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Office of Personnel Management.
Final rule.
The Office of Personnel Management (OPM) is adopting its proposed regulations applicable to electronic benefits processing under the Civil Service Retirement System (CSRS), the Federal Employees' Retirement System (FERS), the Federal Employees' Group Life Insurance (FEGLI), the Federal Employees Health Benefits (FEHB), and the Retired Federal Employee Health Benefits (RFEHB) Programs. These amendments are also being adopted to provide OPM with the flexibility to implement further improvements in automated retirement processing, recordkeeping, and electronic submission of forms and retirement applications as OPM's technological initiatives reach completion.
Effective November 18, 2013.
Roxann Johnson or Kristine Prentice, (202) 606–0299.
On March 5, 2013, OPM published (at 78 FR 14233) proposed regulations to amend part 850 of title 5, Code of Federal Regulations, by updating regulations previously published (at 72 FR 73573). Pursuant to the President's January 18, 2011, Executive Order 13563—
OPM received no comments on the proposed regulations. Accordingly, we are now adopting the proposed regulations as final without change.
The Office of Management and Budget has reviewed this rule in accordance with E.O. 13563 and E.O. 12866.
I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the purpose of this regulation is to assist in facilitating OPM's ongoing modernization of the processing of benefits under CSRS, FERS, FEGLI, FEHB, and RFEHB.
Administrative practice and procedure, Air traffic controllers, Alimony, Claims, Disability benefits, Firefighters, Government employees, Income taxes, Intergovernmental relations, Law enforcement officers, Pensions, Reporting and recordkeeping requirements, Retirement.
Accordingly, OPM is amending 5 CFR part 850 as follows:
5 U.S.C. 8347; 5 U.S.C. 8461; 5 U.S.C. 8716; 5 U.S.C. 8913; sec. 9 of Pub. L. 86–724, 74 Stat. 849, 851–52 (September 8, 1960) as amended by sec. 102 of Reorganization Plan No. 2 of 1978, 92 Stat. 3781, 3783 (February 23, 1978).
(a) The purpose of this part is to enable changes to OPM's retirement and insurance processing systems to improve the quality and timeliness of services to employees and annuitants covered by CSRS and FERS by using contemporary, automated business processes and supporting accessible technologies. By utilizing these automated processes, OPM will employ more efficient and effective business systems to respond to increased customer demand for higher levels of customer service and online self-service tools.
(b) The provisions of this part authorize exceptions from regulatory provisions that would otherwise apply to CSRS and FERS annuities and FEGLI, FEHB, and RFEHB benefits processed by or at the direction of OPM. Those regulatory provisions that would otherwise apply were established for a hardcopy based retirement and insurance benefits processing system that may eventually be phased out but which will continue to operate concurrently with OPM's modernization efforts. During the phased transition to electronic retirement and insurance processing, certain regulations that were not designed with information technology needs in mind, and which are incompatible with electronic business processes, must be set aside with respect to electronic retirement and insurance processing. The regulations set forth in this part make the transition to electronic processing possible.
(c) The provisions of this part do not affect retirement and insurance eligibility and annuity computation provisions. The provisions for capturing retirement and insurance data in an electronic format, however, may support, in some instances, more precise calculations of annuity and insurance benefits than were possible using hardcopy records.
(a) * * *
(4)(i) In general, any regulatory requirement under CSRS, FERS, FEGLI, FEHB or RFEHB that a signature be notarized, certified, or otherwise witnessed, by a notary public or other official authorized to administer oaths may be satisfied by the electronic signature of the person authorized to perform those acts when such electronic signature is attached to or logically associated with all other information and records required to be included by the applicable regulation.
(ii) Except as provided in paragraph (a)(4)(iii) of this section, a person signing a consent or election for the purpose of electronic notarization under paragraph (a)(4)(i) of this section must be in the physical presence of the notary public or an official authorized to administer oaths.
(iii) The Director may provide in directives issued under § 850.104 that alternative procedures utilized by a notary public or other official authorized to administer oaths (such as audio-video conference technology) will be deemed to satisfy the physical presence requirement for a notarized, certified, or witnessed election or consent, but only if those procedures with respect to the electronic system
(a) Hardcopy applications and related submissions that are otherwise required to be made to an individual's employing agency (other than by statute) may instead be submitted electronically in such form as the Director prescribes under § 850.104.
(b) Data provided under subpart C of this part are the basis for adjudicating claims for CSRS and FERS retirement benefits, and will support the administration of FEGLI, FEHB and RFEHB coverage for annuitants, under this part.
Any other election may be effected in such form as the Director prescribes under § 850.104. Such elections include but are not limited to elections of coverage under CSRS, FERS, FEGLI, FEHB, or RFEHB by individuals entitled to elect such coverage; applications for service credit and applications to make deposit; and elections regarding the withholding of State income tax from annuity payments.
(a) Acceptable electronic records for retirement and insurance processing by OPM include—
(1) Electronic employee data, including an eIRR or an ERR, submitted by an agency, agency payroll office, or Shared Service Center, or other entity and stored within the EHRI Retirement Data Repository, the eIRR records storage database, or other OPM database.
(2) Electronic Official Personnel Folder (eOPF) data; and
(3) Documents, including hardcopy versions of the Individual Retirement Record (SF 2806 or SF 3100), or data or images obtained from such documents, including images stored in EDMS, that are converted to an electronic or digital form by means of image scanning or other forms of electronic or digital conversion.
(b) Documents that are not converted to an electronic or digital form will continue to be acceptable records for processing by the retirement and insurance processing system.
An agency or other entity that submits electronic employee records directly or through a Shared Service Center must include in the notice of law enforcement officer, firefighter, or nuclear materials retirement coverage, required by §§ 831.811(a), 831.911(a), 842.808(a), or 842.910(a) of this chapter, the position description number, or other unique alphanumeric identifier, in the notice for the position for which law enforcement officer, firefighter, or nuclear materials courier retirement coverage has been approved. Agencies or other entities must submit position descriptions to OPM in a PDF document to combox address:
Agricultural Marketing Service, USDA.
Final rule.
The Agricultural Marketing Service (AMS) is amending regulations to allow for the addition of an optional cotton futures classification procedure—identified and known as “registration” by the U.S. cotton industry and the Intercontinental Exchange (ICE). In response to requests from the U.S. cotton industry and ICE, AMS will offer a futures classification option whereby cotton bales may be certificated for the purpose of an exchange's cotton futures contract using Smith-Doxey data to verify that submitted bales meet more restrictive quality requirements and age parameters established by that exchange. AMS anticipates that the futures classification option will be available in time for the implementation of ICE's Cotton Resolution No. 2, which is scheduled to commence with the March 2014 contract month.
Darryl Earnest, Deputy Administrator, Cotton & Tobacco Program, AMS, USDA, 3275 Appling Road, Room 11, Memphis, TN 38133. Telephone (901) 384–3060, facsimile (901) 384–3021, or email
This rule has been determined to be not significant for purposes of Executive Order 12866; and, therefore has not been reviewed by the Office of Management and Budget (OMB).
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this rule.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601–612), AMS has considered the economic impact of this action on small entities and has determined that its implementation will not have a significant economic impact on a substantial number of small businesses.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. There are approximately 60 cotton merchant organizations of various sizes active in trading U.S. cotton. Cotton merchants voluntarily use the AMS cotton futures classification services under the Cotton Futures Act (Act) (7 U.S.C. 15b). Many of these cotton merchants are small businesses under the criteria established by the Small Business Administration (13 CFR § 121.201). Establishing the registration option for cotton futures classification will not significantly affect small businesses as defined in the RFA because:
(1) The established user fee for cotton futures classification services is $3.50 per bale (7 CFR § 27.80). Users choosing the registration option would incur no additional charges;
(2) The established cotton futures classification fee represents a very small portion of the cost per-unit currently borne by those entities utilizing the service;
(3) The average price paid to producers for cotton from the 2012 crop was 73.22 cents per pound, making a 500 pound bale of cotton worth an average of $366.10. The current user fee
(4) The fee for this service will not affect competition in the marketplace;
(5) The futures classification option is expected to streamline marketing and create logistical efficiencies for all entities utilizing this option; and
(6) The use of futures classification services is voluntary. For fiscal year 2013, there were 913,179 cotton futures samples (approximately 5.4 percent of the 16,942,409 Smith-Doxey classifications) voluntarily submitted for the futures classification service.
In compliance with OMB regulations (5 CFR part 1320), which implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501), the information collection requirements associated with this rule have been previously approved by OMB and were assigned OMB control number 0581–0008, Cotton Classing, Testing, And Standards.
The Act requires USDA-verified quality measurements for each bale to be included in futures contracts for the purpose of verifying that each bale meets the minimum quality requirements for cotton futures trading. Furthermore, the Act authorizes the charging of user fees required to recover the cost associated with providing futures quality verification services.
USDA was first directed to provide cotton classification services to producers of cotton under the Smith-Doxey Act of April 13, 1937 (Pub. L. 75–28). Therefore, the original classification of a cotton bale's sample and quality data which results from this classification is commonly referred to as the Smith-Doxey classification or Smith-Doxey data. While cotton classification is not mandatory, practically every cotton bale grown in the United States today is classed by AMS under the authority of the Cotton Statistics and Estimates Act (7 U.S.C. 471–476) and the U.S. Cotton Standards Act (7 U.S.C. 51–65) and under regulations found in 7 CFR part 28—Cotton Classing, Testing, and Standards. The U.S. cotton industry uses Smith-Doxey data to assign quality-adjusted market values to U.S. cotton and market U.S. cotton both domestically and internationally. Smith-Doxey data is commonly used by the cotton merchant community to indicate which bales may be tenderable against a cotton futures contract.
Conventional procedures employed for verifying quality measurements for bales to be included in futures contracts consists of two futures classifications: 1) initial futures classification and 2) final futures classification. AMS, Cotton and Tobacco Program revised these procedures to incorporate Smith-Doxey data into the cotton futures classification process in March 2012 (77 FR 5379). When verified by a futures classification, Smith-Doxey data serves as an initial futures classification with the verifying futures classification serving as a final futures classification. The use of Smith-Doxey data significantly reduced the number of futures classifications required for many of the bales that were submitted for certification.
The successful incorporation of Smith-Doxey data into the futures classification procedures prompted the U.S. cotton industry and ICE to request that the AMS, Cotton and Tobacco Program use Smith-Doxey data to certify that bales submitted for quality verification meet more restrictive quality requirements and age parameters set by ICE for use in a cotton futures contract. The U.S. cotton industry and ICE refer to this optional procedure as the “registration option”.
The established user fee for cotton futures classification services is $3.50 per bale (7 CFR 27.80). Customers choosing this cotton futures classification option will incur this charge. In the event that AMS determines that a bale submitted under this option fails to meet quality or age parameters set by the exchange inspection agency, the owner of the bale will be notified of the bale's failure.
AMS, Cotton and Tobacco Program is amending regulations in 7 CFR part 27 to allow for the use of original Smith-Doxey data to certify that bales submitted for quality verification meet quality and age parameters set by the applicable exchange inspection agency. Accordingly, the definition of “Classification” in § 27.2, paragraph (n) is amended to allow the registration option for the futures classification services. Also in § 27.2, the term “Smith-Doxey data” is defined in new paragraphs (p).
A proposed rule was published in the
The U.S. cotton industry and ICE requested that AMS, Cotton and Tobacco Program make this option available in December 2013 to coincide with the implementation of ICE's Cotton Resolution No. 2, which is scheduled to commence with the March 2014 contract month. Accordingly, pursuant to 5 U.S.C. 553, it is found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the
Commodity futures, Cotton.
For the reasons set forth in the preamble, 7 CFR part 27 is amended to read as follows:
7 U.S.C. 15b, 7 U.S.C. 473b, 7 U.S.C. 1622(g).
(n)
(p)
Federal Aviation Administration (FAA), DOT.
Final special conditions.
These special conditions are issued for the Boeing Model 777–200, –300, and –300ER series airplanes. These airplanes, as modified by the Boeing Company, will have novel or unusual design features associated with the architecture and connectivity of the passenger service computer network systems to the airplane critical systems and data networks. This onboard network system will be composed of a network file server, a network extension device, and additional interfaces configured by customer option. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
Varun Khanna, FAA, Airplane and Flight Crew Interface Branch, ANM–111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057–3356; telephone 425–227–1298; facsimile 425–227–1149.
On August 21, 2012, The Boeing Company applied for a change to Type Certificate No. T00001SE Rev. 30 dated June 6, 2012 for installation of an onboard network system, associated line replaceable units (LRUs) and additional software functionality in the Boeing Model 777–200, –300, and –300ER Series Airplanes. The Boeing Model 777–200 airplanes are long-range, wide-body, twin-engine jet airplanes with a maximum capacity of 440 passengers. The Boeing Model 777–300 and 777–300ER series airplanes have a maximum capacity of 550 passengers. The Model 777–200, –300, and –300ER series airplanes have fly-by-wire controls, software-configurable avionics, and fiber-optic avionics networks.
The proposed architecture is novel or unusual for commercial transport airplanes by enabling connection to previously isolated data networks connected to systems that perform functions required for the safe operation of the airplane. This proposed data network and design integration may result in security vulnerabilities from intentional or unintentional corruption of data and systems critical to the safety and maintenance of the airplane. The existing regulations and guidance material did not anticipate this type of system architecture or electronic access to aircraft systems. Furthermore, regulations and current system safety assessment policy and techniques do not address potential security vulnerabilities, which could be caused by unauthorized access to aircraft data buses and servers.
Under Title 14, Code of Federal Regulations (14 CFR) 21.17, The Boeing Company must show that the Model 777–200, –300, and –300ER series airplanes meet the applicable provisions of 14 CFR part 25, as amended by Amendments 25–1 through 25–128.
If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Boeing Model 777–200, –300, and –300ER series airplanes because of a novel or unusual design feature, special conditions are prescribed under § 21.16.
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the proposed special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and proposed special conditions, the Boeing Model 777–200, –300, and –300ER series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36 and the FAA must issue a finding of regulatory adequacy under § 611 of Public Law 92–574, the “Noise Control Act of 1972.”
The FAA issues special conditions, as defined in 14 CFR 11.19, under § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).
The Boeing Model 777–200, –300, –300ER series airplanes will incorporate the following novel or unusual design features: An onboard computer network system, and a network extension device. The network extension device will improve domain separation between the airplane information services domain and the aircraft control domain. The proposed architecture and network configuration may be used for, or interfaced with, a diverse set of functions, including:
1. Flight-safety related control and navigation systems,
2. Operator business and administrative support (operator information services),
3. Passenger information systems, and,
4. Access by systems internal to the airplane.
The integrated network configurations in the Boeing Model 777–200, –300, and –300ER series airplanes may enable increased connectivity with external network sources and will have more interconnected networks and systems, such as passenger entertainment and information services than previous airplane models. This may enable the exploitation of network security vulnerabilities and increased risks potentially resulting in unsafe conditions for the airplanes and occupants. This potential exploitation of security vulnerabilities may result in intentional or unintentional destruction, disruption, degradation, or exploitation of data and systems critical to the safety and maintenance of the airplane. The existing regulations and guidance material did not anticipate these types of system architectures. Furthermore, 14 CFR regulations and current system safety assessment policy and techniques do not address potential security vulnerabilities which could be exploited by unauthorized access to airplane networks and servers. Therefore, these special conditions are being issued to ensure that the security (i.e., confidentiality, integrity, and availability) of airplane systems is not compromised by unauthorized wired or
For the reasons discussed above, these special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Boeing Model 777–200, –300, –300ER series airplanes. Should The Boeing Company apply at a later date for a change to the type certificate to include another model on the same type certificate incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on Boeing Model 777–200, –300, –300ER series airplanes. It is not a rule of general applicability.
The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary, and good cause exists for adopting these special conditions upon publication in the
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Boeing Model 777–200, –300, –300ER series airplanes modified by The Boeing Company.
1. The applicant must ensure that the design provides isolation from, or airplane electronic system security protection against, access by unauthorized sources internal to the airplane. The design must prevent inadvertent and malicious changes to, and all adverse impacts upon, airplane equipment, systems, networks, or other assets required for safe flight and operations.
2. The applicant must establish appropriate procedures to enable the operator to ensure that continued airworthiness of the aircraft is maintained, including all post STC modifications that may have an impact on the approved electronic system security safeguards.
Federal Aviation Administration (FAA), DOT.
Final special conditions.
These special conditions are issued for the Boeing Model 777–200, –300, and –300ER series airplanes. These airplanes, as modified by The Boeing Company, will have novel or unusual design features associated with the architecture and connectivity capabilities of the airplane's onboard network computer systems, which may allow access to or by external computer systems and networks. This onboard network system will be composed of a network file server, a network extension device, and additional interfaces configured by customer option. Connectivity to, or access by, external systems and networks may result in security vulnerabilities to the airplane's onboard network system. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
Varun Khanna, FAA, Airplane and Flight Crew Interface Branch, ANM–111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057–3356; telephone 425–227–1298; facsimile 425–227–1149.
On August 21, 2012, The Boeing Company applied for a change to Type Certificate No. T00001SE Rev. 30 dated June 6, 2012 for installation of an onboard network system, associated line replaceable units (LRUs) and additional software functionality in the Boeing Model 777–200, –300, and –300ER Series Airplanes. The Boeing Model 777–200 airplanes are long-range, wide-body, twin-engine jet airplanes with a maximum capacity of 440 passengers. The Boeing Model 777–300 and 777–300ER series airplanes have a maximum capacity of 550 passengers. The Model 777–200, –300, and –300ER series airplanes have fly-by-wire controls, software-configurable avionics, and fiber-optic avionics networks.
The proposed architecture is novel or unusual for commercial transport airplanes by enabling connection to previously isolated data networks connected to systems that perform functions required for the safe operation of the airplane. This proposed data network and design integration may result in security vulnerabilities from intentional or unintentional corruption of data and systems critical to the safety and maintenance of the airplane. The existing regulations and guidance material did not anticipate this type of system architecture or electronic access to aircraft systems. Furthermore, regulations and current system safety assessment policy and techniques do not address potential security vulnerabilities, which could be caused by unauthorized access to aircraft data buses and servers.
Under Title 14, Code of Federal Regulations (14 CFR) 21.17, The Boeing Company must show that the Boeing Model 777–200, –300, and –300ER series airplanes meet the applicable provisions of 14 CFR part 25, as amended by Amendments 25–1 through 25–128.
If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Boeing Model 777–200, –300, and –300ER series airplanes because of a novel or unusual design feature, special conditions are prescribed under § 21.16.
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the proposed special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and proposed special conditions, the Boeing Model 777–200, –300, and –300ER series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36 and the FAA must issue a finding of regulatory adequacy under § 611 of Public Law 92–574, the “Noise Control Act of 1972.”
The FAA issues special conditions, as defined in 14 CFR 11.19, under § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).
The Boeing Model 777–200, –300, –300ER series airplanes will incorporate the following novel or unusual design features: An onboard computer network system, and a network extension device. The network extension device will improve domain separation between the airplane information services domain and the aircraft control domain. The proposed architecture and network configuration may be used for, or interfaced with, a diverse set of functions, including:
1. Flight Safety related control and information systems.
2. Operator business and administrative support (operator information domain);
3. Passenger information and entertainment systems (passenger entertainment domain), and;
4. The capability to allow access to or by external sources.
The architecture and network configuration in the Boeing Model 777–200, –300, and –300ER series airplanes may enable increased connectivity to, or access by, external airplane sources, airline operations, and maintenance systems to the aircraft control functions and airline information services. The aircraft control functions and airline information services perform functions required for the safe operation and maintenance of the airplane. Previously these domains had very limited connectivity with external sources. The architecture and network configuration may allow the exploitation of network security vulnerabilities resulting in intentional or unintentional destruction, disruption, degradation, or exploitation of data, systems, and networks critical to the safety and maintenance of the airplane. The existing regulations and guidance material did not anticipate these types of airplane system architectures. Furthermore, 14 CFR regulations and current system safety assessment policy and techniques do not address potential security vulnerabilities, which could be exploited by unauthorized access to airplane systems, data buses, and servers. Therefore, these special conditions are issued to ensure that the security (i.e., confidentiality, integrity, and availability) of airplane systems is not compromised by unauthorized wired or wireless electronic connections.
As discussed above, these special conditions are applicable to the Boeing Model 777–200, –300, –300ER series airplanes. Should The Boeing Company apply at a later date for a change to the type certificate to include another model on the same type certificate incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on Boeing Model 777–200, –300, –300ER series airplanes. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.
The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary, and good cause exists for adopting these special conditions upon publication in the
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Boeing Model 777–200, –300, –300ER series airplanes modified by The Boeing Company.
1. The applicant must ensure airplane electronic system security protection from access by unauthorized sources external to the airplane, including those possibly caused by maintenance activity.
2. The applicant must ensure that electronic system security threats are identified and assessed, and that effective electronic system security protection strategies are implemented to protect the airplane from all adverse impacts on safety, functionality, and continued airworthiness.
3. The applicant must establish appropriate procedures to enable the operator to ensure that continued airworthiness of the aircraft is maintained, including all post Type Certification modifications that may have an impact on the approved electronic system security safeguards.
Federal Trade Commission.
Final rule; revisions to Guides.
The Federal Trade Commission (“FTC” or “Commission”) has completed its regulatory review of the Guides for Private Vocational and Distance Education Schools (“Vocational School Guides” or “Guides”) as part of its systematic review of all current FTC rules and guides and issues its revisions.
This action is effective as of November 18, 2013.
Requests for copies of this rule should be sent to the Public Reference Branch, Room 130, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580. The notice is also available on the Commission's Web site,
Maria Del Monaco, Attorney, East Central Region, Federal Trade Commission, (216) 263–3405, 1111
The Commission reviews all Commission rules and guides periodically. These reviews seek information about the costs and benefits of the Commission's rules and guides as well as their regulatory and economic impact. The information obtained assists the Commission in identifying rules and guides that warrant modification or rescission. These Guides, like other industry guides issued by the Commission, are “administrative interpretations of laws administered by the Commission for the guidance of the public in conducting its affairs in conformity with legal requirements.” 16 CFR 1.5. Conduct inconsistent with the Guides may result in corrective action by the Commission under applicable statutory provisions.
The Commission promulgated the Guides (then titled the “Guides for Private Vocational and Home Study Schools”) in May 1972, and they became effective on August 14, 1972 (37 FR 9665 (May 16, 1972)). The Commission amended the Guides effective October 9, 1998. These amendments added a provision addressing misrepresentations related to postgraduation employment. In order to streamline the Guides, certain provisions not specific to vocational schools and a section suggesting affirmative disclosures were deleted (63 FR 42570 (Aug. 10, 1998), as amended at 63 FR 72350 (Dec. 31, 1998)).
On July 30, 2009, the Commission published a
The Guides are intended to advise proprietary businesses that offer vocational training courses, either on the school's premises or through distance education, how to avoid deceptive practices in connection with the advertising, promotion, marketing, or sale of their courses or programs. Specifically, the Vocational School Guides address misrepresentations in the description of a school, including misrepresentations that the school is affiliated with the government or is an employment agency. The Guides also address misleading representations related to the accreditation and approval of the school, the transferability of credit received at the school to other institutions, and the use of testimonials and endorsements. The Guides caution schools against misrepresenting the qualifications of teachers, the nature of courses, the availability of employment after graduation, the availability of financial assistance, and enrollment qualifications. They also address the use of deceptive diplomas or certificates. Finally, the Guides warn against using deceptive sales practices, such as placing classified ads that appear to be “help wanted” ads. The Guides make clear that practices inconsistent with them may violate section 5 of the FTC Act.
The Commission received eight comments in response to the FRN.
Seven of the eight comments stated that the Guides should be retained.
APSCU, the sole dissenter, would retain the Guides only for unaccredited and unlicensed vocational schools. It believes the Guides are unnecessary and create additional burdens for institutions that are licensed by a state or accredited by a DOE-recognized accrediting agency. The Commission disagrees with this statement for at least three reasons. First, APSCU identified no material inconsistencies between the Guides and the standards of any accrediting agencies or state licensing bodies and thus failed to identify how the Guides impose additional burdens. Second, the Guides simply identify deceptive practices that are unlawful under the FTC Act and, therefore, do not impose any burden beyond that already associated with complying with section 5 of the FTC Act. Third, exempting accredited and licensed vocational schools from the Guides could be read as implying that circumstances have changed since the Guides were adopted, when, in fact, law enforcement actions targeting deceptive practices of accredited and licensed vocational schools indicate that some of these entities have continued to engage in such practices.
Many of the comments urging retention of the Guides also focused heavily on the recruitment practices and representations of vocational schools. In response, the Commission proposes to modify the Guides in four respects. These changes address the practices highlighted in the comments, and advise against use of particular types of misleading representations.
First, DOE, NCLC, and Consumers Union urged that the Guides address with greater specificity misrepresentations, frequently used in recruitment, on such topics as salaries, job placement, and completion rates and time frames. Accordingly, the Commission has revised the scope and application section of the Guides in section 254.0(b) to reference specifically the recruitment process. The revised Guides also address misrepresentations about completion and dropout rates and postgraduation employment prospects.
Second, DOE suggested that the Guides address misleading statements indicating that a program of instruction would render a student eligible to take a licensing exam. The Commission believes that doing so is warranted, and has modified section 254.3 of the Guides to address instances in which institutions misrepresent that completion of a program will qualify students to take a licensing exam.
Third, NCLC and Consumers Union recommended that the Guides be modified to cover representations relating to admissions testing and students' suitability for particular courses. In this regard, the Commission has amended section 254.5 of the Guides to state more explicitly that misrepresenting a student's score on an admission test is a deceptive practice. In addition, the revised Guides specify in subsections (c) and (d) of section 254.5 that it is a deceptive practice to provide inaccurate information regarding the time required to complete a course or program of instruction or a student's likelihood of success in a school or program of instruction.
Finally, DOE urged that the Guides address representations regarding transfer of course credit from another school, assistance provided to students facing language or other barriers to learning, the source of funding for student loans, and security policies and crime statistics. In response to these comments, the Commission has amended section 254.4(a) of the Guides to address specific misrepresentations relating to student financial assistance, assistance overcoming language barriers or learning disabilities, the extent to which students will receive credit for courses completed at other institutions, security policies, and crime statistics.
The Commission has decided not to adopt two other changes to the Guides which were suggested in the comments. First, NCLC, Consumers Union, and NACAC opined that the Guides should define “clearly and conspicuously.” Only NACAC, however, provided a reason for doing so, which was to increase the public's awareness of the Guides. We do not believe that adding a definition to the Guides would significantly advance that goal. The Guides have included the words “clearly and conspicuously” for forty years without defining the term. Many FTC guides and rules employ this phrase without a detailed definition.
Finally, DOE recommended expanding the scope of the Guides to include resident primary and secondary schools and institutions of higher education offering at least a two-year program of accredited college level studies generally acceptable for credit toward a bachelor's degree. Presently the Guides exclude such schools and institutions.
For the reasons described above, the Commission has determined to retain the Guides, with the revisions indicated below.
Advertising, Trade practices.
For the reasons set forth in the preamble, the Federal Trade Commission amends 16 CFR Part 254 as follows:
38 Stat. 717, as amended; 15 U.S.C. 41–58.
(b) These Guides represent administrative interpretations of laws administered by the Federal Trade Commission for the guidance of the public in conducting its affairs in conformity with legal requirements. These Guides specifically address the application of section 5 of the FTC Act
(a)
(b)
(c)
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature of the school, its Accreditation, programs of instruction, methods of teaching, or any other material fact through the use of any trade or business name, label, insignia, or designation, or in any other manner.
(b) It is deceptive for an Industry Member to deceptively conceal in any way the fact that it is a school or to misrepresent, directly or indirectly, expressly or by implication, through the use of a trade or business name or in any other manner that:
(1) It is a part of or connected with a branch, bureau, or agency of the U.S. Government, including, but not limited to, the U.S. Department of Education, or of any State, or civil service commission; or
(2) It is an employment agency or an employment agent or authorized training facility for any industry or business.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature, extent, or purpose of any Approval by a State or Federal agency or Accreditation by an accrediting agency or association. For example, an Industry Member should not:
(1) Represent, without qualification, that its school is Accredited unless all courses and programs of instruction have been Accredited by an accrediting agency recognized by the U.S. Department of Education. If an Accredited school offers courses or programs of instruction that are not Accredited, all advertisements or promotional materials pertaining to those courses or programs, and making reference to the Accreditation of the school, should clearly and conspicuously disclose that those particular courses or programs are not Accredited.
(2) Represent that its school or program of instruction is Approved, unless the nature, extent, and purpose of that Approval are disclosed.
(3) Misrepresent the extent to which a student successfully completing a course or program of instruction will be able to transfer any credits the student earns to any other postsecondary institution.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that a school or program of instruction has been Approved by a particular industry, or that successful completion of a course or program of instruction qualifies the student for admission to a labor union or similar organization or for receiving a State or Federal license to perform certain functions.
(c) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that its courses or programs of instruction are recommended by vocational counselors, high schools, colleges, educational organizations, employment agencies, or members of a particular industry, or that it has been the subject of unsolicited testimonials or endorsements from former students. It is deceptive for an Industry Member to use testimonials or endorsements that do not accurately reflect current practices of the school or current conditions or employment opportunities in the industry or occupation for which students are being trained.
The Commission's Guides Concerning Use of Endorsements and Testimonials in Advertising (part 255 of this chapter) provide further guidance in this area.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that its courses or programs of instruction fulfill a requirement that must be completed prior to taking a licensing examination.
The revisions and additions read as follows:
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, in advertising, promotional materials, recruitment sessions, or in any other manner, the size, location, services, facilities, curriculum, books and materials, or equipment of its school or the number or educational qualifications of its faculty and other personnel. For example, an Industry Member should not:
(2) Misrepresent, through statements or pictures, or in any other manner, the nature or efficacy of its courses, training devices, methods, or equipment.
(4) Misrepresent the availability, amount, or nature of any financial assistance available to students, including any Federal student financial assistance. If the cost of training is financed in whole or in part by loans, students should be informed that loans must be repaid whether or not they are successful in completing the program and obtaining employment.
(5) Misrepresent that a private entity providing any financial assistance to the students is part of the Federal government or that loans from the private entity have the same interest rate or repayment terms as loans received from the U.S. Department of Education.
(6) Misrepresent the nature of any relationship between the school or its
(7) Misrepresent that certain individuals or classes of individuals are members of its faculty or advisory board, have prepared instructional materials, or are otherwise affiliated with the school.
(8) Misrepresent the nature and extent of any personal instruction, guidance, assistance, or other service, including placement assistance and assistance overcoming language barriers or learning disabilities, it will provide students either during or after completion of a course.
(9) Misrepresent the extent to which a prospective student will receive credit for courses or a program of instruction already completed at other postsecondary institutions.
(10) Misrepresent the percentage of students who withdraw from a course or program of instruction, or the percentage of students who complete or graduate from a course or program of instruction.
(11) Misrepresent security policies or crime statistics that the school must maintain.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that it is a nonprofit organization or that it is affiliated or otherwise connected with any public institution or private religious or charitable organization.
(c) It is deceptive for an Industry Member that conducts its instruction by correspondence, or other form of distance education, to fail to clearly and conspicuously disclose that fact in all promotional materials.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that a course or program of instruction has been recently revised or instructional equipment is up-to-date, or misrepresent its ability to keep a course or program of instruction current and up-to-date.
(e) It is deceptive for an Industry Member, in promoting any course or program of instruction in its advertising, promotional materials, or in any other manner, to misrepresent, directly or indirectly, expressly or by implication, whether through the use of text, images, endorsements, or by other means, the availability of employment after graduation from a school or program of instruction, the specific type of employment available to a student after graduation from a school or program of instruction, the success that the Industry Member's graduates have realized in obtaining such employment, including the percentage of graduates who have received employment, or the salary or salary range that the Industry Member's graduates have received, or can be expected to receive, in such employment.
(a) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the nature or extent of any prerequisites or qualifications for enrollment in a school or program of instruction.
(b) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, that the lack of a high school education or prior training or experience is not an impediment to successful completion of a course or program of instruction or obtaining employment in the field for which the course or program of instruction provides training.
(c) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, the time required to complete a course or program of instruction.
(d) It is deceptive for an Industry Member to misrepresent, directly or indirectly, expressly or by implication, a student's likelihood of success in a school or program of instruction, including, but not limited to, misrepresenting the student's score on any admissions test.
(a) It is deceptive for an Industry Member to issue a degree, diploma, certificate of completion, or any similar document, that misrepresents, directly or indirectly, expressly or by implication, the subject matter, substance, or content of the course or program of instruction or any other material fact concerning the course or program of instruction for which it was awarded or the accomplishments of the student to whom it was awarded.
(b) It is deceptive for an Industry Member to offer or confer an academic, professional, or occupational degree, if the award of such degree has not been Approved by the appropriate State educational agency or Accredited by a nationally recognized accrediting agency, unless it clearly and conspicuously discloses, in all advertising and promotional materials that contain a reference to such degree, that its award has not been Approved or Accredited by such an agency.
(c) It is deceptive for an Industry Member to offer or confer a high school diploma unless the program of instruction to which it pertains is substantially equivalent to that offered by a resident secondary school, and unless the student is informed, by a clear and conspicuous disclosure in writing prior to enrollment, that the Industry Member cannot guarantee or otherwise control the recognition that will be accorded the diploma by institutions of higher education, other schools, or prospective employers, and that such recognition is a matter solely within the discretion of those entities.
(a) It is deceptive for an Industry Member to use advertisements or promotional materials that misrepresent, directly or indirectly, expressly or by implication, that employment is being offered or that a talent hunt or contest is being conducted. For example, captions such as, “Men/women wanted to train for * * * ,” “Help Wanted,” “Employment,” “Business Opportunities,” and words or terms of similar import, may falsely convey that employment is being offered and therefore should be avoided.
(b) It is deceptive for an Industry Member to fail to disclose to a prospective student, prior to enrollment, the total cost of the program of instruction and the school's refund policy if the student does not complete the program of instruction.
(c) It is deceptive for an Industry Member to fail to disclose to a prospective student, prior to enrollment, all requirements for successfully completing the course or program of instruction and the circumstances that would constitute grounds for terminating the student's enrollment prior to completion of the program of instruction.
By direction of the Commission.
State Department.
Final rule.
This rule is being promulgated to add a new visa classification symbol to the nonimmigrant classification table in our regulations. This amendment is necessary to implement legislation that created an additional nonimmigrant classification as described herein.
This rule is effective November 18, 2013.
Lauren A. Prosnik, Legislation and Regulations Division, Visa Services, Department of State, 2401 E Street NW., Room L–603D, Washington, DC 20520–0106, (202) 663–1260.
Section 1221 of the Violence Against Women Reauthorization Act of 2013 (Pub. L. 113–4) amended Section 101(a)(15)(T)(ii)(III) of the Immigration and Nationality Act by adding a derivative “T” visa class. The T–6 visa would be available to eligible adult and minor children of a derivative beneficiary of a T–1 principal alien whom the Secretary of Homeland Security, in consultation with the law enforcement officer investigating a severe form of trafficking, determines faces a present danger of retaliation as a result of the alien's escape from trafficking or cooperation with law enforcement to accompany or follow to join the principal alien. This rule amends 22 CFR 41.12 to include the T–6 visa classification in the chart of nonimmigrant visa classification symbols.
This regulation involves a foreign affairs function of the United States and, therefore, in accordance with 5 U.S.C. 553(a)(1), is not subject to the rulemaking procedures set forth at 5 U.S.C. 553.
Because this final rule is exempt from notice and comment rulemaking under 5 U.S.C. 553, it is exempt from the regulatory flexibility analysis requirements set forth by the Regulatory Flexibility Act (5 U.S.C. 603 and 604). Nonetheless, consistent with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Department certifies that this rule will not have a significant economic impact on a substantial number of small entities, since it involves creating a nonimmigrant visa category for certain victims of trafficking.
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule will not result in any such expenditure, nor will it significantly or uniquely affect small governments.
This rule is not a major rule as defined by 5 U.S.C. 804. The Department is aware of no monetary effect on the economy that would result from this rulemaking, nor will there be any increase in costs or prices; or any effect on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic and import markets.
The Department of State has reviewed this rule to ensure its consistency with the regulatory philosophy and principles set forth in Executive Order 12866, and has determined that the benefits of this regulation, i.e., complying with a Congressional mandate and providing a nonimmigrant visa category for certain victims of trafficking, outweigh any cost. The Department does not consider this rule to be a significant rulemaking action.
This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. The rule will not have federalism implications warranting the application of Executive Orders 12372 and 13132.
The Department has reviewed the regulation in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.
The Department has considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.
This rule does not impose information collection requirements under the provisions of the Paperwork Reduction Act, 44 U.S.C. Chapter 35 beyond what is already required of other nonimmigrant visa applicants.
Aliens, Foreign Officials, Immigration, Documentation of nonimmigrants, Passports and visas.
For the reasons stated in the preamble, the Department of State amends 22 CFR Part 41 to read as follows:
8 U.S.C. 1104; Pub. L. 105–277, 112 Stat. 2681–795 through 2681–801; 8 U.S.C. 1185 note (section 7209 of Pub. L. 108–458, as amended by section 546 of Pub. L. 109–295).
A visa issued to a nonimmigrant alien within one of the classes described in this section shall bear an appropriate visa symbol to show the classification of the alien. The symbol shall be inserted in the space provided on the visa. The following visa symbols shall be used:
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the special local regulations in 33 CFR 100.1101 during the San Diego Parade of Lights, held on December 8, 2013 and December 15, 2013. This event occurs on the San Diego Bay in San Diego, CA. These special local regulations are necessary to provide for the safety of the participants, crew, spectators, sponsor vessels of the parade, and general users of the waterway. During the enforcement period, persons and vessels are prohibited from entering into, transiting through, or anchoring within this regulated area unless authorized by the Captain of the Port, or his designated representative.
This rule is effective from 5:30 p.m. to 8:30 p.m. on December 8, 2013 and December 15, 2013.
If you have questions on this notice, call or email Petty Officer Bryan Gollogly, Waterways Management, U.S. Coast Guard Sector San Diego, CA; telephone (619) 278–7656, email
The Coast Guard will enforce the special local regulations in 33 CFR 100.1101 in support of the annual marine event, the San Diego Parade of Lights (Item 5 on Table 1 of 33 CFR 100.1101), held over two Sunday nights in December. The Coast Guard will enforce the special local regulations on the northern portion of San Diego Bay on December 8, 2013 and December 15, 2013 from 5:30 p.m. to 8:30 p.m. The parade route will commence at Shelter Island Basin and proceed east to the Embarcadero and Seaport Village, cross the federal channel in the vicinity of the Tenth Avenue Marine Terminal, and end on the north side of Coronado.
Under the provisions of 33 CFR 100.1101, persons and vessels are prohibited from entering into, transiting through, or anchoring within this regulated area unless authorized by the Captain of the Port, or his designated representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.
This notice is issued pursuant to 5 U.S.C. 552 (a) and 33 CFR 100.1101. In addition to this notice in the
If the Captain of the Port Sector San Diego or his designated representative determines that the regulated area need not be enforced for the full duration stated on this notice, he or she may use a Broadcast Notice to Mariners or other communications coordinated by the event sponsor to grant general permission to enter the regulated area.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone in the navigable waters of the Oakland Estuary just north of the Park Street Bridge in Alameda, CA in support of the Oakland Estuary Closure for the Vessel Removal Project on November 4, 2013 through November 22, 2013. This safety zone is established to ensure the safety of workers, mariners, and other vessels transiting the area from the dangers associated with cranes operating under heavy loads in close proximity to both sides of the Oakland Estuary. Unauthorized persons or vessels are prohibited from entering into, transiting through, or remaining in the safety zone without permission of the Captain of the Port or their designated representative.
This rule is effective on November 4, 2013 through November 22, 2013 and will be enforced for two 48-hour periods that will be announced via Broadcast Notice to Mariner.
Documents mentioned in this preamble are part of docket USCG–2013–0914. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this temporary rule, call or email Lieutenant Junior Grade Joshua Dykman, U.S. Coast Guard Sector San Francisco; telephone (415) 399–3585 or email at
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.”
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis for the temporary rule is 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05–1, 6.04–1, 6.04–6, 160.5; Public Law 107–295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to establish safety zones.
The Environmental Protection Agency will sponsor the Oakland Estuary Closure for Vessel Removal Project on November 4, 2013 through November 22, 2013, in the navigable waters of the Oakland Estuary just north of the Park Street Bridge in Alameda, CA. Crane operations to remove sunken vessels are scheduled to take place on November 4, 2013 through November 22, 2013 for two 48-hour periods. Upon commencement of the crane operations, the safety zone will encompass the navigable waters of the Oakland Estuary enclosed within the following points: 37°46′27″ N, 122°14′23″ W; 37°46′23″ N, 122°14′18″ W; 37°46′20″ N, 122°14′21″ W; and 37°46′24″ N, 122°14′28″ W (NAD83). The vessel removal project is necessary to remove vessels that sank in the estuary that pose a potential hazard to vessels in the navigable waterways. The safety zone is issued to establish a temporary restricted area on the waters surrounding the removal of the vessels. The safety zone is necessary to provide for the safety of workers, mariners, and other vessels transiting the area from the dangers associated with cranes operating under heavy loads in close proximity to both sides of the Oakland Estuary.
The Coast Guard will enforce a safety zone in navigable waters of the Oakland Estuary enclosed within the following points: 37°46′27″ N, 122°14′23″ W; 37°46′23″ N, 122°14′18″ W; 37°46′20″ N, 122°14′21″ W; and 37°46′24″ N, 122°14′28″ W (NAD83) during the vessel removal project. Crane operations to remove sunken vessels in the Oakland Estuary scheduled are scheduled to take place from November 4, 2013 through November 22, 2013 for two 48-hour periods. At the conclusion of the crane operations the safety zone shall terminate.
The effect of the temporary safety zone will be to restrict navigation in the vicinity of the vessel removal project. Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the restricted area. These regulations are needed to keep mariners and vessels away from the immediate vicinity of the vessel removal operations to ensure the safety of workers, mariners, and other vessels transiting the area.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.
We expect the economic impact of this rule does not rise to the level of necessitating a full Regulatory Evaluation. The safety zone is limited in duration, and is limited to a narrowly tailored geographic area. In addition, although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Broadcast Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601–612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking.
The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect owners and operators of waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities and sightseeing. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: (i) this rule will encompass only a small portion of the waterway for a limited period of time, and (ii) the maritime public will be advised in advance of this safety zone via Broadcast Notice to Mariners.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
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.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (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 involves a safety zone of limited size and duration. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2–1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, and Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR Part 165 as follows:
33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. 107–295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(d)
(2) The safety zone is closed to all vessel traffic, except as may be permitted by the COTP or a designated representative.
(3) Vessel operators desiring to enter or operate within the safety zone must contact the COTP or a designated representative to obtain permission to do so. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the COTP or a designated representative. Persons and vessels may request permission to enter the safety zone on VHF–23A or through the 24-hour Command Center at telephone (415) 399–3547.
Environmental Protection Agency (EPA).
Final rule.
EPA is taking final action to approve a change to the Florida State Implementation Plan (SIP) for the State of Florida. The change removes from the Florida SIP a provision entitled
This rule will be effective on December 18, 2013.
Twunjala Bradley, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960. The telephone number is (404) 562–9352. Ms. Bradley can also be reached via electronic mail at
EPA determined that rule 62–296.413, Florida Administrative Code (F.A.C.) entitled “Synthetic Organic Fiber Production” was inadvertently incorporated into the Florida SIP on June 16, 1999 (64 FR 32346). Therefore, EPA is taking final action to remove rule 62–296.413, F.A.C. from the federally-approved Florida SIP pursuant to section 110(k)(6)
On December 21, 1994, and April 15, 1996, the State of Florida through the Florida Department of Environmental Protection provided to EPA SIP submissions which included miscellaneous revisions and the recodification of F.A.C. Rule 62–296.413, F.A.C.,
For the reasons stated above, EPA is taking final action to remove rule 62–296.413, F.A.C., from the federally-approved Florida SIP pursuant to section 110(k)(6) of the CAA and to codify this deletion by revising the appropriate paragraph under 40 CFR part 52, subpart K, section 52.520(c).
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
The Congressional Review Act, 5 U.S.C. 801
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
Federal Emergency Management Agency, DHS.
Final rule.
This rule identifies communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed within this rule because of noncompliance with the floodplain management requirements of the program. If the Federal Emergency Management Agency (FEMA) receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in this rule, the suspension will not occur and a notice of this will be provided by publication in the
The effective date of each community's scheduled suspension is the third date (“Susp.”) listed in the third column of the following tables.
If you want to determine whether a particular community was suspended on the suspension date or for further information, contact David Stearrett, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646–2953.
The NFIP enables property owners to purchase Federal flood insurance that is not otherwise generally available from private insurers. In return, communities agree to adopt and administer local floodplain management measures aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits the sale of NFIP flood insurance unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR Part 59. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. We recognize that some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue to be eligible for the sale of NFIP flood insurance. A notice withdrawing the suspension of such communities will be published in the
In addition, FEMA publishes a Flood Insurance Rate Map (FIRM) that identifies the Special Flood Hazard Areas (SFHAs) in these communities. The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year on FEMA's initial FIRM for the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment procedures under 5 U.S.C. 553(b), are impracticable and unnecessary because communities listed in this final rule have been adequately notified.
Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days.
Flood insurance, Floodplains.
Accordingly, 44 CFR part 64 is amended as follows:
42 U.S.C. 4001
Federal Emergency Management Agency, DHS.
Final rule.
This rule identifies communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed within this rule because of noncompliance with the floodplain management requirements of the program. If the Federal Emergency Management Agency (FEMA) receives documentation that the community has adopted the required floodplain management measures prior to the effective suspension date given in this rule, the suspension will not occur and a notice of this will be provided by publication in the
The effective date of each community's scheduled suspension is the third date (“Susp.”) listed in the third column of the following tables.
If you want to determine whether a particular community was suspended on the suspension date or for further information, contact David Stearrett, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646–2953.
The NFIP enables property owners to purchase Federal flood insurance that is not otherwise generally available from private insurers. In return, communities agree to adopt and administer local floodplain management measures aimed at protecting lives and new construction from future flooding. Section 1315 of the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4022, prohibits the sale of NFIP flood insurance unless an appropriate public body adopts adequate floodplain management measures with effective enforcement measures. The communities listed in this document no longer meet that statutory requirement for compliance with program regulations, 44 CFR Part 59. Accordingly, the communities will be suspended on the effective date in the third column. As of that date, flood insurance will no longer be available in the community. We recognize that some of these communities may adopt and submit the required documentation of legally enforceable floodplain management measures after this rule is published but prior to the actual suspension date. These communities will not be suspended and will continue to be eligible for the sale of NFIP flood insurance. A notice withdrawing the suspension of such communities will be published in the
In addition, FEMA publishes a Flood Insurance Rate Map (FIRM) that identifies the Special Flood Hazard Areas (SFHAs) in these communities. The date of the FIRM, if one has been published, is indicated in the fourth column of the table. No direct Federal financial assistance (except assistance pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act not in connection with a flood) may be provided for construction or acquisition of buildings in identified SFHAs for communities not participating in the NFIP and identified for more than a year on FEMA's initial FIRM for the community as having flood-prone areas (section 202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a), as amended). This prohibition against certain types of Federal assistance becomes effective for the communities listed on the date shown in the last column. The Administrator finds that notice and public comment procedures under 5 U.S.C. 553(b), are impracticable and unnecessary because communities listed in this final rule have been adequately notified.
Each community receives 6-month, 90-day, and 30-day notification letters addressed to the Chief Executive Officer stating that the community will be suspended unless the required floodplain management measures are met prior to the effective suspension date. Since these notifications were made, this final rule may take effect within less than 30 days.
Flood insurance, Floodplains.
Accordingly, 44 CFR part 64 is amended as follows:
42 U.S.C. 4001
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary orders; inseason orders.
NMFS publishes Fraser River salmon inseason orders to regulate treaty and non-treaty (all citizen) commercial salmon fisheries in U.S. waters. The orders were issued by the Fraser River Panel (Panel) of the Pacific Salmon Commission (Commission) and subsequently approved and issued by NMFS during the 2013 salmon fisheries within the U.S. Fraser River Panel Area. These orders established fishing dates, times, and areas for the gear types of U.S. treaty Indian and all citizen commercial fisheries during the period the Panel exercised jurisdiction over these fisheries.
The effective dates for the inseason orders are set out in this document under the heading Inseason Orders.
Peggy Mundy at 206–526–4323.
The Treaty between the Government of the United States of America and the
Under authority of the Act, Federal regulations at 50 CFR part 300, subpart F provide a framework for the implementation of certain regulations of the Commission and inseason orders of the Commission's Fraser River Panel for U.S. sockeye salmon fisheries in the Fraser River Panel Area.
The regulations close the U.S. portion of the Fraser River Panel Area to U.S. sockeye and pink salmon tribal and non-tribal commercial fishing unless opened by Panel orders that are given effect by inseason regulations published by NMFS. During the fishing season, NMFS may issue regulations that establish fishing times and areas consistent with the Commission agreements and inseason orders of the Panel. Such orders must be consistent with domestic legal obligations and are issued by Regional Administrator, West Coast Region, NMFS. Official notification of these inseason actions is provided by two telephone hotline numbers described at 50 CFR 300.97(b)(1) and in 77 FR 25915 (May 2, 2012). The inseason orders are published in the
The following inseason orders were adopted by the Panel and issued for U.S. fisheries by NMFS during the 2013 fishing season. Each of the following inseason actions was effective upon announcement on telephone hotline numbers as specified at 50 CFR 300.97(b)(1) and in 78 FR 25865 (May 3, 2013); those dates and times are listed herein. The times listed are local times, and the areas designated are Puget Sound Management and Catch Reporting Areas as defined in the Washington State Administrative Code at Chapter 220–22.
The Assistant Administrator for Fisheries NOAA (AA), finds that good cause exists for the inseason orders to be issued without affording the public prior notice and opportunity for comment under 5 U.S.C. 553(b)(B) as such prior notice and opportunity for comments is impracticable and contrary to the public interest. Prior notice and opportunity for public comment is impracticable because NMFS has insufficient time to allow for prior notice and opportunity for public comment between the time the stock abundance information is available to determine how much fishing can be allowed and the time the fishery must open and close in order to harvest the appropriate amount of fish while they are available.
The AA also finds good cause to waive the 30-day delay in the effective date, required under 5 U.S.C. 553(d)(3), of the inseason orders. A delay in the effective date of the inseason orders would not allow fishers appropriately controlled access to the available fish at that time they are available.
This action is authorized by 50 CFR 300.97, and is exempt from review under Executive Order 12866.
16 U.S.C. 3636(b).
Office of the Federal Register, National Archives and Records Administration.
Extension of comment period; correction.
On October 2, 2013, the Office of the Federal Register published a proposal to amend our regulations governing the approval of agency requests to incorporate material by reference into the Code of Federal Regulations. Given the recent government shutdown and technical issues with Regulations.gov, we are extending the comment period. We are also correcting the docket number and adding a link to the docket.
Comments must be received on or before January 31, 2013.
You may submit comments, identified using the subject line of this document, by any of the following methods:
• Federal eRulemaking Portal:
• Email:
• Mail: the Office of the Federal Register (NF), The National Archives and Records Administration, 8601 Adelphi Road, College Park, MD.
• Hand Delivery/Courier: Office of the Federal Register, 800 North Capitol Street NW., Suite 700, Washington, DC 20001.
Docket materials are available at the Office of the Federal Register, 800 North Capitol Street NW., Suite 700, Washington, DC 20001, 202–741–6030. Please contact the persons listed in the
Amy Bunk, Director of Legal Affairs and Policy, or Miriam Vincent, Staff Attorney, Office of the Federal Register, at
On October 2, 2013, the Office of the Federal Register published a proposal to amend our regulations governing the approval of agency requests to incorporate material by reference into the Code of Federal Regulations (77 FR 11414 (February 27, 2012)). Given the recent government shutdown and technical issues with Regulations.gov, we are extending the comment period. We are also correcting the docket number and adding a link to the docket.
In proposed rule FR Doc. 2013–24217, beginning on page 60784 in the issue of October 2, 2013, make the following corrections:
a. in the Document Heading on page 60784 in the first column between the brackets, remove and replace the docket number as follows:
“Docket Number: OFR–2013–0001”
b. in the
“Federal eRulemaking Portal:
Food and Drug Administration, HHS.
Extension of comment period for the Environmental Impact Statement for the proposed rule.
The Food and Drug Administration (FDA or we) is extending the comment period for the “Notice of Intent to Prepare an Environmental Impact Statement for the Proposed Rule: Standards for Growing, Harvesting, Packing, and Holding of Produce for Human Consumption” that appeared in the
The date(s) and location(s) of any scoping meetings, if determined to be necessary, will be announced at least 15 days in advance through FDA Web site's at
You may submit comments on the scope of issues the Agency should include in the EIS, identified by Docket No. FDA–2011–N–0921 and/or Regulatory Information Number (RIN) 0910–AG35, by any of the following methods:
Submit electronic comments in the following way:
•
Submit written submissions in the following ways:
•
Annette McCarthy, Center for Food Safety and Applied Nutrition (HFS–205), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 240–402–1200.
In the
The purpose of the public scoping process for the EIS is to determine relevant issues that will influence the scope of the environmental analysis, including potential alternatives, and the extent to which those issues and impacts will be analyzed in the EIS. Federal, State, and local agencies, along with tribes and other stakeholders that may be interested in or affected by the produce safety rule are invited to participate in the scoping process. FDA has previously sought comment on potential environmental effects as part of the public comment period for the proposed rule, including specific questions regarding agricultural water, biological soil amendments of animal origin, and wildlife (78 FR 3504 at 3616, 3619–3620; January 16, 2013). FDA believes that these questions are still relevant to the environmental analysis and will consider comments received.
FDA is granting an extension of the public scoping period to allow the public additional time to provide comment and for FDA to hold, as appropriate, one or more public scoping meetings during this time period. As part of the scoping process, the Agency will determine the range of actions, alternatives, and impacts to be considered in the EIS. This notice does not extend the comment period on the produce safety proposed rule published on January 16, 2013 (78 FR 3504). As previously announced (78 FR 48637, August 9, 2013), the comment period on the produce safety proposed rule closes on November 15, 2013.
Interested persons may submit either electronic comments regarding the issues to be included in the EIS for the proposed rule to
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to update the list of marine events that occur annually within the Eleventh Coast Guard District. These updates include adding specific marine events to the list of marine events held annually in the Eleventh Coast Guard District as well as removing marine events that no longer occur. In addition to updating the list of marine events held annually in the Eleventh Coast Guard District, the Coast Guard proposes to amend the special local regulations by standardizing the language and format of listed events. When these special local regulations are activated, and thus subject to enforcement, this proposed rule would restrict vessels from transiting inside the regulated area.
Comments and related material must be received by the Coast Guard on or before December 18, 2013. Requests for public meetings must be received by the Coast Guard on or before December 2, 2013.
You may submit comments identified by docket number USCG–2013–0361 using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or email Lieutenant Junior
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
If you submit a comment, please include the docket number for this proposed rulemaking (USCG–2013–0361), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8½ by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change the rule based on your comments.
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
We do not now plan to hold a public meeting. But you may submit a request for one, using one of the methods specified under
The Coast Guard is conducting this rulemaking under the authority of 33 U.S.C. 1233.
