job categories;
• Increased penalties for fraudulent registrations, violators, and those who have misrepresented facts.
• Closer scrutiny of certain types of companies; and
• Bans or caps on registrations from firms with patterns of overuse;
• Bans on outsourcing companies or third-party placements.
These commenters said that targeted enforcement would better protect program integrity while preserving fairness for bona fide petitioners.
With respect to the suggestions to increase post-selection verification efforts, USCIS officers are trained to appropriately scrutinize each petition to ensure eligibility during the adjudication process, including scrutinizing the wage level, SOC code, and area of intended employment selected on the LCA to determine that the LCA properly corresponds to the petition, and ensuring that the petition includes the same identifying and position information. If USCIS were to determine that the statement of facts contained on the registration or petition submission was inaccurate, fraudulent, materially misrepresents any fact, or was not true and correct, USCIS would deny the petition or, if approved, would revoke the petition approval.
Regarding comments about increasing upfront scrutiny at the registration stage, USCIS does not adjudicate registrations. Because registration is not intended to replace the petition adjudication process or to assess eligibility, USCIS cannot feasibly determine at the time of registration selection whether a registrant has manipulated SOC codes.
Finally, it is noted that commenters provided various other suggestions about increasing enforcement or anti-fraud activities. Although DHS is concerned about preventing fraud and abuse in the H-1B program, this rule is narrowly focused on governing the process by which USCIS selects H-1B registrations for unique beneficiaries for filing H-1B cap-subject petitions. Therefore, DHS considers those comments out of scope. However, DHS may consider ways to improve the integrity of the H-1B program through future rulemakings and policy.
With respect to technical errors, USCIS is confident that the new system and process will be operable in time for the FY 2027 registration and cap filing season. In the unlikely event that USCIS discovers that the new weighted selection process is inoperable in time for the FY 2027 season, USCIS would take remedial measures at that time.
Regarding the request to publish data on selection outcomes, DHS notes that it is not legally required to publish such information. However, DHS already makes certain information about H-1B beneficiaries public on an annual basis. Specifically, pursuant to Section 416(c)(2) of the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA),
Further, DHS notes that the $100,000 payment required by the H-1B
For these reasons, DHS believes that this rule remains necessary to better ensure that initial H-1B visas and status grants would more likely go to the highest-skilled or highest-paid beneficiaries. While DHS recognizes that this could result in increased costs for a business, and that the combined effect of the two policies could further disadvantage businesses that lack the resources to pay the $100,000 fee and higher wages, DHS believes that having a greater chance to recruit or retain talented employees may offset these increased costs. If a company is unable to pay an alien a higher wage for a greater chance of selection, they could alternatively try to find and hire a U.S. worker.
Commenters stated that E.O.s 12866 and 13563 recommend a minimum 60-day comment period for economically significant regulatory actions and wrote that DHS's delay in publishing the rule undermines the urgency argument. The commenters also said that the government shutdown on October 1, 2025, disrupted normal operations since it resulted in the cessation of operations of National Archives and Records Administration (NARA), which controls the
The commenters expressed concern over the lack of prior notice about the rule and cited past DHS statements and court decisions that questioned the legality of prioritizing H-1B petitions based on wages. Several commenters requested more time to conduct economic and legal analysis, collect data, and to propose viable alternatives, asserting that DHS should provide a full 60-day period to allow employers time to analyze the rule, prepare feedback, and adjust operations to reduce unintended negative impacts.
Other commenters advised DHS to take into consideration other factors to prioritize selection, such as age, tenure, performance, and long-term contribution potential and issue an updated proposal or not implement changes until the FY 2028 cap season, particularly “[g]iven that many
With respect to commenters who said they could not access wage-level data during the comment period, it is unclear what they were referencing. However, DHS does not believe that a temporary inability to access wage-level data prevents the commenters from understanding the weighted selection methodology included in this rule. DHS also notes that wage-level data changes from year to year based on adjustments to the OEWS. As discussed elsewhere in this rule, DHS believes that it has compelling reasons to move expeditiously to implement the wage-level-based selection for the upcoming FY 2027 cap season.
An industry group commented that using LCA wage data as a proxy for registration wage data leaves considerable ambiguity on the projected impact of the rule, because the LCA is not currently required to be submitted at registration. The commenter encouraged USCIS to conduct a comprehensive impact assessment that quantifies potential effects on critical industries.
One commenter said that DHS has not “adequately quantified and considered the distortions of this proposal, including potential disparate impacts on the economies of different geographic areas.” A commenter highlighted the need for DHS to estimate the number of affected small entities, detail compliance burdens, consider significant alternatives, and therefore reopen comments to allow meaningful input from small businesses.
A commenter said that DHS failed to adequately address the negative impacts on particular employers, such as those in critical infrastructure sectors. The commenter further stated that DHS acknowledged a significant reduction in H-1B selections for civil engineers and architects yet failed to provide a comprehensive economic assessment of the resulting labor shortages.
DHS recognizes that an LCA is not required at registration and, therefore, DHS does not have data on the number of registrations by wage level. For analytical purposes, DHS assumes that the distribution of wage levels observed in cap-subject petitions (from LCA data) reasonably approximates the distribution of wage levels in registrations. To the extent proffered wages exceed the wage levels indicated on the LCA, the projections presented here should be viewed as an upper bound of the rule's impact. Because DHS cannot estimate how many registrants would select a higher wage level than required on the LCA, DHS uses LCA wage data as a reasonable proxy for registration wage data. DHS did not receive any alternative data sources from commenters that would allow for a more reasonable proxy for registration data or that could appropriately substitute for the petition data used in the analysis.
LCA wage data are based on the Bureau of Labor Statistics' OEWS wage survey which is derived from employer compensation data and produces estimates by occupation and geographic area, reflecting national patterns and regional labor-market conditions. The LCA wage levels are adjusted to correspond to progressively higher degrees of skill, experience, and responsibility within an occupation, and using them in the selection process helps normalize comparisons across local labor markets.
DHS declines to establish carve-outs for particular employers or occupations, and such carve-outs would be impractical within the H-1B framework. Accordingly, DHS applied a consistent allocation method while ensuring that all employers—including small entities and those in essential occupations—retain meaningful opportunities for selection under the same criteria.
In the Initial Regulatory Flexibility Analysis (IRFA) accompanying the NPRM, DHS carefully addressed the number of affected small entities and the estimation methods, the principal North American Industry Classification System (NAICS) sectors among filers, wage-level distributions by entity size, the direct economic impacts and counts of impacted entities, projected reporting, recordkeeping, and other compliance requirements, and the significant alternatives considered. Accordingly, DHS has determined that reopening the comment period is not warranted to obtain additional meaningful input from small entities.
DHS declines to include an economic assessment on separate occupation-specific labor shortages. The new weighted selection process is not designed to project occupational demand, nor does DHS seek to set occupation-specific priorities, guarantees, or reserved allocations. The H-1B program is a general specialty occupation visa category, not a targeted labor shortage program. The weighted selection process applies uniformly and neutrally across all SOC codes and industries. DHS's goal is to fairly and efficiently administer the H-1B cap selection process whenever registrations (or petitions, as applicable) exceed the annual numerical limitations. It is not DHS's goal to ensure a certain number
DHS appreciates the commenter's concerns regarding the potential broader economic impacts of the proposed selection process, particularly on small businesses and their role in job creation and innovation. However, the RFA does not require agencies to assess indirect or secondary effects, such as broader economic impacts or downstream consequences on the economy as a whole. The IRFA and Final Regulatory Flexibility Analysis (FRFA) prepared for this rule focus on the direct economic impacts on small entities that are subject to the proposed selection process. While DHS recognizes the importance of small businesses to the U.S. economy and innovation, the broader economic considerations raised by the commenter are not part of the RFA's requirements.
Some commenters stated that the cost-benefit analysis conducted by DHS is flawed. Specific issues that were raised are addressed below.
DHS also disagrees with the comment that the NPRM does not convincingly show that the new process will actually raise skill or pay levels. As shown in Table 12 of the NPRM, over a five-year period, the wage-level distribution of cap-subject petition receipts was approximately 28 percent (level I), 55 percent (level II), 12% (level III), and 5% (level IV). Because receipts are concentrated in levels I and II, a purely random selection would mirror that distribution. The rule's shift from random to weighted selection is intended to encourage employers to offer higher wages to higher-skilled H-1B workers to increase their chance of selection and to reduce incentives to use the program for relatively lower-paid, lower-skilled workers. As discussed in the RIA, moving to a weighted selection process is expected to increase the number and share of selected registrations with wages that correspond to a level IV, resulting in higher average offered wages among selected H-1B cap-subject workers.
Contrary to the commenter's assumption, DHS does not have the information necessary to merge registrations with LCA data. LCAs are not required for registrations. Registrations currently do not include verified wage level information. Wage levels are verified at the petition stage via the associated LCA. Also, not every registration can be cleanly merged with an LCA by employer and position, and a substantial share of registrations never mature into petitions. For those reasons, wage distributions derived by merging registrations and LCAs by employer and position would be noisy and potentially misleading. DHS acknowledges the limitation of using petition data to estimate the impact at the registration stage; however, using petition data ensures wage levels are validated and provides a reliable basis for analysis.
The beneficiary-centric change reduced the issue of duplicate registrations for the same individual and substantially reduced any potential divergence between petition distributions and registration-level wage mixes for multi-registration beneficiaries. This effort has anchored the registration process to real registration entries rather than speculative ones. For the remaining small number of multi-registration beneficiaries, assigning the lowest wage level across multiple registrations as proposed and finalized in this rule prevents gaming and creates a consistent beneficiary-level input for weighting. Because the lowest wage level will govern selection probability at the registration stage under the new rule when multiple registrations are submitted for the same beneficiary or the beneficiary will work in multiple locations, unique beneficiaries have less incentive to choose to have multiple registrations submitted on their behalf at different wage levels. Therefore, DHS's use of petition data to estimate the wage-level distribution of the registration population is expected to reasonably reflect the wage-level distribution that will occur under the new rule.
Despite the difference, the wage level distribution of advanced degree registrants and regular cap registrants is similar between groups: concentrations at wage level I and II are heavy, while wage level III and IV are lighter. The difference between the two-step and pooled model is small because only 20,000 out of 85,000 cap slots go towards the advanced degree exemption, and the wage-level mix of advanced degree filings is broadly similar to that of the total pool.
DHS disagrees that the economic impact of employers potentially offshoring jobs and the loss of revenue from potentially declining foreign student enrollment at U.S. institutions are transfers that an economic analysis for this rule is able to isolate and monetize. Decisions to offshore work or changes in foreign student enrollment are influenced by numerous factors beyond this rule. DHS is unable to isolate the factors contributing to any potential future decline in foreign student enrollment from the impacts of this rule. The commenter did not provide data to support the assertion that this rule would result in a decline in foreign student enrollment.
DHS is currently unable to effectively model the economic impact of employers potentially offshoring jobs, as there is no reliable publicly available data on how many specific jobs are currently offshored due to unsuccessful H-1B petitions or how that number might change as a result of this rule. Additionally, the commenter did not provide any data or a methodology to quantify the economic impact of one company offshoring a job due to not receiving an H-1B petition in the lottery versus another company retaining a position in the U.S. after successfully obtaining a petition. While DHS acknowledges that this may be a business decision some companies are already making, DHS is unable to determine how the changes in the weighted selection process under this rule might influence these decisions in the future.
The weighted selection process does not mandate any specific wage level; employers remain legally obligated to pay H-1B workers at least the prevailing wage or the actual wage, whichever is higher.
The commenter further estimated that if the number of foreign STEM graduates from U.S. universities drops by 10 percent, due to policies that deter foreign students from enrolling or staying, this would reduce the total supply of high-skilled STEM workers in the United States by 1.9 percent. In turn, this reduction in high-skilled foreign STEM workers would decrease annual Total Factor Productivity growth by 0.024 to 0.048 percentage points. Over a decade, this would make U.S. GDP 0.24 to 0.48 percent smaller than it otherwise would have been. In today's terms, that would equal a loss of $72-$145 billion—comparable to the entire economy of a small U.S. state, such as Delaware or New Hampshire. The loss of international STEM talent would not just affect tech hubs like Silicon Valley and Boston, but also innovation clusters across the country—including the South, Midwest, and smaller cities that rely on international graduates to compete globally. These regions could see weakened innovation ecosystems and reduced competitiveness.
Another commenter stated international students are critical to the U.S. STEM workforce, making up about 20 percent of all STEM graduates and 44 percent of advanced STEM degree recipients. They contribute disproportionately to U.S. innovation, filing more patents and starting more businesses than U.S. natives or other immigrants. Similarly, although H-1B nonimmigrants are a small share of the total U.S. workforce, they make up a significant portion of highly educated workers in technology-intensive industries. The commenter cited academic research showing that H-1B workers earn more than similar U.S. workers, fill critical skill shortages, boost productivity, and drive innovation, helping the United States maintain a competitive edge in science and technology. According to the commenter, the proposed process could make it harder for international students to transition from F-1 to H-1B status, narrowing the early-career talent pipeline. This would reduce the economic benefits of the H-1B program and threaten U.S. competitiveness in key sectors. The potential costs of this reduction could far outweigh any wage gains from the new system. Finally, a commenter estimated that the present value of the lost contributions from even a single talented worker over a 30-40-year career would easily reach millions of dollars in economic value. Multiplied across 10,000 workers annually, the long-term cost to the American economy would reach hundreds of billions of dollars.
However, DHS disagrees that the H-1B weighted selection process would diminish these contributions or that the rule requires a separate productivity- or innovation-specific economic impact analysis. The commenters' discussion largely describes the macroeconomic benefits of high-skilled immigration in general, not the direct effects of any particular H-1B selection mechanism. The new weighted selection process does not reduce the overall number of H-1B cap-subject workers, but it changes the likely distribution of
Regarding Form I-129, H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement, the commenter claimed the additional questions 7 through 11 are unnecessary, as the LCA already provides information about the SOC code, wage level and area of intended employment. The commenter claimed that these questions are outside the scope of the proposed rulemaking, as these questions relate to the prevailing wage level determination and the specialty occupation determination whereas the proposed rule is limited to the issue of administering the registration process for cap-subject petitions. The commenter additionally
Further, the commenter said that DHS failed to adequately assess the burden of adding these questions to the form, as these questions are applicable to all H-1B petitioners, not just those that are cap-subject. The commenter claimed that “[t]he proposed rule lacks any assessment of the impact in terms of the total universe of petitions filed with USCIS that would be subject to and impacted by this change.”
Additionally, the commenter noted that the questions did not contain corresponding instructions. The commenter claimed that these questions are overly broad and confusing, and that the lack of instructions is a “fatal error.”
Finally, regarding the registration tool, the commenter stated that the proposed form does not provide meaningful guidance for situations in which the OEWS wage information is unavailable for the relevant SOC code. The commenter requested a link to DOL guidance and ideally more detailed instructional language.
These questions do not merely duplicate the LCA process. While the LCA does provide information about the SOC code, wage level, and area of intended employment, DHS cannot rely solely on the information provided on the LCA for registration purposes because the LCA process differs from the process by which a registrant selects a wage level on the registration. Specifically, the weighted selection process takes into account the highest wage level that the proffered salary equals or exceeds, whereas the LCA wage level is based solely on the requirements of the position. In instances where the wage level marked on the registration differs from the LCA wage level, USCIS will rely on these questions to assess whether the wage level marked on the registration was appropriate. These questions are necessary for USCIS to determine whether there was any gaming during the registration process, which is fully consistent with USCIS's authority to administer the cap selection process and ensure program integrity.
DHS disagrees with the commenter's assertion that these questions are outside the scope of DHS' authority or that DOL has “exclusive authority over LCAs.” Contrary to the commenter's assertion, DHS has broad authority to administer and enforce the INA.
DHS also disagrees with the claim that the burden estimate was inadequate because all petitioners, not just those that are cap-subject, need to respond to these questions. In the NPRM, DHS estimated the burden of these additional questions “for all H-1B petitions, not just H-1B cap-subject petitions, because these requirements would apply to any H-1B petitions.” 90 FR at 46011. DHS believes the proposed placement of these questions in section 1 of the supplement was reasonable, as section 1 requires petitioners to provide general information about the position including the major/primary field of study, rate of pay, SOC code, and NAICS code. DHS will maintain these questions in section 1 of the supplement.
Further, DHS declines to add corresponding instructions for these questions. DHS disagrees that these questions are overly broad and confusing, and instead, believes these questions are self-explanatory. These questions generally derive from DOL prevailing wage guidance, with which most if not all H-1B petitioners should be familiar.
Finally, DHS disagrees that the registration tool fails to provide adequate guidance. As stated in the NPRM, in the limited instance where there is no current OEWS prevailing wage information for the proffered position, the registrant would follow DOL guidance on PWDs to determine which OEWS wage level to select on the registration. 90 FR 45986, 45993 (Sept. 24, 2025). This sentence included a footnote to the proper guidance in effect as of the time of publication of the NPRM.
Numerous commenters provided comments outside the scope of this rulemaking (
• General comments about terminating the H-1B program or halting immigration in general;
• General comments about the qualities of H-1B workers;
• General comments calling for comprehensive H-1B reform and urging DHS to make structural changes, including changes to the statutory cap;
• Comments solely about the $100,000 fee pursuant to the H-1B Proclamation;
• Comments about H-1B renewals, including suggestions for new fees for renewals;
• General concerns about staffing or outsourcing companies, and requests to ban such companies from the H-1B program permanently or for a limited period of time;
• Comments that would require DOL action, such as increasing the H-1B prevailing wage and improving DOL audits;
• Comments that would require joint DHS and DOL action, such as enhanced employee screening and deploying a digital platform to aid recruitment of U.S. workers;
• Comments about the L-1 visa program and perceived abuse of that program;
• Comments about the F-1 visa program and OPT/Curricular Practical Training;
• Comments about H-4 nonimmigrant status and employment authorization for H-4 spouses;
• Comments about other immigration programs, including the J-1, O-1, and H-2 nonimmigrant classifications and the EB-1 immigrant classification.
Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 14192 (Unleashing Prosperity Through Deregulation) directs agencies to significantly reduce the private expenditures required to comply with Federal regulations and provides that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”
This rule has been designated a “significant regulatory action” that is economically significant, under section 3(f)(1) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
This rule is not an Executive Order 14192 regulatory action because it is being issued with respect to an immigration-related function of the United States. The rule's primary direct purpose is to implement or interpret the immigration laws of the United States (as described in INA sec. 101(a)(17), 8 U.S.C. 1101(a)(17)) or any other function performed by the U.S. Federal Government with respect to aliens. See OMB Memorandum M-25-20, Guidance Implementing Section 3 of Executive Order 14192, titled `Unleashing Prosperity Through Deregulation' (Mar. 26, 2025).
In this final rule, the estimated 10-year total benefits and transfers are 17 percent higher than in the NPRM. This change reflects updated data on the average tenure of cap-subject H-1B workers, including extensions. The NPRM assumed a 4-year average period of stay as an H-1B nonimmigrant. The final rule uses a 5-year average based on observed extensions, including those available beyond the standard six-year limit. The longer average duration means benefits and transfers accrue for more time, increasing the 10-year totals by accounting for an additional year of annual benefits ($502 million) and transfers ($858 million). Figures in Tables 4 and 16-21 have been updated to reflect the most recent data source and may differ immaterially from those in the NPRM. Table 1.2 summarizes the changes in estimated annualized and discounted impacts from the proposed rule to the final rule.
As discussed in the preamble, the purpose of this rule is to amend DHS regulations governing the process by which USCIS selects H-1B registrations for filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement will be suspended), by implementing a process in which all unique beneficiaries, while still randomly selected, will be weighted generally according to the highest OEWS wage level that the proffered wage equals or exceeds for the relevant SOC code in the area(s) of intended employment. Specifically, USCIS will weight and select each unique beneficiary (or petition, if registration is suspended) as follows: a beneficiary (or petition) assigned to wage level IV will be entered into the selection pool four times, a beneficiary (or petition) assigned to wage level III will be entered into the selection pool three times, a beneficiary (or petition) assigned to wage level II will be entered into the selection pool two times, and a beneficiary (or petition) assigned to wage level I will be entered into the selection pool one time.
For the 10-year implementation period of the rule (FY2026 through FY2035), DHS estimates the annual costs will be about $30 million. DHS estimates the annual net benefits (undiscounted) will be approximately $472 million in FY2026, $974 million in FY2027, $1,476 million in FY2028, $1,978 million in FY2029, and $2,480 million in each year from FY2030 through FY2035. DHS estimates the annualized net benefits of the rule will be about $1,925 million at 3 percent and $1,854 million at 7 percent. DHS estimates the annual transfers (undiscounted) will be approximately $858 million in FY2026, $1,717 million in FY2027, $2,575 million in FY2028, $3,434 million in FY2029 and $4,292 million in each year from FY2030 through FY2035. DHS estimates the annualized transfers of the rule will be about $3,343 million at 3 percent and $3,222 million at 7 percent.
Table 1.3 provides a detailed summary of estimated quantifiable and unquantifiable impacts of the final rule.
In addition to the impacts summarized in Table 1.3, and as required by OMB Circular A-4, Table 2 presents the prepared accounting statement showing the costs and benefits that will result in this final rule.
The H-1B nonimmigrant visa program allows U.S. employers to temporarily hire foreign workers to perform services in a specialty occupation, services related to a DOD cooperative research and development project or coproduction project, or services of distinguished merit and ability in the field of fashion modeling.
The number of aliens who may be issued initial H-1B visas or otherwise provided initial H-1B nonimmigrant status during any fiscal year has been capped at various levels by Congress over time, with the current numerical limit being 65,000 per fiscal year.
Under the current regulation, all petitioners seeking to file an H-1B cap-subject petition must first electronically submit a registration for each beneficiary on whose behalf they seek to file an H-1B cap-subject petition, unless USCIS suspends the registration requirement.
In general, prior to filing an H-1B petition, the employer is required to obtain a certified LCA from the DOL.
This final rule will amend DHS regulations concerning the selection of electronic registrations submitted by or on behalf of prospective petitioners seeking to file H-1B cap-subject petitions (or the selection of petitions, if the registration process is suspended), which includes petitions subject to the regular cap and those asserting eligibility for the advanced degree exemption, to allow for weighting and selection generally based on OEWS wage levels for simultaneously submitted registrations (including registrations submitted within the same window of time). When applicable, USCIS will weight and select the registrations for unique beneficiaries (or petitions) received generally based on the highest OEWS wage level that the beneficiary's proffered wage would equal or exceed for the relevant SOC code and in the area(s) of intended employment. Although the allocation of regular cap (65,000) slots and advanced degree exemption (20,000) slots are approximately 75 percent and 25 percent respectively, the multiple-stage random selection process results in an increased probability that H-1B beneficiaries with a qualifying master's degree or higher will be selected.
Table 3 shows the number of H-1B registrations received for beneficiaries without a qualifying master's degree (Non-master's), and with a qualifying master's degree or above (Master's or higher) for FY 2020 through FY 2024.
Table 4 shows the number of H-1B cap-subject petitions (Form I-129, Petition for Nonimmigrant Worker) received for non-master's and master's or higher as well as historical Form G-28 filings by attorneys or accredited representatives accompanying H-1B cap-subject petitions for FY 2020 through FY 2024. DHS notes that these forms are not mutually exclusive. Based on the 5-year average, DHS estimates 80 percent of H-1B cap-subject petitions will be filed with Form G-28.
In this analysis, DHS uses historical data of both registrations and received petitions to estimate the future registration and petition population. Specifically, DHS uses 5-year averages to estimate the number of registrations and H-1B cap-subject petitions received annually. DHS does not adjust these estimates to account for the H-1B Proclamation because, as discussed earlier in this preamble, (1) that Proclamation applies to only a subset of H-1B petitions, (2) exceptions to the $100,000 payment may be granted by the Secretary of Homeland Security to any individual alien, all aliens working for a company, or all aliens working in an industry; and (3) the H-1B Proclamation will expire, absent extension, 12 months from its effective date. This rule, in contrast, will continue indefinitely. DHS acknowledges that the rule's effects could differ in years when the H-1B Proclamation or a similar policy is in effect, but for the reasons stated above DHS is unable to adjust for the potential impacts of the Proclamation.
For purposes of the weighting and selection process in this rulemaking, a registrant will be required to select the box for the highest OEWS wage level (“wage level IV,” “wage level III,” “wage level II,” or “wage level I”) that the beneficiary's proffered wage generally equals or exceeds for the relevant SOC code in the area(s) of intended employment.
For registrants relying on a prevailing wage that is not based on the OEWS survey, if the proffered wage is less than the corresponding level I OEWS wage, the registrant will select the “wage level I” box on the registration form.
DHS recognizes that some occupations do not have current OEWS prevailing wage information available on DOL's OFLC Wage Search website.
This change will add additional requirements for registrants. DHS estimates that this change will increase the time burden by 20 minutes for each registration (0.3333 hours) from 36 minutes (0.6 hours) to 56 minutes (0.9333 hours). The change will offer qualitative benefits. Specifically, submission of additional wage level information and the SOC code on both an electronic registration and on Form I-129 will result in the benefit of allowing USCIS to further improve the integrity of the H-1B cap selection and adjudication processes.
Table 5 shows the number of total H-1B registrations and estimated total registrations with Form G-28 attached. Based on a 5-year annual average, DHS estimates the annual average registrations are 465,523. The estimated 5-year annual average of registrations with Form G-28 attached is 180,970.
DHS estimates the opportunity cost of time of gathering and preparing information by multiplying the estimated increased time burden for those submitting an H-1B registration by the compensation rate of a human resources (HR) specialist, in-house lawyer, or outsourced lawyer, respectively.
In order to estimate the opportunity cost of time for completing and submitting an H-1B registration, DHS assumes that a prospective petitioner will use an HR specialist, an in-house lawyer, or an outsourced lawyer to prepare an H-1B registration.
DHS accounts for worker benefits when estimating the total costs of compensation by calculating a benefits-to-wage multiplier using the Bureau of Labor Statistics (BLS) report detailing the average employer costs for employee compensation for all civilian workers in major occupational groups and industries. DHS estimates that the benefits-to-wage multiplier is 1.45 and, therefore, is able to estimate the full opportunity cost per registration, including employee wages and salaries and the full cost of benefits, such as paid leave, insurance, retirement, etc.
The DHS analysis in Exercise of Time-Limited Authority to Increase the Fiscal Year 2018 Numerical Limitation for the H-2B Temporary Nonagricultural Worker Program, 83 FR 24905 (May 31, 2018), used a multiplier of 2.5 to convert in-house attorney wages to the cost of outsourced attorney wages.
The U.S. Immigration and Customs Enforcement rule, Final Small Entity Impact Analysis: `Safe-Harbor Procedures for Employers Who Receive a No-Match Letter' at G-4 (Aug. 25, 2008),
DHS does not know the exact number of registrants who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and, therefore, provides an average. The estimated number of registrations with Form G-28 attached is 180,970 from Table 5. Table 6 shows the current total annual average cost for a lawyer to complete the registration on behalf of a prospective petitioner. The current opportunity cost of time for submitting an H-1B registration using an attorney or other representative is estimated to range from $13,357,758 to $23,030,242, with an average of $18,194,000.
To estimate the current remaining opportunity cost of time for an HR specialist submitting an H-1B registration without a lawyer, DHS applies the estimated public reporting time burden (0.6 hours) to the compensation rate of an HR specialist. Table 7 estimates the current total annual opportunity cost of time to HR specialists completing and submitting an H-1B registration will be approximately $9,053,907.
Table 8 shows the final estimated time burden will increase by 20 minutes (0.3333 hours) to 56 minutes (0.9333 hours) to the eligible population and compensation rates of those who may submit registrations with or without a lawyer due to changes in the instructions, adding clarifying language regarding denying or revoking approved H-1B petitions, adding passport or travel document instructional language, and providing the corresponding wage level, the appropriate SOC code of the proffered position, and the area of intended employment that served as the basis for the OEWS wage level indicated on the registration. DHS does not know the exact number of registrants who will
To estimate the current remaining opportunity cost of time for an HR specialist submitting an H-1B registration without a lawyer, DHS applies the final estimated public reporting time burden (0.9333 hours) to the compensation rate of an HR specialist. Table 9 estimates the current total annual opportunity cost of time to HR specialists completing and submitting the H-1B registration will be approximately $14,083,353.
DHS estimates the total additional annual cost for attorneys and HR specialists to complete and submit H-1B registrations will be approximately $15,136,213 as shown in Table 10. This table shows the current total opportunity cost of time to submit an H-1B registration and the final total opportunity cost of time.
In the current selection process for H-1B registrations, USCIS randomly selects from among properly submitted registrations the number of unique beneficiaries projected as needed to reach the H-1B numerical allocations. This final rule will change the way USCIS selects unique beneficiaries, and the registrations submitted on their behalf for H-1B cap-subject petitions (or petitions, if the registration process is suspended), including those eligible for the advanced degree exemption. USCIS will weight and select the registrations for unique beneficiaries (or petitions) received generally on the basis of the highest OEWS wage level that the beneficiary's proffered wage will equal or exceed for the relevant SOC code in the area(s) of intended employment. The changes to weight and select registrations will result in the benefit of increasing the chance that registrations or petitions, as applicable, will be selected for higher paid, and presumably higher-skilled or higher-valued, beneficiaries.
Congress has established the limits on certain initial H-1B nonimmigrant visas or status grants each fiscal year not to exceed 65,000 (regular cap) with an annual exemption for those who have earned a qualifying U.S. master's degree or higher from a U.S. institution of higher education not to exceed 20,000 (advanced degree exemption). USCIS monitors the number of H-1B registrations for unique beneficiaries it receives during the announced registration period. At the conclusion of the registration period, USCIS randomly selects from among properly submitted registrations a number of registrations for unique beneficiaries projected as needed to reach the H-1B numerical allocations. Although the allocation of regular cap (65,000) and advanced degree exemption (20,000) are approximately 75 percent and 25 percent respectively, the multiple-stage random selection process results in an increased probability that H-1B beneficiaries with a master's degree or higher will be selected. Table 11 shows the historical numbers of H-1B cap-subject petitions received by wage level and by the beneficiary's degree type for FY 2020 through FY 2024. Based on the 5-year annual average, DHS estimates the annual average receipts of H-1B cap-subject petitions are 94,900 per year. The 5-year annual average of non-master's degree receipts is 46,379, and the 5-year annual average of master's or higher degree receipts is 48,522.
Table 12 presents the percentage of H-1B cap-subject receipts by wage levels for the estimated 94,900 average annual receipts, based on corresponding 5-year averages for FY 2020 through FY 2024. For both non-master's degree and master's or higher degree, wage level II has the most H-1B receipts followed, in order, by level I, level III, and level IV. Master's or higher degree petitions have slightly more receipts in level I and level II as shown by the cumulative percentage of 86 percent compared to the non-master's degree petitions' cumulative percentage of 81 percent. Currently, wage level data are only collected for those beneficiaries who were selected in the registration selection process and on whose behalf a Form I-129 for H-1B petition was filed because H-1B petitioners must obtain a certified LCA from DOL that includes the applicable wage level. An LCA is not a requirement for registration. Therefore, DHS does not have information on the number of registrations for each wage level. DHS assumes that the H-1B cap-subject petition receipts percentages by wage levels from LCA data are predictive of the H-1B registrations percentages by wage levels. However, to the extent that proffered wages may exceed the wage levels indicated on the LCA, the projections in this discussion will represent the upper bound of the impact of the final rule. DHS does not have a way to estimate how many registrants will select a higher wage level than required on the LCA, so DHS uses LCA wage level data as a reasonable proxy for registration wage level data.
DHS uses the percentages of H-1B cap-subject petition receipts by wage level to estimate the distribution of registrations for beneficiaries by wage level. Table 12 shows that the distribution of current H-1B cap-subject petition receipts, 94,900, by wage level is 28 percent, 55 percent, 12 percent, and 5 percent for wage levels I, II, III, and IV, respectively. DHS uses the 5-year average of the number of unique beneficiaries with eligible registrations, 320,711 from Table 3 and applies the distribution of current H-1B cap-subject petition receipts to estimate the number of unique beneficiaries with eligible registrations by wage level shown in Table 12.
This final rule will change the way USCIS selects registrations for H-1B cap-subject petitions (or petitions, if the registration process is suspended), including those eligible for the advanced degree exemption. When random selection is required, USCIS will weight and select unique beneficiaries with properly submitted registrations generally based on the highest OEWS wage level that the beneficiary's proffered wage will equal or exceed for the relevant SOC code in the area(s) of intended employment. A registrant will be required to select the box for the highest OEWS wage level (“wage level IV,” “wage level III,” “wage level II,” or “wage level I”) that the proffered wage generally equals or exceeds for the relevant SOC code in the area of intended employment or otherwise select the appropriate box according to the form instructions. Registrations for unique beneficiaries or petitions will be assigned to the relevant OEWS wage level and entered into the selection pool as follows: registrations for unique beneficiaries or petitions assigned wage level IV will be entered into the selection pool four times, those assigned wage level III will be entered into the selection pool three times, those assigned wage level II will be entered into the selection pool two times, and those assigned wage level I will be entered into the selection pool one time. Each unique beneficiary will only be counted once toward the numerical allocation projections, regardless of how many registrations were submitted for that beneficiary or how many times the beneficiary is entered in the selection pool. If a beneficiary has multiple registrations, the unique beneficiary will be allotted to the lowest wage level of all registrations submitted on his or her behalf. This rule will increase the odds of being selected to file H-1B cap-subject petitions for beneficiaries with proffered wages that correspond to higher wage levels. DHS examines the impacts of the change in three different dimensions: probability of being selected, estimated number of unique beneficiaries selected by wage levels, and economic impact of the change.