Specific marine events are annually held on a recurring basis on the navigable waters within the Eleventh Coast Guard District and require special local regulations to keep spectators and vessels a safe distance away from the vessels and individuals that are participating in the specified events. These events include sailing regattas, powerboat races, rowboat races, parades, and swim events. Some of these marine events are not currently listed in 33 CFR 100 sections 1101, 1102 and 1104 or many of the annual events that are listed in these sections do not correctly reflect the date or approximate date of the event or do not correctly identify other important information specific to the event.
The effect of these proposed special local regulations will be to restrict general navigation in the vicinity of the events, from the start of each event until the conclusion of that event. Except for persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the regulated area. These regulations are needed to keep spectators and vessels a safe distance away from the specified events to help ensure the safety of participants, spectators, and transiting vessels.
The Coast Guard proposes to revise 33 CFR 100.1101, Southern California annual marine events for the San Diego Captain of the Port zone, by adding 12 new events and updating 1 event with correct verbiage. The 12 new events in this section are as follows: “ITU World Triathlon” occurring late April or early May at Bonita Cove and Ventura Cove in Mission Bay, San Diego; “Fearless Triathlon” occurring in March at the South Shores Boat Ramp in Mission Bay, San Diego; “Bay to Bay Rowing and Paddling Regatta” occurring in July from Mission Bay to San Diego Bay; “San Diego Sharkfest Swim” occurring one Saturday in September or October in the waters from Seaport Village across the federal channel to the Coronado Ferry Landing; “San Diego TriRock Triathlon” occurring on a Saturday in March in the East Embarcadero Marina Basin; “San Diego Bayfair” occurring the second or third weekend in September at Mission Bay, San Diego; “Oceanside Harbor Days Tiki Swim” occurring on one Saturday in late September or early October in Oceanside Harbor, Oceanside; “U.S. Open Ski Racing Nationals” occurring one weekend in October at Mission Bay, San Diego; “San Diego Maritime Museum Tall Ship Festival of Sail” occurring one weekend in September in San Diego Bay; “Hanohano Ocean Challenge” an outrigger canoe race occurring on a Saturday in January in Mission Bay, San Diego; “Crystal Pier Outrigger Race” an outrigger canoe race occurring in Mission Bay and Mission Bay Entrance Channel on a Saturday in May, Mission Bay, San Diego; and the “San Diego Ho'olaule'a & Keiki Heihei Wa'a Stand Up for the Kids Race” occurring on a weekend in May in Mission Bay, San Diego. We also propose to update the information specific to the “San Diego Parade of Lights” by inserting a new event sponsor, date, and regulated area.
The Coast Guard proposes to update 33 CFR 100.1102, annual marine events on the Colorado River, between Davis Dam (Bullhead City, AZ) and Headgate Dam (Parker, AZ) within the San Diego Captain of the Port zone, by adding 9 new events and updating 1 event with
Lastly, the Coast Guard proposes to reinstate the 16 annually recurring marine events previously listed in 33 CFR 100.1104, Captain of the Port zone Los Angeles—Long Beach. The 16 marine events being reinstated were mistakenly deleted in 2011 and are not new events. By reinstating these 16 marine events, table 1 of this section will accurately reflect the 17 annually recurring events that are held in the Captain of the Port zone Los Angeles—Long Beach.
The proposed changes will effectively update special local regulations with annually occurring marine events in the Eleventh Coast Guard District. Table 1 for each of the listed sections will reflect current information. This rulemaking limits the unnecessary burden of continually establishing temporary special local regulations every year for events that occur on an annual basis. These events include swimming competitions, sailboat and power boat races and rowing events within the San Diego and Los Angeles—Long Beach Captain of the Port zones.
Regulated areas listed in these events are needed to protect both the event participants, spectators, and other mariners and provide on-water awareness for safety. To reduce associated safety risks, special local regulations will restrict vessels and water craft around the location of each marine event. Within the regulated areas of the listed marine events, persons and vessels not associated with the event will be prohibited from entering, transiting through, remaining, anchoring ormooring within the regulated area unless specifically authorized by the Captain of the Port (COTP) or designated representative. Persons or vessels would be able to request authorization to enter, transit through, remain, anchor or moor within the regulated areas by contacting the Captain of the Port for the respective location, COTP San Diego 619–278–7033 and COTP Los Angeles—Long Beach 310–521–3801 or designated representative on VHF radio channel 16. If any person is authorized to enter, transit through, remain, anchor or moor within any of the regulated areas, the individual would be required to comply with the instructions of the COTP or designated representative.
Designated representatives are comprised of commissioned, warrant, and petty officers of the Coast Guard. The Coast Guard may also be assisted by other federal, state, and local agencies in the enforcement of these regulated areas.
We developed this proposed rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on numerous statutes and executive orders.
This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation is unnecessary. This rulemaking is not a significant regulatory action because the regulations exist for a limited period of time on a limited portion of the waterways. Further, individuals and vessels desiring to use the affected portion of the waterways may, upon permission from the Patrol Commander, use the affected areas.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601–612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities.
We expect this proposed rule will affect the following entities, some of which may be small entities: the owners and operators of vessels intending to fish, transit, or anchor in the waters affected by these special local regulations. These special local regulations will not have a significant economic impact on a substantial number of small entities for the following reasons: small vessel traffic will be able to pass safely around the area and vessels engaged in event activities, sightseeing and commercial fishing have ample space outside of the area governed by the special local regulations to engage in these activities. Small entities and the maritime public will be advised of implementation of these special local regulations via public notice to mariners or notice of implementation published in the
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person
This proposed rule will not form a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520.).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rulemaking is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This proposed rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rulemaking is categorically excluded from further review under paragraph 34(h) of Figure 2–1 of the Commandant Instruction. A preliminary environmental analysis checklist supporting this determination is available in the docket where indicated under
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard proposes to revise 33 CFR part 100 as follows:
33 U.S.C. 1233.
(a)
(b)
(1) No spectator shall anchor, block, loiter, nor impede the through transit of participants or official patrol vessels in the regulated areas during all applicable effective dates and times unless cleared to do so by or through an official patrol vessel.
(2) When hailed and/or signaled by an official patrol vessel, any spectator
(3) The Patrol Commander (PATCOM) is empowered to control the movement of all vessels in the regulated area or to restrict vessels from entering the regulated area. The Patrol Commander shall be designated by the cognizant Coast Guard Sector Commander; will be a U.S. Coast Guard commissioned officer, warrant officer, or petty officer to act as the Sector Commander's official representative; and will be located aboard the lead official patrol vessel. As the Sector Commander's representative, the PATCOM may terminate the event any time it is deemed necessary for the protection of life and property. PATCOM may be reached on VHF–FM Channel 13 (156.65MHz) or 16 (156.8MHz) when required, by the call sign “PATCOM.”
(4) The Patrol Commander may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so.
(5) The Coast Guard may be assisted by other Federal, state, or local agencies.
(a)
(b)
(1) No spectator shall anchor, block, loiter, nor impede the through transit of participants or official patrol vessels in the regulated areas during all applicable effective dates and times unless cleared to do so by or through an official patrol vessel.
(2) When hailed and/or signaled by an official patrol vessel, any spectator located within a regulated area during all applicable effective dates and times shall come to an immediate stop.
(3) The Patrol Commander (PATCOM) is empowered to control the movement of all vessels in the regulated area or to restrict vessels from entering the regulated area. The Patrol Commander shall be designated by the cognizant Coast Guard Sector Commander; will be a U.S. Coast Guard commissioned officer, warrant officer, or petty officer to act as the Sector Commander's official representative; and will be located aboard the lead official patrol vessel. As the Sector Commander's representative, the PATCOM may terminate the event any time it is deemed necessary for the protection of life and property. PATCOM may be reached on VHF–FM Channel 13 (156.65MHz) or 16 (156.8MHz) when required, by the call sign “PATCOM.”
(4) The Patrol Commander may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so.
(5) The Coast Guard may be assisted by other Federal, state, or local agencies.
(a)
(b)
(1) No spectator shall anchor, block, loiter, nor impede the through transit of participants or official patrol vessels in the regulated areas during all applicable effective dates and times unless cleared to do so by or through an official patrol vessel.
(2) When hailed and/or signaled by an official patrol vessel, any spectator located within a regulated area during all applicable effective dates and times shall come to an immediate stop.
(3) The Patrol Commander (PATCOM) is empowered to control the movement of all vessels in the regulated area or to restrict vessels from entering the regulated area. The Patrol Commander shall be designated by the cognizant Coast Guard Sector Commander; will be a U.S. Coast Guard commissioned officer, warrant officer, or petty officer to act as the Sector Commander's official representative; and will be located aboard the lead official patrol vessel. As the Sector Commander's representative, the PATCOM may terminate the event any time it is deemed necessary for the protection of life and property. PATCOM may be reached on VHF–FM Channel 13 (156.65MHz) or 16 (156.8MHz) when required, by the call sign “PATCOM.”
(4) The Patrol Commander may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so.
(5) The Coast Guard may be assisted by other Federal, state, or local agencies.
Federal Communications Commission.
Notice of Proposed Rulemaking.
In this document, the Federal Communications Commission seeks comment on measures to promote the resiliency and transparency of mobile wireless networks. This document considers and seeks comment on, among other measures, a requirement that mobile wireless network providers report for public disclosure on a daily basis during major disasters the percentages of their cell sites that are operational. This document also seeks comment on alternative informational disclosures and on other approaches to improving network resiliency.
Submit comments on or before January 17, 2014 and reply comments by February 18, 2014. Written comments on the Paperwork Reduction Act proposed information collection requirements must be submitted by the public, Office of Management and Budget (OMB), and other interested parties on or before January 17, 2014.
Submit comments to the Federal Communications Commission, 445 12th Street SW., Washington, DC 20554. Comments may be submitted electronically through the Federal Communications Commission's Web site:
Renee Roland, Special Counsel, Public Safety and Homeland Security Bureau, (202) 418–2352 or
This is a summary of the Commission's Notice of Proposed Rulemaking in PS Docket No. 13–239 and PS Docket No. 11–60, released on September 27, 2013, as FCC 13–125. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY–A257, 445 12th Street SW., Washington, DC 20554, or online at
The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and OMB to comment on the proposed information collection requirements contained in this document, as required by the PRA. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and (e) ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107–198,
1. In this
2. In particular, we seek comment on the following issues:
• Whether the proposed reporting and disclosures would provide consumers with useful information for making comparisons about mobile wireless products and services;
• Whether such disclosures, by holding providers publicly accountable, could incentivize improvements to network resiliency while allowing providers flexibility in implementing such improvements;
• Whether such information would be useful to policymakers at state and local levels;
• Whether the proposed disclosures comport with “smart disclosure” principles;
• Whether the proposed disclosure would lead to adverse unintended consequences for consumers and mobile wireless providers;
• Whether the Commission should consider other measures, including alternative informational disclosures,
3. In recent years, a number of major storms, including Superstorm Sandy in 2012, have impaired mobile wireless service in affected regions. Hurricane Isaac hit the Gulf Coast, resulting in more than twenty percent of area cell sites out of service in the aggregate in the designated reporting area. Superstorm Sandy disabled at its peak more than twenty-five percent of cell sites in 158 counties in all or part of ten states and the District of Columbia. The most extensive wireless service impairments from Superstorm Sandy were heavily concentrated in New Jersey and in the New York City metropolitan area, where millions of residents found themselves without reliable and continuous access to mobile wireless communications throughout the storm and its aftermath. Several counties had outages more than double the twenty-five-percent figure for the larger area—some much more—and for the State of New Jersey, all of which was included in the reporting area, aggregated cell site outages were on the order of forty percent. Of course, some service disruption may be unavoidable during major disasters, and surges in demand present added challenges. However, data that mobile wireless service providers submitted to the Commission via the Disaster Information Reporting System (DIRS) and in follow-up meetings with Public Safety and Homeland Security Bureau staff revealed that, as during previous storms such as Hurricane Isaac and others before that, service impacts during Superstorm Sandy and in its aftermath were not evenly distributed among mobile wireless service providers. Moreover, the operational choices and practices of different mobile wireless service providers may account for much of this variation. For example, practices regarding the provision of back-up power supplies at otherwise similar cell sites appear to vary among mobile wireless service providers, which may contribute to the ability of some mobile wireless service providers to provide more continuous and reliable service during the storm than others.
4. To address these types of questions, the Commission launched a
5. More recently, in the months following Superstorm Sandy, the Commission held field hearings in New York and New Jersey to further explore the communications impacts of Superstorm Sandy and consider lessons learned. It then held a follow-up field hearing in California to look, in part, at emerging technological solutions for improving communications during such emergencies. Among the concerns raised at these hearings was the lack of information made publicly available during Superstorm Sandy about the operational status of communications networks and the progress being made to rectify service outages.
6. In a May 13, 2013 letter to the Commission, Consumers Union urged the Commission to conduct a rulemaking proceeding to “establish appropriate metrics for measuring a wireless carrier's network performance,” such as “the number of a wireless carrier's non-functioning cell towers in each county” within a disaster area, “and the percentage of the carrier's cell towers in that county that the number represents.” Further, it urged the Commission to disclose such information to the public and to use it “to set a schedule for phasing in improved performance standards [for wireless networks] as rapidly as practicable, with appropriate incentives for achieving them and appropriate penalties for unexcused failure to achieve them.” In
7. More generally, the Commission relies on periodic reporting from communications providers to gauge network reliability. Part 4 of the Commission's rules, established in 2004, requires,
8. To complement these efforts, the Commission has tasked federal advisory committees, chiefly the Communications Security, Reliability and Interoperability Council (CSRIC), with developing and recommending industry best practices to advance, among other objectives, the “security, reliability, and interoperability of communications systems.” CSRIC has developed and recommended to the Commission specific actions to facilitate industry-wide improvements in these areas. The Commission generally encourages mobile wireless service providers, a significant cross-section of which participate in CSRIC, to implement these recommended best practices within their networks to the extent technically and economically feasible. The Commission relies primarily on NORS and DIRS reporting to assess whether network reliability best practices are being effectively implemented or are in need of refinement. The Technological Advisory Council, which is chartered to advise the Commission more broadly on technical matters, is also exploring approaches for improving broadband network resiliency.
9. Promoting the “safety of life and property” through the use of radio communications is part of the Commission's foundational mission. Whether, and how quickly, emergency calls get through and a first responder arrives might make the difference between life and death, so it is imperative that the public be able to reliably access 911, including with wireless phones. The proceeding we initiate today to improve the resiliency of mobile wireless networks builds upon information gathered through extensive prior efforts to address the resiliency of mobile wireless networks. As noted, these efforts began with the Hurricane Katrina panel in 2006, have included the adoption and subsequent withdrawal of mandatory back-up power requirements, followed by our 2011
10. We seek to determine the benefits to consumers and other communications users that would result from each proposal and any associated burden on mobile wireless service providers. We therefore request comment on a range of questions that will help us to weigh the costs and benefits of the reporting obligations we propose, as well as the alternative measures we put forward for consideration. For each cost or benefit addressed, we ask that commenters provide specific data and information such as actual or estimated dollar figures, including a description of how the data or information was calculated or obtained and any supporting documentation. All comments will be considered and given appropriate weight; vague or unsupported assertions regarding costs or benefits generally will receive less weight and be less persuasive than the more specific and supported statements.
11. Quantifying specific benefits and costs of implementing the proposed rule and other proposals involves challenges. These costs and benefits can have many dimensions, including and beyond cost and revenue implications for industry and financial benefits to consumers. We also must consider other less tangible benefits, such as the value of more informed consumer choice and the value of any lives saved or health outcomes improved due to the completion of calls for help due to infrastructure hardening that could result from the increased competitive pressure to deliver reliable service during natural disasters and immediately thereafter. To assess the expected burden on providers, we seek comment on the nature and magnitude of the costs. In complying with the Paperwork Reduction Act, we recently estimated the annual reporting costs to be approximately $190,000 for all providers inputting wireless county cell site information in DIRS. That figure, however, comprised an estimate for DIRS reporting for considerably more information than is sought here. Moreover, because these carriers are already reporting needed information, they have already incurred the startup costs associated with any reporting system.
12. We estimate that there are fewer than fifty additional providers that are not currently reporting DIRS data. Moreover, we believe that the non-reporting providers mostly are very small companies that typically serve only one or two counties. Therefore, even if we were to require all wireless providers in the disaster areas to file transparency reports—which is a question on which we are seeking comment—we expect the number of additional reporting providers to be below fifty and the counties involved to be relatively few. We estimate the total annual reporting cost for these providers to be $78,000, consisting of three elements. First is a $2,000 cost incurred if fifty providers each spend a half hour, at $80 per hour, to create and enter a user identification when first logging in to our Web site (
13. To assess the expected benefits, we seek comment on the nature and magnitude of the benefits of the proposed rule. If public disclosure increases competitive pressure sufficiently to encourage providers to significantly harden their networks, we assume a likely result will be at least one life saved every five years. We also assume a life has a statistical value of $9.1 million. We seek comment on these two assumptions because, if they are reasonably accurate, they imply public disclosure would produce an annual benefit of $1.82 million (
14. Moreover, the potential benefits of public disclosure may not be limited to the value of human lives saved if infrastructure is enhanced. Medical outcomes also may be improved and considerable pain and suffering avoided when emergency service providers are able to respond to E–911 calls. The total medical benefits from preserving E–911 services may be substantially greater than the value of lives saved. Further, another benefit of public disclosure may be to enable consumers to better assess the performance of mobile wireless service providers during major emergency events and, thus, enable consumers to make informed decisions that conform better to their preferences when selecting mobile wireless products and services.
15. An alternative way to estimate the potential benefits of public disclosure is to consider the value of services lost each year in storms. Superstorm Sandy, for example, caused a substantial loss of wireless services. We believe that had providers done more to improve infrastructure prior to Superstorm Sandy, a significant number of cell site outages could have been prevented, allowing a substantial number of wireless subscribers in the path of the storm to avoid loss or serious impairment of service. We cannot readily determine the value of that lost service, because we cannot know the value of being able to call more easily loved ones and friends, among others, during the Superstorm and in the days following the destruction. Nor can we know the value of more easily reaching firemen, police, repairmen, and other first responders.
16. We can estimate, however, a floor value for lost consumer surplus, a portion of which could have been saved had outages been avoided. Given the average-revenue-per-subscriber data
17. Mobile wireless communications are becoming increasingly central to the day-to-day lives of Americans. In its annual Mobile Competition Reports, the Commission has documented the tremendous growth of the U.S. mobile wireless sector, which now supports over 300 million user connections. Mobile data traffic in particular “increased 270 percent from 2010 to 2011” in the United States and “has more than doubled each year for the past four years,” during which time mobile wireless service providers have continued to upgrade and expand their networks and offer their customers an increasing array of “smartphones” and data-centric devices, such as tablets and e-readers. As mobile wireless technologies have continued to proliferate and evolve, consumers of these services have become increasingly likely to “cut the cord”—to live without residential wireline telephone service, as thirty-eight percent of American households already do.
18. This growing reliance on wireless communications has brought these technologies to the forefront of emergency response. As CTIA noted in its comments on the
19. While consumers value overall network reliability and quality in selecting mobile wireless service providers, they may not be able to compare how well different mobile wireless service providers' networks withstand and recover from disaster conditions. As previously noted, the information made available to the Commission on a non-public basis following Superstorm Sandy and Hurricane Isaac revealed that not all mobile wireless service providers' networks fared the same during the storms, and preparatory efforts and investments to harden networks may account for some of this discrepancy. We thus seek comment on whether mobile wireless customers have adequate means of assessing the resiliency and reliability of mobile wireless networks in disaster conditions, and whether they have reliable basis for evaluating and comparing the network resilience of different mobile wireless service providers.
20. We seek comment in this
21. Moreover, the Executive Branch has issued guidance on the use of informational disclosures as a regulatory tool. A recent executive order directed executive branch federal agencies to focus on efforts “to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice.” The OMB Office of Information and Regulatory Affairs then issued a memorandum providing guidance on the use of “smart disclosure,” a regulatory approach defined as “the timely release of complex information and data in standardized, machine-readable formats in ways that enable consumers to make informed decisions.” Such information can be made available directly to consumers or be used by third parties to create tools, such as mobile phone applications, that can “greatly reduce the cost to consumers of seeking out the relevant information from individual companies.” The purpose of “smart disclosure” is to make information “not merely available, but also accessible and usable,” and the memorandum suggested that when designing related regulatory initiatives, agencies should consider making information as accessible as possible to consumers; making the underlying data available in machine-readable formats; standardizing the information; providing the information to the consumer in a timely manner; ensuring that disclosures keep pace with market innovation; promoting interoperability among data sets; and preventing disclosure of personally identifiable information. We seek comment on whether the proposal we set forth and seek comment on below comports with these principles.
22. If the information disclosed is simple and easy to understand, that could make it more relevant and accessible to consumers than more complex and technical information. We seek comment on these matters. The proposal focuses disclosure on a single percentage figure that may provide a snapshot of service capabilities in a particular area at a given time. This information is collected by the Commission from the wireless service providers and considered useful to provide situational awareness to federal participants in disaster response, and the metric in the disclosures that we propose also has precedent in the information that mobile wireless
23. In this section, we seek comment on specific elements of a proposal to improve the transparency and underlying resiliency of networks that provide mobile wireless services, by requiring providers of these services to provide for public disclosure the percentages of sites operational in their networks during major emergencies. We also seek comment on possible alternative or complementary measures that could improve wireless network resiliency.
24. The proposed rule in this
25. We first seek comment on the extent to which informational disclosures of this sort would enhance consumer choice and facilitate network improvements. Will consumers value having access to this information? Could the information be meaningful and useful to consumers in making the choice among mobile wireless service providers, and if so, how would it affect their decision making? Would the reported information be particularly important to consumers who may have heightened concerns about maintaining communications during emergencies, such as individuals with serious medical conditions and their families? In the absence of the disclosures discussed below, do consumers already have sufficient information about service reliability, as CTIA suggests?
26. We also seek comment on whether providing consumers with such information would incentivize mobile wireless service providers to improve the capability of their network infrastructures to survive and continue operating during and after disasters. Is that correct? Would the potential that public disclosure would affect consumers' choice of mobile wireless service provider cause providers to view additional investment in networks as being competitively necessary to attract and retain customers? Could press coverage and knowledge by policymakers of this information foster improved performance by mobile wireless service providers, even if the elasticity of consumer demand for greater network reliability during emergencies is difficult to quantify or is perceived to be small? In other words, would providers nevertheless respond by seeking to improve their performance as a matter of risk management,
27. On the other hand, would disclosure of network performance, in conjunction with outage reporting, lead to unintended negative consequences, such as a reduction of cooperation among providers during emergencies or disincentives to build out facilities, particularly in areas subject to severe weather? For example, would such disclosures favor large-tower architectures over small-cell and other heterogeneous architectures where there may be more towers, each more likely to fail but more resilient in the aggregate? We seek comment on any unintended consequences of adopting such disclosures, with examples of such consequences. We ask commenters to explain how likely and widespread those consequences would be and describe in detail the anticipated impact on consumers and public safety.
28.
29. In proposing a reporting requirement applicable only to mobile wireless providers, we observe that the great majority of emergency 911 calls originate on mobile wireless networks, and there has been an upward trend in such calls, making mobile wireless service of pre-eminent importance as the preferred method for U.S. consumers to reach out for help when they need it the most. Furthermore, given that most markets across the country are served by multiple mobile wireless service providers, could disclosures based on the proposed metric have a competitive impact that will drive improvements in communications infrastructure? Finally, because the metric tracks the performance of portions of the network that are within mobile wireless service providers' direct control during major emergency events, as opposed to outages that are due to consumers' loss of electric power, is this proposed application to mobile wireless service providers reasonable? We seek comment on our proposed adoption of a reporting metric applicable only to CMRS providers. Should we consider changing the scope of our proposed reporting and disclosure requirements, or developing a separate program, to cover providers in other telecommunications sectors, such as wireline telephone or cable providers? Are some of those services different in important respects, such as whether customer outages are likely to continue due to loss of commercial power at the customer's home, rather than within the service provider's facilities and network? If so, what would be the rationale for applying outage-based reporting obligations to such providers? Is there a simple and easily understood metric that could be used for such disclosures? Are there better alternatives to foster reliability of these other services?
30. Moreover, as noted above, we use the term “cell site” throughout this
31. We also propose that the requirements apply only to facilities-based mobile wireless providers,
32.
33. We seek comment on requiring mobile wireless service providers to report for public disclosure percentages of operational sites on a per-county basis. This is how this information is currently reported in DIRS. Reporting by county enables the geographic scope of reporting to expand or contract (
34. Should mobile wireless service providers also provide the underlying calculation basis to the FCC? Should that happen on a presumptively confidential basis? What additional information, if any, should providers be required to report for disclosure? Should there be a minimum number of cell sites operated by a mobile wireless service provider in a county for reporting of the information to be required? For example, if a provider has only three sites in a county, would the fact that one of these sites is out be probative as a percentage? Should the required reporting further take into account variations in the types of cell sites a provider deploys,
35. Should we consider alternative metrics? If so, what are the relative costs and benefits of such alternatives in comparison to the proposed metric, keeping in mind our stated objectives in this proceeding? Should we consider requiring reporting for disclosure along more than one metric, or granting mobile wireless service providers more flexibility to tailor the content of their reporting to particular circumstances? Would such flexibility undermine the ability of consumers to compare provider performance readily, thereby defeating one of the critical functions of the disclosure requirement? Could the proposed requirements foster behavior from mobile wireless service providers aimed at “scoring well” on the reporting metric, even where doing so comes at the expense of allocating resources most effectively? How and why might such behavior realistically occur and to what extent? Are there likely to be trade-offs in practice between restoration of the greatest possible number of sites and restoration of those most critical to serving customers? If so, if the proposed metric is used, would providers actually delay restoration of the sites that are most critical to their customers, notwithstanding that their customers will be able to detect whether or not their service is improving? If so, under what circumstances would providers engage in these sorts of behaviors? Please include specific examples in your comments.
36. Should we allow a mobile wireless service provider to count as a site “within” its network any site it actually uses to provide service during an emergency, regardless of whether it owns or controls the site? What effect would counting sites gained through sharing in both the numerator and the denominator of the percentage have on providers' incentives to share? Would this counting result in better or worse service for consumers as providers work to increase their own resiliency? For example, if Provider A has sixty of ninety cell sites operating in a certain county, where Provider B has seventy-five of ninety operating, they would respectively report that sixty-seven percent and eighty-three percent of their sites are operational in that county. If each provider granted the other access to its operational sites in that county, however, both providers' reported percentages would increase substantially: Provider A would report seventy-seven percent ((60 + 75) divided by (90 + 75) = 135/165) and Provider B would report ninety percent ((75 + 60) divided by (90 + 60) = 135/150) of sites operational in the county. We seek
37. Rather than include such sites as part of its percentage calculations, should a mobile wireless service provider instead report separately the extent to which it used roaming or similar arrangements to augment its provision of service during an emergency? If so, should providers report percentages both with and without adjustments made to reflect such arrangements? If a facilities-based mobile wireless service provider uses roaming on a routine basis to expand its coverage footprint or network capacity in the counties designated for reporting during a disaster, should sites operated or controlled by its roaming partner within the affected area be counted as part of its network for purposes of calculating percentages of sites operational? Are mobile wireless service providers likely to have visibility into the operational status of individual sites they routinely use on a roaming basis to provide service to their customers?
38. Additionally, the proposal would allow providers to count as sites within their network any temporary sites,
39. We seek comment on the appropriateness of the proposed metric. First, we seek comment on whether consumers are likely to find the metric useful or if a different metric better serve consumer needs. Could the proposed metric unintentionally mislead consumers? For example, might consumers think that the percentage of inoperable sites within a county equals the percentage of lost coverage? Could the presence of overlapping coverage, heterogeneous architectures, and roaming arrangements with other carriers and other factors like Wi-Fi offload mean there is no one-to-one correlation between inoperable sites and lost coverage or capacity? If so, could reporting lead consumers to think that some carriers perform particularly well or particularly poorly even if both carriers end of with effectively the same coverage and capacity as one another throughout a disaster? How likely is it that providers reporting widely diverging percentages of sites in operation in a given county would be providing their customers with comparable levels of service within that county?
40. Second, will consumers find this metric easy to understand, given that all mobile wireless service providers would report a single number on a one-hundred-point scale, with higher reported numbers representing a higher proportion of sites in service? Does the metric require only minimal effort from consumers to process such information and use it to make comparisons among mobile wireless service providers?
41. Third, we seek comment on whether the percentage of cell sites that are operational would provide a substantively reasonable metric that consumers can use to compare the resiliency of wireless networks and services. Although the percentage of operational cell sites may not correlate precisely to the availability of service, as a general matter, the disabling of any site may at least marginally impair the ability of a network to deliver service to customers in the area covered by the site, and the cumulative impairment of service is likely to increase as the percentage of operational cell sites decreases. Thus, are significant differences in percentages between providers likely to reflect real differences in the level of service provided to customers? Moreover, are such differences likely to be most apparent during major disasters? Are such circumstances likely to coincide with increases in attempts to communicate over mobile wireless networks, which would amplify the significance of any disparities among providers in the percentages of sites they have in operation? On the other hand, is it possible that the proposed metric risks overstating the degree to which cell site outages affect service availability? If so, are there potential modifications that could be made to the metric to avoid this potential risk?
42. The reporting of
43. We recognize that the proposed metric potentially has its limitations. Modern mobile wireless networks are complex enterprises, and the technologies that support them continue to evolve at a rapid pace. If we adopt a rule like the proposal, we would expect to review it periodically as technologies evolve to assess its continued effectiveness, and to determine if there are complementary or better ways to obtain and provide useful information for comparing the resiliency of mobile wireless networks. The proposed metric does not specifically address emerging trends in network design that PCIA identifies, such as the proliferation of “small” cells or distributed antenna systems (DAS), that could improve network performance. As providers continue to deploy a more diverse mix of cell types in their networks, there could be increasing numbers of cell sites that cannot feasibly be equipped with generators or dedicated sources of backup power. That said, is it clear whether such design attributes are being developed and implemented widely throughout the industry, or whether there currently are significant divergences among providers in how they design and configure their networks that would suggest the need for more or more complex metrics that specifically take these potential complications into account as PCIA suggests? Along the same lines, providers uniformly cite the need to prioritize restoration of their most critical sites when responding to a
44. We seek comment on what metric would provide consumers with the best picture of a network's operational status. For instance, could the proposed metric provide a better indication of overall network health than would a purely coverage-based metric—even if accompanied by detailed coverage maps,
45.
46. If reporting and disclosures are tied to DIRS activation, the proposal would require providers to report the specified information once every twenty-four hours while the DIRS system remains active. These daily updates would enable consumers to assess the overall trajectory of a mobile wireless service provider's network outages and restoration efforts during an emergency without subjecting the mobile wireless service provider to overly burdensome reporting obligations. We seek comment on this frequency of reporting. Would such reporting fail to capture “critical factors” such as those CTIA identifies, including “a provider's service restoration practices that can make the information outdated in a matter of hours and the reliability of the network during the overwhelming majority of time that DIRS is not activated?” Would reporting on a daily basis provide a sufficiently detailed picture for the overall recovery progress of a provider in responding to a disaster? Could the reporting provide valuable information about network resiliency during major disasters, even if does not address network performance during normal periods of operation? On the other hand, would making the proposed reporting less frequent than once a day discourage providers from keeping up with the daily cycle established for DIRS reporting, leading to reduced situational awareness during disasters?
47. DIRS participants typically provide status updates in DIRS once each day, so adopting a similar schedule for the proposed reporting may generate efficiencies for mobile wireless service providers that participate already in DIRS. To further standardize such reporting and align it with DIRS reporting practices, all reports of operational site percentages would be submitted at a time of day specified by the Commission in the public notice announcing the DIRS activation. We seek comment on these aspects of the proposal.
48. Recognizing that service restoration during an emergency is a complex and dynamic process, should we require providers to make “reasonable efforts” to ensure that submitted information is current and accurate as of the time of filing. To what extent would it differ from carriers do now in reporting under DIRS? Should we consider specifying in more detail the “reasonable efforts” required from providers in verifying the currency and accuracy of submitted information? Should we require providers to submit unsworn declarations attesting to the accuracy of their submissions? We seek comment on this aspect of the proposal.
49. We seek comment on this proposed frequency and schedule for reporting of percentages of sites in operation. Would a requirement to report operational site percentages during an emergency, notwithstanding the voluntary reporting that providers already engage in on the same timetable, significantly divert resources away from service restoration or other emergency response activities? If so, how? Should the Commission consider granting providers additional time to report this information? If so, how long? Would delay in publication of such information diminish its significance and utility for
50. Finally, the proposal's reporting and associated disclosures would be programmatically separate from DIRS, and their implementation would leave intact the scope, confidentiality presumptions, and other operational parameters of DIRS. The proposal would make public only a subset of information that can be derived from information contained in DIRS filings,
51. In addition, we seek comment on the extent to which the disclosures proposed in this
52. The competitive concerns that partially underlie the confidential treatment afforded to DIRS and NORS filings may be inapposite in this proceeding. In establishing confidentiality protections for NORS filings, the Commission acknowledged the concerns of some providers that publicly reported outage information “[h]ad been used by competitors to wage marketing campaigns.” The limited informational disclosures may apply competitive pressure to providers to bolster the resiliency of their mobile wireless network infrastructure. Accordingly, would the incorporation of such disclosed information into “marketing campaigns” improve public safety rather than detract from the effectiveness of these disclosures? Moreover, the proposal's disclosure would not likely contain trade secrets or other privileged information, such that its disclosure would compromise the operation of the mobile wireless marketplace. In reporting its percentages of sites in operation, a provider would not be required to reveal anything about its underlying practices or techniques for achieving network resiliency. The focus of the reporting is on outcomes—how well networks withstand disaster conditions—not on the business judgments or other factors that determine these outcomes. Would such disclosures discourage competition or innovation? Would such disclosures encourage more robust competition among providers to improve the resiliency of their networks? In short, would such disclosures improve consumer welfare? We seek comment on these questions.
53.
54. We seek comment on whether we should establish rules requiring providers to maintain adequate records for some limited period of time of the internal processes and deliberations that support the operational site percentages or any other information they are required to report. If so, what sorts of records should we require providers to keep, and in what form? What time period for retention might be sufficient and why? Do providers already keep records of information that supports their reporting in DIRS? If so, what sorts of records and for how long? Are there incentives for providers to voluntarily keep records, for instance, to provide evidentiary support for their reported percentages in the event of a dispute or enforcement action? What costs and benefits would be associated with the adoption of any recordkeeping requirements the Commission might adopt? Are there ways of minimizing such costs while ensuring that adequate records are kept?
55.
56.
57. We also seek comment on whether there are alternative or complementary measures for improving wireless network reliability that the Commission should consider in this proceeding or subsequently. Commenters identifying such measures should address their associated costs and benefits, and whether such measures should be considered as alternatives to or as complements of the reporting and disclosures we propose in this
58.
59. Another possibility is that the Commission require mobile wireless service providers to report or disclose information about the practices they have implemented to promote the reliability of their networks. Under this option, the Commission might require mobile wireless service providers to report detailed information about their provisioning of back-up power (
60.
61.
62. If we should consider performance standards as a possible alternative, we seek comment on what form such standards should take. For example, should we consider emergency back-up power requirements similar to the requirements the Commission previously adopted for mobile wireless networks but never made effective? Could we grant mobile wireless service providers greater flexibility than the previous rule, for example, by applying global back-up power standards to networks as a whole rather than to each individual site? If we were to specify a minimum duration for provision of back-up power, what would be a reasonable threshold, taking into consideration the capability of currently available back-up power technologies, including batteries? Since loss of backhaul service (
63.
64. We seek comment on whether a similar voluntary initiative might feasibly achieve the improvements to consumer choice and network resiliency that are the objectives of this proceeding. If so, how might such an initiative work in practice? Could a voluntary initiative involving wireless industry and consumer advocacy groups timely develop additional or improved metrics about service availability and network performance during natural disasters that result in extensive service outages that would meet the objectives of providing consumers with information that they may find useful, and spurring comparisons and competition that result in greater reliability? Would such an initiative be likely to produce candid and transparent reporting of information to consumers, even from providers that must report poor performance? Additionally, are there opportunities for public-private initiatives that could help achieve the objectives? Could a real-time crowdsourcing approach work?
65. We seek comment on whether reporting requirements of the sort proposed in this
66. Are there other Title II or Title III provisions that would provide a legal basis for the adoption of requirements of the sort we propose insofar as they extend to the provision of CMRS services? Could such mandatory reporting of network reliability data for public disclosure be grounded in section 214(d)'s requirement that a common carrier “provide itself with adequate facilities for the expeditious and efficient performance of its service as a common carrier” and to “undertake improvements in facilities” to meet public demand? Would the proposed requirements also fall within the Commission's authority under section 218 to obtain from common carriers “full and complete information necessary to enable the Commission to perform the duties and carry out the objects for which it was created?” With respect to CMRS service, would such proposals be within the scope of our “broad authority” under Title III? We seek comment in particular on the applicability of sections 301 and 316, and our authority under section 303(b) to “[p]rescribe the nature of the service to be rendered by each class of licensed stations and each station within any class.” Section 301 provides for licensing of CMRS providers, and section 316 authorizes the Commission to modify such licenses “if in the judgment of the Commission such action will promote the public interest, convenience, and necessity.” Would the foregoing sources of authority, when coupled with our authority to “generally encourage the larger and more effective use of radio in the public interest,” and to adopt rules “as may be necessary to carry out the provisions of th[e] Act,” extend to the proposed disclosure requirements, as less restrictive ways of promoting more reliable service by wireless providers?
67. Also, we seek comment on the applicability of the Commission's authority over 911 service. The Nation's 911 system is part of its critical communications infrastructure, and the Commission plays a key role ensuring that the communications networks, including those of mobile wireless service providers, promote public safety, especially on matters involving national security and emergency preparedness of the United States. Indeed, Congress established the Commission in part to promote the “safety of life and property.” Consequently, the Commission also enjoys “broad public safety and 9–1–1 authority.” With mobile wireless service subscribers originating an increasing share of the nation's 911 calls—already the great majority and measured at as high as 75 percent in some areas—the resiliency of mobile wireless networks is becoming ever more critical to the reliable provision of 911 service. Accordingly, we seek comment on the extent to which the Commission's authority over 911 service could provide additional support for the adoption of requirements proposed in this
68. We seek comment on whether the reporting requirements proposed in this
69. In particular, we seek comment on whether reporting obligations of the sort we propose in this
70. We note that the proposed requirements would require reporting only of a single, fact-based metric, one that can be calculated from information that providers already tabulate and routinely report in DIRS filings. Such regulation is different in kind from minimum back-up power requirements previously adopted by the Commission, or other forms of direct regulation of wireless network facilities or practices. Moreover, in other contexts the proposed reporting of information to the government for purposes of compilation and disclosure that has been deemed less restrictive than requiring “companies themselves to publicly post detailed information in a particular format.” In addition, we observe that the proposed reporting would in no way restrict providers from disclosing information of their own choosing directly to the public, as many already do, to provide a fuller context for assessing the performance of their networks during an emergency. We seek comment on the relevance of these considerations.
71. Finally, we seek comment on the applicability of the
As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the recommendations in this
72. The American public relies increasingly on mobile wireless networks to communicate, with the great majority of calls to 911 already originating on wireless networks and a large and growing number of households having only wireless phones. Notwithstanding these trends, during Superstorm Sandy and other recent storms, mobile wireless networks suffered extensive site outages, seriously impairing the ability of millions of customers to summon emergency assistance, receive emergency information, and reach their loved ones. Although some service disruptions may be unavoidable during a major emergency, and surges in demand for wireless service at those times present added challenges, the current state of affairs is not acceptable and requires action. We believe that better service and hardening of mobile wireless networks is feasible and could dramatically reduce the severity of these problems, which are not incurred in equal measure by all mobile wireless providers.
73. Accordingly, our central proposal in this
74. In addition to seeking comments below on specific transparency
75. The legal basis for the rules and rule changes proposed in this
76. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the proposed rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).
77. Our action may, over time, affect small entities that are not easily categorized at present. We therefore describe here, at the outset, three comprehensive, statutory small entity size standards. First, nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA. In addition, a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 2007, there were approximately 1,621,315 small organizations. Finally, the term “small governmental jurisdiction” is defined generally as “governments of cities, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” Census Bureau data for 2011 indicate that there were 89,476 local governmental jurisdictions in the United States. We estimate that, of this total, as many as 88,506 entities may qualify as “small governmental jurisdictions.” Thus, we estimate that most governmental jurisdictions are small.
78. The disclosure obligations proposed in the
79. The
80. In addition, the
81. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.
82. The disclosure obligations we do propose are minimally extensive, and for several reasons we do not believe that their implementation would have a significant economic impact on any mobile wireless providers, including those that qualify as small. First, the disclosures would be required only during serious emergencies, and even then only once a day. The content of the disclosure, a single percentage figure for each affected county, is minimal both in terms of size and complexity. Also, the information subject to disclosure is already routinely reported on a voluntary basis by mobile wireless providers, including many small providers, in the Commission's Disaster Information Reporting System (DIRS). For such providers, compliance with the reporting obligation would require no additional effort. We further observe that the disclosure requirement would not prescribe a design standard, as providers would be required to report statistics on the resiliency of their networks but retain wide flexibility to implement the strategies they deem most effective in achieving sufficient resiliency.
83. The disclosure requirements proposed in the
84. Finally, notwithstanding these observations, we seek comment in the
85. None.
Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS:
Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW–A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.
For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 4 as follows:
Sec. 5, 48 Stat.1068, as amended; 47 U.S.C. 154, 155, 201, 251, 307, 316, 615a–1, 1302(a), and 1302(b).
(a)
(1)
(2)
(b) Facilities-based CMRS providers are required to report the information specified in paragraph (c) of this section during periods of activation of the DIRS system, but only when such activation is announced by means of a public notice.
(1) In carrying out the reporting specified in paragraph (c) of this section, providers shall report only with respect to counties subject to the DIRS activation.
(2) The reporting specified in paragraph (c) of this section shall be made at the time specified in the public notice announcing the DIRS activation,
(c) Under the circumstances specified in paragraph (b) of this section, CMRS providers shall report to the Commission the percentage of their network sites in each county that are operational sites at the time the percentage is reported. Providers shall make reasonable efforts to ensure that all reported information is accurate and current as of the time it is reported.
(d) Providers shall carry out the reporting required under paragraph (c) of this section by submitting the required information to the Federal Communications Commission in a machine-readable format, and in accordance with any guidance the Public Safety and Homeland Security Bureau (Bureau) may issue with respect to such submissions.
(e) The Bureau shall compile the information reported under paragraph (c) of this section and publicly disclose the information on the Federal Communications Commission Web site,
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
90-day petition findings, request for information, and initiation of status review.
We, NMFS, announce 90-day findings on two petitions received to list the pinto abalone (
Information and comments on the subject action must be received by January 17, 2014.
You may submit comments, information, or data, identified by “NOAA–NMFS–2013–0158” by any one of the following methods:
•
•
Instructions: All comments received are a part of the public record and may be posted to
Melissa Neuman, NMFS, West Coast Region, (562) 980–4115; or Lisa Manning, NMFS, Office of Protected Resources, (301) 427–8466.
On July 1, 2013, we received a petition from the Natural Resources Defense Council (NRDC) to list the pinto abalone (
Section 4(b)(3)(A) of the ESA of 1973, as amended (16 U.S.C. 1531
Under the ESA, a listing determination may address a species, which is defined to also include any subspecies and, for vertebrate species, any distinct population segment (DPS) which interbreeds when mature (16 U.S.C. 1532(16)). A joint NMFS–U.S. Fish and Wildlife Service (USFWS) (jointly, “the Services”) policy clarifies the agencies' interpretation of the phrase “distinct population segment” for the purposes of listing, delisting, and reclassifying a species under the ESA (61 FR 4722; February 7, 1996). A species, subspecies, or DPS is
ESA implementing regulations define “substantial information” in the context of reviewing a petition to list, delist, or reclassify a species as the amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted (50 CFR 424.14(b)). In evaluating whether substantial information is contained in a petition, the Secretary must consider whether the petition: (1) Clearly indicates the administrative measure recommended and gives the scientific and any common name of the species involved; (2) contains detailed narrative justification for the recommended measure, describing, based on available information, past and present numbers and distribution of the species involved and any threats faced by the species; (3) provides information regarding the status of the species over all or a significant portion of its range; and (4) is accompanied by the appropriate supporting documentation in the form of bibliographic references, reprints of pertinent publications, copies of reports or letters from authorities, and maps (50 CFR 424.14(b)(2)).
At the 90-day stage, we evaluate the petitioners' request based upon the information in the petition, including its references and the information readily available in our files. We do not conduct additional research and we do not solicit information from parties outside the agency to help us in evaluating the petition. We will accept the petitioners' sources and characterizations of the information presented if they appear to be based on accepted scientific principles, unless we have specific information in our files indicating the petition's information is incorrect, unreliable, obsolete, or otherwise irrelevant to the requested action. Information that is susceptible to more than one interpretation or that is contradicted by other available information will not be dismissed at the 90-day finding stage, so long as it is reliable and a reasonable person would conclude it supports the petitioners' assertions. Conclusive information indicating the species may meet the ESA's requirements for listing is not required to make a positive 90-day finding. We will not conclude that a lack of specific information negates a positive 90-day finding if a reasonable person would conclude that the uncertainty from the lack of information suggests an extinction risk of concern for the species at issue.
To make a 90-day finding on a petition to list a species, we evaluate whether the petition presents substantial scientific or commercial information indicating the subject species may be either threatened or endangered, as defined by the ESA. First, we evaluate whether the information presented in the petition, along with the information readily available in our files, indicates that the petitioned entity constitutes a “species” eligible for listing under the ESA. Next, we evaluate whether the information indicates that the species faces an extinction risk that is cause for concern; this may be indicated in information expressly discussing the species' status and trends, or in information describing impacts and threats to the species. We evaluate any information on specific demographic factors pertinent to evaluating extinction risk for the species (e.g., population abundance and trends, productivity, spatial structure, age structure, sex ratio, diversity, current and historical range, habitat integrity or fragmentation), and the potential contribution of identified demographic risks to extinction risk for the species. We then evaluate the potential links between these demographic risks and the causative impacts and threats identified in section 4(a)(1).
Information presented on impacts or threats should be specific to the species and should reasonably suggest that one or more of these factors may be operative threats that act or have acted on the species to the point that it may warrant protection under the ESA. Broad statements about generalized threats to the species, or identification of factors that could negatively impact a species, do not constitute substantial information indicating that listing may be warranted. We look for information indicating that not only is the particular species exposed to a factor, but that the species may be responding in a negative fashion; then we assess the potential significance of that negative response.
Many petitions identify risk classifications made by non-governmental organizations, such as the International Union on the Conservation of Nature (IUCN), the American Fisheries Society, or NatureServe, as evidence of extinction risk for a species. Risk classifications by other organizations or made under other Federal or state statutes may be informative, but the classification alone does not provide the rationale for a positive 90-day finding under the ESA. For example, as explained by NatureServe, their assessments of a species' conservation status do “not constitute a recommendation by NatureServe for listing under the U.S. Endangered Species Act” because NatureServe assessments “have different criteria, evidence requirements, purposes and taxonomic coverage than government lists of endangered and threatened species, and therefore these two types of lists should not be expected to coincide” (
The pinto abalone is a marine gastropod mollusc and a member of the family Haliotidae and the genus
The pinto abalone's muscular foot is tan and is used to adhere to hard substrate and for locomotion. The epipodium (the circular fringe of skin around the foot) and tentacles are mottled yellow to dark tan with vertical banding patterns. The underside of the foot is pearly white. The outer surface of the shell is characterized by irregular
Pinto abalone occur in intertidal and subtidal habitats (0–20m depth, most commonly 0–10m depth; Rothaus
Pinto abalone exhibit separate sexes and are thought to reach sexual maturity at sizes ranging between 50–70 mm shell length, which correspond to ages ranging between 2 to 5 years (Rothaus
The pinto abalone has been a target species for recreational and/or commercial fisheries in Alaska, British Columbia, Washington, and California. A full discussion of the impacts of fisheries on pinto abalone populations is discussed in the
Fishery-independent information from Alaska, British Columbia, Washington, and California corroborate the declining trends suggested by landings data. Qualitative observations during dive surveys conducted in Southeastern Alaska from 1988–1999, suggest a continued, steady decline in pinto abalone densities (Woodby
The two petitions request the same action, to list the pinto abalone as endangered or threatened under the ESA and to designate critical habitat for the species. In addition, NRDC requested the following alternative to listing the species throughout its range:
“In the alternative, NMFS should list the southern subspecies of pinto abalone as endangered, and identify distinct population segments (DPSs) of the northern subspecies of pinto abalone and list such DPSs as endangered or threatened.”
The ESA allows for the listing of species and subspecies of invertebrates, but does not allow for listing of invertebrate DPSs. Thus, NMFS does not have the authority to list DPSs of pinto abalone or to list DPSs of either of its two recognized subspecies, as requested by the NRDC.
The petitions contain similar information on the species, including the taxonomy, species description, geographic distribution, habitat, population status and trends, and factors contributing to the species' decline. Both petitioners identified historical overfishing, current low densities resulting in low recruitment rates, and poaching as the primary factors contributing to the decline of pinto abalone. The petitioners state that predation, inadequate state fishing regulations, climate change, and ocean acidification also pose serious threats to the species' persistence.
In the following sections, we analyze the information presented by the petitions and readily available in our files regarding the specific ESA section 4(a)(1) factors (hereafter, “listing factors”) affecting the population's risk of extinction.
Both petitions suggest that increases in atmospheric CO
Direct impacts of water quality parameters associated with climate change on pinto abalone were evident in a study conducted by Bouma (2007), whereby larvae experienced higher mortality rates at decreased salinities (<26 practical salinity units) and elevated water temperatures (>21° Celsius). Recent studies by Crim
We conclude that the information in the petitions and in our files suggests that climate change and its associated impacts, especially low salinity, elevated water temperatures, and ocean acidification may already be impacting pinto abalone populations in some areas and may impede the continued existence of the species in to the future. However, additional information regarding predicted rates of change in these parameters by area, including error terms, are necessary to evaluate future impacts to pinto abalone survival. The information provided on the indirect effects of climate change on the availability of food sources and suitable settlement habitat is insufficient to evaluate whether these factors may be reducing the quality or quantity of pinto abalone habitat enough such that listing may be warranted.
Information from both petitions suggests that fisheries have contributed historically to population declines of pinto abalone throughout their range. Pinto abalone were harvested in commercial fisheries in Alaska, British Columbia, and California, until their closures in 1995, 1990 and 1996, respectively. In Alaska, the fishery began in the mid-1960s and operated initially with very few restrictions (Woodby
Recreational and/or subsistence fisheries were conducted in British Columbia, Washington and California until their closures in 1990, 1994 and 1997, respectively. Unfortunately, annual harvest information for these recreational fisheries was either not recorded or is unavailable (Rothaus
The petitioners assert that pinto abalone populations in many areas throughout their range have not recovered despite commercial and recreational fishery closures and more restrictive regulations for remaining subsistence, personal use and recreational fisheries. The petitioners argue that historical fishing reduced pinto abalone densities to levels that were below those necessary for successful fertilization in many areas.
We conclude that the petitions and information in our files present substantial evidence that fisheries throughout a large portion of the species' range had an impact on the viability of pinto abalone populations through density reduction and possibly subsequent reproductive failure that may continue today in some areas. This information suggests that the impacts of historical fishing may continue to affect
The CBD petition briefly mentions that pinto abalone are susceptible to a protist parasite in aquaculture environments and asserts that diseases and parasites do pose risks to abalone in general, especially as ocean temperatures rise due to climate change impacts. The petition does not provide any additional information to support that disease is a factor affecting the species' continued existence such that listing may be warranted. Thus, the available information is insufficient to evaluate if disease may be affecting the continued existence of pinto abalone.
The petitioners list crabs, octopus, and sea stars as major predators of pinto abalone (Griffiths and Gosselin 2008). The NRDC believes that pinto abalone face a high level of predation by sea otters in Alaska based on information contained within Alaska Department of Fish and Game (ADFG, 2013). The NRDC does not believe that sea otters represent the main cause of pinto abalone declines in other locations because: (1) Pinto abalone populations are still declining in areas, especially in British Columbia, where sea otters are not present; and (2) the persistence of large animals in Washington (most animals are > 100 mm shell length) suggests that predation by sea otters (which selectively prey on large abalone) is not having a large impact on populations there.
We conclude that the NRDC petition and information in our files present substantial evidence that predation may be having an impact on the continued existence of pinto abalone in some areas of the range (i.e. by sea otters in Alaska), but not others. Additional information regarding sea otter abundance (historical, present, and predicted future), predation rates, and prey composition from subtidal areas (25 meters depth) up into the intertidal zone in Southeastern Alaska and Washington is necessary to determine whether sea otter predation is contributing to the decline of pinto abalone populations.
The petitions assert that the inadequacy of existing Federal, state, or international regulatory mechanisms has contributed to the continued decline of pinto abalone populations throughout a large portion of their range. The petitioners contend that despite Federal, state, and international fisheries' closures approximately two decades ago, a Federal threatened listing in Canada under the Species at Risk Act in 1999 (and upgrading to endangered status in 2009; COESWIC, 2009), addition to the NOAA Species of Concern List in 2004, the development of recovery plans in Canada and California (NRAP, 2003; CDFW 2005), an abalone rebuilding strategy implemented in Mexico in 2000 (OECD, 2012), and stricter measures regulating subsistence, personal use, recreational and commercial fisheries where they remain, pinto abalone populations continue to decline. The petitioners assert that this continued decline is likely the result of multiple stressors (i.e. historical overharvest, current harvest, discard mortality, poaching, and predation by sea otters) that have occurred or are occurring in different combinations, and acting in synergistic ways depending on location, to further reduce densities and the reproductive potential of remaining pinto abalone populations. The petitioners provide evidence to indicate that four of these stressors, historical overharvest, current harvest, discard mortality, and poaching, may be occurring because of inadequate past and present regulations and lack of enforcement of those regulations by state, Federal, and international governing bodies.
The states invoked increasingly protective measures during their commercial fisheries (e.g, bag limits, size limits, quotas, limited entry) to safeguard pinto abalone populations, but according to the petitioners these measures were either not restrictive enough, were not followed or enforced, and/or came too late to prevent the species' continued decline even after the fisheries were closed. In early 2012, Alaska closed its sport fishery and limited the subsistence and personal use fisheries to five abalone per day with a minimum shell length of 3.5 inches. Pinto abalone may only be collected by hand, using snorkel gear, and using abalone irons; the use of compressed air has been prohibited since 1997 (Herbert, pers. comm.). The 3.5-inch size limit failed to prevent stock collapse in the Alaska commercial fishery before its closure (Woodby
Both petitions state that poaching has threatened and continues to plague pinto abalone populations throughout their range. In the Pacific Northwest, pinto abalone are particularly susceptible to poaching because they aggregate in relatively shallow waters, they occur in remote and largely unpatrolled coastlines and their market value remains high. Authorities in British Columbia have reported 30 abalone poaching convictions between 1997 and 2006, and they estimate that this only reflects a small percentage (10–20 percent) of the actual poaching activity (COSEWIC, 2009). The Organisation for Economic Co-Operation and Development (OECD, 2012) reports that even though the abalone rebuilding plan in Mexico is entirely focused on controlling fishing effort to address fishery decline, disease, climate change, predation, poaching, and a lack of fishery surveillance by the Mexican government also threaten the recovery of the fishery. A number of cases involving the illegal trade of federally protected abalone from Mexico into the United States and Canada (white and black in the United States and pinto abalone in Canada) have occurred over the last decade (Zetwo, pers. communication), indicating that existing regulatory mechanisms in Mexico have not eliminated risks to pinto abalone posed by poaching.
The CBD petition asserts that existing regulatory mechanisms are inadequate to address the threats to pinto abalone posed by greenhouse gas emissions. CBD argues that in the United States, domestic laws that protect the environment are only partially being implemented and therefore are not sufficient to reverse predicted increases in greenhouse gases in our atmosphere, and will merely slow the rate at which predicted increases will occur. On the international stage, emission reduction targets have been set and pledges have been made at a number of world conferences, but many countries, including the United States, have not met their reduction goals. The petition does not discuss any specifics regarding what levels of greenhouse gas emissions
The CBD petition contends that inadequate regulation of commercial abalone farms and captive propagation and enhancement programs for restoring pinto abalone populations pose risks to wild pinto abalone populations including: disease-spread, loss of genetic diversity, and reduced fitness. However the petition does not provide any specific information that validates their concerns, such as examples of how diseases spread by land-based facilities, or that the outplanting of captive-raised animals that may be genetically or behaviorally unfit has led to the decline of pinto abalone populations. The petition also does not explain how inadequate Federal and state regulation of these programs has led to the species' decline.
Based on the information in the petitions and in our files as discussed above, we conclude that existing regulatory mechanisms may be inadequate to ensure sustainable fishing, minimize incidental collection, and sufficiently reduce or eliminate poaching of pinto abalone populations. To further evaluate the adequacy of existing regulatory mechanisms, more information is needed regarding the effectiveness of recent fishing restrictions and the level of poaching occurring in the United States, Canada, and Mexico. We conclude that while the information presented in the CBD petition suggests that regulations regarding greenhouse gas emissions may not be adequate to reverse the predicted rising trend in greenhouse gas emissions, there is great uncertainty regarding the population-level impacts of climate change to pinto abalone and the adaptability of pinto abalone to climate change effects occurring over long time scales. Therefore, the available information is not sufficient to determine if inadequate regulation of greenhouse gas emissions may be threatening pinto abalone populations such that listing may be warranted. We conclude that the CBD petition does not present sufficient information to determine whether inadequate regulation of abalone farms or captive propagation and enhancement programs are impacting the continued existence of pinto abalone populations.
The NRDC petition discusses the direct and indirect impacts of climate change under this listing factor in their petition. We have reviewed the information in the petition and in our files under the listing factor entitled
The CBD petition discusses the threat imposed by low pinto abalone densities and resulting reproductive failure on pinto abalone populations under this listing factor. We have reviewed the information in the petition and in our files under the listing factor entitled
After reviewing the information contained in both petitions, as well as information readily available in our files, we conclude the petitions present substantial scientific information indicating the petitioned action of listing the pinto abalone as a threatened or endangered may be warranted. Therefore, in accordance with section 4(b)(3)(A) of the ESA and NMFS' implementing regulations (50 CFR 424.14(b)(3)), we will commence a status review of the species. Following completion of the status review, we will determine whether the species is in danger of extinction (endangered) or likely to become so within the foreseeable future (threatened) throughout all or a significant portion of its range. We now initiate this review, and thus, the pinto abalone is considered to be a candidate species (50 CFR 424.15(b)). Within 12 months of the receipt of the NRDC petition (July 1, 2013), we will make a finding as to whether listing the species as endangered or threatened is warranted as required by section 4(b)(3)(B) of the ESA. If listing the species is warranted, we will publish a proposed rule and solicit public comments before developing and publishing a final rule.
To ensure that the status review is based on the best available scientific and commercial data, we are soliciting information relevant to whether pinto abalone is threatened or endangered. Specifically, we are soliciting published and unpublished information in the following areas: (1) Long-term trends in abundance, distribution, size ranges, and nearest neighbor distances, especially in areas where fishing pressure, sea otter predation, and poaching occurs; (2) potential factors for decline now and in the future, especially overharvesting, poaching, natural predation (especially by southern sea otters), disease, climate change, and ocean acidification; (3) southern sea otter population status, predation rates, and prey composition in Alaska and Washington from coastal intertidal areas to 25 meters depth; (4) population status in Mexico; (5) factors important for management of ongoing subsistence, personal use, and recreational fisheries; (6) current estimates of population size and available habitat; (7) data on various life history parameters including, but not limited: to size/age at maturity, fecundity, length of larval stage, and larval dispersal dynamics; (8) enforcement information from Alaska, Washington, Oregon, California, and Mexico regarding the frequency, severity, and location of poaching incidents; (9) projections on population growth or decline and risk of extinction considering the impacts of stressors; and (10) ongoing or planned efforts to protect and restore the species and its habitat.
We also request information on critical habitat for pinto abalone. Specifically, we request information on the physical and biological habitat features that are essential to the conservation of the species and identification of habitat areas that include these essential physical and biological features. Essential features include, but are not limited to: (1) Space for individual and population growth and for normal behavior; (2) food, water, air, light, minerals, or other nutritional or physiological requirements; (3) cover or shelter; (4) sites for reproduction and development of offspring; and (5) habitats that are protected from disturbance or are representative of the historical, geographical, and ecological distributions of the species (50 CFR 424.12). For habitat areas potentially qualifying as critical habitat, we request information describing: (1) The activities that affect the habitat areas or could be affected by the designation; and (2) the economic impacts, impacts to national security, or other relevant impacts of additional requirements of management measures likely to result from the designation.
We request that all information be accompanied by: (1) Supporting documentation such as maps, raw data with associated documentation, bibliographic references, or reprints of pertinent publications; and (2) the submitter's name, mailing address, email address, and any association,
A complete list of references is available upon request from the NMFS West Coast Regional Office (see
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Comments regarding (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB),
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Rural Business-Cooperative Service, USDA.
Proposed collection; Comments requested.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Rural Business-Cooperative Service's intention to request an extension for a currently approved information collection in support of the program for 7 CFR Part 4284, subpart J, Value-Added Producer Grant Program.
Comments on this notice must be received by January 17, 2014 to be assured of consideration.
Mr. Chad Parker, Deputy Administrator, Rural Business-Cooperative Service, USDA, Room 4016-South, MS 3252, 1400 Independence Ave. SW., Washington, DC 20250. Telephone: (202) 720–7558, Email
Copies of this information collection can be obtained from Jeanne Jacobs, Regulations and Paperwork Management Branch, Support Services Division at (202) 692–0040.
Comments may be sent to Jeanne Jacobs, Regulations and Paperwork Management Branch, Support Services Division, U.S. Department of Agriculture, Rural Development, STOP 0742, 1400 Independence Avenue SW., Washington, DC 20250–0742.
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.
Enforcement and Compliance, formerly Import Administration, International Trade Administration, Department of Commerce.
Yang Jin Chun at (202) 482–5760 (the People's Republic of China (PRC)); Patrick O'Connor at (202) 482–0989 (Germany); Thomas Martin at (202) 482–3936 (Japan); Dmitry Vladimirov at (202) 482–0665 (the Republic of Korea (Korea)); Drew Jackson at (202) 482–4406 (Sweden); or Krisha Hill at (202) 482–4037 (Taiwan), AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On September 30, 2013, the Department of Commerce (the Department) received antidumping duty (AD) petitions concerning imports of non-oriented electrical steel (NOES) from the PRC, Germany, Japan, Korea, Sweden, and Taiwan filed in proper form on behalf of AK Steel Corporation (Petitioner). The AD petitions were accompanied by three countervailing duty (CVD) petitions.
On October 22, 2013, and October 29, 2013, the Department requested additional information and clarification of certain areas of the Petitions.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), Petitioner alleges that imports of NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan are being, or are likely to be, sold in the United States at less than fair value within the meaning of section 731 of the Act and that such imports are materially injuring, or threatening material injury to, an industry in the United States. Also, consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to Petitioner supporting its allegations.
The Department finds that Petitioner filed these Petitions on behalf of the domestic industry because Petitioner is an interested party as defined in section 771(9)(C) of the Act. The Department also finds that Petitioner has demonstrated sufficient industry support with respect to the initiation of the AD investigations that Petitioner is requesting.
Pursuant to 19 CFR 351.204(b)(1), because the Petitions were filed on September 30, 2013, the period of investigation (POI) for the PRC investigation is January 1, 2013, through June 30, 2013. The POI for the Germany, Japan, Korea, Sweden, and Taiwan investigations is July 1, 2012, through June 30, 2013.
The product covered by these investigations is NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan. For a full description of the scope of the investigations,
During our review of the Petitions, the Department issued questions to, and received responses from, Petitioner pertaining to the proposed scope to ensure that the scope language in the Petitions would be an accurate reflection of the products for which the domestic industry is seeking relief. As discussed in the preamble to the
All submissions to the Department must be filed electronically using IA ACCESS.
The Department requests comments from interested parties regarding the appropriate physical characteristics of NOES to be reported in response to the Department's antidumping duty questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors and costs of production accurately as well as to develop appropriate product-comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, while there may be some physical product characteristics utilized by manufacturers to describe NOES, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, the Department attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, we must receive comments on product characteristics by November 20, 2013. Rebuttal comments must be received by November 27, 2013. All comments and submissions to the Department must be filed electronically using IA ACCESS, as referenced above.
As explained in the memorandum from the Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from October 1, through October 16, 2013.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the industry.
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, Petitioner does not offer a definition of the domestic like product distinct from the scope of the investigations. Based on our analysis of the information submitted on the record, we have determined that NOES constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product.
In determining whether Petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in Appendix I of this notice. To establish industry support, Petitioner provided its own production of the domestic like product in 2012.
On October 28, 2013, we received a submission on behalf of JFE Steel Corporation and Nippon Steel & Sumitomo Metal Corporation, Japanese producers of NOES, questioning Petitioner's industry support calculation. On October 30, 2013, Petitioner responded to the Japanese producers' challenge.
Our review of the data provided in the Petitions, supplemental submissions, and other information readily available to the Department indicates that Petitioner has established industry support.
The Department finds that Petitioner filed the Petitions on behalf of the domestic industry because it is an interested party as defined in section 771(9)(C) of the Act and it has demonstrated sufficient industry support with respect to the AD investigations that it is requesting the Department initiate.
Petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, Petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
Petitioner contends that the industry's injured condition is illustrated by reduced market share; underselling and price depression or suppression; lost sales and revenues; and adversely impacted production, capacity utilization, and financial performance.
The following is a description of the allegations of sales at less than fair value upon which the Department based its decision to initiate AD investigations of imports of NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the country-specific initiation checklists.
For the PRC, Japan and Korea, Petitioner based U.S. price on price quotes obtained by an independent researcher for subject merchandise produced in the subject country by producer(s) of NOES in that country and sold or offered for export sale to the United States by producer(s) and/or traders of NOES.
For Germany, Taiwan, and Sweden, and as additional indicators of export prices for Japan, Petitioner based U.S. prices on the free-on-board (FOB) foreign port prices of entries of merchandise under consideration obtained from U.S. Customs and Border Protection's (CBP) Automated Manifest System, which Petitioner then linked to publicly available data maintained by the U.S. Census Bureau
In addition, for Japan, Korea, Germany, Taiwan, and Sweden, Petitioner also based U.S. prices on FOB foreign port average unit value data for products classified under the appropriate Harmonized Tariff Schedule of the United States (HTSUS) numbers for the merchandise under consideration imported from these respective countries into the United States during the POI, derived from official U.S. import statistics, also obtained
For the PRC, Germany, Japan, Korea, Sweden, and Taiwan, Petitioner made deductions for movement and other expenses consistent with the sales and delivery terms.
For Japan, Korea, Taiwan, and Sweden, Petitioner based NV on price quotes provided by an independent researcher for the foreign like product produced in the subject country by producer(s) of NOES in that country and sold or offered for sale in the subject country by producer(s) and/or traders of NOES.
For Germany, Petitioner was unable to obtain home-market or third-country prices; accordingly, Petitioner based NV on constructed value (CV).
For Sweden, Petitioner made deductions for movement expenses consistent with the terms of delivery.
With respect to the PRC, Petitioner states that the Department has long treated the PRC as a non-market economy (NME) country.
Petitioner claims that Thailand is an appropriate surrogate country because it is a market economy country that is at a level of economic development comparable to that of the PRC, it is a significant producer of the merchandise under consideration, and the data for valuing FOPs are both available and reliable.
Petitioner also explained that, in
Petitioner based the FOPs usage for materials, labor and energy on the consumption rates of its own production of NOES in the United States.
Petitioner valued the FOPs for various raw material inputs used to produce subject merchandise based on Thai data from the Global Trade Atlas (GTA) statistics for the POI for the PRC under applicable HTSUS codes.
Petitioner made a deduction for the value of scrap recovered during the production process based on the average import value of other ferrous waste and scrap using HTSUS subheading 7204.49 as published by GTA for the period from January 2013 through June 2013.
Petitioner excluded all import values from countries previously determined by the Department to maintain broadly available, non-industry-specific export subsidies and from countries previously determined by the Department to be NME countries. In addition, in accordance with the Department's practice, the average import value excludes imports that were labeled as originating from an unidentified country.
Petitioner calculated labor using a 2006 industry-specific wage rate for Thailand, which was published in 2007 by the Thailand National Statistics Office. Petitioner adjusted this wage rate for inflation using the Thai Consumer Price Index as published by the International Monetary Fund.
Petitioner valued electricity based on the data from the Metropolitan Electricity Authority.
Petitioner calculated surrogate financial ratios (
For Japan, Korea, Sweden, and Taiwan, Petitioner provided information demonstrating reasonable grounds to believe or suspect that sales of NOES in the respective home markets were made at prices below the fully-absorbed COP, within the meaning of section 773(b) of the Act, and requested that the Department conduct country-wide sales-below-cost investigations. The Statement of Administrative Action (SAA), submitted to the Congress in connection with the interpretation and application of the Uruguay Round Agreements Act, states that an allegation of sales below COP need not be specific to individual exporters or producers.
Further, the SAA provides that section 773(b)(2)(A) of the Act retains the requirement that the Department have “reasonable grounds to believe or suspect” that below-cost sales have occurred before initiating such an investigation. Reasonable grounds exist when an interested party provides specific factual information on costs and prices, observed or constructed, indicating that sales in the foreign market in question are at below-cost prices.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost of manufacturing (COM); SG&A expenses; financial expenses; and packing expenses. Petitioner calculated COM (except for depreciation) based on Petitioner's experience adjusted for known differences between the industry in the United States and the industries of the respective country (
To determine depreciation, SG&A, and financial expense rates, Petitioner relied on financial statements of producers of comparable merchandise operating in the respective foreign country.
Based upon a comparison of the prices of the foreign like product in the home market to the calculated COP of the most comparable product, we find reasonable grounds to believe or suspect that sales of the foreign like products were made at prices that are below the COP, within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating country-wide cost investigations on sales of NOES from Japan, Korea, Sweden, and Taiwan.
For Japan, Korea, Sweden, and Taiwan, because they alleged sales below cost, pursuant to sections 773(a)(4), 773(b), and 773(e) of the Act, Petitioner additionally calculated NV based on constructed value (CV). Petitioner calculated CV using the same average COM, SG&A, financial expense, and packing figures used to compute the COPs. Petitioner relied on the same financial statements used as the basis for the depreciation and SG&A expense rates to calculate the profit rates.
For Germany, Petitioner based NV on CV, as neither a home market nor a third country price was reasonably available. Pursuant to section 773(e) of the Act, CV consists of the COM; SG&A expenses; financial expenses; packing expenses; and profit. Petitioner calculated COM (except for depreciation) based on Petitioner's experience adjusted for known differences between the German and U.S. industries during the proposed POI, multiplied by the value of the inputs used to manufacture NOES in Germany using publicly available data.
To determine depreciation, SG&A, and financial expense rates, Petitioner relied on the financial statements of a German producer of comparable merchandise.
Based on the data provided by Petitioner, there is reason to believe that imports of NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of export price (EP) to NV in accordance with section 773(a) of the Act, the estimated dumping margins for NOES from: (1) Germany range from 73.74 percent to 98.84 percent;
Based upon the examination of the AD Petitions on NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan, we find that the Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan are being, or are likely to be, sold in the United States at less than fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no
Petitioner named three companies as producers/exporters of NOES from Germany, five from Japan, three from Korea, one from Sweden, and two from Taiwan.
With respect to the PRC, Petitioner has identified 25 potential respondents. In accordance with our standard practice for respondent selection in cases involving NME countries, we intend to issue quantity and value questionnaires to each potential respondent and base respondent selection on the responses received. In addition, the Department will post the quantity and value questionnaire along with the filing instructions on the Enforcement and Compliance Web site at
In order to obtain separate rate status in an NME investigation, exporters and producers must submit a separate rate application.
The Department will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
{w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME Investigation will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of “combination rates” because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of the PRC, Germany, Japan, Korea, Sweden, and Taiwan
Pursuant to a request by the Government of Korea, on November 5, 2013, Department officials met with Korean Government officials to discuss that government's inquiry regarding the status of the Department's consideration of the Petition and industry support, as provided under section 732(b)(3)(B) of the Act.
We have notified the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine no later than December 2, 2013, whether there is a reasonable indication that imports of NOES from the PRC, Germany, Japan, Korea, Sweden, and Taiwan are materially injuring or threatening material injury to a U.S. industry. A negative ITC determination for any country will result in the investigation being terminated with respect to that country; otherwise, these investigations will proceed according to statutory and regulatory time limits.
On April 10, 2013, the Department published
On September 20, 2013, the Department modified its regulation concerning the extension of time limits for submissions in AD and CVD proceedings.
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
This notice is issued and published pursuant to section 777(i) of the Act.
The merchandise subject to these investigations consists of non-oriented electrical steel (NOES), which includes cold-rolled, flat-rolled, alloy steel products, whether or not in coils, regardless of width, having an actual thickness of 0.20 mm or more, in which the core loss is substantially equal in any direction of magnetization in the plane of the material. The term “substantially equal” in the prior sentence means that the cross grain direction of core loss is no more than 1.5 times the straight grain direction (
NOES is subject to these investigations whether it is fully processed (fully annealed to develop final magnetic properties) or semi-processed (finished to final thickness and physical form but not fully annealed to develop final magnetic properties); whether or not it is coated (
NOES is sometimes referred to as cold-rolled non-oriented electrical steel (CRNO), non-grain oriented (NGO), non-oriented (NO), or cold-rolled non-grain oriented (CRNGO). These terms are interchangeable.
The subject merchandise is provided for in subheadings 7225.19.0000, 7226.19.1000, and 7226.19.9000 of the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may also be entered under subheadings 7225.50.8085, 7225.99.0090, 7226.92.5000, 7226.92.7050, 7226.92.8050, 7226.99.0180 of the HTSUS. Although HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope is dispositive.
International Trade Administration, Department of Commerce.
Notice.
The United States Department of Commerce, International Trade Administration, U.S. and Foreign Commercial Service is amending notice
Frank Spector, Office of Industry and Analysis, Trade Promotion Programs, Phone: 202–482–2054; Fax: 202–482–9000, Email:
The International Trade Administration will have a senior executive lead the Travel and Tourism Trade Mission to Taiwan, Japan and Korea, March 10–14, 2014, published at 78 FR 34344, June 7, 2013. As previously published, the notice did not specify that there would be a fee charged for each additional participant.
For these reasons, the Mission Description of the Notice of the Travel and Tourism Trade Mission to Taiwan, Japan and Korea is amended to read as follows:
After a company has been selected to participate in the mission, a payment to the Department of Commerce in the form of a participation fee is required.
This Trade Mission is organized as three separate segments (Taiwan, Korea and Japan). Companies may choose to participate in one, two or all three segments. The fee for participating in more than one segment is the sum of the individual segments.
For business-to-business meetings in Taiwan only (not traveling to an additional trade mission country), the participation fee will be $1,400 for a small or medium-sized enterprise (SME) and $1,625 for large firms.
For business-to-business meetings in Japan only (not traveling to an additional trade mission country), the participation fee will be $1,725 for a small or medium-sized enterprise (SME) and $1,925 for large firms.
For business-to-business meetings in Korea only (not traveling to an additional trade mission country), the participation fee will be $1,275 for a small or medium-sized enterprise (SME) and $1,475 for large firms.
The fee for each additional firm representative (SME or large) is $700. Expenses for travel, lodging, some meals, and incidentals will be the responsibility of each mission participant.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The Caribbean Fishery Management Council (Council) and its Administrative Committee will hold meetings.
The meetings will be held on December 11–12, 2013. The Council will convene on Wednesday, December 11, 2013, from 9 a.m. to 5 p.m., and the Administrative Committee will meet from 5:15 p.m. to 6 p.m. The Council will reconvene on Thursday, December 12, 2013, from 9 a.m. to 5 p.m.
The meetings will be held at the Wyndham Sugar Bay Resort and Spa, 6500 Estate Smith Bay, St. Thomas, USVI 00802.
Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico 00918, telephone: (787) 766–5926.
The Council will hold its 148th regular Council Meeting to discuss the items contained in the following agenda:
The established times for addressing items on the agenda may be adjusted as necessary to accommodate the timely completion of discussion relevant to the agenda items. To further accommodate discussion and completion of all items on the agenda, the meeting may be extended from, or completed prior to the date established in this notice.
The meetings are open to the public, and will be conducted in English. Fishers and other interested persons are invited to attend and participate with oral or written statements regarding agenda issues.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be subjects for formal action during these meetings. Actions will be restricted to those issues specifically identified in this notice, and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided that the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. For more information or request for sign language interpretation and/other auxiliary aids, please contact Mr. Miguel A. Rolón, Executive Director, Caribbean Fishery Management Council, 270 Muñoz Rivera Avenue, Suite 401, San Juan, Puerto Rico, 00918, telephone (787) 766–5926, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of permit.
Notice is hereby given that a permit has been issued to Wessley Merten, Marine Sciences Department, University of Puerto Rico, Mayagüez Campus, PO Box 9000, Mayagüez, PR 00682, to conduct commercial or educational photography of bottlenose dolphins (
The permit and related documents are available for review upon written request or by appointment in the following offices:
Rosa L. González or Carrie Hubard, (301) 427–8401.
On September 12, 2013, notice was published in the
Permit No. 18171 authorizes commercial/educational underwater and vessel-based filming and photography of marine mammals in waters off Puerto Rico. Footage will be used in two documentaries, one focused on offshore sport fishing in Puerto Rico and another one focused on Puerto Rico's marine mammal and marine mammal program (i.e., Department of Natural and Environmental Resources Marine Mammal Rescue Program). The first documentary will be presented at a film festival in Puerto Rico and distributed to schools and the public throughout Puerto Rico. A maximum of 210 bottlenose, 210 spinner, and 210 striped dolphins, 60 false killer and 60 killer whales, could be approached and filmed annually. Filming may occur year-round. The permit is valid through November 7, 2015.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; proposed incidental harassment authorization; request for comments.
NMFS has received an application from Tetra Tech EC, Inc. (Tetra Tech), on behalf of the Northeast Gateway® Energy Bridge
Comments and information must be received no later than December 18, 2013.
Comments should be addressed to P. Michael Payne, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910. The mailbox address for providing email comments on this action is
The Maritime Administration (MARAD) and U.S. Coast Guard (USCG) Final Environmental Impact Statement (Final EIS) on the Northeast Gateway Energy Bridge LNG Deepwater Port license application is available for viewing at
Shane Guan, Office of Protected Resources, NMFS, (301) 427–8401.
Sections 101(a)(5)(A)(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.”
Section 101(a)(5)(D) of the MMPA established an expedited process by which citizens of the U.S. can apply for a one-year authorization to incidentally take small numbers of marine mammals by harassment, provided that there is no potential for serious injury or mortality to result from the activity. Section 101(a)(5)(D) establishes a 45-day time limit for NMFS review of an application followed by a 30-day public notice and comment period on any proposed authorizations for the incidental harassment of marine mammals. Within 45 days of the close of the comment period, NMFS must either issue or deny the authorization.
On January 18, 2013, NMFS received an application from Excelerate Energy, L.P. (Excelerate) and Tetra Tech EC, Inc., on behalf of Northeast Gateway and Algonquin, for an authorization to take 14 species of marine mammals by Level B harassment incidental to operations, maintenance, and repair of an LNG port and the Pipeline Lateral facilities in Massachusetts Bay. They are: North Atlantic right whale, humpback whale, fin whale, sei whale, minke whale, long-finned pilot whale, Atlantic white-sided dolphin, bottlenose dolphin, short-beaked common dolphin, killer whale, Risso's dolphin, harbor porpoise, harbor seal, and gray seal. Since LNG Port and Pipeline Lateral operation, maintenance, and repair activities have the potential to take marine mammals, a marine mammal take authorization under the MMPA is warranted. NMFS previously issued an IHA to Northeast Gateway and Algonquin to allow for the incidental harassment of small numbers of marine mammals resulting from the construction and operation of the NEG Port and the Algonquin Pipeline Lateral (72 FR 27077; May 14, 2007). Subsequently, NMFS issued four one-year IHAs for the take of marine mammals incidental to the operation of the NEG Port activity pursuant to section 101(a)(5)(D) of the MMPA (73 FR 29485, May 21, 2008; 74 FR 45613, September 3, 2009; 75 FR 53672, September 1, 2010; and 76 FR 62778, October 11, 2011). The most recent IHA expired on October 6, 2012. Unlike the previous IHAs, which only covered incidental harassment during standard operations of the deepwater port, the new IHA application from Excelerate requests take coverage during standard operations, as well as during planned and unplanned maintenance and repair. Marine mammals could be affected by noise generated by operating the dynamic positioning system during the docking of LNG vessels at the NEG Port, and noises generated from maintenance and repair of the LNG Port and Pipeline Lateral facilities.
The Northeast Gateway Port is located in Massachusetts Bay and consists of a submerged buoy system to dock specially designed LNG carriers approximately 13 mi (21 km) offshore of Massachusetts in federal waters approximately 270 to 290 ft (82 to 88 m) in depth. This facility delivers regasified LNG to onshore markets via the Algonquin Pipeline Lateral (Pipeline Lateral). The Pipeline Lateral consists of a 16.1-mile (25.8-kilometer) long, 24-inch (61-centimeter) outside diameter natural gas pipeline which interconnects the Port to an offshore natural gas pipeline known as the HubLine.
The Northeast Gateway Port consists of two subsea Submerged Turret Loading
During NEG Port operations, EBRVs servicing the NEG Port would utilize the International Maritime Organization (IMO)-approved Boston Traffic Separation Scheme (TSS) to delivery LNG to the NEG Port facility. When an EBRV arrives at the NEG Port, it would retrieve one of the two permanently anchored submerged STL buoys. It would make final connection to the buoy through a series of engine and bow thruster actions. The EBRV would require the use of thrusters for dynamic positioning (DP) during docking procedure. Typically, the docking procedure is completed over a 10- to 30-minute period, with the thrusters activated as necessary for short periods (bursts in seconds). During this time period thrusters would be engaged in use for docking at the NEG Port approximately 10 to 30 minutes for each vessel arrival and departure. Once connected to the buoy, the EBRV would make ready to begin vaporizing the LNG into its natural gas state using the onboard regasification system. As the LNG is regasified, natural gas would be transferred at pipeline pressures off the EBRV through the STL buoy and flexible riser via a steel flowline leading to the connecting Algonquin Pipeline Lateral. When the LNG vessel is on the buoy, wind and current effects on the
According to NEG, it is estimated that the NEG Port could receive approximately 65 cargo deliveries a year, although none have been received since February 2010.
Detailed information on the operation activities can be found in the MARAD/USCG Final EIS on the Northeast Gateway Project (see
The specified design life of the NEG Port is about 40 years, with the exception of the anchors, mooring chain/rope, and riser/umbilical assemblies, which are based on a maintenance-free design life of 20 years. The buoy pick-up system components are considered consumable and are inspected following each buoy connection, and replaced (from inside the STL compartment during the normal cargo discharge period) as deemed necessary. The underwater components of the NEG Port are inspected once yearly in accordance with Classification Society Rules (American Bureau of Shipping) using either divers or remotely operated vehicles (ROV) to inspect and record the condition of the various STL system components. These activities are conducted using the NEG Port's normal support vessel (125-foot [38 meter], 99 gross ton, 2,700 horsepower, aluminum mono-hull vessel), and to the extent possible coincide with planned weekly visits to the NEG Port.
In addition to these routine activities, there may be instances whereby unanticipated events at the NEG Port necessitate emergency maintenance and/or repair activities. While the extent and number of such maintenance and repair activities at the NEG Port over its expected 25 year life cannot be accurately estimated, it is reasonable to assume that a worst-case maintenance and/or repair scenario would result in similar types of activities and require the use of similar support vessels and equipment as used for construction. There may also be certain unanticipated circumstances that require the presence of an EBRV at the NEG Port to support these maintenance and repair activities (e.g., maintenance and repair on the STL Buoy, vessel commissioning, and any onboard equipment malfunction or failure occurring while a vessel is present for cargo delivery). To assess the impact to marine mammals from the NEG port maintenance and repair, a 14-day maintenance period during one calendar is selected. This is based on evaluation of the potential marine mammal takes associated with similar maintenance and repair at the Neptune Port Facility in Massachusetts Bay, due to the fact that both the NEG and Neptune Ports are very similar in their potential need and type of maintenance and repair of port facilities.
The planned activities required for the operations and maintenance (O&M) of the Algonquin Pipeline Lateral and Flowlines over a 1-year period are limited. Similar to the inspection of the NEG Port underwater components, the only planned O&M activity is the annual inspection of the cathodic protection monitors by a ROV. The monitors are located at the ends of the Algonquin Pipeline Lateral and the adjacent Flowlines. Each inspection activity would take approximately 3 days and would utilize a ROV launched from a vessel of opportunity. The most likely vessel would be similar to the NEG Port's normal support vessel referenced earlier in the document. This vessel is self-positioning and requires no anchors or use of thrusters. The vessel would mobilize from Salem, Massachusetts, and would inspect the monitors in the vicinity of the NEG Port and at the point where the Algonquin Pipeline Lateral interconnects with Algonquin's HubLine. These activities would be performed during daylight hours and during periods of good weather.
Unplanned O&M activities may be required from time to time at a location along the Algonquin Pipeline Lateral or along one of the Flowlines should the line become damaged or malfunction. Repair activities requiring limited excavation to access the pipeline or cathodic protection maintenance are authorized by the FERC certificate.
Should repair work be required, it is likely a dive vessel would be the main vessel used to support the repair work. The type of diving spread and the corresponding vessel needed to support the spread would be dictated by the type of repair work required and the water depth at the work location. In addition, the type of vessel used may vary depending upon availability. The duration of an unplanned activity would also vary depending upon the repair work involved (e.g., repairing or replacing a section of the pipeline, connection, or valve) but can generally be assumed to take less than 40 work days to complete based on industry experience with underwater pipeline repairs.
A diving spread required to execute an unplanned activity might necessitate several vessels. Most likely the dive vessel would support a saturation diving spread and be moored at the work location using four anchors. Once secured at the work location, the dive vessel would remain on site through the completion of the work, weather permitting. A crew/supply boat would be utilized to intermittently provide labor and supply transfers. Once or twice during the work, a tug may be required to bring a material barge to and from the location. While unlikely, there is a small possibility that a second dive vessel would be required to support the main dive vessel, depending upon the work activity. The second dive vessel would be on-site for a shorter work duration. These vessels would be supported from an onshore base located between Quincy and Gloucester, Massachusetts.
The selection of a dive vessel would be driven by the technical requirements of the work. In addition, the degree of urgency required to address the work and the availability of vessels will also enter into the decision process for securing a dive vessel. It may be that a four-point moored dive vessel is either not available or doesn't meet the technical capabilities required by the work. It then becomes possible that a DP dive vessel may have to be utilized. The use of a DP dive vessel removes the need for an attendant tug to support the vessel since no anchors will be deployed. However, potential impacts related to noise are increased when a DP dive vessel is used. The noise generated by a DP dive vessel varies, and results from the use of the thrusters which run at various levels to maintain the vessel's position during the work depending upon currents, winds, waves and other forces acting on the vessel at the time of the work.
Marine mammal species that potentially occur in the vicinity of the Northeast Gateway facility include several species of cetaceans and pinnipeds:
Information on those species that may be affected by this activity is discussed in detail in the USCG Final EIS on the Northeast Gateway LNG proposal. Please refer to that document for more information on these species and potential impacts from construction and operation of this LNG facility. In addition, general information on these marine mammal species can also be found in Würsig
The highest abundance for humpback whales is distributed primarily along a relatively narrow corridor following the 100-m (328 ft) isobath across the southern Gulf of Maine from the northwestern slope of Georges Bank, south to the Great South Channel, and northward alongside Cape Cod to Stellwagen Bank and Jeffreys Ledge. The relative abundance of whales increases in the spring with the highest occurrence along the slope waters (between the 40- and 140-m, or 131- and 459-ft, isobaths) off Cape Cod and Davis Bank, Stellwagen Basin and Tillies Basin and between the 50- and 200-m (164- and 656-ft) isobaths along the inner slope of Georges Bank. High abundance is also estimated for the waters around Platts Bank. In the summer months, abundance increases markedly over the shallow waters (<50 m, or <164 ft) of Stellwagen Bank, the waters (100–200 m, or 328–656 ft) between Platts Bank and Jeffreys Ledge, the steep slopes (between the 30- and 160-m isobaths) of Phelps and Davis Bank north of the Great South Channel towards Cape Cod, and between the 50- and 100-m (164- and 328-ft) isobath for almost the entire length of the steeply sloping northern edge of Georges Bank. This general distribution pattern persists in all seasons except winter, when humpbacks remain at high abundance in only a few locations including Porpoise and Neddick Basins adjacent to Jeffreys Ledge, northern Stellwagen Bank and Tillies Basin, and the Great South Channel. The best estimate of abundance for Gulf of Maine, formerly western North Atlantic, humpback whales is 847 animals (Waring
Spatial patterns of habitat utilization by fin whales are very similar to those of humpback whales. Spring and summer high-use areas follow the 100-m (328 ft) isobath along the northern edge of Georges Bank (between the 50- and 200-m (164- and 656-ft) isobaths), and northward from the Great South Channel (between the 50- and 160-m, or 164- and 525-ft, isobaths). Waters around Cashes Ledge, Platts Bank, and Jeffreys Ledge are all high-use areas in the summer months. Stellwagen Bank is a high-use area for fin whales in all seasons, with highest abundance occurring over the southern Stellwagen Bank in the summer months. In fact, the southern portion of the Stellwagen Bank National Marine Sanctuary (SBNMS) is used more frequently than the northern portion in all months except winter, when high abundance is recorded over the northern tip of Stellwagen Bank. In addition to Stellwagen Bank, high abundance in winter is estimated for Jeffreys Ledge and the adjacent Porpoise Basin (100- to 160-m, 328- to 656-ft, isobaths), as well as Georges Basin and northern Georges Bank. The best estimate of abundance for the western North Atlantic stock of fin whales is 2,269 (Waring
Like other piscivorous baleen whales, highest abundance for minke whale is strongly associated with regions between the 50- and 100-m (164- and 328-ft) isobaths, but with a slightly stronger preference for the shallower waters along the slopes of Davis Bank, Phelps Bank, Great South Channel and Georges Shoals on Georges Bank. Minke whales are sighted in the SBNMS in all seasons, with highest abundance estimated for the shallow waters (approximately 40 m, or 131 ft) over southern Stellwagen Bank in the summer and fall months. Platts Bank, Cashes Ledge, Jeffreys Ledge, and the adjacent basins (Neddick, Porpoise and Scantium) also support high relative abundance. Very low densities of minke whales remain throughout most of the southern Gulf of Maine in winter. The best estimate of abundance for the Canadian East Coast stock, which occurs from the western half of the Davis Strait to the Gulf of Mexico, of minke whales is 3,312 animals (Waring
North Atlantic right whales are generally distributed widely across the southern Gulf of Maine in spring with highest abundance located over the deeper waters (100- to 160-m, or 328- to 525-ft, isobaths) on the northern edge of the Great South Channel and deep waters (100–300 m, 328–984 ft) parallel to the 100-m (328-ft) isobath of northern Georges Bank and Georges Basin. High abundance is also found in the shallowest waters (<30 m, or <98 ft) of Cape Cod Bay, over Platts Bank and around Cashes Ledge. Lower relative abundance is estimated over deep-water basins including Wilkinson Basin, Rodgers Basin and Franklin Basin. In the summer months, right whales move almost entirely away from the coast to deep waters over basins in the central Gulf of Maine (Wilkinson Basin, Cashes Basin between the 160- and 200-m, or 525- and 656-ft, isobaths) and north of Georges Bank (Rogers, Crowell and Georges Basins). Highest abundance is found north of the 100-m (328-ft) isobath at the Great South Channel and over the deep slope waters and basins along the northern edge of Georges Bank. The waters between Fippennies Ledge and Cashes Ledge are also estimated as high-use areas. In the fall months, right whales are sighted infrequently in the Gulf of Maine, with highest densities over Jeffreys Ledge and over deeper waters near Cashes Ledge and Wilkinson Basin. In winter, Cape Cod Bay, Scantum Basin, Jeffreys Ledge, and Cashes Ledge were the main high-use areas. Although SBNMS does not appear to support the highest abundance of right whales, sightings within SBNMS are reported for all four seasons, albeit at low relative abundance. Highest sighting within SBNMS occurred along the southern edge of the Bank.
The western North Atlantic population size was estimated to be at
The long-finned pilot whale is more generally found along the edge of the continental shelf (a depth of 330 to 3,300 ft, or 100 to 1,000 m), choosing areas of high relief or submerged banks in cold or temperate shoreline waters. This species is split between two subspecies: The Northern and Southern subspecies. The Southern subspecies is circumpolar with northern limits of Brazil and South Africa. The Northern subspecies, which could be encountered during operation of the NEG Port, ranges from North Carolina to Greenland (Reeves
In spring, summer and fall, Atlantic white-sided dolphins are widespread throughout the southern Gulf of Maine, with the high-use areas widely located either side of the 100-m (328-ft) isobath along the northern edge of Georges Bank, and north from the Great South Channel to Stellwagen Bank, Jeffreys Ledge, Platts Bank and Cashes Ledge. In spring, high-use areas exist in the Great South Channel, northern Georges Bank, the steeply sloping edge of Davis Bank and Cape Cod, southern Stellwagen Bank and the waters between Jeffreys Ledge and Platts Bank. In summer, there is a shift and expansion of habitat toward the east and northeast. High-use areas are identified along most of the northern edge of Georges Bank between the 50- and 200-m (164- and 656-ft) isobaths and northward from the Great South Channel along the slopes of Davis Bank and Cape Cod. High numbers of sightings are also recorded over Truxton Swell, Wilkinson Basin, Cashes Ledge and the bathymetrically complex area northeast of Platts Bank. High numbers of sightings of white-sided dolphin are recorded within SBNMS in all seasons, with highest density in summer and most widespread distributions in spring located mainly over the southern end of Stellwagen Bank. In winter, high numbers of sightings are recorded at the northern tip of Stellwagen Bank and Tillies Basin.
A comparison of spatial distribution patterns for all baleen whales (Mysticeti) and all porpoises and dolphins combined show that both groups have very similar spatial patterns of high- and low-use areas. The baleen whales, whether piscivorous or planktivorous, are more concentrated than the dolphins and porpoises. They utilize a corridor that extended broadly along the most linear and steeply sloping edges in the southern Gulf of Maine indicated broadly by the 100 m (328 ft) isobath. Stellwagen Bank and Jeffreys Ledge support a high abundance of baleen whales throughout the year. Species richness maps indicate that high-use areas for individual whales and dolphin species co-occur, resulting in similar patterns of species richness primarily along the southern portion of the 100-m (328-ft) isobath extending northeast and northwest from the Great South Channel. The southern edge of Stellwagen Bank and the waters around the northern tip of Cape Cod are also highlighted as supporting high cetacean species richness. Intermediate to high numbers of species are also calculated for the waters surrounding Jeffreys Ledge, the entire Stellwagen Bank, Platts Bank, Fippennies Ledge and Cashes Ledge. The best estimate of abundance for the western North Atlantic stock of white-sided dolphins is 63,368 (Waring
Although these five species are some of the most widely distributed small cetacean species in the world (Jefferson
In the U.S. waters of the western North Atlantic, both harbor and gray seals are usually found from the coast of Maine south to southern New England and New York (Waring
Along the southern New England and New York coasts, harbor seals occur seasonally from September through late May (Schneider and Payne, 1983). In recent years, their seasonal interval along the southern New England to New Jersey coasts has increased (deHart, 2002). In U.S. waters, harbor seal breeding and pupping normally occur in waters north of the New Hampshire/Maine border, although breeding has occurred as far south as Cape Cod in the early part of the 20th century (Temte
Although gray seals are often seen off the coast from New England to Labrador, within the U.S. waters, only small numbers of gray seals have been observed pupping on several isolated islands along the Maine coast and in Nantucket-Vineyard Sound, Massachusetts (Katona
The proposed NEG LNG port operations and maintenance and repair activities could adversely affect marine mammal species and stocks by exposing them to elevated noise levels in the vicinity of the activity area.
Marine mammals exposed to high intensity sound repeatedly or for prolonged periods can experience hearing threshold shift (TS), which is the loss of hearing sensitivity at certain frequency ranges (Kastak
In addition, chronic exposure to excessive, though not high-intensity, noise could cause masking at particular frequencies for marine mammals that utilize sound for vital biological functions (Clark
Masking occurs at the frequency band which the animals utilize. Therefore, since noise generated from in-water vibratory pile driving and removal is mostly concentrated at low frequency ranges, it may have less effect on high frequency echolocation sounds by odontocetes (toothed whales). However, lower frequency man-made noises are more likely to affect detection of communication calls and other potentially important natural sounds such as surf and prey noise. It may also affect communication signals when they occur near the noise band and thus reduce the communication space of animals (e.g., Clark
Unlike TS, masking can potentially affect the species at population, community, or even ecosystem levels, as well as individual levels. Masking affects both senders and receivers of the signals and could have long-term chronic effects on marine mammal species and populations. Recent science suggests that low frequency ambient sound levels have increased by as much as 20 dB (more than 3 times in terms of SPL) in the world's ocean from pre-industrial periods, and most of these increases are from distant shipping (Hildebrand 2009). All anthropogenic noise sources, such as those from vessel traffic, vessel docking and stationing while operating dynamic positioning (DP) thrusters, dredging and pipe laying associated with LNG Port and Pipeline Lateral maintenance and repair, and LNG regasification activities, contribute to the elevated ambient noise levels, thus increasing potential for or severity of masking.
Finally, exposure of marine mammals to certain sounds could lead to behavioral disturbance (Richardson
The biological significance of many of these behavioral disturbances is difficult to predict, especially if the detected disturbances appear minor. However, the consequences of behavioral modification are expected to be biologically significant if the change affects growth, survival, and/or reproduction.
The onset of behavioral disturbance from anthropogenic noise depends on both external factors (characteristics of noise sources and their paths) and the receiving animals (hearing, motivation, experience, demography) and is also difficult to predict (Southall
Northeast Gateway contracted with Tetra Tech EC, Inc. (Tetra Tech) to perform field investigations to document various underwater noise levels emitted during the construction of the NEG Port and Algonquin Pipeline Lateral and during the operation of NEG Port facilities (namely the operation of EBRVs). Tetra Tech conducted five offshore hydroacoustic field programs: One in 2005 and one in 2006 at the Gulf Gateway Deepwater Port located approximately 116 miles off the coast of Louisiana in the Gulf of Mexico; and three in 2007 at the NEG Port and Algonquin Pipeline Lateral Project area. The 2005 measurements were completed to determine underwater noise levels during EBRV onboard regasification and vessel movements. The data from the 2005 field program was used to support the modeling and analysis of potential acoustic effects of EBRV operations in Massachusetts Bay during the NEG Port permitting and licensing process. The data collected in 2006 was also associated with EBRV operation activities and were collected for the purpose of verifying the measurement completed in 2005 as well as to further document sound levels
A detailed report describing both the 2006 and 2007 operation and construction noise measurement events and associated results have been included as Appendix B of the IHA application. The following sections describe those activities that could result in Level B harassment as they relate to NEG Port and Algonquin O&M activities.
For the purposes of understanding the noise footprint of operations at the NEG Port, measurements taken to capture operational noise (docking, undocking, regasification, and EBRV thruster use) during the 2006 Gulf of Mexico field event were taken at the source. Measurements taken during EBRV transit were normalized to a distance of 328 feet (100 meters) to serve as a basis for modeling sound propagation at the NEG Port site in Massachusetts Bay.
Sound propagation calculations for operational activities were then completed at two positions in Massachusetts Bay to determine site-specific distances to the 120/160/180 dB re 1 µPa isopleths: At LNG Port (EBRV Operations) and at Boston TSS (EBRV Transit).
At each of these locations sound propagation calculations were performed to determine the noise footprint of the operation activity at each of the specified locations. Calculations were performed in accordance with Marsh and Schulkin (1985) and Richardson et al (1995) and took into consideration aspects of water depth, sea state, bathymetry, and seabed composition. In addition, the acoustic modeling performed specifically evaluated sound energy in 1/3-octave spectral bands covering frequencies from 12.5 hertz (Hz) to 20 kilohertz (kHz). This range encompasses the auditory frequency range of marine mammals and the range at which sound propagates beyond the immediate vicinity of the source (i.e., high frequency sounds have a much higher attenuation rate than frequencies in the low to middle range due to a higher absorption rate by seawater and boundary effects). These results were then summed across frequencies to provide the broadband received levels at receptor locations. A literature review of relevant underwater noise measurement data of offshore construction activities in similar shallow water environments were referred to for estimating typical propagation rates. Relevant here, the resulting distances to the 120 dB isopleth (180 dB re 1 µPa does not exist) was estimated to determine the maximum distance at which Level B harassment may occur.
To further understand how NEG Port activities may result in underwater noise that could harass marine mammals, Northeast Gateway has engaged scientists from Cornell University's Bioacoustics Research Program (BRP) and the Woods Hole Oceanographic Institution (WHOI) as the consultants for collecting and analyzing the acoustic data throughout the project area (see sections 13.0 and 14.0 of the IHA application). Elevated underwater sound levels within Massachusetts Bay due to this existing vessel traffic and other Bay activities may effectively mask sound generated during Port activities. Sound levels recorded by marine autonomous recording units (MARUs) within frequency bands for marine mammals have been reported to include whales, other biotic and abiotic sound sources and ambient noise that could be occurring at the time (BRP 2011).
As stated in earlier in the document, routine inspections of NEG Port mooring components occur after each buoy connection from the Port's normal support vessel. Inspections of other Port facility components such as the STL Buoy, flexible riser, mooring system, pipeline end manifold (PLEM) are conducted annually by a ROV and/or diver launched from a vessel of opportunity.
In addition to these routine activities, there may be instances whereby unanticipated events at the NEG Port necessitate emergency maintenance and/or repair activities. While the extent and number of such maintenance and repair activities at the NEG Port over its expected 25 year life cannot be accurately estimated, it is reasonable to assume that a worst-case maintenance and/or repair scenario would result in similar types of activities and require the use of similar support vessels and equipment as used for construction.
Modeling analysis conducted by TetraTech concluded that the only underwater noise of critical concern during NEG Port construction would be from vessel noises such as turning screws, engine noise, noise of operating machinery, and thruster use. To confirm these modeled results and better understand the noise footprint associated with construction activities at the NEG Port, field measurements were taken of various construction activities during the 2007 NEG Port and Algonquin Pipeline Lateral Construction period. Measurements were taken to establish the “loudest” potential construction measurement event. The location at the LNG Port was used to determine site-specific distances to the 120/180 dB re 1 µPa isopleths for NEG Port maintenance and repair activities.
As described for NEG Port operations, sound propagation calculations were performed to determine the noise footprint of the construction activity. The calculations took into consideration aspects of water depth, sea state, bathymetry, and seabed composition, and specifically evaluated sound energy in the range that encompasses the auditory frequencies of marine mammals and at which sound propagates beyond the immediate vicinity of the source. These results were then summed across frequencies to provide the broadband received levels at receptor locations. The resulting distances to the 120 dB isopleth (180 dB re 1 µPa does not exist) was estimated to determine the maximum distance at which Level B harassment may occur (Table 1).
As discussed earlier in the document, routine inspections of the Algonquin Pipeline Lateral are conducted annually by a ROV launched from a vessel of opportunity. Planned O&M activity is the annual inspection of the cathodic protection monitors by a ROV. The monitors are located at the ends of the Algonquin Pipeline Lateral and the adjacent Flowlines. Each inspection activity will take approximately 3 days and will utilize a ROV launched from a vessel of opportunity. The most likely vessel will be similar to the NEG Port's normal support vessel.
In addition to these routine activities, there may be instances whereby unanticipated events at the NEG Port and Algonquin Pipeline Lateral necessitate emergency maintenance and/or repair activities. While the extent
Modeling analysis conducted in support of the final EIS/EIR concluded that the only underwater noise of critical concern during NEG Port and Algonquin Pipeline Lateral construction would be from vessel noises such as turning screws, engine noise, noise of operating machinery, and thruster use. As with construction noise at the NEG Port, to confirm modeled results and better understand the noise footprint associated with construction activities along the Algonquin Pipeline Lateral, field measurements were taken of various construction activities during the 2007 NEG Port and Algonquin Pipeline Lateral Construction period. Again, measurements were taken to establish the “loudest” potential construction measurement event. Two positions within Massachusetts Bay were then used to determine site-specific distances to the 120/180 dB re 1 µPa isopleths: at PLEM and at Mid-Pipeline.
As described for NEG Port operations and maintenance and repair, at each location sound propagation calculations were performed to determine the noise footprint of the construction activity at each of the specified locations. The resulting distances to the 120 dB isopleth (180 dB re 1 µPa does not exist) was estimated to determine the maximum distance at which Level B harassment may occur (Table 1).
Operation of the NEG Port will not result in short-term effects; however, long-term effects on the marine environment, including alteration of the seafloor conditions, continued disturbance of the seafloor, regular withdrawal of sea water, and regular generation of underwater noise, will result from Port operations. Specifically, a small area (0.14 acre) along the Pipeline Lateral has been permanently altered (armored) at two cable crossings. In addition, the structures associated with the NEG Port (flowlines, mooring wire rope and chain, suction anchors, and pipeline end manifolds) occupy 4.8 acres of seafloor. An additional area of the seafloor of up to 43 acres (worst case scenario based on severe 100-year storm with EBRVs occupying both STL buoys) will be subject to disturbance due to chain sweep while the buoys are occupied. Given the relatively small size of the NEG Port area that will be directly affected by Port operations, NMFS does not anticipate that habitat loss will be significant.
EBRVs are currently authorized to withdraw an average of 4.97 million gallons per day (mgd) and 2.6 billion gallons per year of sea water for general ship operations during it cargo delivery activities at the NEG Port. However, during the operations of the NEG Port facility, it was revealed that significantly more water usage is needed from what was originally evaluated in the final USCG Environmental Impact Statement/Environmental Impact Report (EIS/EIR). The updates for the needed water intake and discharge temperature are:
• 11 billion gallons of total annual water use at the Port;
• Maximum daily intake volume of up to 56 mgd at a rate of 0.45 feet per second when an EBRV is not able to achieve the heat recovery system (HRS: It is the capability of reducing water use during the regasification process) mode of operation; and,
• Maximum daily change in discharge temperature of 12 °C (21.6 °F) from ambient from the vessel's main condenser cooling system.
Under the requested water-use scenario, Tech Tech (2011) conducted an environmental analysis on the potential impacts to marine mammals and their prey. To evaluate impacts to phytoplankton under the increased water usage, the biomass of phytoplankton lost from the Massachusetts Bay ecosystem was estimated based on the method presented in the final EIS/EIR. Phytoplankton densities of 65,000 to 390,000 cells/gallon were multiplied by the annual planned activities of withdrawal rate of 11 billion gallons to estimate a loss of 7.15 × 10
In addition, zooplankton losses will also increase proportionally to the increase in water withdrawn. The final EIS/EIR used densities of zooplankton determined by the sampling conducted by the Massachusetts Water Resource Authority (MWRA) to characterize the area around its offshore outfall and assumed a mean zooplankton density of 34.9 × 10
Finally, ichthyoplankton (fish eggs and larvae) losses and equivalent age one juvenile fish estimates under the proposed activity were made based on actual monthly ichthyoplankton data collected in the port area from October 2005 through December 2009 and the proposed activity withdrawal volume of 11 billion gallons per year evenly distributed among months (0.92 billion gallons per month) as a worst-case scenario, representing the maximum number of Port deliveries during any given month. Similarly, the lower, upper, and mean annual entrainment estimates are based on the lower and upper 95 percent confidence limits, of the monthly mean ichthyoplankton densities, and the monthly mean estimates multiplied by the monthly withdrawal rate of 0.92 billion gallons per month. At this withdrawal rate approximately 106 million eggs and 67 million larvae are estimated to be lost (see Table 4.2–2 of the IHA application). The most abundant species and life stages estimated to be entrained under the proposed activity are cunner post yolk-sac larvae (33.3 million), yellowtail flounder/
These estimated losses are not significant given the very high natural mortality of ichthyoplankton. This comparison was done in the final EIS/EIR where ichthyoplankton losses based on historic regional ichthyoplankton densities and a withdrawal rate of approximately 2.6 billion gallons per year were represented by the equivalent number of age one fish. Under the final EIS/EIR withdrawal scenario, equivalent age one losses due to entrainment ranged from 1 haddock to 43,431 sand lance (Tetra Tech 2010). Equivalent age one losses under the conditions when no NEG Port operation occurrence were recalculated using Northeast Gateway monitoring data in order to facilitate comparisons between the permitted scenario. Using Northeast Gateway monitoring data, withdrawal of 2.6 billion gallons per year would result in equivalent age one losses ranging from less than 1 haddock to 5,602 American sand lance. By comparison, equivalent age one losses under the proposed activity withdrawal rate of 11 billion gallons per year ranged from less than 1 haddock to 23,701 sand lance and were generally similar to or less than those in the final EIS/EIR. Substantially more equivalent age one Atlantic herring, pollock, and butterfish were estimated to be lost under the final EIS/EIR at a withdrawal rate of 2.6 billion gallons per year, while substantially more equivalent age one Atlantic cod, silver hake and hake species, cunner, and Atlantic mackerel are estimated to be lost under the proposed activity.
Although no reliable annual food consumption rates of baleen whales are available for comparison, based on the calculated quantities of phytoplankton, zooplankton, and ichthyoplankton removal analyzed above, it is reasonable to conclude that baleen whale predation rates would dwarf any reasonable estimates of prey removals by NEG Port operations. Therefore, NMFS believes that the prey removals by NEG Port operations resulting from water usage will have negligible impacts on marine mammal habitat.
As stated earlier, NEG LNG Port will require scheduled maintenance inspections using either divers or ROVs. The duration of these inspections are not anticipated to be more than two 8-hour working days. An EBRV will not be required to support these annual inspections. Water usage during the LNG Port maintenance would be limited to the standard requirements of NEG's normal support vessel. As with all vessels operating in Massachusetts Bay, sea water uptake and discharge is required to support engine cooling, typically using a once-through system. The rate of seawater uptake varies with the ship's horsepower and activity and therefore will differ between vessels and activity type. For example, the
Certain maintenance and repair activities may also require the presence of an EBRV at the Port. Such instances may include maintenance and repair on the STL Buoy, vessel commissioning, and any onboard equipment malfunction or failure occurring while a vessel is present for cargo delivery. Because the requested water-use scenario allows for daily water use of up to 56 mgd to support standard EBRV requirements when not operating in the HRS mode, vessels would be able to remain at the Port as necessary to support all such maintenance and repair scenarios. Therefore, NMFS considers that NEG Port maintenance and repair
As stated earlier, proper care and maintenance of the Algonquin Pipeline Lateral should minimize the likelihood of an unanticipated maintenance and/or repair event; however, unanticipated activities may occur from time to time if facility components become damaged or malfunction. Unanticipated repairs may range from relatively minor activities requiring minimal equipment and one or two diver/ROV support vessels to major activities requiring larger construction-type vessels similar to those used to support the construction and installation of the facility.