Under the current H-1B selection process, if more registrations for unique beneficiaries are submitted than projected as needed to reach the numerical allocations, USCIS randomly selects from among unique beneficiaries for whom registrations were properly submitted, the number of unique beneficiaries projected as needed to reach the H-1B numerical allocations. Under this random H-1B registration selection process, USCIS first selects from a pool of all unique beneficiaries, including those eligible for the advanced degree exemption. USCIS then selects from the remaining unique beneficiaries a sufficient number projected as needed to reach the advanced degree exemption. 8 CFR 214.2(h)(8)(iii)(A)(
Table 13 compares the probabilities of being selected and corresponding estimated petition receipts by wage level for the current random selection process and new weighted selection process. Under the current random selection process in which every unique beneficiary has an equal chance of being selected, the probability of being selected to file an H-1B cap-subject petition for a unique beneficiary is 29.59 percent across all the wage levels. Under the new weighted selection, DHS
Table 14 shows the estimated difference in H-1B cap-subject petitions by wage level from the current to the new selection process. DHS applies 85,000, which is the statutory limit on the number of initial H-1B visas, rather than the historical 5-year annual average of H-1B cap-subject petition receipts, which is 94,900,
All LCAs that are required for H-1B petitions specify SOC codes for the prospective jobs. The top two SOC major group codes, Computer and Mathematical Occupations (2-digit SOC major group code 15) and Architecture and Engineering Occupations (2-digit SOC major group code 17), make up 81 percent of H-1B cap-subject petitions received in FY 2020-FY 2024. The top five SOC major group codes make up 96 percent of total petitions. Figure 1 breaks out the wage levels for these SOC codes. The H-1B cap-subject petitions by wage level presented in previous tables show that most of the petitions are at wage level II. As seen in Figure 1, this is driven by Computer and Mathematical Occupations. Petitions for Computer and Mathematical Occupations are overwhelmingly at wage level II, whereas petitions for Architecture and Engineering Occupations are greater at wage level I than wage level II. For the rest of the top five SOC major group codes, the number of H-1B cap-subject petitions filed at wage level II is greater than level I, but not as drastically different as Computer and Mathematical Occupations.
Given that the analysis estimates a 48 percent drop in selections for wage level I beneficiaries, the distribution of wage levels at the SOC code will determine the effects of the final rule for occupations under that SOC code. DHS examines these effects for the top two SOC major group codes (15 and 17) by breaking out the distribution into 6-digit SOC codes. The results are summarized in Figure 2 and Figure 3.
Of the 470,023 H-1B cap-subject petitions received in FY 2020-FY 2024, 69 percent (326,000) were associated with SOC major group 15 (Computer and Mathematical Occupations). This major occupation group contains 460 distinct 6-digit SOC codes, each corresponding to a different detailed occupation. Examples of detailed occupations include 15-1252 (Software Developers) and 15-2051 (Data Scientists). The top five detailed occupations make up 71 percent of the 326,000 petitions received under SOC major group 15. Figure 2 details the counts for these five detailed occupations, separated by whether they were grouped at wage level I or at one of the higher wage levels (II, III, IV). As Figure 2 shows, all detailed occupations under SOC major group 15 have counts of petitions in wage level I and in higher wage levels except 15-2041 (Statistician).
The final rule does not project a significant increase in the selection of higher wage level workers in the 15-2041 (Statistician) occupation.
After SOC major group code 15, the major group with the next greatest number of petitioners is SOC major group code 17 (Architecture and Engineering Occupations). This major group had 52,402 petitions filed in FY 2020 through FY 2024. Figure 3 details the counts for the top five detailed occupations within SOC major group code 17 that had the greatest number of petitions in FY 2020 through FY 2024. As for SOC major group code 17, many of these occupations have petition counts in wage level I and in higher wage levels. SOC code 17-2051 (Civil Engineers) and 17-1011 (Architects, Except Landscape and Naval) are also a notable exception since all the petitions under this code in the figure were wage level I. The final rule will reduce the number of selected H-1B registrations for Civil Engineers and Architects by up to 48 percent, assuming such registrations will be submitted at wage level I consistent with historical LCA wage level data for Civil Engineers.
Most of the petitions are filed with the same top 6-digit SOC codes across wage levels, with several exceptions. The final rule projects that almost half of the registrations for beneficiaries with a proffered wage that corresponds to a wage level I typically associated with entry-level workers will not be selected but registrations for beneficiaries with a proffered wage that corresponds to a higher wage level typically associated with more experienced workers will be selected in the same occupational categories.
A prospective petitioner (employer) may respond to the final rule in several ways. An employer could choose to increase the proffered wage to increase the probability of getting its H-1B registration selected. If employers choose to increase the proffered wage, or if employers were already offering a
Other prospective employers may leave the position vacant if the alien beneficiary they registered is not selected, because they will not be able to justify raising the proffered wage to an amount that corresponds to a higher wage level and that will have improved their chance of selection. These employers might be unable to fill their position(s). And other employers might incur additional costs to find available replacement workers, such as by seeking out and/or training other workers.
The effects of this rulemaking on any given employer will depend in part on the interaction of a number of complex variables that constantly are in flux, including national, state, and local labor market conditions, economic and business factors, the type of occupations and skills involved, and the substitutability between H-1B workers and U.S. workers.
DHS acknowledges costs incurred associated with loss of output from not being able to employ H-1B beneficiaries. Costs incurred associated with loss of potential output will be discussed as a transfer later in this section.
Table 15 shows the annual quantified economic impacts of the final rule. To estimate the economic impact of the final rule, DHS uses the average annual salary of H-1B cap-subject workers by wage level in FY 2024. In Table 15, the average annual salary for wage level I is $85,006, for wage level II is $103,071, for wage level III is $131,454, and for wage level IV is $162,528. The estimated total annual salary paid to H-1B cap-subject workers under the current selection process in FY 2024 dollars will be $8,862,595,799. However, under the weighted selection process, the estimated total annual salary paid to initial H-1B cap-subject workers will increase because there will be fewer wage level I workers and more wage level II, III, and IV workers. DHS estimates that the total annual salaries paid to H-1B workers will increase by $502,080,486 to $9,364,676,285. The $502 million increase is the estimated quantifiable economic benefit resulting from the final rule in the first year.
The maximum initial granted period of stay for H-1B status is three years, with extensions for up to three years thereafter. An H-1B worker is generally limited to a six-year period of authorized stay, unless eligible for an exemption from the general 6-year period of stay limitation under 8 CFR 214.2(h)(13)(iii)(D) and (E). Based on a DHS analysis of FY2017 through FY2019 cohort of initial H-1B cap-subject approvals, the average total validity period, including extensions, is 5.2 years among beneficiaries whose extension basis for classification is “Continuation of previously approved employment without change with the same employer.”
The estimated economic benefits in the first year when the new registration selection process is in effect are approximately $502 million. Assuming H-1B cap-subject workers work an average of five years in the United States, these benefits will accrue for four additional years. The benefits in the second year will be about $1,004 million, which includes the initial $502 million in benefits accrued from new H-1B cap-subject workers with higher wages in the first year plus an estimated $502 million in benefits accrued from new H-1B cap-subject workers in the second year. Similarly, the benefits in years 3 and 4 are $1,506 million and $2,008 million, respectively, reflecting granted H-1B cap-subject workers
In addition to the $502 million in first-year benefits discussed previously, the $9.4 billion in first-year H-1B wages resulting from the final rule also contains a transfer from wage level I workers to wage level II, III, and IV workers. When a regulation generates a gain for one group and an equal-dollar-value loss for another group, the regulation is said to cause a transfer from the latter group to the former.
Assuming H-1B cap-subject workers work an average of five years in H-1B nonimmigrant status, transfers will also accrue for four additional years. The transfers in the second year will be approximately $1,717 million and in years 3 and 4 the transfers will be about $2,575 million and $3,434 million, respectively. In years 5 and beyond, the transfers will be approximately $4,292 million. These transfers are the costs incurred associated with loss of output from not being able to employ the labor of wage level I H-1B workers for the employers who registered H-1B workers at wage level I. Whereas the transfers are a benefit to the employers who registered H-1B workers at higher wage levels because they will expect gains in output by being able to employ H-1B workers. To the extent that benefits and transfers are estimated using LCA data, and proffered wages may exceed the wage levels indicated on the LCA, the projections in this discussion will represent the upper bound of the impact of the final rule.
There is an unquantifiable transfer from the employers who will lose an opportunity to employ wage level I H-1B workers to the employers who will gain an opportunity to employ higher wage level workers in terms of output produced. When an employer gets into an economic activity of hiring workers and producing output, they will expect the output to at least recover the labor cost of hiring workers. DHS is not able to quantify this producer surplus. According to this analysis, half of the employers who hire H-1B workers at wage level I will lose the opportunity to gain the surplus under the final rule. This gained surplus will be transferred to the employers who will have an opportunity to hire workers at higher wage levels.
By engaging in a wage-level-based weighting of registrations for unique beneficiaries, DHS will increase the chances that initial H-1B visas and status grants will go to higher-skilled or higher-paid beneficiaries. Facilitating the admission of higher-skilled workers “will benefit the economy and increase the United States' competitive edge in attracting the `best and the brightest' in the global labor market,”
Unless registration is suspended, a petitioner may file an H-1B petition for a beneficiary who may be counted under section 214(g)(1)(A) of the Act, or eligible for exemption under section 214(g)(5)(C) of the Act, only if the petition is based on a valid selected registration.
This change will add additional questions for petitioners for both the Form I-129 and the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement (paper and online e-file). DHS estimates that these additional questions will increase the time burden by 15 minutes for each petition (0.25 hours) for all H-1B petitions, not just H-1B cap-subject petitions, because these questions will be on the forms completed and submitted by all H-1B petitioners. The change will offer qualitative benefits. Specifically, submission of additional information on the petition form (including wage level information and the SOC code), and evidence of the basis of the wage level selected will allow USCIS to further improve the integrity of the H-1B cap selection and adjudication processes.
Based on a 5-year annual average, between FY 2020 and FY 2024 from Table 16, DHS estimates the annual average H-1B petition receipts are 422,759. The 5-year annual average of Form I-129 H-1B receipts with Form G-28 is 336,023.
DHS does not know the exact number of petitioners who will choose an in-house or an outsourced lawyer but assumes it may be a 50/50 split and therefore provides an average. Table 17 shows the additional annual average cost for a lawyer to complete the petition on behalf of a petitioner. The additional opportunity cost of time for completing and submitting an H-1B petition using an attorney or other representative is estimated to range from $10,334,387 to $17,817,620 with an average of $14,076,004.
To estimate the current remaining opportunity cost of time for an HR specialist submitting an H-1B petition without a lawyer, DHS applies the estimated increased public reporting time burden 15 minutes (0.25 hours) to the compensation rate of an HR specialist. Table 18 estimates the current total annual opportunity cost of time to HR specialists completing and submitting an H-1B petition will be approximately $1,149,903.
DHS estimates the additional total annual cost for attorneys and HR specialists to complete and submit an H-1B petition will be $15,225,907 as shown in Table 19.
DHS is revising 8 CFR 214.2(h)(10)(ii) to clarify that a valid registration must represent a bona fide job offer. The final rule will also require an H-1B petition filed after registration selection to contain and be supported by the same identifying information and position information, including SOC code, provided in the selected registration and indicated on the LCA used to support the petition.
The final rule will allow USCIS to deny a subsequent new or amended petition filed by the petitioner, or a related entity, on behalf of the same beneficiary if USCIS were to determine that the filing of the new or amended petition was part of the petitioner's attempt to unfairly increase the odds of selection during the registration (or petition, if applicable) selection process, such as by reducing the proffered wage to an amount that will be equivalent to a lower wage level than that indicated on the original registration or petition.
As is currently required, the entity submitting a registration or petition will be required to certify the veracity of the contents of such submissions. DHS estimates that the final rule could lead to an increase in the number of denials or revocations of H-1B petitions. DHS cannot quantify this impact. The changes in process integrity will lead to improved program integrity for USCIS.
DHS considered proposing the methodology from the 2020 H-1B Selection NPRM (85 FR 69236 (Nov. 2, 2020)) and the 2021 H-1B Selection Final Rule (86 FR 1676 (Jan. 8, 2021)). Under the 2021 H-1B Selection Final Rule, USCIS would have ranked and selected registrations generally based on the highest prevailing wage level that the proffered wage equals or exceeds for the relevant SOC code and area(s) of intended employment. The rule was expected to result in the likelihood that registrations for level I wages would not be selected, as well as a reduced likelihood that registrations for level II would be selected. As discussed earlier in this preamble, DHS believes the selection process finalized under the 2021 H-1B Selection Final Rule was a reasonable approach to facilitate the admission of higher-skilled or higher-paid workers. However, DHS believes that rule did not capture the optimal approach because it effectively left little or no opportunity for the selection of lower wage level or entry level workers, some of whom may still be highly skilled. DHS also considered various alternatives suggested by commenters, such as weighted selection by various factors (occupational preferences, industry preferences, preferences for certain educational degrees, etc.), but declined to adopt those suggested alternatives for the reasons previously explained in the comment responses.
In this section, DHS presents the total annual costs, benefits, and transfers annualized over a 10-year period of analysis. DHS summarizes the annual costs, benefits, and transfers (undiscounted) of this final rule in Table 20. DHS estimates the total annual cost will be $30,362,120 for FY 2026 through FY 2035. In Table 20, DHS estimates the total annual benefit will be $502,080,486 in FY2026, $1,004,160,972 in FY2027, $1,506,241,458 in FY2028, $2,008,321,944 in FY2029, and $2,510,402,430 in each year from FY2030 through FY2035. DHS estimates annual transfers (undiscounted) will be $858,470,298 in FY2026, $1,716,940,595 in FY2027, $2,575,410,893 in FY2028, $3,433,881,191 in FY2029, and $4,292,351,489 in each year from FY2030 through FY2035. The net benefit will be calculated by subtracting the cost from the benefit each year. 10-Year undiscounted total net benefits to the public of $19,779,598,238 are the total benefits minus total costs.
Table 21 illustrates that over a 10-year period of analysis of the final rule, DHS estimates that annualized net benefits will be $1,924,995,394 discounted at 3 percent and $1,854,251,990 discounted at 7 percent. Table 21 also shows that over a 10-year period of analysis of the final rule, that annualized transfers will be $3,343,321,229 discounted at 3 percent and $3,222,362,314 discounted at 7 percent.
DHS is revising the regulations governing the selection of registrations for unique beneficiaries submitted by prospective petitioners (also referred to as registrants) seeking to file H-1B cap-subject petitions (or the selection of petitions, if the registration process were suspended). This final rule will require updates to USCIS IT systems and additional time spent by USCIS to review newly required information during the adjudication of the petition and maintain program integrity.
The INA provides for the collection of fees at a level that will ensure recovery of the full costs of providing adjudication and naturalization services by DHS, including administrative costs and services provided without charge to certain applicants and petitioners.
The Regulatory Flexibility Act of 1980 (RFA), Public Law 96-354, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, 5 U.S.C. 601 through 612, requires Federal agencies to consider the potential impact of regulations on small businesses, small governmental jurisdictions, and small organizations during the development of their rules. 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.
DHS believes that the changes in this final rule will have a significant economic impact on a substantial number of small entities that file H-1B cap-subject petitions.
DHS's objectives and legal authority for this final rule are discussed earlier in the preamble. DHS is amending its regulations governing H-1B specialty occupation workers. The purpose of the changes is to better ensure that initial H-1B visas or grants of status are more likely to be awarded to petitioners seeking to employ higher-paid and higher-skilled beneficiaries, while not effectively precluding those at lower wage levels. DHS believes these changes will disincentivize use of the H-1B program to fill relatively lower paid, lower skilled positions, better aligning the H-1B program with congressional intent.
Further, another commenter stated that despite acknowledging the negative impacts for small businesses, DHS did not propose exemptions, transitional relief, or offsetting mechanisms that 5 U.S.C. 603 requires for small entities. Some commenters recommended what analyses would be needed to ensure a rigorous cost-benefit analysis. A commenter stated that the analysis should incorporate empirical data by industry and firm size, model cumulative costs and opportunity losses, and explicitly consider flexible approaches that preserve program integrity while mitigating disproportionate harm to small U.S. employers. Another commenter stated that DHS should “prepare a supplemental regulatory analysis under E.O. 12866 and OMB Circular A-4 that: (a) quantifies the distributional effects and transfers produced by weighting across firm sizes, regions, and occupations; (b) rigorously evaluates reasonable alternatives (including keeping a beneficiary-centric random selection, partial weighting, geographic/occupation-adjusted weighting, and small-entity safeguards); and (c) explains why the chosen approach best meets the stated objectives at least cost.” Furthermore, the commenter suggested the need for an IRFA, including a robust analysis of significant alternatives to minimize small entity impacts. Finally, a commenter stated that the DHS analysis should have accounted for other major costs, such as reduced competitiveness for U.S. businesses in terms of lost market share and innovation, weakened research institutions, the strategic advantage gained by competitor nations that attract the excluded talent, inefficiencies from wage inflation, barriers to entrepreneurship for small businesses, and reduced innovation and business formation.
The RIA quantifies transfers and evaluates distributional effects across SOC codes, and the IRFA presents impacts by firm size. With respect to geography, the weighted selection process generally relies on prevailing wage levels by occupation and 5. area of intended employment, which normalizes for local labor markets and mitigates any systematic advantage for higher-cost regions.
DHS considered reasonable alternatives against the rule's objectives—increasing the chance of selection for higher-paid, higher skilled aliens while maintaining program integrity and administrative efficiency—and explained why other options were not adopted (see 5. Alternatives Considered). Retaining a purely random selection process (with or without additional anti-fraud measures) does not advance the policy allocation objective and preserves incentives for mass registration at lower wage levels. Anti-fraud tools are complementary to, not substitutes for, an allocation mechanism. Partial weighting does not materially improve the status quo, while very steep weighting would overly favor high-wage cases and likely crowd out lower wage levels entirely.
DHS acknowledges that the rule is likely to have a significant economic impact on a substantial number of small entities. Under the new rule, employers or industries with higher share of wage level III or IV may see improved selection outcomes. In contrast, those with a higher share of wage level I may experience lower relative selection outcomes. However, DHS does not believe it would be fair, effective, and administratively efficient or practical within the H-1B cap selection process to create carveouts for specific employers, industries, or occupations. Accordingly, DHS is finalizing the weighted cap selection process as proposed to ensure that all employers—including small entities and those in essential occupations—retain meaningful opportunities for selection.
DHS appreciates the commenter's concerns regarding the potential negative impact U.S. competitiveness, innovation, research, entrepreneurship, and business growth on small businesses and their role in creating barriers to small business entrepreneurship. However, the RFA
The Chief Counsel for Advocacy of the Small Business Administration did not file any comments in response to this rule.
For this analysis, DHS used internal data for employers filing H-1B cap-subject petitions for FY 2024 merged with LCA data.
To determine whether an entity is small for purposes of the RFA, DHS first identified the entity's NAICS code and then used SBA guidelines to classify the revenue or employee count threshold for each entity. Some entities were classified as small based on their annual revenue, and some by their number of employees. Approximately 20 percent of petitions were not matched using SBA's table of size standards. These unmatched employers were considered small entities if their number of employees was less than 500.
Using FY 2024 internal data on actual filings of H-1B cap-subject petitions, there were 94,873 petitions filed. DHS recognized 23,452 unique entities and was able to classify 22,453 as either small entities or not small entities. DHS determined that 76 percent of the total 22,453 unique entities that filed Form I-129 under the H-1B classification and cap-subject were small entities.
Table 23 shows the Top 10 NAICS Code for small entities filing H-1B cap-subject petitions for FY2024. The table shows the size standards for each NAICS code in millions of dollars or by number of employees. Of the top 10 NAICS codes three are related to the computer industry, and two are related to manufacturing. The remaining five top industries are engineering services, offices of lawyers, research and development in biotechnology,
Table 24 shows the number of H-1B cap-subject petitions filed by small entities for FY 2024 by wage level. Out of 94,873 H-1B petitions filed, DHS was able to classify the petitioners of 82,204 H-1B petitions as either small entities or not small entities and identify the number of petitions filed by such petitioners by wage level, as well as the percentage of petitions filed at each wage level by small entities. As shown in Table 24, more small entities filed petitions at wage levels I and II (61 percent and 47 percent) than at wage levels III and IV (25 percent and 29 percent).
The quantifiable economic impact, represented as a percentage, for each small entity is the total quantified costs of the changes divided by the entity's sales revenue. There are two sources of quantifiable costs. One is the opportunity cost of time to submit H-1B registrations or to file H-1B petitions, or both. This cost is relatively small, so it is not considered in this analysis. The other cost is the loss of output for employers who registered with wage level I but are not selected due to the change in the selection process by the final rule and thus are unable to file an H-1B petition. DHS estimates the loss of output as a transfer, $858,470,298, from the lost wages of wage level I workers to those higher wage level workers. The loss of output from the loss of labor is considered as a cost to employers because less output means less profit. The loss of output from the loss of labor is estimated using the wage of the lost labor, which is the wage level I average annual salary, $85,006 (Table 15). Therefore, DHS projects in the final rule that some small entities who filed H-1B petitions at wage level I will incur costs of approximately $85,006.
DHS divides $85,006 by the revenue for each entity then finds that 5,193 small entities will experience a cost increase that is greater than 1 percent of its revenue and 2,665 will experience a cost increase that is greater than 5 percent of its revenue.
Based on this analysis, DHS believes that the changes in this final rule will have a significant economic impact on a substantial number of small entities that file H-1B cap-subject petitions.
The selection process in the final rule will result in an additional burden to employers reporting additional information, including a beneficiary's appropriate wage level, SOC code, and area of intended employment in the registration system, on the Form I-129 petition, and on the H-1B and H-1B1 Data Collection and Filing Fee Exemption Supplement to Form I-129. DHS estimates the increased burden to submit an H-1B registration is 20 minutes and the increased burden to file the Form I-129, Petition for Nonimmigrant Worker, to request H-1B classification is 15 minutes. DHS believes this will be completed by an HR specialist, in-house lawyer, or outsourced lawyer.
DHS considered alternative solutions that are described in further detail in the section on Executive Orders 12866 and 13563 earlier in the preamble of this rule, as well as in the comment summaries and responses. While the collection of additional information and the change to a weighted selection process will impose a burden on some prospective small employers, USCIS found no other alternatives that achieved the stated objectives with less burden to small entities.
Under the 2021 H-1B Selection Final Rule, USCIS would have ranked and selected registrations generally based on the highest prevailing wage level. The rule was expected to result in the likelihood that registrations for level I wages would not be selected, as well as a reduced likelihood that registrations for level II would be selected. Compared to this final rule, DHS believes that the 2021 H-1B Selection Final Rule approach would have an even greater negative effect on small businesses hiring lower wage level or entry level workers.
As stated earlier in this analysis, this final rule will also benefit small entities that are applying for higher-earning employees who will be weighted at level III or level IV as they will have a greater chance of their employees being selected compared to the current random selection process. Thus, it is possible that any alternative that imposes a lower burden on small entities generally could also reduce those employers' chance of selection for higher wage level workers. For example, if USCIS were to artificially elevate the corresponding wage level for small businesses compared to other businesses, such an alternative could actually decrease the likelihood that those small entities' registrations with a level IV wage will be selected, relative to the selection process under the final rule, if other small businesses are artificially elevated to level IV equivalency based on factors other than the corresponding wage amount. Furthermore, given that 76 percent of unique cap-subject H-1B filers are small entities, and 47 percent of H-1B cap petitions in FY 2024 were filed by small entities, any alternative process that provides a different, preferential weighting scheme especially for small entities would undermine the overall utility of this final rule, which is to generally favor the allocation of H-1B visas to higher-skilled and higher-paid aliens.
The Office of Information and Regulatory Affairs has determined that this final rule is a major rule, as defined in 5 U.S.C. 804, also known as the “Congressional Review Act” (CRA), as enacted in section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, sec. 251, 110 Stat. 868, 873, and codified at 5 U.S.C. 801
The Unfunded Mandates Reform Act of 1995 (UMRA) is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and Tribal governments. Title II of UMRA requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a final rule that includes any Federal mandate that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector.
The inflation adjusted value of $100 million in 1995 is approximately $206 million in 2024 based on the Consumer Price Index for All Urban Consumers (CPI-U).
Calculation of inflation-adjusted value: Convert 106% inflation percentage to an inflation factor = 1 + 106/100 = 2.06. $100 million in 1995 dollars × 2.06 = $206 million in 2024 dollars.
This final rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this final rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.
This final rule was drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform. This final rule was written to provide a clear legal standard for affected conduct and was carefully reviewed to eliminate drafting errors and ambiguities, so as to minimize litigation and undue burden on the Federal court system. DHS has determined that this final rule meets the applicable standards provided in section 3 of E.O. 12988.
This final rule does not have “tribal implications” because it will not have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, E.O. 13175, Consultation and Coordination with Indian Tribal Governments, requires no further agency action or analysis.
DHS and its components analyze regulatory actions to determine whether the National Environmental Policy Act (NEPA), 42 U.S.C. 4321
NEPA allows Federal agencies to establish, in their NEPA implementing procedures, categories of actions (“categorical exclusions”) that experience has shown do not, individually or cumulatively, have a significant effect on the human environment and, therefore, do not require an environmental assessment or environmental impact statement.
Under DHS NEPA implementing procedures, for an action to be categorically excluded, it must satisfy each of the following three conditions: (1) the entire action clearly fits within one or more of the categorical exclusions; (2) the action is not a piece of a larger action; and (3) no extraordinary circumstances exist that create the potential for a significant environmental effect.
This final rule is limited to amending DHS's existing regulations at 8 CFR 214.2(h)(8), (10), and (11) to provide for the selection of unique beneficiaries toward the H-1B annual numerical limitations and the advanced degree exemption in a weighted manner based on the wage level listed in each H-1B registration that corresponds to the prospective petitioner's proffered wage. DHS has reviewed this final rule and finds that no significant impact on the environment, or any change in environmental effect, will result from the amendments being promulgated in this final rule.
Accordingly, DHS finds that the promulgation of this final rule's amendments to current regulations clearly fits within categorical exclusion A3 established in DHS's NEPA implementing procedures as an administrative change with no change in environmental effect, is not part of a larger Federal action, and does not present extraordinary circumstances that create the potential for a significant environmental effect.
Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-12, DHS must submit to OMB, for review and approval, any reporting requirements inherent in a rule unless they are exempt. In accordance with the PRA, the information collection notice was published in the
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Administrative practice and procedure, Aliens, Cultural exchange program, Employment, Foreign officials, Health professionals, Reporting and recordkeeping requirements, Students.
Accordingly, DHS amends chapter I of title 8 of the Code of Federal Regulations as follows:
6 U.S.C. 202, 236; 8 U.S.C. 1101, 1102, 1103, 1182, 1184, 1186a, 1187, 1188, 1221, 1281, 1282, 1301-1305, 1357, and 1372; sec. 643, Pub. L. 104-208, 110 Stat. 3009-708; Pub. L. 106-386, 114 Stat. 1477-1480; section 141 of the Compacts of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands, and with the Government of Palau, 48 U.S.C. 1901 note and 1931 note, respectively; 48 U.S.C. 1806; 8 CFR part 2; Pub. L. 115-218, 132 Stat. 1547 (48 U.S.C. 1806).
The revisions and additions read as follows:
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Assistant Secretary for Technology Policy (ASTP)/Office of the National Coordinator for Health Information Technology (ONC) (collectively, ASTP/ONC), Department of Health and Human Services (HHS).
Proposed rule.
This proposed rule focuses on deregulatory actions identified in HHS regulations regarding Health information technology standards, implementation specifications, and certification criteria and certification programs for health information technology, and information blocking. This proposed rule seeks to reduce burden, offer flexibility to both developers and providers, and support innovation through the removal and revisions of certain certification criteria and regulatory provisions. This proposed rule also seeks to address reported misuse and abuse of information blocking definitions and exceptions.
To be assured consideration, written or electronic comments must be received at one of the addresses provided below, no later than 5 p.m. Eastern Time on February 27, 2026.
You may submit comments, identified by RIN 0955-AA09, by any of the following methods (please do not submit duplicate comments). Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
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Michael Lipinski, Office of Policy, Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology, 202-690-7151.
On January 31, 2025, President Trump issued Executive Order (E.O.) 14192 “Unleashing Prosperity Through Deregulation,”
In order to implement the President's deregulatory initiatives, and to better promote the health and well-being of the American people, HHS intends to dramatically expand its deregulatory efforts. An important component of Making America Healthy Again is making sure that health care providers and caretakers can focus on preventing and treating chronic diseases. By proposing to remove duplicative and unnecessary requirements of the ONC Health IT Certification Program (Certification Program), we will support providers in caring for their patients. Developers of certified health IT will have more time to support providers' specific technological needs. Providers may also have more health IT choices to meet their needs through increased competition in the certified health IT market that may come from reduced barriers to entry for the certification of health IT. Further, proposed revisions to the information blocking regulations would support health care providers in using innovative third-party software with their EHRs as well as their access, exchange, and use of patients' EHI.
Since the inception of the Certification Program, ASTP/ONC has aimed to implement and administer the Certification Program in the least burdensome manner that supports an administration's policy goals. Throughout the years, we have worked to improve the Certification Program with a focus on ways to reduce burden, offer flexibility to both developers and providers, and support innovation. Over the past 15 years, we have established a set of regulatory requirements that have provided a foundation for our voluntary Certification Program. As we look to the future, there is an opportunity to review the existing requirements and make updates as needed. Through both formal notice and comment rulemaking and informal engagements, we have received suggestions on how to update the Certification Program to meet current market needs. This proposed rule proposes deregulatory actions that: take into consideration these suggestions; account for the current and future state of technology; reduce burden by eliminating redundant requirements; and promote innovation for health IT developers, providers, and other interested parties. We have also evaluated the information blocking regulations and propose the removal of one exception, removal and revisions of conditions of other exceptions, and revisions of definitions to better promote EHI access, exchange, and use. Together, these efforts directly align with Administration goals as outlined in E.O. 14192 (Unleashing Prosperity through Deregulation)
In 2012, Health Level Seven (HL7®) first published for industry feedback what is now called the Fast Healthcare Interoperability Resources (FHIR®)
Since FHIR Draft Standard for Trial Use (DSTU) 1 was officially published in September 2014, HL7 has iteratively advanced FHIR through a comprehensive ballot process that combines industry pilots, Connectathons, and formal community review. In 2015, ONC released the “2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications” Final Rule (2015 Edition Final Rule) (80 FR 62602), which among other requirements, adopted non-standards-based, functional application programming interface (API) certification criteria (45 CFR 170.315(g)(7), (8), and (9)). The adoption of these certification criteria combined with the data elements specified in the “common clinical data set” (CCDS) helped catalyze the industry to focus on developing a consistent implementation guide for FHIR-based API deployment in the United States (US). This industry-led effort resulted in the “Argonaut Data Query Implementation Guide” based on FHIR DSTU 2, which became commonly deployed in production and used as the basis to build early versions of patient access applications with the potential for nationwide scale.
In parallel to this wave of standards development and industry implementation, API-focused interoperability policy also advanced. The 21st Century Cures Act (Cures Act) (Pub. L. 114-255) was signed into law at the end of 2016 and ASTP/ONC subsequently engaged in rulemaking to implement its provisions. This included, among other new policies, the adoption of a FHIR-based API certification criterion (45 CFR 170.315(g)(10)) and the establishment of an API Condition of Certification, which focused on the publication of APIs that would allow EHI “to be accessed, exchanged, and used without special effort . . . including providing access to all data elements of a patient's electronic health record . . .”. On May 1, 2020, ONC published the “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” Final Rule (Cures Act Final Rule) (85 FR 25642), which adopted a suite of FHIR-based requirements in the Certification Program. This final rule required support for HL7's FHIR US Core Implementation Guide (IG) (based on FHIR Release 4 and consistent with United States Core Data for Interoperability (USCDI) v1 data elements), FHIR Bulk Data Access Implementation Guide, and HL7® SMART Application Launch Framework Implementation Guide. We stated that developers of certified health IT certified to the applicable criteria were required to upgrade certified health IT to these FHIR API standards and provide them to their customers by no later than May 2, 2022, in the Cures Act Final Rule (85 FR 25948). We then extended the compliance date to December 31, 2022, in the “Information Blocking and the ONC Health IT Certification Program: Extension of Compliance Dates and Timeframes in Response to the COVID-19 Public Health Emergency Interim” Final Rule (85 FR 70072).
In the years since the Cures Act Final Rule, ASTP/ONC and industry established an iterative, annual cycle whereby a new USCDI version is released that then helps inform further data element constraints for a new version of the FHIR-based US Core IG. This predictable, consistent, and collaborative approach has been transformative for standards development and FHIR-based policy making. It has also positioned the US as a world leader in FHIR adoption and use. Other federal agencies, such as the Centers for Medicare & Medicaid Services (CMS), Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), Health Resources and Services Administration (HRSA), and National Institutes of Health (NIH) have also pursued FHIR-oriented regulatory policy and program implementations based on this foundation.
America's interoperability arc in health care has bent decisively toward FHIR-based APIs. An open, interoperable health data ecosystem invites entrepreneurship, drives innovation, and cements American leadership and competitiveness in the expanding digital health marketplace. As discussed in this deregulatory proposed rule, we propose to aggressively reduce and remove long-standing functionality-oriented and non-FHIR-based certification criteria from the Certification Program. While this approach would directly and rapidly reduce compliance burdens for health IT developers that participate in the Certification Program, more broadly, it enables ASTP/ONC to reset the Certification Program's regulatory scope and establish a new foundation on which to build FHIR-based API requirements in the future. This would allow more creative artificial intelligence (AI)-enabled interoperability solutions that combine FHIR with newer standards to emerge, such as Model Context Protocol (MCP) which “standardizes how applications provide context to Large Language Models (LLMs)”,
While FHIR provides the potential for better, faster, and more consistent ways to address emerging market needs and policy imperatives, more work is needed for certain use cases. We intend to continue to fully engage industry and our federal partners, such as CMS, to rapidly advance FHIR specifications for regulatory readiness. We also intend to sharpen the Certification Program's future focus to prioritize FHIR-based APIs that: (1) enhance automation and API performance; (2) move beyond read-only interactions; and (3) expand the scope of data available to support clinical efficiency, patient-centered care, and timely reporting (
The transition to a FHIR-based API ecosystem is a strategic imperative and an investment in the US's interoperability future. To execute this vision, it will require a collective commitment from policymakers, software developers, clinicians, payers, and patients alike. Together, we can build interoperable solutions that meet today's challenges and anticipate tomorrow's opportunities.
In this proposed rule, our proposals remove or revise certain certification criteria that are consistent with our drive toward and our support for the FHIR standard, as discussed above. The push toward universal adoption of FHIR is not just important for secure, streamlined data access, it is a critical step toward modernizing our health care system with the ultimate goal of Making America Healthy Again.
We have identified certification criteria for proposed removal or revision. The removal or revision of the identified certification criteria would reduce burden and costs for health IT developers and clinicians, for reasons including but not limited to, eliminating the need to design and meet specific certification functionalities; prepare, test, and certify health IT in certain instances; and maintain conformance to certification requirements. We do not anticipate that the proposed removals or revisions would alter behavior across product implementations by health IT developers for the capabilities that have thus far been included as part of certification criteria in the Certification Program. We have observed over time that certification is likely no longer a primary factor driving improvements or compliance in particular areas, such as with respect to privacy and security. Generally, at the time of certification, developers have (in some cases for over a decade) consistently demonstrated for many certification criteria that their certified health IT can perform required functionalities in a conformant manner.
In total, out of the 60 certification criteria that are currently in effect, we propose to remove 34 and revise seven. Of the revised criteria, one of the proposed revisions would reduce the scope of the “decision support interventions” certification criterion to fully remove the artificial intelligence (AI) “model card” requirements. We intend to retain and make no changes to 19 certification criteria, which include new and revised certification criteria that were adopted in the Health Data, Technology, and Interoperability: Electronic Prior Authorization and Real-Time Prescription Benefit (HTI-4) Final Rule (90 FR 37130). This final rule was published as a part of the “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization” (FY2026 IPPS/LTCH PPS) Final Rule, which was published by CMS on August 4, 2025 (90 FR 36536).
In some instances where we propose to remove or revise a certain certification criterion, we also propose to remove the standard(s) that is referenced by the certification criterion. In some cases, we propose to remove standards consistent with a certification criterion transition period until January 1, 2027. In very limited circumstances, we retain a standard referenced in a certification criterion proposed for removal for purposes of health IT interoperability alignment.
Because of the proposed removal of certain certification criteria as discussed above, we propose to make conforming edits to the terms and definitions in § 170.102. We propose to revise the definition of “Base EHR” to remove references to criteria that we have proposed to remove from the Code of Federal Regulations (CFR). We also propose to remove the definitions of “Common Clinical Data Set,” “Global Unique Device Identification Database (GUDID),” and “Production Identifier” because these terms are no longer referenced in 45 CFR part 170.
We propose to make conforming edits for several Conditions and Maintenance of Certification requirements, including the “Assurances” (§ 170.402), “Application Programming Interfaces” (§ 170.404), and “Attestations” (§ 170.406) Conditions and Maintenance of Certification requirements. In addition to conforming edits, we also propose to descope the “Real World Testing” Condition and Maintenance of Certification requirements (§ 170.405) with deregulatory actions related to real world testing plans, results, and the use of the standards version advancement process (SVAP). These proposals are consistent with the enforcement discretion notice we issued on June 30, 2025.
We propose to make conforming edits, to remove references to certification criteria that we propose to remove in this proposed rule, in subpart E of 45 CFR part 170. Specifically, in §§ 170.523, 170.550, 170.555, and 170.570.
We propose to revise the § 171.102 “access” and “use” definitions to emphasize that the definitions include automated means of access, exchange, or use of EHI—including, without limitation, autonomous AI systems. As an alternative proposal, we propose, in addition to updating the “access” and “use” definitions, to revise the “exchange” definition in a similar manner.
We propose to remove the
We propose to revise or, in the alternative, remove the
We propose to revise the Manner Exception's
We propose to remove subpart D from 45 CFR part 171, which includes the Trusted Exchange Framework and Common Agreement
It is our intent that if any provision of this rule were, if or when finalized, held to be invalid or unenforceable facially, or as applied to any person, plaintiff, or stayed pending further judicial or agency action, such provision shall be severable from other provisions of this rule, and from rules and regulations currently in effect, and not affect the remainder of this rule. It is also our intent that, unless such provision shall be held to be utterly invalid or unenforceable, it be construed to give the provision maximum effect permitted by law including in the application of the provision to other persons not similarly situated or to other, dissimilar circumstances from those where the provision may be held to be invalid or unenforceable.
In this rule, we propose provisions that are intended to and will operate independently of each other, even if multiple of them serve the same or similar general purpose(s) or policy goal(s). Where a provision is necessarily dependent on another, the context generally makes that clear (such as by cross-reference to a particular standard, requirement, condition, or pre-requisite). Where a provision that is dependent on one that is stayed or held invalid or unenforceable (as described in the preceding paragraph) is included in a subparagraph, paragraph, or section within part 170 or 171 of 45 CFR, we intend that other provisions of such subparagraph(s), paragraph(s), or section(s) that operate independently of said provision would remain in effect.
For example, if any proposed revision of any section or paragraph of part 170, if finalized, were stayed or held utterly invalid or unenforceable, we would intend for all other finalized revisions in part 170 that do not depend upon the stayed or invalidated revision to remain in full effect. To illustrate, if a removal of a certification criterion were to be finalized and then held to be entirely invalid or unenforceable, any corresponding removal of a cross-reference to that provision would depend on that revision and would be affected by the holding of invalidity or unenforceability. But in direct contrast, any revision to any other certification criterion or other Certification Program requirement or provision codified in part 170 that is not made based specifically on the removal of the certification criterion for which removal was held invalid or unenforceable, is intended to remain in full effect even if both revisions were proposed in this same proposed rule and were to be finalized in a single final rule.
To provide another example, if we were to finalize the proposed removal of paragraph (a)(3) from § 171.204 (the Infeasibility Exception), and the removal of this paragraph was stayed or held facially invalid or unenforceable in whole or in part, we would intend for other finalized revisions in part 171, including without limitation the proposed revision or, in the alternative, removal of paragraph (a)(4) from § 171.204 (the Infeasibility Exception) to continue in effect. Each of the conditions (subparagraphs) within § 171.204(a) is designed to stand independent of any and every other subparagraph in § 171.204(a). Moreover, each information blocking exception is intended and designed to stand independent of any and every other exception unless any specific provision of an exception might explicitly reference another exception. Likewise, any dependency on cross-referenced provision(s) is intended to be limited to the exact provision, or function of such provision, that relies upon the cross-reference. For example, paragraph (a)(4) in § 171.204 cross-references subparagraphs (1)(i) and (1)(ii) in § 171.301(b) (the Manner Exception's
If any revision to any provision of part 170 or 171 (such as the removal or revision of a specific condition within one information blocking exception in part 171 or a revision to a certification criterion in part 170) were stayed or held to be invalid or unenforceable as applied to any person, plaintiff, or circumstance, it is our intent that such provision—and any section or paragraph of part 171 or 170 that may reference such provision—be construed to give the provision maximum effect permitted by law including in the application of the provision to other persons not similarly situated or to other, dissimilar circumstances from those where the provision may be held to be invalid or unenforceable.
The Regulatory Impact Analysis (RIA) includes an updated analysis of the costs and benefits associated with the proposals in this proposed rule. The proposed deregulatory actions provide substantial relief for developers of certified health IT and significant cost savings realized from the revision and removal of certain Certification Program requirements. The cost savings have been estimated using the best available data and modeled on the costs estimated and finalized in prior ASTP/ONC rulemakings. The proposed deregulatory actions reduce the effort of developers of certified health IT to meet ongoing Certification Program requirements and reduce entry barriers for new Certification Program participants. The proposed actions, importantly, return effort back to developers of certified health IT to innovate with their technology, improve interoperability and third-party integration, and focus on the needs of their customers. We do not expect costs to be associated with these deregulatory proposals. We expect the proposed deregulatory actions to result in significant benefits for health IT developers, providers, ONC-Authorized Certification Bodies (ONC-
The analysis included in this proposed rule indicates that the proposed updates to the Certification Program would result in $0 in implementation costs on developers of certified health IT. However, we do estimate some costs for reviewers who review this proposed rule. We estimate those costs to be $284,132 in total for an estimated 644 reviewers, which include developers and medical associations. We do not quantify benefits for this proposed rule and instead rely on our calculation of cost savings to developers of certified health IT to quantify in dollars the time and effort developers would have expended had these requirements remained in effect in perpetuity. In total, this proposed rulemaking would result in a present value of cost savings of $1.53 billion in 2024 dollars and discounted at a rate of 7%, beginning in 2027 and in perpetuity.
The Health Information Technology for Economic and Clinical Health Act (HITECH Act), Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5), was enacted on February 17, 2009. The HITECH Act amended the Public Health Service Act (PHSA) and created “Title XXX—Health Information Technology and Quality” (Title XXX) to improve health care quality, safety, and efficiency through the promotion of health IT and electronic health information (EHI) exchange.
The 21st Century Cures Act (Pub. L. 114-255) (Cures Act) was enacted on December 13, 2016, to accelerate the discovery, development, and delivery of 21st century cures, and for other purposes. The Cures Act, through Title IV—Delivery, amended the HITECH Act by modifying or adding certain provisions to the PHSA relating to health IT.
The HITECH Act established two Federal advisory committees, the Health IT Policy Committee (HITPC) and the Health IT Standards Committee (HITSC). Each was responsible for advising the National Coordinator for Health Information Technology (National Coordinator) on different aspects of standards, implementation specifications, and certification criteria.
Section 4003(e) of the Cures Act amended sections 3002 and 3003 of the PHSA by replacing, in an amended section 3002, the HITPC and HITSC with one committee named the Health Information Technology Advisory Committee (Health IT Advisory Committee or HITAC). Section 3002(a) of the PHSA, as added by the Cures Act, establishes that the HITAC recommends to the National Coordinator policies and standards, implementation specifications, and certification criteria, relating to the implementation of a health information technology infrastructure, nationally and locally, that advances the electronic access, exchange, and use of health information. Further described in section 3002(b)(1) of the PHSA, this includes recommending to the National Coordinator a policy framework to advance interoperable health information technology infrastructure, updating recommendations to the policy framework, and making new recommendations, as appropriate. Section 3002(b)(2)(A) of the PHSA specifies that in general, the HITAC shall recommend to the National Coordinator for purposes of adoption under section 3004, standards, implementation specifications, and certification criteria and an order of priority for the development, harmonization, and recognition of such standards, specifications, and certification criteria. Like the process previously required of the former HITPC and HITSC, section 3002(b)(5) of the PHSA requires the HITAC to develop a schedule, updated annually, for the assessment of policy recommendations, which the Secretary publishes in the
Section 3004 of the PHSA establishes a process for the adoption of health IT standards, implementation specifications, and certification criteria and authorizes the Secretary to adopt such standards, implementation specifications, and certification criteria. As specified in section 3004(a)(1), the Secretary is required, in consultation with representatives of other relevant federal agencies, to jointly review standards, implementation specifications, and certification criteria endorsed by the National Coordinator in section 3001(c) and subsequently determine whether to propose the adoption of such standards, implementation specifications, or certification criteria. Section 3004(a)(3) requires the Secretary to publish all such determinations in the
Section 3004(b)(3) of the PHSA, titled, Subsequent Standards Activity, provides that the Secretary shall adopt additional standards, implementation specifications, and certification criteria as necessary and consistent with the schedule published by the HITAC. We consider this provision in the broader context of the HITECH Act and Cures Act to grant the Secretary the authority and discretion to adopt standards, implementation specifications, and certification criteria that have been recommended by the HITAC and endorsed by the National Coordinator, as well as other appropriate and necessary health IT standards, implementation specifications, and certification criteria.
Section 3001(c)(5) of the PHSA provides the National Coordinator with the authority to establish a certification program or programs for the voluntary certification of health IT. Section 3001(c)(5)(A) specifies that the National Coordinator, in consultation with the Director of the National Institute of Standards and Technology (NIST), shall keep or recognize a program or programs for the voluntary certification of health IT that is in compliance with applicable certification criteria adopted in section 3004 of the PHSA.
The certification program(s) must also include, as appropriate, testing of the technology in accordance with section 13201(b) of the HITECH Act. Overall, section 13201(b) of the HITECH Act requires that, with respect to the development of standards and implementation specifications, the Director of NIST shall support the establishment of a conformance testing infrastructure, including the development of technical test beds. The HITECH Act also indicates that the development of this conformance testing infrastructure may include a program to accredit independent, non-federal laboratories to perform testing.
Section 4002(a) of the Cures Act amended section 3001(c)(5) of the PHSA by adding section 3001(c)(5)(D), which requires the Secretary, through notice and comment rulemaking, to require conditions of certification and maintenance of certification for the Certification Program. Specifically, the health IT developers or entities with technology certified under the Certification Program must, in order to maintain such certification status, adhere to certain conditions and
The Secretary issued an interim final rule with request for comments on January 13, 2010, “Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology” (the “S&CC January 2010 Interim Final Rule”) (75 FR 2014), which adopted an initial set of standards, implementation specifications, and certification criteria. On March 10, 2010, the Secretary issued a proposed rule, “Proposed Establishment of Certification Programs for Health Information Technology” (75 FR 11328), that proposed both temporary and permanent certification programs for the purposes of testing and certifying health IT. A final rule establishing the temporary certification program was published on June 24, 2010, “Establishment of the Temporary Certification Program for Health Information Technology” (75 FR 36158), and a final rule establishing the permanent certification program was published on January 7, 2011, “Establishment of the Permanent Certification Program for Health Information Technology” (76 FR 1262).
After consideration of the comments received on the S&CC January 2010 Interim Final Rule, a final rule was issued to complete the adoption of the initial set of standards, implementation specifications, and certification criteria and realign them with the final objectives and measures established for the EHR Incentive Programs Stage 1, titled “Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology” (75 FR 44590, July 28, 2010) (2011 Edition Final Rule). The 2011 Edition Final Rule also established the first version of the certified electronic health record technology (CEHRT) definition. Subsequent to the 2011 Edition Final Rule, on October 13, 2010, we issued an interim final rule “Health Information Technology: Revisions to Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology” with a request for comment to remove certain implementation specifications related to public health surveillance that had been previously adopted in the 2011 Edition Final Rule (75 FR 62686).
The standards, implementation specifications, and certification criteria adopted by the Secretary in the 2011 Edition Final Rule established the capabilities that CEHRT must include in order to, at a minimum, support the achievement of EHR Incentive Programs Stage 1 by eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) under the “Medicare and Medicaid Programs; Electronic Health Record Incentive Program” final rule (75 FR 44314, July 28, 2010) (EHR Incentive Programs Stage 1 Final Rule).
On March 7, 2012, the Secretary issued a proposed rule with request for comments titled “Health Information Technology: Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology, 2014 Edition; Revisions to the Permanent Certification Program for Health Information Technology” (77 FR 13832) (2014 Edition Proposed Rule), which proposed new and revised standards, implementation specifications, and certification criteria.
After consideration of the comments received on the 2014 Edition Proposed Rule, a final rule titled “Health Information Technology: Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology, 2014 Edition; Revisions to the Permanent Certification Program for Health Information Technology” (77 FR 54163) (2014 Edition Final Rule) was issued on September 4, 2012, to adopt the 2014 Edition set of standards, implementation specifications, and certification criteria and realign them with the final objectives and measures established for the EHR Incentive Programs Stage 2, as well as Stage 1 revisions. The 2014 Edition Final Rule adopted a proposal to change the Permanent Certification Program's name to the “ONC HIT Certification Program,” revised the process for permitting the use of newer versions of “minimum standard” code sets, modified the certification processes ONC-ACBs need to follow for certifying EHR Modules in a manner that provides clear implementation direction and compliance with the new certification criteria, and eliminated the certification requirement that every EHR Module be certified to the “privacy and security” certification criteria.
The standards, implementation specifications, and certification criteria adopted by the Secretary in the 2014 Edition Final Rule established the capabilities that CEHRT must include in order to, at a minimum, support the achievement of the EHR Incentive Programs Stage 2 by EPs, eligible hospitals, and CAHs under the “Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 2” final rule (77 FR 53968, September 4, 2012) (EHR Incentive Programs Stage 2 Final Rule).
On December 7, 2012, an interim final rule with a request for comment, titled “Health Information Technology: Revisions to the 2014 Edition Electronic Health Record Certification Criteria; and Medicare and Medicaid Programs; Revisions to the Electronic Health Record Incentive Program” (77 FR 72985), was jointly issued and published by ONC and CMS to update certain standards that had been previously adopted in the 2014 Edition Final Rule. The interim final rule also revised the EHR Incentive Programs by adding an alternative measure for the Stage 2 objective for hospitals to provide structured electronic laboratory results to ambulatory providers, corrected the regulation text for the measures associated with the objective for hospitals to provide patients the ability to view online, download, and transmit information about a hospital admission, and made the case number threshold exemption policy for clinical quality measure (CQM) reporting applicable for eligible hospitals and CAHs beginning with FY 2013. In addition, the interim final rule provided notice of CMS's intent to issue technical corrections to the electronic specifications for CQMs released on October 25, 2012. On September 4, 2014, a final rule “Medicare and Medicaid Programs; Modifications to the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program for 2014 and Other Changes to the EHR Incentive Program; and Health Information Technology: Revisions to the Certified EHR Technology Definition and EHR Certification Changes Related to Standards” (79 FR 52910) was published adopting these proposals.
On November 4, 2013, the Secretary published an interim final rule with a request for comment titled “2014 Edition Electronic Health Record Certification Criteria: Revision to the Definition of `Common Meaningful Use (MU) Data Set' ” (78 FR 65884) to make a minor revision to the Common MU Data Set definition. This revision was intended to allow more flexibility with respect to the representation of dental
On February 26, 2014, the Secretary published a proposed rule titled “Voluntary 2015 Edition Electronic Health Record (EHR) Certification Criteria; Interoperability Updates and Regulatory Improvements” (79 FR 10880) (“Voluntary Edition Proposed Rule”). The proposed rule proposed a voluntary edition of certification criteria that was designed to enhance interoperability, promote innovation, and incorporate “bug fixes” to improve upon the 2014 Edition. The Voluntary Edition Proposed Rule also included proposals that focused on improving regulatory clarity, simplifying the certification of EHR Modules that are designed for purposes other than meeting requirements of the EHR Incentive Programs, and discontinuing the use of the Complete EHR definition. A correction notice was published for the Voluntary Edition Proposed Rule on March 19, 2014, entitled “Voluntary 2015 Edition Electronic Health Record (EHR) Certification Criteria; Interoperability Updates and Regulatory Improvements; Correction” (79 FR 15282). This correction notice corrected the preamble text and gap certification table for four certification criteria that were omitted from the list of certification criteria eligible for gap certification for the 2015 Edition EHR certification criteria. On September 11, 2014, a final rule was published titled “2014 Edition Release 2 Electronic Health Record (EHR) Certification Criteria and the ONC HIT Certification Program; Regulatory Flexibilities, Improvements, and Enhanced Health Information Exchange” (79 FR 54430) (2014 Edition Release 2 Final Rule). The final rule adopted a small subset of the original proposals in the Voluntary Edition Proposed Rule as optional and revised 2014 Edition EHR certification criteria that provide flexibility, clarity, and enhance health information exchange. It also finalized administrative proposals (
On May 23, 2014, CMS and ONC jointly published a proposed rule titled “Medicare and Medicaid Programs; Modifications to the Medicare and Medicaid Electronic Health Record Incentive Programs for 2014; and Health Information Technology: Revisions to the Certified EHR Technology Definition” (79 FR 29732). The proposed rule proposed to update the EHR Incentive Programs Stage 2 and Stage 3 participation timeline. It proposed to revise the CEHRT definition to permit the use of EHR technology certified to the 2011 Edition to meet the CEHRT definition for FY/CY 2014. It also proposed to allow EPs, eligible hospitals, and CAHs that could not fully implement EHR technology certified to the 2014 Edition for an EHR reporting period in 2014 due to delays in the availability of such technology to continue to use EHR technology certified to the 2011 Edition or a combination of EHR technology certified to the 2011 Edition and 2014 Edition for the EHR reporting periods in CY 2014 and FY 2014. On September 4, 2014, a final rule titled “Medicare and Medicaid Programs; Modifications to the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program for 2014 and Other Changes to the EHR Incentive Program; and Health Information Technology: Revisions to the Certified EHR Technology Definition and EHR Certification Changes Related to Standards” (CEHRT Flexibility Final Rule) was published (79 FR 52910) adopting these proposals.
On March 30, 2015, the Secretary published a proposed rule titled “2015 Edition Health Information Technology (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications” (80 FR 16804) (2015 Edition Proposed Rule). The 2015 Edition Proposed Rule proposed revisions to the Certification Program with a revised edition of certification criteria that was designed to enhance interoperability.
On October 16, 2015, the Secretary published a final rule titled “2015 Edition Health Information (Health IT) Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications” (80 FR 62602) (2015 Edition Final Rule). The 2015 Edition Final Rule established a new edition of certification criteria (2015 Edition) and a new 2015 Edition Base EHR definition. CMS subsequently established the 2015 Edition Base EHR definition as encompassing the minimum capabilities and the related minimum standards and implementation specifications that CEHRT would need to include to support the achievement of “meaningful use” by eligible clinicians, eligible hospitals, and CAHs under the Medicare and Medicaid EHR Incentive Programs (the predecessors to the Medicare Promoting Interoperability Program and the Promoting Interoperability performance category under the Merit-based Incentive Payment System (MIPS)). The final rule also adopted a proposal to change the Certification Program's name to the “ONC Health IT Certification Program” from the ONC HIT Certification Program, modified the Certification Program to make it more accessible to other types of health IT beyond EHR technology and for health IT that supports care and practice settings beyond the ambulatory and inpatient settings, and adopted new and revised Principles of Proper Conduct (PoPC) for ONC-ACBs. A final rule making corrections and clarifications was published for the 2015 Edition Final Rule (80 FR 76868) on December 11, 2015, to correct preamble and regulatory text errors and clarify requirements of the CCDS, the 2015 Edition privacy and security certification framework, and the mandatory disclosures for health IT developers.
After issuing a proposed rule on March 2, 2016, “ONC Health IT Certification Program: Enhanced Oversight and Accountability” (81 FR 11056), we published a final rule by the same title (81 FR 72404) (EOA Final Rule) on October 19, 2016. The EOA Final Rule finalized modifications and new requirements under the Certification Program, including provisions related to our role in the Certification Program. The EOA Final Rule created a regulatory framework for our direct review of health IT certified under the Certification Program, including, when necessary, requiring the correction of non-conformities found in health IT certified under the Certification Program and suspending and terminating certifications issued to Complete EHRs and Health IT Modules. The final rule also set forth processes for us to authorize and oversee accredited testing laboratories under the Certification Program. In addition, it included provisions for expanded public availability of certified health IT surveillance results.
On March 4, 2019, the Secretary published a proposed rule titled “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” (84 FR
On May 1, 2020, the Cures Act Final Rule was published in the
On April 18, 2023, the Secretary published a proposed rule titled “Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing” (88 FR 23746) (HTI-1 Proposed Rule). The HTI-1 Proposed Rule proposed to implement the EHR Reporting Program provision of the Cures Act by establishing new Conditions and Maintenance of Certification requirements for health IT developers under the Certification Program. The HTI-1 Proposed Rule also proposed several updates to certification criteria and implementation specifications recognized by the Certification Program, including revised certification criteria for: “clinical decision support,” “patient demographics and observations,” and “electronic case reporting.” The HTI-1 Proposed Rule also proposed to establish a new baseline version of the USCDI. Additionally, the HTI-1 Proposed Rule also proposed enhancements to support information sharing under the information blocking regulations.
On January 9, 2024, the Secretary issued the “Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing” final rule (HTI-1 Final Rule), which implemented the EHR Reporting Program provision of the 21st Century Cures Act and established new Conditions and Maintenance of Certification requirements for health IT developers under the Certification Program (89 FR 1192). The HTI-1 Final Rule also made several updates to certification criteria and standards recognized by the Certification Program. The Certification Program updates included revised certification criteria for “decision support interventions” (DSIs), “patient demographics and observations,” and “electronic case reporting,” as well as adopted a new baseline version of the USCDI standard, USCDI Version 3 (v3). Additionally, the HTI-1 Final Rule provided enhancements to support information sharing under the information blocking regulations. Through these provisions, we sought to advance interoperability, improve algorithm transparency, and support the access, exchange, and use of EHI. The HTI-1 Final Rule also updated numerous technical standards in the Certification Program to advance interoperability, enhance health IT certification, and reduce burden and costs for health IT developers and users of health IT.
On August 5, 2024, the Secretary published a proposed rule titled “Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability” (89 FR 63498) (HTI-2 Proposed Rule). The HTI-2 Proposed Rule sought to advance interoperability, improve transparency, and support the access, exchange, and use of EHI through proposals for: standards adoption; adoption of certification criteria to advance public health data exchange; expanded uses of certified APIs, such as for electronic prior authorization, patient access, care management, and care coordination; and information sharing under the information blocking regulations. Additionally, the HTI-2 Proposed Rule proposed to establish a new baseline version of the USCDI standard and proposed to update the Certification Program to enhance interoperability and optimize certification processes to reduce burden and costs. The HTI-2 Proposed Rule also proposed to implement certain provisions related to TEFCA, which would support the reliability, privacy, security, and trust within TEFCA.
On December 16, 2024, the Secretary issued the “Health Data, Technology, and Interoperability: Trusted Exchange Framework and Common Agreement (TEFCA)” final rule (89 FR 101772) (HTI-2 Final Rule) which implemented advancements to interoperability, improved transparency, and supported the access, exchange, and use of electronic health information. The HTI-2 Final Rule codified definitions of certain TEFCA terms in § 171.401 of the information blocking regulations and finalized the 45 CFR part 172 TEFCA provisions.
On December 17, 2024, the Secretary issued the “Health Data, Technology, and Interoperability: Protecting Care Access” final rule (89 FR 102512) (HTI-3 Final Rule). The HTI-3 Final Rule finalized certain proposals from the HTI-2 Proposed Rule to support the access, exchange, and use of EHI. The final rule amended the information blocking regulations to revise two existing information blocking exceptions and established an additional reasonable and necessary activity that does not constitute information blocking referred to as the Protecting Care Access Exception.
On July 31, 2025, ASTP/ONC finalized the “Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization” final rule (90 FR 37130) (HTI-4 Final Rule), as a part of the FY2026 IPPS/LTCH PPS Final Rule, published by CMS on August 4, 2025 (90 FR 36536). The HTI-4 Final Rule finalized a limited subset of the proposals in the HTI-2 Proposed Rule (89 FR 63498) and focused on improving care delivery and reducing administrative burden through the exchange of clinical and administrative information. The HTI-4 Final Rule updated the ONC Health IT Certification Program to add several new certification criteria that advance health care providers' ability to engage in electronic prescribing, real-time prescription benefit checks, and electronic prior authorization.
In this preamble, we present our proposals in an order that begins with the certification criteria we propose to remove and subsequently the standards, definitions, and other related Certification Program provisions proposed for removal or revision. This approach should make it easier for readers to follow our proposed Certification Program removals, in part, due to the natural cascading effects of proposing to remove or revise a certification criterion. For example, we propose to remove the “application access—all data request” certification criterion in 45 CFR 170.315(g)(9), the referenced HL7 CDA R2 Implementation Guide: C-CDA Templates for Clinical Notes R2.1 Companion guide, Release 2-US Realm, October 2019 (45 CFR 170.205(a)(5)), and the “application access—all data request” certification criterion from the Base EHR definition. In some cases, we propose to remove a standard consistent with a certification criterion transition period until January 1, 2027. In very limited circumstances, we retain a standard that is cross-referenced in a certification criterion that we propose to remove. We do this because the standard is cross-referenced in another criterion and/or supports health IT interoperability alignment. For example, although we propose to remove the “transport methods and other protocols” certification criteria in § 170.315(h), we propose to retain the Direct Project transport standard adopted in § 170.202(a)(2) because we believe keeping the primary Direct Project standard would acknowledge the current utilization of the Direct standard, while removing the certification criteria in § 170.315(h) recognizes the ongoing technological advancements related to transport, including movement toward FHIR-based standards, and would encourage and provide space for further innovation and market competition in this area. We also propose to remove the certification criteria in § 170.315(h) from the “Base EHR” definition. Additionally, we solely propose to remove standards when they are no longer referenced by existing certification criteria. Further, as noted above, we propose to remove certain Conditions and Maintenance of Certification requirements and other Certification Program requirements.
Recently, the Office of Management and Budget (OMB), the Department, and CMS-ASTP/ONC issued requests for information (RFIs) related to deregulation. We reviewed comments related to ASTP/ONC. In response to the CMS-ASTP/ONC Request for Information; Health Technology Ecosystem (90 FR 21034) (CMS-ASTP/ONC RFI), commenters expressed a strong desire to modernize the Certification Program to be more modular, API-focused, and less centered on specific EHR functionalities. Commenters recommended simplifying the process, reducing costs, and expanding certification requirements to ensure payers and other health IT systems adhere to the same interoperability standards. There was an overwhelming demand to strengthen, expand, and mandate the use of FHIR-based APIs. Commenters strongly advocated for retiring outdated, less efficient standards to reduce complexity. A central theme from commenters was the need for regulatory modernization to reduce administrative and financial burdens on providers and technology developers. Commenters also expressed concern that existing certification requirements are often too rigid, costly, and not aligned with emerging care models like value-based care or specialized technologies such as AI and remote monitoring. A commenter that responded to the HHS RFI expressed concerns with the Real World Testing and Insights Conditions of Certification, stating that the requirements are overly burdensome and offer limited value to providers or patients. The commenter also recommended retiring low-value certification criteria requirements that add complexity without improving care. A commenter that responded to the OMB RFI suggested that revisions could be made to the Conditions and Maintenance of Certification requirements that focus on streamlined and meaningful oversight without placing undue demands on developers, especially where those demands offer limited direct benefit to health care provider customers or their patients. The commenter also suggested the removal of “non-interoperability-focused, redundant, or valueless” criteria and focus on promoting standardized and scalable interoperability. ASTP/ONC addresses a number of these comments in the proposals below, specifically the suggestions to remove non-interoperability-focused and redundant certification criteria. Commenters were strongly supportive of our focus on FHIR-based standards. Some commenters, however, included suggestions related to new regulatory actions. These suggestions are out of scope for this proposed deregulatory rule, but we may consider the suggestions for a future rulemaking.
In this proposed rule we have identified certification criteria for removal or revision. For some of the criteria below, we justify removing the certification criteria because they have been “widely adopted” or “widely implemented.” To determine if the certification criterion is “widely adopted” or “widely implemented,” we considered whether and for how long the certification criterion has been included in the Base EHR definition in § 170.102, or the Certified Electronic Health Record Technology (CEHRT) definitions established by CMS in 42 CFR 495.4 and 414.1305. The CEHRT definitions incorporate the Base EHR definition and may also incorporate certification criteria necessary to report applicable objectives and measures under the Medicare Promoting Interoperability (PI) Program or the Promoting Interoperability performance category in the Merit-based Incentive Payment System (MIPS), certification criteria determined applicable for an Alternative Payment Model (APM), and other certification criteria as specified. To participate in the Promoting Interoperability Program and the MIPS Promoting Interoperability performance category, eligible hospitals, CAHs, and eligible clinicians must use CEHRT as specified by the applicable definition. In addition, CEHRT is required for the purposes of determinations under 42 CFR 414.1415 and 414.1420 regarding Advanced APM status. ASTP/ONC tracks and publishes data on the adoption and use of health IT, including CEHRT, by US hospitals and office-based physicians. Our most recent survey data from 2021 shows that 96 percent of hospitals and 78 percent of physicians reported having a certified EHR.
In the 2014 Edition Final Rule, we included “demographics” in the Base EHR definition in § 170.102 (77 FR 54265). We noted that including demographics in the Base EHR definition aligns with the statutory “Qualified EHR” definition and is intended to facilitate the recording, capture, and access to a patient's demographic data. In the 2015 Edition Final Rule (80 FR 62602), we added the requirement to record, capture, and access a patient's sex, sexual orientation, and gender identity for Health IT Modules certified to the demographics' certification criterion (§ 170.315(a)(5)) (80 FR 62747). The 2015 Edition Final Rule also defined a required set of standardized terminology to represent each of these data elements (80 FR 62618 through 62620).
In the HTI-1 Final Rule (89 FR 1428), we adopted USCDI v3, which includes data elements for Sex, Sexual Orientation, and Gender Identity. To ensure consistent capture of these data elements across health IT, we made updates to the data elements in § 170.315(a)(5) to incorporate the newly adopted data elements in USCDI v3. Specifically, these same data elements were adopted as “sex” (§ 170.315(a)(5)(i)(C)), “sexual orientation” (§ 170.315(a)(5)(i)(D)), and “gender identity” (§ 170.315(a)(5)(i)(E)). To ensure consistency with our adoption of USCDI v3, we finalized the name change of the certification criterion in § 170.315(a)(5) from “demographics” to “patient demographics and observations” due to the inclusion of data elements based on clinical observations.
Additionally, in the HTI-1 Final Rule, we finalized the replacement of the specific concepts referenced in § 170.315(a)(5)(i)(D) and (E), sexual orientation and gender identity, respectively, with the SNOMED Clinical Terms U.S. Edition (SNOMED CT®) U.S. Edition code set, as referenced in the standard in § 170.207(o)(3). In
After publication of the HTI-1 Final Rule and our adoption of the revisions in § 170.315(a)(5), we began exercising enforcement discretion and issued certification guidance for the Certification Program regarding Health IT Module conformance with certain data elements in the patient demographics and observations certification criterion.