Major repair activities, although unlikely, may include repairing or replacement of pipeline manifolds or a sections of the Pipeline Lateral. This type of work would likely require the use of large specialty construction vessels such as those used during the construction and installation of the NEG Port and Algonquin Pipeline Lateral. The duration of a major unplanned activity would depend upon the type of repair work involved and would require careful planning and coordination.
Turbidity would likely be a potential effect of Algonquin Pipeline Lateral maintenance and repair activities on listed species. In addition, the possible removal of benthic or planktonic species, resulting from relatively minor construction vessel water use requirements, as measured in comparison to EBRV water use, is unlikely to affect in a measurable way the food sources available to marine mammals. Therefore, NMFS considers that Algonquin Pipeline Lateral maintenance and repair would have negligible impacts to marine mammal habitat in the proposed activity area.
In order to issue an incidental take authorization under Section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable adverse impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses.
For the proposed NEG LNG Port operations and maintenance and repair activities, Excelerate and Tetra Tech worked with NMFS and proposed the following mitigation measures to minimize the potential impacts to marine mammals in the project vicinity as a result of the LNG Port and Algonquin Pipeline Lateral operations and maintenance and repair activities. The primary purpose of these proposed mitigation measures is to ensure that no marine mammal would be injured or killed by vessels transiting the LNG Port facility, and to minimize the intensity of noise exposure of marine mammals in the activity area. For the proposed NEG Port and Algonquin Pipeline Lateral operations and maintenance and repair, the following mitigation measures are proposed.
(i) All vessels shall utilize the International Maritime Organization (IMO)-approved Boston Traffic Separation Scheme (TSS) on their approach to and departure from the NEG Port and/or the repair/maintenance area at the earliest practicable point of transit in order to avoid the risk of whale strikes.
(ii) Upon entering the TSS and areas where North Atlantic right whales are known to occur, including the Great South Channel Seasonal Management Area (GSC–SMA) and the SBNMS, the EBRV shall go into “Heightened Awareness” as described below.
(A) Prior to entering and navigating the modified TSS the Master of the vessel shall:
(I) Consult Navigational Telex (NAVTEX), NOAA Weather Radio, the NOAA Right Whale Sighting Advisory System (SAS) or other means to obtain current right whale sighting information as well as the most recent Cornell acoustic monitoring buoy data for the potential presence of marine mammals;
(II) Post a look-out to visually monitor for the presence of marine mammals;
(III) Provide the US Coast Guard (USCG) required 96-hour notification of an arriving EBRV to allow the NEG Port Manager to notify Cornell of vessel arrival.
(B) The look-out shall concentrate his/her observation efforts within the 2-mile radius zone of influence (ZOI) from the maneuvering EBRV.
(C) If marine mammal detection was reported by NAVTEX, NOAA Weather Radio, SAS and/or an acoustic monitoring buoy, the look-out shall concentrate visual monitoring efforts towards the areas of the most recent detection.
(D) If the look-out (or any other member of the crew) visually detects a marine mammal within the 2-mile radius ZOI of a maneuvering EBRV, he/she will take the following actions:
(I) The Officer-of-the-Watch shall be notified immediately; who shall then relay the sighting information to the Master of the vessel to ensure action(s) can be taken to avoid physical contact with marine mammals.
(II) The sighting shall be recorded in the sighting log by the designated look-out.
(iii) In accordance with 50 CFR 224.103(c), all vessels associated with NEG Port and Pipeline Lateral activities shall not approach closer than 500 yards (460 m) to a North Atlantic right whale and 100 yards (91 m) to other whales to the extent physically feasible given navigational constraints. In addition, when approaching and departing the project area, vessels shall be operated so as to remain at least 1 km away from any visually-detected North Atlantic right whales.
(iv) In response to active right whale sightings and active acoustic detections, and taking into account exceptional circumstances, EBRVs, repair and maintenance vessels shall take appropriate actions to minimize the risk of striking whales. Specifically vessels shall:
(A) Respond to active right whale sightings and/or DMAs reported on the Mandatory Ship Reporting (MSR) or SAS by concentrating monitoring efforts towards the area of most recent detection and reducing speed to 10 knots or less if the vessel is within the boundaries of a DMA (50 CFR 224.105) or within the circular area centered on an area 8 nm in radius from a sighting location;
(B) Respond to active acoustic detections by concentrating monitoring efforts towards the area of most recent detection and reducing speed to 10 knots or less within an area 5 nm in radius centered on the detecting AB; and
(C) Respond to additional sightings made by the designated look-outs within a 2-mile radius of the vessel by slowing the vessel to 10 knots or less and concentrating monitoring efforts towards the area of most recent sighting.
(v) All vessels operated under NEG and Algonquin must follow the established specific speed restrictions when calling at the NEG Port. The specific speed restrictions required for all vessels (i.e., EBRVs and vessels associated with maintenance and repair) consist of the following:
(A) Vessels shall reduce their maximum transit speed while in the TSS from 12 knots or less to 10 knots or less from March 1 to April 30 in all waters bounded by straight lines
(B) Vessels shall reduce their maximum transit speed while in the TSS to 10 knots or less unless an emergency situation dictates for an alternate speed from April 1 to July 31 in all waters bounded by straight lines connecting the following points in the order stated below. This area shall hereafter be referred to as the GSC–SMA and tracks NMFS regulations at 50 CFR 224.105:
(C) Vessels are not expected to transit the Cape Cod Bay or the Cape Cod Canal; however, in the event that transit through the Cape Cod Bay or the Cape Cod Canal is required, vessels shall reduce maximum transit speed to 10 knots or less from January 1 to May 15 in all waters in Cape Cod Bay, extending to all shorelines of Cape Cod Bay, with a northern boundary of 42°12′ N latitude and the Cape Cod Canal. This area shall hereafter be referred to as the Cape Cod Bay Seasonal Management Area (CCB–SMA).
(D) All Vessels transiting to and from the project area shall report their activities to the mandatory reporting Section of the USCG to remain apprised of North Atlantic right whale movements within the area. All vessels entering and exiting the MSRA shall report their activities to WHALESNORTH. Vessel operators shall contact the USCG by standard procedures promulgated through the Notice to Mariner system.
(E) All Vessels greater than or equal to 300 gross tons (GT) shall maintain a speed of 10 knots or less, unless an emergency situation requires speeds greater than 10 knots.
(F) All Vessels less than 300 GT traveling between the shore and the project area that are not generally restricted to 10 knots will contact the Mandatory Ship Reporting (MSR) system, the USCG, or the project site before leaving shore for reports of active DMAs and/or recent right whale sightings and, consistent with navigation safety, restrict speeds to 10 knots or less within 5 miles (8 kilometers) of any sighting location, when traveling in any of the seasonal management areas (SMAs) or when traveling in any active dynamic management area (DMA).
(b) NEG Port-Specific Operations
(i) In addition to the general marine mammal avoidance requirements identified in (5)(a) above, vessels calling on the NEG Port must comply with the following additional requirements:
(A) EBRVs shall travel at 10 knots maximum speed when transiting to/from the TSS or to/from the NEG Port/Pipeline Lateral area. For EBRVs, at 1.86 miles (3 km) from the NEG Port, speed will be reduced to 3 knots and to less than 1 knot at 1,640 ft (500 m) from the NEG buoys, unless an emergency situation dictates the need for an alternate speed.
(B) EBRVs that are approaching or departing from the NEG Port and are within the ATBA5 surrounding the NEG Port, shall remain at least 1 km away from any visually-detected North Atlantic right whale and at least 100 yards (91 m) away from all other visually-detected whales unless an emergency situation requires that the vessel stay its course. During EBRV maneuvering, the Vessel Master shall designate at least one look-out to be exclusively and continuously monitoring for the presence of marine mammals at all times while the EBRV is approaching or departing from the NEG Port.
(C) During NEG Port operations, in the event that a whale is visually observed within 1 km of the NEG Port or a confirmed acoustic detection is reported on either of the two ABs closest to the NEG Port (western-most in the TSS array), departing EBRVs shall delay their departure from the NEG Port, unless an emergency situation requires that departure is not delayed. This departure delay shall continue until either the observed whale has been visually (during daylight hours) confirmed as more than 1 km from the NEG Port or 30 minutes have passed without another confirmed detection either acoustically within the acoustic detection range of the two ABs closest to the NEG Port, or visually within 1 km from the NEG Port.
(ii) Vessel captains shall focus on reducing dynamic positioning (DP) thruster power to the maximum extent practicable, taking into account vessel and Port safety, during the operation activities. Vessel captains will shut down thrusters whenever they are not needed.
(c) Planned and Unplanned Maintenance and Repair Activities
(i) NEG Port
(A) The Northeast Gateway shall conduct empirical source level measurements on all noise emitting construction equipment and all vessels that are involved in maintenance/repair work.
(B) If dynamic positioning (DP) systems are employed and/or activities will emit noise with a source level of 139 dB re 1 μPa at 1 m or greater, activities shall be conducted in accordance with the requirements for DP systems listed in (b)(ii) above.
(C) Northeast Gateway shall provide the NMFS Headquarters Office of the Protected Resources, NMFS Northeast Region Ship Strike Coordinator, and SBNMS with a minimum of 30 days notice prior to any planned repair and/or maintenance activity. For any unplanned/emergency repair/maintenance activity, Northeast Gateway shall notify the agencies as soon as it determines that repair work must be conducted. Northeast Gateway shall continue to keep the agencies apprised of repair work plans as further details (e.g., the time, location, and nature of the repair) become available. A final notification shall be provided to agencies 72 hours prior to crews being deployed into the field.
(ii) Pipeline Lateral
(A) Pipeline maintenance/repair vessels less than 300 GT traveling between the shore and the maintenance/repair area that are not generally restricted to 10 knots shall contact the MSR system, the USCG, or the project site before leaving shore for reports of active DMAs and/or recent right whale sightings and, consistent with navigation safety, restrict speeds to 10 knots or less within 5 miles (8 km) of any sighting location, when travelling in any of the seasonal management areas (SMAs) as defined above.
(B) Maintenance/repair vessels greater than 300 GT shall not exceed 10 knots, unless an emergency situation that requires speeds greater than 10 knots.
(C) Planned maintenance and repair activities shall be restricted to the period between May 1 and November 30.
(D) Unplanned/emergency maintenance and repair activities shall be conducted utilizing anchor-moored dive vessel whenever operationally possible.
(E) Algonquin shall also provide the NMFS Office of the Protected Resources, NMFS Northeast Region Ship Strike Coordinator, and Stellwagen Bank National Marine Sanctuary (SBNMS) with a minimum of 30-day notice prior to any planned repair and/or maintenance activity. For any unplanned/emergency repair/
(F) If dynamic positioning (DP) systems are to be employed and/or activities will emit noise with a source level of 139 dB re 1 μPa at 1 m or greater, activities shall be conducted in accordance with the requirements for DP systems listed in (b)(ii) above.
(G) In the event that a whale is visually observed within 0.5 mile (0.8 kilometers) of a repair or maintenance vessel, the vessel superintendent or on-deck supervisor shall be notified immediately. The vessel's crew shall be put on a heightened state of alert and the marine mammal shall be monitored constantly to determine if it is moving toward the repair or maintenance area.
(H) Repair/maintenance vessel(s) must cease any movement and/or cease all activities that emit noises with source level of 139 dB re 1 μPa @ 1 m or higher when a right whale is sighted within or approaching at 500 yd (457 m) from the vessel. Repair and maintenance work may resume after the marine mammal is positively reconfirmed outside the established zones (500 yd [457 m]) or 30 minutes have passed without a redetection. Any vessels transiting the maintenance area, such as barges or tugs, must also maintain these separation distances.
(I) Repair/maintenance vessel(s) must cease any movement and/or cease all activities that emit noises with source level of 139 dB re 1 μPa @ 1 m or higher when a marine mammal other than a right whale is sighted within or approaching at 100 yd (91 m) from the vessel. Repair and maintenance work may resume after the marine mammal is positively reconfirmed outside the established zones (100 yd [91 m]) or 30 minutes have passed without a redetection. Any vessels transiting the maintenance area, such as barges or tugs, must also maintain these separation distances.
(J) Algonquin and associated contractors shall also comply with the following:
(I) Operations involving equipment with sound source levels exceeding 139 dB re 1μPa @ 1 m shall “ramp-up” sound sources, allowing whales a chance to leave the area before sounds reach maximum levels. In addition, Northeast Gateway, Algonquin, and other associated contractors shall maintain equipment to manufacturers' specifications, including any sound-muffling devices or engine covers in order to minimize noise effects. Noisy construction equipment shall only be used as needed and equipment shall be turned off when not in operation.
(II) Any material that has the potential to entangle marine mammals (e.g., anchor lines, cables, rope or other construction debris) shall only be deployed as needed and measures shall be taken to minimize the chance of entanglement.
(III) For any material mentioned above that has the potential to entangle marine mammals, such material shall be removed from the water immediately unless such action jeopardizes the safety of the vessel and crew as determined by the Captain of the vessel.
(IV) In the event that a marine mammal becomes entangled, the marine mammal coordinator and/or PSO will notify NMFS (if outside the SBNMS), and SBNMS staff (if inside the SBNMS) immediately so that a rescue effort may be initiated.
(K) All maintenance/repair activities shall be scheduled to occur between May 1 and November 30; however, in the event of unplanned/emergency repair work that cannot be scheduled during the preferred May through November work window, the following additional measures shall be followed for Pipeline Lateral maintenance and repair related activities between December and April:
(I) Between December 1 and April 30, if on-board PSOs do not have at least 0.5-mile visibility, they shall call for a shutdown. At the time of shutdown, the use of thrusters must be minimized. If there are potential safety problems due to the shutdown, the captain will decide what operations can safely be shut down.
(II) Prior to leaving the dock to begin transit, the barge shall contact one of the PSOs on watch to receive an update of sightings within the visual observation area. If the PSO has observed a North Atlantic right whale within 30 minutes of the transit start, the vessel shall hold for 30 minutes and again get a clearance to leave from the PSOs on board. PSOs shall assess whale activity and visual observation ability at the time of the transit request to clear the barge for release.
(III) Transit route, destination, sea conditions and any marine mammal sightings/mitigation actions during watch shall be recorded in the log book. Any whale sightings within 1,000 m of the vessel shall result in a high alert and slow speed of 4 knots or less and a sighting within 750 m shall result in idle speed and/or ceasing all movement.
(IV) The material barges and tugs used in repair and maintenance shall transit from the operations dock to the work sites during daylight hours when possible provided the safety of the vessels is not compromised. Should transit at night be required, the maximum speed of the tug shall be 5 knots.
(V) All repair vessels must maintain a speed of 10 knots or less during daylight hours. All vessels shall operate at 5 knots or less at all times within 5 km of the repair area.
(i) Vessels associated with maintaining the acoustic seafloor array of Marine Autonomous Recording Units (MARUs) and the AB network operating as part of the mitigation/monitoring protocols shall adhere to the following speed restrictions and marine mammal monitoring requirements.
(A) Vessels maintaining the MARU array that are greater than 300 gross tons (GT) shall not exceed 10 knots.
(B) Vessels maintaining the MARU array that are less than 300 GT shall not exceed 15 knots at any time, but shall adhere to speeds of 10 knots or less in the following areas and seasons:
(I) In the ORP–SMA between March 1 and April 30; and
(II) In the CCB–SMA between January 1 and May 15.
(C) In accordance with 50 CFR 224.103 (c), all vessels associated with NEG Port activities shall not approach closer than 500 yards (460 meters) to a North Atlantic right whale.
(D) All vessels shall obtain the latest DMA or right whale sighting information via the NAVTEX, MSR, SAS, NOAA Weather Radio, or other available means prior to operations to determine if there are right whales present in the operational area.
NMFS has carefully evaluated the proposed mitigation measures in the context of ensuring that NMFS prescribes the means of effecting the least practicable impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another:
• The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals;
• The proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and
• The practicability of the measure for applicant implementation.
Based on our evaluation of the applicant's proposed measures, NMFS has preliminarily determined that the proposed mitigation measures provide the means of effecting the least practicable impact on marine mammal species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an ITA 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 ITAs must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area.
(i) Vessel-Based monitoring for marine mammals shall be done by trained look-outs during NEG LNG Port and Pipeline Lateral operations and maintenance and repair activities. The observers shall monitor the occurrence of marine mammals near the vessels during LNG Port and Pipeline Lateral related activities. Lookout duties include watching for and identifying marine mammals; recording their numbers, distances, and reactions to the activities; and documenting “take by harassment”.
(ii) The vessel look-outs assigned to visually monitor for the presence of marine mammals and shall be provided with the following:
(A) Recent NAVTEX, NOAA Weather Radio, SAS and/or acoustic monitoring buoy detection data;
(B) Binoculars to support observations;
(C) Marine mammal detection guide sheets; and
(D) Sighting log.
(i) All individuals onboard the EBRVs responsible for the navigation duties and any other personnel that could be assigned to monitor for marine mammals shall receive training on marine mammal sighting/reporting and vessel strike avoidance measures.
(ii) While an EBRV is navigating within the designated TSS, there shall be three people with look-out duties on or near the bridge of the ship including the Master, the Officer-of-the-Watch and the Helmsman-on-watch. In addition to the standard watch procedures, while the EBRV is transiting within the designated TSS, maneuvering within the Area to be Avoided (ATBA), and/or while actively engaging in the use of thrusters, an additional look-out shall be designated to exclusively and continuously monitor for marine mammals.
(iii) All sightings of marine mammals by the designated look-out, individuals posted to navigational look-out duties and/or any other crew member while the EBRV is transiting within the TSS, maneuvering within the ATBA and/or when actively engaging in the use of thrusters, shall be immediately reported to the Officer-of-the-Watch who shall then alert the Master. The Master or Officer-of-the-Watch shall ensure the required reporting procedures are followed and the designated marine mammal look-out records all pertinent information relevant to the sighting.
(iv) Visual sightings made by look-outs from the EBRVs shall be recorded using a standard sighting log form. Estimated locations shall be reported for each individual and/or group of individuals categorized by species when known. This data shall be entered into a database and a summary of monthly sighting activity shall be provided to NMFS. Estimates of take and copies of these log sheets shall also be included in the reports to NMFS.
(i) Two (2) qualified and NMFS-approved protected species observers (PSOs) shall be assigned to each vessel that will use dynamic positioning (DP) systems during maintenance and repair related activities. PSOs shall operate individually in designated shifts to accommodate adequate rest schedules. Additional PSOs shall be assigned to additional vessels if auto-detection buoy (AB) data indicates that sound levels exceed 120 dB re 1 μPa, further then 100 meters (328 feet) from these vessels.
(ii) All PSOs shall receive NMFS-approved marine mammal observer training and be approved in advance by NMFS after review of their resume. All PSOs shall have direct field experience on marine mammal vessels and/or aerial surveys in the Atlantic Ocean/Gulf of Mexico.
(iii) PSOs (one primary and one secondary) shall be responsible for visually locating marine mammals at the ocean's surface and, to the extent possible, identifying the species. The primary PSO shall act as the identification specialist and the secondary PSO will serve as data recorder and also assist with identification. Both PSOs shall have responsibility for monitoring for the presence of marine mammals and sea turtles. Specifically PSO's shall:
(A) Monitor at all hours of the day, scanning the ocean surface by eye for a minimum of 40 minutes every hour.
(B) Monitor the area where maintenance and repair work is conducted beginning at daybreak using 25x power binoculars and/or hand-held binoculars. Night vision devices must be provided as standard equipment for monitoring during low-light hours and at night.
(C) Conduct general 360° visual monitoring during any given watch period and target scanning by the observer shall occur when alerted of a whale presence.
(D) Alert the vessel superintendent or construction crew supervisor of visual detections within 2 miles (3.31 kilometers) immediately.
(E) Record all sightings on marine mammal field sighting logs. Specifically, all data shall be entered at the time of observation, notes of activities will be kept, and a daily report prepared and attached to the daily field sighting log form. The basic reporting requirements include the following:
• Beaufort sea state;
• Wind speed;
• Wind direction;
• Temperature;
• Precipitation;
• Glare;
• Percent cloud cover;
• Number of animals;
• Species;
• Position;
• Distance;
• Behavior;
• Direction of movement; and
• Apparent reaction to construction activity.
(iv) In the event that a whale is visually observed within the 2-mile (3.31-kilometers) zone of influence (ZOI) of a DP vessel or other construction vessel that has shown to emit noise with source level in excess of 139 dB re 1 µPa @ 1 m, the PSO will notify the repair/maintenance construction crew to minimize the use of thrusters until the animal has moved away, unless there are divers in the water or an ROV is deployed.
(i) Northeast Gateway shall monitor the noise environment in Massachusetts Bay in the vicinity of the NEG Port and Pipeline Lateral using an array of 19 MARUs that were deployed initially in April 2007 to collect data during NEG LNG Port and Pipeline Lateral related activities.
(ii) The acoustic data collected by the MARUs shall be analyzed to document the seasonal occurrences and overall distributions of whales (primarily fin, humpback and right whales) within approximately 10 nm of the NEG Port and shall measure and document the noise “budget” of Massachusetts Bay so as to eventually assist in determining whether or not an overall increase in noise in the Bay associated with the Project might be having a potentially negative impact on marine mammals.
(iii) In addition to the 19 MARUs, Northeast Gateway shall deploy 10 ABs within the Separation Zone of the TSS for the operational life of the Project.
(iv) The ABs shall be used to detect a calling North Atlantic right whale an average of 5 nm from each AB. The AB system shall be the primary detection mechanism that alerts the EBRV Master to the occurrence of right whales, heightens EBRV awareness, and triggers necessary mitigation actions as described in section (5) above.
(i) NEG Port Operations
(A) Ten (10) ABs that have been deployed since 2007 shall be used to continuously screen the low-frequency acoustic environment (less than 1,000 Hertz) for right whale contact calls occurring within an approximately 5-nm radius from each buoy (the AB's detection range).
(B) Once a confirmed detection is made, the Master of any EBRVs operating in the area will be alerted immediately.
(ii) NEG Port and Pipeline Lateral Planned and Unplanned/Emergency Repair and Maintenance Activities
(A) If the repair/maintenance work is located outside of the detectible range of the 10 project area ABs, Northeast Gateway and Algonquin shall consult with NOAA (NMFS and SBNMS) to determine if the work to be conducted warrants the temporary installation of an additional AB(s) to help detect and provide early warnings for potential occurrence of right whales in the vicinity of the repair area.
(B) The number of ABs installed around the activity site shall be commensurate with the type and spatial extent of maintenance/repair work required, but must be sufficient to detect vocalizing right whales within the 120-dB impact zone.
(C) Should acoustic monitoring be deemed necessary during a planned or unplanned/emergency repair and/or maintenance event, active monitoring for right whale calls shall begin 24 hours prior to the start of activities.
(D) Source level data from the acoustic recording units deployed in the NEG Port and/or Pipeline Lateral maintenance and repair area shall be provided to NMFS.
(a) Throughout NEG Port and Pipeline Lateral operations, Northeast Gateway and Algonquin shall provide a monthly Monitoring Report. The Monitoring Report shall include:
(i) Both copies of the raw visual EBRV lookout sighting information of marine mammals that occurred within 2 miles of the EBRV while the vessel transits within the TSS, maneuvers within the ATBA, and/or when actively engaging in the use of thrusters, and a summary of the data collected by the look-outs over each reporting period.
(ii) Copies of the raw PSO sightings information on marine mammals gathered during pipeline repair or maintenance activities. This visual sighting data shall then be correlated to periods of thruster activity to provide estimates of marine mammal takes (per species/species class) that took place during each reporting period.
(iii) Conclusion of any planned or unplanned/emergency repair and/or maintenance period, a report shall be submitted to NMFS summarizing the repair/maintenance activities, marine mammal sightings (both visual and acoustic), empirical source-level measurements taken during the repair work, and any mitigation measures taken.
(b) During the maintenance and repair of NEG Port components, weekly status reports shall be provided to NOAA (both NMFS and SBNMS) using standardized reporting forms. The weekly reports shall include data collected for each distinct marine mammal species observed in the repair/maintenance area during the period that maintenance and repair activities were taking place. The weekly reports shall include the following information:
(i) Location (in longitude and latitude coordinates), time, and the nature of the maintenance and repair activities;
(ii) Indication of whether a DP system was operated, and if so, the number of thrusters being used and the time and duration of DP operation;
(iii) Marine mammals observed in the area (number, species, age group, and initial behavior);
(iv) The distance of observed marine mammals from the maintenance and repair activities;
(v) Changes, if any, in marine mammal behaviors during the observation;
(vi) A description of any mitigation measures (power-down, shutdown, etc.) implemented;
(vii) Weather condition (Beaufort sea state, wind speed, wind direction, ambient temperature, precipitation, and percent cloud cover etc.);
(viii) Condition of the observation (visibility and glare); and
(ix) Details of passive acoustic detections and any action taken in response to those detections.
(i) In the unanticipated event that survey operations clearly cause the take of a marine mammal in a manner prohibited by the proposed IHA, such as an injury (Level A harassment), serious injury or mortality (e.g., ship-strike, gear interaction, and/or entanglement), NEG and/or Algonquin shall immediately cease activities and immediately report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401 and/or by email to
(A) time, date, and location (latitude/longitude) of the incident;
(B) the name and type of vessel involved;
(C) the vessel's speed during and leading up to the incident;
(D) description of the incident;
(E) status of all sound source use in the 24 hours preceding the incident;
(F) water depth;
(G) environmental conditions (e.g., wind speed and direction, Beaufort sea state, cloud cover, and visibility);
(H) description of marine mammal observations in the 24 hours preceding the incident;
(I) species identification or description of the animal(s) involved;
(J) the fate of the animal(s); and
(K) photographs or video footage of the animal (if equipment is available).
Activities shall not resume until NMFS is able to review the circumstances of the prohibited take.
(ii) In the event that NEG and/or Algonquin discovers an injured or dead marine mammal, and the lead PSO determines that the cause of the injury or death is unknown and the death is relatively recent (i.e., in less than a moderate state of decomposition as described in the next paragraph), NEG and/or Algonquin will immediately report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401, and/or by email to
(iii) In the event that NEG or Algonquin discovers an injured or dead marine mammal, and the lead PSO determines that the injury or death is not associated with or related to the activities authorized (if the IHA is issued) (e.g., previously wounded animal, carcass with moderate to advanced decomposition, or scavenger damage), NEG and/or Algonquin shall report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401, and/or by email to
Based on monthly activity reports submitted to NMFS for the period between August 2010 and October 2013, there were no activities at the NEG Port during the period. Therefore, no take of marine mammals occurred or were reported during this period.
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]. Only take by Level B harassment is anticipated as a result of NEG's operation and maintenance and repair activities. Anticipated take of marine mammals is associated with operation of dynamic positioning during the docking of the LNG vessels and positioning of maintenance and dive vessels, and by operations of certain machinery during maintenance and repair activities. The regasification process itself is an activity that does not rise to the level of taking, as the modeled source level for this activity is 108 dB. Certain species may have a behavioral reaction to the sound emitted during the activities. Hearing impairment is not anticipated. Additionally, vessel strikes are not anticipated, especially because of the speed restriction measures that are proposed that were described earlier in this document.
The full suite of potential impacts to marine mammals was described in detail in the “Potential Effects of the Specified Activity on Marine Mammals” section found earlier in this document. The potential effects of sound from the proposed open water marine survey programs might include one or more of the following: masking of natural sounds; behavioral disturbance; non-auditory physical effects; and, at least in theory, temporary or permanent hearing impairment (Richardson
For non-pulse sounds, such as those produced by operating dynamic positioning (DP) thruster during vessel docking and supporting underwater construction and repair activities and the operations of various machineries that produces non-pulse noises, NMFS uses the 120 dB (rms) re 1 μPa isopleth to indicate the onset of Level B harassment.
For the purposes of understanding the noise footprint of operations at the NEG Port, measurements taken to capture operational noise (docking, undocking, regasification, and EBRV thruster use) during the 2006 Gulf of Mexico field event were taken at the source. Measurements taken during EBRV transit were normalized to a distance of 328 feet (100 meters) to serve as a basis for modeling sound propagation at the NEG Port site in Massachusetts Bay.
Sound propagation calculations for operational activities were then completed at two positions in Massachusetts Bay to determine site-specific distances to the 120/160/180 dB isopleths:
At each of these locations sound propagation calculations were performed to determine the noise footprint of the operation activity at each of the specified locations. Calculations were performed in accordance with Marsh and Schulkin (1985) and Richardson
Modeling analysis conducted for the construction of the NEG Port concluded that the only underwater noise of critical concern during NEG Port construction would be from vessel noises such as turning screws, engine noise, noise of operating machinery, and thruster use. To confirm these modeled results and better understand the noise footprint associated with construction activities at the NEG Port, field measurements were taken of various construction activities during the 2007 NEG Port and Algonquin Pipeline Lateral Construction period. Measurements were taken and normalized as described to establish the “loudest” potential construction measurement event. One position within Massachusetts Bay was then used to determine site-specific distances to the 120/180 dB isopleths for NEG Port maintenance and repair activities:
Sound propagation calculations were performed to determine the noise footprint of the construction activity. The calculations took into consideration aspects of water depth, sea state, bathymetry, and seabed composition, and specifically evaluated sound energy in the range that encompasses the auditory frequencies of marine mammals and at which sound propagates beyond the immediate vicinity of the source. These results were then summed across frequencies to provide the broadband received levels at receptor locations. The results showed that the estimated distance from the loudest source involved in construction activities fell to 120 dB re 1 µPa at a distance of 3,600 m.
Modeling analysis conducted during the NEG Port and Pipeline Lateral construction concluded that the only underwater noise of critical concern during such activities would be from vessel noises such as turning screws, engine noise, noise of operating machinery, and thruster use. As with construction noise at the NEG Port, to confirm modeled results and better understand the noise footprint associated with construction activities along the Algonquin Pipeline Lateral, field measurements were taken of various construction activities during the 2007 NEG Port and Algonquin Pipeline Lateral construction period. Measurements were taken and normalized to establish the “loudest” potential construction measurement event. Two positions within Massachusetts Bay were then used to determine site-specific distances to the 120/160/180 dB isopleths:
• Construction Position 2. PLEM: 70°46.755′ W and 42°28.764′ N.
• Construction Position 3. Mid-Pipeline: 70°40.842′ W and 42°31.328′ N.
Sound propagation calculations were performed to determine the noise footprint of the construction activity. The calculations took into consideration aspects of water depth, sea state, bathymetry, and seabed composition, and specifically evaluated sound energy in the range that encompasses the auditory frequencies of marine mammals and at which sound propagates beyond the immediate vicinity of the source. These results were then summed across frequencies to provide the broadband received levels at receptor locations. The results of the distances to the 120-dB are shown in Table 3.
The basis for Northeast Gateway and Algonquin's “take” estimate is the number of marine mammals that would be exposed to sound levels in excess of 120 dB, which is the threshold used by NMFS for non-pulse sounds. For the NEG LNG Port and Algonquin Pipeline Lateral operations and maintenance and repair activities, the take estimates are determined by multiplying the 120-dB esonified area by local marine mammal density estimates, and then multiplying by the estimated dates such activities would occur during a year-long period. For the NEG Port operations, the 120-dB esonfied area is 56.8 km
Although there have been no LNG deliveries since February 2010 at the NEG LNG Port, NEG expected when the Port is under full operation, NEW expects it will receive up to 65 LNG shipments per year, and would require 14 days for NEG Port maintenance and up to 40 days for planned and unplanned Algonquin Pipeline Lateral maintenance and repair.
NMFS recognizes that baleen whale species other than North Atlantic right whales have been sighted in the project area from May to November. However, the occurrence and abundance of fin, humpback, and minke whales is not well documented within the project area. Nonetheless, NMFS uses the data on cetacean distribution within Massachusetts Bay, such as those published by the National Centers for Coastal Ocean Science (NCCOS 2006), to estimate potential takes of marine mammals species in the vicinity of project area.
The NCCOS study used cetacean sightings from two sources: (1) The North Atlantic Right Whale Consortium (NARWC) sightings database held at the University of Rhode Island (Kenney, 2001); and (2) the Manomet Bird Observatory (MBO) database, held at NMFS Northeast Fisheries Science Center (NEFSC). The NARWC data contained survey efforts and sightings data from ship and aerial surveys and opportunistic sources between 1970 and 2005. The main data contributors included: Cetacean and Turtles Assessment Program (CETAP), Canadian Department of Fisheries and Oceans, PCCS, International Fund for Animal Welfare, NOAA's NEFSC, New England Aquarium, Woods Hole Oceanographic Institution, and the University of Rhode Island. A total of 653,725 km (406,293 mi) of survey track and 34,589 cetacean observations were provisionally selected for the NCCOS study in order to minimize bias from uneven allocation of survey effort in both time and space. The sightings-per-unit-effort (SPUE) was calculated for all cetacean species by month covering the southern Gulf of
The MBO's Cetacean and Seabird Assessment Program (CSAP) was contracted from 1980 to 1988 by NMFS NEFSC to provide an assessment of the relative abundance and distribution of cetaceans, seabirds, and marine turtles in the shelf waters of the northeastern United States (MBO, 1987). The CSAP program was designed to be completely compatible with NMFS NEFSC databases so that marine mammal data could be compared directly with fisheries data throughout the time series during which both types of information were gathered. A total of 5,210 km (8,383 mi) of survey distance and 636 cetacean observations from the MBO data were included in the NCCOS analysis. Combined valid survey effort for the NCCOS studies included 567,955 km (913,840 mi) of survey track for small cetaceans (dolphins and porpoises) and 658,935 km (1,060,226 mi) for large cetaceans (whales) in the southern Gulf of Maine. The NCCOS study then combined these two data sets by extracting cetacean sighting records, updating database field names to match the NARWC database, creating geometry to represent survey tracklines and applying a set of data selection criteria designed to minimize uncertainty and bias in the data used.
Owing to the comprehensiveness and total coverage of the NCCOS cetacean distribution and abundance study, NMFS calculated the estimated take number of marine mammals based on the most recent NCCOS report published in December 2006. A summary of seasonal cetacean distribution and abundance in the project area is provided above, in the “Description of Marine Mammals in the Area of the Specified Activities” section. For a detailed description and calculation of the cetacean abundance data and SPUE, please refer to the NCCOS study (NCCOS, 2006). These data show that the relative abundance of North Atlantic right, fin, humpback, minke, sei, and pilot whales, and Atlantic white-sided dolphins for all seasons, as calculated by SPUE in number of animals per square kilometer, is 0.0082, 0.0097, 0.0118, 0.0059, 0.0084, 0.0407, and 0.1314 n/km, respectively.
In calculating the area density of these species from these linear density data, NMFS used 0.5 mi (0.825 km) as the hypothetical strip width (W). This strip width is based on the distance of visibility used in the NARWC data that was part of the NCCOS (2006) study. However, those surveys used a strip transect instead of a line transect methodology. Therefore, in order to obtain a strip width, one must divide the visibility or transect value in half. Since the visibility value used in the NARWC data was 2.3 mi (3.7 km), it thus gives a strip width of 1.15 mi (1.85 km). The hypothetical strip width used in the analysis is less than half of that derived from the NARWC data, therefore, the analysis provided here is more protective in calculating marine mammal densities in the area. Based on this information, the area density (D) of these species in the project area can be obtained by the following formula:
In addition, bottlenose dolphins, common dolphins, killer whales, Risso's dolphins, harbor porpoises, harbor seals, and gray seals could also be taken by Level B harassment as a result of deepwater NEG Port and Algonquin Pipeline Lateral operations and maintenance and repair. Since these species are less likely to occur in the area, and there are no density estimates specific to this particular area, NMFS based the take estimates on typical group size. Therefore, NMFS estimates that up to approximately 20 bottlenose dolphins, 40 short-beaked common dolphins, 40 Risso's dolphins, 10 killer whales, 20 harbor porpoises, 60 harbor seals, and 30 gray seals could be exposed to continuous noise at or above 120 dB re 1 µPa rms incidental to operations during the one year period of the IHA, respectively. These numbers represent 0.16%, 0.06%, 0.26%, and 0.03% of the bottlenose dolphin, short-
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.” In making a negligible impact determination, NMFS considers a variety of factors, including but not limited to: (1) The number of anticipated mortalities; (2) the number and nature of anticipated injuries; (3) the number, nature, intensity, and duration of Level B harassment; and (4) the context in which the takes occur.
No injuries or mortalities are anticipated to occur as a result of proposed Northeast Gateway LNG Port Algonquin Pipeline Lateral operations and maintenance and repair activities, and none are proposed to be authorized by NMFS. Additionally, animals in the area are not anticipated to incur any hearing impairment (i.e., TTS or PTS), as the modeling of source levels indicates that none of the source received levels exceed 180 dB (rms).
While some of the species occur in the proposed project area year-round, some species only occur in the area during certain seasons. Humpback and minke whales are not expected in the project area in the winter. During the winter, a large portion of the North Atlantic right whale population occurs in the southeastern U.S. calving grounds (i.e., South Carolina, Georgia, and northern Florida). The fact that certain activities will occur during times when certain species are not commonly found in the area will help reduce the amount of Level B harassment for these species.
Many animals perform vital functions, such as feeding, resting, traveling, and socializing, on a diel cycle (24-hr cycle). Behavioral reactions to noise exposure (such as disruption of critical life functions, displacement, or avoidance of important habitat) are more likely to be significant if they last more than one diel cycle or recur on subsequent days (Southall
Of the 14 marine mammal species likely to occur in the area, four are listed as endangered under the ESA: North Atlantic right, humpback, and fin whales. All of these species are also considered depleted under the MMPA. There is currently no designated critical habitat or known reproductive areas for any of these species in or near the proposed project area. However, there are several well known North Atlantic right whale feeding grounds in the Cape Cod Bay and Great South Channel. No mortality or injury is expected to occur, and due to the nature, degree, and context of the Level B harassment anticipated, the activity is not expected to impact rates of recruitment or survival. There is no critical habitat or biologically important areas for marine mammals within the proposed project area.
The population estimates for the species that may be taken by Level B behavioral harassment contained in the most recent U.S. Atlantic Stock Assessment Reports were provided earlier in this document. From the most protective estimates of both marine mammal densities in the project area and the size of the 120-dB ZOI, the maximum calculated number of individual marine mammals for each species that could potentially be harassed annually is small relative to the overall population sizes.
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 mitigation and monitoring measures, NMFS preliminarily finds that the proposed Northeast Gateway LNG Port and Algonquin Pipeline Lateral operations and maintenance and repair activities would result in the incidental take of small numbers of marine mammals, by Level B harassment only, and that the total taking from Northeast Gateway and Algonquin's proposed activities will have a negligible impact on the affected species or stocks.
There are no relevant subsistence uses of marine mammals 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.
This section contains a draft of the IHA itself. The wording contained in this section is proposed for inclusion in the IHA (if issued).
(1) This Authorization is valid from January 6, 2014, through January 5, 2015.
(2) This Authorization is valid only for activities associated with Northeast Gateway's LNG Port and Algonquin's Pipeline Lateral operations and maintenance and repair activities in the Massachusetts Bay. The specific area of the activities is shown in Figure 2–1 of the Excelerate Energy, L.P. and Tetra Tech EC., Inc.'s IHA application.
(3)(a) The species authorized for incidental harassment takings, Level B harassment only, are: Right whales (
(3)(b) The authorization for taking by harassment is limited to the following acoustic sources and from the following activities:
(i) NEG Port operations;
(ii) NEG Port maintenance and repair; and
(iii) Algonquin Pipeline Lateral operations and maintenance.
(3)(c) The taking of any marine mammal in a manner prohibited under this Authorization must be reported within 24 hours of the taking to the National Marine Fisheries Service (NMFS) Northeast Regional Administrator (978–281–9300) or his designee (978–282–8468), NMFS Headquarter Chief of the Permits and Conservation Division, Office of Protected Resources, NMFS, at (301–427–8401), or his designee (301–427–8418).
(a) The taking, by incidental harassment only, is limited to the species listed under condition 3(a) above and by the numbers listed in Table 3. The taking by Level A harassment, injury or death of these species or the taking by harassment, injury or death of any other species of marine mammal is prohibited and may result in the modification, suspension, or revocation of this Authorization.
(b) The taking of any marine mammal is prohibited whenever the required mitigation measures under (5) of this authorization are not implemented.
(a) General Marine Mammal Avoidance Measures
(i) All vessels shall utilize the International Maritime Organization (IMO)-approved Boston Traffic Separation Scheme (TSS) on their approach to and departure from the NEG Port and/or the repair/maintenance area at the earliest practicable point of transit in order to avoid the risk of whale strikes.
(ii) Upon entering the TSS and areas where North Atlantic right whales are known to occur, including the Great South Channel Seasonal Management Area (GSC–SMA) and the SBNMS, the EBRV shall go into “Heightened Awareness” as described below.
(A) Prior to entering and navigating the modified TSS the Master of the vessel shall:
(I) Consult Navigational Telex (NAVTEX), NOAA Weather Radio, the NOAA Right Whale Sighting Advisory System (SAS) or other means to obtain current right whale sighting information as well as the most recent Cornell acoustic monitoring buoy data for the potential presence of marine mammals;
(II) Post a look-out to visually monitor for the presence of marine mammals;
(III) Provide the US Coast Guard (USCG) required 96-hour notification of an arriving EBRV to allow the NEG Port Manager to notify Cornell of vessel arrival.
(B) The look-out shall concentrate his/her observation efforts within the 2-mile radius zone of influence (ZOI) from the maneuvering EBRV.
(C) If marine mammal detection was reported by NAVTEX, NOAA Weather Radio, SAS and/or an acoustic monitoring buoy, the look-out shall concentrate visual monitoring efforts towards the areas of the most recent detection.
(D) If the look-out (or any other member of the crew) visually detects a marine mammal within the 2-mile radius ZOI of a maneuvering EBRV, he/she will take the following actions:
(I) The Officer-of-the-Watch shall be notified immediately; who shall then relay the sighting information to the Master of the vessel to ensure action(s) can be taken to avoid physical contact with marine mammals.
(II) The sighting shall be recorded in the sighting log by the designated look-out.
(iii) In accordance with 50 CFR 224.103(c), all vessels associated with NEG Port and Pipeline Lateral activities shall not approach closer than 500 yards (460 m) to a North Atlantic right whale and 100 yards (91 m) to other whales to the extent physically feasible given navigational constraints. In addition, when approaching and departing the project area, vessels shall be operated so as to remain at least 1 km away from any visually-detected North Atlantic right whales.
(iv) In response to active right whale sightings and active acoustic detections, and taking into account exceptional circumstances, EBRVs, repair and maintenance vessels shall take appropriate actions to minimize the risk of striking whales. Specifically vessels shall:
(A) Respond to active right whale sightings and/or DMAs reported on the Mandatory Ship Reporting (MSR) or SAS by concentrating monitoring efforts towards the area of most recent detection and reducing speed to 10 knots or less if the vessel is within the boundaries of a DMA (50 CFR 224.105) or within the circular area centered on an area 8 nm in radius from a sighting location;
(B) Respond to active acoustic detections by concentrating monitoring efforts towards the area of most recent detection and reducing speed to 10 knots or less within an area 5 nm in radius centered on the detecting AB; and
(C) Respond to additional sightings made by the designated look-outs within a 2-mile radius of the vessel by slowing the vessel to 10 knots or less and concentrating monitoring efforts towards the area of most recent sighting.
(v) All vessels operated under NEG and Algonquin must follow the established specific speed restrictions when calling at the NEG Port. The specific speed restrictions required for all vessels (i.e., EBRVs and vessels associated with maintenance and repair) consist of the following:
(A) Vessels shall reduce their maximum transit speed while in the TSS from 12 knots or less to 10 knots or less from March 1 to April 30 in all waters bounded by straight lines connecting the following points in the order stated below unless an emergency situation dictates for an alternate speed. This area shall hereafter be referred to as the Off Race Point Seasonal Management Area (ORP–SMA) and tracks NMFS regulations at 50 CFR 224.105:
(B) Vessels shall reduce their maximum transit speed while in the TSS to 10 knots or less unless an emergency situation dictates for an alternate speed from April 1 to July 31 in all waters bounded by straight lines connecting the following points in the order stated below. This area shall hereafter be referred to as the GSC–SMA and tracks NMFS regulations at 50 CFR 224.105:
(C) Vessels are not expected to transit the Cape Cod Bay or the Cape Cod Canal; however, in the event that transit through the Cape Cod Bay or the Cape Cod Canal is required, vessels shall reduce maximum transit speed to 10 knots or less from January 1 to May 15 in all waters in Cape Cod Bay, extending to all shorelines of Cape Cod Bay, with a northern boundary of 42°12' N latitude and the Cape Cod Canal. This area shall hereafter be referred to as the Cape Cod Bay Seasonal Management Area (CCB–SMA).
(D) All Vessels transiting to and from the project area shall report their activities to the mandatory reporting Section of the USCG to remain apprised of North Atlantic right whale movements within the area. All vessels
(E) All Vessels greater than or equal to 300 gross tons (GT) shall maintain a speed of 10 knots or less, unless an emergency situation requires speeds greater than 10 knots.
(F) All Vessels less than 300 GT traveling between the shore and the project area that are not generally restricted to 10 knots will contact the Mandatory Ship Reporting (MSR) system, the USCG, or the project site before leaving shore for reports of active DMAs and/or recent right whale sightings and, consistent with navigation safety, restrict speeds to 10 knots or less within 5 miles (8 kilometers) of any sighting location, when traveling in any of the seasonal management areas (SMAs) or when traveling in any active dynamic management area (DMA).
(b) NEG Port-Specific Operations
(i) In addition to the general marine mammal avoidance requirements identified in (5)(a) above, vessels calling on the NEG Port must comply with the following additional requirements:
(A) EBRVs shall travel at 10 knots maximum speed when transiting to/from the TSS or to/from the NEG Port/Pipeline Lateral area. For EBRVs, at 1.86 miles (3 km) from the NEG Port, speed will be reduced to 3 knots and to less than 1 knot at 1,640 ft (500 m) from the NEG buoys, unless an emergency situation dictates the need for an alternate speed.
(B) EBRVs that are approaching or departing from the NEG Port and are within the ATBA5 surrounding the NEG Port, shall remain at least 1 km away from any visually-detected North Atlantic right whale and at least 100 yards (91 m) away from all other visually-detected whales unless an emergency situation requires that the vessel stay its course. During EBRV maneuvering, the Vessel Master shall designate at least one look-out to be exclusively and continuously monitoring for the presence of marine mammals at all times while the EBRV is approaching or departing from the NEG Port.
(C) During NEG Port operations, in the event that a whale is visually observed within 1 km of the NEG Port or a confirmed acoustic detection is reported on either of the two ABs closest to the NEG Port (western-most in the TSS array), departing EBRVs shall delay their departure from the NEG Port, unless an emergency situation requires that departure is not delayed. This departure delay shall continue until either the observed whale has been visually (during daylight hours) confirmed as more than 1 km from the NEG Port or 30 minutes have passed without another confirmed detection either acoustically within the acoustic detection range of the two ABs closest to the NEG Port, or visually within 1 km from the NEG Port.
(ii) Vessel captains shall focus on reducing dynamic positioning (DP) thruster power to the maximum extent practicable, taking into account vessel and Port safety, during the operation activities. Vessel captains will shut down thrusters whenever they are not needed.
(A) The Northeast Gateway shall conduct empirical source level measurements on all noise emitting construction equipment and all vessels that are involved in maintenance/repair work.
(B) If dynamic positioning (DP) systems are to be employed and/or activities will emit noise with a source level of 139 dB re 1 μPa at 1 m, activities shall be conducted in accordance with the requirements for DP systems listed in (5)(b)(ii).
(C) Northeast Gateway shall provide the NMFS Headquarters Office of the Protected Resources, NMFS Northeast Region Ship Strike Coordinator, and SBNMS with a minimum of 30 days notice prior to any planned repair and/or maintenance activity. For any unplanned/emergency repair/maintenance activity, Northeast Gateway shall notify the agencies as soon as it determines that repair work must be conducted. Northeast Gateway shall continue to keep the agencies apprised of repair work plans as further details (e.g., the time, location, and nature of the repair) become available. A final notification shall be provided to agencies 72 hours prior to crews being deployed into the field.
(A) Pipeline maintenance/repair vessels less than 300 GT traveling between the shore and the maintenance/repair area that are not generally restricted to 10 knots shall contact the MSR system, the USCG, or the project site before leaving shore for reports of active DMAs and/or recent right whale sightings and, consistent with navigation safety, restrict speeds to 10 knots or less within 5 miles (8 km) of any sighting location, when travelling in any of the seasonal management areas (SMAs) as defined above.
(B) Maintenance/repair vessels greater than 300 GT shall not exceed 10 knots, unless an emergency situation that requires speeds greater than 10 knots.
(C) Planned maintenance and repair activities shall be restricted to the period between May 1 and November 30.
(D) Unplanned/emergency maintenance and repair activities shall be conducted utilizing anchor-moored dive vessel whenever operationally possible.
(E) Algonquin shall also provide the NMFS Office of the Protected Resources, NMFS Northeast Region Ship Strike Coordinator, and Stellwagen Bank National Marine Sanctuary (SBNMS) with a minimum of 30-day notice prior to any planned repair and/or maintenance activity. For any unplanned/emergency repair/maintenance activity, Northeast Gateway shall notify the agencies as soon as it determines that repair work must be conducted. Algonquin shall continue to keep the agencies apprised of repair work plans as further details (e.g., the time, location, and nature of the repair) become available. A final notification shall be provided to agencies 72 hours prior to crews being deployed into the field.
(F) If dynamic positioning (DP) systems are to be employed and/or activities will emit noise with a source level of 139 dB re 1 μPa at 1 m, activities shall be conducted in accordance with the requirements for DP systems listed in (5)(b)(ii).
(G) In the event that a whale is visually observed within 0.5 mile (0.8 kilometers) of a repair or maintenance vessel, the vessel superintendent or on-deck supervisor shall be notified immediately. The vessel's crew shall be put on a heightened state of alert and the marine mammal shall be monitored constantly to determine if it is moving toward the repair or maintenance area.
(H) Repair/maintenance vessel(s) must cease any movement and/or cease all activities that emit noises with source level of 139 dB re 1 μPa @ 1 m or higher when a right whale is sighted within or approaching at 500 yd (457 m) from the vessel. Repair and maintenance work may resume after the marine mammal is positively reconfirmed outside the established zones (500 yd [457 m]) or 30 minutes have passed without a redetection. Any vessels transiting the maintenance area, such as barges or tugs, must also maintain these separation distances.
(I) Repair/maintenance vessel(s) must cease any movement and/or cease all activities that emit noises with source level of 139 dB re 1 μPa @ 1 m or higher when a marine mammal other than a right whale is sighted within or approaching at 100 yd (91 m) from the vessel. Repair and maintenance work may resume after the marine mammal is positively reconfirmed outside the established zones (100 yd [91 m]) or 30 minutes have passed without a redetection. Any vessels transiting the maintenance area, such as barges or tugs, must also maintain these separation distances.
(J) Algonquin and associated contractors shall also comply with the following:
(I) Operations involving excessively noisy equipment (source level exceeding 139 dB re 1μPa @ 1 m) shall “ramp-up” sound sources, allowing whales a chance to leave the area before sounds reach maximum levels. In addition, Northeast Gateway, Algonquin, and other associated contractors shall maintain equipment to manufacturers' specifications, including any sound-muffling devices or engine covers in order to minimize noise effects. Noisy construction equipment shall only be used as needed and equipment shall be turned off when not in operation.
(II) Any material that has the potential to entangle marine mammals (e.g., anchor lines, cables, rope or other construction debris) shall only be deployed as needed and measures shall be taken to minimize the chance of entanglement.
(III) For any material that has the potential to entangle marine mammals, such material shall be removed from the water immediately unless such action jeopardizes the safety of the vessel and crew as determined by the Captain of the vessel.
(IV) In the event that a marine mammal becomes entangled, the marine mammal coordinator and/or PSO will notify NMFS (if outside the SBNMS), and SBNMS staff (if inside the SBNMS) immediately so that a rescue effort may be initiated.
(K) All maintenance/repair activities shall be scheduled to occur between May 1 and November 30; however, in the event of unplanned/emergency repair work that cannot be scheduled during the preferred May through November work window, the following additional measures shall be followed for Pipeline Lateral maintenance and repair related activities between December and April:
(I) Between December 1 and April 30, if on-board PSOs do not have at least 0.5-mile visibility, they shall call for a shutdown. At the time of shutdown, the use of thrusters must be minimized. If there are potential safety problems due to the shutdown, the captain will decide what operations can safely be shut down.
(II) Prior to leaving the dock to begin transit, the barge shall contact one of the PSOs on watch to receive an update of sightings within the visual observation area. If the PSO has observed a North Atlantic right whale within 30 minutes of the transit start, the vessel shall hold for 30 minutes and again get a clearance to leave from the PSOs on board. PSOs shall assess whale activity and visual observation ability at the time of the transit request to clear the barge for release.
(III) Transit route, destination, sea conditions and any marine mammal sightings/mitigation actions during watch shall be recorded in the log book. Any whale sightings within 1,000 m of the vessel shall result in a high alert and slow speed of 4 knots or less and a sighting within 750 m shall result in idle speed and/or ceasing all movement.
(IV) The material barges and tugs used in repair and maintenance shall transit from the operations dock to the work sites during daylight hours when possible provided the safety of the vessels is not compromised. Should transit at night be required, the maximum speed of the tug shall be 5 knots.
(V) All repair vessels must maintain a speed of 10 knots or less during daylight hours. All vessels shall operate at 5 knots or less at all times within 5 km of the repair area.
(i) Vessels associated with maintaining the acoustic seafloor array of Marine Autonomous Recording Units (MARUs) and the AB network operating as part of the mitigation/monitoring protocols shall adhere to the following speed restrictions and marine mammal monitoring requirements.
(A) Vessels maintaining the MARU array that are greater than 300 gross tons (GT) shall not exceed 10 knots.
(B) Vessels maintaining the MARU array that are less than 300 GT shall not exceed 15 knots at any time, but shall adhere to speeds of 10 knots or less in the following areas and seasons:
(I) In the ORP–SMA between March 1 and April 30; and
(II) In the CCB–SMA between January 1 and May 15.
(C) In accordance with NOAA Regulation 50 CFR 224.103 (c), all vessels associated with NEG Port activities shall not approach closer than 500 yards (460 meters) to a North Atlantic right whale.
(D) All vessels shall obtain the latest DMA or right whale sighting information via the NAVTEX, MSR, SAS, NOAA Weather Radio, or other available means prior to operations to determine if there are right whales present in the operational area.
(i) Vessel-based monitoring for marine mammals shall be done by trained look-outs during NEG LNG Port and Pipeline Lateral operations and maintenance and repair activities. The observers shall monitor the occurrence of marine mammals near the vessels during LNG Port and Pipeline Lateral related activities. Lookout duties include watching for and identifying marine mammals; recording their numbers, distances, and reactions to the activities; and documenting “take by harassment”.
(ii) The vessel look-outs assigned to visually monitor for the presence of marine mammals and shall be provided with the following:
(A) Recent NAVTEX, NOAA Weather Radio, SAS and/or acoustic monitoring buoy detection data;
(B) Binoculars to support observations;
(C) Marine mammal detection guide sheets; and
(D) Sighting log.
(i) All individuals onboard the EBRVs responsible for the navigation duties and any other personnel that could be assigned to monitor for marine mammals shall receive training on marine mammal sighting/reporting and vessel strike avoidance measures.