We have reviewed the requirements in § 170.315(a)(5)(i) and have determined that removal of certain requirements in § 170.315(a)(5)(i) would result in burden reduction for health IT developers and cost savings associated with the (1) enforcement discretion and (2) ongoing maintenance costs affected by the proposed updates to the certification criterion. Accordingly, for these reasons and reasons discussed below, we propose the following revisions to § 170.315(a)(5)(i).
We propose to revise § 170.315(a)(5)(i)(C) to remove the reference to the standard in § 170.207(n)(1) (HL7 Administrative Gender and NullFlavor). As discussed above, in the HTI-1 Final Rule, we finalized that the adoption of the code sets referenced in § 170.207(n)(1) will expire on January 1, 2026. Beginning January 1, 2026, a Health IT Module certified to § 170.315(a)(5) is required to demonstrate, for conformance with paragraph (a)(5)(i)(C), that it can record sex in accordance with the SNOMED CT® U.S. Edition codes found in the standard specified in § 170.207(n)(2). Given the timing of publication of this proposed rule, the reference to § 170.207(n)(1) in § 170.315(a)(5)(i)(C) is outdated and no longer relevant. Therefore, we propose to remove the cross-reference to § 170.207(n)(1) in § 170.315(a)(5)(i)(C) because retaining the reference may cause confusion for interested parties. Our proposed revision would keep the cross-reference to § 170.207(n)(2) in § 170.315(a)(5)(i)(C). We propose that to demonstrate conformance with § 170.315(a)(5), a Health IT Module would only need to demonstrate that it can record sex in accordance with either the 248152002 Female (finding) or 248153007 Male (finding) SNOMED CT® U.S. Edition codes found in the standard specified in § 170.207(n)(2). A Health IT Module would not need to demonstrate that it can record sex with any other code found in SNOMED CT® U.S. Edition.
We have reviewed and evaluated the data elements in § 170.315(a)(5)(i)(D) through (H) for consistency with our overall deregulatory approach, and we have determined that it is no longer necessary to include the paragraphs specified in § 170.315(a)(5)(i)(D) through (H) (
We propose a conforming name change of the certification criterion from “patient demographics and observations” to “patient demographics.” This revision is not a substantive change to certification requirements, but would return the certification criterion's naming convention to as it was prior to the HTI-1 Final Rule, as well as acknowledge that the data described in § 170.315(a)(5) is understood to be demographic information. We note that our proposed revisions are limited to § 170.315(a)(5)(i), and we do not propose to revise the “inpatient setting only” requirements in § 170.315(a)(5)(ii). We welcome comments on these proposals.
We propose to remove the “clinical decision support” (CDS) certification criterion and reserve § 170.315(a)(9).
In 2012, we established a new set of requirements for Health IT Modules to support CDS. These requirements included capabilities to support evidence-based CDS based on a defined set of data elements; CDS configuration for both inpatient and ambulatory settings; and the display of source attribute or bibliographic citation of CDS (77 FR 54212). In the 2015 Edition Final Rule, we finalized an updated CDS certification criterion in § 170.315(a)(9) (80 FR 62622). In the HTI-1 Proposed Rule, we noted our belief that the continued evolution of decision support software, especially as it relates to AI or machine learning-driven Predictive DSIs, necessitates new requirements for the Certification Program's CDS certification criterion (88 FR 23781).
In the HTI-1 Final Rule, we finalized an expiration date of January 1, 2025, for the CDS certification criterion in § 170.315(a)(9) and incorporate certain policies with modifications in the “decision support intervention” certification criterion in § 170.315(b)(11) (89 FR 1237). We finalized a conforming expiration date for the CDS certification criterion in the Base EHR definition in § 170.102. We noted that no action is required for developers relating to the expiration of § 170.315(a)(9) in the Base EHR. However, we also noted that developers with Health IT Modules certified to § 170.315(a)(9) wishing to maintain certification to the Base EHR definition, needed to update to the DSI certification criterion in § 170.315(b)(11) by December 31, 2024.
As of January 1, 2025, the CDS certification criterion in § 170.315(a)(9) is no longer available in the Certification Program. Therefore, we propose to remove and reserve § 170.315(a)(9). This proposal would be effective upon the effective date of a subsequent final rule. We welcome feedback on this proposal.
We propose to remove the “family health history” certification criterion and reserve § 170.315(a)(12). Health IT Modules certified to § 170.315(a)(12) must enable a user to record, change, and access a patient's family health history in accordance with the familial concepts or expressions included in, at a minimum, the version of the standard in § 170.207(a)(1) (SNOMED CT®, U.S. Edition, March 2022 Release). This certification criterion is not included in the Base EHR definition but is included in the CEHRT definitions established by CMS for the Medicare Promoting Interoperability Program (42 CFR 495.4) and the MIPS Promoting Interoperability performance category (42 CFR 414.1305).
We adopted the family health history certification criterion in the 2015 Edition Final Rule as a revised iteration of the 2014 Edition family health history certification criterion adopted in § 170.314(a)(13) (80 FR 62624). In the 2014 Edition Proposed Rule, we proposed the first iteration of the family health history certification criterion to align with a Meaningful Use Stage 2 proposal (77 FR 13838). We solicited comment on whether we should adopt the HL7 Pedigree standard and/or the Systematized Nomenclature of Medicine—Clinical Terms (SNOMED CT® U.S. Edition) terms for familial conditions. We also sought comment on a tool produced by the HHS Office of the Surgeon General for capturing family health histories. In the 2014 Edition Final Rule, we finalized a certification criterion that required, at a minimum, that health IT must enable a user to record, change, and access information about a patient's first degree relative within the said patient's record (see also 77 FR 54174). We also finalized that health IT certified to § 170.314(a)(13) could meet this certification criterion by either being able to capture a patient's family health history in SNOMED CT® U.S. Edition or in the HL7 Pedigree standard. We noted that because the use of SNOMED CT® U.S. Edition was required for meeting several other certification criteria, it would not be a challenge to meet the certification criterion. In the 2015 Edition Proposed Rule, we proposed two separate certification criteria for family health history—one based on functionality according to the SNOMED CT® U.S. Edition standard and one based on functionality according to the HL7 Pedigree standard (80 FR 16822 through 16823). However, we only adopted the family health history certification criterion (§ 170.315(a)(12)) based on SNOMED CT® U.S. Edition, stating that the functionality should be available to providers for more comprehensive patient care (80 FR 62624).
In light of our overall deregulatory approach, we have determined that we should remove the family health history certification criterion in § 170.315(a)(12). The functionality of this certification criterion has been part of the Certification Program and associated with the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category (including prior iterations such as the EHR Incentives Programs and the CEHRT definitions) for over 12 years. As such, the functionality is embedded in certified health IT and has been widely adopted by hospitals and physicians due to participation in those programs.
As noted above, the family health history certification criterion in § 170.315(a)(12) is included in the CEHRT definitions. Therefore, to provide sufficient time for CMS to update the CEHRT definitions to remove reference to the certification criterion, we propose a January 1, 2027, effective date for the removal of this certification criterion. We welcome comments on these proposals.
We propose to remove and reserve the “implantable device list” certification criterion in § 170.315(a)(14). The implantable device list certification criterion requires Health IT Modules certified to § 170.315(a)(14) to exchange, record, and allow a user to access a list of Unique Device Identifiers (UDIs) associated with a patient's implantable devices. There is no adopted standard or implementation guide associated with this functionality. However, the implantable device list certification criterion is included in the Base EHR definition, and we propose a conforming revision in § 170.102 to remove § 170.315(a)(14) from the Base EHR definition (please see section III.C.1 of this proposed rule).
In the 2015 Edition Final Rule, we adopted § 170.315(a)(14) with the purpose of establishing a baseline functionality to support the exchange and use of UDIs in certified health IT (80 FR 62748). We explained that the need to exchange and have access to this information wherever patients seek care is broadly relevant to all clinical users of health IT, regardless of setting or specialty, so that they may know what devices their patients are using (or have used) and thereby prevent device-related adverse events and deliver safe and effective care (80 FR 62625 through 62627). We also stated that this need is most acute for implantable devices, which by their nature are difficult to detect and identify in the absence of reliable clinical documentation.
We acknowledged the challenges of fully implementing UDIs in health IT in the 2015 Edition Final Rule, yet believed our adoption of the certification criterion, as well as including the certification criterion in the 2015 Base EHR definition and a UDI data element in the 2015 CCDS definition, were important steps to support electronic exchange and use of UDIs (80 FR 62625 through 62626). In responding to comments on the 2015 Edition Proposed Rule, we recognized that fully implementing UDIs in health IT will take time and require addressing a number of challenges, so we adopted a certification criterion that focused narrowly on baseline health IT capabilities that developers could feasibly implement. We stated that these capabilities would provide the foundation for broader adoption and more advanced capabilities and use cases. This approach minimized the potential burden while maximizing the impact of this certification criterion for all stakeholders.
We have reviewed the implantable device list certification criterion in § 170.315(a)(14) and, as explained below, have determined that we have achieved our policy goals associated with the exchange and use of UDIs. In consideration of this outcome and our overall regulatory goals to reduce burden and offer flexibility to both health IT developers and health care providers, we propose to remove the implantable device list certification criterion and reserve § 170.315(a)(14).
First, we have achieved our stated policy goal of broad adoption of § 170.315(a)(14). As we explained in prior rulemakings, we believe in a foundational approach as the first step to broader adoption of health IT capabilities (80 FR 16824, 80 FR 62626). We added the implantable device list certification criterion to the 2015 Edition Base EHR definition in the 2015 Edition Final Rule. The Base EHR definition (2015 Edition and subsequent versions) is part of the CEHRT definitions under the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category.
Second, our proposed removal of the implantable device list certification criterion would reduce burden and costs. We have historically, where feasible and appropriate, taken measures to reduce burden within the Certification Program and make the Certification Program more effective, flexible, and streamlined. We believe our proposal to remove the implantable device list certification criterion would result in reduced burden, increased flexibility, and cost savings. Developers of certified heath IT would have the flexibility to implement those functionalities supporting the exchange and use of UDIs that best meet the needs of their clients without additional regulatory burden, which could also lead to innovations in these and related functionalities.
Third, support for UDIs within certified health IT is incorporated into other Certification Program elements besides the implantable device list certification criterion. For example, UDIs are a required data element in USCDI v3, and the proposed USCDI v3.1 standard, as the “Unique Device Identifier(s) for a patient's implantable device(s)” data element. We believe retaining a functional data capture certification criterion that requires the same information as the USCDI v3 standard supports (as part of key criteria enabling health information exchange) would be duplicative and unnecessary (we refer readers to section III.B.1 of this proposed rule for a discussion on the proposed USCDI v3.1).
We also note that in USCDI v6, published in July 2025, we adopted a significantly modified definition of the UDI data element to include non-implantable devices.
Therefore, we believe that some health IT developers may choose to voluntarily update relevant certified Health IT Modules to utilize USCDI v6
We propose to revise the “transitions of care” certification criterion in § 170.315(b)(1) to simplify its requirements, with an effective date of January 1, 2027. We propose to reduce the scope of the criterion to focus on enabling the receipt of a Consolidated CDA (C-CDA) document as a way to position this criterion for a future evolution to receipt of FHIR-formatted data. The transitions of care criterion supports the structured transition of care summaries and referral summaries that help ensure continuity and care coordination as patients move between providers. In the 2014 Edition Final Rule, we finalized adoption of the C-CDA standard for this criterion because it accommodated formatting of a summary care record that included all of the data elements that CMS proposed be available for inclusion in a summary care record (77 FR 54217). We also stressed that an EHR technology's ability to incorporate data for medications, medication allergies, and problems in structured form from a C-CDA document was the minimum necessary to meet this certification criterion and encouraged EHR technology developers to go beyond this minimum (77 FR 54219). Additionally, in the 2014 Edition Final Rule we included § 170.315(b)(1) in the Base EHR definition (77 FR 54265).
In the Cures Act Final Rule, we updated the transitions of care criterion's data requirements to include USCDI v1 (85 FR 25667), and in the HTI-1 Final Rule we updated the data requirements to include USCDI v3 (89 FR 1298). We note that the certification criterion in § 170.315(b)(1) is currently associated with several measures under the Health Information Exchange Objective of the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category. Specifically, the certification criterion in § 170.315(b)(1) is specified as required for the Support Electronic Referral Loops by Sending Health Information and Support Electronic Referral Loops by Receiving and Reconciling Health Information measures and specified as an example of a criterion that may be used to support the actions of the Health Information Exchange (HIE) Bi-directional Exchange and Enabling Exchange under TEFCA measures.
We have reviewed and evaluated the transitions of care certification criterion in § 170.315(b)(1) in order to identify ways to reduce burden while still supporting our policy goals. As we noted in the S&CC January 2010 Interim Final Rule, we take an iterative approach to addressing the interoperability of health IT and consider factors such as maturity, market prevalence, and complexity of implementation to inform our adoption of standards and certification criteria (75 FR 2020). Our approach then and now is intended to be “pragmatic, but forward looking” and involves sustainable and incremental steps to harmonize current and future standards, as well as phase out standards and certification criteria when needed (75 FR 2021).
Several industry trends have led us to propose revising this certification criterion. First, FHIR supports the functionalities of a contemporary web-based architecture, using technologies such as RESTful APIs, JSON, and XML, making the standard more approachable to software developers and enabling easier integration with web-based and mobile applications than the C-CDA standard. Second, FHIR is a more granular data standard, enabling exchange of more discrete data concepts rather than entire documents. C-CDA is a document-centric standard that does not support retrieval of information at the data element level, which can lead to information overload during transitions of care. Finally, we believe that FHIR supports easier scalability to support real-time data exchange, which will support a broader ecosystem of health IT tools than C-CDA. Various capabilities, such as CDS Hooks, Subscriptions, and SMART Health Links, support new interoperability paradigms that are much more difficult to do using C-CDA. These trends notwithstanding, we remain cognizant that the C-CDA standard is widely adopted, and we anticipate its continued use over the near-term, especially for transitions of care among health care delivery settings, such as in-patient and long-term and post-acute care.
In detail, we propose to revise the transitions of care certification criterion in § 170.315(b)(1) as of January 1, 2027. We propose to remove the requirements in § 170.315(b)(1)(i) “send and receive via edge protocol” and in § 170.315(b)(1)(iii) “create” and to simplify the requirements in § 170.315(b)(1)(ii) “validate and display” to focus on the ability to receive and validate C-CDA documents. We propose to remove the requirements in § 170.315(b)(1)(ii)(B) and (C). We also propose to move the requirements in § 170.315(b)(1)(ii)(A) “validate C-CDA conformance—system performance” to § 170.315(b)(1)(i) and to rename § 170.315(b)(1) to read “transitions of care—receive and validate.” Additionally, in § 170.315(b)(1)(ii)(A) we propose to remove the references to § 170.205(a)(3) and to replace the references to § 170.205(a)(5), which expires on January 1, 2026, with references to § 170.205(a)(6). We welcome feedback on these proposals.
We propose to remove the “clinical information reconciliation and incorporation” certification criterion in § 170.315(b)(2) with an effective date of January 1, 2027, and to reserve that section. The clinical information reconciliation and incorporation (CIRI) certification criterion allows health care providers to reconcile and incorporate patient health information sent from external sources to maintain a more accurate and up-to-date patient record. The CIRI certification criterion is not currently included in the Base EHR definition; however, the criterion is required for the Support Electronic Referral Loops by Receiving and Reconciling Health Information measure and specified as an example of a criterion that may be used to support the actions of the HIE Bi-Directional Exchange and Enabling Exchange under TEFCA measures in the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category.
Our requirements for CIRI in the Certification Program were first established in the S&CC January 2010 Interim Final Rule to enable a user to
We have reviewed and evaluated the CIRI certification criterion in § 170.315(b)(2), seeking to identify ways to reduce burden while still supporting our policy goals. As we have stressed in prior rulemaking, we take an incremental approach to improving health IT interoperability and performance, relying on factors such as market prevalence and industry readiness to harmonize current and future standards and phase out standards and certification criteria as needed (75 FR 2020). Our review of industry adoption of the CIRI certification criterion indicates widespread adoption. Review also indicates that its capabilities are widely implemented and used in health IT at this time and thus not likely to go away as supported capabilities by developers of certified health IT solely on the basis of removal of the criterion from the Certification Program
We have concluded that removing the CIRI certification criterion in § 170.315(b)(2) would reduce burden for health IT developers, such as testing and other burden associated with certification to this criterion, while still allowing ASTP/ONC to achieve our policy goals of supporting interoperability and access to quality EHI at the point of care. Additionally, we believe that removing this C-CDA-based certification criterion from the Certification Program would encourage movement toward FHIR-based standards which can further spur innovation and development in this area, improving interoperability and patient care. Because the certification criterion in § 170.315(b)(2) is a requirement for Promoting Interoperability measures, we believe a transition date for removal is needed. We propose a January 1, 2027, effective date for the removal of the CIRI certification criterion in § 170.315(b)(2). We welcome feedback on these proposals.
We propose to remove the “security tags—summary of care—send” certification criterion in § 170.315(b)(7) and the “security tags—summary of care—receive” certification criterion in § 170.315(b)(8) and reserve those sections. Together, these certification criteria support the application and persistence of security labels for document-based exchange. The security tags—summary of care—send certification criterion in § 170.315(b)(7) enables a user to create a summary record that is tagged as restricted and subject to restrictions on re-disclosure, while the security tags—summary of care—receive certification criterion in § 170.315(b)(8) enables a user to receive a summary record that is tagged as restricted and subject to restrictions on re-disclosure. These criteria are not currently included in the Base EHR definition.
The certification criteria in § 170.315(b)(7) and (b)(8) were originally adopted in the 2015 Edition Final Rule as “data segmentation for privacy” (DS4P) certification criteria and only required security tagging of C-CDA documents at the document level (80 FR 62646 and 62647). In the Cures Act Final Rule, we updated the requirements to support security tagging of C-CDA documents at the document, section, and entry levels (85 FR 25646).
We have reviewed the security tags—summary of care—send certification criterion in § 170.315(b)(7) and the security tags—summary of care—receive certification criterion in § 170.315(b)(8), evaluating how to reduce burden while still addressing policy priorities to support privacy protections in information exchange. As we have stated previously in this proposed rule, we consider factors such as market prevalence and the uptake in implementation of criteria by developers of health IT when making revisions to Certification Program certification criteria. Currently, 35 unique Health IT Modules are certified to the criterion in § 170.315(b)(7), and 36 unique Health IT Modules are certified to the criterion in § 170.315(b)(8), out of a total of 707 active and non-suspended certifications listed on the Certified Health IT Product List (CHPL), a comprehensive listing of all certified health IT successfully tested and certified under the Certification Program.
We have concluded that removing the certification criteria in § 170.315(b)(7) and (8) would reduce burden for health IT developers and health care providers while still supporting our policy goals to support privacy protections in information exchange. We propose to remove the security tags—summary of care—send certification criterion in § 170.315(b)(7) and the security tags—summary of care—receive certification criterion in § 170.315(b)(8) as of the effective date of a final rule. We welcome feedback on these proposals.
We propose to remove the “care plan” certification criterion in § 170.315(b)(9) and reserve that section. This criterion
We have evaluated the care plan certification criterion in § 170.315(b)(9) with a goal of reducing burden on health IT developers and health care providers while still achieving our policy priorities. Currently, 54 unique Health IT Modules are certified to the criterion in § 170.315(b)(9) out of a total of 707 active and non-suspended certifications listed on the CHPL. We believe this may indicate low interest by health IT developers in certifying to this criterion.
We have concluded that removing the certification criterion in § 170.315(b)(9) would reduce burden for health IT developers and health care providers while still supporting our goals. Additionally, as discussed previously, moving away from C-CDA-based requirements in the Certification Program would help promote greater innovation and advancement in this area. We propose to remove the care plan certification criterion in § 170.315(b)(9) as of the effective date of a final rule. We welcome feedback on these proposals.
We propose to revise the “decision support interventions” (DSI) certification criterion in § 170.315(b)(11). The DSI certification criterion ensures that users can leverage health IT for clinical decision-making by supporting their selection of both evidence-based and predictive DSIs and enabling users' access to transparent information on DSI performance and quality. In the HTI-1 Final Rule, we adopted the DSI certification criterion in § 170.315(b)(11) as both an update and replacement criterion for the CDS certification criterion in § 170.315(a)(9) (89 FR 1236). We also added § 170.315(b)(11) to the Base EHR definition in the HTI-1 Final Rule (89 FR 1197). When we finalized the DSI certification criterion in the HTI-1 Final Rule, we cited E.O. 14091 on Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (February 16, 2023), which addressed bias in AI, and E.O. 14110 on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (October 30, 2023), which addressed the risks of AI (89 FR 1232). These EOs were revoked in E.O. 14148 on Initial Rescissions of Harmful Executive Orders and Actions (January 20, 2025).
We have reviewed and evaluated the DSI certification criterion in § 170.315(b)(11), focusing on ways to reduce burden while still supporting our policy priorities. As we have noted previously in this proposed rule and in prior rulemakings, we consider factors such as standards maturity, market adoption, and complexity of implementation when adopting, revising, or phasing out standards and certification criteria (75 FR 2020). Currently, the requirements in § 170.315(b)(11) reference data expressed in the USCDI standards in § 170.213. We have received feedback from developers of certified health IT that requiring support of predictive DSIs that use
We propose to revise the DSI certification criterion in § 170.315(b)(11) as detailed below as of the effective date of a subsequent final rule. We propose to remove the requirement in § 170.315(b)(11)(ii)(B) to enable interventions when a patient's medications, allergies and intolerance, and problems are incorporated from a transition of care or referral summary received and pursuant to paragraph § 170.315(b)(2)(iii)(D). As described above in section III.A.2.b, we propose to remove § 170.315(b)(2), which is a C-CDA-based criterion, from the Certification Program completely as of January 1, 2027. Thus, we propose to remove the requirement in § 170.315(b)(11)(ii)(B), which references § 170.315(b)(2), as well. We also propose to redesignate the certification criterion currently in § 170.315(b)(11)(ii)(C) as § 170.315(b)(11)(ii)(B).
We propose to remove the parenthetical reference in § 170.315(b)(11)(iii) to “drug-drug and drug-allergy contraindication checking” upon the effective date of a final rule. We have retained the “drug-drug, drug-allergy interaction checks for CPOE” certification criterion in § 170.315(a)(4), and in order to simplify overall Certification Program requirements, we do not believe it is necessary to reference this capability as part of decision support functionality in § 170.315(b)(11)(iii). We note that this reference was initially included as part of the revisions made to the Certification Program's decision support certification criterion (then referenced in § 170.314(a)(8)) in 2012 (see 77 FR 54215). Since this time, the Certification Program has taken deliberate actions to support a more modular marketplace for health IT (see 84 FR 7428, 89 FR 63567 through 63568, and 90 FR 37158). Removal of this specified capability within § 170.315(b)(11) to support drug-drug and drug-allergy contraindication checking furthers this goal of modularity without precluding support for such interaction checks, due to the retention of requirements in § 170.315(b)(11)(iii)(A)(
Additionally, we propose to revise the requirements in § 170.315(b)(11)(iii)(B), which currently relate to enabling predictive DSIs that use any data expressed in the standards in § 170.213, to limit the application of the certification criterion to just data expressed in § 170.315(b)(11)(iii)(A) as well as data expressed in the Clinical Notes and the Assessment and Plan of Treatment data classes in the standards in § 170.213. While we originally wanted to apply the requirements of this certification criterion to any data expressed in the standards in § 170.213 in order to reflect our focus on the USCDI and the variety of data for which DSIs may be enabled, we believe a number of USCDI data elements are not likely to be used as inputs, as mentioned above. We believe that revising the requirements to focus on fewer data elements would significantly reduce burden for health IT developers without diminishing users' ability to select (
Finally, we propose to remove the requirements in § 170.315(b)(11)(iv) and (v) regarding source attribute support, access, and modification and in § 170.315(b)(11)(vi) regarding intervention risk management for predictive DSIs. In addition to reducing burden, removal of these requirements would comply with E.O. 14179 on Removing Barriers to American Leadership in Artificial Intelligence (January 23, 2025). E.O. 14179 calls for the review of regulations and other actions taken pursuant to revoked E.O. 14110, and any actions taken that are inconsistent with the policy set forth in E.O. 14179 to “sustain and enhance America's global AI dominance in order to promote human flourishing, economic competitiveness, and national security”
Additionally, we note several factors supporting the proposal to modify the DSI certification criterion. First, developers of certified health IT have reported that during care delivery, most clinical users lack the time or technical background to engage with source attribute information for either evidence-based DSIs or predictive DSIs supplied by the developer of certified health IT.
Second, transparency regarding how a predictive or generative AI application was designed, developed, tested, evaluated, and should be used may not have the savings and benefits we anticipated. As described in the regulatory impact analysis (RIA) to the HTI-1 Final Rule, we estimated considerable benefits from this policy (89 FR 1411), noting that transparency into AI applications would result in health care delivery organizations selecting and using more accurate AI applications. We quantified associated benefits for two illustrative cases, sepsis detection and ambulatory care sensitive admissions (89 FR 1412 through 1414), estimating that our policies would result in a 10-year savings of up to $3 billion for the sepsis use case through increased application of more sensitive predictive models for this condition. We have not encountered supporting evidence or published research indicating that source attribute transparency requirements in § 170.315(b)(11)(iv) have improved health care delivery organizations' evaluation and effective use of AI. We understand that the benefits articulated in the HTI-1 Final Rule impact analysis are not being realized.
Third, developers of certified health IT have reported an inconsistent approach to oversight of other parties producing similar, health-based AI systems.
Finally, in order to promote innovation of AI in health care, we propose to remove transparency and risk management requirements established in the HTI-1 Final Rule. Additionally, we have heard from health IT developers that the requirements are burdensome and detrimental to such innovation and growth, which is the opposite of our stated policy intent to optimize the ubiquitous use of high-quality AI in health care.
For these and the aforementioned reasons, we propose to remove all requirements related to source attributes in § 170.315(b)(11)(iv), their access in § 170.315(b)(11)(v)(A), and their modification in § 170.315(b)(11)(v)(B), as well as requirements to manage risks related to the development and deployment of predictive DSIs supplied by health IT developers as part of their product in § 170.315(b)(11)(vi). We welcome comments on these proposals.
We propose to revise the “clinical quality measures—report” certification criterion in § 170.315(c)(3) as of the effective date of a final rule. We propose to remove the requirement in § 170.315(c)(3)(ii), as this provision may no longer be used to support certification to the criterion. In the Cures Act Interim Final Rule, we revised § 170.315(c)(3) to include a corrected compliance transition timeline for the criterion in § 170.315(c)(3)(ii), which specified the use of standards in § 170.205(h)(2) and in § 170.205(k)(1) and (2), for the period before December 31, 2022 (85 FR 70075, 70083). We propose to remove paragraph § 170.315(c)(3)(ii) because that transition time period has elapsed. We also propose to move the requirements in § 170.315(c)(3)(i) to § 170.315(c)(3), thus removing all subparagraphs and including all criterion requirements in the main paragraph for § 170.315(c)(3). We welcome comments on our proposal.
We propose to remove the “clinical quality measures—filter” certification criterion in § 170.315(c)(4) with an effective date of January 1, 2027. This certification criterion assesses whether a Health IT Module can filter quality data based on a set of standardized data elements for electronic clinical quality measures (eCQM) calculated using certified health IT.
In the Voluntary Edition Proposed Rule, we proposed a new certification criterion in § 170.315(c)(4) that would require health IT to record structured data allowing CQM results to be grouped by patient characteristics (79 FR 10903 and 10904).
In the 2015 Edition Proposed Rule (80 FR 16844) we proposed to add § 170.315(c)(4) as a new certification criterion for CQM filtering based on the rationale that health IT should support an organization's ability to filter individual and aggregate eCQM results in ways that support administrative reporting, identification of health disparities, and identification of gaps in care.
In the 2015 Edition Final Rule, we adopted the “CQMs—filter” certification criterion in § 170.315(c)(4), along with three other CQM certification criteria: “CQMs—record and export” (§ 170.315(c)(1)), “CQMs—import and calculate” (§ 170.315(c)(2)), and “CQMs—report” (§ 170.315(c)(3)) (80 FR 62649 through 62655). Together, these four criteria were adopted to support providers' quality improvement activities and to support reporting to programs such as the EHR Incentive Programs, Quality Payment Program, and Comprehensive Primary Care plus initiative.
The 2015 Edition Final Rule adopted § 170.315(c)(4) as a new 2015 Edition certification criterion that supports the capability of a clinician to filter eCQM results using data captured for quality improvement and quality reporting purposes. We finalized that Health IT Modules certified to § 170.315(c)(4) must be able to: record data and filter CQM results at both patient and aggregate levels; filter by any combination of the data elements established as part of the criterion with associated vocabulary standards; create a data file of the filtered data in accordance with the QRDA Category I and Category III standards; and display the filtered data in a human readable format.
This certification criterion is not included in the Base EHR definition in § 170.102 but is included in the CEHRT definition for MIPS in 42 CFR 414.1305 as an optional criterion. While we recognize the value of this functionality, we propose to remove this criterion for multiple reasons. We reviewed and evaluated existing regulations to identify deregulatory actions that would reduce administrative burden, and the private expenditures required for compliance with federal regulations. We have identified that the administrative costs of certification for the CQMs—filter certification criterion are no longer offset by the benefits of advancing the specific functionality supported by the criterion. Further, we do not believe that quality measure filtering functionality would be removed from health IT systems because of our proposal to remove this criterion.
Quality reporting programs, such as those required by states and CMS programs, require broader supplemental data and capabilities beyond what we currently require for certification. In addition, health IT developers have widely implemented technology solutions that expand beyond the baseline requirements of the certification criterion (see section III.A for a discussion on “widely implemented”). Through listening sessions with a wide range of health care provider types and sites of service, public correspondence, and CHPL data, we understand that the use of the CQMs—filter certified functionality is fairly low relative to the other certification criteria that support clinical quality measure capabilities. According to CHPL data, as of August 2025, there are 340 active Health IT Modules certified to § 170.315(c)(1), (2), or (3), but only 71 active Health IT Modules certified to § 170.315(c)(4). Among the feedback we have received, health care providers participating in CMS alternative payment models, as well as health IT developers supporting quality initiatives, have reported that they have different options to filter eCQM results, including using customized systems and/or the support of third parties to support innovative, specialty-specific quality measurement and reporting tailored to their particular needs. We therefore believe the value of maintaining this certification criterion is minimal as health IT developer time and resources would be better spent on quality data system modernization efforts leveraging FHIR-based APIs for quality data exchange.
We therefore propose to remove the certification criterion in § 170.315(c)(4) as of January 1, 2027.
We propose to remove all the privacy and security certification criteria in § 170.315(d) and the associated Privacy and Security Certification Framework under § 170.550(h) as of the effective date of a subsequent final rule.
We first adopted a version of the privacy and security certification criteria currently found in § 170.315(d) (and associated standards) in the 2011 Edition through an interim final rule (75 FR 2033 through 2035). These certification criteria originated from HIT Policy Committee and HIT Standards Committee recommendations. The
With the 2014 Edition, we included the privacy and security certification criteria in the Base EHR definition in an attempt to provide both developers and health care providers more flexibility in meeting Certification Program requirements, while still providing health care providers with basic technical options that could support compliance with parts of the HIPAA Privacy and Security Rules (77 FR 54265). Based on recommendations from the HIT Standards Committee, we established a third privacy and security certification approach under § 170.550(h) for the new 2015 Edition so that each certification criterion also had a set of separate privacy and security certification criteria attributed to them that were applicable to the criterion's functionality (80 FR 62705 through 62707). In doing so, we established the current Privacy and Security Certification Framework, which has been in place for the past 10 years. Under this framework, health IT developers have two options for meeting requirements: build the capabilities themselves natively into their certified health IT; or provide system documentation to demonstrate that the certified health IT could integrate (via service interfaces) with required privacy and security capabilities (80 FR 62707).
We have come to the conclusion that, despite the Certification Program providing various certification flexibilities and approaches to accommodate the privacy and security certification criteria (
First, we have found that health IT developers have changed their development processes to build in privacy and security capabilities to meet these certification requirements rather than attempting to demonstrate that their technology could interface with other health IT that provides these capabilities. This has led to negative experiences for health care providers who have sought to use a best-of-breed, non-certified security technology to work across their deployed enterprise (
Second, as certified health IT (which is generally EHR-focused technology) is often implemented in enterprise-wide settings (
Third, while certified health IT has always been “linked” to the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category, those programs have not required participating health care providers to use or implement the privacy and security capabilities included in certified health IT for purposes of meeting the security risk analysis measure. Rather, the health care providers must “have” such certified health IT. As such and as discussed in more detail below, health care providers participating in the Medicare Promoting Interoperability Program or the MIPS Promoting Interoperability performance category are required to adopt certified capabilities that they may not use because, for example, they may prefer a non-certified security health IT product to meet their overall security needs under relevant HIPAA Security Rule requirements.
Fourth, many stakeholders have overinterpreted the Certification Program's limited scope and policy purpose with respect to health IT security and instead assumed that the Certification Program assessed discrete specific security capabilities at significant depths, such as when and how the capabilities are implemented in health care provider or system settings. For example, stakeholders have expressed incorrect expectations of certified health IT and developers, such as expectations that the Certification Program required health IT developers of certified health IT to implement and conduct penetration testing of certified health IT or ensure that certified authentication and authorization capabilities protect against known or unknown vulnerabilities. In contrast, and to allow for significant scalable deployment flexibility, certified heath IT must only, for example, demonstrate support for basic authentication and role-based access control.
Finally, there remains a disconnect between health IT certified to the privacy and security certification criteria under the Certification Program and the implementation and compliance responsibilities of most purchasers and users of certified health IT with the HIPAA Privacy and Security Rule requirements. This disconnect has led to the introduction of unnecessary regulatory burden and duplication, as well as unwarranted opportunity costs for innovation. As we noted above and in our rulemakings related to the privacy and security certification criteria, the adoption of health IT certified to the privacy and security certification criteria does not guarantee compliance with the HIPAA Privacy and Security Rule requirements. Further, the adoption of health IT certified to the privacy and security certification criteria does not serve as an affirmative defense, has not been identified as a mitigating factor in assessing HIPAA civil money penalties, and does not exempt a HIPAA-regulated entity from having to comply with any applicable provision of the HIPAA Privacy or Security Rules. These facts alone have created unnecessary burden for health care providers that adopt
We will continue to collaborate with our colleagues in HHS to promote privacy and security and to strengthen the nation's critical health care infrastructure. Equally, we are not completely foregoing the adoption of privacy and security capabilities within the Certification Program. Instead, going forward, we intend to prioritize the adoption of privacy and security capabilities that are fit for purpose, use case specific, and deliver much needed technical consistency in the market when paired with specific conformance requirements. For example, as we pursue more API-focused certification criteria, if the standards and implementation guides adopted for them do not specify or leave optional specific security requirements, we may look to add further constraints (
In lieu of removing, on the effective date of a subsequent final rule, all of the privacy and security certification criteria in § 170.315(d) and the associated Privacy and Security Certification Framework under § 170.550(h), we would retain the “auditable events and tamper resistance” (§ 170.315(d)(2)), “audit report(s)” (§ 170.315(d)(2)), and “auditing actions on health information” (§ 170.315(d)(10)) certification criteria and associated Privacy and Security Certification Framework certification requirements. These certification criteria and included functionality may serve to help identify fraud and abuse. The functionality may also support health care provider compliance obligations and investigations by relevant entities, including both civil and criminal matters at the federal and state levels. Identifying and addressing fraud and abuse increases confidence in the nation's health care system, reduces inappropriate and wasteful spending, and protects taxpayer dollars when it comes to government spending on health care.
We welcome feedback on these proposals.
We propose to revise the “view, download, and transmit to 3rd party” (VDT) certification criterion in three ways as described below. These proposed revisions, if finalized, would be effective as of the effective date of a subsequent final rule.
We first included the Web Content Accessibility Guidelines (WCAG 2.0) standard as a requirement of the view, download, and transmit to 3rd party (VDT) certification criterion (§ 170.315(e)(1)) in the 2014 Edition. Specifically, the VDT certification criterion viewing capability required conformance to WCAG Level A (77 FR 54179). This provided an accessibility baseline for health IT certified to the criterion. With the 2015 Edition, we proposed compliance with WCAG Level AA (as we did for the 2014 Edition) but finalized a policy that gave developers the option of demonstrating conformance with either Level A or Level AA to meet the certification requirements (80 FR 62660).
We now propose to remove the WCAG conformance requirement from the certification criterion (found in § 170.315(e)(1)(i)). As noted above, the WCAG baseline certification standard of Level A was adopted with the 2014 Edition in 2012 and has been part of the VDT certification criterion since that time. The functionality is now sufficiently widespread among certified health IT and health care providers who adopt such technology. This is true because the VDT certification criterion has been part of the CEHRT definitions and specifically supports the patient access measure under the Medicare Promoting Interoperability Program and MIPS Promoting Interoperability performance category since the 2014 Edition. By removing the WCAG certification requirement, health IT developers of health IT currently certified to § 170.315(e)(1) will have the opportunity to consider other innovative ways to provide patients with the viewing functionality. To this point, commenters noted in response to the 2014 Edition WCAG proposals that most patients want functions and content provided in a more visually appealing manner than the WCAG standard allows. Further, as we noted in the 2011 Edition Interim Final Rule and again in response to comments on the 2011 Edition Interim Final Rule, in providing patients with access to their online health information, the accessibility requirements of the Americans with Disabilities Act of 1990 and Section 504 of the Rehabilitation Act of 1973 still apply to entities covered by these federal civil rights laws (75 FR 2036, 75 FR 44643). In addition, Section 1557 of the Patient Protection and Affordable Care Act (Affordable Care Act) prohibits covered entities from subjecting individuals to certain forms of discrimination, including on the grounds prohibited by Section 504 of the Rehabilitation Act, in any health program or activity.
We also propose to remove the VDT requirement in § 170.315(e)(1)(ii)(A)(
We propose to remove and reserve § 170.315(e)(1)(i)(A)(
We welcome comments on these proposals.
We propose to remove the “patient health information capture” certification criterion in § 170.315(e)(3) with an effective date of January 1, 2027, and to reserve that section. The patient health information capture certification criterion allows health care providers to incorporate unstructured patient generated health data or data from a non-clinical setting into a patient record. The criterion is not currently included in the Base EHR definition; however, the criterion is included in CEHRT definitions established by CMS for the Medicare Promoting Interoperability Program (42 CFR 495.4) and the MIPS Promoting Interoperability performance category (42 CFR 414.1305).
The patient health information capture certification criterion was first adopted in the 2015 Edition Health IT Certification Criteria, 2015 Edition Base Electronic Health Record (EHR) Definition, and ONC Health IT Certification Program Modifications Final Rule (80 FR 62602). The criterion replaced the § 170.314(a)(17) advance directives and applied to various patient health information documents (80 FR 62661). In the 2015 Edition Final Rule, we stated that a Health IT Module would need to enable a user to: (1) identify (
The intent of the criterion is to establish at least one means for accepting patient health information directly and electronically from patients in the most flexible manner possible (80 FR 62662). The criterion did not define the types of health information that could be accepted as we believed it should be as broad as possible and could be documents or health information from devices or applications. The devices and applications could include home health or personal health monitoring devices, fitness and nutrition applications, or a variety of other devices and applications. In addition, patient health information could be accepted directly and electronically through a patient portal, an API, or even email (80 FR 62662). As adopted, we anticipated health IT developers would develop innovative and efficient ways to meet this criterion and simultaneously support providers accepting health information from patients.
We have reviewed and evaluated the patient health information capture certification criterion in § 170.315(e)(3), seeking to identify ways to reduce burden while still supporting our policy goals. As we have stressed in prior rulemaking, we take an incremental approach to improving health IT interoperability and performance, relying on factors such as market prevalence and industry readiness to harmonize current and future standards and phase out standards and certification criteria as needed (75 FR 2021). Our review of industry adoption of the patient health information capture certification criterion has found that the capabilities described in the criterion are widely implemented (as discussed above in section III.A) and used in health IT at this time, suggesting that these capabilities will remain in health IT products even if the corresponding criterion is removed from the Certification Program. We also have seen indications that removing the criterion from the Certification Program could spur greater development and innovation in this area.
We have concluded that removing the patient health information capture certification criterion in § 170.315(e)(3) on January 1, 2027, would reduce administrative burden as well as burden for health IT developers of certified health IT and health care providers while still allowing us to achieve our policy goals. There are other certification criteria that support patient engagement, such as the 2015 Edition view, download, and transmit to 3rd party and “API” certification criteria. We have seen developers integrate the functionality in the patient health information capture certification criterion as part of other patient engagement features, such as patient portals. With these considerations in mind, we believe removing this criterion from the Certification Program will help reduce burden and costs, while also spurring further innovations
We propose to remove the “transmission to cancer registries” certification criterion in § 170.315(f)(4) with an effective date of January 1, 2027, and reserve that section. This criterion assesses whether a Health IT Module can properly create and format cancer case information for electronic transmission according to a CDA-based implementation specification for reporting to public health agencies. In the 2014 Edition Final Rule, we expanded the public health-related standards and certification criteria to include a criterion for transmission to cancer registries in § 170.314(f)(6) that we designated as optional for Complete EHR certification (77 FR 54195). We stated that we proposed this criterion to support a new meaningful use objective and measure for reporting cancer cases to cancer registries (77 FR 54194). In the 2015 Edition Final Rule, we finalized a revised transmission to cancer registries criterion in § 170.315(f)(4) which was no longer labeled as optional and required updated standards (80 FR 62666), and in the HTI-1 Final Rule we further updated the associated vocabulary standards (89 FR 1208). The standards currently referenced in the criterion include the Health Level 7 (HL7®) Implementation Guide for CDA® Release 2: Reporting to Public Health Cancer Registries from Ambulatory Healthcare Providers, Release 1, DSTU Release 1.1, April 2015 in § 170.205(i)(2), the SNOMED CT®, U.S. Edition, March 2022 Release in § 170.207(a)(1), and the Logical Observation Identifiers Names and Codes (LOINC®) Database Version 2.72, February 16, 2022 in § 170.207(c)(1). In the Meaningful Use Stage 3 Final Rule, the transmission to cancer registries certification criterion was identified as one of the criteria that eligible professionals could utilize to report the Public Health Registry measure in the EHR Incentive Programs (80 FR 62882). Subsequently, CMS stated that this criterion could be used to report on the Public Health Registry measure that was included in the MIPS Advancing Care Information performance category (later renamed the MIPS Promoting Interoperability performance category) (81 FR 77236). Currently, MIPS eligible clinicians that report on the Public Health Registry measure may earn optional bonus points for submitting this data.
We have reviewed and evaluated the transmission to cancer registries certification criterion in § 170.315(f)(4), seeking to identify ways to reduce burden while still supporting our policy goals. We recognize trends within the industry that support removal of this criterion. Of note, there is specific work being done to move cancer registry reporting from CDA to FHIR through the Helios FHIR Accelerator and updates to the Central Cancer Registry Reporting IG in support of more efficient tumor abstract completion and supportive harmonization and standardization of data elements through USCDI+ Cancer.
We believe that removing the certification criterion in § 170.315(f)(4) would reduce burden and encourage the ongoing evolution in cancer registry reporting by offering health IT developers space to move toward FHIR standards and modern reporting solutions, further encouraging innovation. We propose a January 1, 2027, effective date for the removal of the transmission to cancer registries certification criterion in § 170.315(f)(4). We welcome feedback on these proposals.
We propose to revise the “transmission to public health agencies—electronic case reporting” (eCR) certification criterion in § 170.315(f)(5). This criterion enables a user to create case reports that can be transmitted electronically to public health agencies. In the 2015 Edition Final Rule, we included a new certification criterion in § 170.315(f)(5) with functional requirements to support the electronic transmission of case reporting information to public health agencies (80 FR 62667). When we originally proposed this criterion, we highlighted several goals, including linking EHR data with other data in a structured way in order to improve quality, safety, population health, and research, as well as making case reporting from providers to public health agencies more efficient (80 FR 16855). In the 2015 Edition Final Rule, we noted commenter concerns with the proposed standards and recommendations that case reporting continue as a public health reporting option for the EHR Incentive Programs, but without a requirement to use a particular standard (80 FR 62667). We further noted ongoing advancements in FHIR standards and stated that in order to permit flexibility and accommodate evolution, we would not finalize a required standard (80 FR 62667).
In the HTI-1 Final Rule, we finalized a policy to require support for either a FHIR or CDA standard in order to provide technical design flexibility while still supporting the existing CDA-based landscape, and we established a transition period from functional requirements to standards-based requirements (89 FR 1227). Specifically, we finalized requirements in § 170.315(f)(5)(ii) to create case reports consistent with either the HL7 FHIR eCR IG in § 170.205(t)(1) or the HL7 CDA eICR IG in § 170.205(t)(2), and to receive, consume, and process a case report response formatted to either the HL7 FHIR eCR IG in § 170.205(t)(1) or the HL7 CDA RR IG in § 170.205(t)(3) (89 FR 1227). We stated that we would continue monitoring the development of standards for case reporting, and that as FHIR-based standards advanced we intended to transition solely to a FHIR-based approach for case reporting in future rulemaking (89 FR 1227). We also stated in the HTI-1 Final Rule, in response to comments that technology used by public health agencies may not be able to accept incoming FHIR-based reports, that we understood commenters' “concerns related to performance, scalability, and maintenance, and will monitor standards development and implementation to inform future rulemaking” (89 FR 1229).
Consistent with E.O. 14192, ASTP/ONC published the “Electronic Case Reporting Certification Criterion Enforcement Discretion Notice” on July 31, 2025.
We have reviewed and evaluated the transmission to public health agencies—electronic case reporting certification criterion in § 170.315(f)(5) with a focus on reducing burden while still supporting our policy priorities. We understand from developers of certified health IT that there may be issues with readiness to adopt these standards as well as concerns regarding the performance, scalability, or maintenance of these standards. We also note that the § 170.315(f)(5) certification criterion is required to complete the Electronic Case Reporting measure in the MIPS Promoting Interoperability performance category and the Medicare Promoting Interoperability Program.
We propose to revise the eCR certification criterion to be a functional requirement in order to reduce burden and allow for industry innovation. In particular, we propose to rescind the expiration date for the functional requirements defined in § 170.315(f)(5) as of the effective date of a subsequent final rule. We propose to revise the introductory text of the criterion to enable a user to create a case report for electronic transmission meeting the functional requirements described in paragraph (f)(5)(i) of this section. Additionally, we propose to remove the standards-based requirements defined in § 170.315(f)(5)(ii) as of the effective date of a subsequent final rule and reserve that section. We welcome feedback on these proposals.
We propose to revise the “transmission to public health agencies—antimicrobial use and resistance reporting” certification criterion in § 170.315(f)(6). This criterion assesses whether Health IT Modules can create and properly format an antimicrobial use and resistance report for electronic transmission, following specified sections of a CDA-based implementation guide. In the 2015 Edition Final Rule, we expanded the public health-related standards and certification criteria to include a new criterion for transmission of antimicrobial use and resistance reporting data to public health registries (80 FR 62668). We stated in the 2015 Edition Final Rule that the antimicrobial use and resistance reporting data is only collected by CDC rather than at the jurisdictional level (80 FR 62668). The transmission to public health agencies—antimicrobial use and resistance reporting certification criterion currently references the Health Level 7 (HL7®) Implementation Guide for CDA® Release 2—Level 3: Healthcare Associated Infection (HAI) Reports, Release 1, U.S. Realm, August 2013 standard in § 170.205(r)(1) and only requires conformance to certain sections of the implementation guide. The § 170.315(f)(6) certification criterion is required for completing the Antimicrobial Use Surveillance and Antimicrobial Resistance Surveillance measures in the Medicare Promoting Interoperability Program for eligible hospitals and CAHs.
We have reviewed and evaluated the transmission to public health agencies—antimicrobial use and resistance reporting certification criterion in § 170.315(f)(6) with a focus on achieving burden reduction while still supporting our policy goals. We have identified trends within the industry regarding a shift in reporting approach that supports revision of this criterion.
We believe that revising the certification criterion in § 170.315(f)(6) to functional requirements only would reduce burden and allow for standards advancement and adoption of FHIR-based reporting to move more quickly. We welcome feedback on these proposals.
We propose to remove the “transmission to public health agencies—health care surveys”
We have reviewed and evaluated the transmission to public health agencies—health care surveys certification criterion in § 170.315(f)(7) with a goal of reducing burden while still supporting our policy priorities. We are also seeking to align with CDC priorities around data modernization and encouraging the use of FHIR-based approaches. The removal of this criterion would encourage industry to modernize and scale their reporting approach alongside CDC's efforts.
We believe that removing the certification criterion in § 170.315(f)(7) would reduce burden while at the same time honor our policy goals to ensure health IT interoperability and functionality. Hospitals and clinicians have been actively submitting these surveys for over a decade and continue to meet the technical requirements set by CDC, even when these requirements outpace the certification criteria.
In the 2015 Edition Final Rule (80 FR 62669), we adopted a certification criterion in § 170.315(g)(1) that requires the capability to create a report or file that enables a user to review the patients or actions that would make the patient or action eligible to be included in the numerator of a percentage-based measure in the MIPS Promoting Interoperability performance category and the Medicare Promoting Interoperability Program. We first adopted this capability for the 2014 edition in § 170.314(g)(1) to complement the “automated measure calculation” certification criterion to support the associated meaningful use objectives in the EHR Incentive Programs. In the Cures Act Final Rule (85 FR 25708), we updated the references to the EHR Incentive Programs in the criterion to reflect CMS' updates to the name of the Programs, which are now the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category.
We propose to remove the “automated numerator recording” certification criterion and reserve § 170.315(g)(1). We have reviewed and evaluated the certification criterion in § 170.315(g)(1), seeking to identify ways to reduce burden while still supporting our policy goals. Health IT developers that facilitate customer participation in the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category have been supporting the recording of numerator data associated with the measures and its previous iterations for many years. CMS establishes the measures and provides any additional information about how the numerator should be recorded through rulemaking and subsequent communications. ASTP/ONC uses the measure specifications established by CMS to develop testing procedures for health IT developers to certify their products to the automated numerator recording certification criterion. Certification of health IT to record the actions of the numerator has played an important role in ensuring health IT developers consistently implemented the measures established by CMS. However, we believe that developers now have significant experience with implementing CMS requirements, and they will continue to ensure that the measures are recorded in a fashion that meets CMS requirements to ensure that their customers can successfully participate in the absence of additional testing requirements under the ONC Health IT Certification Program. If our removal of the automated numerator recording certification criterion is finalized as proposed, we will work with CMS to ensure relevant guidance and materials for existing measures is consolidated as part of the informational materials that CMS maintains regarding measures in the Medicare Promoting Interoperability Program and MIPS Promoting Interoperability performance category.
We believe that removing the certification criterion in § 170.315(g)(1) will reduce administrative burden, as well as burden for health IT developers and health care providers while still allowing us to achieve our policy goals. Because the certification criterion in § 170.315(g)(1) is specified in the definitions of CEHRT established by CMS for the Medicare Promoting Interoperability Program (42 CFR 495.4) and the MIPS Promoting Interoperability performance category (42 CFR 414.1305), we believe that a transition date is needed. Therefore, we propose to remove the automated numerator recording certification criterion as of January 1, 2027, and reserve § 170.315(g)(1). We welcome comments on this proposal.
In the 2015 Edition Final Rule (80 FR 62669 through 62670), we adopted the “automated measure calculation” certification criterion in § 170.315(g)(2) that requires the capability to record the numerator and denominator and create a report including the numerator, denominator, and resulting percentage associated with each applicable measure in the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category. This capability was first adopted as a 2011 Edition certification criterion to support the associated meaningful use stage 1 objectives and subsequently adopted in the 2014 Edition in § 170.314(g)(2) (77 FR 54184). In the Cures Act Final Rule (85 FR 25708), we updated the references to the EHR Incentive Programs in the certification criterion to reflect CMS' updated names for the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability
We now propose to remove the “automated measure calculation” certification criterion and reserve § 170.315(g)(2) with an effective date of January 1, 2027. We have reviewed and evaluated the certification criterion in § 170.315(g)(2), seeking to identify ways to reduce burden while still supporting our policy goals. As with the automated numerator recording certification criterion discussed above, health IT developers that facilitate customer participation in the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category have been supporting the calculation of measures in the program and its previous iterations for many years. CMS establishes these measures and provides any additional information about how the measures should be calculated through rulemaking and subsequent program communications. ASTP/ONC uses the measure specifications established by CMS to develop testing procedures for health IT developers to certify their products to the automated measure calculation certification criterion. Certification of health IT for measure calculation has played an important role in ensuring health IT developers consistently implemented the measures established by CMS. However, we believe that developers now have significant experience with implementing CMS requirements, and that they will continue to ensure that the measures are calculated in a fashion that meets CMS requirements to ensure that their customers can successfully participate in the absence of additional testing requirements under the Certification Program. If our removal of the automated measure calculation certification criterion is finalized as proposed, we will work with CMS to ensure relevant guidance and materials for existing measures is consolidated as part of the informational materials that CMS maintains regarding measures in the Medicare Promoting Interoperability Program and MIPS Promoting Interoperability performance category.
We believe that removing the certification criterion in § 170.315(g)(2) will reduce administrative burden for health IT developers that support customer participation in the Medicare Promoting Interoperability Program and MIPS Promoting Interoperability performance category. Because the certification criterion in § 170.315(g)(2) is specified in the definitions of CEHRT in 42 CFR 414.1305 and 495.4 and currently required for reporting of Promoting Interoperability measures, we believe that a transition date is needed. Therefore, we propose to remove and reserve the automated measure calculation certification criterion in § 170.315(g)(2) as of January 1, 2027. We welcome comments on this proposal.
We propose to remove the “safety-enhanced design” certification criterion in § 170.315(g)(3) and the reference to this certification criterion in § 170.550(g)(1) as of the effective date of a final rule for this proposed rule. The safety-enhanced design certification criterion specifies the user-centered design (UCD) testing that must be applied to certain health IT capabilities submitted for certification. Certification to this certification criterion is conditional as its scope and applicability depends on the other certification criteria for which a Health IT Module is presented for certification. Section 170.315(g)(3) prescribes specific requirements for how certified capabilities are designed or made available to users. For example, during the design and development of certified health IT, developers are required to apply UCD processes to the capabilities reference in § 170.315(g)(3). This certification criterion is not included in the Base EHR definition in § 170.102 or the definition of CEHRT established by CMS in 42 CFR 414.1305 and 42 CFR 495.4.
In the 2014 Edition Proposed Rule (77 FR 13842), we provided an overview of the International Organization for Standardization's (ISO) definition of usability and outlined that EHR technology certification could introduce some improvements that we believed would enhance both the safety and efficiency of CEHRT. This position mirrored statements made by interested parties regarding a gap between optimal usability and the usability offered by some EHR technologies at that time. In November 2011, the Institute of Medicine (IOM) called on the Secretary of HHS to specify the quality and risk management process requirements that health IT vendors must adopt, with a particular focus on human factors, safety culture, and usability. In the 2014 Edition Proposed Rule, we proposed to focus on the process of UCD to improve overall usability. We prioritized eight certification criteria
In the 2014 Edition Final Rule (77 FR 54187 through 54190), we adopted § 170.314(g)(3) as proposed, specifying that UCD must be applied to each capability of an EHR technology that is associated with the eight certification criteria named in the safety-enhanced design certification criterion. In addition, we finalized that the information from the NISTIR 7742 was required to be submitted for each of the criteria specified in the 2014 Edition safety-enhanced design certification criterion.
In the 2014 Edition Release 2 Final Rule, we revised the safety-enhanced design certification criterion in to include three CPOE certification criteria (79 FR 54436) and the clinical information reconciliation and incorporation (CIRI) certification criterion (79 FR 54439).
In the 2015 Edition Proposed Rule (80 FR 16856), we proposed to adopt a 2015
In the 2015 Edition Final Rule (80 FR 62670), we adopted the proposed safety-enhanced design certification criterion with modifications. Modifications included adopting a reduced list of criteria for inclusion in the safety-enhanced design certification criterion
We anticipate the removal of this criterion would reduce costs and burden for health IT developers and health care providers. For example, when pursuing certification, health IT developers must recruit a minimum of ten participants, conduct the necessary testing, and submit metrics for each certification criterion, for which they seek certification, that is refenced within § 170.315(g)(3). We refer readers to section VIII (Regulatory Impact Analysis) of this proposed rule for more detailed information on cost estimates of safety-enhanced design and potential cost savings. In addition to reducing costs and burden for health IT developers, we anticipate that removing this certification criterion would allow health IT developers to redirect time and resources towards more innovative approaches to support and improve safety-enhanced design in their products. Additionally, we no longer believe that this certification criterion provides the same benefit to the regulatory burden profile that it did when first adopted over ten years ago. In contrast, its presence in the Certification Program has led to instances where administrative processes to fulfill its requirements have delayed health IT developers from achieving product certifications without added improvements in user-centered design. In short, this certification criterion's impact has diminished since it was first adopted. Moreover, compared to its burden, we have seen little use of the transparent reporting associated with this certification criterion (§ 170.523(f)(1)(xix)).
Consistent with E.O. 14192, “Unleashing Prosperity Through Deregulation,” and the reasons we stated above, we believe it is appropriate to remove this certification criterion. Therefore, we propose to remove the safety-enhanced design certification criterion in § 170.315(g)(3) and the reference to this certification criteria in § 170.550(g)(1) as of the effective date of a subsequent final rule. We welcome comments on our proposal.
We propose to remove the “quality management system” (QMS) certification criterion in § 170.315(g)(4) and the reference to this certification criteria in § 170.550(g)(2) as of the effective date of a final rule for this proposed rule. The QMS certification criterion states for each capability that a technology includes and for which that capability's certification is sought, the use of a QMS in the development, testing, implementation, and maintenance of that capability must be identified and satisfied in one of the following ways: either the QMS used is established by the Federal government or a standards developing organization (SDO) or the QMS used is mapped to one or more QMS established by the Federal government or SDOs. Per § 170.550(g), this certification criterion is mandatory for all certified Health IT Modules.
The 2014 Edition Proposed Rule (77 FR 13842) referenced a report by the Institute of Medicine (IOM) in which IOM recommended that we “[establish] quality management principles and processes in health IT.” Accordingly, we stated that we were considering including in the final rule an additional certification criterion that would require an EHR technology developer to document how their EHR technology development processes either align with, or deviate from, certain quality management principles and processes (77 FR 13843).
In the 2014 Edition Final Rule, we adopted a new quality management system certification criterion in § 170.314(g)(4) that was intended as a first step to focus on QMS and build on it in an incremental fashion (77 FR 54191). We finalized that all EHR technology certified to the 2014 Edition certification criteria would need to be certified to this certification criterion. In addition, we revised § 170.550 to require that, when certifying EHR Modules to the 2014 Edition EHR certification criteria, ONC-ACBs must certify EHR Modules to this certification criterion.
In the 2015 Edition Proposed Rule (80 FR 16858), we proposed a revised version of the QMS certification criterion in § 170.315(g)(4). We proposed to require the identification of the QMS used in the development, testing, implementation, and maintenance of capabilities certified under the Certification Program. We proposed that for a Health IT Module to be certified, the identified QMS must be compliant with a quality management system established by the Federal government or an SDO, or mapped to one or more quality management systems established by the Federal government or SDOs. In the 2015 Edition Final Rule (80 FR 62672), we adopted the proposed version of the QMS certification criterion in § 170.315(g)(4). In addition, we revised § 170.550 to require ONC-ACBs to certify Health IT Modules to the new criterion in § 170.315(g)(4) when certifying to the 2015 Edition.
When we initially proposed this certification criterion in the 2014 Edition Proposed Rule, we understood that some EHR technology developers already had quality management principles and processes in place, but we did not believe, especially considering the IOM recommendation, that the EHR technology industry consistently followed such processes. Since the adoption of the QMS certification criterion, we find that industry and other interested parties now widely employ quality management principles. As an example,
We propose to remove the “accessibility-centered design” (ACD) certification criterion in § 170.315(g)(5) and the reference to this certification criteria in § 170.550(g)(3) as of the effective date of a final rule for this proposed rule. This certification criterion requires that all developers of Health IT Modules identify and use a health IT accessibility-centered design standard or law in the development, testing, implementation and maintenance of each capability for which certification is sought. The removal of this certification criterion, if finalized, would not exempt health IT developers and providers from their independent obligations under applicable federal civil rights laws, including Section 504 of the Rehabilitation Act, Section 1557 of the Affordable Care Act, and the Americans with Disabilities Act. The requirements of these civil rights laws include, but are not limited to, providing individuals with disabilities equal access to information and appropriate auxiliary aids and services as provided in the applicable statutes and regulations.
In the 2015 Edition Proposed Rule, we proposed a new accessibility-centered design certification criterion in § 170.315(g)(8) (80 FR 16861). We proposed that this criterion would require the identification of user-centered design standard(s) or laws for accessibility that were applied, or complied with, in the development of specific capabilities included in a Health IT Module or, alternatively, the lack of such application or compliance. We proposed to require that for each capability that a Health IT Module includes, and for which that capability's certification is sought, the use of a health IT accessibility-centered design standard or compliance with a health IT accessibility law in the development, testing, implementation, and maintenance of that capability must be identified. We also proposed that the method(s) used to meet this proposed certification criterion would be reported through the open data CHPL and we proposed to revise § 170.550 to require ONC-ACBs to certify all Health IT Modules certified to the 2015 Edition to the accessibility-centered design certification criterion.
The 2015 Edition Final Rule adopted the accessibility-centered design (ACD) certification criterion as proposed, moving it to § 170.315(g)(5) (80 FR 62673). Additionally, we finalized in § 170.550 that ONC-ACBs must certify all 2015 Edition Health IT Modules to the criterion in § 170.315(g)(5).
In the 2015 Edition Proposed Rule we explained that the proposed certification criterion would serve to increase transparency around the application of user-centered design standards for accessibility to health IT and the compliance of health IT with accessibility laws (80 FR 16861). We stated that this transparency would benefit health care providers, consumers, government entities, and other stakeholders, and would encourage health IT developers to pursue the application of more accessibility standards and laws in product development that could lead to improved usability for health care providers with disabilities and health care outcomes for patients with disabilities. Since the adoption of this certification criterion, we find that industry and other interested parties have readily adopted this application of user-centered design as an industry standard. For instance, according to CHPL data, as of August 2025, every single active Certified Health IT Module (721 total) was certified to § 170.315(g)(5). The proposed removal of this certification criterion would reduce the effort of health IT developers to meet ongoing program requirements that duplicate widely adopted accessibility-centered design practices, allowing developers to refocus these resources on innovation and meeting the needs of their clients and end users in other areas.
Therefore, we propose to remove the accessibility-center design certification criterion in § 170.315(g)(5) and the reference to this certification criterion in § 170.550(g)(3) as of the effective date of a final rule for this proposed rule. As stated earlier, the removal of this certification criterion, if finalized as proposed, would not exempt health IT developers and providers from their independent obligations under applicable federal civil rights laws, including but not limited to, providing individuals with disabilities equal access to information and appropriate auxiliary aids and services. We welcome comments on our proposal.
We propose to remove the certification criterion in § 170.315(g)(6) and reserve that section. We also propose to remove § 170.550(g)(4) which references the criterion, as described elsewhere in this proposed rule. The “Consolidated CDA creation performance” certification criterion helps to ensure the proper conformance of Consolidated CDAs (C-CDAs) for transition of care and referral summaries that are sent to and received from external organizations. In the 2015 Edition Final Rule, we adopted a new Consolidated CDA creation performance certification criterion in § 170.315(g)(6) that assesses a product's C-CDA creation performance if the Health IT Module is presented for certification with C-CDA creation capabilities within its scope (80 FR 62674). In the HTI-1 Final Rule, we updated the associated standards (89 FR 1224).
We have stated elsewhere in this proposed rule that while C-CDA-based standards are still in use, the industry is shifting toward adoption of FHIR-based standards, which are designed to enable greater interoperability and innovation. We believe that maintaining the current level of support for this and other C-CDA-based criteria, including putting effort and resources toward testing and certification, can detract from industry efforts to move toward FHIR-based solutions. We believe that removing the Consolidated CDA creation performance certification criterion in § 170.315(g)(6) would contribute to reducing the effort health IT developers and health care providers are focusing on C-CDA support and allow for redirection of efforts toward greater use of FHIR-based standards in health IT. We propose to remove the Consolidated CDA creation performance certification criterion in § 170.315(g)(6) as of the effective date of a subsequent final rule. We welcome feedback on these proposals.
In the 2015 Edition Final Rule (80 FR 62602), we adopted the “application
We propose to remove the application access—patient selection criterion and reserve § 170.315(g)(7) as of January 1, 2027. We have reviewed and evaluated the certification criterion in § 170.315(g)(7), seeking to identify ways to reduce burden while still supporting our policy goals. We refer readers to section I.A.2.b for detailed discussion on “America's FHIR-Forward Future.” Given our increased focus on standards-based APIs in the Certification Program, we believe it is appropriate to remove this functional API criterion at this time. Specifically, since adoption of the SMART App Launch Implementation Guide in § 170.215(c) all Health IT Modules certified to the standardized API for patient and population services certification criterion in § 170.315(g)(10) must support the functional requirement described in § 170.315(g)(7)(i) according to the SMART App Launch Implementation Guide. Further, we are also proposing elsewhere in this proposed rule to remove a corresponding certification criterion in § 170.315(g)(9). Should we finalize removal of the certification criterion in § 170.315(g)(9), the certification criterion in § 170.315(g)(7) would lose its intended utility. We believe that reducing compliance burdens for health IT developers that participate in the Certification Program would foster industry innovation and encourage the development of more creative interoperability solutions. We have similarly also removed the certification criterion in § 170.315(g)(8) via a technical correction in the HTI-4 Final Rule (90 FR 37182), which was published in tandem with the FY2026 IPPS/LTCH PPS Final Rule (90 FR 36536). We had intended to remove § 170.315(g)(8) in the HTI-2 Final Rule, but mistakenly removed § 170.315(g)(2) instead due to an amendatory instruction drafting instruction error. We corrected this error in the HTI-4 Final Rule.
The application access—patient selection certification criterion is included in the Base EHR definition in § 170.102. The criterion is also associated with measures under the Provider to Patient Exchange and Health Information Exchange objectives of the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category. Accordingly, we believe that a transition date is needed for the removal of this measure, if our proposal is finalized, that would allow CMS to make appropriate program adjustments. Therefore, we propose to remove the application access—all data request certification criterion as of January 1, 2027, and reserve § 170.315(g)(7).
We believe that removing the certification criterion in § 170.315(g)(7) will reduce administrative burden as well as burden for health IT developers and health care providers while still allowing us to achieve our policy goals. We welcome comments on this proposal.
In the 2015 Edition Final Rule (80 FR 62602), we established the “application access—all data request” certification criterion at § 170.315(g)(9) that requires the capability to respond to requests for patient data for all of the data classes expressed in the standards in § 170.213. In the Cures Act Final Rule (85 FR 25642), we revised § 170.315(g)(9) to add requirements for the USCDI and remove support for the CCDS by a specified date. In the HTI-1 Final Rule (89 FR 1192), we made revisions to support USCDI v2 and v3 updates and changes to data classes and constituent data elements for C-CDA and C-CDA 2.1 Companion Guide.