(ii) While an EBRV is navigating within the designated TSS, there shall be three people with look-out duties on or near the bridge of the ship including the Master, the Officer-of-the-Watch and the Helmsman-on-watch. In addition to the standard watch procedures, while the EBRV is transiting within the designated TSS, maneuvering within the Area to be Avoided (ATBA), and/or while actively engaging in the use of thrusters, an additional look-out shall be designated to exclusively and continuously monitor for marine mammals.
(iii) All sightings of marine mammals by the designated look-out, individuals posted to navigational look-out duties and/or any other crew member while the EBRV is transiting within the TSS, maneuvering within the ATBA and/or
(iv) Visual sightings made by look-outs from the EBRVs shall be recorded using a standard sighting log form. Estimated locations shall be reported for each individual and/or group of individuals categorized by species when known. This data shall be entered into a database and a summary of monthly sighting activity shall be provided to NMFS. Estimates of take and copies of these log sheets shall also be included in the reports to NMFS.
(i) Two (2) qualified and NMFS-approved protected species observers (PSOs) shall be assigned to each vessel that will use dynamic positioning (DP) systems during maintenance and repair related activities. PSOs shall operate individually in designated shifts to accommodate adequate rest schedules. Additional PSOs shall be assigned to additional vessels if auto-detection buoy (AB) data indicates that sound levels exceed 120 dB re 1 µPa, farther than 100 meters (328 feet) from these vessels.
(ii) All PSOs shall receive NMFS-approved marine mammal observer training and be approved in advance by NMFS after review of their resume. All PSOs shall have direct field experience on marine mammal vessels and/or aerial surveys in the Atlantic Ocean/Gulf of Mexico.
(iii) PSOs (one primary and one secondary) shall be responsible for visually locating marine mammals at the ocean's surface and, to the extent possible, identifying the species. The primary PSO shall act as the identification specialist and the secondary PSO will serve as data recorder and also assist with identification. Both PSOs shall have responsibility for monitoring for the presence of marine mammals and sea turtles. Specifically PSO's shall:
(A) Monitor at all hours of the day, scanning the ocean surface by eye for a minimum of 40 minutes every hour.
(B) Monitor the area where maintenance and repair work is conducted beginning at daybreak using 25x power binoculars and/or hand-held binoculars. Night vision devices must be provided as standard equipment for monitoring during low-light hours and at night.
(C) Conduct general 360° visual monitoring during any given watch period and target scanning by the observer shall occur when alerted of a whale presence.
(D) Alert the vessel superintendent or construction crew supervisor of visual detections within 2 miles (3.31 kilometers) immediately.
(E) Record all sightings on marine mammal field sighting logs. Specifically, all data shall be entered at the time of observation, notes of activities will be kept, and a daily report prepared and attached to the daily field sighting log form. The basic reporting requirements include the following:
• Beaufort sea state;
• Wind speed;
• Wind direction;
• Temperature;
• Precipitation;
• Glare;
• Percent cloud cover;
• Number of animals;
• Species;
• Position;
• Distance;
• Behavior;
• Direction of movement; and
• Apparent reaction to construction activity.
(iv) In the event that a whale is visually observed within the 2-mile (3.31-kilometers) zone of influence (ZOI) of a DP vessel or other construction vessel that has shown to emit noise with source level in excess of 139 dB re 1 µPa @ 1 m, the PSO will notify the repair/maintenance construction crew to minimize the use of thrusters until the animal has moved away, unless there are divers in the water or an ROV is deployed.
(i) Northeast Gateway shall monitor the noise environment in Massachusetts Bay in the vicinity of the NEG Port and Pipeline Lateral using an array of 19 MARUs that were deployed initially in April 2007 to collect data during NEG LNG Port and Pipeline Lateral related activities.
(ii) The acoustic data collected by the MARUs shall be analyzed to document the seasonal occurrences and overall distributions of whales (primarily fin, humpback and right whales) within approximately 10 nm of the NEG Port and shall measure and document the noise “budget” of Massachusetts Bay so as to eventually assist in determining whether or not an overall increase in noise in the Bay associated with the Project might be having a potentially negative impact on marine mammals.
(iii) In addition to the 19 MARUs, Northeast Gateway shall deploy 10 ABs within the Separation Zone of the TSS for the operational life of the Project.
(iv) The ABs shall be used to detect a calling North Atlantic right whale an average of 5 nm from each AB. The AB system shall be the primary detection mechanism that alerts the EBRV Master to the occurrence of right whales, heightens EBRV awareness, and triggers necessary mitigation actions as described in section (5) above.
(i) NEG Port Operations
(A) Ten (10) ABs that have been deployed since 2007 shall be used to continuously screen the low-frequency acoustic environment (less than 1,000 Hertz) for right whale contact calls occurring within an approximately 5-nm radius from each buoy (the AB's detection range).
(B) Once a confirmed detection is made, the Master of any EBRVs operating in the area will be alerted immediately.
(ii) NEG Port and Pipeline Lateral Planned and Unplanned/Emergency Repair and Maintenance Activities
(A) If the repair/maintenance work is located outside of the detectible range of the 10 project area ABs, Northeast Gateway and Algonquin shall consult with NOAA (NMFS and SBNMS) to determine if the work to be conducted warrants the temporary installation of an additional AB(s) to help detect and provide early warnings for potential occurrence of right whales in the vicinity of the repair area.
(B) The number of ABs installed around the activity site shall be commensurate with the type and spatial extent of maintenance/repair work required, but must be sufficient to detect vocalizing right whales within the 120-dB impact zone.
(C) Should acoustic monitoring be deemed necessary during a planned or unplanned/emergency repair and/or maintenance event, active monitoring for right whale calls shall begin 24 hours prior to the start of activities.
(D) Source level data from the acoustic recording units deployed in the NEG Port and/or Pipeline Lateral maintenance and repair area shall be provided to NMFS.
(a) Throughout NEG Port and Pipeline Lateral operations, Northeast Gateway and Algonquin shall provide a monthly Monitoring Report. The Monitoring Report shall include:
(i) Both copies of the raw visual EBRV lookout sighting information of marine mammals that occurred within 2 miles
(ii) Copies of the raw PSO sightings information on marine mammals gathered during pipeline repair or maintenance activities. This visual sighting data shall then be correlated to periods of thruster activity to provide estimates of marine mammal takes (per species/species class) that took place during each reporting period.
(iii) Conclusion of any planned or unplanned/emergency repair and/or maintenance period, a report shall be submitted to NMFS summarizing the repair/maintenance activities, marine mammal sightings (both visual and acoustic), empirical source-level measurements taken during the repair work, and any mitigation measures taken.
(b) During the maintenance and repair of NEG Port components, weekly status reports shall be provided to NOAA (both NMFS and SBNMS) using standardized reporting forms. The weekly reports shall include data collected for each distinct marine mammal species observed in the repair/maintenance area during the period that maintenance and repair activities were taking place. The weekly reports shall include the following information:
(i) Location (in longitude and latitude coordinates), time, and the nature of the maintenance and repair activities;
(ii) Indication of whether a DP system was operated, and if so, the number of thrusters being used and the time and duration of DP operation;
(iii) Marine mammals observed in the area (number, species, age group, and initial behavior);
(iv) The distance of observed marine mammals from the maintenance and repair activities;
(v) Changes, if any, in marine mammal behaviors during the observation;
(vi) A description of any mitigation measures (power-down, shutdown, etc.) implemented;
(vii) Weather condition (Beaufort sea state, wind speed, wind direction, ambient temperature, precipitation, and percent cloud cover etc.);
(viii) Condition of the observation (visibility and glare); and
(ix) Details of passive acoustic detections and any action taken in response to those detections.
(i) In the unanticipated event that survey operations clearly cause the take of a marine mammal in a manner prohibited by the proposed IHA, such as an injury (Level A harassment), serious injury or mortality (e.g., ship-strike, gear interaction, and/or entanglement), NEG and/or Algonquin shall immediately cease activities and immediately report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401 and/or by email to
(A) Time, date, and location (latitude/longitude) of the incident;
(B) the name and type of vessel involved;
(C) the vessel's speed during and leading up to the incident;
(D) description of the incident;
(E) status of all sound source use in the 24 hours preceding the incident;
(F) water depth;
(G) environmental conditions (e.g., wind speed and direction, Beaufort sea state, cloud cover, and visibility);
(H) description of marine mammal observations in the 24 hours preceding the incident;
(I) species identification or description of the animal(s) involved;
(J) the fate of the animal(s); and
(K) photographs or video footage of the animal (if equipment is available).
Activities shall not resume until NMFS is able to review the circumstances of the prohibited take. NMFS shall work with NEG and/or Algonquin to determine what is necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. NEG and/or Algonquin may not resume their activities until notified by NMFS via letter, email, or telephone.
(ii) In the event that NEG and/or Algonquin discovers an injured or dead marine mammal, and the lead PSO determines that the cause of the injury or death is unknown and the death is relatively recent (i.e., in less than a moderate state of decomposition as described in the next paragraph), NEG and/or Algonquin will immediately report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401, and/or by email to
(iii) In the event that NEG or Algonquin discovers an injured or dead marine mammal, and the lead PSO determines that the injury or death is not associated with or related to the activities authorized (if the IHA is issued) (e.g., previously wounded animal, carcass with moderate to advanced decomposition, or scavenger damage), NEG and/or Algonquin shall report the incident to the Supervisor of the Incidental Take Program, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401, and/or by email to
On February 5, 2007, NMFS concluded consultation with MARAD and the USCG, under section 7 of the ESA, on the proposed construction and operation of the Northeast Gateway LNG facility and issued a biological opinion. The finding of that consultation was that the construction and operation of the Northeast Gateway LNG terminal may adversely affect, but is not likely to jeopardize, the continued existence of northern right, humpback, and fin whales, and is not likely to adversely affect sperm, sei, or blue whales and Kemp's ridley, loggerhead, green or leatherback sea turtles. An incidental take statement (ITS) was issued following NMFS' issuance of the 2007 IHA.
On November 15, 2007, Northeast Gateway and Algonquin submitted a letter to NMFS requesting an extension for the LNG Port construction into December 2007. Upon reviewing
However, both biological opinions only analyzed ESA-listed species for activities under the initial short construction period and during operations, and did not take into consideration potential impacts to marine mammals that could result from the subsequent LNG Port and Pipeline Lateral maintenance and repair activities. In addition, NEG also revealed that significantly more water usage and vessel operating air emissions are needed from what was originally evaluated for the LNG Port operation. NMFS PR1 has initiated consultation with NMFS NERO under section 7 of the ESA on the issuance of an IHA to NEG under section 101(a)(5)(D) of the MMPA for the proposed activities that include increased NEG Port and Algonquin Pipeline Lateral maintenance and repair and water usage for the LNG Port operations this activity. Consultation will be concluded prior to a determination on the issuance of an IHA.
MARAD and the USCG released a Final EIS/Environmental Impact Report (EIR) for the proposed Northeast Gateway Port and Pipeline Lateral. A notice of availability was published by MARAD on October 26, 2006 (71 FR 62657). The Final EIS/EIR provides detailed information on the proposed project facilities, construction methods and analysis of potential impacts on marine mammals.
NMFS was a cooperating agency (as defined by the Council on Environmental Quality (40 CFR 1501.6)) in the preparation of the Draft and Final EISs. NMFS reviewed the Final EIS and adopted it on May 4, 2007. NMFS issued a separate Record of Decision for issuance of authorizations pursuant to section 101(a)(5) of the MMPA for the construction and operation of the Northeast Gateway's LNG Port Facility in Massachusetts Bay.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of issuance of a Letter of Authorization.
In accordance with the Marine Mammal Protection Act (MMPA), as amended, and implementing regulations, notification is hereby given that a Letter of Authorization (LOA) has been issued to the City of Seattle's Department of Transportation (SDOT) for the take of nine species of marine mammals incidental to pile driving activities associated with the Elliott Bay Seawall Project (EBSP).
Effective from October 22, 2013, through October 21, 2014.
The LOA and supporting documentation are available for review on the Internet at:
Michelle Magliocca, Office of Protected Resources, NMFS, 301–427–8401.
Sections 101(a)(5)(A) 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 identified 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 in the regulations. 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.”
Regulations governing the taking of harbor seals (Phoca vitulina), California sea lions, Steller sea lions (
Pursuant to those regulations, NMFS issued an LOA, effective from October 22, 2013, through October 21, 2014, which authorizes the incidental take of the nine marine mammal species listed above that may result from construction associated with the Elliott Bay Seawall project. Take of marine mammals will be minimized through implementation of the following mitigation measures: (1) Limited impact pile driving; (2) containment of impact pile driving; (3) additional sound attenuation measures; (4) ramp-up of pile-related activities; (5) marine mammal exclusion zones; and (6) shutdown and delay procedures.
Reports will be submitted to NMFS at the time of request for a renewal of the LOA, and a final comprehensive report, which will summarize all previous reports and assess cumulative impacts, will be submitted before the rule expires. This LOA will be renewed based on review of the annual monitoring report and provided that NMFS makes the required findings.
Defense Security Cooperation Agency, Department of Defense.
Notice.
The Department of Defense is publishing the unclassified text of a section 36(b)(1) arms sales notification. This is published to fulfill the requirements of section 155 of Public Law 104–164 dated July 21, 1996.
Ms. B. English, DSCA/DBO/CFM, (703) 601–3740.
The following is a copy of a letter to the Speaker of the House of Representatives, Transmittals 13–59 with attached transmittal, policy justification, and Sensitivity of Technology.
(i) Prospective Purchaser: Romania
(ii)
(iii)
Also included are spare and repair parts, support equipment, tanker support, ferry services, repair and return services, software development/integration, test and equipment, supply support, personnel training and training equipment, publications and technical data, U.S. Government and contractor
(iv)
(v)
(vi)
(vii)
(viii)
*as defined in Section 47(6) of the Arms Export Control Act.
The Government of Romania has requested a possible sale of weapons, equipment, and support for 12 F–16 MLU Block 15 aircraft that will be procured through a third party transfer from Portugal. Articles and services will include:
Also included are spare and repair parts, support equipment, tanker support, ferry services, repair and return services, software development/integration, test and equipment, supply support, personnel training and training equipment, publications and technical data, U.S. Government and contractor technical services, and other related elements of logistics and program support. The estimated cost is $457 million.
The proposed sale will contribute to the foreign policy and national security of the United States by helping to improve security of a NATO ally which continues to be an important force for political stability and economic progress. The proposed sale of weapons, equipment, and support for the transferred F–16s will support Romania's needs for its own self-defense and enhance the interoperability of these aircraft with those of the U.S. and other NATO nations.
The proposed sale will support the Romanian Air Force's (RoAF) efforts to equip and utilize the 12 F–16 aircraft it is procuring from Portugal. These aircraft will provide the RoAF with a fleet of modernized multi-role combat aircraft. This proposed sale of weapons, equipment, and follow-on F–16 support will enable Romania to support both its own air defense needs and coalition operations. The RoAF will have no difficultly absorbing these systems into its armed forces.
The proposed sale of this follow-on support will not alter the basic military balance in the region. The principal contractors will be:
There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of additional U.S. Government or contractor representatives to Romania.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
(vii)
1. The AIM–9M–8/9 Sidewinder Missile includes the following advanced technology: Active Optical Target Detector (AOTD), Gyro Optics Assembly within the Guidance Control Section (GCS), Infrared Countermeasures (IRCM), Detection and Rejection Circuitry, and a reduced smoke rocket motor. The equipment/hardware, software, and maintenance are classified Confidential. Manuals and technical documents are classified Secret. Performance and operating information is classified Secret.
2. The LAU–129 Guided Missile Launcher is capable of launching the AIM–9 family of missile or AIM–120 Advanced Medium Range Air-to-Air Missile (AMRAAM). The LAU–129 launcher provides mechanical and electrical interface between missile and aircraft. There are five versions produced strictly for foreign military sales. The only difference between these launchers is the material they are coated with or the color of the coating.
3. The AIM–120 AMRAAM is a radar-guided missile featuring digital technology and micro-miniature solid-state electronics. The AMRAAM capabilities include look-down/shoot-down, multiple launches against multiple targets, resistance to electronic countermeasures, and interception of high- and low-flying and maneuvering targets. The AMRAAM All Up Round (AUR) is classified Confidential, major components and subsystems range from Unclassified to Confidential, and technical data and other documentation are classified up to Secret.
4. The GBU–12 (500 lb) is a laser guidance kit and tail assembly for general-purpose bombs (MK–82). The hardware is Unclassified and the ballistics are Confidential.
5. AGM–65 Maverick: The AGM–65 air-to-ground missile hardware is Unclassified, but has an overall classification of Secret. The Secret aspects of the Maverick system are tactics, information revealing its vulnerability to countermeasures, and counter-countermeasures. Manuals and technical documents that are necessary for operational use and organizational maintenance have portions that are classified Confidential. Performance and operating logic of countermeasures circuits are Secret.
6. The Multifunctional Information Distribution System-Low Volume Terminal (MIDS–LVT) is an advanced Link-16 command, control, communications, and intelligence (C3I) system incorporating high-capacity, jam-resistant, digital communication links for exchange of near real-time tactical information, including both data and voice, among air, ground, and sea elements. MIDS–LVT is intended to support key theater functions such as surveillance, identification, air control, weapons engagement coordination, and direction for all services and allied forces. The system will provide jamming-resistant, wide-area communications on a Link-16 network among MIDS and Joint Tactical Information Distribution System (JTIDS) equipped platforms. The MIDS/LVT and
7. EGI LN–260: The Embedded GPS–INS (EGI) LN–260 is a sensor that combines GPS and inertial sensor inputs to provide accurate location information for navigation and targeting. The EGI LN–260 is Unclassified. The GPS crypto variable keys needed for highest GPS accuracy are classified up to Secret.
8. The ALQ–131 is a pod-mounted Receiver/Processor that detects, analyzes, identifies and prioritizes threat radars for effective jamming. The Receiver/Processor is a wideband, frequency agile super heterodyne receiver with a self-contained processor for signal sorting and threat ID. It provides the jammer with power management while look-through maximizes jammer effectiveness. It has been a standard jamming system for USAF and 11 other countries.
9. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar advanced capabilities.
10. A determination has been made that the recipient country can provide the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
Defense Health Agency, DoD.
Notice to amend nineteen Record Systems.
The TRICARE Management Activity (TMA) transitioned to the Defense Health Agency (DHA) effective October 1, 2013. The Defense Health Agency is now realigning the System of Records Notices (SORNS) to the Defense Health Agency's compilation of Privacy Act SORNS. The realignment of the nineteen system identifiers reflect the new numbering system that will be used by the Defense Health Agency.
This proposed action will be effective on December 19, 2013 unless comments are received which result in a contrary determination. Comments will be accepted on or before December 18, 2013.
You may submit comments, identified by docket number and title, by any of the following methods:
* Federal Rulemaking Portal:
* Mail: Federal Docket Management System Office, 4800 Mark Center Drive, East Tower, 2nd Floor, Suite 02G09, Alexandria, VA 22350–3100.
Ms. Linda S. Thomas, Director, Defense Health Agency Privacy and Civil Liberties Office, Defense Health Agency Headquarters, 7700 Arlington Boulevard, Suite 5101, Falls Church, VA 22042–5101, or by phone at (703) 681–7500.
The Defense Health Agency notices for systems of records subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
In the Department of Defense (DoD), systems of records are grouped by the DoD Component responsible for that system and its system of records notice. Each DoD Component has an assigned letter denominator for systems of records for which it is responsible. The Defense Health Agency, which was established on October 1, 2013, is assigned `E' as its letter denominator.
Department of the Army, DoD.
Notice of open meeting.
Under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended) and 41 CFR 102–3.150, the Department of Defense announces that the following Federal advisory committee meeting will take place:
Pursuant to 41 CFR 102–3.105(j) and 102–3.140 and section 10(a)(3) of the Federal Advisory Committee Act of 1972, the public may submit written statements to the Board of Visitors of the DLI in response to the agenda. All written statements shall be submitted to the ADFO for DLI Board of Visitors (see
For information, please contact Dr. Robert Savukinas, at
Department of the Navy, DoD.
Notice.
This notice provides information on the 30-day public review period and availability of a Final Environmental Assessment (EA) and Draft Finding of No Significant Impact (FONSI) for the Department of Navy's (DoN) transfer of excess property at Naval Air Station (NAS) Alameda, Alameda, California.
Ms. Kimberly A. Ostrowski, Director, Naval Facilities Engineering Command, Base Realignment and Closure Program Management Office, West, 1455 Frazee Road, Suite 900, San Diego, CA 92108–4310, telephone 619–532–0993.
The Proposed Action is the transfer of approximately 624 acres of excess federal property at the former NAS Alameda from the DoN to the Department of Veterans Affairs (VA) via
Based on information gathered during preparation of the Final EA and based upon the findings in the Final EA, DoN finds that implementation of the Proposed Action, with the VA's implementation and monitoring of the mitigation measures identified in the FONSI, would not have a significant impact on the human environment and an Environmental Impact Statement is not required for the transfer of excess property and VA's development of an OPC, offices, cemetery, and associated infrastructure at the former NAS Alameda.
The FONSI is available for public review for 30 days before becoming final at which time the proposed action may be implemented. The FONSI public review period ends 30 days after issuance of the Notice of Availability.
Take notice that on October 28, 2013, Houston Pipe Line Company LP (HPL), 1300 Main Street, Houston, Texas 77002, filed an application in Docket No. CP14–13–000 under section 3 of the Natural Gas Act (NGA), and Subpart B of Part 153 of the Commission's regulations requesting authorization to site, construct, operate, and maintain certain natural gas pipeline facilities to export and/or import natural gas between the United States and the Republic of Mexico (Border Crossing Project) at a point on the International Boundary between the United States in Hidalgo County, Texas and the Republic of Mexico in the vicinity of the City of Reynosa, State of Tamaulipas. Furthermore, HPL requests that the Commission issue a Presidential Permit authorizing HPL to site, construct, operate, and maintain the Border Crossing Project pursuant to Subpart C of Part 153 of the Commission's regulations to export and/or import natural gas between the United States and Mexico, all as more fully set forth in the application which is on file with the Commission and open to public inspection. This filing is available for review at the Commission in the Public Reference Room or may be viewed on the Commission's Web site at
Any questions regarding this application should be directed to Mr. Jim Wright, Deputy General Counsel, Houston Pipe Line Company LP, 1300 Main Street, Houston, TX 77002, or by calling (713) 989–7010 (telephone) or (713) 989–1212 (fax).
Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commentors will not be required to serve copies of filed documents on all other parties. However, the non-party commentors will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
As announced in the Notice of Technical Conference issued on October 25, 2013, and as required in the Commission's October 16, 2013, order in this docket, there will be a technical conference in this proceeding on November 19, 2013, at the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC, Hearing Room 6.
The conference will not be webcast, but will be accessible via telephone. Parties wishing to participate by phone should fill out the registration form and check the box indicating that they wish to participate by conference call, and do so no later than 5:00 p.m. (Eastern Time) on Friday, November 15, 2013. Parties selecting this option will receive a confirmation email containing a dial-in number and a password before the conference. To the extent possible, individuals calling from the same location should share a single telephone line.
FERC conferences are accessible under section 508 of the Rehabilitation Act of 1973. For accessibility accommodations please send an email to
For further information regarding this conference, contact Cristie DeVoss at
The conference will consist of three sessions, as detailed below. For each session, a representative of Midcontinent Independent System Operator, Inc. (MISO) and a representative of MISO's Independent Market Monitor should be prepared to make opening statements that address the questions below. After statements by the MISO and Independent Market Monitor representatives, Commission staff will ask questions; as time permits, other attendees (including telephone participants) may also ask questions. The times given below are approximate and may change, as needed.
1. Explain in detail each step of the Constraint Management Charge Allocation Factor determination process under proposed Schedule 46.
a. For step one, define the terms “Hourly Real-Time RSG MWP” and “Resource CMC Real-time RSG MWG” and explain why the terms are equal for each hour and active transmission constraint, as stated in Schedule 46. Also, explain the determination of the Constraint Management Charge capacity committed (CMC_CAP_COM).
b. For step two, define the terms “RES_LP_VOL,” “TP_Next_Hour,” “RT_BLL_MTR
c. For step three, explain the criteria for determining whether a resource was available for commitment for a capacity resource commitment analysis period. Also, explain how MISO will select the Constraint Management Charge Replacement Resource (CMC_RR) and determine the associated Capacity Commitment Make-Whole Payment (CAP_COM_MWP).
d. For step four, explain the determination of the Capacity Contribution (CAP_CON), Constraint Management Charge Contribution (CMC_CON), and Constraint Management Charge Allocation Factor.
2. Explain in detail how the calculation of the Constraint Management Charge Allocation Factor under proposed Schedule 46 accounts for real-time Revenue Sufficiency Guarantee (RSG) costs allocated to Voltage and Local Reliability, the RSG Second Pass Distribution, and Day-Ahead Schedule Deviation and Headroom Charges. For example, explain why the product of the aggregate applicable real-time RSG credits and the difference between one and the Constraint Management Charge Allocation Factor equals the RSG costs funded through Day-Ahead Schedule Deviation and Headroom Charges, pursuant to the proposed revisions to section 40.3.3.a.v.
3. The description of the Constraint Management Charge in proposed Schedule 46 states that the Constraint Management Charge Allocation Factor Study determines the share of real-time RSG costs attributable to the “commitment of Resources for Active Transmission Constraints.” Should this instead be “Resources committed in any R[eliability] A[ssessment] C[ommitment] process or the L[ook] A[head] C[ommitment] process for an Active Transmission constraint and not otherwise attributable to Topology Adjustment and Transmission De-rates,” consistent with the definition of the Constraint Management Charge in section 1.537a of the existing MISO tariff?
4. Provide numerical examples demonstrating (a) MISO's existing Constraint Management Charge formula under sections 40.3.3.a.iv and v, and (b) how MISO's proposed revisions to its tariff will change this formula. Provide examples illustrating these formulas in the event that the Constraint Management Charge rate cap does and does not apply.
5. MISO states that the Constraint Management Charge Allocation Factor should be a better indicator than the Constraint Contribution Factor of the real-time RSG costs attributable to an active transmission constraint and that the Constraint Management Charge should “no longer be limited by the C[onstraint] C[ontribution] F[actor] of the Resource committed to address the relevant constraint.”
a. Explain in detail why MISO should continue using the Constraint Contribution Factor in section 40.3.3.a.iv to calculate the “adjusted deviations” used to determine the real-time RSG Constraint Management Charges to be paid by market participants in sections 40.3.3.a.iv(a) and 40.3.a.iv(b).
b. In the event that the Constraint Management Charge rate cap does not apply, explain in detail why MISO should continue using the Constraint Contribution Factor in the denominator of the Constraint Management Charge formula provided in section 40.3.3.a.v to calculate the “adjusted deviations,” pursuant to section 40.3.3.a.iv, and to adjust topology adjustments or transmission de-rates.
c. In the event that the Constraint Management Charge rate cap applies, explain in detail why MISO should use the Constraint Management Charge Allocation Factor, rather than the Constraint Contribution Factor, to adjust the applicable hourly economic maximum dispatch amounts in the denominator of the Constraint Management Charge rate.
6. MISO proposes in section 40.3.3.a.v to modify the numerator of the Constraint Management Charge rate by multiplying the aggregate real-time RSG credits in an hour attributable to resources committed in the Reliability Assessment Commitment or Look-Ahead Commitment processes by “the Constraint Management Charge Allocation Factor, pursuant to Schedule 46.”
a. In the event that the Constraint Management Charge rate cap does not apply, explain in detail how MISO's proposal to begin adjusting the numerator of the rate by the Constraint Management Charge Allocation Factor, while continuing to use the existing Constraint Contribution Factor to calculate adjusted deviations and adjust topology adjustments or transmission de-rates in the denominator of the rate, will affect the applicable Constraint Management Charge rate. For example, will the proposal result in a decrease in Constraint Management Charge rates?
b. In the event that the Constraint Management Charge rate cap applies, explain in detail how MISO's proposal to begin using the Constraint Management Charge Allocation Factor to adjust the numerator and denominator of the rate will affect the applicable Constraint Management Charge rate. Specifically, by multiplying both the numerator and denominator of the rate by the same term, does MISO intend those terms to cancel (e.g., so that the Constraint Management Charge rate cap will equal the applicable Economic Maximum Dispatch amounts)?
7. MISO states that load zones with net injections “impact the management of congestion and may also result in a Post-Notification Deadline deviation in the Day-Ahead Schedule Deviation Charge rate formula.”
8. Explain why MISO proposes in section 40.3.3.a.viii(6) to use “any positive difference” between a load zone's actual energy withdrawal or injection adjusted by any associated demand response injections and its demand forecast in effect at the notification deadline when determining Day-Ahead Schedule Deviation and Headroom Charges. Contrast this with MISO's use, pursuant to section 40.3.3.a.iii(4), of “any difference” between a load zone's demand forecast in effect at the notification deadline and its actual energy withdrawal or injection adjusted by any associated demand response injections when determining Constraint Management Charges.
9. Explain in detail the determination of Day-Ahead Schedule Deviation and Headroom Charges if the sum of the Market-Wide Net Deviations and Headroom Need is (1) less than or equal to zero, (2) greater than or equal to the Economic Committed Capacity, or (3) greater than zero but less than the Economic Committed Capacity. Explain how this calculation accounts for situations where the Market-Wide Net Deviations are negative but the Headroom Need is positive, such that their sum is greater than zero.
10. MISO maintains that deviations that cause the commitment of additional resources are “the most relevant” causes of real-time RSG costs and that “the operative fact is the commitment of additional Resources in [sic] R[eliability] A[ssessment] C[ommitment], not the pricing circumstances of the market into which those Resources will be committed.”
a. Describe the extent to which supply-increasing deviations that occur after the notification deadline affect the incurrence of real-time RSG costs, such as by reducing costs by augmenting available capacity and increasing costs by reducing real-time prices.
b. Using actual 2012 data, explain the extent to which supply-increasing deviations that occurred after the notification deadline caused the incurrence of real-time RSG costs.
c. Explain whether the implementation of MISO's Look-Ahead Commitment process would affect the incurrence of real-time RSG costs due to supply-increasing deviations that occur after the notification deadline.
Staff will conclude the conference and outline next steps.
On August 14, 2013, Houtama Hydropower LLC filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the McKay Dam Hydroelectric Project (project) to be located at McKay Dam near Pendleton in Umatilla County, Oregon. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would utilize flows at the existing McKay Reservoir, and would consist of the following new features: (1) A 48-inch diameter, 60-foot-long steel penstock that extends from the existing dam penstock to a powerhouse; (2) a 20-foot by 30-foot powerhouse; (3) a single 2.3-megawatt turbine/generator; (4) a switchyard with a 69 kilovolt (kV) step-up transformer; (5) an approximately 3,000-foot-long, 69-kV transmission line interconnecting to the Pacific Power distribution system; and (6) appurtenant facilities. The estimated annual generation of the project would be 5 gigawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
On September 9, 2013, Mid-Atlantic Hydro, LLC, filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Tuttle Creek Hydroelectric Project (Tuttle Creek Project or project) to be located on Big Blue River, in the city of Manhattan, Riley County, Kansas. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would consist of the following: (1) A new 350-foot-long, 16-foot-diameter steel penstock; (2) a new 100-foot-long, 50-foot-wide concrete powerhouse, containing one 7.9-megawatt (MW) turbine generator unit; (3) a new 2.8-mile-long, 25-kilovolt (kV) transmission line; (4) an existing 860-foot-long, 20-foot-diameter horseshoe conduit; (5) a new 40-foot-long, 50-foot-wide switchyard connecting to the existing Weststar Substation; and (6) appurtenant facilities. The estimated annual generation of the Tuttle Creek Project would be 30,500 megawatt-hours per year.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
On October 1, 2013, JD Products, LLC (JD Products) filed an application for a successive preliminary permit, pursuant to section 4(f) of the Federal Power Act, proposing to study the feasibility of the proposed San Onofre Electricity Farm Project (project). The proposed project would utilize up to 1,314 generation units, with an estimated installed capacity of 2,000 megawatts with a projected average annual generation of about 17,519 megawatthours. The requested project boundary comprises of approximately 6 square nautical miles of coastal waters and lands located along the coast of San Diego County, California, near the towns of San Onofre and San Clemente, and include portions of the San Onofre California State Park and the United States Marine Corps Base Camp Pendleton.
The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land disturbing or construction activities or to otherwise enter upon lands or waters owned by others without the owners' express permission.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60
For a simpler method of submitting text only comments, click on “Quick Comment.” For assistance, please contact FERC Online Support at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency has submitted an information collection request (ICR), Compliance Assurance Monitoring Program (Renewal) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the information collection request, which is currently approved through December 31, 2013. Public comments were previously requested via the
Additional comments may be submitted on or before December 18, 2013.
Submit your comments, referencing Docket ID No. EPA–HQ–OAR–2003–0152 online using
The EPA's policy is that all comments received will be included in the public docket without change, including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information or other information whose disclosure is restricted by statute.
Angela Hackel, Office of Air Quality and Planning Standards, Sector Policies and Programs Division (D243–05), Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541–5262; fax number: (919) 541–3207; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this information collection request. The docket can be viewed online at www.regulations.gov or in person at the EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The telephone number for the Docket Center is (202) 566–1744. For additional information about the EPA's public docket, visit:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency has submitted an information collection request (ICR), 8-Hour Ozone National Ambient Air Quality Standard, to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through December 31, 2013. Public comments were previously requested via the
Additional comments may be submitted on or before December 18, 2013.
Submit your comments, referencing Docket ID Number EPA–HQ–OAR–2003–0079, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Mr. H. Lynn Dail, Air Quality Policy Division, Office of Air Quality Planning and Standards, Mail Code C539–01, Environmental Protection Agency, T.W. Alexander Drive, Research Triangle Park, NC 27711; telephone number: (919) 541–2363; fax number: (919) 541–0824; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency has submitted an information collection request (ICR), “Air Emission Standards for Tanks, Surface Impoundment and Containers (40 CFR Part 264, Subpart CC, and 40 CFR Part 265, Subpart CC) (Renewal)” (EPA ICR No. 1593.09, OMB Control No. 2060–0318), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501
Additional comments may be submitted on or before December 18, 2013.
Submit your comments, referencing Docket ID Number EPA–HQ–OECA–2013–0333, to: (1) EPA online, using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Learia Williams, Monitoring, Assistance, and Media Programs Division, Office of Compliance, Mail Code 2227A, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 564–4113; fax number: (202) 564–0050; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at
There is also an increase of one response in this ICR due to a correction. The previous ICR did not account for the annual project report for the Sisterville Plant when calculating the total number of responses.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency has submitted an information collection request (ICR), Implementation of Ambient Air Protocol Gas Verification Program (Renewal) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through December 31, 2013. Public comments were previously requested via the
Additional comments may be submitted on or before December 18, 2013.
Submit your comments, referencing Docket ID No. EPA–HQ–OAR–2010–0050, to (1) EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Mrs. Laurie Trinca, Air Quality Assessment Division, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Mail Code C304–06, Research Triangle Park, NC 27711; telephone: 919–541–0520; fax: 919–541–1903; email:
Supporting documents, which explain in detail the information that EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
The EPA Ambient Air Quality Monitoring Program's quality assurance requirements in 40 CFR part 58, appendix A, require: “2.6 Gaseous and Flow Rate Audit Standards. Gaseous pollutant concentration standards (permeation devices or cylinders of compressed gas) used to obtain test concentrations for CO, SO
These requirements give assurance to end users that all specialty gas producers selling EPA Protocol Gases are participants in a program that provides an independent assessment of the accuracy of their gases' certified concentrations. In 2010, EPA developed an Ambient Air Protocol Gas Verification Program that provides end users with information about participating producers and verification results. Each year, EPA will attempt to compare gas cylinders from every specialty gas producer being used by ambient air monitoring organizations. Cylinders will be verified at a pre-determined time each quarter. In order to make the appropriate selection, EPA needs to know what specialty gas producers are being used by the monitoring organizations. Therefore, EPA needs information from each primary quality assurance organization every year on specialty gas producers being used and whether the monitoring organization would like to participate in the verification for the upcoming calendar year.
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Banks of the United States (Ex-Im Bank), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
This collection of information is necessary, pursuant to 12 U.S.C. 635(a)(1), to determine eligibility of the applicant for Ex-Im Bank assistance.
The Application for Short Term Letter of Credit Export Credit Insurance Policy is used to determine the eligibility of the applicant and the transaction for Export-Import Bank assistance under its insurance program. Export-Import Bank customers are able to submit this form on paper or electronically.
The application tool can be reviewed at:
Comments must be received on or before December 18, 2013 to be assured of consideration.
Comments may be submitted electronically on
Federal Communications Commission.
Notice.
The following applicants filed AM or FM proposals to change the community of license: CBS RADIO ANNAPOLIS LLC, Station WLZL, Facility ID 20983, BMPH–20131022ALD, From ANNAPOLIS, MD, To COLLEGE PARK, MD; FAMILY LIFE MINISTRIES, INC., Station WCIK, Facility ID 20631, BPH–20130924AJT, From BATH, NY, To AVOCA, NY; PRITCHARD BROADCASTING CORPORATION, Station WQKQ, Facility ID 7635, BPH–20130930BFH, From CARTHAGE, IL, To DALLAS CITY, IL; SMILE FM, Station WKKM, Facility ID 93344, BPED–20130814ADM, From SPEAKER TOWNSHIP, MI, To GRANT TOWNSHIP, MI; SOUTHERN ELECTRONICS COMPANY, INC., Station WONA–FM, Facility ID 61281, BPH–20130620AAY, From WINONA, MS, To SHERMAN, MS; SOUTHERN WABASH COMMUNICATIONS OF MIDDLE TENNESSEE, INC., Station WBGB, Facility ID 172966, BPED–20130909AAI, From SCOTTSVILLE, KY, To PORTLAND, TN; SSR COMMUNICATIONS, INC., Station KIMW, Facility ID 191575, BMPH–20130913ACG, From HAYNESVILLE, LA, To HEFLIN, LA; THE MONTANA RADIO COMPANY, LLC, Station KKRK, Facility ID 189560, BPH–20130918ADF, From WHITEHALL, MT, To HELENA VALLEY SE., MT; THE MONTANA RADIO COMPANY, LLC, Station KIMO, Facility ID 83110, BPH–20130918ADH, From HELENA VALLEY SE., MT, To TOWNSEND, MT.
The agency must receive comments on or before January 17, 2014.
Federal Communications Commission, 445 Twelfth Street SW., Washington, DC 20554.
Tung Bui, 202–418–2700.
The full text of these applications is available for inspection and copying during normal business hours in the Commission's Reference Center, 445 12th Street SW., Washington, DC 20554 or electronically via the Media Bureau's Consolidated Data Base System,
Federal Election Commission.
78 FR 68444 (November 14, 2013)
999 E Street NW., Washington, DC.
This meeting will be closed to the public.
The meeting will begin at 11:00 a.m.
Compliance matters pursuant to 2 U.S.C. 437g.
Matters concerning participation in civil actions or proceedings or arbitration.
Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action.
Judith Ingram, Press Officer, Telephone: (202) 694–1220.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice of request for comments regarding an extension, with changes, to an existing OMB clearance.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat will be submitting to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement concerning preaward survey forms (Standard Forms 1403, 1404, 1405, 1406, 1407, and 1408). A notice was published in the
Submit comments on or before December 18, 2013.
Submit comments identified by Information Collection 9000–0011, Preaward Survey Forms, (Standard Forms 1403, 1404, 1405, 1406, 1407, and 1408) by any of the following methods:
•
•
•
Ms. Cecelia L. Davis, Procurement Analyst, Office of Governmentwide Acquisition Policy, GSA, 202–219–0202 or email
To protect the Government's interests and to ensure timely delivery of items of the requisite quality, contracting officers, prior to award, must make an affirmative determination that the prospective contractor is responsible,
The analysis of the public comments is summarized as follows:
1. Necessity of the information collection requirement.
2. OMB approval to extend the approval of this information collection requirement.
3. Accuracy of data estimates.
With regard to the estimate of 3,540 respondents, that number was clearly stated to be an estimate, not an actual number. We are unable to provide an actual number, because that information is not available through the Federal Procurement Data System (FPDS), nor is it collected in any single location.
However, the basis used for the estimate has been reconsidered due to the comment. Initially, we estimated that 30 percent of the contracts awarded in Fiscal Year 2012 (according to FPDS statistics) that were over the simplified acquisition threshold and that did not use FAR part 12 commercial acquisition procedures had a preaward survey conducted and therefore required the firm to complete at least one of the standard forms included in the information collection request. Upon reconsideration, it became obvious that a preaward survey would only be needed if the firm had not previously been a Government contractor. The revised estimate is that only 15 percent of such awards are first-time Government contract awards. This reduces the basis of the estimate from 3,540 contracts to 1,771 contracts.
4. Timing of request for extension.
5. The collective burden of compliance.
A preaward survey would be needed only if the firm had not previously been a Government contractor and therefore had no record of past performance. The data from FPDS for FY 2012 showed a total of 11,805 contracts awarded Governmentwide that were over the $150,000 simplified acquisition threshold, and for which commercial acquisition procedures were not used. Initially, we estimated that preaward surveys were completed for 30 percent of the total or 3,540. After reconsideration, it became obvious that a preaward survey would only be needed if the firm had not previously been a Government contractor. The revised estimate is that only 15 percent of awards will potentially require a preaward survey. The estimate is reduced from 3,540 contracts to 1,771 contracts. Of the six Standard Forms (1403, 1404, 1405, 1406, 1407, and 1408), we estimated that Standard Form 1403 is used most frequently because it is a general form and accounts for 30 percent or 531 times, Standard Forms 1404 and 1407 account for 15 percent or 266 times, Standard Form 1408 accounts for 20 percent or 354 times, and Standard Forms 1405 and 1406 account 10 percent or 177 times.
Public comments are particularly invited on: Whether this collection of information is necessary for the proper performance of functions of the Federal Acquisition Regulations (FAR), and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology.
Please cite OMB Control Number 9000–0011, Preaward Survey Forms (Standard Forms 1403, 1404, 1405, 1406, 1407, and 1408), in all correspondence.
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project: “Collection of Information for Agency for Healthcare Research and Quality's (AHRQ) Consumer Assessment of Healthcare Providers and Systems (CAHPS) Health Plan Survey Comparative Database.” In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501–3521, AHRQ invites the public to comment on this proposed information collection.
This proposed information collection was previously published in the
Comments on this notice must be received by December 18, 2013.
Written comments should be submitted to: AHRQ's OMB Desk Officer by fax at (202) 395–6974 (attention: AHRQ's desk officer) or by
Copies of the proposed collection plans, data collection instruments, and specific details on the estimated burden can be obtained from the AHRQ Reports Clearance Officer.
Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427–1477, or by email at
Request for information collection approval. The Agency for Healthcare Research and Quality (AHRQ) requests that the Office of Management and Budget (OMB) reapprove, under the Paperwork Reduction Act of 1995, AHRQ's collection of information for the AHRQ Consumer Assessment of Healthcare Providers and Systems (CARPS) Database for Health Plans: OMB Control number 0935–0165, expiration July 31, 2013. The CAHPS Health Plan Database consists of data from the AHRQ CAHPS Health Plan Survey. Health plans in the U.S. are asked to voluntarily submit data from the survey to AHRQ, through its contractor, Westat. The CAHPS Database was developed by AHRQ in 1998 in response to requests from health plans, purchasers, and the Centers for Medicare & Medicaid Services (CMS) to provide comparative data to support public reporting of health plan ratings, health plan accreditation and quality improvement.
Background on the CAHPS Health Plan Survey. The CAHPS Health Plan Survey is a tool for collecting standardized information on enrollees' experiences with health plans and their services. The development of the CAHPS Health Plan Survey began in 1995, when AHRQ awarded the first set of CAHPS grants to Harvard, RTI, and RAND. In 1997 the CAHPS 1.0 survey was released by the CAHPS Consortium. The CAHPS Consortium refers to the research organizations involved in the development, dissemination, and support of CAHPS products. The current Consortium includes AHRQ, CMS, RAND, Yale School of Public Health, and Westat.
Since that time, the Consortium has clarified and updated the survey instrument to reflect field test results; feedback from industry experts; reports from health plan participants, data collection vendors, and other users; and evidence from cognitive testing and focus groups. In November 2006, the CAHPS Consortium released the latest version of the instrument: The CAHPS Health Plan Survey 4.0. The development of this update to the Health Plan Survey has been part of the “Ambulatory CAHPS (A–CAHPS) Initiative,” which arose as a result of extensive research conducted with users. AHRQ released the CAHPS Health Plan Survey 4.0, along with guidance on how to customize and administer it. The National Quality Forum endorsed the 4.0 version of the Health Plan Survey in July 2007.
Rationale for the information collection. The CAHPS Health Plan Database uses data from AHRQ's standardized CAHPS Health plan survey to provide comparative results to health care purchasers, consumers, regulators and policy makers across the country. The Database also provides data for AHRQ's annual National Healthcare Quality and National Healthcare Disparities Reports. Voluntary participants include public and private employers, State Medicaid agencies, State Children's Health Insurance Programs (SCHIP), the Centers for Medicare & Medicaid Services (CMS), and individual health plans.
This study is being conducted by AHRQ through its contractor, Westat, pursuant to AHRQ's statutory authority to conduct and support research on healthcare and on systems for the delivery of such care, including activities with respect to: The quality, effectiveness, efficiency, appropriateness and value of healthcare services; quality measurement and improvement; and database development. 42 U.S.C. 299a(a)(1), (2), and (a)(8).
Each year State Medicaid agencies, and individual health plans decide whether to participate in the database and prepare their materials and dataset for submission to the CARPS Health Plan Database. Participating organizations are typically State Medicaid agencies with multiple health plans. However, individual health plans are also encouraged to submit their data to the CARPS Database. The number of data submissions per registrant varies from participant to participant and year to year because some participants submit data for multiple health plans, while others may only submit survey data for one plan.
Each organization that decides to participate in the database must have their point-of-contact (POC) complete a registration form providing their contact information for access to the on-line data submission system, sign and submit a DUA, and provide health plan characteristics such as health plan name, product type, type of population surveyed, health plan state, and plan name to appear in the reporting of their results.
Each vendor that submits files on behalf of a Medicaid agency or individual health plan must also complete the registration form in order to obtain access to the on-line submission system. The vendor, on behalf of their client, may also complete additional information about survey administration (CAHPS survey version used, mode of survey administration, total enrollment count, description of how the sample was selected), submit a copy of the questionnaire used, and submit one data file per health plan. Commercial health plan data is received directly from NCQA. Medicare health plan data is received from CMS.
Survey data from the CAHPS Health Plan Database is used to produce four types of products: (1) An annual chartbook available to the public on the CAHPS Database Web site (
Exhibit 1 shows the estimated burden hours for the respondent to participate in the database. The burden hours pertain only to the collection of Medicaid data from State Medicaid agencies and individual Medicaid health plans because those are the only entities that submit data through the data submission process (other data are obtained directly from NCQA and CMS as noted earlier in Section 2). The 80 POCs in exhibit 1 are a combination of an estimated 60 State Medicaid agencies and individual health plans, and 20 estimated vendors.
Each State Medicaid agency, health plan or vendor will register online for submission. The online Registration form will require about 5 minutes to complete. Each submitter will also
Exhibit 2 shows the estimated annualized cost burden based on the respondents' time to complete one submission process. The cost burden is estimated to be $20,202 annually.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) Whether the proposed collection of information is necessary for the proper performance of AHRQ health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All comments will become a matter of public record.
In compliance with the requirement of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 for opportunity for public comment on proposed data collection projects, the Centers for Disease Control and Prevention (CDC) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the data collection plans and instruments, call 404–639–7570 and
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Written comments should be received within 60 days of this notice.
From 2009–2012, CDC conducted incident specific, public health emergency response operations on average of six public health incidents a year with an average emergency response length of 50 days for each incident. The effectiveness and efficiency of CDC's response to any public health incident depends on information at the agency's disposal to characterize and monitor the incident, make timely decisions, and take appropriate actions to prevent or reduce the impact of the incident.
Available information in anticipation of, during and following public health incident responses is often incomplete, is not easily validated by state and local health authorities, and is sometimes conflicting. This lack of reliable information often creates a high level of uncertainty with potential negative impacts on public health response operations. Secure communications with CDC's state, local, territorial, and tribal public health partners is essential to resolve conflicting information, validate incident status, and establish and maintain situational awareness. Reliable, secure communications are essential for the agency to gain and maintain accurate situational awareness, make informed decisions, and to respond in the most appropriate manner possible in order to minimize the impact of an incident on the public health of the United States.
This generic Information Collection Request (ICR) is being revised to: (1) Remove verbiage limiting data collection to activation of the Incident Management Structure, (2) broaden categories under which data may be collected to increase its utilization, and (3) provide clarity regarding the data elements.
CDC has recognized a need to expand the use of
Authorized officials from state and local health departments affected by the public health incident will be informed of this data collection first through an
Respondents will receive the survey instrument(s) as an official CDC email, which is clearly labeled, “
There are no costs to respondents except their time.
The Centers for Disease Control and Prevention (CDC) publishes a list of information collection requests under review by the Office of Management and Budget (OMB) in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these requests, call (404) 639–7570 or send an email to
National Notifiable Disease Surveillance System (NNDSS) [
CDC requests a three year approval for a Revision of the National Notifiable Diseases Surveillance System (NNDSS) information collection, [National Electronic Disease Surveillance System (NEDSS, OMB Control No.
Because this information collection request includes case notifications that were not part of the 2010 NNDSS/NEDSS application, replaces one application and replaces parts of three other OMB applications, burden estimates have been adjusted to incorporate burden estimates from the other four applications. The estimates are adjusted for the increased number of conditions reported to NNDSS, the expansion of core data elements, and the inclusion of more disease-specific tables. These changes have increased the burden estimates in this application in comparison with the burden estimates in the 2010 NNDSS/NEDSS OMB application (OMB Control No.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
The Centers for Disease Control and Prevention (CDC) located within the Department of Health and Human Services (HHS) is publishing the names of the Performance Review Board Members who are reviewing performance for Fiscal Year 2013.
Sharon O'Brien, Deputy Director, Executive and Scientific Resources Office, Human Capital and Resources Management Office, Centers for Disease Control and Prevention, 4770 Buford Highway NE., Mailstop K–15, Atlanta, Georgia 30341, Telephone (770) 488–1781.
Title 5, U.S.C. 4314(c)(4) of the Civil Service Reform Act of 1978, Public Law 95–454, requires that the appointment of Performance Review Board Members be published in the
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by January 17, 2014.
Submit electronic comments on the collection of information to
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50–400B, Rockville, MD 20850,
Under the PRA (44 U.S.C. 3501–3520), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed 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) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
The “Guidance for Industry on Special Protocol Assessment” describes Agency procedures to evaluate issues related to the adequacy (e.g., design, conduct, analysis) of certain proposed studies. The guidance describes procedures for sponsors to request special protocol assessment and for the Agency to act on such requests. The guidance provides information on how the Agency interprets and applies provisions of the Food and Drug Administration Modernization Act of 1997 and the specific Prescription Drug User Fee Act of 1992 (PDUFA) goals for special protocol assessment associated with the development and review of PDUFA products. The guidance describes the following two collections of information: (1) The submission of a notice of intent to request special protocol assessment of a carcinogenicity protocol and (2) the submission of a request for special protocol assessment.
As described in the guidance, a sponsor interested in Agency assessment of a carcinogenicity protocol should notify the appropriate division in FDA's Center for Drug Evaluation and Research (CDER) or the Center for Biologics Evaluation and Research (CBER) of an intent to request special protocol assessment at least 30 days
The guidance asks that a request for special protocol assessment be submitted as an amendment to the investigational new drug application (IND) for the underlying product and that it be submitted to the Agency in triplicate with Form FDA 1571 attached. The guidance also suggests that the sponsor submit the cover letter to a request for special protocol assessment via facsimile to the appropriate division in CDER or CBER. Agency regulations (21 CFR 312.23(d)) state that information provided to the Agency as part of an IND is to be submitted in triplicate and with the appropriate cover form, Form FDA 1571. An IND is submitted to FDA under existing regulations in part 312 (21 CFR part 312), which specifies the information that manufacturers must submit so that FDA may properly evaluate the safety and effectiveness of investigational drugs and biological products. The information collection requirements resulting from the preparation and submission of an IND under part 312 have been estimated by FDA and the reporting and recordkeeping burden has been approved by OMB under OMB control number 0910–0014.
FDA suggests that the cover letter to the request for special protocol assessment be submitted via fax to the appropriate division in CDER or CBER to enable Agency staff to prepare for the arrival of the protocol for assessment. The Agency recommends that a request for special protocol assessment be submitted as an amendment to an IND for two reasons: (1) To ensure that each request is kept in the administrative file with the entire IND and (2) to ensure that pertinent information about the request is entered into the appropriate tracking databases. Use of the information in the Agency's tracking databases enables the appropriate Agency official to monitor progress on the evaluation of the protocol and to ensure that appropriate steps will be taken in a timely manner.
The guidance recommends that the following information should be submitted to the appropriate Center with each request for special protocol assessment so that the Center may quickly and efficiently respond to the request:
• Questions to the Agency concerning specific issues regarding the protocol; and
• All data, assumptions, and information needed to permit an adequate evaluation of the protocol, including: (1) The role of the study in the overall development of the drug; (2) information supporting the proposed trial, including power calculations, the choice of study endpoints, and other critical design features; (3) regulatory outcomes that could be supported by the results of the study; (4) final labeling that could be supported by the results of the study; and (5) for a stability protocol, product characterization and relevant manufacturing data.
FDA estimates the burden of this collection as follows:
Food and Drug Administration, HHS.
Notice; extension of comment period.
The Food and Drug Administration (FDA or we) is extending the comment period for the information collection entitled “Food Canning Establishment Registration, Process Filing, and Recordkeeping for Acidified Foods and Thermally Processed Low-Acid Foods in Hermetically Sealed Containers” that appeared in the
FDA is extending the comment period on the proposed information collection. Submit either electronic or written comments by February 18, 2014.
Submit electronic comments on the collection of information to
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50–400B, Rockville, MD 20850,
In the
We have received a request to extend the comment period for the proposed collection of information. The request noted that we intend to issue a draft guidance document further explaining the forms that are the subject of the collection of information and requested that the comment period for the proposed collection of information be extended to match the comment period that will be announced in a future notice requesting comments on such a draft guidance document. The requestor expected that a likely comment period for the draft guidance would be 60 days.
We have considered the request and are extending the comment period for the information collection for 90 days, until February 18, 2014. We believe that a 90-day extension allows adequate time for interested persons to submit comments without significantly delaying our submission of the proposed collection of information to OMB for review under the PRA. We are not granting the specific request to extend the comment period to match the date when we publish a notice of availability for a related draft guidance because we cannot say with certainty when that notice will publish. However, we expect to issue that notice in a timely manner such that we would announce a comment period until approximately February 18, 2014. In addition, we note that comments are welcome on guidance documents at any time (21 CFR 10.115(g)(5)).
Interested persons may submit either electronic comments regarding this document to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or we) 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.