We propose to remove the application access—all data request certification criterion in § 170.315(g)(9) as of January 1, 2027. We have reviewed and evaluated the certification criterion in § 170.315(g)(9), seeking to identify ways to reduce burden for health IT developers and health care providers while still supporting our policy goals. As we have stated in the above section on our proposal to remove § 170.315(g)(7) and in section I.A.2.b of this rule, we are increasing focus on standards-based APIs, and we believe it is appropriate to remove this functional API criterion at this time. We believe the functionality of the criterion has been widely adopted (as discussed in section III.A) among health IT developers and is not likely to go away as a supported functionality solely because of removal from the Certification Program. We also believe that removing this certification criterion could spur further industry innovation and support the development of more creative interoperability solutions.
We believe that removing the certification criterion in § 170.315(g)(9) will reduce administrative burden as well as burden for health IT developers and health care providers by eliminating the need for developers of certified health IT to certify to the certification criterion in § 170.315(g)(9). Because the certification criterion in § 170.315(g)(9) is associated with measures under the Provider to Patient Exchange and Health Information Exchange objectives of the Medicare Promoting Interoperability Program and the MIPS Promoting Interoperability performance category, we believe that a transition date is needed.
In the 2015 Edition Final Rule (80 FR 62602), we adopted a revised certification criterion in § 170.315(h)(1) that includes the capability to send and receive according to the Applicability Statement for Secure Health Transport (the primary Direct Project specification). We previously adopted this capability across different certification criteria as the 2014 Edition EHR Certification Criteria were maintained at § 170.314(b)(1), (b)(2), and (h)(1).
We propose to remove the “transport methods and other protocols—direct project” certification criterion in § 170.315(h)(1) as of the effective date of a final rule. We have reviewed and evaluated the certification criterion in § 170.315(h)(1), seeking to identify ways to reduce burden while still supporting our policy goals. We believe that because this certification criterion was included as part of the 2014 Base EHR definition, the 2015 Base EHR definition (subsequently renamed the Base EHR definition), the functionality of this certification criterion has been widely adopted (as discussed in section III.A) among health IT developers and is not likely to go away as a supported functionality solely because of removal from the Certification Program. We no longer believe there is added benefit to include conformance testing for this functionality in the Certification Program as it is widely relied on and supported in the health care industry and would be incorporated in health IT absent the certification criterion. We further believe that removing this certification criterion could spur further
We believe the removal of this certification criterion will reduce administrative burden and costs associated with certification for health IT developers and health care providers by eliminating the need for developers of certified health IT to certify to the certification criterion in § 170.315(h)(1) without substantially impacting our broader policy goals around interoperability and exchange and will allow for further innovation and development. Therefore, we propose to remove the transport methods and other protocols—direct project certification criterion in § 170.315(h)(1) as of the effective date of a subsequent final rule. We welcome comments on this proposal.
In the 2015 Edition final rule we adopted a variation of the § 170.315(h)(1) certification criterion in § 170.315(h)(2) to accommodate implementation differences. This certification criterion combined three standards conformance requirements (the primary Direct standard, the edge protocol, and XDR/XDM handling). We propose to remove the “transport methods and other protocols—Direct Project, Edge Protocol, and XDR/XDM” certification criterion in § 170.315(h)(2) as of the effective date of a subsequent final rule. We have reviewed and evaluated the certification criterion in § 170.315(h)(2), seeking to identify ways to reduce burden while still supporting our policy goals. Similar to § 170.315(h)(1), we believe the functionality of this certification criterion has been widely adopted (as discussed in section III.A) among health IT developers and is not likely to go away as a supported functionality solely because of removal from the Certification Program, since it has been part of the 2014 Edition Base EHR definition, and 2015 Edition Base EHR definition (renamed the Base EHR definition), and the current criterion has not substantively changed since it was adopted in the 2015 Edition Final Rule. We further believe that removing this criterion could spur further industry innovation in this area by allowing for greater flexibility and reduced burden and costs from the need to certify to the certification criterion. Because removing §§ 170.315(h)(1)-(2) would remove all of the certification criteria under § 170.315(h), we propose to remove and reserve § 170.315(h) in its entirety. We welcome comments on this proposal.
The USCDI standard in § 170.213 is a baseline set of data that can be commonly exchanged across care settings for a wide range of uses. Certain certification criteria in the Certification Program currently require the use of one of the versions of the USCDI standard in § 170.213. We established USCDI as a standard in the Cures Act Final Rule (85 FR 25670), adopting USCDI Version 1 (USCDI v1) in § 170.213 and incorporating it by reference in § 170.299. USCDI is also referenced by HHS programs and used by the health care community to align interoperability requirements and national priorities for health IT across industry initiatives. For the overall structure and organization of USCDI, including data classes and data elements, please see
We published the “USCDI v3 Data Elements Enforcement Discretion Notice,”
1. Does not demonstrate the capability to categorize data on individuals based on either or both of the following data elements:
• Sexual orientation; and
• Gender identity; or
2. Only demonstrates the capability to categorize data on individuals for the sex data element in accordance with the following SNOMED CT® codes:
• 248152002 | Female (finding) |; and
• 248153007 | Male (finding) |.
Additionally, under this enforcement discretion notice and certification guidance, we stated that ASTP/ONC will not take any enforcement action under 45 CFR 170.565 against an ONC-ACB based on non-compliance with 45 CFR 170.550 for certifying a Health IT Module that is presented for certification to the “patient demographics and observations” certification criterion (45 CFR 170.315(a)(5)), where the Health IT Module:
1. Does not demonstrate conformance with any or all of the following data and observations in paragraph (a)(5)(i): sex parameter for clinical use, sexual orientation, gender identity, name to use, and pronouns; or
2. Does not demonstrate conformance with any or all of the following paragraphs of (a)(5)(i): (D) (“sexual orientation”), (E) (“gender identity”), (F) (“sex parameter for clinical use”), (G) (“name to use”), and (H) (“pronouns”); or
3. Only demonstrates, for conformance with paragraph (a)(5)(i)(C) (“sex”), that it can record sex in accordance with either the standard specified in § 170.207(n)(1) for the period up to and including December 31, 2025, or the following SNOMED CT® codes found in the standard specified in § 170.207(n)(2):
• 248152002 | Female (finding) |; and
• 248153007 | Male (finding) |.
We stated that ASTP/ONC will not exercise its direct review authority under 45 CFR 170.580 for any non-conformity, potential or actual, that arises solely from a Health IT Module not demonstrating the capabilities specified above or for only demonstrating the limited specified capabilities above, as applicable, for the relevant certification criteria requirements.
We also stated that this enforcement discretion notice, and certification guidance will remain in effect for twelve (12) months from the date of this notice or until HHS completes a regulatory action to revise the applicable regulations, whichever comes first.
In June 2025, we published the USCDI v3.1,
We welcome comments on our proposals.
The National Technology Transfer and Advancement Act (NTTAA) of 1995 (15 U.S.C. 3701
We are not aware of any voluntary consensus standard that could serve as an alternative for the purposes we describe in further detail throughout this proposed rule, including for establishing a baseline set of data that can be commonly exchanged across care settings for a wide range of uses.
The Office of the Federal Register has established requirements for materials (
As discussed above, we have proposed to remove or revise certain certification criteria in the Certification Program in an effort to reduce burden, offer flexibility to both developers and health care providers, as well as to support innovation. Included in certain certification criteria are references to standards. In those instances where we have proposed to remove the criterion, we also generally propose to remove the standard that is referenced from the CFR. Where the certification criterion is not removed as of the effective date of a final rule but allows time for transition until January 1, 2027, we generally propose to also remove those referenced standards on January 1, 2027. Only in limited circumstances do we retain a standard that is referenced in a certification criterion proposed for removal.
We propose to remove the following standards as of the effective date of a subsequent final rule because they would no longer be referenced in certification criteria in the CFR: transport standards in § 170.202(b) through (e); functional standards in § 170.204; content exchange standards in § 170.205(a)(3) and (5); vocabulary standards for representing electronic health information in § 170.207(r) and (s); and standards for health information technology to protect electronic health information created, maintained, and exchanged in § 170.210. We note that certain standards in § 170.210 may not be removed contingent on whether we finalize the alternative privacy and security proposal (see section III.A.4). We also propose to remove the following standards as of the effective date of a final rule since we propose to revise the associated certification criterion requirements to no longer reference the given standard: the content and exchange standard in § 170.205(r)(1), including the specific document templates in § 170.205(r)(1)(i) through (iii).
We propose to remove content exchange standards and implementation specifications referenced in certification criteria requirements that have expired in § 170.205(k)(1) and (2) from the CFR. We propose to remove API standards that expire on January 1, 2026, in § 170.215(b)(1)(i) and (c)(1), and we also propose to remove and reserve outdated vocabulary standards in § 170.207(f)(2) and (m)(1).
Where we propose to remove certain certification criteria after a transition period until January 1, 2027, we also propose to remove those standards from the CFR effective on January 1, 2027. Standards referenced in a certification criterion proposed for removal with a transition date of January 1, 2027, include content exchange standards in § 170.205(i)(2), (t)(1) through (4), and (s)(1). We also propose to remove certain vocabulary standards in order to eliminate outdated standards that are no longer referenced or have expired. Therefore, we propose to remove vocabulary standards in § 170.207(a)(4), (c)(3), (e)(3) and (4). We also propose to remove vocabulary standards in § 170.207(d)(1)(ii), (d)(1)(iii), (n)(1) and (3), and (o) from the CFR and reserve these subsections.
We welcome comments on our proposals. Specifically, we request comment on whether we should retain any of the standards and implementation specifications proposed for removal because the standard or implementation specification should be required for purposes of health IT
In certain instances, we have not proposed to remove a standard even though we propose to remove the certification criterion where the standard is referenced. As noted, under section 3004 of the PHSA, we may adopt standards independently of associated criteria in the Certification Program. Standards adopted in 45 CFR 170 subpart B may be referenced by other HHS programs and policies besides the Certification Program. For example, standards adopted in 45 CFR 170 subpart B, regardless of whether they are associated with health IT certification criteria, are also required for use under sections 13111 and 13112 of the HITECH Act when acquiring, implementing or upgrading health IT systems and products in certain instances.
We do not propose to remove the standard in § 170.205(o), data segmentation for privacy, because some developers still rely on these standards, which allow health care providers to tag health care documents with privacy metadata. We also do not propose to remove the Direct Project transport standard in § 170.202(a)(2). We realize that the Direct Project standards are widely utilized in various use cases and emphasize that developers may still use these standards even if they are removed from certification criteria. We welcome comments on these proposals.
We believe that keeping the primary Direct Project standard in § 170.202(a)(2) but removing the other related standards and protocols in § 170.202(b) through (e) from the Certification Program would acknowledge the current utilization of the Direct Project standard while recognizing the ongoing technological advancements related to transport, including movement toward FHIR-based standards, and would encourage and provide space for further innovation and market competition in this area. We propose a minor revision to § 170.205(d)(2) to add the full name of the HL7 Messaging Standard Version 2.5.1 standard. Lastly, we request comments on retaining the “Applicability Statement for Secure Health Transport” requirement found in § 170.315(h)(1)(i).
Because of the proposed removal of certain certification criteria from § 170.315 discussed above, we propose to make conforming edits to the terms and definitions in § 170.102.
We propose to make conforming revisions to the Base EHR definition in § 170.102 based on our proposals to remove certification criteria from the CFR that are currently referenced in § 170.102. The Base EHR definition provides a baseline assurance that certified health IT has been developed to possess, at a minimum, a key set of capabilities. We note the Base EHR definition is based on the “Qualified EHR” definition in section 3000(13) of the PHSA (77 FR 54262). As we noted recently, we have generally sought to limit the Base EHR definition to elements required for the Qualified EHR definition in PHSA section 3000 (90 FR 37145). In section (3)(i) of the Base EHR definition, we propose to remove references to § 170.315(a)(14), (g)(7) and (9), and (h)(1) and (2). We propose to remove these certification criteria from the Base EHR definition because we have proposed to remove those certification criteria from the CFR. We also propose to move § 170.315(b)(11) to section (3)(i) of the definition and remove and reserve section (3)(ii) and remove section (3)(iii) because the transition date has passed. We welcome feedback on these proposals.
We finalized in the Cures Act Final Rule that the CCDS would no longer be applicable for certified Health IT Modules 24 months after the publication date of the Cures Act Final Rule (85 FR 25671), and then extended that date to December 31, 2022, in the interim final rule titled “Information Blocking and the ONC Health IT Certification Program: Extension of Compliance Dates and Timeframes in Response to the COVID-19 Public Health Emergency” (85 FR 70073). Because § 170.315(b)(6)(ii)(A), which also referenced CCDS, was available for the period before December 31, 2023, we did not propose to remove the definition of CCDS in § 170.102 at that time. However, now that the date of December 31, 2023, has passed and we finalized the removal § 170.315(b)(6) in the HTI-2 Final Rule (89 FR 101776) and there are no longer any references to CCDS in 45 CFR part 170, we propose to remove the term Common Clinical Data Set in § 170.102. We welcome comments on these proposals.
In section III.A.1.d, we propose to remove the “implantable device list” certification criterion in § 170.315(a)(14) and reserve § 170.315(a)(14). The implantable device list certification criterion requires Health IT Modules certified to § 170.315(a)(14) to exchange, record, and allow a user to access a list of Unique Device Identifiers (UDIs) associated with a patient's implantable devices. The only references to the Global Unique Device Identification Database and Production Identifier in 45 CFR part 170 are in § 170.315(a)(14). Because we propose to remove § 170.315(a)(14), we propose to remove the definitions of Global Unique Device Identification Database and Production Identifier in § 170.102 too as the terms would no longer be referenced in any other section of 45 CFR part 170. We welcome comments on these proposals.
Section 3001(c)(5) of the PHSA (42 U.S.C. 300jj-11) (section 4002 of the Cures Act) requires that a health IT developer, as a Condition of Certification requirement under the Certification Program, provide assurances to the Secretary that, unless for legitimate purpose(s) as specified by the Secretary, the developer will not take any action that constitutes information blocking as defined in section 3022(a) of the PHSA or any other action that may inhibit the appropriate exchange, access, and use of EHI. In the Cures Act Final Rule (85 FR 25718), we implemented this provision through several Conditions of Certification and accompanying Maintenance of Certification requirements, which are set forth in § 170.402. Because the transition dates in § 170.402(b)(2)(i) and (ii) have passed, we propose to revise the Maintenance of Certification requirements in § 170.402(b)(2) to remove the transition dates and only include that a health IT developer that must comply with the requirements of § 170.402(a)(4) must provide all of its customers of certified health IT with the health IT certified to the certification criterion in § 170.315(b)(10).
We also propose to make additional conforming edits to § 170.402(b). Because we propose to remove the requirements in § 170.315(b)(11)(iv) and (v) regarding source attribute support, access, and modification and in § 170.315(b)(11)(vi) regarding intervention risk management for predictive DSIs, we also propose to remove § 170.402(b)(4), which requires
As a Condition of Certification requirement in section 3001(c)(5) of the PHSA (42 U.S.C. 300jj-11) (section 4002 of the Cures Act), health IT developers are required to publish APIs that allow “health information from such technology to be accessed, exchanged, and used without special effort through the use of application programming interfaces or successor technology or standards, as provided for under applicable law.” Section 4002 of the Cures Act also states that a developer must, through an API, “provid[e] access to all data elements of a patient's electronic health record to the extent permissible under applicable privacy laws.” The Cures Act Final Rule (85 FR 25642) captured both the technical functionality and behaviors necessary to implement the Cures Act API Condition of Certification requirement. Specifically, we adopted new standards, new implementation specifications, a new certification criterion, and modified the Base EHR definition. In addition, we finalized detailed Condition and Maintenance of Certification requirements for health IT developers of certified health IT in § 170.404. Because the transition dates in § 170.404(b)(2), (3), and (4) have passed, we propose to revise the Maintenance of Certification requirements in § 170.404(b). We propose to revise § 170.404(b)(2) to remove the date, and we propose to remove paragraphs (b)(3) and (b)(4) entirely as they are outdated and, in the case of (b)(4) because it refers to certification criteria that we are proposing to remove. We also propose to revise § 170.404(c) to update certification criteria referenced in the “Certified API technology” definition. We propose to remove the reference to “§ 170.315(g)(7) through” and only keep § 170.315(g)(10) in the “Certified API technology” definition because we are proposing to remove § 170.315(g)(7) through (9). We welcome feedback on these proposals.
Section 3001(c)(5) of the PHSA (42 U.S.C. 300jj-11) (section 4002 of the Cures Act) requires, as a Condition and Maintenance of Certification under the Certification Program, that health IT developers have successfully tested the real world use of the technology for interoperability in the type of setting in which such technology would be marketed. Section 4003(a)(2) of the Cures Act defines interoperability as health information technology that enables the secure exchange of electronic health information with, and use of electronic health information from, other health information technology without special effort on the part of the user; allows for complete access, exchange, and use of all electronically accessible health information for authorized use under applicable state or federal law; and does not constitute information blocking as defined in section 3022(a) of the Cures Act. This definition for interoperability was codified in 45 CFR 170.102.
In the Cures Act Final Rule, through the Real World Testing Condition and Maintenance of Certification requirements, we finalized the implementation of the statute's real world testing requirements in 45 CFR 170.405 for health IT certified to the following certification criteria:
• The “care coordination” certification criteria in § 170.315(b);
• The “clinical quality measures” certification criteria in § 170.315(c)(1) through (c)(3);
• The “view, download, and transmit to 3rd party” certification criterion in § 170.315(e)(1);
• The “public health” certification criteria in § 170.315(f);
• The certification criteria related to APIs in § 170.315(g)(7) through (g)(10); and
• The “transport methods and other protocols” certification criteria in § 170.315(h).
However, in that same final rule we replaced the “application access—data category request” certification criterion (§ 170.315(g)(8)) with the “standardized API for patient and population services” certification criterion (§ 170.315(g)(10)). The “application access—data category request” certification criterion was only available for certification until December 31, 2022, and we eventually removed the certification criterion from the CFR (89 FR 101776). In the HTI-4 Final Rule, we finalized six new certification criteria. We clarified that because § 170.405(a) cross references § 170.315(b), the new § 170.315(b)(4) “real-time prescription benefit” certification criterion finalized in HTI-4 would be automatically included within real world testing requirements. Similarly, we included five API-focused certification criteria: § 170.315(g)(31) “provider prior authorization API—coverage requirements discovery”; § 170.315(g)(32) “provider prior authorization API—documentation templates and rules”; § 170.315(g)(33) “provider prior authorization API—prior authorization support”; § 170.315(j)(20) “workflow triggers for decision support interventions—clients”; and § 170.315(j)(21) “subscriptions—client” in scope for real world testing. Health IT certified to the identified real world testing certification criteria are eligible for the SVAP under § 170.405(b)(8) and (9).
Consistent with the “Real World Testing Condition and Maintenance of Certification Requirements Enforcement Discretion Notice”
We note that certain certification criteria would be fully removed from real world testing requirements by virtue of their proposed removal from the Certification Program. We have included such an outcome in our proposed revised Real World Testing Condition of Certification (45 CFR 170.405(a)). If, in a subsequent final rule, we determine to keep any of the criteria proposed for removal and they are currently identified in the Real World Testing Condition of Certification (45 CFR 170.405(a)), they would also remain part of the Real World Testing Condition of Certification. Examples of such criteria would be the public health criteria proposed for removal (“transmission to cancer registries” (§ 170.315(f)(4)) and “transmission to public health agencies—health care surveys” (§ 170.315(f)(7)).
First, we propose to remove the real world testing plan submission requirement from the Real World Testing Maintenance of Certification requirements (§ 170.405(b)). Second, we propose to revise the results reporting requirements under § 170.405(b)(2) to make clear what health IT developers must include in their real world testing results reporting. Specifically, developers will be expected to report on all health IT certified to any of the certification criteria in § 170.315(g) certification criteria as of January 1 of the year in which they must complete real world testing. Developers must also
We propose to limit real world testing reporting (§ 170.405(b)(2)) to API-focused certification criteria which are, at this time: “standardized API for patient and population services” (§ 170.315(g)(10)); “provider prior authorization API—coverage requirements discovery” (§ 170.315(g)(31)); “provider prior authorization API—documentation templates and rules” (§ 170.315(g)(32)); and “provider prior authorization API—prior authorization support” (§ 170.315(g)(33)). This approach aligns with our overall move to focus the Certification Program on APIs (see discussion in section I.A.2) with a particular focus on FHIR-based APIs.
SVAP will remain available for all certified health IT subject to the Real World Testing Condition of Certification and Maintenance of Certification requirements. For the API-focused certification criteria identified above, the real world testing SVAP reporting requirements will not change. However, for health IT certified to the remaining real world testing certification criteria identified in § 170.405(a), developers will only need to identify in their real world testing results their voluntary updates (health IT products, certification criteria, and standards/implementation specifications) to standards and implementation specifications that the National Coordinator has approved through SVAP, which is consistent with current requirements under 45 CFR 170.405(b)(2)(ii)(C). This approach will allow developers to continue to voluntarily update to newer versions of standards once approved by the National Coordinator, which supports advancing interoperability. For clarity, we have captured this SVAP requirement separately in proposed 45 CFR 170.405(b)(2)(iv). We also propose a revision to § 170.405(b)(8) to cross-reference paragraph (a) of § 170.405 instead of paragraph (b) due to our proposed revisions.
Section 4002(a) of the Cures Act requires that a health IT developer, as a Condition and Maintenance of Certification requirement under the Certification Program, provide to the Secretary an attestation to the Conditions of Certification required in section 3001(c)(5)(D) of the PHSA. In the Cures Act Final Rule, we adopted regulation text implementing the Cures Act's “Attestations” Condition of Certification requirement in § 170.406 (85 FR 25781). Under § 170.406, health IT developers attest twice a year to compliance with the Conditions and Maintenance of Certification requirements. A health IT developer of certified health IT must provide the Secretary an attestation of compliance with § 170.404, the API Conditions and Maintenance of Certification requirements, according to § 170.406(a)(4). Because we discuss the proposal to remove § 170.315(g)(7) through (9) in section III.A.7 of this proposed rule, we also propose to remove the reference to § 170.315(g)(7) through (9) in § 170.406(a)(4). In § 170.406(a)(5), we also propose to remove the reference to § 170.315(g)(7) through (9). Additionally, we propose to remove the reference to § 170.315(h) in § 170.406(a)(5) because, as we discussed in section III.A.8, we propose to remove § 170.315(h)(1) and (2), in effect removing the entirety of § 170.315(h).
The Cures Act specified requirements in section 4002(c) to establish an EHR Reporting Program to provide transparent reporting on certified health IT in the categories of interoperability, usability and user-centered design, security, conformance to certification testing, and other categories, as appropriate to measure the performance of EHR technology. In the HTI-1 Final Rule (89 FR 1311), we established the EHR Reporting Program as the “Insights Condition and Maintenance of Certification” (also referred to as the “Insights Condition”) and finalized in § 170.407 the first set of measures to reflect the interoperability category required by section 3009A(a)(3)(A)(iii) of the PHSA. The Insights Condition includes seven measures on which health IT developers under the Certification Program must annually report consistent with specified timelines. We refer readers to the HTI-1 Proposed Rule (88 FR 23831) for detailed background on how we engaged with the health IT community for the purpose of identifying measures that developers of certified health IT would be required to report on as a Condition and Maintenance of Certification under the Certification Program.
Consistent with E.O. 14192, “Unleashing Prosperity Through Deregulation,”
• ASTP/ONC will not exercise its direct review authority under 45 CFR 170.580 for any non-conformity, potential or actual, that arises solely from a health IT developer not complying with 45 CFR 170.407(b) except for reporting requirements related to the “use of FHIR in apps through certified health IT” measure (45 CFR 170.407(a)(3)(iv)). Stated another way, ASTP/ONC only expects that health IT developers will report on the “use of FHIR in apps through certified health IT” measure (§ 170.407(a)(3)(iv)(A) and (B) beginning in July of 2027 and (a)(3)(iv)(C) beginning in July 2028).
• ASTP/ONC will not conclude that an ONC-ACB has failed to adhere to 45 CFR 170.523(u), find a violation of 45 CFR 170.560(a), or take any enforcement action under 45 CFR 170.565 against an ONC-ACB if an ONC-ACB confirms that the only measure under 45 CFR 170.407(b) for which a health IT developer submits responses is the “use of FHIR in apps through certified health IT” measure (45 CFR 170.407(a)(3)(iv)).
We stated that this enforcement discretion will be in effect beginning on July 1, 2027, and will remain in effect until HHS completes a deregulatory action to remove or revise 45 CFR 170.407 and 170.523(u). Therefore, in this proposed rule, we propose to remove the following measures in § 170.407(a)(3):
• § 170.407(a)(3)(i), Individuals' access to electronic health information through certified health IT;
• § 170.407(a)(3)(ii), Consolidated clinical document architecture (C-CDA) problems, medications, and allergies reconciliation and incorporation through certified health IT;
• § 170.407(a)(3)(iii), Applications supported through certified health IT;
• § 170.407(a)(3)(v), Use of FHIR bulk data access through certified health IT;
• § 170.407(a)(3)(vi), Immunization administrations electronically submitted
• § 170.407(a)(3)(vii), Immunization history and forecasts through certified health IT.
Note, given this proposal, we propose to make conforming edits to the list structure in § 170.407(a)(3) to revise the “use of FHIR in apps through certified health IT” as paragraph (i) instead of (iv). In addition, we propose to remove corresponding references to the removed measures in § 170.407(b) as we only expect that health IT developers would report on the “use of FHIR in apps through certified health IT” measure in the newly designated § 170.407(a)(3)(i), specifically, paragraphs (a)(3)(i)(A) and (B) beginning July of 2027 and (a)(3)(i)(C) beginning in July 2028. We believe our proposal to remove the measures listed above reduces cost and burden to the public.
Our proposals ensure that the Insights Condition is aligned with other proposed policies and changes to the Certification Program that prioritize exchange using FHIR-based APIs. Among the measures that related to FHIR-based APIs, the “use of FHIR in apps through certified health IT” provides the most valuable insights related to implementation and use of FHIR. We welcome comments on these proposals.
In the HTI-1 Final Rule (89 FR 1346), we finalized the Insights Condition reporting frequency to annually for any Health IT Module that has or has had an active certification to § 170.407(b)(1) during the prior six months. We propose to revise § 170.407(b)(1) to clarify that a developer must provide an annual response to the Insights Condition of Certification if they had at least one actively certified Health IT Module as of January 1 of the reporting period (
This also applies to newer versions of certified health IT leveraging inherited certified status (ICS). We expect that developers of certified health IT requesting ICS for newer versions would include data for all applicable certified health IT, including newer versions in scope of the Insights Condition requirements as of January 1, at the start of the data collection reporting period. We note that developers of certified health IT would not be expected to separate their certified health IT, in scope of ICS, by versions when submitting their response. This has always been the expectation from what we finalized in the HTI-1 Final Rule (89 FR 1348).
We propose to revise the name of § 170.407 (Insights Condition and Maintenance of Certification) to simply “Insights.” This proposed change is intended to ensure consistency and uniformity across all the Conditions and Maintenance of Certification in subpart D of 45 CFR part 170. We welcome comments on our proposals.
In the HTI-1 Final Rule (89 FR 1313), we stated that while the substantive requirements for each measure are defined in rulemaking, we determined that measure specification sheets are a logical and accessible method for the public to also view the technical specification that supports those requirements, and that this is consistent with the approach used by other HHS programs related to measure specifications (
We also stated that we intend to provide up to date measure specification sheets to assist with the regulated community's understanding of the finalized measures and metric calculations (89 FR 1313). In January 2025, we provided developers of certified health IT updated measure specification sheets for certain measures finalized in the HTI-1 Final Rule, with the flexibility to implement either version 2 or version 4 of the measure specification sheets for the first year of reporting.
Under the “principles of proper conduct (PoPCs) for ONC-ACBs” in § 170.523, we require ONC-ACBs to provide ASTP/ONC a “certified product listing” in § 170.523(f) which is a current list of Health IT Modules that have been certified. We propose to revise § 170.523(f)(1)(viii) to no longer require ONC-ACBs to provide test data versions used and whether any test data was altered for the certification criterion or criteria to which the Health IT Module has been certified. With this proposed revision, we would still require the test procedure and test tool version used. Through our CHPL, we have tracked user access to the test data versions used and have found engagement to be very infrequent. In addition, an analysis of Health IT Modules in the CHPL indicates that the majority of developers do not employ custom data when conducting certification testing but instead utilize the ASTP/ONC-provided test data. Due to low user engagement and little variance from the use of ASTP/ONC-provided test data, we believe documenting the test data provides little value to the public and represents additional administrative burden for both health IT developers and ONC-ACBs. We believe this proposed revision to remove this requirement aligns with our goals to reduce burden for both health IT developers and ONC-ACBs.
We propose to make conforming revisions to the PoPCs for ONC-ACBs in § 170.523 by removing cross-references to certain certification criteria that we propose to remove in this proposed rule. Specifically, we propose to remove and reserve § 170.523(f)(1)(ix) through (xi) which reference the “privacy and security” certification criteria (§ 170.315(d)), the “quality management system” certification criterion (§ 170.315(g)(4)), and the “accessibility-centered design” certification criterion (§ 170.315(g)(5)). We also propose to remove and reserve § 170.523(f)(1)(xix), which references the “safety enhanced
Consistent with the proposals related to the Real World Testing Condition and Maintenance of Certification in § 170.405, we propose to remove the ONC-ACB review and confirmation process for real world testing plans in § 170.523(p)(1) and the reference to submit real world testing plans in § 170.523(p)(3). We welcome comments on our proposals.
We propose to revise the “Health IT Module dependent criteria” in § 170.550(g) by removing § 170.550(g)(1) through (4) to conform with our proposals to remove certain certification criteria related to privacy and security, and design and performance. We also propose to renumber the remaining paragraphs in § 170.550(g)(5) and (g)(6) to (g)(1) and (g)(2), respectively. We propose to remove § 170.550(h) “privacy and security certification framework” and § 170.550(j) “direct project transport method” to also conform with our proposals to remove certification criteria in § 170.315(d) and § 170.315(h).
Lastly, we propose to revise § 170.550(e) “standards updates” to correct a cross-reference from “§ 171.405(b)(7) or (8)” to “§ 170.405(b)(7) or (8).” In the Cures Act Final Rule, we adopted § 170.550(e) “standards updates” requiring ONC-ACBs to provide an option for certification of Health IT Modules consistent with SVAP to one or more of the certification criteria referenced in real world testing requirements in § 170.405(a) based on newer versions of standards (85 FR 25952). However, in the regulatory text we erroneously amended § 170.550(e) to require ONC-ACBs provide an option for certification of Health IT Modules consistent with § 171.405(b)(7) or (8). We intended, as indicated by the preamble, to adopt the reference to the real world testing requirements in 45 CFR part 170 instead of 45 CFR part 171 Information Blocking. Therefore, we propose to revise § 170.550(e) to reference the SVAP requirements in § 170.405(b)(7) and (8). We welcome comments on our proposals.
We propose to revise the “certification to newer versions of certain standards” in § 170.555 by removing references to the term “Complete EHR” as it is no longer relevant in our Certification Program. Retaining the references may cause confusion for the public because the ability to maintain “Complete EHR” certification was only permitted with health IT certified to the 2014 Edition certification criteria, and the “Complete EHR” concept was discontinued for the 2015 Edition (80 FR 62719). The Cures Act Final Rule removed the 2014 Edition certification criteria in § 170.314 and references to “Complete EHR”, and in the HTI-1 Final Rule, we removed the “Complete EHR” language from all reference points in §§ 170.523 and 170.524 (89 FR 1209 through 1210). We continued to remove the remaining references to “Complete EHR” in the HTI-2 TEFCA Final Rule (89 FR 101775) within subpart E of 45 CFR part 170, and we finalized our proposal to remove the term “Complete EHR” including in § 170.555(b)(2). However, we inadvertently excluded amendatory instructions to revise § 170.555(b)(2) in the final rule. Therefore, we propose to revise § 170.555(b)(2) to remove the reference to “Complete EHR.” We welcome comments on our proposal.
We propose to revise the title of § 170.570 from “Effect of revocation on the certifications issued to Complete EHRs and EHR Module(s)” to “Effect of revocation on the certifications issued to Health IT Module(s).” As discussed above, the term “Complete EHRs” is no longer a relevant term in our Certification Program and retaining it may cause confusion for the public. Therefore, we propose to revise the title of § 170.570 to further align with our removals of the outdated “Complete EHR” terminology. We welcome comments on our proposal.
Comments received in response to the CMS-ASTP/ONC Request for Information; Health Technology Ecosystem (90 FR 21034) (CMS-ASTP/ONC RFI) and other RFIs, such as the Federal Trade Commission's Request for Public Comment Regarding Reducing Anti-Competitive Regulatory Barriers (FTC-2025-0028), expressed concerns about several exceptions to the information blocking rule as well as general concerns about the exceptions. Innovators and patient advocates indicated that some of the exceptions as currently codified may be too broad or are being misused in an anti-competitive or obstructive way. For example, some commenters suggested narrowing or eliminating the exceptions for infeasibility, security, and fees. This proposed rule aims to address several prominent themes among the concerns raised by commenters through proposals below. Each of these proposed revisions to the information blocking regulations would be effective, if finalized, on the effective date of a subsequent final rule. We are also considering further actions such as future rulemaking, guidance, and educational outreach in response to other RFI comments and feedback from stakeholders.
In the Cures Act Final Rule, we finalized definitions of “access,” “exchange,” and “use” (85 FR 25805). We explained that the concepts of access, exchange, and use are closely related, and noted that EHI cannot be used unless it can be accessed, and that this often requires that EHI be exchanged among different individuals or entities and through various technological means (85 FR 25805). Our references to various technological means always included access via automated means, such as robotic process automation (commonly referred to as the use of “bots”)
In addition to the discussion in the Cures Act Final Rule regarding individuals or entities accessing, exchanging, and using EHI (85 FR 25805), we also discussed the concept of automated access in the HTI-1 Final Rule. Specifically, we noted that some entities may provide data services and that such actions are considered access, exchange, or use regardless of the route used to request, access, or receive data (89 FR 1363). The heterogeneity in how individuals and entities may access, exchange, or use EHI as well as the potential for significantly increased use of automated means to improve efficiency
We are also considering to similarly revise the “exchange” definition in § 171.102. We propose to revise the “exchange” definition in addition to the proposed revisions to the “access” and “use” definitions, as an alternative proposal to only revising the “access” and “use” definitions. Under this alternative proposal, we propose that the meaning of “exchange” includes, without limitation, the ability for EHI to be transmitted, through use of automation technologies (
We remind readers that, as we have explained in prior rules, the information blocking regulations are designed to operate in a manner consistent with the framework of the HIPAA Privacy Rule and other laws providing privacy rights for patients (85 FR 25812). Any actor (as defined in 45 CFR 171.102) that is also subject to any provision(s) in 45 CFR parts 160, 162, or 164 must continue to comply with such provision(s) when and to the extent such provisions of the HIPAA Rules are applicable to the actor's conduct (89 FR 1380), such as with providing access, exchange, or use of protected EHI.
We propose and seek comments on revisions to two separate conditions of the Infeasibility Exception (45 CFR 171.204). Specifically, we propose to remove the “
In the HTI-1 Final Rule, we finalized the “
HTI-1 Proposed Rule commenters expressed concern that certain actors, such as health IT developers of certified health IT, may seek to misuse the proposal to restrict access to EHI in an overly broad manner (89 FR 1377). Of these commenters, some expressed concern that the proposal could potentially inhibit care coordination by making it too easy for an actor holding EHI to simply refuse modification use requests from third parties who also furnish services to the same patient(s) (89 FR 1377).
Commenters on the HTI-1 Proposed Rule stated that the limitation to this condition is not broad enough, and that ASTP/ONC should expand the limitation of this condition to also apply when the actor's customers are not HIPAA covered entities; or are not health care providers, but are maintaining EHI in systems licensed by an actor (89 FR 1379). For reasons stated in response to these comments in the HTI-1 Final Rule (89 FR 1379), we did not expand the finalized exclusion from applicability of the condition but noted that we may consider amending the condition in the future (89 FR 1379).
In the HTI-2 Proposed Rule, we proposed two revisions to narrow the application and use of the
Although comments on the HTI-2 Proposed Rule's potential revisions to the Infeasibility Exception, including but not limited to the
We received a relatively small number of comments specific to the proposed narrowing of the
We have evaluated not only our previously proposed revisions to the condition but also the
In the HTI-1 Proposed Rule, we solicited comment on whether the (then-proposed)
We agreed in the HTI-1 Final Rule with those commenters who had indicated that it would be premature to establish at that time a sunset date for § 171.204(a)(3) because the appropriateness of eliminating it depended on the continued development of health IT's capability to support lawful third-party modification use of EHI by any party and with no or minimal infeasibility or other concerns (89 FR 1378). However, we also said that if advances in health IT capabilities or other changes in the interoperability and information sharing environment indicated to us that the condition should be modified or sunset, we would anticipate proposing such a change in a future rulemaking (89 FR 1378).
We have observed substantial growth in technical approaches that enable efficient, appropriately secure modification use as well as two-way exchange interactions between different developers' systems to support modification use of EHI since HHS announced the HTI-1 Final Rule in December, 2023.
We are aware that actors may have concerns about third-party modifications relating to the confidentiality, integrity, or availability of EHI, or to the potential risks to patient safety arising from corrupt or misidentified patient data. We remind health care providers, other actors, patients, and others who may have such concerns that we have established exceptions designed for those types of concerns. For example, an actor may choose to satisfy the Security Exception (§ 171.203) where an actor has identified a specific threat that a request for access, exchange, or use poses to the confidentiality, integrity, or availability of EHI in an actor's systems. Similarly, an actor may choose to satisfy the Preventing Harm Exception (§ 171.201) if the actor knows or reasonably suspects specific data a third party seeks to write into the EHI the actor maintains to be misidentified or mismatched, corrupt due to technical failure, or erroneous for another reason. Actors may choose to satisfy other exceptions, where applicable, regardless of whether we finalize retirement of the
We also remind actors that, if we were to finalize this proposal to remove the
We note again, as we did in the HTI-1 Final Rule, that the
To preserve accuracy of references in existing information blocking educational materials to specific conditions of the Infeasibility Exception by CFR citation, we propose to remove and reserve subparagraph (3) within § 171.204(a). We are not proposing at this time to redesignate any of the other conditions currently codified within § 171.204(a), nor are we proposing to make any other changes to any of these conditions or the
In the HTI-1 Proposed Rule, we proposed to re-number the “
We explained that the proposed
(i) The actor could not reach agreement with a requestor in accordance with § 171.301(a)
(ii) The actor offered all alternative manners “in accordance with” § 171.301(b)
(iii) The actor does not provide the same access, exchange, or use of the requested electronic health information to a substantial number of individuals or entities that are similarly situated to the requester (88 FR 23869).
We requested comments on all aspects of the proposal. In particular, in regards to the second factor, we asked whether an actor should have to offer access, exchange, or use in manners that would satisfy all three of the alternative manners in § 171.301(b)(1)
Regarding the third factor, we asked whether the language provided adequate assurance that actors would not be able to misuse the § 171.204(a)(4)
In the HTI-1 Final Rule, we finalized the
The
Specifically, we noted that “similarly situated” would serve to indicate that different specific individuals or entities within a class of such individuals or entities who are similarly situated to one another should be treated in a consistent and non-discriminatory manner, and that it is not our intent for the “individuals or entities that are similarly situated to the requester” criterion of the condition to be used in a way that differentiates the same access to EHI simply based on the requestor's status, such as an individual (
The
Based on comments received in response to the CMS-ASTP/ONC RFI, questions received through the ASTP/ONC Health IT Feedback and Inquiry Portal,
Specifically, we propose (in § 171.204(a)(4)(ii)) to increase the minimum number of alternative manners required to be considered to have “exhausted” the Manner Exception from two to “all,” in line with the original (HTI-1 Proposed Rule) proposal for the condition. In referring to “all alternative manners,” we do not mean all possible manners of exchange other than the manner requested. Rather, we specifically mean those manners that are set forth in subparagraph (i), (ii), or (iii) of § 171.301(b)(1). We seek comment on whether, and to what extent, actors and those who request EHI access, exchange, or use from actors would find useful a further reiteration in the text of the condition that each alternative manner must be attempted consistent with § 171.301(b) (the
We also welcome comment on whether revisions to the wording of § 171.204(a)(4)(ii) would help ensure an actor can only claim to a requestor that fulfilling the request is “infeasible” under the
In § 171.204(a)(4)(iii), we propose three revisions. First, we proposed to replace “same” with “analogous” as it refers to the access, exchange, or use of EHI. We discussed in the HTI-1 Final Rule how “same” meant the same requested access, exchange, or use, including the “same” manners of EHI access, exchange, or use, as provided to others. We still intend to include the concept of “the same” access, exchange, or use of EHI in consideration of whether the provision is met, but we believe the more expansive term “analogous” is more appropriate. We believe using “analogous” access, exchange, or use in comparison to what the actor provides to other individual(s) or entity(ies) is a basis less subject to manipulation than “same,” which some actors may argue equates to “identical” access, exchange, or use of EHI. We do not intend for “same” to be interpreted in a way that could be limiting and potentially manipulated to deny access, exchange, or use. For example, this condition would not be available to an actor when a requestor requests API access with certain features, such as “write” capabilities or filtering functionality, that the actor provides to other entities. Assuming for the sake of this example that the actor is not prohibited by applicable law from providing the requested access, exchange, or use of the requested EHI to the requestor,
Similarly, the
Second and third, we propose: changing the “substantial number” element to “any,” by which we mean at least one individual or entity; and removing consideration of whether such individual or entity is similarly situated to the requestor. The proposed revisions to § 171.204(a)(4)(iii) would explicitly exclude from application of the condition any situation where the actor offers at least one individual or entity the requested access, exchange, or use. These revisions would alleviate concerns that the terms “substantial” and “similarly situated” are being manipulated to deny access, exchange, or use. Further, we do not believe that removal of the terms would undermine the stated overall objective of the condition when it was proposed, which was to provide certainty to actors when they were faced with situations where the request would involve building “one off” access, exchange, or use interfaces. Rather, the condition could still be met if the actor does not provide analogous
If we finalize the proposal to retain the § 171.204(a)(4) condition with removal of the “similarly situated” element from § 171.204(a)(4)(iii), instead of our alternative proposal (below) to remove § 171.204(a)(4) in its entirety, we also propose to remove § 171.204(a)(4)(iv). Specifying bases an actor shall not use in determining whether a requestor is “similarly situated” under § 171.204(a)(4)(iii) would be moot upon removal of “substantially similar” from § 171.204(a)(4)(iii).
In the alternative to our proposed revisions to the condition above, we propose to remove the § 171.204(a)(4)
If we were to finalize the alternative proposal to remove the § 171.204(a)(4)
In the Cures Act Final Rule, we established the Manner Exception (then referred to as the “Content and Manner” Exception) in § 171.301 (85 FR 25959,
In the HTI-1 Final Rule (effective April 8, 2024), we revised § 171.301 to remove reference to the
Based on comments received in response to the CMS-ASTP/ONC RFI, questions received through the ASTP/ONC Health IT Feedback and Inquiry Portal,
In both the Cures Act Proposed Rule and the Cures Act Final Rule, we recognized the inherent power inequity between EHR developers and various types of requestors (
As currently codified, the Manner Exception's
Further, the
We reiterate the plain language of the Manner Exception, and particularly the
To further explicate the applicability of the Manner Exception where the actor has the technical capability and is able to reach agreement with the requestor to fulfill access, exchange, or use of requested EHI in a manner requested by the requestor, we offer two proposals. First, we propose to revise § 171.301(a)(2) to add a new subparagraph (iii) to incorporate in regulation text and explicitly state that any contract or agreement related to the access, exchange, or use of EHI: (1) must be at market rate; (2) must not be a contract of adhesion; and (3) must not contain unconscionable terms. As stated in the Cures Act Final Rule, agreements must be negotiated at market rate (85 FR 25877). We propose to define, in § 171.102, “market rate” using paragraph (1) of the definition of “fair market value” found in the Stark Law regulations at 42 CFR 411.351: “(1)
An actor's practice that meets the
This proposed approach offers both benefits and some potential challenges. We believe this proposal to define new terms and emphasize the parameters of the condition would offer more certainty to responding actors and to requestors
We recognize the first proposed approach of adding explicit language to § 171.301(a) to ensure fair market rates and exclude certain types of contracts and contractual terms may not fully address all concerns about the misuse of the Manner Exception and may add complexity or ambiguity with new terms. Therefore, we also propose in the alternative to remove paragraph (a)(2) from the
Removing paragraph (2) from § 171.301(a) and applying the Fees and Licensing Exceptions also specifically addresses the concerns related to indemnification terms in contracts, as well as revenue-sharing agreements. Under this alternative proposal, the actor and requestor would retain the flexibility to negotiate and execute specific details related to the requested manner of access, exchange, or use of the requested EHI. This proposal also ensures there is no mistaken belief that the Manner Exception would apply to any other practice of the actor related to fulfilling the request, including any contract or agreement on fees, licensing terms, or any matter other than the specific technical details of what EHI is requested, and how the request to access, exchange, or use the requested EHI will be fulfilled. As noted above, we have heard that actors may be abusing the
We welcome comments on our proposed revisions to the Manner Exception, including each of our proposals.
In the HTI-1 Final Rule, we finalized a new TEFCA Manner Exception in 45 CFR 171.403, explaining that an actor's practice of limiting the manner in which it fulfills a request for access, exchange, or use of EHI to providing such access, exchange, or use only via TEFCA would not be considered information blocking when the practice follows certain conditions (89 FR 1387). The conditions include that the actor and requestor are both part of TEFCA, that the requestor is capable of such access, exchange, or use of the requested EHI from the actor via TEFCA, that the request is not made via the standards adopted in 45 CFR 170.215 or version approved pursuant to 45 CFR 170.405(b)(8), and that any fees charged by the actor and the terms for any license of interoperability elements granted by the actor in relation to fulfilling the request satisfy, respectively, the Fees Exception (45 CFR 171.302) and the Licensing Exception (§ 171.303) (89 FR 1388).
In the HTI-2 Proposed Rule, we requested further comment on the TEFCA Manner Exception. We noted that the finalized exception differed in two ways from the proposal in the HTI-1 Proposed Rule: by applying the Fees Exception and the Licensing Exception to the TEFCA Manner Exception, and by including the limitation that carves out requests made for access, exchange, or use of EHI via FHIR API standards (89 FR 63643). We also solicited comment on the “FHIR” carve out, specifically for options for revising or sunsetting the condition (89 FR 63643). Having considered comments received, we finalized the exception without changes in the HTI-2 Final Rule (89 FR 101778 through 80). We also proposed in the HTI-2 Proposed Rule (89 FR 63642) and finalized in the HTI-2 Final Rule (89 FR 101777 through 78) the addition of a definitions section (§ 171.401) to Subpart D of part 171: “Exceptions That Involve Practices Related to Actors' Participation in The Trusted Exchange Framework and Common Agreement (TEFCA
We now propose to remove the TEFCA Manner Exception (§ 171.403) from 45 CFR part 171. Based on TEFCA's continued implementation and maturation and public comments received, including those received in response to the CMS-ASTP/ONC Request for Information; Health Technology Ecosystem (90 FR 21034) (CMS-ASTP/ONC RFI), the removal of the TEFCA Manner Exception (§ 171.403) is appropriate for multiple reasons.
The exception was intended to incentivize participation in TEFCA. However, many of the Qualified Health Information Networks (QHINs)—who already participate in TEFCA—were critical of the exception when it was proposed and presumably did not find the exception to be an incentive. Further, we have observed that there is significant private sector investment being made toward TEFCA participation in the health information ecosystem. In comments on the CMS-ASTP RFI, stakeholders representing health care providers, technology innovators, and other perspectives, in addition to QHINs, advocated for continued use and advancement of TEFCA. We therefore believe that it is unnecessary to sustain the TEFCA Manner Exception to incentivize participation in TEFCA.
We also believe the TEFCA Exception may be negatively impacting participants in the health information ecosystem due to some entities' potential misunderstanding regarding its purpose and applicability. For example, although we stated when we finalized the exception that an actor responding to a request from an individual (
The exception is also now unnecessary because it describes activities that are, given the robust TEFCA participation we are seeing, still covered by the Manner Exception (§ 171.301) or Infeasibility Exception (§ 171.204). The Manner Exception encourages active negotiation between a requestor and actor toward getting requestors the EHI access, exchange, and use they seek in a manner to which the requestor agrees. Conversely, the TEFCA Manner Exception allows for responding actors to limit a requestor who also participates in TEFCA to receiving EHI only via TEFCA when certain conditions are met by the actor, potentially slowing adoption of more innovative manners of access, exchange, or use than may be generally supported by TEFCA participants at any given point in time. Further, if an actor is unable to provide access, exchange, or use of EHI in the manner requested, the actor may find the Infeasibility Exception applicable to their circumstances, including the “
With consideration of comments received in response to the CMS-ASTP/ONC RFI and other RFIs, such as the Federal Trade Commission's Request for Public Comment Regarding Reducing Anti-Competitive Regulatory Barriers (FTC-2025-0028), we have become concerned that the narrow TEFCA Manner Exception (applicable only to certain types of exchange) may create an
We note that removing the TEFCA Manner Exception would not remove any obligations an actor may have as a QHIN, Participant, or Sub-participant in TEFCA to fulfill TEFCA requirements. The TEFCA Manner Exception does not create, reduce, or otherwise affect any obligations any actor may have as a QHIN, Participant, or Sub-participant in TEFCA to fulfill TEFCA requirements.
Finally, we remind readers that removing this exception would
Because the TEFCA Manner Exception (§ 171.403) is the only exception codified in subpart D of part 171, we also propose to remove the entire subpart (subpart D). As currently codified, subpart D includes only three sections: § 171.400; § 171.401; and § 171.403. The removal of § 171.403 would render the remaining two sections unnecessary. Section 171.400, “Availability and effect of exceptions,” mirrors §§ 171.200 and 171.300, stating that a practice shall not be treated as information blocking if the actor satisfies an exception to the information blocking provision as set forth in subpart D by meeting all applicable requirements and conditions of the exception at all relevant times (89 FR 1388). Without any exceptions specific to practices related to an actor's participation in TEFCA, § 171.400 would serve no purpose. Similarly, § 171.401 would serve no purpose because it only includes definitions for the subpart via cross-reference to the TEFCA definitions included 45 CFR part 172, “Trusted Exchange Framework and Common Agreement.”
We welcome comments on these proposals.
The Office of the Federal Register has established requirements for materials (
To make the material we intend to incorporate by reference reasonably available, we provide a uniform resource locator (URL) for the standard. This standard is directly accessible through the URL provided. As an alternative, a copy of the standard may be viewed for free at the U.S. Department of Health and Human Services, Office of the National Coordinator for Health Information Technology, 330 C Street SW, Washington, DC 20201. Please call (202) 690-7171 in advance to arrange inspection.
The NTTAA and the OMB Circular A-119 require the use of, wherever practical, technical standards that are developed or adopted by voluntary consensus standards bodies to carry out policy objectives or activities, with certain exceptions. The NTTAA and OMB Circular A-119 provide exceptions to selecting only standards developed or adopted by voluntary consensus standards bodies, namely when doing so would be inconsistent with applicable law or otherwise impractical. As discussed in section III.B.1.a of this preamble, we have followed the NTTAA and OMB Circular A-119 in proposing a standard for adoption, including describing any exceptions in the adoption of the standard.
As required by 1 CFR 51.5(a), we provide a summary of the standard we propose to adopt and subsequently incorporate by reference in the CFR. We also provide relevant information about the standard throughout the preamble.
•
The following standards appear in the amendatory text of this document and have already been approved for the locations in which they appear:
No changes are proposed to the IBR material.
Because of the large number of public comments normally received in response to
Under the Paperwork Reduction Act of 1995 (PRA), codified as amended at 44 U.S.C. 3501
1. Whether the information collection is necessary and useful to carry out the proper functions of the agency;
2. The accuracy of the agency's estimate of the information collection burden;
3. The quality, utility, and clarity of the information to be collected; and
4. Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
Under the PRA, the time, effort, and financial resources necessary to meet the information collection requirements referenced in this section are to be considered. We explicitly seek, and will consider, public comment on our assumptions as they relate to the PRA requirements summarized in this section.
We propose to descope the “Real World Testing” Condition and Maintenance of Certification requirements in § 170.405 with deregulatory actions related to real world testing plans, results, and the use of the standards version advancement process (SVAP). Consistent with these proposals to descope the Real World Testing Condition and Maintenance of Certification requirements, we propose to make conforming edits in § 170.523(p) to remove the ONC-ACB review and confirmation process for real world testing plans in § 170.523(p)(1), and the submission of real world testing plans in § 170.523(p)(3) which requires ONC-ACBs to collect and report certain information to ONC related to real world testing plans (
In the 2015 Edition proposed rule (80 FR 16894), we estimated fewer than ten annual respondents for all of the regulatory “collection of information” requirements that apply to the ONC-Approved Accreditor (ONC-AA) and ONC-ACBs, including those previously approved by OMB. In the 2015 Edition Final Rule (80 FR 62733), we concluded that the regulatory “collection of information” requirements for the ONC-AA and the ONC-ACBs were not subject to the PRA under 5 CFR 1320.3(c). We continue to estimate less than ten annual respondents for all of the proposed regulatory “collection of information” requirements for ONC-ACBs under part 170 of title 45, including those previously approved by OMB and proposed in this proposed rule. Accordingly, the regulatory “collection of information” requirements under the Program described in this section are not subject to the PRA under 5 CFR 1320.3(c). We welcome comments on these conclusions and the supporting rationale on which they are based. For the cost and burden reduction estimates related to these proposed deregulatory actions, we refer readers to section VIII (Regulatory Impact Analysis) of this proposed rule.
The “Insights” Condition and Maintenance of Certification requirements in § 170.407 include seven measures that health IT developers under the ONC Health IT Certification Program must annually report on consistent with specified regulatory compliance timelines. In the HTI-1 Final Rule (89 FR 1399), we estimated the total crude upper bound burden to be 1,767,692 hours. In this proposed rule, we propose to remove and descope measures associated in § 170.407 to limit reporting requirements only to the “use of FHIR in apps through certified health IT” measure, which would reduce reporting burden for health IT developers reporting under the Certification Program. In other words, we propose to reduce reporting burden associated with the Insights Condition and Maintenance of Certification requirements, and do not propose any new requirements that would add information collection burden. For more detailed discussion of burden reduction estimates of these deregulatory actions associated with the Insights Condition and Maintenance of Certification, we refer readers to section VIII (Regulatory Impact Analysis) of this proposed rule.
E.O. 14192 on Unleashing Prosperity Through Deregulation, issued January 31, 2025, sets the policy to “to significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life for each citizen.”
We have examined the impacts of this proposed rule as required by E.O. 12866, “Regulatory Planning and Review”; E.O. 13132, “Federalism”; E.O. 13563, “Improving Regulation and Regulatory Review”; E.O. 14192, “Unleashing Prosperity Through Deregulation”; section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532); and the Regulatory Flexibility Act (RFA) (Pub. L. 96-354).
This proposed rule implements relevant policy priorities outlined in E.O.s 12866, 13563, and 14192. E.O. 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety
These proposed deregulatory actions provide substantial relief for developers of certified health IT and significant cost savings realized from the revision and removal of certain program requirements. For the purpose of estimating the cost savings of this proposed rulemaking, we have determined that these policies would continue absent this regulatory action. The cost savings have been estimated using the best available data and modeled on the costs estimated and finalized in prior ASTP/ONC rulemakings. As articulated in the preamble, these proposed deregulatory actions reduce the effort of developers of certified health IT to meet ongoing program requirements and reduce barriers to entry for new program participants. The proposed actions, importantly, return effort back to developers of certified health IT to innovate their technology and focus on the needs of their clients and end users.
We have made employee assumptions about the level of expertise needed to complete the requirements that are affected by this proposed rule. Unless indicated otherwise, for wage calculations for Federal employees and ONC-ACBs, we have correlated the employee's expertise with the corresponding grade and step of an employee classified under the General Schedule (GS) Federal Salary Classification, relying on the associated employee hourly rates for the Washington, DC, locality pay area as published by the OPM for 2025.
Unless otherwise noted, we have consistently used the May 2024 National Occupational Employment and Wage Estimates reported by the U.S. Bureau of Labor Statistics (BLS) to calculate private sector employee wage estimates (
According to the May 2024 BLS occupational employment statistics, the mean hourly wage for a “Software Developer” is $69.50. As noted previously, we have assumed that other indirect costs (including benefits) are equal to 100% of pre-tax wages, so the hourly wage including other indirect costs for Software Developers is $139.00.
Given the wide range of proposed deregulatory actions, we have not adopted a single, over-arching approach to calculate the number of health IT developers and products affected by this rulemaking. We believe, however, that each current developer of certified health IT and participant in the Certification Program will be affected by these proposed actions, but that impact will vary, given the breadth and scope of each developer's participation in the Certification Program. For each set of proposed actions, we describe our methodology for calculating the current number of health IT developers and products affected, and, where applicable, model estimated future counts of developers and products affected.
The breadth and scope of the proposed deregulatory actions create immediate and significant cost savings for developers of certified health IT. As we have finalized in prior ASTP/ONC rulemakings—Cures Act Final Rule (85 FR 25642) and HTI-1 Final Rule (89 FR 1192)—we assume the regulatory costs imposed by those rules on developers may be passed on to end users of their technology in the form of increased fees and other costs. These deregulatory actions, though scoped to provide immediate relief and reduce ongoing burden on developers of certified health IT, may have downstream impacts on technology end users who may benefit from lower marginal costs to license and update their software; focused developers efforts on emerging end user needs; and other forms of innovation that may lead to unquantified benefits and savings for end users. We assume developers of certified health IT will use the cost savings to invest in innovation and emerging technology, rather than directly reduce costs on their end users, but, overall, believe the cost savings will create a net benefit to end users, if not directly as an immediate financial savings.
We do not expect costs to be associated with the deregulatory action proposals. We do, however, estimate the costs to review the rule.
All entities affected by this proposed rule, if finalized, would spend time to read and understand the final rule, resulting in a one-time cost. The current Preamble and proposed regulatory text together contain approximately 64,727 words; we use this as a proxy for the length of the final rule. Consistent with HHS guidelines, we assume that industry reviewers read at the average adult reading speed of approximately 288 (64,727/225) words per minute, so the time to read and understand the regulation would be about 4 hours per person (288*60=17,280) (64,727/17,280=3.75). We estimate the total number of reviewers by taking the number of estimated developers and adding an estimated number of medical associations that represent health care providers and health information networks, etc. The counts of developers included in Table R-1 were calculated using publicly available Certification Program data available through the
We expect the proposed deregulatory actions to result in significant benefits for health IT developers, providers, ONC-ACBs, ONC-ATLs, and ASTP/ONC. These expected benefits are detailed below. Generally, these benefits are in the form of cost and time savings and reductions in administrative burden to comply with Certification Program requirements. The proposed actions reduce the scope and breadth of program requirements. The proposed program revisions provide direct cost savings (quantified, below) to developers of certified health IT and their users (
We propose to remove 34 certification criteria. Of these, we propose to remove 24 criteria as of the effective date of any final rule and the remaining ten criteria as of January 1, 2027. We developed a common model for estimating cost savings associated with the removal of all but one certification criterion, described below. For all criteria we assume that the cost savings from these criteria would begin January 1, 2027.
Table R-1, below, provides criterion-level results of our model for 32 of the proposed criteria removals. For each certification criterion we identified the original costs to certify to the functionality from prior rules (the lower and upper bounds of “Total Hours” in Table R-1.)
The “Final Effort Multiplier” is a sum of the five factors listed in the table and described above. We then used this multiplier to determine the annual costs of meeting and maintaining the individual criteria by taking the product of the lower and upper bound “Total Hours”, described above, and this multiplier. We then estimated the lower and upper bounds of “Hours saved” by multiplying the “Annual” hours by the number of products that certify each criterion. The counts of developers and products included in Table R-1 are current as of May 1, 2025. The counts were calculated using publicly available Certification Program data available through the CHPL.
For the 32 certification criteria proposed for removal in Table R-1, we estimate the total annual hours saved to range from 272,344 to 456,052, among 444 developers of certified health IT and 589 certified products (Table R-1). Using the hourly labor rate ($139), described above, we estimate the total undiscounted annual cost savings to range from $37,855,816 to $63,391,228. We welcome comments on the proposed methodology and the accuracy and validity of the model's estimates.
Cost savings from the proposed removal of § 170.315(g)(3) safety-enhanced design (SED) is estimated separately from non-SED removed criteria. In the 2015 Edition Final Rule, we estimated that developers would spend 300 to 400 hours implementing the SED criterion at a cost of $63 per hour and that 266 developers would certify to SED. This resulted in a final cost estimate ranging from $5,027,400 to $6,703,200 in 2014 dollars. Since the finalization of that policy, we have received substantial input from developers of certified health IT that the cost estimates specified in that rule were an under-estimate of the initial and recurring costs associated with the SED certification criterion. In contrast to those estimates, we understand that individual developers of certified health IT incur recurring costs greater than $200,000 to recruit participants and conduct testing specified by the SED certification criterion. In response to input from the impacted community, we have revised our estimates of the costs of SED and potential cost savings that can be realized from the proposed removal of the SED certification criterion in this proposed rule.
The SED certification criterion is required for all developers seeking certification to § 170.315(a)(1) through (5), (9) (until the certification criterion's expiration date), (a)(14), (b)(2), (b)(3) or (b)(11). Developers must recruit at least ten participants, conduct testing, and submit metrics for each of the criterion for which they seek certification that is referenced within § 170.315(g)(3). Thus, we believe cost savings from the removal of SED are incremental per the number of dependent criteria certified because there are additional costs per product associated with SED testing and data reporting. Based on stakeholder input and because developers can certify multiple products each with up to ten criteria that requires SED, we believe an estimated annual cost of between $8,000 and $12,000 per product per certification criterion that requires SED testing is appropriate. This estimate represents the effort to design tests, recruit participants, conduct testing, document that testing, and report results to the ONC-ACB in the required format.
To estimate the total costs of SED, we estimated the number of products that will be certified to SED and the number of SED criteria each product will certify. We report those costs in Table R-2. The count of products that are certified to SED and number of SED criteria each product certifies in the table are current as of May 1, 2025. The counts were calculated using publicly available Certification Program data available through the CHPL.
In total, 373 products are certified to SED and at least one SED certification criterion. Based on Table R-2, we estimate the total undiscounted annual cost savings from removing the SED certification criteria to be between $22,080,000 and $33,120,000. We welcome comments on the proposed methodology and the accuracy and validity of the estimates.
We propose to revise seven certification criteria. For each revised certification criterion, we have estimated the annual savings generated by the proposed revisions.
We propose to codify certification guidance for the Certification Program exercising our enforcement discretion—specifically, for the “patient demographics and observations” certification criterion in § 170.315(a)(5).
We propose to revise the certification criterion in § 170.315(b)(1) to reduce burden on developers of health IT by removing the “send and receive via edge protocol” C-CDA requirement and “create” C-CDA requirement in the criterion and by simplifying the remaining criterion requirements to focus solely on validating receipt of C-CDA documents. We believe that these revisions remove a substantial proportion of the ongoing effort required to maintain and update the functional requirement of the certification criterion, but we acknowledge that it does not remove requirements to support the C-CDA standard or to update functionality to receive C-CDA documents. We assume that this reduces the overall ongoing cost for this criterion by 60%. Following the methodology described for removed criterion, we considered annual maintenance of § 170.315(b)(1) to represent high complexity equivalent to 15% of the initial development costs annually. We note from an analysis of current Certification Program data that 256 developers have certified 300 products to § 170.315(b)(1) and that the initial developer hours estimated to implement the criterion had a lower bound of 3,000 hours and an upper bound of 4,000 hours in the 2015 Edition Final Rule (80 FR 62602).
We propose to remove all requirements related to source attributes, their access, and modification and requirements to manage risks related to the development of predictive DSIs.
In the HTI-1 Final Rule, we indicated that the costs to implement § 170.315(b)(11) ranged from 2,200 hours to 4,600 hours, that updating source attribute information annually would cost an additional 0 to 1085 hours annually, depending on the number of DSIs the developer supplied, and that engaging in risk management and updating information would result in an additional 0 to 285 hours annually. Without this revision, we estimate that annual maintenance costs for this criterion would represent 12% of initial development costs. We believe these changes reduce these costs by 80% and would eliminate annual costs to update information for source attributes and risk management.
In total, we estimate that the revision will reduce maintenance costs by 211 to 1,812 hours per product. We note that 232 products developed by 183 developers were certified to § 170.315(b)(11) resulting in an annual reduction of 48,952 to 420,384 labor hours. We estimate the total undiscounted annual cost savings to range from $6,804,328 to $58,433,376.
We propose revisions to § 170.315(c)(3) to remove expired standards references. These proposed revisions are considered de minimis and do not create net new cost savings.
We propose to revise § 170.315(e)(1) to remove the standards referenced in § 170.315(e)(1)(i), Web Content Accessibility Guidelines (WCAG) 2.0, and § 170.315(e)(1)(ii), Network Time Protocol (NTP) standard. We believe that the requirement to demonstrate conformance to the WCAG standard creates substantial burden for developers. We received feedback from developers that licensing a tool for WCAG assessments costs thousands of dollars annually. We acknowledge that the current referenced standards are old and do not easily work with newer versions of both the standard itself as well as testing tools to determine compliance. Thus, we expect these changes will reduce unnecessary burden associated with maintaining current conformance requirements as part of certification. In total, we estimate that the annual maintenance burden associated with the WCAG standard represented 2% of the initial development costs of the VDT criterion. We note that 215 developers have certified 255 products to § 170.315(e)(1) and that the initial developer hours estimated to implement the criterion had a lower bound of 1,300 hours and an upper bound of 2,000 hours in the 2015 Edition Final Rule which included the updated WCAG requirement. We therefore estimate that the revision of this criterion will reduce effort to maintain the criterion annually by 2% annually or between 26 and 40 hours per product and 6,630 to 10,200 hours across all products. We estimate the total undiscounted annual cost savings to range from $921,570 to $1,417,800.
We propose to codify certification guidance for the Certification Program exercising our enforcement discretion for—specifically, the “Transmission to public health agencies—electronic case reporting” certification criterion in § 170.315(f)(5).
Currently, 94 developers and 127 products are certified to § 170.315(f)(5). Eighty-six developers and 112 products are certified to the “functional” requirements in § 170.315(f)(5)(i) alone, while 10 developers and 15 products are certified to the standards-based requirements in § 170.315(f)(5)(ii). The initial developer hours estimated to implement the criterion had a lower bound of 0 hours and an upper bound of 2,160 in the HTI-1 Final Rule. We therefore estimate that the revision of this criterion will reduce annual effort to maintain the criterion by between 0 and 367 labor hours per product and 0 to 46,609 labor hours across all 127 products. We estimate the total undiscounted annual cost savings for reduced maintenance to range from $0 to $6,478,651.
We propose to remove the standards-based requirements in § 170.315(f)(6) that were adopted in the 2015 Edition Final Rule and revise this criterion to be a functional requirement. We received stakeholder feedback that the CDA-based standards cited in this criterion are not required for users to submit antimicrobial use and resistance (AUR) data to the CDC's National Healthcare Safety Network (NHSN), creating a disconnect between the criterion and what is used in practice. We expect the removal of standards-based requirements to better align with the NHSN's goals for reporting and reduce the burden on developers to meet this requirement. Following the methodology described for removed criteria, we considered annual maintenance of § 170.315(f)(6) to represent medium complexity equivalent to 20% of the initial development costs annually. We estimate that removal of standards-based requirements will reduce annual maintenance costs to 6% of initial development costs, resulting in a 70% reduction in effort.