Fax written comments on the collection of information by December 18, 2013.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202–395–7285, or emailed to
FDA PRA Staff, Office of Operations, Food and Drug Administration, 1350 Piccard Dr., PI50–400B, Rockville, MD 20850,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Section 413(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 350b(a)) provides that at least 75 days before the introduction or delivery for introduction into interstate commerce of a dietary supplement that contains an NDI, a manufacturer or distributor of dietary supplements or of an NDI is to submit to us (as delegate for the Secretary of Health and Human Services) information upon which the manufacturer or distributor has based its conclusion that a dietary supplement containing an NDI will reasonably be expected to be safe. Part 190 (21 CFR part 190) implements these statutory provisions. Section 190.6(a) requires each manufacturer or distributor of a dietary supplement containing an NDI, or of an NDI, to submit to the Office of Nutrition, Labeling, and Dietary Supplements notification of the basis for their conclusion that said supplement or ingredient will reasonably be expected to be safe. Section 190.6(b) requires that the notification include the following: (1) The complete name and address of the manufacturer or distributor, (2) the name of the NDI, (3) a description of the dietary supplements that contain the NDI, and (4) the history of use or other evidence of safety establishing that the dietary ingredient will reasonably be expected to be safe.
The notification requirements described previously are designed to enable us to monitor the introduction into the food supply of NDIs and dietary supplements that contain NDIs, in order to protect consumers from the introduction of unsafe dietary supplements into interstate commerce. We use the information collected under these regulations to help ensure that a manufacturer or distributor of a dietary supplement containing an NDI is in full compliance with the FD&C Act. We are currently developing an electronic means for submitting this information.
In the
One comment suggested providing drop-down menus to facilitate data entry. FDA appreciates this suggestion and will continue to consider various configurations for submitting information in electronic form that are most effective and efficient for respondents. Another comment stated that FDA's estimate of 20 hours per notification is not accurate. The comment indicated that 40 to 60 hours were required to extract and summarize relevant information from the firm's files, and that an additional 20 to 40 hours was needed to format the information to meet NDI requirements. FDA deliberated over this comment, but believes that collecting and compiling data under applicable regulatory requirements for the premarket notification program places a minimal burden on respondents. As noted both in our August 26, 2013, notice and in this document, § 190.6(a) requires each manufacturer or distributor of an NDI, or dietary supplement containing an NDI, to submit notification of the basis for their conclusion that the supplement or ingredient will reasonably be expected to be safe. Because we are requesting only that information that the manufacturer or distributor should have already developed, we believe that 20 hours per submission is an appropriate burden estimate.
Both comments note that in the
FDA estimates the burden of this collection of information as follows:
We believe that there will be minimal burden on the industry to generate data to meet the requirements of the premarket notification program because we are requesting only that information that the manufacturer or distributor should already have developed to satisfy itself that a dietary supplement containing an NDI is in full compliance with the FD&C Act. In the past, commenters argued that our burden estimate is too low. Section 190.6(a) requires each manufacturer or distributor of a dietary supplement containing an NDI, or of an NDI, to submit notification of the basis for their conclusion that said supplement or ingredient will reasonably be expected to be safe. Section 190.6 requests simply the extraction and summarization of the safety data that should have already been developed by the manufacturer or distributor. Thus, we estimate that extracting and summarizing the relevant
We estimate that 55 respondents will submit one premarket notification each and that it will take a respondent 20 hours to prepare the notification, for a total of 1,100 hours. The estimated number of premarket notifications and hours per response is an average based on our experience with notifications received during the last 3 years and information from firms that have submitted recent premarket notifications.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the Recombinant DNA Advisory Committee.
The meeting will be open to the public, 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.
Information is also available on the Institute's/Center's home page:
OMB's “Mandatory Information Requirements for Federal Assistance Program Announcements” (45 FR 39592, June 11, 1980) requires a statement concerning the official government programs contained in the Catalog of Federal Domestic Assistance. Normally NIH lists in its announcements the number and title of affected individual programs for the guidance of the public. Because the guidance in this notice covers virtually every NIH and Federal research program in which DNA recombinant molecule techniques could be used, it has been determined not to be cost effective or in the public interest to attempt to list these programs. Such a list would likely require several additional pages. In addition, NIH could not be certain that every Federal program would be included as many Federal agencies, as well as private organizations, both national and international, have elected to follow the NIH Guidelines. In lieu of the individual program listing, NIH invites readers to direct questions to the information address above about whether individual programs listed in the Catalog of Federal Domestic Assistance are affected.
Title 5, U.S.C. Section 4314(c)(4) of the Civil Service Reform Act of 1978, Public Law 95–454, requires that the appointment of Performance Review Board Members be published in the
The following persons may be named to serve on the Performance Review Boards or Panels, which oversee the evaluation of performance appraisals of Senior Executive Service members of the Department of Health and Human Services.
Federal Emergency Management Agency, DHS.
Notice.
The Federal Emergency Management Agency, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a new information collection. In accordance with the Paperwork Reduction Act of 1995, this notice seeks comments concerning the SalesForce Customer Relationship Management System.
Comments must be submitted on or before January 17, 2014.
To avoid duplicate submissions to the docket, please use only one of the following means to submit comments:
(1)
(2)
(3)
All submissions received must include the agency name and Docket ID. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal eRulemaking Portal at
Contact Traci D. Crawford, Program Analyst, FEMA, Office of External Affairs, (202) 646–3164 for additional information. You may contact the Records Management Division for copies of the proposed collection of information at facsimile number (202) 646–3347 or email address:
FEMA Office of External Affairs, Public Affairs Division, is implementing the SalesForce Customer Relationship Management (CRM) system to improve the response to correspondences from individuals seeking information from a FEMA program office pursuant to Exec. Order No. 13411, which calls for improvements to the delivery of Federal disaster assistance by providing disaster survivors with “prompt and efficient access to Federal disaster assistance, as well as information regarding assistance available from State and local government and private sector sources.” The SalesForce CRM provides a centralized portal to manage frequently asked questions relating to Federal, State, local, and tribal information.
Comments may be submitted as indicated in the
Federal Emergency Management Agency, DHS.
Notice.
The Federal Emergency Management Agency (FEMA) will submit the information collection abstracted below to the Office of Management and Budget for review and clearance in accordance with the requirements of the Paperwork Reduction Act of 1995. The submission will describe the nature of the information collection, the categories of respondents, the estimated burden (i.e., the time, effort and resources used by respondents to respond) and cost, and the actual data collection instruments FEMA will use.
Comments must be submitted on or before December 18, 2013.
Submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the Desk Officer for the Department of Homeland Security, Federal Emergency Management Agency, and sent via electronic mail to
Requests for additional information or copies of the information collection should be made to Director, Records Management Division, 1800 South Bell Street, Arlington, VA 20598–3005, facsimile number (202) 646–3347, or email address
Federal Emergency Management Agency, DHS.
Notice.
The Federal Emergency Management Agency (FEMA) will submit the information collection abstracted below to the Office of Management and Budget for review and clearance in accordance with the requirements of the Paperwork Reduction Act of 1995. The submission will describe the nature of the information collection, the categories of respondents, the estimated burden (i.e., the time, effort and resources used by respondents to respond) and cost, and the actual data collection instruments FEMA will use.
Comments must be submitted on or before December 18, 2013.
Submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the Desk Officer for the Department of Homeland Security, Federal Emergency Management Agency, and sent via electronic mail to
Requests for additional information or copies of the information collection should be made to Director, Records Management Division, 1800 South Bell Street, Arlington, VA 20598–3005, facsimile number (202) 646–3347, or email address
The Homeland Security Grant Program (HSGP) is a primary funding mechanism for building and sustaining national preparedness capabilities. HSGP is comprised of three separate grant programs: the State Homeland Security Program (SHSP), the Urban Areas Security Initiative (UASI), and the Operation Stonegarden (OPSG). Together, these grants fund a range of preparedness activities, including planning, organization, equipment purchase, training, exercises, and management and administration costs.
Federal Emergency Management Agency, DHS.
Notice.
The Federal Emergency Management Agency, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a revision of a currently approved information collection. In accordance with the Paperwork Reduction Act of 1995, this notice seeks comments concerning the collection of information necessary to allow FEMA to support the needs of States during disaster situations through the use of other Federal agency resources.
Comments must be submitted on or before January 17, 2014.
To avoid duplicate submissions to the docket, please use only one of the following means to submit comments:
(1)
(2)
(3)
All submissions received must include the agency name and Docket ID. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal eRulemaking Portal at
Contact Patricia Pritchett, Program Specialist, Response Directorate, Operations Division, National Response Coordination Center, Federal Emergency Management Agency, (202) 646–3411 for additional information. You may contact the Records Management Division for copies of the proposed collection of information at facsimile number (202) 646–3347 or email address:
Under Section 653 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq), FEMA is authorized to provide assistance to States based on needs before, during and after a disaster has impacted the state. For a major disaster, the Stafford Act authorizes FEMA to direct any agency to utilize its existing authorities and resources in support of State and local assistance response and recovery efforts.
Comments may be submitted as indicated in the
U.S. Customs and Border Protection (CBP), Department of Homeland Security.
60-Day Notice and request for comments; Extension of an existing collection of information: 1651–0036.
As part of its continuing effort to reduce paperwork and respondent burden, CBP invites the general public and other Federal agencies to comment on an information collection requirement concerning the Declaration of the Ultimate Consignee that Articles were Exported for Temporary Scientific or Educational Purposes. This request for comment is being made pursuant to the Paperwork Reduction Act of 1995 (Public Law 104–13; 44 U.S.C. 3505(c)(2)).
Written comments should be received on or before January 17, 2014 to be assured of consideration.
Direct all written comments to U.S. Customs and Border Protection, Attn: Tracey Denning, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC. 20229–1177.
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC. 20229–1177, at 202–325–0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104–13; 44 U.S.C. 3505(c)(2)). The comments should address: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimates 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 including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual costs burden to respondents or record keepers from the collection of information (a total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP request for Office of Management and Budget (OMB) approval. All comments will become a matter of public record. In this document CBP is soliciting comments concerning the following information collection:
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day notice and request for comments; Extension of an existing information collection: 1651–0074.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act: Prior Disclosure. This is a proposed extension of an information collection that was previously approved. CBP is proposing that this information collection be extended with no change to the burden hours or to the information collected. This document is published to obtain comments from the public and affected agencies. This proposed information collection was previously published in the
Written comments should be received on or before December 18, 2013 to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229–1177, at 202–325–0265.
U.S. Customs and Border Protection (CBP) encourages the general public and affected Federal agencies to submit written comments and suggestions on proposed and/or continuing information collection requests pursuant to the Paperwork Reduction Act (Pub. L.104–13). Your comments should address one of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency/component, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agencies/components estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collections of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological techniques or other forms of information.
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of Inspectorate America Corporation, as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that Inspectorate America Corporation, has been approved to gauge and accredited to test petroleum and petroleum products, organic chemicals and vegetable oils for customs purposes for the next three years as of August 27, 2013.
Effective Dates: The accreditation and approval of Inspectorate America Corporation, as commercial gauger and laboratory became effective on August 27, 2013. The next triennial inspection date will be scheduled for August 2016.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services, U.S. Customs and
Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that Inspectorate America Corporation, 37 Panagrossi Circle, East Haven, CT 06512, has been approved to gauge and accredited to test petroleum and petroleum products, organic chemicals and vegetable oils for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved 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
Office of the Chief Information Officer, HUD.
Notice.
HUD has submitted the proposed information collection requirement described below to the Office of Management and Budget (OMB) for review, in accordance with the Paperwork Reduction Act. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202–395–5806. Email:
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410; email Colette Pollard at
This notice informs the public that HUD has submitted to OMB a request for approval of the information collection described in Section A. The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) The accuracy of the agency's estimate of the burden of the proposed collection of information; (3) Ways to enhance the quality, utility, and clarity of the information to be collected; and (4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapters 35.
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This Notice advises the public of a second allocation of Community Development Block Grant disaster recovery (CDBG–DR) funds appropriated by the Disaster Relief Appropriations Act, 2013 (Pub. L. 113–2) for the purpose of assisting recovery in the most impacted and distressed areas identified in major disaster declarations due to Hurricane Sandy and other eligible events in calendar years 2011, 2012 and 2013. This allocation provides $5.1 billion primarily to assist Hurricane Sandy recovery as well as recovery from Hurricane Irene and Tropical Storm Lee. The Notice also establishes requirements governing the use of these funds.
Effective Date: November 25, 2013.
Stan Gimont, Director, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 7th Street SW., Room 7286, Washington, DC 20410, telephone number 202–708–3587. Persons with hearing or speech impairments may access this number via TTY by calling the Federal Relay Service at 800–877–8339. Facsimile inquiries may be sent to Mr. Gimont at 202–401–2044. (Except for the “800” number, these telephone numbers are not toll-free.) Email inquiries may be sent to
The Disaster Relief Appropriations Act, 2013 (Pub. L. 113–2, approved January 29, 2013) (Appropriations Act) made available $16 billion in Community Development Block Grant (CDBG) funds for necessary expenses related to disaster relief, long-term recovery, restoration of infrastructure and housing, and economic revitalization in the most impacted and distressed areas resulting from a major disaster declared pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1974 (42 U.S.C. 5121
On March 1, 2013, the President issued a sequestration order pursuant to section 251A of the Balanced Budget and Emergency Deficit Control Act, as amended (2 U.S.C. 901a), and reduced funding for CDBG–DR grants under the Appropriations Act to $15.18 billion. Through a
To comply with statutory direction that funds be used for disaster-related expenses in the most impacted and distressed areas, HUD computes allocations based on the best available data that cover all the eligible affected areas. The initial allocation to Hurricane Sandy grantees was based on unmet housing and economic revitalization needs. The data used to calculate the allocation did not include unmet infrastructure restoration needs as damage estimates were preliminary at that time. As more data regarding unmet infrastructure needs are now available, this Notice provides the following Round 2 awards totaling $5.1 billion:
To ensure funds provided under this Notice address unmet needs within the “most impacted and distressed” counties, each local government receiving a direct award under this Notice must expend its entire CDBG–DR award within its jurisdiction (e.g., New York City must expend all funds within New York City). State grantees may expend funds in any county that received a Presidential disaster declaration in 2011, 2012, or 2013 subject to the limitations described in Table 2.
Table 2 identifies a minimum percentage that must be spent in the HUD-identified Hurricane Sandy affected Most Impacted and Distressed counties. The opportunity for certain grantees to expend 20 percent of their allocations outside the most impacted and distressed counties identified by HUD enables those grantees to respond to highly localized distress identified via their own data.
This Notice builds upon the requirements of the
Executive Order 13632, published at 77 FR 74341, established the Hurricane Sandy Rebuilding Task Force, to ensure government-wide and region-wide coordination to help communities as they are making decisions about long-term rebuilding and to develop a comprehensive rebuilding strategy. Section 5(b) of Executive Order 13632 requires that HUD, “as appropriate and to the extent permitted by law, align [the Department's] relevant programs and authorities” with the Hurricane Sandy Rebuilding Strategy (the Rebuilding Strategy). Accordingly, this Notice is further informed by both the Rebuilding Strategy released by the Task Force on August 19, 2013 and Rebuild by Design (RBD), an initiative of the Hurricane Sandy Rebuilding Task Force and HUD. RBD is aimed at addressing structural and environmental vulnerabilities that Hurricane Sandy exposed in communities throughout the region and developing fundable solutions to better protect residents from future disasters. The Rebuilding Strategy and information about RBD can be found, respectively, at:
The Appropriations Act requires funds to be used only for specific disaster recovery related purposes. Consistent with the Rebuilding Strategy, it is essential to build back stronger and more resilient. This allocation provides additional funds to Sandy-impacted grantees to support investments in mitigation and resilience and directs grantees to undertake comprehensive planning to promote regional resilience as part of the recovery effort.
The Appropriations Act requires that prior to the obligation of CDBG–DR funds, a grantee shall submit a plan detailing the proposed use of funds, including criteria for eligibility and how the use of these funds will address disaster relief, long-term recovery, restoration of infrastructure and housing and economic revitalization in the most impacted and distressed areas. In an Action Plan for Disaster Recovery (Action Plan), grantees must describe uses and activities that: (1) Are authorized under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301
As provided by the HCD Act, funds may be used as a matching requirement, share, or contribution for any other federal program when used to carry out an eligible CDBG–DR activity. However, pursuant to the requirements of the Appropriations Act, CDBG–DR funds may not be used for expenses reimbursable by, or for which funds are made available by FEMA or the United States Army Corps of Engineers (USACE).
Consistent with the allocation methodology in Appendix A of the Notice, the State of New York must either ensure that: (1) A portion of its allocation is used to address resiliency and local cost share requirements for damage to both the Metropolitan Transportation Authority infrastructure in New York City and the Port Authority of New York and New Jersey; or (2) must demonstrate that such resiliency needs and local cost share has otherwise been met. The State of New Jersey must undertake one of the same actions with regard to the Port Authority. New York City must review the methodology to inform an analysis to address the recovery and resilience needs of the New York City Housing Authority (NYCHA).
The Appropriations Act requires that funds be expended within two years of the date HUD obligates funds to a grantee and funds are obligated to a grantee upon HUD's signing of a grantee's CDBG–DR grant agreement. In its Action Plan, a grantee must demonstrate how funds will be fully expended within two years of obligation and HUD must obligate all funds not later than September 30, 2017. For any funds that the grantee believes will not be expended by the deadline and that it desires to retain, the grantee must submit a letter to HUD not less than 30 days in advance justifying why it is necessary to extend the deadline for a specific portion of funds. The letter must detail the compelling legal, policy, or operational challenges for any such waiver, and must also identify the date by when the specified portion of funds will be expended. The Office of Management and Budget has provided HUD with authority to act on grantee waiver requests but grantees are cautioned that such waivers may not be approved. Approved waivers will be published in the
To access funds allocated by this Notice grantees must submit a substantial Action Plan Amendment to their approved Action Plan. Any substantial Action Plan Amendment submitted after the effective date of this Notice is subject to the following requirements:
• Grantee consults with affected citizens, stakeholders, local governments and public housing authorities to determine updates to its needs assessment; in addition, grantee prepares a comprehensive risk analysis (see section VI(2)(d) of this Notice);
• Grantee amends its citizen participation plan to reflect the requirements of this Notice (e.g., new requirement for a public hearing);
• Grantee publishes a substantial amendment to its previously approved Action Plan for Disaster Recovery on the grantee's official Web site for no less than 30 calendar days and holds at least one public hearing to solicit public comment;
• Grantee responds to public comment and submits its substantial Action Plan Amendment to HUD (with any additional certifications required by this Notice) no later than 120 days after the effective date of this Notice;
• HUD reviews the substantial Action Plan Amendment within 60 days from date of receipt and approves the Amendment according to criteria identified in the Prior Notices and this Notice;
• HUD sends an Action Plan Amendment approval letter, revised grant conditions (may not be applicable to all grantees), and an amended unsigned grant agreement to the grantee. If the substantial Amendment is not approved, a letter will be sent identifying its deficiencies; the grantee must then re-submit the Amendment within 45 days of the notification letter;
• Grantee ensures that the HUD-approved substantial Action Plan Amendment (and updated Action Plan) is posted on its official Web site;
• Grantee signs and returns the grant agreement;
• HUD signs the grant agreement and revises the grantee's line of credit amount (this triggers the two year expenditure deadline for any funds obligated by this grant agreement);
• If it has not already done so, grantee enters the activities from its published Action Plan Amendment into the Disaster Recovery Grant Reporting (DRGR) system and submits it to HUD within the system;
• The grantee may draw down funds from the line of credit after the Responsible Entity completes applicable environmental review(s) pursuant to
• Grantee amends its published Action Plan to include its projection of expenditures and outcomes within 90 days of the Action Plan Amendment approval as provided for in paragraph (3)(g) of Section VI of this Notice; and
• Grantee updates its full consolidated plan to reflect disaster-related needs no later than its Fiscal Year 2015 consolidated plan update.
The Appropriations Act authorizes the Secretary to waive, or specify alternative requirements for, any provision of any statute or regulation that the Secretary administers in connection with HUD's obligation or use by the recipient of these funds (except for requirements related to fair housing, nondiscrimination, labor standards, and the environment). Waivers and alternative requirements are based upon a determination by the Secretary that good cause exists and that the waiver or alternative requirement is not inconsistent with the overall purposes of title I of the HCD Act. Regulatory waiver authority is also provided by 24 CFR 5.110, 91.600, and 570.5.
This section of the Notice describes requirements imposed by the Appropriations Act, as well as applicable waivers and alternative requirements. For each waiver and alternative requirement described in this Notice, the Secretary has determined that good cause exists and the action is not inconsistent with the overall purpose of the HCD Act. The following requirements apply only to the CDBG–DR funds appropriated in the Appropriations Act.
Grantees may request additional waivers and alternative requirements to address specific needs related to their recovery activities. Except where noted, waivers and alternative requirements described below apply to all grantees under this Notice. Under the requirements of the Appropriations Act, regulatory waivers are effective five days after publication in the
1.
2.
Section VI(A)(1) of the March 5, 2013 Notice (“Action Plan for Disaster Recovery waiver and alternative requirement”), as amended by the April 19, 2013 Notice, is modified to require:
a.
b.
(1) Infrastructure Project: For purposes of this Notice, an infrastructure project is defined as an activity, or a group of related activities, designed by the grantee to accomplish, in whole or in part, a specific objective related to critical infrastructure sectors such as energy, communications, water and wastewater systems, and transportation, as well as other support measures such as flood control. This definition is rooted in the implementing regulations of the National Environmental Policy Act (NEPA) at 40 CFR part 1508 and 24 CFR Part 58. Further, consistent with HUD's NEPA implementing requirements at 24 CFR 58.32(a), in responding to the requirements of this Notice, a grantee must group together and evaluate as a single infrastructure project all individual activities which are related to one another, either on a geographical or functional basis, or are logical parts of a composite of contemplated infrastructure-related actions.
(2) Related Infrastructure Project: Consistent with 40 CFR part 1508,
c.
d.
The description of the comprehensive risk analysis must be sufficient for HUD to determine if the analysis meets the requirements of this Notice.
e.
f.
In addition, the HCD Act authorizes public facilities activities that may include green infrastructure approaches that restore degraded or lost natural systems (e.g., wetlands and sand dunes ecosystems) and other shoreline areas to enhance storm protection and reap the many benefits that are provided by these systems. Protecting, retaining, and enhancing natural defenses should be considered as part of any coastal resilience strategy.
g.
(1)
(2)
The grantee must describe how Covered Projects address the risks, gaps, and vulnerabilities in the region as identified by the comprehensive risk analysis. Grantees must also describe how the collaborative risk analysis developed through the Rebuild by Design initiative has been or will be used for the evaluation of Covered Projects.
(3)
(4)
(5)
h.
3.
a.
b.
c.
d.
e.
f.
g.
4.
The grantee must continue to make the Action Plan, any amendments, and all performance reports available to the public on its Web site and on request and the grantee must make these documents available in a form accessible to persons with disabilities and persons of limited English proficiency, in accordance with the requirements of the March 5, 2013 Notice. Grantees are also encouraged to outreach to local nonprofit and civic organizations to disseminate substantial Action Plan Amendments submitted after the effective date of this Notice. During the term of the grant, the grantee must provide citizens, affected local governments, and other interested parties with reasonable and timely access to information and records relating to the Action Plan and to the grantee's use of grant funds. This objective should be achieved through effective use of the grantee's comprehensive Web site mandated by the Appropriations Act.
5.
6.
7.
8.
9.
Additionally, as provided by the HCD Act, funds for public services activities may be used as a matching requirement, share, or contribution for any other federal program when used to carry out an eligible CDBG–DR activity. However, the activity must still meet a national objective and address all applicable CDBG cross-cutting requirements.
10.
11.
Executive Order 13632 established the Hurricane Sandy Rebuilding Task Force. The Task Force was charged with identifying and working to remove obstacles to resilient rebuilding while taking into account existing and future risks and promoting the long-term sustainability of communities and ecosystems in the Sandy-affected region. The Task Force was further tasked with the development of a rebuilding strategy, which was released on August 19, 2013. The Executive Order directs HUD and other federal agencies, to the extent permitted by law, to align its relevant programs and authorities with the Rebuilding Strategy. The requirements set forth elsewhere in this Notice related to the selection of infrastructure projects and assistance to public and assisted multifamily housing reflect recommendations in the Rebuilding Strategy. To further address these recommendations, each grantee is strongly encouraged to incorporate the following components into its long term strategy for recovery from Hurricane Sandy, and to reflect the incorporation of these components, to the extent appropriate, in Action Plan Amendments.
1.
2.
3.
4.
5.
6.
In addition, all rehabilitation projects should apply appropriate construction standards to mitigate risk, which may include: (a) Raising utilities or other mechanical devices above expected flood level; (b) wet flood proofing in a basement or other areas below ABFE/best available data + 1 foot; (c) using water resistant paints or other materials; or (d) dry flood proofing non-residential structures by strengthening walls, sealing openings, or using waterproof compounds or plastic sheeting on walls to keep water out.
Grantees are reminded of the mandatory mitigation requirements described in the April 19, 2013 Notice. That is, reconstruction and substantial improvement projects located in a floodplain, according to the best available data as defined above, must be designed using the base flood elevation plus one foot as the baseline standard for lowest floor elevation. If higher elevations are required by locally adopted code or standards, those higher standards apply.
In addition to the mandatory requirements of the April 19, 2013 Notice, grantees may also engage in voluntary risk mitigation measures. For example, instead of elevating non-residential structures that are not critical actions, as defined at 24 CFR 55.2(b)(2), grantees may design and construct the project such that below the flood level, the structure is flood proofed to the level of the best available base flood data plus one foot. Flood proofing requires structures to be water tight with walls substantially impermeable to the passage of water and with structural components having the capability of resisting hydrostatic loads, hydrodynamic loads, the effects of buoyancy, or higher standards required by the FEMA National Flood Insurance Program as well as state and locally adopted codes.
In undertaking mitigation activities, grantees are also encouraged to include projects identified that are ultimately identified through the Rebuild by Design initiative referenced in Section I of this Notice.
7.
The Catalog of Federal Domestic Assistance number for the disaster recovery grants under this Notice is as follows: 14.269.
A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section
The first allocation of $5.4 billion for Disaster Recovery needs associated with Sandy was based on preliminary data associated with unmet housing and business needs. The second allocation of $5.1 billion reflects updated housing and business unmet needs that have more complete information on insurance coverage, infrastructure data from FEMA, the Department of Transportation, and the Corps of Engineers.
This allocation is calculated is based on relative share of needs HUD has estimated are required to rebuild to a higher standard consistent with CDBG program requirements and the goals set forth in the Hurricane Sandy Rebuilding Strategy.
HUD calculates the cost to rebuild the most impacted and distressed homes, businesses, and infrastructure back to pre-disaster conditions. From this base calculation, HUD calculates both the amount not covered by insurance and other federal sources to rebuild back to pre-disaster conditions as well as a “resiliency” amount which is calculated at 30 percent of the total basic cost to rebuild back the most distressed homes, businesses, and infrastructure to pre-storm conditions. The repair unmet needs are combined with the resiliency needs to calculate the total severe unmet needs estimated to achieve long-term recovery. The formula allocation is made proportional to those calculated severe unmet needs.
The “best available” data HUD staff have identified as being available to calculate unmet needs at this time for the targeted disasters come from the following data sources:
• FEMA Individual Assistance program data on housing unit damage;
• SBA for management of its disaster assistance loan program for housing repair and replacement;
• SBA for management of its disaster assistance loan program for business real estate repair and replacement as well as content loss;
• FEMA, Department of Transportation, and Corps of Engineers data on infrastructure; and
• Action Plans and supplemental data submitted by Sandy CDBG Grantees.
The core data on housing damage for both the unmet housing needs calculation and the concentrated damage are based on home inspection data for FEMA's Individual Assistance program. For unmet housing needs, the FEMA data are supplemented by Small Business Administration data from its Disaster Loan Program. HUD calculates “unmet housing needs” as the number of housing units with unmet needs times the estimated cost to repair those units less repair funds already provided by FEMA, where:
• Each of the FEMA inspected owner units are categorized by HUD into one of five categories:
○ Minor-Low: Less than $3,000 of FEMA inspected
○ Minor-High: $3,000 to $7,999 of FEMA inspected
○ Major-Low: $8,000 to $14,999 of FEMA inspected
○ Major-High: $15,000 to $28,800 of FEMA inspected
○ Severe: Greater than $28,800 of FEMA inspected
To meet the statutory requirement of “most impacted” in this legislative language, homes are determined to have a high level of damage if they have damage of “major-low” or higher. That is, they have a real property FEMA inspected damage of $8,000 or flooding over 4 foot. Furthermore, a homeowner is determined to have unmet needs if they have received a FEMA grant to make home repairs. For homeowners with a FEMA grant and insurance for the covered event, HUD assumes that the unmet need “gap” is 20 percent of the difference between total damage and the FEMA grant.
• FEMA does not inspect rental units for real property damage so personal property damage is used as a proxy for unit damage. Each of the FEMA inspected renter units are categorized by HUD into one of five categories:
○ Minor-Low: Less than $1,000 of FEMA inspected
○ Minor-High: $1,000 to $1,999 of FEMA inspected
○ Major-Low: $2,000 to $3,499 of FEMA inspected
○ Major-High: $3,500 to $7,499 of FEMA inspected
○ Severe: Greater than $7,500 of FEMA inspected
For rental properties, to meet the statutory requirement of “most impacted” in this legislative language, homes are determined to have a high level of damage if they have damage of “major-low” or higher. That is, they have a FEMA personal property damage assessment of $2,000 or greater or flooding over 1 foot. Furthermore, landlords are presumed to have adequate insurance coverage unless the unit is occupied by a renter with income of $30,000 or less. Units are occupied by a tenant with income less than $30,000 are used to calculate likely unmet needs for affordable rental housing. For those units occupied by tenants with incomes under $30,000, HUD estimates unmet needs as 75 percent of the estimated repair cost.
• The median cost to fully repair a home for a specific disaster
• To proxy unmet infrastructure needs, HUD uses data from FEMA's Public Assistance program on the state match requirement. This allocation uses only a subset of the Public Assistance damage estimates reflecting the categories of activities most likely to require CDBG funding above the Public Assistance and state match requirement. Those activities are categories: C-Roads and Bridges; D-Water Control Facilities; E-Public Buildings; F-Public Utilities; and G-Recreational-Other. Categories A (Debris Removal) and B (Protective Measures) are largely expended immediately after a disaster and reflect interim recovery measures rather than the long-term recovery measures for which CDBG funds are generally used. Because Public Assistance damage estimates are available only statewide (and not county), CDBG funding allocated by the estimate of unmet infrastructure needs are sub-allocated to New York City from the New York State total based on the distribution of initial project-level estimates obtained from FEMA.
For the second round of CDBG–DR funding for Sandy recovery, HUD included three additional sources of information:
1. US Army Corps of Engineers (USACE) Infrastructure Resilience Coordination. Many USACE Sandy projects require very high local cost shares. However, Federal requirements only allow grantees to no more than $250,000 of CDBG–DR funding towards local match requirements for these projects. As such, this calculation only includes $250,000 per USACE project where local match is higher than that amount.
2. DOT, Federal Highway Administration (FHWA) Sandy Recovery Grants—Emergency
3. DOT, Federal Transit Administration (FTA) Transit Emergency Relief (ER). We include the 10% local cost share for these transit projects. Note, since much of the New York City transit damage is owned by a state organization, the Metropolitan Transportation Authority, New York State receives the vast majority of need from this grant. Also note that the State of New Jersey receives 66% of the local match requirement from the Port Authority's match requirement; New York State receives 34% of the Authority's match requirement.
• Based on SBA disaster loans to businesses, HUD used the sum of real property and real content loss of small businesses not receiving an SBA disaster loan. This is adjusted upward by the proportion of applications that were received for a disaster that content and real property loss were not calculated because the applicant had inadequate credit or income. For example, if a state had 160 applications for assistance, 150 had calculated needs and 10 were denied in the pre-processing stage for not enough income or poor credit, the estimated unmet need calculation would be increased as (1 + 10/160) * calculated unmet real content loss.
• Because applications denied for poor credit or income are the most likely measure of needs requiring the type of assistance available with CDBG–DR funds, the calculated unmet business needs for each state are adjusted upwards by the proportion of total applications that were denied at the pre-process stage because of poor credit or inability to show repayment ability. Similar to housing, estimated damage is used to determine what unmet needs will be counted as severe unmet needs. Only properties with total real estate and content loss in excess of $30,000 are considered severe damage for purposes of identifying the most impacted areas.
○ Category 1: real estate + content loss = below 12,000
○ Category 2: real estate + content loss = 12,000−30,000
○ Category 3: real estate + content loss = 30,000−65,000
○ Category 4: real estate + content loss = 65,000−150,000
○ Category 5: real estate + content loss = above 150,000
• To obtain unmet business needs, the amount for approved SBA loans is subtracted out of the total estimated damage
CDBG Disaster Recovery Funds are often used to not only support rebuilding to pre-storm conditions, but also to build back much stronger. For Sandy, HUD has required that grantees use their funds in a way that results in rebuilding back stronger so that future storms do less damage and recovery can happen faster. To calculate these resiliency costs, HUD multiplied it estimates of total repair costs for seriously damaged homes, small businesses, and infrastructure by 30 percent. Total repair costs are the repair costs including costs covered by insurance, SBA, FEMA, and other federal agencies. The resiliency estimate at 30 percent of damage is intended to reflect some of the unmet needs associated with building to higher standards such as elevating homes, voluntary buyouts, hardening, and other costs in excess of normal repair costs. Data on damage to public housing for purpose of calculating resiliency need was based on damage estimates from both FEMA and HUD's Office of Public and Indian Housing.
Office of the Secretary, HUD.
Notice.
This notice designates “Difficult Development Areas” (DDAs) for purposes of the Low-Income Housing Tax Credit (LIHTC) under Section 42 of the Internal Revenue Code of 1986 (IRC). The United States Department of Housing and Urban Development (HUD) makes new DDA designations annually. In addition to announcing the 2014 DDA designations, this notice announces a change in the designation methodology for metropolitan DDAs, beginning with the 2016 designations. The revised methodology will use Small Area Fair Market Rents (SAFMRs), rather than metropolitan-area Fair Market Rents (FMRs), for designating metropolitan DDAs and was originally described in a notice published in the
The designations of “Qualified Census Tracts” (QCTs) under IRC Section 42, published on April 20, 2012, remain in effect.
For questions on how areas are designated and on geographic definitions, contact Michael K. Hollar, Senior Economist, Economic Development and Public Finance Division, Office of Policy Development and Research, U.S. Department of Housing and Urban Development, at 451 Seventh Street SW., Room 8234, Washington, DC 20410–6000; telephone number 202–402–5878 or email address
This notice designates DDAs for each of the 50 states, the District of Columbia, Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands. The designations of DDAs in this notice are based on final Fiscal Year (FY) 2013 Fair Market Rents (FMRs), FY2013 income limits, and 2010 Census population counts.
This notice also announces the adoption of a revised methodology, beginning with the 2016 metropolitan DDA designations, which will be the first to rely on the use of Small Area FMRs, estimated at the ZIP-code level and based on the relationship of ZIP-code rents to metropolitan-area rents, as the housing cost component of the DDA formula, rather than metropolitan-area FMRs. This revised methodology was first described in a
Data from the 2010 Census on total population of metropolitan areas and nonmetropolitan areas are used in the designation of DDAs. The Office of Management and Budget (OMB) first published new metropolitan area definitions incorporating 2000 Census data in OMB Bulletin No. 03–04 on June 6, 2003, and updated them periodically through OMB Bulletin No. 10–02 on December 1, 2009. FY2013 FMRs and FY2013 income limits used to designate DDAs are based on these Metropolitan
The U.S. Department of the Treasury (Treasury) and its Internal Revenue Service (IRS) are authorized to interpret and enforce the provisions of the IRC (26 U.S.C. 42), including the LIHTC found at Section 42. The Secretary of HUD is required to designate DDAs and QCTs by IRC Section 42(d)(5)(B). In order to assist in understanding HUD's mandated designation of DDAs and QCTs for use in administering IRC Section 42, a summary of the section is provided. The following summary does not purport to bind Treasury or the IRS in any way, nor does it purport to bind HUD, since HUD has authority to interpret or administer the IRC only in instances where it receives explicit statutory delegation.
The LIHTC is a tax incentive intended to increase the availability of low-income housing. IRC Section 42 provides an income tax credit to owners of newly constructed or substantially rehabilitated low-income rental housing projects. The dollar amount of the LIHTC available for allocation by each state (credit ceiling) is limited by population. Each state is allowed a credit ceiling based on a statutory formula indicated at IRC Section 42(h)(3). States may carry forward unallocated credits derived from the credit ceiling for one year; however, to the extent such unallocated credits are not used by then, the credits go into a national pool to be redistributed to states as additional credit. State and local housing agencies allocate the state's credit ceiling among low-income housing buildings whose owners have applied for the credit. Besides IRC Section 42 credits derived from the credit ceiling, states may also provide IRC Section 42 credits to owners of buildings based on the percentage of certain building costs financed by tax-exempt bond proceeds. Credits provided under the tax-exempt bond “volume cap” do not reduce the credits available from the credit ceiling.
The credits allocated to a building are based on the cost of units placed in service as low-income units under particular minimum occupancy and maximum rent criteria. In general, a building must meet one of two thresholds to be eligible for the LIHTC: (1) 20 percent of the units must be rent-restricted and occupied by tenants with incomes no higher than 50 percent of the Area Median Gross Income (AMGI) or (2) 40 percent of the units must be rent-restricted and occupied by tenants with incomes no higher than 60 percent of AMGI. A unit is “rent-restricted” if the gross rent, including an allowance for tenant-paid utilities, does not exceed 30 percent of the imputed income limitation (i.e., 50 percent or 60 percent of AMGI) applicable to that unit. The rent and occupancy thresholds remain in effect for at least 15 years, and building owners are required to enter into agreements to maintain the low-income character of the building for at least an additional 15 years.
The LIHTC reduces income tax liability dollar-for-dollar. It is taken annually for a term of 10 years and is intended to yield a present value of (1) 70 percent of the “qualified basis” for new construction or substantial rehabilitation expenditures that are not federally subsidized (as defined in IRC Section 42(i)(2)) or (2) 30 percent of the qualified basis for the cost of acquiring certain existing buildings or projects that are federally subsidized. The actual credit rates are adjusted monthly for projects placed in service after 1987 under procedures specified in IRC Section 42. Individuals can use the credits up to a deduction equivalent of $25,000 (the actual maximum amount of credit that an individual can claim depends on the individual's marginal tax rate). For buildings placed in service after December 31, 2007, individuals can use the credits against the alternative minimum tax. Corporations, other than S or personal service corporations, can use the credits against ordinary income tax and, for buildings placed in service after December 31, 2007, against the alternative minimum tax. These corporations also can deduct losses from the project.
The qualified basis represents the product of the building's “applicable fraction” and its “eligible basis.” The applicable fraction is based on the number of low-income units in the building as a percentage of the total number of units, or based on the floor space of low-income units as a percentage of the total floor space of residential units in the building. The eligible basis is the adjusted basis attributable to acquisition, rehabilitation, or new construction costs (depending on the type of LIHTC involved). These costs include amounts chargeable to a capital account that are incurred prior to the end of the first taxable year in which the qualified low-income building is placed in service or, at the election of the taxpayer, the end of the succeeding taxable year. In the case of buildings located in designated DDAs or designated QCTs, eligible basis can be increased up to 130 percent from what it would otherwise be. This means that the available credits also can be increased by up to 30 percent. For example, if a 70 percent credit is available, it effectively could be increased to as much as 91 percent.
IRC Section 42 defines a DDA as an area designated by the Secretary of HUD that has high construction, land, and utility costs relative to the AMGI. All designated DDAs in metropolitan areas (taken together) may not contain more than 20 percent of the aggregate population of all metropolitan areas, and all designated areas not in metropolitan areas may not contain more than 20 percent of the aggregate population of all nonmetropolitan areas.
IRC Section 42(d)(5)(B)(v) allows states to award an increase in basis up to 30 percent to buildings located outside of federally designated DDAs and QCTs if the increase is necessary to make the building financially feasible. This state discretion applies only to buildings allocated credits under the state housing credit ceiling and is not permitted for buildings receiving credits in connection with tax-exempt bonds. Rules for such designations shall be set forth in the LIHTC-allocating agencies' qualified allocation plans (QAPs).
In developing the list of DDAs, HUD compared housing costs with incomes. HUD used the 2010 Census population for metropolitan and nonmetropolitan areas, and the MSA definitions, as published in OMB Bulletin No. 10–02 on December 1, 2009, with modifications, as described below. In keeping with past practice of basing the coming year's DDA designations on data from the preceding year, the basis for these comparisons is the FY2013 HUD income limits for very low-income households (very low-income limits, or VLILs), which are based on 50 percent of AMGI, and metropolitan FMRs based on the Final FY2013 FMRs used for the Housing Choice Voucher (HCV) program.
In formulating the FY2013 FMRs and VLILs, HUD modified the current OMB definitions of MSAs to account for substantial differences in rents among areas within each current MSA that were in different FMR areas under definitions used in prior years. HUD formed these “HUD Metro FMR Areas” (HMFAs) in cases where one or more of
HUD's unit of analysis for designating metropolitan DDAs consists of: Entire MSAs, in cases where these were not broken up into HMFAs for purposes of computing FMRs and VLILs; and HMFAs within the MSAs that were broken up for such purposes. Hereafter in this notice, the unit of analysis for designating metropolitan DDAs will be called the HMFA, and the unit of analysis for nonmetropolitan DDAs will be the nonmetropolitan county or county equivalent area. The procedure used in making the DDA calculations follows:
1. For each metropolitan HMFA and each nonmetropolitan county, HUD calculated a ratio. HUD used the final FY2013 two-bedroom FMR and the FY2013 four-person VLIL for this calculation.
a. The numerator of the ratio, representing the development cost of housing, was the area's final FY2013 FMR. In general, the FMR is based on the 40th-percentile gross rent paid by recent movers to live in a two-bedroom apartment. In metropolitan areas granted an FMR based on the 50th-percentile rent for purposes of improving the administration of HUD's HCV program (see 76 FR 52058), HUD used the 40th-percentile rent to ensure nationwide consistency of comparisons.
b. The denominator of the ratio, representing the maximum income of eligible tenants, was the monthly LIHTC income-based rent limit, which was calculated as 1/12 of 30 percent of 120 percent of the area's VLIL (where the VLIL was rounded to the nearest $50 and not allowed to exceed 80 percent of the AMGI in areas where the VLIL is adjusted upward from its 50 percent-of-AMGI base).
2. The ratios of the FMR to the LIHTC income-based rent limit were arrayed in descending order, separately, for HMFAs and for nonmetropolitan counties.
3. The DDAs are those with the highest ratios cumulative to 20 percent of the 2010 Census Bureau population of all metropolitan areas and all nonmetropolitan areas.
In identifying DDAs, HUD applied caps, or limitations, as noted above. The cumulative population of metropolitan DDAs cannot exceed 20 percent of the cumulative population of all metropolitan areas. The cumulative population of nonmetropolitan DDAs cannot exceed 20 percent of the cumulative population of all nonmetropolitan areas.
In applying these caps, HUD established procedures to deal with how to treat small overruns of the caps. The remainder of this section explains those procedures. In general, HUD stops selecting areas when it is impossible to choose another area without exceeding the applicable cap. The only exceptions to this policy are when the next eligible excluded area contains either a large absolute population or a large percentage of the total population, or the next excluded area's ranking ratio, as described above, was identical (to four decimal places) to the last area selected, and its inclusion resulted in only a minor overrun of the cap. Thus, for both the designated metropolitan and nonmetropolitan DDAs, there may be minimal overruns of the cap. HUD believes the designation of additional areas in the above examples of minimal overruns is consistent with the intent of the IRC. As long as the apparent excess is small due to measurement errors, some latitude is justifiable, because it is impossible to determine whether the 20 percent cap has been exceeded. Despite the care and effort involved in a Decennial Census, the U.S. Census Bureau and all users of the data recognize that the population counts for a given area and for the entire country are not precise. Therefore, the extent of the measurement error is unknown. There can be errors in both the numerator and denominator of the ratio of populations used in applying a 20 percent cap. In circumstances where a strict application of a 20 percent cap results in an anomalous situation, recognition of the unavoidable imprecision in the census data justifies accepting small variances above the 20 percent limit.
As stated in OMB Bulletin 10–02, defining metropolitan areas:
“OMB establishes and maintains the definitions of Metropolitan . . . Statistical Areas, . . . solely for statistical purposes. . . . OMB does not take into account or attempt to anticipate any nonstatistical uses that may be made of the definitions[.] In cases where . . . an agency elects to use the Metropolitan . . . Area definitions in nonstatistical programs, it is the sponsoring agency's responsibility to ensure that the definitions are appropriate for such use. An agency using the statistical definitions in a nonstatistical program may modify the definitions, but only for the purposes of that program. In such cases, any modifications should be clearly identified as deviations from the OMB statistical area definitions in order to avoid confusion with OMB's official definitions of Metropolitan . . . Statistical Areas.”
Following OMB guidance, the estimation procedure for the FY2013 FMRs and income limits incorporates the current OMB definitions of metropolitan areas based on the Core-Based Statistical Area (CBSA) standards, as implemented with 2000 Census data, but makes adjustments to the definitions in order to separate subparts of these areas in cases where FMRs (and, in a few cases, VLILs) would otherwise change significantly if the new area definitions were used without modification. In CBSAs where subareas are established, it is HUD's view that the geographic extent of the housing markets are not yet the same as the geographic extent of the CBSAs, but may approach becoming so as the social and economic integration of the CBSA component areas increases.
The geographic baseline for the FMR and income limit estimation procedure is the CBSA Metropolitan Areas (referred to as Metropolitan Statistical Areas or MSAs) and CBSA Non-Metropolitan Counties (nonmetropolitan counties include the county components of Micropolitan CBSAs where the counties are generally assigned separate FMRs). The HUD-modified CBSA definitions allow for subarea FMRs within MSAs based on the boundaries of “Old FMR Areas” (OFAs) within the boundaries of new MSAs. (OFAs are the FMR areas defined for the FY2005 FMRs. Collectively, they include the June 30, 1999, OMB definitions of MSAs and Primary MSAs (old definition MSAs/PMSAs), metropolitan counties deleted from old definition MSAs/PMSAs by HUD for FMR-setting purposes, and counties and county parts outside of old definition MSAs/PMSAs referred to as
In the New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), HMFAs are defined according to county subdivisions or minor civil divisions (MCDs), rather than county boundaries. However, since no part of an HMFA is outside an OMB-defined, county-based MSA, all New England nonmetropolitan counties are kept intact for purposes of designating nonmetropolitan DDAs.
For the convenience of readers of this notice, the geographical definitions of designated metropolitan DDAs are included in the list of DDAs.
HUD will designate metropolitan DDAs according to current policy for 2015. Beginning with the 2016 metropolitan area designations, HUD will use SAFMRs defined at the ZIP Code level within metropolitan areas as the measure of “construction, land, and utility costs relative to area median gross income” rather than FMRs established for HMFAs. In general, HUD estimates SAFMRs by multiplying the ratio of ZIP–code area to metropolitan-area median gross rent by the metropolitan-area FMRs (a complete description of how SAFMRs are estimated is available at
HUD's unit of analysis for designating metropolitan ZIP Code level small DDAs (SDDAs) will consist of Census-defined 5-digit ZIP Code Tabulation Areas (ZCTAs) that closely correspond to U.S. Postal Service-established 5-digit ZIP codes. In cases where ZCTAs span metropolitan area boundaries, the ZCTA will be separated into two areas in order to calculate the SAFMR. Similarly, ZCTAs located on the boundary of a metropolitan and nonmetropolitan area will be split since nonmetropolitan DDAs will be designated separately at the full county level. As in current DDA policy, nonmetropolitan counties would not be broken along ZCTA or any other lines under the SDDA policy. ZCTAs that span more than one metropolitan CBSA would have different FMRs in each CBSA as they do under current metropolitan FMR policy, so that the part of a ZCTA in one metropolitan area may be a DDA while the other part of a ZCTA in another metropolitan area (or nonmetropolitan county) is not. Nonmetropolitan DDAs will continue to be designated by nonmetropolitan county or county equivalent area.
HUD is providing, for reference purposes only, the list of ZIP codes that would qualify as SDDAs in 2014 if this methodology were in place.
The procedure used in making 2014 hypothetical SDDA calculations follows:
1. For each metropolitan ZCTA, a ratio was calculated using the final FY2013 two-bedroom SAFMR and the FY2013 four-person VLIL.
a. The numerator of the ratio, representing the development cost of housing, was the area's final FY2013 SAFMR. In general, the SAFMR is based on the 40th-percentile gross rent paid by recent movers to live in a two-bedroom apartment. In metropolitan areas granted a FMR based on the 50th-percentile rent for purposes of improving the administration of HUD's HCV program (see 76 FR 52058), SAFMRs are calculated based on the 40th percentile rents because ZCTAs are too small to meet the regulatory requirements for 50th percentile FMR status.
b. The denominator of the ratio, representing the maximum income of eligible tenants, was the monthly LIHTC income-based rent limit, which was calculated as 1/12 of 30 percent of 120 percent of the area's VLIL (where the VLIL was rounded to the nearest $50 and not allowed to exceed 80 percent of the AMGI in areas where the VLIL is adjusted upward from its 50 percent-of-AMGI base).
2. The ratios of the SAFMR to the LIHTC income-based rent limit were arrayed in descending order.
3. The hypothetical SDDAs are those with the highest ratios cumulative to 20 percent of the 2010 population of all metropolitan ZCTAs.
The 2014 lists of DDAs are effective:
(1) for allocations of credit after December 31, 2013; or
(2) for purposes of IRC Section 42(h)(4), if the bonds are issued and the building is placed in service after December 31, 2013.
If an area is not on a subsequent list of DDAs, the 2014 lists are effective for the area if:
(1) the allocation of credit to an applicant is made no later than the end of the 365-day period after the applicant submits a complete application to the LIHTC-allocating agency, and the submission is made before the effective date of the subsequent lists; or
(2) for purposes of IRC Section 42(h)(4), if:
(a) the bonds are issued or the building is placed in service no later than the end of the 365-day period after the applicant submits a complete application to the bond-issuing agency, and
(b) the submission is made before the effective date of the subsequent lists, provided that both the issuance of the bonds and the placement in service of the building occur after the application is submitted.
An application is deemed to be submitted on the date it is filed if the application is determined to be complete by the credit-allocating or bond-issuing agency. A “complete application” means that no more than
In the case of a “multiphase project,” the DDA or QCT status of the site of the project that applies for all phases of the project is that which applied when the project received its first allocation of LIHTC. For purposes of IRC Section 42(h)(4), the DDA or QCT status of the site of the project that applies for all phases of the project is that which applied when the first of the following occurred: (a) the building(s) in the first phase were placed in service or (b) the bonds were issued.
For purposes of this notice, a “multiphase project” is defined as a set of buildings to be constructed or rehabilitated under the rules of the LIHTC and meeting the following criteria:
(1) The multiphase composition of the project (i.e., total number of buildings and phases in the project, with a description of how many buildings are to be built in each phase and when each phase is to be completed, and any other information required by the agency) is made known by the applicant in the first application of credit for any building in the project, and that applicant identifies the buildings in the project for which credit is (or will be) sought;
(2) The aggregate amount of LIHTC applied for on behalf of, or that would eventually be allocated to, the buildings on the site exceeds the one-year limitation on credits per applicant, as defined in the QAP of the LIHTC-allocating agency, or the annual per-capita credit authority of the LIHTC allocating agency, and is the reason the applicant must request multiple allocations over 2 or more years; and
(3) All applications for LIHTC for buildings on the site are made in immediately consecutive years.
Members of the public are hereby reminded that the Secretary of the U.S. Department of Housing and Urban Development, or the Secretary's designee, has legal authority to designate DDAs and QCTs, by publishing lists of geographic entities as defined by, in the case of DDAs, the U.S. Census Bureau, the several states and the governments of the insular areas of the United States and, in the case of QCTs, by the U.S. Census Bureau; and to establish the effective dates of such lists. The Secretary of the U.S. Treasury Department, through the IRS thereof, has sole legal authority to interpret, and to determine and enforce compliance with the IRC and associated regulations, including
The 2013 designations of QCTs under IRC Section 42 published April 20, 2012 (77 FR 23735) remain in effect. The above language regarding 2014 and subsequent designations of DDAs also applies to the designations of QCTs published April 20, 2012, and to subsequent designations of QCTs.
For the convenience of readers of this notice, interpretive examples are provided below to illustrate the consequences of the effective date in areas that gain or lose DDA status. The examples covering DDAs are equally applicable to QCT designations.
(Case A) Project A is located in a 2014 DDA that is not a designated DDA in 2015. A complete application for tax credits for Project A is filed with the allocating agency on November 15, 2014. Credits are allocated to Project A on October 30, 2015. Project A is eligible for the increase in basis accorded a project in a 2014 DDA because the application was filed before January 1, 2015 (the assumed effective date for the 2015 DDA lists), and because tax credits were allocated no later than the end of the 365-day period after the filing of the complete application for an allocation of tax credits.
(Case B) Project B is located in a 2014 DDA that is not a designated DDA in 2015 or 2016. A complete application for tax credits for Project B is filed with the allocating agency on December 1, 2014. Credits are allocated to Project B on March 30, 2016. Project B is NOT eligible for the increase in basis accorded a project in a 2014 DDA because, although the application for an allocation of tax credits was filed before January 1, 2015 (the assumed effective date of the 2015 DDA lists), the tax credits were allocated later than the end of the 365-day period after the filing of the complete application.
(Case C) Project C is located in a 2014 DDA that was not a DDA in 2013. Project C was placed in service on November 15, 2013. A complete application for tax-exempt bond financing for Project C is filed with the bond-issuing agency on January 15, 2014. The bonds that will support the permanent financing of Project C are issued on September 30, 2014. Project C is NOT eligible for the increase in basis otherwise accorded a project in a 2014 DDA, because the project was placed in service before January 1, 2014.
(Case D) Project D is located in an area that is a DDA in 2014, but is not a DDA in 2015. A complete application for tax-exempt bond financing for Project D is filed with the bond-issuing agency on October 30, 2014. Bonds are issued for Project D on April 30, 2015, but Project D is not placed in service until January 30, 2016. Project D is eligible for the increase in basis available to projects located in 2014 DDAs because: (1) One of the two events necessary for triggering the effective date for buildings described in Section 42(h)(4)(B) of the IRC (the two events being bonds issued and buildings placed in service) took place on April 30, 2015, within the 365-day period after a complete application for tax-exempt bond financing was filed; (2) the application was filed during a time when the location of Project D was in a DDA; and (3) both the issuance of the bonds and placement in service of Project D occurred after the application was submitted.
(Case E) Project E is a multiphase project located in a 2014 DDA that is not a designated DDA in 2015. The first phase of Project E received an allocation of credits in 2014, pursuant to an application filed March 15, 2014, which describes the multiphase composition of the project. An application for tax credits for the second phase of Project E is filed with the allocating agency by the same entity on March 15, 2015. The second phase of Project E is located on a contiguous site. Credits are allocated to the second phase of Project E on October 30, 2015. The aggregate amount of credits allocated to the two phases of Project E exceeds the amount of credits that may be allocated to an applicant in one year under the allocating agency's QAP and is the reason that applications were made in multiple phases. The second phase of Project E is, therefore, eligible for the increase in basis accorded a project in a 2014 DDA, because it meets all of the conditions to be a part of a multiphase project.