Currently, 28 developers and 47 products are certified to § 170.315(f)(6). The initial developer hours estimated to implement the criterion had a lower bound of 1,000 hours and an upper bound of 1,400 hours in the 2015 Edition. We therefore estimate that the revision of this criterion will reduce effort to maintain the criterion annually by 14% or between 140 to 196 hours per product and 6,580 to 9,212 hours across all products. We estimate the total undiscounted annual cost savings to range from $914,620 to $1,280,468.
In Table R-3, we estimate the total annual hours saved from the proposed criteria revisions to range from 155,834 to 627,141 among 328 developers of certified health IT and 418 certified products. Using the labor rate of $139, described above, we estimate the total undiscounted annual cost savings to range from $21,660,9326 to $87,172,599. We welcome comments on the proposed methodology and the accuracy and validity of the estimates.
We propose to codify certification guidance for the Certification Program exercising our enforcement discretion—specifically, for the United States Core Data for Interoperability (USCDI) v3 standard.
As finalized in the HTI-1 Final Rule, developers of certified health IT were required to update and certify their Health IT Modules to adopt USCDI v3 by January 1, 2026. This proposal reduces the effort for developers of certified health IT to adopt the USCDI v3 via the removal or revision of two data elements: sexual orientation and gender identity. We do not estimate reduced effort from ongoing maintenance of these requirements, as the effort is considered part of activities that occurred prior to the effective date of any final rule. We request comments on this approach.
Unless noted differently, proposed revisions to Certification Program administration conform to revisions proposed elsewhere related to Certification Program requirements. We do not assess net new cost savings or costs to program administration for these conforming revisions. We welcome comments on whether these conforming revisions create net new cost savings or costs.
Under the principles of proper conduct for ONC-ACBs, we propose to revise the “certified product listing” principle in § 170.523(f)(1)(viii) to remove requirements on ONC-ACBs to include the test data version used and whether any test data was altered for the certification criterion or criteria to which the Health IT Module has been certified. This proposed revision is meant to reduce the overall effort for ONC-ACBs for this principle, as our analysis shows that these data elements for the “certified product listing” are low value. We determined that the cost savings to ONC-ACBs are de minimis, and welcome comments on this analysis. In addition, we propose conforming revisions to the principles of proper conduct for ONC-ACBs. These conforming revisions do not create net new cost savings to developers of certified health IT, ASTP/ONC, or ONC-ACBs. These conform to revisions made elsewhere to Certification Program requirements, and cost savings, if applicable, are assessed elsewhere in this impact analysis.
We propose conforming revisions to the principles of proper conduct for ONC-ATLs. These conforming revisions do not create net new cost savings to developers of certified health IT, ASTP/ONC, or ONC-ATLs. These conform to revisions made elsewhere to Certification Program requirements, and cost savings, if applicable, are assessed elsewhere in this impact analysis.
We propose conforming revisions to Health IT Module certification. These conforming revisions do not create net new cost savings to developers of certified health IT, ASTP/ONC, or ONC-ACBs. These conform to revisions made elsewhere to Certification Program requirements, and cost savings, if applicable, are assessed elsewhere in this impact analysis.
We propose conforming revisions to certification to newer versions of certain standards. These conforming revisions do not create net new cost savings to developers of certified health IT, ASTP/ONC, or ONC-ACBs. These conform to revisions made elsewhere to Certification Program requirements, and cost savings, if applicable, are assessed elsewhere in this impact analysis.
We propose conforming revisions that do not create net new cost savings.
We propose updates to the Code of Federal Regulations (CFR) that do not create net new cost savings.
We propose updates to the CFR that do not create net new cost savings.
We propose revisions to the Real World Testing Condition of Certification that de-scope reporting requirements and codify certification guidance for the Certification Program exercising our enforcement discretion for the Condition of Certification.
The proposed revisions to real world testing would take effect beginning in 2027. Cost savings to developers for ongoing compliance are, therefore, estimated beginning in 2027. Any costs for 2024 and 2025 are considered sunk. Beginning in the 2026 reporting year, as permitted in the real world testing enforcement discretion, only developers of certified APIs would be required to report for real world testing, specifically developers who certify to the standardized API for patient and population services certification criterion, § 170.315(g)(10).
As of the end of 2024, using publicly available Certification Program data, we calculated that 336 developers had submitted real world testing plans for 2025 collection and 2026 reporting.
Beginning in 2026, we calculated an expected count of developers who we estimated would be required to report for real world testing in 2026 and beyond. This count assumes attrition from the original count of developers required to report for real world testing as finalized in the Cures Act Final Rule, as we described above for years prior to 2026. But given the changed program dynamics, in that real world testing would be required only for developers of certified APIs, the attrition rate beyond 2026 is harder to estimate. Given that current requirements are applicable for over 20 criteria adopted in the Certification Program and our attrition rate is based on participant exits from the Certification Program (for developers who certify for any of these criteria), we assume that attrition rate is likely more profound than exits for developers of certified APIs alone. We therefore estimate a new rate of developers who would be required to report for real world testing in total (n=320), beginning in 2026.
In our RIA for the HTI-4 Final Rule (included in the FY2026 IPPS/LTHC PPS Final Rule (90 FR 36536) as an ancillary provision), we estimated that beginning in 2027, approximately 189 developers would certify an electronic prior authorization API. The 189 count is a proxy measure, representing our estimation of the number of developers that would certify the § 170.315(g)(10) certification criterion in 2027.
Given that the revised Real World Testing Condition of Certification would only be associated with developers of certified APIs, we estimate beginning in 2026 that approximately 189 developers would be subject to the revised real world testing requirements. We used this count (189) to determine the net number of developers who would have been required to report for real world testing under the original requirements (inclusive of those who would have reported § 170.315(g)(10) testing results under the original requirements.)
At the end of 2024, of the 336 developers required to report for real world testing, 198 developers certified to the § 170.315(g)(10) certification criterion or 59% of all developers. Using this rate, we estimate that beginning in 2026, approximately 320 developers would be subject to real world testing requirements, as finalized by the Cures Act Final Rule.
Total savings beginning in 2027 are considered consistent and do not decrease due to future unknown attrition; however, we consider these cost savings to be realized by developers when the revised requirements take effect. If they were to exit the program in a year beyond 2027, these are still cost savings to be realized today from requirements they do not need to meet in all future years.
Beginning in 2027, cost savings are calculated by totaling the cost to all developers who certify real world testing applicable criteria to meet current real world testing requirements as finalized in the Cures Act Final Rule and revised in subsequent rulemakings (the HTI-1 Final Rule and the HTI-4 Final Rule) and subtracting the remaining cost for developers of certified APIs to comply with revised real world testing requirements. We estimate that, per developer, the cost of collecting and reporting real world testing data on § 170.315(g)(10) would be on average $4,400 annually. We estimate this by calculating the average cost per criterion to meet real world testing requirements as finalized by the Cures Act Final Rule ($109,557/23 = $4,763) and decrease that by the proposed eliminated effort to submit annual testing plans (estimated to be 8% of total annual testing effort.)
Beginning in 2027, we also assume that developers of certified APIs would need to meet requirements for § 170.315(g)(10), as well as for § 170.315(g)(31), (g)(32), and (g)(33), as finalized in the HTI-4 Final Rule.
We estimate cost savings for reduced upfront effort in 2027 to be (original real world testing costs + § 170.315(b)(4) planning costs) minus (§ 170.315(g)(10) revised costs), which equal $35.1 million in undiscounted cost savings for 2026. For costs savings, beginning in 2027 and in perpetuity, we estimate that together, (original real world testing costs + § 170.315(b)(4) costs) minus ((g)(10)+(g)(31)+(g)(32)+(g)(33) revised costs) equal the estimated annual undiscounted cost savings of $33.6 million.
We propose updates to the CFR that do not create net new cost savings.
In the HTI-1 Final Rule (89 FR 1192), we finalized requirements for developers to report on the Insights Condition of Certification, a set of uniform measures collected and reported by developers of certified health IT about the performance of their certified technology.
ASTP/ONC issued enforcement discretion in April 2025 that effectively de-scoped Insights requirements on developers to a single measure—“Use of FHIR”—a “Year 1” measure.
To calculate cost savings associated with the proposed revisions to the Insights Condition of Certification, we subtracted the estimated amount for developers to report for the remaining Insights measure (“Use of FHIR”) from the estimated cost for developers to meet the Insights Condition of Certification, as finalized in the HTI-1 Final Rule. In Table 35 of the HTI-1 Final Rule, we estimated that the upper bound cost for all developers to report on the “Use of FHIR” measure over a ten-year period was $36.3 million.
In Table R-4 we show the undiscounted revised costs for the Insights Condition of Certification. We estimated, on average, that the HTI-1 Final Rule costs for Insights would be $137.9 million. We estimated that the cost for developers to begin implementing Insights in 2024 (toward effort to collect and report on measures in 2026 and 2027) would on average, total $46.4 million. This included initial planning and development costs for all measures with more assumed effort toward completing work to prepare for “Year 1” measures set to begin collection January 1, 2026. We consider these costs as sunk. The Insights enforcement discretion, however, reduced effort for ongoing planning and development work for 2025 and after. We consider this reduced effort in 2025 and 2026 and reduced effort to meet this requirements in years 2027 and after to be a net cost savings to developers, as Table R-4 shows.
Cost savings in 2027 and thereafter are considered tied to the reduced effort associated with ongoing planning and reporting for the proposed revised requirements. The total undiscounted cost savings for this reduced ongoing effort, beginning in 2027, are $12.7 million (Table R-4).
This proposed rule, if finalized as proposed, is expected to be an E.O. 14192 deregulatory action. The proposals remove or reduce requirements on developers of certified health IT. No proposals create net new requirements or additional burden to comply with existing requirements. However, we do estimate some costs for reviewers who review this proposed rule. We estimate those costs to be
To calculate the cost savings associated with this proposed rulemaking, we replicate the analysis of prior finalized rulemakings and align those with current data, adopting, where necessary, novel methodologies and models to assess the current costs to developers of certified health IT of the proposed revisions to the Certification Program. As shown in Table R-5, we present the undiscounted cost savings over ten years and in Table R-6 we present the discounted cost savings associated with these proposals. In Table R-6, we adopt a 3% and 7% discount rate consistent with Circular A-4 (2003).
The Regulatory Flexibility Act (RFA) requires agencies to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. The Small Business Administration (SBA) establishes the size of small businesses for Federal Government programs based on average annual receipts or the average employment of a firm.
The entities that are likely to be directly affected by the requirements in this proposed rule are health IT developers. We note that the reasonable and necessary activities identified by the Secretary as not constituting information blocking are themselves exceptions to compliance with the information blocking definition and
While health IT developers that pursue certification of their health IT under the Certification Program represent a small segment of the overall information technology industry, we believe that many health IT developers impacted by the requirements proposed in this proposed rule most likely fall under the North American Industry Classification System (NAICS) code 541511 “Custom Computer Programming Services.”
OMB advised that the Federal statistical establishment data published for reference years beginning on or after January 1, 2022, should be published using the 2022 NAICS United States codes.
With the exception of rule review costs, this proposed rulemaking is deregulatory and does not create new requirements on developers of certified health IT, including small businesses. We believe the proposed deregulatory actions will create net cost savings for developers and would not create a significant economic impact on a substantial number of small entities. Additionally, the Secretary proposes to certify that this proposed rule would not have a significant economic impact on a substantial number of small entities. However, we request comments on whether: there are (and how many) small entities that currently pursue certification of health IT under the Certification Program; what products they certify; whether there are any negative or unintended costs for small entities from the proposals included in this proposed rule; and whether small entities will significantly benefit from the proposals include in this proposed rule.
E.O. 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has federalism implications. Nothing in this proposed rule imposes substantial direct compliance costs on State and local governments, preempts State law, or otherwise has federalism implications. We are not aware of any State laws or regulations that are contradicted or impeded by any of the proposals in this proposed rule. We welcome comments on this assessment.
Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits before issuing any rule that imposes unfunded mandates on State, local, and Tribal governments or the private sector requiring spending in any one year of $100 million in 1995 dollars, updated annually for inflation. The current inflation-adjusted statutory threshold is approximately $187 million in 2025. This proposed rule is deregulatory, and, therefore, the estimated potential cost effects of this proposed rule do not reach the statutory threshold. This proposed rule does not impose unfunded mandates on State, local, and Tribal governments, or the private sector. We welcome comments on these conclusions.
Computer technology, Electronic health record, Electronic information system, Electronic transactions, Health, Healthcare, Health information technology, Health insurance, Health records, Hospitals, Incorporation by reference, Laboratories, Medicaid, Medicare, Privacy, Reporting and record keeping requirements, Public health, Security.
Computer technology, Electronic health record, Electronic information system, Electronic transactions, Health, Healthcare, Health care provider, Health information exchange, Health information technology, Health information network, Health insurance, Health records, Hospitals, Privacy, Public health, Reporting and record keeping requirements, Security.
For the reasons set forth in the preamble, HHS proposes to amend 45 CFR subtitle A, subchapter D, as follows:
42 U.S.C. 300jj-11; 42 U.S.C 300jj-14; 5 U.S.C. 552
The revision reads as follows:
(3) * * *
(i) Section 170.315(a)(1), (2), or (3), (a)(5), (b)(1) and (11), (c)(1), and (g)(10).
The Secretary adopts the following transport standard: ONC Applicability Statement for Secure Health Transport, Version 1.2 (incorporated by reference in § 170.299).
The revisions read as follows:
(d) * * *
(2)
(i) * * *
(2)
(s) * * *
(1)
(t) * * *
(1)
(2)
(3)
(4)
The Secretary adopts the following versions of the United States Core Data for Interoperability standard:
(a)
(b) [Reserved]
(a) 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(b) and 1 CFR part 51. All approved incorporation by reference (IBR) material is available for inspection at the U.S. Department of Health and Human Services (HHS) and at the National Archives and Records Administration (NARA). Contact HHS at: U.S. Department of Health and Human Services, Office of the National Coordinator for Health Information Technology, 330 C Street SW, Washington, DC 20201; call ahead to arrange for inspection at 202-690-7151. For information on the availability of this material at NARA, visit
(b) Centers for Disease Control and Prevention, 2500 Century Parkway, Mailstop E-78, Atlanta, GA 30333; phone: (800) 232-4636); website:
(1)-(3) [ Reserved]
(4) HL7 2.5.1 Implementation Guide for Immunization Messaging Release 1.0, May 1, 2010, IBR approved for § 170.205.
(5) PHIN Messaging Guide for Syndromic Surveillance: Emergency Department and Urgent Care Data, ADT Messages A01, A03, A04, and A08, HL7 Version 2.5.1 (Version 2.3.1 Compatible), Release 1.1, August 2012, IBR approved for § 170.205.
(6) Conformance Clarification for EHR Certification of Electronic Syndromic Surveillance, ADT MESSAGES A01, A03, A04, and A08, HL7 Version 2.5.1, Addendum to PHIN Messaging Guide for Syndromic Surveillance: Emergency Department and Urgent Care Data (Release 1.1), August 2012, IBR approved for § 170.205.
(7)-(8) [Reserved]
(9) ELR 2.5.1 Clarification Document for EHR Technology Certification, July 16, 2012, IBR approved for § 170.205.
(10) PHIN Messaging Guide for Syndromic Surveillance: Emergency Department, Urgent Care, Inpatient and Ambulatory Care Settings, Release 2.0, April 21, 2015, IBR approved for § 170.205(d).
(11) Erratum to the CDC PHIN 2.0 Implementation Guide, August 2015; Erratum to the CDC PHIN 2.0 Messaging Guide, April 2015 Release for Syndromic Surveillance: Emergency Department, Urgent Care, Inpatient and Ambulatory Care Settings, IBR approved for § 170.205(d).
(12) HL7 2.5.1 Implementation Guide for Immunization Messaging, Release 1.5, October 1, 2014, IBR approved for § 170.205(e).
(13) HL7 Version 2.5.1 Implementation Guide for Immunization Messaging (Release 1.5)—Addendum, July 2015, IBR approved for § 170.205(e).
(14)-(16) [Reserved]
(17) HL7® Standard Code Set CVX—Vaccines Administered, dated June 15, 2022; IBR approved for § 170.207(e).
(18) National Drug Code Directory (NDC)—Vaccine NDC Linker, dated July 19, 2022; IBR approved for § 170.207(e).
(19) CDC Race and Ethnicity Code Set version 1.2 (July 08, 2021); IBR approved for § 170.207(f).
(c) Centers for Medicare & Medicaid Services, Office of Clinical Standards and Quality, 7500 Security Boulevard, Baltimore, Maryland 21244; phone: (410) 786-3000; website:
(1) CMS PQRI 2009 Registry XML Specifications, IBR approved for § 170.205.
(2) 2009 Physician Quality Reporting Initiative Measure Specifications Manual for Claims and Registry, Version
(3) [Reserved]
(4) CMS Implementation Guide for Quality Reporting Document Architecture: Category I; Hospital Quality Reporting Implementation Guide for 2020; published December 3, 2019, IBR approved for § 170.205(h).
(5) CMS Implementation Guide for Quality Reporting Document Architecture: Category III; Eligible Clinicians and Eligible Professionals Programs Implementation Guide for 2020; published April 30, 2020, IBR approved for § 170.205(k).
(d) Council of State and Territorial Epidemiologists, 2635 Century Parkway NE, Suite 700, Atlanta, GA 30345; phone: (770) 458-3811; website:
(1) Reportable Conditions Trigger Codes Value Set for Electronic Case Reporting. RCTC OID: 2.16.840.1.114222.4.11.7508, Release March 29, 2022; IBR approved for § 170.205(t).
(2) [Reserved]
(e) Health Level Seven, 3300 Washtenaw Avenue, Suite 227, Ann Arbor, MI 48104; phone: (734) 677-7777; website:
(1) [Reserved]
(2) Health Level Seven Messaging Standard Version 2.5.1 (HL7 2.5.1), An Application Protocol for Electronic Data Exchange in Healthcare Environments, February 21, 2007, IBR approved for § 170.205.
(3) [Reserved]
(4) HL7 Version 2.5.1 Implementation Guide: Electronic Laboratory Reporting to Public Health, Release 1 (US Realm) HL7 Version 2.5.1: ORU-R01, HL7 Informative Document, February, 2010, IBR approved for § 170.205.
(5)-(8) [Reserved]
(9) HL7 Clinical Document Architecture, Release 2.0, Normative Edition, May 2005, IBR approved for § 170.205.
(10)-(11) [Reserved]
(12) HL7 Implementation Guide for CDA® Release 2: Quality Reporting Document Architecture, DTSU Release 2 (Universal Realm), Draft Standard for Trial Use, July 2012, IBR approved for § 170.205.
(13) HL7 v2.5.1 IG: Electronic Laboratory Reporting to Public Health (US Realm), Release 1 Errata and Clarifications, September, 29, 2011, IBR approved for § 170.205.
(14)-(17) [Reserved]
(18) HL7 Implementation Guide for CDA® Release 2: Consolidated CDA Templates for Clinical Notes (US Realm), Draft Standard for Trial Use, Volume 1—Introductory Material, Release 2.1, August 2015, IBR approved for § 170.205(a).
(19) HL7 Implementation Guide for CDA® Release 2: Consolidated CDA Templates for Clinical Notes (US Realm), Draft Standard for Trial Use, Volume 2—Templates and Supporting Material, Release 2.1, August 2015, IBR approved for § 170.205(a).
(20) HL7 CDA® R2 Implementation Guide: Quality Reporting Document Architecture—Category I (QRDA I); Release 1, DSTU Release 3 (US Realm), Volume 1—Introductory Material, June 2015, IBR approved for § 170.205(h).
(21) HL7 CDA® R2 Implementation Guide: Quality Reporting Document Architecture—Category I (QRDA I); Release 1, DSTU Release 3 (US Realm), Volume 2—Templates and Supporting Material, June 2015, IBR approved for § 170.205(h).
(22)-(24) [Reserved]
(25) HL7 Version 3 Implementation Guide: Data Segmentation for Privacy (DS4P), Release 1, Part 1: CDA R2 and Privacy Metadata Reusable Content Profile, May 16, 2014, IBR approved for § 170.205(o).
(26) [Reserved]
(27) HL7 Implementation Guide for CDA® Release 2: National Health Care Surveys (NHCS), Release 1—US Realm, HL7 Draft Standard for Trial Use, Volume 1—Introductory Material, December 2014, IBR approved for § 170.205(s).
(28) HL7 Implementation Guide for CDA® Release 2: National Health Care Surveys (NHCS), Release 1—US Realm, HL7 Draft Standard for Trial Use, Volume 2—Templates and Supporting Material, December 2014, IBR approved for § 170.205(s).
(29-30) [Reserved]
(31) HL7 FHIR® Bulk Data Access (Flat FHIR®) (v1.0.0: STU 1), August 22, 2019, IBR approved for § 170.215(a).
(32) HL7 FHIR SMART Application Launch Framework Implementation Guide Release 1.0.0, November 13, 2018, IBR approved for § 170.215(a).
(33) HL7 Fast Healthcare Interoperability Resources Specification (FHIR®) Release 4, Version 4.0.1: R4, October 30, 2019, including Technical Correction #1, November 1, 2019, IBR approved for § 170.215(a).
(34) HL7 FHIR® US Core Implementation Guide STU3 Release 3.1.1, August 28, 2020, IBR approved for § 170.215(a).
(35) HL7 CDA® R2 Implementation Guide: C-CDA Templates for Clinical Notes STU Companion Guide, Release 4.1 (US Realm) Standard for Trial Use, Specification Version: 4.1.1, June 2023 (including appendices A and B); IBR approved for § 170.205(a).
(36) HL7 FHIR® Implementation Guide: Electronic Case Reporting (eCR)—US Realm, Version 2.1.0—STU 2 US (HL7 FHIR eCR IG), August 31, 2022; IBR approved for § 170.205(t).
(37) HL7 CDA® R2 Implementation Guide: Public Health Case Report—the Electronic Initial Case Report (eICR) Release 2, STU Release 3.1—US Realm (HL7 CDA eICR IG), July 2022, volumes 1 and 2; IBR approved for § 170.205(t).
(38) HL7 CDA® R2 Implementation Guide: Reportability Response, Release 1, STU Release 1.1—US Realm (HL7 CDA RR IG), July 2022, volumes 1 through 4; IBR approved for § 170.205(t).
(39) HL7 FHIR US Core Implementation Guide Version 6.1.0—STU 6, June 19, 2023; IBR approved for § 170.215(b).
(40) HL7 FHIR® SMART App Launch [Implementation Guide], 2.0.0—Standard for Trial Use, November 26, 2021; IBR approved for § 170.215(c).
(41) HL7 FHIR® Da Vinci—Coverage Requirements Discovery (CRD) Implementation Guide, Version 2.0.1—STU 2, January 8, 2024, IBR approved for § 170.215(j).
(42) HL7 FHIR® Da Vinci—Documentation Templates and Rules (DTR) Implementation Guide, Version 2.0.1—STU 2, January 11, 2024, IBR approved for § 170.215(j).
(43) HL7 FHIR® Da Vinci Prior Authorization Support (PAS) FHIR Implementation Guide, Version 2.0.1—STU 2, December 1, 2023, IBR approved for § 170.215(j).
(44) HL7 FHIR® CARIN Consumer Directed Payer Data Exchange (CARIN IG for Blue Button®) Implementation Guide, Version 2.0.0—STU 2 US, November 28, 2022, IBR approved for § 170.215(k).
(45) HL7 FHIR® Da Vinci Payer Data Exchange (PDex) Implementation Guide, Version 2.1.0—STU 2.1, June 18, 2025, IBR approved for § 170.215(k).
(46) HL7 FHIR® Da Vinci Payer Data Exchange (PDex) US Drug Formulary Implementation Guide, Version 2.0.1—STU 2, December 1, 2023, IBR approved for § 170.215(m).
(47) HL7 FHIR® Da Vinci Payer Data Exchange (PDex) Plan Net Implementation Guide, Version 1.1.0—STU 1.1 US, April 4, 2022, IBR approved for § 170.215(n).
(48) HL7 FHIR® Subscriptions R5 Backport Implementation Guide, Version 1.1.0—Standard for Trial Use, draft as of January 11, 2023, IBR approved for § 170.215(h).
(49) HL7 FHIR® CDS Hooks Implementation Guide, Version 2.0.1—ci-build, March 12, 2025, IBR approved for § 170.215(f).
(f) Integrating the Healthcare Enterprise (IHE), 820 Jorie Boulevard, Oak Brook, IL Telephone (630) 481-1004,
(1) IHE IT Infrastructure Technical Framework Volume 2b (ITI TF-2b), Transactions Part B—Sections 3.29—2.43, Revision 7.0, August 10, 2010, IBR approved for § 170.205(p).
(2) [Reserved]
(g) Internet Engineering Task Force (IETF) Secretariat, c/o Association Management Solutions, LLC (AMS), 48377 Fremont Blvd., Suite 117, Fremont, CA 94538, Telephone (510) 492-4080,
(1)-(2) [Reserved]
(3) Request for Comment (RFC) 5646, “Tags for Identifying Languages, September 2009,” copyright 2009, IBR approved for § 170.207(g).
(h) International Telecommunication Union (ITU), Place des Nations, 1211 Geneva 20 Switzerland, Telephone (41) 22 730 511,
(1) ITU-T E.123, Series E: Overall Network Operation, Telephone Service, Service Operation and Human Factors, International operation—General provisions concerning users: Notation for national and international telephone numbers, email addresses and web addresses, February 2001, IBR approved for § 170.207(q).
(2) ITU-T E.164, Series E: Overall Network Operation, Telephone Service, Service Operation and Human Factors, International operation—Numbering plan of the international telephone service, The international public telecommunication numbering plan, November 2010, IBR approved for § 170.207(q).
(i) National Council for Prescription Drug Programs (NCPDP), Incorporated, 9240 E Raintree Drive, Scottsdale, AZ 85260-7518; phone (480) 477-1000; fax: (480) 767-1042: website:
(1) NCPDP SCRIPT Standard, Implementation Guide, Version 2017071, ANSI-approved July 28, 2017; IBR approved for § 170.205(b).
(2) NCPDP SCRIPT Standard, Implementation Guide, Version 2023011, ANSI-approved January 17, 2023; IBR approved for § 170.205(b).
(3) NCPDP Real-Time Prescription Benefit Standard, Implementation Guide, Version 13, ANSI-approved May 19, 2022; IBR approved for § 170.205(c).
(4) NCPDP Formulary and Benefit Standard, Implementation Guide, Version 60, ANSI-approved April 12, 2023; IBR approved for § 170.205(u).
(j) Office of the National Coordinator for Health Information Technology (ONC), 330 C Street SW, Washington, DC 20201; phone: (202) 690-7151; website:
(1) United States Core Data for Interoperability (USCDI), Version 3.1 (v3.1), June 2025, IBR approved for § 170.213.
(2) [Reserved]
(k) Public Health Data Standards Consortium, 111 South Calvert Street, Suite 2700, Baltimore, MD 21202; phone: (801) 532-2299; website:
(1) Public Health Data Standards Consortium Source of Payment Typology Code Set Version 5.0 (October 2011), IBR approved for § 170.207(s).
(2) Users Guide for Source of Payment Typology, Version 9.2, December 2020; IBR approved for § 170.207(s).
(l) Regenstrief Institute, Inc., LOINC® c/o Regenstrief Center for Biomedical Informatics, Inc., 410 West 10th Street, Suite 2000, Indianapolis, IN 46202-3012; phone: (317) 274-9000; website:
(1) Logical Observation Identifiers Names and Codes (LOINC®) Database Version 2.72, February 2022; IBR approved for § 170.207(c).
(2) The Unified Code for Units of Measure, Version 2.1, November 21, 2017; IBR approved for § 170.207(m).
(m) U.S. National Library of Medicine, 8600 Rockville Pike, Bethesda, MD 20894; phone (301) 594-5983; website:
(1) SNOMED CT® [SNOMED Clinical Terms] U.S. Edition, March 2022 Release; IBR approved for § 170.207(a).
(2) RxNorm, Full Update Release, July 5, 2022; IBR approved for § 170.207(d).
(3) RxNorm, December 4, 2023, Full Update Release, IBR approved for § 170.207(d).
The revisions and republication read as follows:
(a) * * *
(5)
(A)
(
(
(B)
(C)
(ii) Inpatient setting only. Enable a user to record, change, and access the preliminary cause of death and date of death in the event of mortality.
(b) * * *
(1)
(A) Parse each of the document types.
(B) Detect errors in corresponding “document-templates,” “section-templates,” and “entry-templates,” including invalid vocabulary standards and codes not specified in the standard adopted in § 170.205(a)(6).
(C) Identify valid document-templates and process the data elements required in the corresponding section-templates and entry-templates from the standard adopted in § 170.205(a)(6).
(D) Correctly interpret empty sections and null combinations.
(E) Record errors encountered and allow a user through at least one of the following ways to:
(
(
(ii) [Reserved]
(11) * * *
(iii)
(B) Predictive Decision Support Interventions and use any data in paragraph (b)(11)(iii)(A) of this section as well as Clinical Notes and Assessment and Plan of Treatment expressed in the standards for this data in § 170.213.
(c) * * *
(3)
(e) * * *
(1)
(A)
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(B)
(
(
(
(
(
(3)
(C)
(
(
(
(
(D)
(
(
(ii)
(
(
(
(
(B) [Reserved]
(iii)
(f) * * *
(5)
(6)
The revision reads as follows:
(b) * * *
(2) A health IT developer that must comply with the requirements of paragraph (a)(4) of this section must provide all of its customers of certified health IT with the health IT certified to the certification criterion in § 170.315(b)(10).
The revisions read as follows:
The following Condition and Maintenance of Certification requirements apply to developers of Health IT Modules certified to any of the certification criteria adopted in § 170.315(g)(10) and (31) through (33) unless otherwise specified in this section.
(b) * * *
(2)
(c) * * *
The revisions and republication read as follows:
(a)
(b) * * *
(2)
(ii) For real world testing activities conducted during the immediately preceding calendar year, a health IT developer must submit to its ONC-ACB an annual real world testing results report that:
(A) Addresses each of its certified Health IT Modules that were certified to, including through Inherited Certified Status, the § 170.315(g) certification criteria referenced in paragraph (a) in the year preceding the real world testing calendar year reporting period.
(B) Includes the newer versions of certified Health IT Modules that include the § 170.315(g) certification criteria referenced in paragraph (a) of this section that were updated using Inherited Certified Status during the real world testing reporting period; and
(C) Is submitted by a date determined by the ONC-ACB that enables the ONC-ACB to publish a publicly available hyperlink to the results report on the CHPL no later than March 15 of each calendar year, beginning in 2023.
(iii) The real world testing results must report the following for each of the § 170.315(g) certification criteria identified in paragraph (a) of this section that are included in the Health IT Module's scope of certification:
(A) The method(s) that was used to demonstrate real world interoperability;
(B) The care setting(s) that was tested for real world interoperability;
(C) The voluntary updates to standards and implementation specifications that the National Coordinator has approved through the Standards Version Advancement Process;
(D) A list of the key milestones met during real world testing;
(E) The outcomes of real world testing including a description of any challenges encountered during real world testing; and
(F) At least one measurement/metric associated with the real world testing.
(iv) For each Health IT Module certified to any certification criterion specified in paragraph (a) of this section, other than the § 170.315(g) certification criteria (see paragraph (b)(2)(iii) for requirements), identify the voluntary updates to standards and implementation specifications that the National Coordinator has approved through the Standards Version Advancement Process.
(8)
(a) * * *
(4) Section 170.404 if the health IT developer has a Health IT Module(s) certified to any of the certification criteria adopted in § 170.315(g); and such health IT developer must also ensure that health IT allows for health information to be exchanged, accessed, and used, in the manner described in § 170.404; and
(5) Section 170.405 if a health IT developer has a Health IT Module(s) certified to any one or more ONC
The revisions and republication read as follows:
(a) * * *
(1) * * *
(ii) * * *
(B) Have health IT certified to the certification criteria specified in each measure in paragraph (a)(3) of this section; or
(C) Have any users using the certified health IT specified in each measure in paragraphs (a)(3) of this section during the reporting period.
(3)
(A) User type;
(B) FHIR resource; and
(C) US Core Implementation Guide version.
(ii) [Reserved]
(b)
(i) A health IT developer must provide responses for measures specified in:
(A) Paragraphs (a)(3)(i)(A) and (B) of this section beginning July 2027.
(B) Paragraphs (a)(3)(i)(C) of this section beginning July 2028.
(2) [Reserved]
The revisions read as follows.
(f) * * *
(1) * * *
(viii) The certification criterion or criteria to which the Health IT Module has been certified, including the test procedure and test tool version used;
(p) * * *
(3) Submit real world testing results by March 15 of each calendar year to ONC for public availability.
The revisions and republication read as follows:
(e)
(g)
(1) Section 170.315(b)(10) when a health IT developer presents a Health IT Module for certification that can store electronic health information at the time of certification by the product, of which the Health IT Module is a part.
(2) Section 170.315(b)(4) if the Health IT Module is presented for certification to the certification criteria in § 170.315(b)(3).
(b) * * *
(2) A certified Health IT Module may be upgraded to comply with newer versions of standards identified as minimum standards in subpart B of this part without adversely affecting its certification status, unless the Secretary prohibits the use of a newer version for certification.
42 U.S.C. 300jj-52; 5 U.S.C. 552.
The revisions and additions read as follows:
The revisions and republication read as follows:
(a) * * *
(4) * * *
(ii) The actor offered all alternative manners that are set forth in § 171.301(b) in accordance with § 171.301(b), regardless of whether the requestor specified the manner or agreed to it.
(iii) The actor does not provide analogous access, exchange, or use of the requested electronic health information to any other individual or entity.
The addition reads as follows:
(a) * * *
(2) * * *
(iii) Any contract or agreement under which the actor and requestor agree to fulfill a request for access, exchange, or use of EHI, and any license from the actor of interoperability elements used in fulfilling the request in the manner requested:
(A) must be at market rate,
(B) must not be a contract of adhesion, and
(C) must not contain unconscionable terms.