(Case F) Project F is a multiphase project located in a 2014 DDA that is not a designated DDA in 2015. The first phase of Project F received an allocation of credits in 2014, pursuant to an application filed March 15, 2014, which does not describe the multiphase composition of the project. An application for tax credits for the second phase of Project F is filed with the allocating agency by the same entity on March 15, 2016. Credits are allocated to the second phase of Project F on October 30, 2016. The aggregate amount of credits allocated to the two phases of Project F exceeds the amount of credits that may be allocated to an applicant in one year under the allocating agency's QAP. The second phase of Project F is, therefore, not eligible for the increase in basis accorded a project in a 2014 DDA, since it does not meet all of the conditions for a multiphase project, as defined in this notice. The original application for credits for the first phase did not describe the multiphase composition of the project. Also, the application for credits for the second phase of Project F was not made in the
This notice involves the establishment of fiscal requirements or procedures that are related to rate and cost determinations and do not constitute a development decision affecting the physical condition of specific project areas or building sites. Accordingly, under 40 CFR 1508.4 of the regulations of the Council on Environmental Quality and 24 CFR 50.19(c)(6) of HUD's regulations, this notice is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any policy document that has federalism implications if the document either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the document preempts state law, unless the agency meets the consultation and funding requirements of Section 6 of the executive order. This notice merely designates DDAs as required under Section 42 of the IRC, as amended, for use by political subdivisions of the states in allocating the LIHTC. This notice also details the technical methodology used in making such designations. As a result, this notice is not subject to review under the order.
60-day Notice.
To comply with the Paperwork Reduction Act of 1995 (PRA), Bureau of Safety and Environmental Enforcement (BSEE) is inviting comments on a collection of information that we will resubmit to the Office of Management and Budget (OMB) for review and approval. The resubmission of this information collection request (ICR) is necessary to include a form that we developed to clarify and facilitate submission of certain voluntary paperwork requirements in the regulations under Subpart A, General. The new form is BSEE–0011 and entails no additional information collection burden to that already approved by OMB for the Subpart A regulations.
You must submit comments by January 17, 2014.
You may submit comments by either of the following methods listed below.
• Electronically: go to
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Cheryl Blundon, Regulations and Standards Branch at (703) 787–1607 to request additional information about this ICR.
In addition to the general rulemaking authority of the OCSLA at 43 U.S.C. 1334, section 301(a) of the Federal Oil and Gas Royalty Management Act (FOGRMA), 30 U.S.C. 1751(a), grants authority to the Secretary to prescribe such rules and regulations as are reasonably necessary to carry out FOGRMA's provisions. While the majority of FOGRMA is directed to royalty collection and enforcement, some provisions apply to offshore operations. For example, section 108 of FOGRMA, 30 U.S.C. 1718, grants the Secretary broad authority to inspect lease sites for the purpose of determining whether there is compliance with the mineral leasing laws. Section 109(c)(2) and (d)(1), 30 U.S.C. 1719(c)(2) and (d)(1), impose substantial civil penalties for failure to permit lawful inspections and for knowing or willful preparation or submission of false, inaccurate, or misleading reports, records, or other information. Because the Secretary has delegated some of the authority under FOGRMA to BSEE, 30 U.S.C. 1751 is included as additional authority for these requirements.
These authorities and responsibilities are among those delegated to the Bureau of Safety and Environmental Enforcement (BSEE). The regulations at 30 CFR 250, Subpart A, concern the general regulatory requirements of the oil, gas, and sulphur operations on the OCS. This specific collection pertains to a new form, BSEE–0011, iSEE, Internet-Based Safety and Environmental Enforcement Reporting System, that was created to clarify what information is needed when someone reports an apparent violation. Regulations governing reports and investigations of possible violations are covered under § 250.193 and are for the most part,
(a) Any person may report to BSEE any hazardous or unsafe working condition on any facility engaged in OCS activities, and any possible violation or failure to comply with:
(1) Any provision of the Act,
(2) any provision of a lease, approved plan, or permit issued under the Act,
(3) any provision of any regulation or order issued under the Act, or
(4) any other Federal law relating to safety of offshore oil and gas operations.
(b) To make a report under this section, a person is not required to know whether any legal requirement listed in (a) has been violated.
(c) When BSEE receives a report of a possible violation, or when a BSEE employee detects a possible violation, BSEE will investigate according to BSEE procedures.
Regulations at 30 CFR 250, Subpart A, implement these statutory requirements. We use the information to investigate potential violations related to OCS activities.
BSEE developed a new form that respondents must use to submit certain information collection requirements under § 250.193. This form entails no additional burden as it only clarifies and facilitates the submission of the currently approved information collection requirements to which the form pertains. This resubmitted ICR is revised to only include the new Form BSEE–0011, iSEE, Internet-Based Safety and Environmental Enforcement Reporting System. No burden hours have been changed from the currently OMB approved collection. The information on BSEE–0011 is as follows: The first 4 parts of the form are for the purposes of asking follow-up questions if necessary—First and Last Name, Email Address, Phone number.
We will protect personally identifiable information about individuals according to the
Agencies must also estimate the non-hour paperwork cost burdens to respondents or recordkeepers resulting from the collection of information. Therefore, if you have other than hour burden costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. For further information on this burden, refer to 5 CFR 1320.3(b)(1) and (2), or contact the Bureau representative listed previously in this notice.
We will summarize written responses to this notice and address them in our submission for OMB approval. As a result of your comments, we will make any necessary adjustments to the burden in our submission to OMB.
The form BSEE–0011 is as follows:
60-day Notice.
To comply with the Paperwork Reduction Act of 1995 (PRA), Bureau of Safety and Environmental Enforcement (BSEE) is inviting comments on a collection of information that we will submit to the Office of Management and Budget (OMB) for review and approval. The information collection request (ICR) concerns a renewal to the paperwork requirements in the regulations under 30 Part 291,
You must submit comments by January 17, 2014.
You may submit comments by either of the following methods listed below.
• Electronically: go to
• Email
Nicole Mason, Regulations and Standards Branch at (703) 787–1605 to request additional information about this ICR.
Section 1334(f)(1) states “Except as provided in paragraph (2), every permit, license, easement, right-of-way, or other grant of authority for the transportation by pipeline on or across the Outer Continental Shelf of oil or gas shall require that the pipeline be operated in accordance with the following competitive principles: (A) The pipeline
The Independent Offices Appropriations Act (31 U.S.C. 9701), the Omnibus Appropriations Bill (Pub. L. 104–133, 110 Stat. 1321, April 26, 1996), and OMB Circular A–25, authorize Federal agencies to recover the full cost of services that confer special benefits. Regulations at §§ 291.106(b) and 108 require a nonrefundable processing fee of $7,500 that a shipper must pay when filing a complaint to BSEE. Federal policy and statute require us to recover the cost of services that confer special benefits to identifiable non-Federal recipients.
These authorities and responsibilities are among those delegated to BSEE; and 30 CFR Part 291 implements these statutory requirements. These regulations concern open and nondiscriminatory access to pipelines, and are the subject of this collection.
The BSEE will use the submitted information to initiate a more detailed investigation into the specific circumstances associated with a complainant's allegation of denial of access or discriminatory access to pipelines on the OCS. The complaint information will be provided to the alleged offending party. Informal resolution of the complaint is an option via a hotline or alternative dispute resolution. The BSEE may request additional information upon completion of the initial investigation.
Commercial or financial information submitted to the Department of the Interior relative to minerals removed from the Federal OCS may be proprietary. The BSEE will protect information considered proprietary and will not disclose documents exempt from disclosure under the Freedom of Information Act (5 U.S.C. 552) and its implementing regulations (43 CFR part 2). The BSEE will protect personally identifiable information about individuals according to the Privacy Act (5 U.S.C. 552a) and DOI's implementing regulations (43 CFR part 2). No items of a sensitive nature are collected. Responses to this ICR are required to obtain and retain a benefit, or are voluntary.
Agencies must also estimate the non-hour paperwork cost burdens to respondents or recordkeepers resulting from the collection of information. Therefore, if you have other than hour burden costs to generate, maintain, and disclose this information, you should comment and provide your total capital and startup cost components or annual operation, maintenance, and purchase of service components. For further information on this burden, refer to 5 CFR 1320.3(b)(1) and (2), or contact the Bureau representative listed previously in this notice.
We will summarize written responses to this notice and address them in our submission for OMB approval. As a result of your comments, we will make any necessary adjustments to the burden in our submission to OMB.
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service (Service), announce the availability of a draft long range transportation plan for public review and comment. The Draft Long Range Transportation Plan outlines a strategy for improving and maintaining transportation assets that provide access to Service-managed lands in the Midwest Region (Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio, and Wisconsin) over the next 20 years.
We must receive written comments on or before December 18, 2013.
Alternatively, you may contact Brandon Jutz, Regional Transportation Coordinator, Midwest Region, U.S. Fish and Wildlife Service, 5600 American Boulevard West, Suite 990, Bloomington, MN (612–713–5407).
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For additional information about submitting comments, see the “Public Availability of Comments” section below.
Brandon Jutz, at the above address, phone number, or email.
With this notice, we make the Draft LRTP for the Midwest Region of the U.S. Fish and Wildlife Service available for public review and comment. When finalized, the LRTP will apply to Service-managed lands in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio, and Wisconsin.
The Moving Ahead for Progress in the 21st Century Act (Map-21) requires all Federal land management agencies to conduct long-range transportation planning in a manner that is consistent with metropolitan planning organization and State departments of transportation planning. This LRTP was initiated within the Service to achieve the following:
• Establish a defensible structure for sound transportation planning and decision-making.
• Establish a vision, mission, goals, and objectives for transportation planning in the Service's Midwest Region.
• Implement coordinated and cooperative transportation partnerships in an effort to improve the Service's transportation infrastructure.
• Bring the Service into compliance with the Moving Ahead for Progress in the 21st Century Act (MAP–21), which requires all Federal land management agencies (FLMA) to conduct long-range transportation planning in a manner that is consistent with metropolitan planning organization (MPO) and State department of transportation (DOT) planning.
• Integrate transportation planning and funding for wildlife refuges and fish hatcheries into existing and future Service management plans and strategies—e.g., comprehensive conservation plans (CCPs) and comprehensive hatchery management plans (CHMPs).
• Increase awareness of Alternative Transportation Systems (ATS) and associated benefits.
• Develop best management practices (BMP) for transportation improvements on Service lands.
• Serve as a pilot project for the implementation of a region-level transportation planning process within the Service.
Through a collaborative effort, the Refuge and Fisheries Programs, in cooperation with the planning and visitor services programs within the Service's Midwest Region, have contributed to defining the mission, goals, and objectives presented in this document. The resulting mission, goals, and objectives are intended to provide a systematic approach to guide the process for evaluating and selecting transportation improvement for the Service lands in the Midwest Region. These guiding principles have shaped the development, conclusions, and recommendations of this LRTP.
To support the Service's mission by connecting people to fish, wildlife, and their habitats through strategic implementation of transportation programs.
This long-range transportation plan has six categories of goals: Resource protection, safety and condition, welcome and orientation, planning, partnerships, and sustainability. Under each goal, we present distinct objectives that move us to the goal.
• Natural Resource Protection: Ensure that the transportation program helps to conserve and enhance fish, wildlife, and plant resources and their habitats.
• Safety and Conditions: Provide a safe and reliable transportation network to and within Service lands.
• Welcome and Orientation: Develop and maintain a transportation network that enhances the welcoming and orienting experience of visitors.
• Planning: Integrate appropriate transportation planning into Service plans and processes.
• Partnerships: Develop partnerships to leverage resources and develop integrated transportation solutions.
• Sustainability: Adopt and promote sustainable transportation practices.
After this comment period ends, we will analyze the comments and address them in the form of a final LRTP.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Fish and Wildlife Service, Interior.
Notice.
We, the U.S. Fish and Wildlife Service, announce a public meeting and teleconference meeting of the Trinity Adaptive Management Working Group (TAMWG).
The in-person meeting will be held at the Indian Creek Lodge, 59741 California 299, Douglas City, CA 96024. You may participate in person or from your home phone.
Elizabeth W. Hadley, Redding Electric Utility, 777 Cypress Avenue, Redding, CA 96001; telephone: 530–339–7327; email:
In accordance with the requirements of the Federal Advisory Committee Act, 5 U.S.C. App., we announce that the Trinity Adaptive Management Working Group (TAMWG) will hold a meeting.
The TAMWG affords stakeholders the opportunity to give policy, management, and technical input concerning Trinity River (California) restoration efforts to the Trinity Management Council (TMC). The TMC interprets and recommends policy, coordinates and reviews management actions, and provides organizational budget oversight.
• Designated Federal Officer (DFO) updates,
• TMC Chair report,
• Executive Director's report,
• TRRP Contracting,
• BLM Land Acquisitions,
• Hatchery update and fish projections,
• TRRCD weed management,
• Design update,
• 2014 Gravel Recommendation,
• Bylaw discussion,
• 2014 Flow Alternatives,
• Status of Klamath fall flow release,
• Mining issues,
• TRRP workgroup update, and
• Public Comment.
The final agenda will be posted on the Internet at
Interested members of the public may submit relevant information or questions for the TAMWG to consider during the meeting. Written statements must be received by the date listed in “Public Input,” so that the information may be available to the TAMWG for their consideration prior to this teleconference. Written statements must be supplied to Elizabeth Hadley in one of the following formats: One hard copy with original signature, one electronic copy with original signature, and one electronic copy via email (acceptable file formats are Adobe Acrobat PDF, MS Word, PowerPoint, or rich text file).
Registered speakers who wish to expand on their oral statements, or those who wished to speak but could
Summary minutes of the meeting will be maintained by Elizabeth Hadley (see
Bureau of Land Management, Interior.
60-Day notice and request for comments.
In compliance with the Paperwork Reduction Act, the Bureau of Land Management (BLM) invites public comments on, and plans to request approval to continue, the collection of information on the purchases of crude helium by Federal helium suppliers from the BLM and the amount of refined helium supplied by them to Federal agencies and their contractors. The Office of Management and Budget (OMB) has assigned control number 1004–0179 to this information collection.
Please submit comments on the proposed information collection by January 17, 2014.
Comments may be submitted by mail, fax, or electronic mail.
Please indicate “Attn: 1004–0179” regardless of the form of your comments.
Robert Jolley at 806–356–1002. Persons who use a telecommunication device for the deaf may call the Federal Information Relay Service at 1–800–877–8339, to leave a message for Mr. Jolley.
OMB regulations at 5 CFR part 1320, which implement provisions of the Paperwork Reduction Act, 44 U.S.C. 3501–3521, require that interested members of the public and affected agencies be given an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d) and 1320.12(a)). This notice identifies an information collection that the BLM plans to submit to OMB for approval. The Paperwork Reduction Act provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond.
The BLM will request a 3-year term of approval for this information collection activity. Comments are invited on: (1) The need for the collection of information for the performance of the functions of the agency; (2) the accuracy of the agency's burden estimates; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information. A summary of the public comments will accompany our submission of the information collection requests to OMB.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The following information is provided for the information collection:
The itemized burdens of this collection are shown below:
Bureau of Land Management, Interior.
60-Day notice and request for comments.
In compliance with the Paperwork Reduction Act, the Bureau of Land Management (BLM) invites public comments on, and plans to request approval to continue, the collection of information from participants in the oil and gas leasing program within the
Please submit comments on the proposed information collection by January 17, 2014.
Comments may be submitted by mail, fax, or electronic mail.
Please indicate “Attn: 1004–0196” regardless of the form of your comments.
Wayne Svejnoha at 907–271–4407. Persons who use a telecommunication device for the deaf may call the Federal Information Relay Service at 1–800–877–8339 to leave a message for Mr. Svejnoha.
OMB regulations at 5 CFR part 1320, which implement provisions of the Paperwork Reduction Act, 44 U.S.C. 3501–3521, require that interested members of the public and affected agencies be given an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d) and 1320.12(a)). This notice identifies an information collection that the BLM plans to submit to OMB for approval. The Paperwork Reduction Act provides that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond.
The BLM will request a 3-year term of approval for this information collection activity. Comments are invited on: (1) The need for the collection of information for the performance of the functions of the agency; (2) the accuracy of the agency's burden estimates; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information. A summary of the public comments will accompany our submission of the information collection requests to OMB.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The following information is provided for the information collection:
The estimated burdens are itemized in the following table:
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management (BLM) Rio Grande Natural Area Commission will meet as indicated below.
The meeting will be held from 10 a.m. to 3:30 p.m. on December 17, 2013.
Rio Grande Water Conservation District, 10900 East U.S. Highway 160, Alamosa, CO 81101.
Kyle Sullivan, Public Affairs Specialist, BLM Front Range District Office, 3028 Main Street, Cañon City, CO 81212. Phone: (303) 239–3861. Email:
The Rio Grande Natural Area Commission was established in the Rio Grande Natural Area Act (16 U.S.C. 460rrr–2). The nine-member commission advises the Secretary of the Interior, through the BLM, concerning the preparation and implementation of a management plan for non-Federal land in the Rio Grande Natural Area, as directed by law. Planned agenda topics for this meeting include finalizing recommendations for the draft management plan and an update on the livestock trespass hearing. The public may offer oral comments at 10:15 a.m. or written statements, which may be submitted for the commission's consideration. Please send written comments to Kyle Sullivan at the address above by December 3, 2013.
Depending on the number of persons wishing to comment and time available, the time for individual oral comments may be limited. Summary minutes for the commission meeting will be maintained in the San Luis Valley Field Office and will be available for public inspection and reproduction during regular business hours within 30 days following the meeting. Meeting minutes and agenda are also available at:
National Park Service, Interior.
Notice of Availability of a Supplemental Draft Environmental Impact Statement for the General Management Plan, Biscayne National Park.
Pursuant to Section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C. 4332(2)(C), the National Park Service (NPS) announces the availability of a Supplemental Draft Environmental Impact Statement/General Management Plan (Supplemental Draft EIS) for Biscayne National Park (Park), Florida. The Supplemental Draft EIS describes and analyzes two new alternatives that have been developed since the 2011 release of the Draft Environmental Impact Statement/General Management Plan (Draft EIS). A new NPS preferred alternative has been proposed that incorporates various management prescriptions to ensure protection and enjoyment of the Park's resources, while providing access for visitors.
The NPS will accept comments for a period of 90 days following publication of the Environmental Protection Agency's Notice of Availability in the
Electronic copies of the Supplemental Draft EIS will be available online at
Superintendent Brian Carlstrom, Biscayne National Park, 9700 SW 328 Street, Homestead, FL 33033–5634 or by telephone at (305) 230–1144.
The NPS released the Draft EIS to the public in August 2011. Electronic copies of the Draft EIS can also be found online at
Based on the comments received, the NPS undertook an evaluative process to consider a number of management actions that could be deployed to achieve the goal of providing a diversified visitor use experience, while protecting the Park's natural and cultural resources. Two new alternatives (alternatives 6 and 7) were developed in consultation with the FWC and the National Oceanic and Atmospheric Administration. These alternatives contain many of the same elements as
In alternative 6 (the new agency preferred alternative), the special recreation zone would include the following activities and limitations: Fishing would be allowed year-round, with a special permit required for access to fish recreationally. There would be some zone-specific fishing restrictions (e.g., no grouper or lobster take, no spearfishing), but in general all other state fishing regulations would apply. There would be no commercial fishing allowed in the special recreation zone, with exception of the existing ballyhoo lampara net fishery. Anchoring within the zone would be prohibited; however additional mooring buoys would be added over time as needed to disperse visitor use and improve the safety of diving operations. Snorkeling and diving would be encouraged, and marine debris would be removed throughout the zone to improve the overall visitor experience for these activities. Alternative 7 is similar to alternative 6 in that it includes a special recreation zone with many of the same zone-specific fishing limitations. Differing from alternative 6, alternative 7 would not require an access permit to fish in the zone, but the area would be closed to recreational fishing during the summer months (June to September). This period is when the coral reef ecosystem is most stressed by warm water conditions and would benefit greatest from a respite in fishing pressure.
Adaptive management would be used in both new alternatives to guide long-term decision-making. Both alternatives would employ a collaborative research and monitoring program (10-year Science Plan) to inform adaptive management decisions. Under alternative 6 only, in years three, five, and eight, the NPS would evaluate effort and take to determine if the original assumptions are being met. Effort and take, in this instance, refer to fishing intensity and total harvest of fish in the zone by permitted fishermen. If the assumptions of effort and take are being exceeded, a multi-agency team would evaluate whether to reduce the number of permits to be issued for following years. For both Alternatives 6 and 7, a multi-agency team would evaluate the need for other management actions that may be warranted to reduce recreational impacts, through the adaptive management process. Depending on site-specific observations and concerns, such actions might include adjustments to the number and location of mooring buoys, changes to public messaging and law enforcement effort, and increased effort to remove marine debris. For both alternatives, a panel of experts would be convened at years five and ten to provide recommendations on the Science Plan, the monitoring results, and long-term management. After ten years the NPS would consider monitoring trends and panel recommendations, and would consult with state and federal agencies before deciding whether to continue adaptively managing visitor use in the special recreation zone or implement a marine reserve zone.
If you wish to comment on the Supplemental Draft EIS, you may submit your comments by any one of several methods. We encourage you to comment via the internet on the PEPC Web site at
Before including your address, phone number, email address, or other personal identifying information in your comment, please be aware your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The responsible official for this Supplemental Draft EIS is the Regional Director, NPS Southeast Region, 100 Alabama Street SW., 1924 Building, Atlanta, Georgia 30303.
United States International Trade Commission.
In accordance with the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the U.S. International Trade Commission (Commission) hereby gives notice that it plans to submit a request for approval of a questionnaire to the Office of Management and Budget for review and requests public comment on its draft collection.
To ensure consideration, written comments must be submitted on or before January 14, 2014.
Direct all written comments to William Powers, Project Leader, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436 (or via email at
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(8) Information obtained from the questionnaire that qualifies as confidential business information will be so treated by the Commission and not disclosed in a manner that would reveal the individual operations of a firm.
The House Committee on Ways and Means and the Senate Committee on Finance (the Committees) have directed the Commission to produce a report that examines Indian policies that discriminate against U.S. trade and investment and estimates the effects these barriers have on the U.S. economy and U.S. jobs. The Committees have requested that the report should (1) Provide an overview of trends and policies in India affecting trade and foreign direct investment; (2) describe the significant policies currently maintained by India, the U.S. sectors most affected by these policies, and Indian competitiveness in the affected sectors; (3) present case studies of the effects of particular measures; (4) quantify the economic effects of identified Indian measures on the U.S. economy; and (5) survey U.S. firms in selected sectors on their perceptions of recent changes in Indian policies and the effect these changes have on U.S. firms' strategies towards India. The Commission will base its report on a review of available data and other information, including the collection of primary data through a survey of U.S. firms in industries particularly affected by Indian policies.
Respondents will be mailed a letter directing them to download and fill out a form-fillable PDF questionnaire. Once complete, respondents may submit it by uploading it to a secure webserver, emailing it to the study team, faxing it, or mailing a hard copy to the Commission.
Comments are invited on (1) Whether the proposed collection of information is necessary; (2) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
The draft questionnaire and other supplementary documents may be downloaded from the USITC Web site at
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they will also become a matter of public record.
By order of the Commission.
60-Day notice.
The Department of Justice (DOJ) Office of Community Oriented Policing Services (COPS) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The revision of a previously approved information collection is published to obtain comments from the public and affected agencies.
The purpose of this notice is to allow for 60 days for public comment until January 17, 2014. This process is conducted in accordance with 5 CFR 1320.10.
If you have comments, especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Danielle Ouellette, Department of Justice Office of Community Oriented Policing Services, 145 N Street NE., Washington, DC 20530.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
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If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., Washington DC 20530.
Pursuant to Title 21 Code of Federal Regulations 1301.34(a), this is notice that on September 5, 2013, Johnson Matthey, Inc., Pharmaceutical Materials, 2003 Nolte Drive, West Deptford, New Jersey 08066–1742, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of the following basic classes of controlled substances:
The company plans to import the listed controlled substances as raw materials, to be used in the manufacture of bulk controlled substances, for distribution to its customers.
Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
In reference to the non-narcotic raw material, the company plans to import gram amounts to be used as reference standards for sale to its customers. Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances listed in schedules I or II, which fall under the authority of section 1002(a)(2)(B) of the Act (21 U.S.C. 952(a)(2)(B)) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODW), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than December 18, 2013.
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
Pursuant to Title 21 Code of Federal Regulations 1301.34(a), this is notice that on July 16, 2013, Cerilliant Corporation, 811 Paloma Drive, Suite A, Round Rock, Texas 78665–2402, made application to the Drug Enforcement Administration (DEA) for registration as an importer of the following basic classes of controlled substances:
The company plans to import the listed controlled substances for manufacture and distribution to their research and forensic customers conducting drug testing and analysis.
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substance listed in schedules I and II, which fall under the authority of section 1002(a)(2)(B) of the Act (21 U.S.C. 952(a)(2)(B)) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control,
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
By Notice dated August 15, 2013, and published in the
The company plans to import the listed controlled substances to manufacture bulk controlled substances for sale to its customers. The company plans to import an intermediate form of Tapentadol (9780); and then to bulk manufacture Tapentadol for distribution to its customers.
Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
DEA has considered the factors in 21 U.S.C. 823(a) and 952(a) and determined that the registration of Chattem Chemicals, Inc., to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Chattem Chemicals, Inc., to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
By Notice dated August 15, 2013, and published in the
The company plans to import a finished pharmaceutical product containing cannabis extracts in dosage form for a clinical trial study. In addition, the company plans to import an ointment for the treatment of wounds which contains trace amounts of the controlled substances normally found in poppy straw concentrate for packaging and labeling to be used in clinical trials.
Comments and requests for any hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
DEA has considered the factors in 21 U.S.C. 823(a) and 952(a) and determined that the registration of Catalent CTS, LLC., to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Catalent CTS, LLC., that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
By Notice dated August 14, 2013, and published in the
The company plans to import Thebaine (9333) analytical standards for distribution to its customers. The company plans to import an intermediate form of Tapentadol (9780) to bulk manufacture Tapentadol for distribution to its customers. The company plans to import the Phenylacetone (8501) in bulk for the manufacture of a controlled substance.
Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417(2007).
In reference to the non-narcotic raw material, any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances listed in schedules I or II, which fall under the authority of section 1002(a)(2)(B) of the Act (21 U.S.C. 952(a)(2)(B)) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43, and in such form as prescribed by 21 CFR 1316.47.
DEA has considered the factors in 21 U.S.C. 823(a) and 952(a) and determined that the registration of Noramco, Inc., to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Noramco, Inc., to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on September 6, 2013, National Center for Natural Products Research—NIDA MProject, University of Mississippi, 135 Coy Waller Complex, University, Mississippi 38677, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to cultivate marihuana in support of the National Institute on Drug Abuse for research approved by the Department of Health and Human Services.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODW), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than January 17, 2014.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on September 5, 2013, Johnson Matthey Inc., Custom Pharmaceuticals Department, 2003 Nolte Drive, West Deptford, New Jersey 08066–1742, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for sale to its customers.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODW), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than January 17, 2014.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on October 7, 2013, Morton Grove Pharmaceuticals, 6451 Main Street, Morton Grove, Illinois 60053–2633, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of Gamma Hydroxybutyric Acid (2010), a basic class of controlled substance listed in schedule I.
The company plans to manufacture a controlled substance for product development.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substance, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODW), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than January 17, 2014.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on September 5, 2013, Johnson Matthey, Inc., Pharmaceuticals Materials, 900 River Road, Conshohocken, Pennsylvania 19428, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for distribution and sale to its customers.
The Thebaine (9333) will be used to manufacture other controlled substances for sale in bulk to its customers.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODW), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than January 17, 2014.
By Notice dated May 14, 2013, and published in the
The company plans to manufacture the listed controlled substances as bulk reagents for use in drug abuse testing.
In reference to drug code 7370 the company plans to bulk manufacture a synthetic Tetrahydrocannabinol. No other activity for this drug code is authorized for this registration.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Lin Zhi International, Inc., to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Lin Zhi International, Inc., to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history.
Therefore, pursuant to 21 U.S.C. 823, and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated July 23, 2013, and published in the
The company is a contract manufacturer. In reference to Poppy Straw Concentrate the company will manufacture Thebaine intermediates to sell to its customers for further manufacture. No other activity for this drug code is authorized for registration.
No comments or objections have been received. Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of AMPAC Fine Chemicals, LLC., to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time.
DEA has investigated AMPAC Fine Chemicals, LLC., to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history.
Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated July 23, 2013, and published in the
The company plans to manufacture small quantities of the listed controlled substances to make reference standards for distribution to their customers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a), and determined that the registration of Apertus Pharmaceuticals to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time.
DEA has investigated Apertus Pharmaceuticals to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history.
Therefore, pursuant to 21 U.S.C. 823, and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
Notice.
The Department of Labor (DOL) is submitting the Bureau of Labor Statistics (BLS) sponsored information collection request (ICR) titled, “Current Population Survey—Displaced Worker, Job Tenure, and Occupational Mobility Supplement,” to the Office of Management and Budget (OMB) for review and approval for reinstatement, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq.
Submit comments on or before December 18, 2013.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–BLS, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202–395–6881 (this is not a toll-free number); or by email:
Contact Michel Smyth by telephone at 202–693–4129 (this is not a toll-free number) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to reinstate a previously approved
The survey also probes for the length of time workers, including those who have not been displaced, have been with their current employer. The BLS will collect additional data on the receipt of unemployment compensation, the loss of health insurance coverage, and the length of time spent without a job.
Information collected by this survey will be used to estimate the size and nature of the population affected by job displacements and to determine the needs and scope of programs serving adult displaced workers. The information will also will be used to assess employment stability by determining the length of time workers have been with their current employer and to estimate the incidence of occupational change over the course of a year. Combining the questions on displacement, job tenure, and occupational mobility will enable analysts to obtain a more complete picture of employment stability.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.
Mine Safety and Health Administration, Labor.
Notice.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and 30 CFR part 44 govern the application, processing, and disposition of petitions for modification. This notice is a summary of petitions for modification submitted to the Mine Safety and Health Administration (MSHA) by the parties listed below to modify the application of existing mandatory safety standards codified in Title 30 of the Code of Federal Regulations.
All comments on the petitions must be received by the Office of Standards, Regulations and Variances on or before December 18, 2013.
You may submit your comments, identified by “docket number” on the subject line, by any of the following methods:
1.
2.
3.
MSHA will consider only comments postmarked by the U.S. Postal Service or proof of delivery from another delivery service such as UPS or Federal Express on or before the deadline for comments.
Barbara Barron, Office of Standards, Regulations and Variances at 202–693–9447 (Voice),
Section 101(c) of the Federal Mine Safety and Health Act of 1977 (Mine Act) allows the mine operator or representative of miners to file a petition to modify the application of any mandatory safety standard to a coal or other mine if the Secretary of Labor determines that:
1. An alternative method of achieving the result of such standard exists which will at all times guarantee no less than the same measure of protection afforded the miners of such mine by such standard; or
2. That the application of such standard to such mine will result in a diminution of safety to the miners in such mine.
In addition, the regulations at 30 CFR 44.10 and 44.11 establish the
(1) A person trained in the testing procedures specific to the water deluge-type fire suppression systems utilized at each belt drive of the mine affected by this petition will conduct an examination, functional test, and residual pressure measurements consisting of the following:
(a) A visual examination of each of the water deluge-type fire suppression systems in the affected mine.
(b) A functional test of the water deluge-type fire suppression systems by actuating the system and observing its performance.
(c) Taking residual pressure measurements at the most hydraulically demanding nozzle to determine whether the system meets the manufacturer's specifications.
(d) Keeping a record of the results of the examinations, function tests, and residual pressure measurements in a book maintained on the surface for that purpose. Such record book will be made available to the authorized representative of the Secretary and retained at the mine for one year after the last recorded examination.
(2) Any malfunctioning or clogged nozzle(s) detected as a result of the weekly examination or functional test will be corrected immediately.
(3) The procedure used to perform the functional test will be posted at or near each belt drive that utilizes a deluge-type water spray fire suppression system.
The petitioner will submit to the District Manager proposed provisions for each applicable 30 CFR part 48 training plan specifying the procedures to be used to conduct the weekly functional test, as well as initial and refresher training (including addressing any necessary conditions specified in the proposed decision and order granting approval).
The petitioner asserts that the proposed alternative method will at all times guarantee no less than the same measure of protection as that afforded by the existing standard.
(1) A person trained in the testing procedures specific to the water deluge-type fire suppression systems utilized at each belt drive of the mine affected by this petition will conduct an examination, functional test, and residual pressure measurements consisting of the following:
(a) A visual examination of each of the water deluge-type fire suppression systems in the affected mine.
(b) A functional test of the water deluge-type fire suppression systems by actuating the system and observing its performance.
(c) Taking residual pressure measurements at the most hydraulically demanding nozzle to determine whether the system meets the manufacturer's specifications.
(d) Keeping a record of the results of the examinations, function tests, and residual pressure measurements in a book maintained on the surface for that purpose. Such record book will be made available to the authorized representative of the Secretary and retained at the mine for one year after the last recorded examination.
(2) Any malfunctioning or clogged nozzle(s) detected as a result of the weekly examination or functional test will be corrected immediately.
(3) The procedure used to perform the functional test will be posted at or near each belt drive that utilizes a deluge-type water spray fire suppression system.
The petitioner will submit to the District Manager proposed provisions for each applicable 30 CFR part 48 training plan specifying the procedures to be used to conduct the weekly functional test, as well as initial and refresher training (including addressing any necessary conditions specified in the proposed decision and order granting approval).
The petitioner asserts that the proposed alternative method will at all times guarantee no less than the same measure of protection as that afforded by the existing standard.
(1) A person trained in the testing procedures specific to the water deluge-type fire suppression systems utilized at each belt drive of the mine affected by this petition will conduct an examination, functional test, and residual pressure measurements consisting of the following:
(a) A visual examination of each of the water deluge-type fire suppression systems in the affected mine.
(b) A functional test of the water deluge-type fire suppression systems by actuating the system and observing its performance.
(c) Taking residual pressure measurements at the most hydraulically demanding nozzle to determine whether the system meets the manufacturer's specifications.
(d) Keeping a record of the results of the examinations, function tests, and residual pressure measurements in a book maintained on the surface for that purpose. Such record book will be made available to the authorized representative of the Secretary and retained at the mine for one year after the last recorded examination.
(2) Any malfunctioning or clogged nozzle(s) detected as a result of the weekly examination or functional test will be corrected immediately.
(3) The procedure used to perform the functional test will be posted at or near each belt drive that utilizes a deluge-type water spray fire suppression system.
The petitioner will submit to the District Manager proposed provisions for each applicable 30 CFR part 48 training plan specifying the procedures to be used to conduct the weekly functional test, as well as initial and refresher training (including addressing any necessary conditions specified in the proposed decision and order granting approval).
The petitioner asserts that the proposed alternative method will at all times guarantee no less than the same measure of protection as that afforded by the existing standard.
(1) The mention of waterlines in the standard implies that there must be a steady flow of drinking water from an outside source. The house and fire protection water for the Ruby Mine currently taps a spring located above the portal. This water and conveyance pipeline has not yet been tested for potability.
(2) The refuge chamber is approximately 3,000 feet from the nearest exit at the Ruby portal, running a dedicated potable water line to the refuge chamber will incur considerable expense.
(3) There is no mention of 30 CFR 57.11052 in the Program Policy Manual to provide further guidance to the standard. Procedures pertaining to drinking water are mentioned in 30 CFR 71.602(a) and (b).
(4) Bottled water would be just as safe if not safer than a waterline, because there is a chance that the water can become polluted from some external event such as a fire or some other situation that causes the source of a waterline to become undrinkable or unavailable for any number of possible reasons.
(5) No more than five miners are anticipated to seek refuge in the chamber during a mine emergency. The duration of any mine emergency is not expected to exceed one or two days. Each miner would require up to 64 ounces of water per day, so that over a 2-day period five miners would require an aggregate of five gallons of water.
(6) The refuge chamber at the Ruby Mine is expected to be only a temporary facility since a primary project of the current operation is the restoration of a safe and usable second exit for the mine.
(7) The current operations at the mine are extremely low risk for the occurrence of any incident which could require the need to use the refuge chamber for the following reasons:
(a) There are no electrical power lines underground;
(b) No internal combustion equipment is in use underground; and
(c) The tunnel is being rehabilitated. All activities are being conducted in, as well as immediately adjacent to, the sections of the tunnel that have been recently retimbered to provide new and reinforced ground support.
(8) While it appears that the standard in 30 CFR 71.602 provides an acceptable alternative to the use of a dedicated waterline in a refuge chamber, we are respectively requesting a variance of 30 CFR 57.11052(d) so that bottled water may be stored for use in the refuge chamber at the Ruby Mine.
(9) Application of the standard will reduce the safety of the miners affected, as a dedicated waterline extending from the portal to the refuge chamber is subject to interruption and is inherently less safe than sanitary bottled water stored inside the refuge chamber.
(10) An external water supply could be interrupted from any number of conditions within or outside the mine.
(11) The nature of any emergency itself could cause an external water supply to be polluted, choked, or cutoff entirely if the pipeline were to be compromised. If the external supply of water is interrupted for any reason the miners will be at extreme risk with no other sources of drinking water available.
The petitioner further states that:
(1) As an alternative method, a sufficient supply of bottled water stored in the refuge chamber for use in an emergency represents 100 percent certainty that the miners will have sanitary drinking water available to them regardless of the nature of any emergency that might require the use of the refuge chamber.
(2) Bottled water is sanitary and cannot be compromised by any emergency situation outside of the refuge chamber.
(3) By having bottled water stored inside the chamber there is virtually no opportunity for the water supply to be compromised from normal mining operations (e.g., blasting, scaling, etc.) such as what could potentially occur with an external water line, and thus stored bottled water represents a significant safety improvement.
(4) We understand that the intent of the standard is to provide a supply of drinking water in the event of an emergency that may last for an extended period of time beyond a few days, but as stated, in the event an external water line is compromised then water will be unavailable from the very outset of an emergency let alone whatever may develop over the course of time.
(5) Stored bottled water provides miners with the absolute certainty that water will be available immediately whenever needed, and in the very first hours of an emergency that are often the most critical.
(6) The Ruby Mine is not a shaft that extends vertically to depth. It is a drift mine that extends by way of flat tunnel into the earth laterally to follow the course of ancient river channels. In the event of an emergency requiring the use of the refuge chamber, we believe a rescue can be effected within a relatively short period of time such that any emergency would not have a long duration.
The petitioner asserts that the proposed alternative method will at all times guarantee no less than the same measure of protection as that afforded by the existing standard.
Open.
10:00 a.m., Thursday, November 21, 2013.
Board Room, 7th Floor, Room 7047, 1775 Duke Street (All visitors must use Diagonal Road Entrance), Alexandria, VA 22314–3428.
1. Quarterly Report on Corporate Stabilization Fund.
2. Board Briefing, Estimated Range of Premiums for the NCUSIF and Assessment for the Corporate Stabilization Fund.
3. NCUA's Rules and Regulations, Credit Union Service Organizations.
4. 2014 Operating Budget.
5. 2014 Overhead Transfer Rate.
6. 2014 Operating Fee Scale.
Gerard Poliquin, Secretary of the Board, Telephone: 703–518–6304.
In accordance with the Federal Advisory Committee Act (Pub. L. 92–463, as amended), the National Science Foundation announces the following meeting:
6:30 p.m. to 8:30 p.m.: Closed. Site Team and NSF Staff meets to discuss Site Visit materials, review process and charge.
8:00 a.m. to 1:00 p.m.: Open. Presentations by Awardee Institution, faculty staff and students, to Site Team and NSF Staff. Discussions and question and answer sessions.
1:00 p.m.–8:00 p.m.: Closed. Draft report on education and research activities.
8:30 a.m.–noon: Open. Response presentations by Site Team and NSF Staff Awardee Institution faculty staff to. Discussions and question and answer sessions.
Noon to 3:00 p.m.: Closed. Complete written site visit report with preliminary recommendations.
The National Science Board, pursuant to NSF regulations (45 CFR Part 614), the National Science Foundation Act, as amended (42 U.S.C. 1862n–5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice of the scheduling of meetings for the transaction of National Science Board business and other matters specified, as follows:
November 21, 2013 from 7:00 a.m. to 4:15 p.m.
These meetings will be held at the National Science Foundation, 4201Wilson Blvd., Rooms 1235, Arlington, VA 22230. All visitors must contact the Board Office (call 703–292–7000 or send an email message to
Public meetings and public portions of meetings will be webcast. To view the meetings, go to
Jennie L. Moehlmann,
Dana Topousis,
Portions open; portions closed.
4:15 p.m.
The National Science Board, pursuant to NSF regulations (45 CFR part 614), the National Science Foundation Act, as amended (42 U.S.C. 1862n–5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice in regard to the scheduling of a teleconference meeting of the National Science Board.
Friday, November 15, 2013 from noon to 1:00 p.m. EST.
Discussion of legislative matters.
Closed.
This meeting will be held by teleconference originating at the National Science Board Office, National Science Foundation, 4201 Wilson Blvd., Arlington, VA 22230.
Please refer to the National Science Board Web site
Peter Arzberger, contact at 703/292–8000 or
Nuclear Regulatory Commission.
Standard review plan—draft section revision; extension of comment period.
On September 30, 2013, the U.S. Nuclear Regulatory Commission (NRC) published a request for public comment on draft revision of NUREG–0800, “Standard Review Plan for the Review of Safety Analysis Reports for Nuclear Power Plants,” LWR Edition: Section 13.6.2, “Physical Security—Design Certification and Operating Reactors.” The public comment period was originally scheduled to close on October 30, 2013. The Nuclear Energy Institute (NEI) submitted a letter on October 9, 2013 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML13291A261), requesting an extension of the public comment period on this section until November 29, 2013. The NRC has decided to extend the public comment period on this document to allow more time for members of the public to assemble and submit their comments.
The comment period has been extended and now closes on November 29, 2013. Comments received after this date will be considered, if it is practical to do so, but the NRC is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods (unless this document describes a different method for submitting comments on a specific subject):
•
•
For additional direction on accessing information and submitting comments, see “Accessing Information and Submitting Comments” in the
Wesley Held, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–1583 or email:
Please refer to Docket ID NRC–2013–0225 when contacting the NRC about the availability of information regarding this document. You may access publicly-available information related to this action by the following methods:
•
•
•
Please include the respective Docket ID NRC–2013–0225 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Request for action; receipt.
The U.S. Nuclear Regulatory Commission (NRC) is giving notice that by petition dated August 10, 2013, George Walther-Meade (the petitioner) has requested that the NRC take action with regard to CSMI. The petitioner's requests are included in the
Please refer to Docket ID NRC–2013–0250 when contacting the NRC about the availability of information regarding this document. You may access publicly available information related to this action by the following methods:
• Federal Rulemaking Web site: Go to
• NRC's Agencywide Documents Access and Management System (ADAMS): You may access publicly available documents online in the NRC Library at
• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1–F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
On August 10, 2013 (ADAMS Accession No. ML13226A020), the petitioner requested that the NRC take action with regard to CSMI. The petitioner requested immediate enforcement action by issuing an order to revoke CSMI's License No. 20–35022–01.
As the basis for this request, the petitioner states that the Licensee has committed willful violations involving falsification of information that are of particular concern because the NRC's regulatory program is based on licensees acting with integrity and communicating with candor.
The request is being treated pursuant to section 2.206 of Title 10 of the
For the Nuclear Regulatory Commission.
Pension Benefit Guaranty Corporation.
Notice of request for extension of OMB approval of collection of information.
The Pension Benefit Guaranty Corporation (PBGC) is requesting that the Office of Management and Budget (OMB) extend approval, under the Paperwork Reduction Act, of the collection of information for the termination premium under its regulation on Payment of Premiums (29 CFR Part 4007) (OMB control number 1212–0064; expires December 31, 2013), with minor changes. This notice informs the public of PBGC's request and solicits public comment on the collection of information.
Comments should be submitted by December 18, 2013.
Comments should be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Pension Benefit Guaranty Corporation, via electronic mail at
The currently approved collection of information (Form T and instructions) and PBGC's premium payment regulation may be found on PBGC's Web site at
Deborah C. Murphy, Deputy Assistant
The Pension Benefit Guaranty Corporation (PBGC) administers the pension plan termination insurance program under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). Section 4006(a)(7) of ERISA provides for a “termination premium” (in addition to the flat-rate and variable-rate premiums under section 4006(a)(3) and (8) of ERISA) that is payable for three years following certain distress and involuntary plan terminations. PBGC's regulations on Premium Rates (29 CFR part 4006) and Payment of Premiums (29 CFR part 4007) implement the termination premium. Sections 4007.3 and 4007.13(b) of the premium payment regulation require the filing of termination premium information and payments with PBGC. PBGC has promulgated Form T and instructions for paying the termination premium.
In general, the termination premium applies where a single-employer plan terminates in a distress termination under ERISA section 4041(c) (unless contributing sponsors and controlled group members meet the bankruptcy liquidation requirements of ERISA section 4041(c)(2)(B)(i)) or in an involuntary termination under ERISA section 4042, and the termination date under section 4048 of ERISA is after 2005. The termination premium does not apply in certain cases where termination occurs during a bankruptcy proceeding filed before October 18, 2005.
The termination premium is payable for three years. The same amount is payable each year. The amount of each payment is based on the number of participants in the plan as of the day before the termination date. In general, the amount of each payment is equal to $1,250 times the number of participants. However, the rate is increased from $1,250 to $2,500 in certain cases involving commercial airline or airline catering service plans. The termination premium is due on the 30th day of each of three consecutive 12-month periods. The first 12-month period generally begins shortly after the termination date or after the conclusion of bankruptcy proceedings in certain cases.
The termination premium and related information must be filed by a person liable for the termination premium. The persons liable for the termination premium are contributing sponsors and members of their controlled groups, determined on the day before the plan termination date. Interest on late termination premiums is charged at the rate imposed under section 6601(a) of the Internal Revenue Code, compounded daily, from the due date to the payment date. Penalties based on facts and circumstances may be assessed both for failure to timely pay the termination premium and for failure to timely file required related information and may be waived in appropriate circumstances. A penalty for late payment will not exceed the amount of termination premium paid late. Section 4007.10 of the premium payment regulation requires the retention of records supporting or validating the computation of premiums paid and requires that the records be made available to PBGC.
OMB has approved the termination premium collection of information (Form T and instructions) under control number 1212–0064 through December 31, 2013. PBGC is requesting that OMB extend approval of this collection of information for three years, with minor changes. PBGC is eliminating from Form T and instructions the requirement to report the method of payment and making minor editorial changes to the form and instructions. 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.
PBGC estimates that it will each year receive an average of about 25 filings for the first year a termination premium is due, 20 filings for the second year a termination premium is due, and 15 filings for the third year a termination premium is due, from a total of about 60 respondents. PBGC estimates that the total annual burden of the collection of information will be about ten hours and $8,800.
Wednesday, December 11, 2013, at 11 a.m.
Commission Hearing Room, 901 New York Avenue NW., Suite 200, Washington, DC 20268–0001.
Part of this meeting will be open to the public. The rest of the meeting will be closed to the public. The open session will be audiocast. The audiocast may be accessed via the Commission's Web site at
The agenda for the Commission's December 11, 2013 meeting includes the items identified below.
1. Report from the Office of Public Affairs and Government Relations on legislative activities and the handling of rate and service inquiries from the public.
2. Report from the Office of General Counsel on the status of Commission dockets.
3. Report from the Office of Accountability and Compliance.
4. Report from the Office of the Secretary and Administration.
5. Selection of Vice Chairman.
6. Update for the Commissioners on the Work of the Military Postal Service Agency by Mr. David Ernst, Deputy Director, Military Postal Service Agency.
7. Discussion of pending litigation.
Stephen L. Sharfman, General Counsel, Postal Regulatory Commission, 901 New York Avenue NW., Suite 200, Washington, DC 20268–0001, at 202–789–6820 (for agenda-related inquiries) and Shoshana M. Grove, Secretary of the Commission, at 202–789–6800 or
By direction of the Commission.
Railroad Retirement Board.
Notice.
Pursuant to section 8(c)(2) and section 12(r)(3) of the Railroad Unemployment Insurance Act (Act) (45 U.S.C. 358(c)(2) and 45 U.S.C. 362(r)(3), respectively), the Board gives notice of the following:
1. The balance to the credit of the Railroad Unemployment Insurance (RUI) Account, as of June 30, 2013, is $204,247,991.98;
2. The September 30, 2013, balance of any new loans to the RUI Account, including accrued interest, is zero;
3. The system compensation base is $4,002,416,128.99 as of June 30, 2013;
4. The cumulative system unallocated charge balance is ($363,515,181.06) as of June 30, 2013;
5. The pooled credit ratio for calendar year 2014 is zero;
6. The pooled charged ratio for calendar year 2014 is zero;
7. The surcharge rate for calendar year 2014 is zero;
8. The monthly compensation base under section 1(i) of the Act is $1,440 for months in calendar year 2014;
9. The amount described in sections 1(k) and 3 of the Act as “2.5 times the monthly compensation base” is $3,600.00 for base year (calendar year) 2014;
10. The amount described in section 4(a–2)(i)(A) of the Act as “2.5 times the monthly compensation base” is $3,600.00 with respect to disqualifications ending in calendar year 2014;
11. The amount described in section 2(c) of the Act as “an amount that bears the same ratio to $775 as the monthly compensation base for that year as computed under section 1(i) of this Act bears to $600” is $1,860 for months in calendar year 2014;
12. The maximum daily benefit rate under section 2(a)(3) of the Act is $70 with respect to days of unemployment and days of sickness in registration periods beginning after June 30, 2014.
The balance in notice (1) and the determinations made in notices (3) through (7) are based on data as of June 30, 2013. The balance in notice (2) is based on data as of September 30, 2013. The determinations made in notices (5) through (7) apply to the calculation, under section 8(a)(1)(C) of the Act, of employer contribution rates for 2014. The determinations made in notices (8) through (11) are effective January 1, 2014. The determination made in notice (12) is effective for registration periods beginning after June 30, 2014.
Secretary to the Board, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 60611–2092.
Marla L. Huddleston, Bureau of the Actuary, Railroad Retirement Board, 844 Rush Street, Chicago, Illinois 60611–2092, telephone (312) 751–4779.
The RRB is required by section 8(c)(1) of the Railroad Unemployment Insurance Act (Act) (45 U.S.C. 358(c)(1)) as amended by Public Law 100–647, to proclaim by October 15 of each year certain system-wide factors used in calculating experience-based employer contribution rates for the following year. The RRB is further required by section 8(c)(2) of the Act (45 U.S.C. 358(c)(2)) to publish the amounts so determined and proclaimed. The RRB is required by section 12(r)(3) of the Act (45 U.S.C. 362(r)(3)) to publish by December 11, 2013, the computation of the calendar year 2014 monthly compensation base (section 1(i) of the Act) and amounts described in sections 1(k), 2(c), 3 and 4(a–2)(i)(A) of the Act which are related to changes in the monthly compensation base. Also, the RRB is required to publish, by June 11, 2014, the maximum daily benefit rate under section 2(a)(3) of the Act for days of unemployment and days of sickness in registration periods beginning after June 30, 2014.
A surcharge is added in the calculation of each employer's contribution rate, subject to the applicable maximum rate, for a calendar year whenever the balance to the credit of the RUI Account on the preceding June 30 is less than the greater of $100 million or the amount that bears the same ratio to $100 million as the system compensation base for that June 30 bears to the system compensation base as of June 30, 1991. If the RUI Account balance is less than $100 million (as indexed), but at least $50 million (as indexed), the surcharge will be 1.5 percent. If the RUI Account balance is less than $50 million (as indexed), but greater than zero, the surcharge will be 2.5 percent. The maximum surcharge of 3.5 percent applies if the RUI Account balance is less than zero.
The ratio of the June 30, 2013 system compensation base of $4,002,416,128.99 to the June 30, 1991 system compensation base of $2,763,287,237.04 is 1.44842566. Multiplying 1.44842566 by $100 million yields $144,842,566. Multiplying $50 million by 1.44842566 produces $72,421,283. The Account balance on June 30, 2013, was $204,247,991.98. Accordingly, the surcharge rate for calendar year 2014 is zero.
For years after 1988, section 1(i) of the Act contains a formula for determining the monthly compensation base. Under the prescribed formula, the monthly compensation base increases by approximately two-thirds of the cumulative growth in average national wages since 1984. The monthly compensation base for months in calendar year 2014 shall be equal to the greater of (a) $600 or (b) $600 [1 + {(A − 37,800)/56,700}], where A equals the amount of the applicable base with respect to tier 1 taxes for 2014 under section 3231(e)(2) of the Internal Revenue Code of 1986. Section 1(i) further provides that if the amount so determined is not a multiple of $5, it shall be rounded to the nearest multiple of $5.
Using the calendar year 2014 tier 1 tax base of $117,000 for A above produces the amount of $1,438.10, which must then be rounded to $1,440. Accordingly, the monthly compensation base is determined to be $1,440 for months in calendar year 2014.
For years after 1988, sections 1(k), 3, 4(a–2)(i)(A) and 2(c) of the Act contain formulas for determining amounts related to the monthly compensation base.
Under section 1(k), remuneration earned from employment covered under the Act cannot be considered subsidiary remuneration if the employee's base year compensation is less than 2.5 times the monthly compensation base for months in such base year. Under section 3, an employee shall be a “qualified employee” if his/her base year compensation is not less than 2.5 times the monthly compensation base for months in such base year. Under section 4(a–2)(i)(A), an employee who leaves work voluntarily without good cause is disqualified from receiving unemployment benefits until he has been paid compensation of not less than 2.5 times the monthly compensation base for months in the calendar year in which the disqualification ends.
Multiplying 2.5 by the calendar year 2014 monthly compensation base of $1,440 produces $3,600.00. Accordingly, the amount determined under sections 1(k), 3 and 4(a–2)(i)(A) is $3,600.00 for calendar year 2014.
Under section 2(c), the maximum amount of normal benefits paid for days of unemployment within a benefit year and the maximum amount of normal benefits paid for days of sickness within a benefit year shall not exceed an
The calendar year 2014 monthly compensation base is $1,440. The ratio of $1,440 to $600 is 2.40000000. Multiplying 2.40000000 by $775 produces $1,860. Accordingly, the amount determined under section 2(c) is $1,860 for months in calendar year 2014.
Section 2(a)(3) contains a formula for determining the maximum daily benefit rate for registration periods beginning after June 30, 1989, and after each June 30 thereafter. Legislation enacted on October 9, 1996, revised the formula for indexing maximum daily benefit rates. Under the prescribed formula, the maximum daily benefit rate increases by approximately two-thirds of the cumulative growth in average national wages since 1984. The maximum daily benefit rate for registration periods beginning after June 30, 2014, shall be equal to 5 percent of the monthly compensation base for the base year immediately preceding the beginning of the benefit year. Section 2(a)(3) further provides that if the amount so computed is not a multiple of $1, it shall be rounded down to the nearest multiple of $1.
The calendar year 2013 monthly compensation base is $1,405. Multiplying $1,405 by 0.05 yields $70.25, which must then be rounded down to $70. Accordingly, the maximum daily benefit rate for days of unemployment and days of sickness beginning in registration periods after June 30, 2014, is determined to be $70.
By Authority of the Board.
Securities and Exchange Commission (“Commission”).
Notice of application under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from section 19(b) of the Act and rule 19b-1 under the Act.
Applicants request an order to permit a registered closed-end investment company to make periodic distributions of long-term capital gains with respect to its outstanding common shares as frequently as monthly in any one taxable year, and as frequently as distributions are specified by or in accordance with the terms of any outstanding preferred shares that such investment company may issue.
Guggenheim Equal Weight Enhanced Equity Income Fund (the “Initial Fund”) and Guggenheim Funds Investment Advisers, LLC (the “Adviser”).
The application was filed on April 22, 2013, and amended on September 25, 2013.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 6, 2013, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090; Applicants, c/o Michael K. Hoffman, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY 10036.
Bruce R. MacNeil, Senior Counsel, at (202) 551–6817, or Daniele Marchesani, Branch Chief, at (202) 551–6821 (Division of Investment Management, Exemptive Applications Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. The Initial Fund is a closed-end management investment company registered under the Act and is organized as a Delaware statutory trust.
2. The Adviser is registered under the Investment Advisers Act of 1940 (“Advisers Act”) and serves as the investment adviser to the Initial Fund. A Fund's portfolio may be managed by one or more investment sub-advisers (each a “Sub-Adviser”). Any Sub-Adviser to a Fund will be registered as an investment adviser under the Advisers Act or not subject to registration.
3. Applicants state that, prior to a Fund's implementing a distribution
4. Applicants state that the purpose of a Distribution Policy, generally, would be to permit a Fund to distribute over the course of each year, through periodic distributions in relatively equal amounts (plus any required special distributions), an amount closely approximating the total taxable income of such Fund during such year and, if so determined by its Board, all or a portion of returns of capital paid by portfolio companies to such Fund during the year. Under the Distribution Policy of a Fund, such Fund would distribute to its respective common shareholders a fixed monthly percentage of the market price of such Fund's common shares at a particular point in time or a fixed monthly percentage of NAV at a particular time or a fixed monthly amount, any of which may be adjusted from time to time. It is anticipated that under a Distribution Policy, the minimum annual distribution rate with respect to such Fund's common shares would be independent of a Fund's performance during any particular period but would be expected to correlate with a Fund's performance over time. Except for extraordinary distributions and potential increases or decreases in the final dividend periods in light of a Fund's performance for an entire calendar year and to enable a Fund to comply with the distribution requirements of Subchapter M of the Internal Revenue Code (“Code”) for the calendar year, each distribution on the Fund's common shares would be at the stated rate then in effect.
5. Applicants state that prior to implementing a Distribution Policy in reliance on the order, the Board of a Fund will adopt policies and procedures pursuant to rule 38a–1 under the Act (“Section 19 Compliance Policies”) that: (a) are reasonably designed to ensure that all notices required to be sent to a Fund's shareholders pursuant to section 19(a) of the Act, rule 19a–1 thereunder and condition 4 below (each a “19(a) Notice”) include the disclosure required by rule 19a–1 under the Act and by condition 2(a) below, and that all other written communications by the Fund or its agents regarding distributions under the Distribution Policy include the disclosure required by condition 3(a) below; and (b) require the Fund to keep records that demonstrate its compliance with all of the conditions of the order and that are necessary for such Fund to form the basis for, or demonstrate the calculation of, the amounts disclosed in its 19(a) Notices.
1. Section 19(b) of the Act generally makes it unlawful for any registered investment company to make long-term capital gains distributions more than once every twelve months. Rule 19b–1 under the Act limits the number of capital gains dividends, as defined in section 852(b)(3)(C) of the Code (“distributions”), that a fund may make with respect to any one taxable year to one, plus a supplemental distribution made pursuant to section 855 of the Code not exceeding 10% of the total amount distributed for the year, plus one additional capital gain dividend made in whole or in part to avoid the excise tax under section 4982 of the Code.
2. Section 6(c) of the Act provides, in relevant part, that the Commission may exempt any person, security, or transaction from any provision of the Act or any rule under the Act if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
3. Applicants state that the one of the concerns leading to the enactment of section 19(b) and adoption of rule 19b–1 was that shareholders might be unable to distinguish between frequent distributions of capital gains and dividends from investment income. Applicants state, however, that rule 19a–1 effectively addresses this concern by requiring that distributions (or the confirmation of the reinvestment thereof) estimated to be sourced in part from capital gains or capital be accompanied by a separate statement showing the sources of the distribution (e.g., estimated net income, net short-term capital gains, net long-term capital gains and/or return of capital). Applicants state that similar information is included in the Funds' annual reports to shareholders and on the Internal Revenue Service Form 1099–DIV (“Form 1099–DIV”), which is sent to each common and preferred shareholder who received distributions during a particular year (including shareholders who have sold shares during the year).
4. Applicants further state that each of the Funds will make the additional disclosures required by the conditions set forth below, and each of them will adopt the Section 19 Compliance Policies to ensure that all required 19(a) Notices and disclosures are sent to shareholders. Applicants state that by providing the information required by section 19(a) and rule 19a–1, the Distribution Policy, the Section 19 Compliance Policies, and the conditions listed below will help ensure that each Fund's shareholders are provided sufficient information to understand that their periodic distributions are not tied to the Fund's net investment income (which for this purpose is the Fund's taxable income other than from capital gains) and realized capital gains to date, and may not represent yield or investment return. Accordingly, Applicants assert that continuing to subject the Funds to section 19(b) and rule 19b–1 would afford shareholders no extra protection.
5. Applicants note that section 19(b) of the Act and rule 19b–1 were intended to prevent certain improper sales practices, including, in particular, the practice of urging an investor to purchase shares of a fund on the basis
6. Applicants also note that the common shares of closed-end funds often trade in the marketplace at a discount to their NAV. Applicants believe that this discount may be reduced if the Funds are permitted to pay relatively frequent dividends on their common shares at a consistent rate, whether or not those dividends contain an element of long-term capital gains.
7. Applicants assert that the application of rule 19b–1 to a Distribution Policy actually could have an inappropriate influence on portfolio management decisions. Applicants state that, in the absence of an exemption from rule 19b–1, the adoption of a periodic distribution plan imposes pressure on management (i) not to realize any net long-term capital gains until the point in the year that the fund can pay all of its remaining distributions in accordance with rule 19b–1 and (ii) not to realize any long-term capital gains during any particular year in excess of the amount of the aggregate pay-out for the year (since as a practical matter excess gains must be distributed and, accordingly, would not be available to satisfy pay-out requirements in following years), notwithstanding that purely investment considerations might favor realization of long-term gains at different times or in different amounts. Applicants assert that by limiting the number of capital gain dividends that a Fund may make with respect to any one year, rule 19b–1 may prevent the normal and efficient operation of a periodic distribution plan whenever that Fund's realized net long-term capital gains in any year exceed the total of the periodic distributions that may include such capital gains under the rule.
8. Applicants also assert that rule 19b–1 may force the fixed regular periodic distributions under a periodic distribution plan to be funded with returns of capital
9. Applicants state that Revenue Ruling 89–81 under the Code requires that a fund that seeks to qualify as a regulated investment company under the Code and that has both common shares and preferred shares outstanding designate the types of income, e.g., investment income and capital gains, in the same proportion as the total distributions distributed to each class for the tax year. To satisfy the proportionate designation requirements of Revenue Ruling 89–81, whenever a fund has realized a long term capital gain with respect to a given tax year, the fund must designate the required proportionate share of such capital gain to be included in common and preferred share dividends. Applicants state that although rule 19b–1 allows a fund some flexibility with respect to the frequency of capital gains distributions, a fund might use all of the exceptions available under the rule for a tax year and still need to distribute additional capital gains allocated to the preferred shares to comply with Revenue Ruling 89–81.
10. Applicants assert that the potential abuses addressed by section 19(b) and rule 19b–1 do not arise with respect to preferred shares issued by a closed-end fund. Applicants assert that such distributions are either fixed or are determined in periodic auctions by reference to short-term interest rates rather than by reference to performance of the issuer, and Revenue Ruling 89–81 determines the proportion of such distributions that are comprised of the long-term capital gains.
11. Applicants also submit that the “selling the dividend” concern is not applicable to preferred shares, which entitles a holder to no more than a periodic dividend at a fixed rate or the rate determined by the market, and, like a debt security, is priced based upon its liquidation value, dividend rate, credit quality, and frequency of payment. Applicants state that investors buy preferred shares for the purpose of receiving payments at the frequency bargained for and do not expect the liquidation value of their shares to change.
12. Applicants request an order under section 6(c) of the Act granting an exemption from the provisions of section 19(b) of the Act and rule 19b–1 thereunder to permit each Fund to distribute periodic capital gain dividends (as defined in section 852(b)(3)(C) of the Code) as often as monthly in any one taxable year in respect of its common shares and as often as specified by or determined in accordance with the terms thereof in respect of its preferred shares.
Applicants agree that, with respect to each Fund that adopts a Distribution Policy in reliance upon the order, the order will be subject to the following conditions:
1.
2.
(a) Each 19(a) Notice disseminated to the Fund's common shareholders, in addition to the information required by section 19(a) and rule 19a–1:
(i) Will provide, in a tabular or graphical format:
(1) The amount of the distribution, on a per common share basis, together with the amounts of such distribution amount, on a per common share basis and as a percentage of such distribution amount, from estimated: (A) net investment income; (B) net realized short-term capital gains; (C) net realized long-term capital gains; and (D) return of capital or other capital source;
(2) the fiscal year-to-date cumulative amount of distributions, on a per common share basis, together with the amounts of such cumulative amount, on a per common share basis and as a percentage of such cumulative amount of distributions, from estimated: (A) net investment income; (B) net realized
(3) the average annual total return in relation to the change in NAV for the 5-year period (or, if the Fund's history of operations is less than five years, the time period commencing immediately following the Fund's first public offering) ending on the last day of the month ended immediately prior to the most recent distribution record date compared to the current fiscal period's annualized distribution rate expressed as a percentage of NAV as of the last day of the month prior to the most recent distribution record date; and
(4) the cumulative total return in relation to the change in NAV from the last completed fiscal year to the last day of the month prior to the most recent distribution record date compared to the fiscal year-to-date cumulative distribution rate expressed as a percentage of NAV as of the last day of the month prior to the most recent distribution record date. Such disclosure shall be made in a type size at least as large and as prominent as the estimate of the sources of the current distribution; and
(ii) will include the following disclosure:
(1) “You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's Distribution Policy,”
(2) “The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund's investment performance and should not be confused with `yield' or `income'”;
(3) “The amounts and sources of distributions reported in this 19(a) Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099–DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes;” Such disclosure shall be made in a type size at least as large as and as prominent as any other information in the 19(a) Notice and placed on the same page in close proximity to the amount and the sources of the distribution.
(b) On the inside front cover of each report to shareholders under rule 30e–1 under the Act, the Fund will:
(i) describe the terms of the Distribution Policy (including the fixed amount or fixed percentage of the distributions and the frequency of the distributions);
(ii) include the disclosure required by condition 2(a)(ii)(1) above;
(iii) state, if applicable, that the Distribution Policy provides that the Board may amend or terminate the Distribution Policy at any time without prior notice to Fund shareholders; and
(iv) describe any reasonably foreseeable circumstances that might cause the Fund to terminate the Distribution Policy and any reasonably foreseeable consequences of such termination.
(c) Each report provided to shareholders under rule 30e–1 under the Act, and each prospectus filed with the Commission on Form N–2 under the Act, will provide the Fund's total return in relation to changes in NAV in the financial highlights table and in any discussion about the Fund's total return
3.
(a) The Fund will include the information contained in the relevant 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, in any written communication (other than a communication on Form 1099) about the Distribution Policy or distributions under the Distribution Policy by the Fund, or agents that the Fund has authorized to make such communication on the Fund's behalf, to any Fund shareholder, prospective shareholder or third-party information provider;
(b) The Fund will issue, contemporaneously with the issuance of any 19(a) Notice, a press release containing the information in the 19(a) Notice and will file with the Commission the information contained in such 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, as an exhibit to its next filed Form N–CSR; and
(c) The Fund will post prominently a statement on its (or the Adviser's) Web site containing the information in each 19(a) Notice, including the disclosure required by condition 2(a)(ii) above, and maintain such information on such Web site for at least 24 months.
4.
(a) will request that the financial intermediary, or its agent, forward the 19(a) Notice to all beneficial owners of the Fund's shares held through such financial intermediary;
(b) will provide, in a timely manner, to the financial intermediary, or its agent, enough copies of the 19(a) Notice assembled in the form and at the place that the financial intermediary, or its agent, reasonably requests to facilitate the financial intermediary's sending of the 19(a) Notice to each beneficial owner of the Fund's shares; and
(c) upon the request of any financial intermediary, or its agent, that receives copies of the 19(a) Notice, will pay the financial intermediary, or its agent, the reasonable expenses of sending the 19(a) Notice to such beneficial owners.
5.
If:
(a) The Fund's common shares have traded on the stock exchange that they primarily trade on at the time in question at an average premium to NAV equal to or greater than 10%, as determined on the basis of the average of the discount or premium to NAV of the Fund's common shares as of the close of each trading day over a 12-week rolling period (each such 12-week rolling period ending on the last trading day of each week); and
(b) The Fund's annualized distribution rate for such 12-week rolling period, expressed as a percentage of NAV as of the ending date of such 12-week rolling period, is greater than the Fund's average annual total return in relation to the change in NAV over the 2-year period ending on the last day of such 12-week rolling period; then:
(i) At the earlier of the next regularly scheduled meeting or within four months of the last day of such 12-week rolling period, the Board, including a majority of the Independent Trustees:
(1) will request and evaluate, and the Adviser will furnish, such information as may be reasonably necessary to make an informed determination of whether the Distribution Policy should be continued or continued after amendment;
(2) will determine whether continuation, or continuation after amendment, of the Distribution Policy is
(A) whether the Distribution Policy is accomplishing its purpose(s);
(B) the reasonably foreseeable material effects of the Distribution Policy on the Fund's long-term total return in relation to the market price and NAV of the Fund's common shares; and
(C) the Fund's current distribution rate, as described in condition 5(b) above, compared with the Fund's average annual taxable income or total return over the 2-year period, as described in condition 5(b), or such longer period as the Board deems appropriate; and
(3) based upon that determination, will approve or disapprove the continuation, or continuation after amendment, of the Distribution Policy; and
(ii) The Board will record the information considered by it including its consideration of the factors listed in condition 5(b)(i)(2) above and the basis for its approval or disapproval of the continuation, or continuation after amendment, of the Distribution Policy in its meeting minutes, which must be made and preserved for a period of not less than six years from the date of such meeting, the first two years in an easily accessible place.
6.
(a) a rights offering below NAV to the Fund's common shareholders;
(b) an offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the Fund; or
(c) an offering other than an offering described in conditions 6(a) and 6(b) above, provided that, with respect to such other offering:
(i) the Fund's annualized distribution rate for the six months ending on the last day of the month ended immediately prior to the most recent distribution record date,
(ii) the transmittal letter accompanying any registration statement filed with the Commission in connection with such offering discloses that the Fund has received an order under section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its common shares as frequently as twelve times each year, and as frequently as distributions are specified by or determined in accordance with the terms of any outstanding preferred shares as such Fund may issue.
7.
The requested order will expire on the effective date of any amendment to rule 19b–1 that provide relief permitting certain closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common shares as frequently as twelve times each year.
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c–1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act, and under section 12(d)(1)(J) for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act.
Applicants request an order that would permit (a) certain open-end management investment companies or series thereof to issue shares (“Shares”) that are redeemable in large aggregations only (“Creation Units”); (b) secondary market transactions in Shares to occur at negotiated market prices; (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days after the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Shares.
Ranger Funds Investment Trust (the “Trust”) and Ranger Alternative Management, L.P. (the “Initial Adviser”).
The application was filed on March 8, 2013, and amended on June 4, 2013, and November 1, 2013. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 9, 2013, and should be accompanied by proof of service on applicants, in the form of an affidavit, or for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090; Applicants, 2828 N. Harwood Street, Suite 1600, Dallas, Texas 75201.
David J. Marcinkus, Senior Counsel, at (202) 551–6882, or David P. Bartels, Branch Chief, at (202) 551–6821 (Division of Investment Management, Exemptive Applications Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. The Trust is a Delaware statutory trust and is registered under the Act as
2. Applicants request that the order apply to the Initial Fund and any additional series of the Trust
3. Certain of the Funds will be based on Underlying Indexes which will be comprised of equity and/or fixed income securities issued by domestic issuers or non-domestic issuers meeting the requirements for trading in U.S. markets (“Domestic Indexes”). Other Funds will be based on Underlying Indexes which will be comprised of foreign and domestic or solely foreign equity and/or fixed income securities (“Foreign Indexes”). Funds which track Domestic Indexes are referred to as “Domestic Funds” and Funds which track Foreign Indexes are referred to as “Foreign Funds.” Underlying Indexes that include both long and short positions in securities are referred to as “Long/Short Indexes.” Funds based on Long/Short Indexes are “Long/Short Funds.” Underlying Indexes that use a 130/30 investment strategy are referred to as “130/30 Indexes.” Funds based on 130/30 Indexes are “130/30 Funds.”
4. An Adviser registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”) will serve as investment adviser to the Funds. The Adviser may enter into sub-advisory agreements with one or more investment advisers to act as a sub-adviser to a Fund (each, a “Sub-Adviser”). Each Sub-Adviser will be registered or not subject to registration under the Advisers Act. The Trust will enter into a distribution agreement with one or more distributors, each registered as a broker-dealer under the Securities Exchange Act of 1934 (the “Exchange Act”), which will act as the principal underwriter and distributor for the Funds.
5. Each Fund will hold certain securities and other instruments (“Portfolio Securities”) selected to correspond to the performance of its Underlying Index.
6. A Fund will utilize either a replication or representative sampling strategy to track its Underlying Index. A Fund using a replication strategy will invest in substantially all of the Component Securities in its Underlying Index in the same approximate proportions as in the Underlying Index. A Fund using a representative sampling strategy will hold some, but may not hold all, of the Component Securities of its Underlying Index. Applicants state that use of the representative sampling strategy may prevent a Fund from tracking the performance of its Underlying Index with the same degree of accuracy as would a Fund that invests in every Component Security of the Underlying Index. Applicants expect that each Fund will have an annual tracking error relative to the performance of its Underlying Index of less than 5 percent.
7. Each Fund will issue, on a continuous basis, Creation Units, which will typically consist of at least 25,000 Shares and have an initial price per Share of $15 to $100. All orders to purchase Creation Units must be placed with the Distributor by or through a party that has entered into an agreement with the Distributor (“Authorized Participant”). The Distributor will be responsible for delivering the Fund's prospectus to those persons acquiring Creation Units and for maintaining records of both the orders placed with it and the confirmations of acceptance furnished by it. In addition, the Distributor will maintain a record of the instructions given to the applicable Fund to implement the delivery of its Shares. An Authorized Participant must be either (a) a “Participating Party,” (
8. The Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis. Except where the purchase or redemption will include cash under the limited circumstances specified below, purchasers will be required to purchase Creation Units by making an in-kind deposit of specified instruments (“Deposit Instruments”), and shareholders redeeming their Shares will receive an in-kind transfer of specified instruments (“Redemption Instruments”).
9. Purchases and redemptions of Creation Units may be made in whole or in part on a cash basis, rather than in kind, solely under the following circumstances: (a) to the extent there is a Balancing Amount, as described above; (b) if, on a given Business Day, a Fund announces before the open of trading that all purchases, all redemptions or all purchases and redemptions on that day will be made entirely in cash; (c) if, upon receiving a purchase or redemption order from an Authorized Participant, a Fund determines to require the purchase or redemption, as applicable, to be made entirely in cash;
10. Each Business Day, before the open of trading on a national securities exchange, as defined in section 2(a)(26) of the Act (“Exchange”) on which Shares are listed (“Listing Exchange”), each Fund will cause to be published through the NSCC the names and quantities of the instruments comprising the Deposit Instruments and the Redemption Instruments, as well as the estimated Balancing Amount (if any), for that day. The list of Deposit Instruments and the list of Redemption Instruments will apply until new lists are announced on the following Business Day, and there will be no intra-day changes to the lists except to correct errors in the published lists.
11. For each Long/Short Fund and 130/30 Fund, the Adviser will provide full portfolio transparency on the Fund's Web site (“Web site”) by making available the identities and quantities of the portfolio holdings that will form the basis for the Fund's calculation of NAV at the end of the Business Day. The information provided on the Web site will be formatted to be reader-friendly. Each Listing Exchange or other major market data provider will disseminate, every 15 seconds during regular Exchange trading hours, through the facilities of the Consolidated Tape Association, an amount for each Fund representing the sum of (a) the estimated Balancing Amount and (b) the current value of the Deposit Instruments and any short positions, on a per individual Share basis (such intra-day indicative value, the “IIV”). With respect to the Long/Short Funds and 130/30 Funds, the investment characteristics of any financial instruments and short positions used to achieve short and long exposures will be described in sufficient detail for market participants to understand the principal investment strategies of the Funds and to permit informed trading of their Shares.
12. Shares of each Fund will be listed and traded individually on an Exchange. It is expected that one or more member firms of an Exchange will be designated to act as a market maker (“Market Maker”) and maintain a market in Shares trading on the Exchange. Prices of Shares trading on an Exchange will be based on the current bid/ask market. Shares sold in the secondary market will be subject to customary brokerage commissions and charges.
13. Applicants expect that purchasers of Creation Units will include institutional investors and arbitrageurs. Market Makers also may purchase Creation Units for use in market-making activities. Applicants expect that secondary market purchasers of Shares will include both institutional investors and retail investors.
14. Shares will not be individually redeemable. To redeem, an investor must accumulate enough Shares to constitute a Creation Unit. Redemption orders must be placed by or through an Authorized Participant.
15. An investor purchasing or redeeming a Creation Unit from a Fund
16. Neither the Trust nor any Fund will be advertised, marketed or otherwise held out as a traditional open-end investment company or a mutual fund. Instead, each Fund will be marketed as an “exchange traded fund (“ETF”). All marketing materials that describe the features or method of obtaining, buying or selling Creation Units, or Shares traded on an Exchange, or refer to redeemability, will prominently disclose that Shares are not individually redeemable and that the owners of Shares may purchase or redeem Shares from the Fund in Creation Units. The same approach will be followed in the shareholder reports issued or circulated in connection with the Shares. The Funds will provide copies of their annual and semi-annual shareholder reports to DTC Participants for distribution to shareholders.
17. Applicants also request that the order allow them to offer Funds for which an affiliated person of the Adviser will serve as the Index Provider (“Affiliated Index Fund”). The Index Provider to an Affiliated Index Fund (“Affiliated Index Provider”) will create a proprietary, rules based methodology (“Rules-Based Process”) to create Underlying Indexes for use by the Affiliated Index Funds and other investors (an “Affiliated Index”).
18. Applicants contend that the potential conflicts of interest arising from the fact that the Affiliated Index Provider will be an “affiliated person” of the Adviser will not have any impact on the operation of the Affiliated Index Funds because the Affiliated Indexes will maintain transparency, the Affiliated Index Funds' portfolios will be transparent, and the Affiliated Index Provider, the Adviser, any Sub-Adviser and the Affiliated Index Funds each will adopt policies and procedures to address any potential conflicts of interest (“Policies and Procedures”). The Affiliated Index Provider will publish in the public domain, including on its Web site and/or the Affiliated Index Funds' Web site, all of the rules that govern the construction and maintenance of each of its Affiliated Indexes. Applicants believe that this public disclosure will prevent the Adviser from possessing any advantage over other market participants by virtue of its affiliation with the Affiliated Index Provider, the owner of the Affiliated Indexes. Applicants note that the identity and weightings of the securities of any Affiliated Index will be readily ascertainable by any third party because the Rules-Based Process will be publicly available.
19. Like other index providers, the Affiliated Index Provider may modify the Rules-Based Process in the future. The Rules-Based Process could be modified, for example, to reflect changes in the underlying market tracked by an Affiliated Index, the way in which the Rules-Based Process takes into account market events or to change the way a corporate action, such as a stock split, is handled. Such changes would not take effect until the Index Personnel (defined below) has given (a) the Calculation Agent (defined below) reasonable prior written notice of such rule changes, and (b) the investing public at least sixty (60) days published notice that such changes will be implemented. Affiliated Indexes may have reconstitution dates and rebalance dates that occur on a periodic basis more frequently than once yearly, but no more frequently than monthly.
20. As owner of the Affiliated Indexes, the Affiliated Index Provider will hire a calculation agent (“Calculation Agent”). The Calculation Agent will determine the number, type, and weight of securities that will comprise each Affiliated Index, will perform all other calculations necessary to determine the proper make-up of the Affiliated Index, including the reconstitutions for such Affiliated Index, and will be solely responsible for all such Affiliated Index maintenance, calculation, dissemination and reconstitution activities. The Calculation Agent will not be an affiliated person, as such term is defined in the Act, or an affiliated person of an affiliated person, of the Funds, the Adviser, any Sub-Adviser, any promoter of a Fund or the Distributor.
21. The Adviser and the Affiliated Index Provider will adopt and implement Policies and Procedures to address any potential conflicts of interest. Among other things, the Policies and Procedures will be designed to limit or prohibit communication between employees of the Affiliated Index Provider and its affiliates who have responsibility for the Affiliated Indexes and the Rules Based Process, as well as those employees of the Affiliated Index Provider and its affiliates appointed to assist such employees in the performance of his/her duties (“Index Personnel”) and other employees of the Affiliated Index Provider. The Index Personnel (a) will not have any responsibility for the management of the Affiliated Index Funds or the Accounts, (b) will be expressly prohibited from sharing this information with any employees of the Adviser or those of any Sub-Adviser, that have responsibility for the management of the Affiliated Index Funds or any Affiliated Account until such information is publicly announced, and (c) will be expressly prohibited from sharing or using this non-public information in any way except in connection with the performance of their respective duties. In addition, the Adviser and any Sub-Adviser will adopt and implement, pursuant to rule 206(4)–7 under the Advisers Act, written policies and procedures designed to prevent violations of the Advisers Act and the rules thereunder. Also, the Adviser has adopted a code of ethics pursuant to rule 17j–1 under the Act and rule 204A–1 under the Advisers Act (“Code of Ethics”). Any Sub-Adviser will be required to adopt a Code of Ethics and provide the Trust with the certification required by rule 17j–1 under the Act. In conclusion, Applicants submit that the Affiliated Index Funds will operate in a manner very similar to the other index-based ETFs which are currently traded.
1. Applicants request an order under section 6(c) of the Act for an exemption from sections 2(a)(32), 5(a)(1), 22(d), and
2. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction, or any class of persons, securities or transactions, from any provision of the Act, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 17(b) of the Act authorizes the Commission to exempt a proposed transaction from section 17(a) of the Act if evidence establishes that the terms of the transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned, and the proposed transaction is consistent with the policies of the registered investment company and the general provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provisions of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors.
3. Section 5(a)(1) of the Act defines an “open-end company” as a management investment company that is offering for sale or has outstanding any redeemable security of which it is the issuer. Section 2(a)(32) of the Act defines a redeemable security as any security, other than short-term paper, under the terms of which the owner, upon its presentation to the issuer, is entitled to receive approximately his proportionate share of the issuer's current net assets, or the cash equivalent. Because Shares will not be individually redeemable, applicants request an order that would permit the Funds to register as open-end management investment companies and issue Shares that are redeemable in Creation Units only. Applicants state that investors may purchase Shares in Creation Units and redeem Creation Units from each Fund. Applicants further state that because the market price of Shares will be disciplined by arbitrage opportunities, investors should be able to buy and sell Shares in the secondary market at prices that do not vary materially from their NAV.
4. Section 22(d) of the Act, among other things, prohibits a dealer from selling a redeemable security that is currently being offered to the public by or through a principal underwriter, except at a current public offering price described in the prospectus. Rule 22c–1 under the Act generally requires that a dealer selling, redeeming or repurchasing a redeemable security do so only at a price based on its NAV. Applicants state that secondary market trading in Shares will take place at negotiated prices, not at a current offering price described in a Fund's prospectus, and not at a price based on NAV. Thus, purchases and sales of Shares in the secondary market will not comply with section 22(d) of the Act and rule 22c–1 under the Act. Applicants request an exemption under section 6(c) from these provisions.
5. Applicants assert that the concerns sought to be addressed by section 22(d) of the Act and rule 22c–1 under the Act with respect to pricing are equally satisfied by the proposed method of pricing Shares. Applicants maintain that while there is little legislative history regarding section 22(d), its provisions, as well as those of rule 22c–1, appear to have been designed to (a) prevent dilution caused by certain riskless trading schemes by principal underwriters and contract dealers, (b) prevent unjust discrimination or preferential treatment among buyers, and (c) ensure an orderly distribution system of investment company shares by eliminating price competition from non-contract dealers offering shares at less than the published sales price and repurchasing shares at more than the published redemption price.
6. Applicants believe that none of these purposes will be thwarted by permitting Shares to trade in the secondary market at negotiated prices. Applicants state that (a) secondary market trading in Shares does not involve Trust assets and will not result in dilution of an investment in Shares, and (b) to the extent different prices exist during a given trading day, or from day to day, such variances occur as a result of third party market forces, such as supply and demand. Therefore, applicants assert that secondary market transactions in Shares will not lead to discrimination or preferential treatment among purchasers. Finally, applicants contend that the proposed distribution system will be orderly because competitive forces will ensure that the difference between the market price of Shares and their NAV remains narrow.
7. Section 22(e) of the Act generally prohibits a registered investment company from suspending the right of redemption or postponing the date of payment of redemption proceeds for more than seven days after the tender of a security for redemption. Applicants observe that the settlement of redemptions for the Foreign Funds will be contingent not only on the settlement cycle of the U.S. securities markets, but also on the delivery cycles in local markets for the underlying foreign securities held by the Foreign Funds. Applicants believe that under certain circumstances, the delivery cycles for transferring Portfolio Securities to redeeming investors, coupled with local market holiday schedules, will require a delivery process of up to 15 calendar days.
8. Applicants submit that section 22(e) was designed to prevent unreasonable, undisclosed and unforeseen delays in the actual payment of redemption proceeds. Applicants state that allowing redemption payments for Creation Units of a Foreign Fund to be made within a maximum of 15 calendar days would not be inconsistent with the spirit and intent of section 22(e). Applicants state the SAI will identify those instances in a given year where, due to local holidays, more than seven days will be needed to deliver redemption proceeds and will list such holidays and the maximum number of days, but in no case more than 15 calendar days. Applicants are only seeking relief from section 22(e) to the extent that the Foreign Funds effect creations and redemptions of Creation Units in-kind.
9. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a registered investment company from acquiring securities of an investment company if such securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter or any other broker or dealer from selling the investment company's shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally.
10. Applicants request an exemption to permit management investment companies (“Investing Management Companies”) and unit investment trusts (“Investing Trusts”) registered under the Act that are not sponsored or advised by the Adviser and are not part of the same “group of investment companies,” as defined in section 12(d)(1)(G)(ii) of the Act, as the Funds (collectively, “Fund of Funds”) to acquire Shares beyond the limits of section 12(d)(1)(A). In addition, applicants seek relief to permit the Funds, the Distributor, and any broker-dealer that is registered under the Exchange Act to sell Shares to Fund of Funds in excess of the limits of section 12(d)(1)(B).
11. Each Investing Management Company will be advised by an investment adviser within the meaning of section 2(a)(20)(A) of the Act (the “Fund of Funds Adviser”) and may be sub-advised by one or more investment advisers within the meaning of section 2(a)(20)(B) of the Act (each a “Fund of Funds Sub-Adviser”). Any Fund of Funds Adviser or Fund of Funds Sub-Adviser will be registered or not subject to registration under the Advisers Act. Each Investing Trust will have a sponsor (“Sponsor”).
12. Applicants submit that the proposed conditions to the requested relief adequately address the concerns underlying the limits in section 12(d)(1)(A) and (B), which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees and overly complex fund structures. Applicants believe that the requested exemption is consistent with the public interest and the protection of investors.
13. Applicants believe that neither the Fund of Funds nor any Fund of Funds Affiliate would be able to exert undue influence over the Funds or any Fund Affiliates.
14. Applicants do not believe that the proposed arrangement involves excessive layering of fees. The board of directors or trustees of any Investing Management Company, including a majority of the disinterested directors or trustees, will find that the advisory fees charged under the contract are based on services provided that will be in addition to, rather than duplicative of, services provided under the advisory contract of any Fund in which the Acquiring Management Company may invest. In addition, under condition B.5, a Fund of Funds Adviser or a Fund of Funds' trustee or Sponsor, as applicable, will waive fees otherwise payable to it by the Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by a Fund under rule 12b–1 under the Act) received from a Fund by the Fund of Funds Adviser, trustee or Sponsor or an affiliated person of the Fund of Funds Adviser, trustee or Sponsor, other than any advisory fees paid to Fund of Funds Adviser, trustee or Sponsor or its affiliated person by a Fund, in connection with the investment by the Fund of Funds in the Fund. Applicants state that any sales charges or service fees on shares of a Fund of Funds will not exceed the limits applicable to a fund of funds set forth in NASD Conduct Rule 2830.
15. Applicants submit that the requested 12(d)(1) Relief addresses concerns over overly complex structures. Applicants note that a Fund will be prohibited from acquiring securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent permitted by exemptive relief from the Commission permitting the Fund to purchase shares of other investment companies for short-term cash management purposes.
16. To ensure that a Fund of Funds is aware of the terms and conditions of the requested order, the Fund of Fund must enter into an agreement with the respective Fund (“FOF Participation Agreement”). The FOF Participation
17. Applicants also note that a Fund may choose to reject a direct purchase of Shares by a Fund of Funds. To the extent that a Fund of Funds purchases Shares in the secondary market, a Fund would still retain its ability to reject initial purchases of Shares made in reliance on the requested order by declining to enter into the FOF Participation Agreement prior to any investment by a Fund of Funds in excess of the limits of section 12(d)(1)(A).
18. Section 17(a) of the Act generally prohibits an affiliated person of a registered investment company, or an affiliated person of such a person (“second-tier affiliate”), from selling any security or other property to or acquiring any security or other property from the company. Section 2(a)(3) of the Act defines “affiliated person” of another person to include (a) any person directly or indirectly owning, controlling or holding with power to vote 5% or more of the outstanding voting securities of the other person, and (c) any person directly or indirectly controlling, controlled by or under common control with the other person. Section 2(a)(9) of the Act defines control as the power to exercise a controlling influence over the management of policies of a company. It also provides that a control relationship will be presumed where one person owns more than 25% of a company's voting securities. The Funds may be deemed to be controlled by the Adviser and hence affiliated persons of each other. In addition, the Funds may be deemed to be under common control with any other registered investment company (or series thereof) advised by the Adviser (an “Affiliated Fund”).
19. Applicants request an exemption from section 17(a) of the Act pursuant to sections 17(b) and 6(c) of the Act to permit persons to effectuate in-kind purchases and redemptions with a Fund when they are affiliated persons or second-tier affiliates of the Fund solely by virtue of one or more of the following: (a) holding 5% or more, or more than 25%, of the outstanding Shares of one or more Funds; (b) having an affiliation with a person with an ownership interest described in (a); or (c) holding 5% or more, or more than 25%, of the shares of one or more Affiliated Funds.
20. Applicants assert that no useful purpose would be served by prohibiting these types of affiliated persons from acquiring or redeeming Creation Units through in-kind transactions. Except as described in Section II.K.2 of the application, the Deposit Instruments and Redemption Instruments will be the same for all purchasers and redeemers regardless of the their identity. The deposit procedures for both in-kind purchases and in-kind redemptions of Creation Units will be the same for all purchases and redemptions, regardless of size or number. Deposit Instruments and Redemption Instruments will be valued in the same manner as Portfolio Securities are valued for purposes of calculating NAV. Applicants submit that, by using the same standards for valuing Portfolio Securities as are used for calculating in-kind redemptions or purchases, the Fund will ensure that its NAV will not be adversely affected by such transactions. Applicants also believe that in-kind purchases and redemptions will not result in self-dealing or overreaching of the Fund.
21. Applicants also seek relief from section 17(a) to permit a Fund that is an affiliated person or second-tier affiliate of a Fund of Funds to sell its Shares to and redeem its Shares from a Fund of Funds, and to engage in the accompanying in-kind transactions with the Fund of Funds.
Applicants agree that any order of the Commission granting the requested ETF Relief will be subject to the following conditions:
1. The requested relief will expire on the effective date of any Commission rule under the Act that provides relief permitting the operation of index-based ETFs.
2. As long as a Fund operates in reliance on the order, the Shares of such Fund will be listed on an Exchange.
3. No Fund will be advertised or marketed as an open-end investment company or mutual fund. Any advertising material that describes the purchase or sale of Creation Units or refers to redeemability will prominently disclose that Shares are not individually redeemable and that owners of Shares may acquire those Shares from the Fund and tender those Shares for redemption to a Fund in Creation Units only.
4. The Web site for the Funds, which is and will be publicly accessible at no charge, will contain, on a per Share basis for each Fund, the prior Business Day's NAV and the market closing price or the Bid/Ask Price, and a calculation of the premium or discount of the market closing price or Bid/Ask Price against such NAV.
Applicants agree that any order of the Commission granting the requested 12(d)(1) Relief will be subject to the following conditions:
1. The members of a Fund of Funds' Advisory Group will not control (individually or in the aggregate) a Fund within the meaning of Section 2(a)(9) of the Act. The members of a Fund of Funds' Sub-Advisory Group will not control (individually or in the aggregate) a Fund within the meaning of Section 2(a)(9) of the Act. If, as a result of a decrease in the outstanding voting securities of a Fund, the Fund of Funds' Advisory Group or the Fund of Funds' Sub-Advisory Group, each in the aggregate, becomes a holder of more than 25 percent of the outstanding voting securities of a Fund, it will vote
2. No Fund of Funds or Fund of Funds Affiliate will cause any existing or potential investment by the Fund of Funds in a Fund to influence the terms of any services or transactions between the Fund of Funds or Fund of Funds Affiliate and the Fund or a Fund Affiliate.
3. The board of directors or trustees of an Investing Management Company, including a majority of the non-interested directors or trustees, will adopt procedures reasonably designed to ensure that the Fund of Funds Adviser and Fund of Funds Sub-Adviser are conducting the investment program of the Investing Management Company without taking into account any consideration received by the Investing Management Company or a Fund of Funds Affiliate from a Fund or Fund Affiliate in connection with any services or transactions.
4. Once an investment by a Fund of Funds in the securities of a Fund exceeds the limit in Section 12(d)(1)(A)(i) of the Act, the board of directors (“Board”) of the Fund, including a majority of the non-interested directors or trustees, will determine that any consideration paid by the Fund to the Fund of Funds or a Fund of Funds Affiliate in connection with any services or transactions: (i) is fair and reasonable in relation to the nature and quality of the services and benefits received by the Fund; (ii) is within the range of consideration that the Fund would be required to pay to another unaffiliated entity in connection with the same services or transactions; and (iii) does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between a Fund and its investment adviser(s), or any person controlling, controlled by or under common control with such investment adviser(s).
5. The Fund of Funds Adviser, or trustee or Sponsor of an Investing Trust, as applicable, will waive fees otherwise payable to it by the Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by a Fund under Rule 12b-l under the Act) received from a Fund by the Fund of Funds Adviser, or trustee or Sponsor of the Investing Trust, or an affiliated person of the Fund of Funds Adviser, or trustee or Sponsor of the Investing Trust, other than any advisory fees paid to the Fund of Funds Adviser, Trustee or Sponsor of an Investing Trust, or its affiliated person by the Fund, in connection with the investment by the Fund of Funds in the Fund. Any Fund of Funds Sub-Adviser will waive fees otherwise payable to the Fund of Funds Sub-Adviser, directly or indirectly, by the Investing Management Company in an amount at least equal to any compensation received from a Fund by the Fund of Funds Sub-Adviser, or an affiliated person of the Fund of Funds Sub-Adviser, other than any advisory fees paid to the Fund of Funds Sub-Adviser or its affiliated person by the Fund, in connection with the investment by the Investing Management Company in the Fund made at the direction of the Fund of Funds Sub-Adviser. In the event that the Fund of Funds Sub-Adviser waives fees, the benefit of the waiver will be passed through to the Investing Management Company.
6. No Fund of Funds or Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to a Fund) will cause a Fund to purchase a security in any Affiliated Underwriting.
7. The Board of a Fund, including a majority of the non-interested Board members, will adopt procedures reasonably designed to monitor any purchases of securities by the Fund in an Affiliated Underwriting, once an investment by a Fund of Funds in the securities of the Fund exceeds the limit of Section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Fund of Funds in the Fund. The Board will consider, among other things: (i) whether the purchases were consistent with the investment objectives and policies of the Fund; (ii) how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and (iii) whether the amount of securities purchased by the Fund in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to ensure that purchases of securities in Affiliated Underwritings are in the best interest of shareholders of the Fund.
8. Each Fund will maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and will maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in Affiliated Underwritings once an investment by a Fund of Funds in the securities of the Fund exceeds the limit of Section 12(d)(1)(A)(i) of the Act, setting forth from whom the securities were acquired, the identity of the underwriting syndicate's members, the terms of the purchase, and the information or materials upon which the Board's determinations were made.
9. Before investing in a Fund in excess of the limits in Section 12(d)(1)(A), a Fund of Funds and the Trust will execute a FOF Participation Agreement stating without limitation that their respective boards of directors or trustees and their investment advisers, or trustee and Sponsor, as applicable, understand the terms and conditions of the Order, and agree to fulfill their responsibilities under the Order. At the time of its investment in Shares of a Fund in excess of the limit in Section 12(d)(1)(A)(i), a Fund of Funds will notify the Fund of the investment. At such time, the Fund of Funds will also transmit to the Fund a list of the names of each Fund of Funds Affiliate and Underwriting Affiliate. The Fund of Funds will notify the Fund of any changes to the list of the names as soon as reasonably practicable after a change occurs. The Fund and the Fund of Funds will maintain and preserve a copy of the Order, the FOF Participation Agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place.
10. Before approving any advisory contract under Section 15 of the Act, the board of directors or trustees of each Investing Management Company, including a majority of the non-interested directors or trustees, will find that the advisory fees charged under such contract are based on services
11. Any sales charges and/or service fees charged with respect to shares of a Fund of Funds will not exceed the limits applicable to a fund of funds as set forth in NASD Conduct Rule 2830.
12. No Fund will acquire securities of an investment company or company relying on Section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in Section 12(d)(1)(A) of the Act, except to the extent the Fund acquires securities of another investment company pursuant to exemptive relief from the Commission permitting the Fund to acquire securities of one or more investment companies for short-term cash management purposes.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 12(d)(1)(A) and (B) of the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (2) of the Act, and under section 6(c) of the Act for an exemption from rule 12d1–2(a) under the Act.
The requested order would (a) permit certain registered open-end management investment companies that operate as “funds of funds” to acquire shares of certain registered open-end management investment companies and unit investment trusts (“UITs”) that are within and outside the same group of investment companies as the acquiring investment companies, and (b) permit funds of funds relying on rule 12d1–2 under the Act to invest in certain financial instruments.
Altegris Advisors, L.L.C. (the “Adviser”) and Northern Lights Fund Trust (the “Trust”), on behalf of Altegris Multi-Strategy Alternative Fund (the “Multi-Strategy Alternative Fund”).
The application was filed on March 7, 2013, and amended on October 3, 2013.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on December 6, 2013, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants: c/o Richard Horowitz, Dechert LLP, 1095 Avenue of the Americas, New York, NY 10036.
Bruce R. MacNeil, Senior Counsel, at (202) 551–6817 or Daniele Marchesani, Branch Chief, at (202) 551–6821 (Division of Investment Management, Exemptive Applications Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The Trust is an open-end management investment company registered under the Act and organized as a Delaware statutory trust. The Trust currently is comprised of multiple series, including the Multi-Strategy Alternative Fund, each of which has its own investment objective, policies, and restrictions.
2. The Adviser, a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”) and serves as investment adviser to the Multi-Strategy Alternative Fund, certain other Funds of the Trust, and may serve as investment adviser to future Funds.
3. Applicants request an order to permit (a) a Fund that operates as a “fund of funds” (each a “Fund of Funds”)
4. Applicants also request an exemption under section 6(c) from rule 12d1–2 under the Act to permit any
1. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter, and any Broker from selling the investment company's shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's total outstanding voting stock, or if the sale will cause more than 10% of the acquired company's total outstanding voting stock to be owned by investment companies generally.
2. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Applicants seek an exemption under section 12(d)(1)(J) of the Act to permit a Fund of Funds to acquire shares of the Underlying Funds in excess of the limits in section 12(d)(1)(A), and an Underlying Fund, any principal underwriter for an Underlying Fund, and any Broker to sell shares of an Underlying Fund to a Fund of Funds in excess of the limits in section 12(d)(1)(B) of the Act.
3. Applicants state that the terms and conditions of the proposed arrangement will not give rise to the policy concerns underlying sections 12(d)(1)(A) and (B), which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors.
4. Applicants submit that the proposed arrangement will not result in the exercise of undue influence by the Fund of Funds or a Fund of Funds Affiliate (as defined below) over the Unaffiliated Funds.
5. To further ensure that an Unaffiliated Investment Company understands the implications of an investment by a Fund of Funds under the requested order, prior to a Fund of Funds' investment in the shares of an Unaffiliated Investment Company in excess of the limit in section 12(d)(1)(A)(i) of the Act, the Fund of Funds and the Unaffiliated Investment Company will execute an agreement stating, without limitation, that their respective board of directors or trustees (for any entity, the “Board”) and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order (“Participation Agreement”). Applicants note that an Unaffiliated Investment Company (other than an ETF whose shares are purchased by a Fund of Funds in the secondary market) will retain its right at all times to reject any investment by a Fund of Funds.
6. Applicants state that they do not believe that the proposed arrangement will involve excessive layering of fees. The Board of each Fund of Funds, including a majority of the trustees who are not “interested persons” (within the meaning of section 2(a)(19) of the Act) (“Independent Trustees”), will find that the advisory fees charged under any investment advisory or management contract(s) are based on services provided that will be in addition to, rather than duplicative of, the services provided under such advisory contract(s) of any Underlying Fund in which the Fund of Funds may invest. In addition, the Adviser will waive fees otherwise payable to it by a Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Unaffiliated Investment Company under rule 12b–1 under the Act) received from an Unaffiliated Fund by the Adviser or an affiliated person of the Adviser, other than any advisory fees paid to the Adviser or its affiliated person by an Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund. Any sales charges and/or service fees, as defined in rule 2830 of the Conduct Rules of the NASD (“NASD Conduct
7. Applicants submit that the proposed arrangement will not create an overly complex fund structure. Applicants note that no Underlying Fund will acquire securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except in certain circumstances identified in condition 11 below.
1. Section 17(a) of the Act generally prohibits sales or purchases of securities between a registered investment company and any affiliated person of the company. Section 2(a)(3) of the Act defines an “affiliated person” of another person to include (a) any person directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of the other person; (b) any person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the other person; and (c) any person directly or indirectly controlling, controlled by, or under common control with the other person.
2. Applicants state that a Fund of Funds and the Affiliated Funds might be deemed to be under common control of the Adviser and therefore affiliated persons of one another. Applicants also state that the Funds of Funds and the Unaffiliated Funds might be deemed to be affiliated persons of one another if the Fund of Funds acquires 5% or more of an Unaffiliated Fund's outstanding voting securities. In light of these and other possible affiliations, section 17(a) could prevent an Underlying Fund from selling shares to and redeeming shares from a Fund of Funds.
3. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
4. Applicants submit that the proposed transactions satisfy the standards for relief under sections 17(b) and 6(c) of the Act.
1. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (a) The acquiring company and acquired company are part of the same group of investment companies; (b) the acquiring company holds only securities of acquired companies that are part of the same group of investment companies, government securities, and short-term paper; (c) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (d) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
2. Rule 12d1–2 under the Act permits a registered open-end investment company or a registered unit investment trust that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (a) Securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (b) securities (other than securities issued by an investment company); and (c) securities issued by a money market fund, when the investment is in reliance on rule 12d1–1 under the Act. For the purposes of rule 12d1–2, “securities” means any security as defined in section 2(a)(36) of the Act.
3. Applicants state that the proposed arrangement would comply with the provisions of rule 12d1–2 under the Act, but for the fact that a Same Group Fund of Funds may invest a portion of its assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1–2(a) to allow the Same Group Funds of Funds to invest in Other Investments. Applicants assert that permitting Same Group Funds of Funds to invest in Other Investments as described in the application would not raise any of the concerns that the requirements of section 12(d)(1) were designed to address.
4. Applicants represent that, consistent with its fiduciary obligations under the Act, the Board of each Same Group Fund of Funds will review the advisory fees charged by the Same Group Fund of Fund's investment adviser to ensure that they are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to the advisory agreement of any investment company in which the Same Group Fund of Funds may invest.
Applicants agree that the relief to permit Funds of Funds to invest in Underlying Funds shall be subject to the following conditions:
1. The members of an Advisory Group will not control (individually or in the
2. No Fund of Funds or Fund of Funds Affiliate will cause any existing or potential investment by the Fund of Funds in shares of an Unaffiliated Fund to influence the terms of any services or transactions between the Fund of Funds or a Fund of Funds Affiliate and the Unaffiliated Fund or an Unaffiliated Fund Affiliate.
3. The Board of each Fund of Funds, including a majority of the Independent Trustees, will adopt procedures reasonably designed to ensure that its Adviser and any Sub-adviser(s) to the Fund of Funds are conducting the investment program of the Fund of Funds without taking into account any consideration received by the Fund of Funds or Fund of Funds Affiliate from an Unaffiliated Fund or an Unaffiliated Fund Affiliate in connection with any services or transactions.
4. Once an investment by a Fund of Funds in the securities of an Unaffiliated Investment Company exceeds the limit of section 12(d)(l)(A)(i) of the Act, the Board of the Unaffiliated Investment Company, including a majority of the Independent Trustees, will determine that any consideration paid by the Unaffiliated Investment Company to a Fund of Funds or a Fund of Funds Affiliate in connection with any services or transactions: (a) Is fair and reasonable in relation to the nature and quality of the services and benefits received by the Unaffiliated Investment Company; (b) is within the range of consideration that the Unaffiliated Investment Company would be required to pay to another unaffiliated entity in connection with the same services or transactions; and (c) does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between an Unaffiliated Investment Company and its investment adviser(s) or any person controlling, controlled by or under common control with such investment adviser(s).
5. No Fund of Funds or Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Unaffiliated Investment Company or sponsor to an Unaffiliated Trust) will cause an Unaffiliated Fund to purchase a security in any Affiliated Underwriting.
6. The Board of an Unaffiliated Investment Company, including a majority of the Independent Trustees, will adopt procedures reasonably designed to monitor any purchases of securities by the Unaffiliated Investment Company in an Affiliated Underwriting once an investment by a Fund of Funds in the securities of the Unaffiliated Investment Company exceeds the limit of section 12(d)(l)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board of the Unaffiliated Investment Company will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Fund of Funds in the Unaffiliated Investment Company. The Board of the Unaffiliated Investment Company will consider, among other things: (a) Whether the purchases were consistent with the investment objectives and policies of the Unaffiliated Investment Company; (b) how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and (c) whether the amount of securities purchased by the Unaffiliated Investment Company in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board of the Unaffiliated Investment Company will take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to ensure that purchases of securities in Affiliated Underwritings are in the best interests of shareholders.
7. Each Unaffiliated Investment Company shall maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and shall maintain and preserve for a period not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in an Affiliated Underwriting once an investment by a Fund of Funds in the securities of an Unaffiliated Investment Company exceeds the limit of section 12(d)(l)(A)(i) of the Act, setting forth the: (a) Party from whom the securities were acquired; (b) identity of the underwriting syndicate's members; (c) terms of the purchase, and; (d) information or materials upon which the determinations of the Board of the Unaffiliated Investment Company were made.
8. Prior to its investment in shares of an Unaffiliated Investment Company in excess of the limit in section 12(d)(l)(A)(i) of the Act, the Fund of Funds and the Unaffiliated Investment Company will execute a Participation Agreement stating, without limitation, that their Boards and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order. At the time of its investment in shares of an Unaffiliated Investment Company in excess of the limit in section 12(d)(l)(A)(i), a Fund of Funds will notify the Unaffiliated Investment Company of the investment. At such time, the Fund of Funds will also transmit to the Unaffiliated Investment Company a list of the names of each Fund of Funds Affiliate and Underwriting Affiliate. The Fund of Funds will notify the Unaffiliated Investment Company of any changes to the list of the names as soon as reasonably practicable after a change occurs. The Unaffiliated Investment Company and the Fund of Funds will maintain and preserve a copy of the order, the Participation Agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place.
9. Before approving any advisory contract under section 15 of the Act, the Board of each Fund of Funds, including a majority of the Independent Trustees, shall find that the advisory fees charged under such advisory contract are based on services provided that are in addition to, rather than duplicative of, services
10. The Adviser will waive fees otherwise payable to it by a Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Unaffiliated Investment Company under rule 12b-1 under the Act) received from an Unaffiliated Fund by the Adviser, or an affiliated person of the Adviser, other than any advisory fees paid to the Adviser or its affiliated person by an Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund. Any Sub-adviser will waive fees otherwise payable to the Sub-adviser, directly or indirectly, by the Fund of Funds in an amount at least equal to any compensation received by the Sub-adviser, or an affiliated person of the Sub-adviser, from an Unaffiliated Fund, other than any advisory fees paid to the Sub-adviser or its affiliated person by an Unaffiliated Investment Company, in connection with the investment by the Fund of Funds in the Unaffiliated Fund made at the direction of the Sub-adviser. In the event that the Sub-adviser waives fees, the benefit of the waiver will be passed through to the Fund of Funds.
11. No Underlying Fund will acquire securities of any other investment company or company relying on section 3(c)(l) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent that such Underlying Fund: (a) Receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(l) of the Act); or (b) acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund to (i) acquire securities of one or more investment companies for short-term cash management purposes, or (ii) engage in interfund borrowing and lending transactions.
12. Any sales charges and/or service fees charged with respect to shares of a Fund of Funds will not exceed the limits applicable to fund of funds set forth in NASD Conduct Rule 2830.
Applicants agree that the relief to permit Same Group Funds of Funds to invest in Other Investments shall be subject to the following condition:
13. Applicants will comply with all provisions of rule 12d1–2 under the Act, except for paragraph (a)(2) to the extent that it restricts any Same Group Fund of Funds from investing in Other Investments as described in the application.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Rule 6.25 (Nullification and Adjustment of Options Transactions). The text of the proposed rule change is available on the Exchange's Web site (
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.
Exchange Rule 6.25 (Nullification and Adjustment of Options Transactions) governs the nullification and adjustment of options transactions. The Exchange is proposing to amend Rule 6.25(a)(1) to modify how the Exchange will nullify or adjust an obvious error. The Exchange believes this proposal will also harmonize its rules to more closely align with other options exchanges.
Under the current rule 6.25(a)(1)(i), the Exchange will adjust the price of an erroneous transaction to the Theoretical Price when the transaction is between two market-makers unless such parties agree to adjust the transaction to a different price or bust the trade within fifteen minutes of being notified by Exchange Trading Officials of the error. Pursuant to current Exchange Rule 6.25(a)(1)(iv), transactions involving at least one non-CBOE market-maker will be adjusted to the Theoretical Price provided that the adjustment does not violate the non-CBOE market-maker's limit price unless both parties agree to adjust the transaction to a different price or agree to bust the trade within thirty minutes of being notified by Trading Officials of the error.
The Exchange is now proposing to amend Rule 6.25(a)(1) to modify the Exchange obvious error procedures by nullifying trades for transactions involving at least one non-broker-dealer customer and adjusting all other trades between groups that do not fall into that category including for example, a market maker or a broker-dealer.
More specifically, the Exchange is first proposing to include all transactions in which neither party is a non-broker-dealer customer in the current Rule 6.25(a)(1)(i) instead of only including transactions between CBOE market-makers. In addition, the Exchange is proposing to limit the time in which these parties have to decide to adjust to a price other than the Theoretical Price or nullify the trade to ten minutes instead of the fifteen minutes that is currently allowed.
The Exchange believes that the proposal will limit obvious error trade nullification only to transactions involving non-broker-dealer customers. The Exchange believes that this approach will limit the number of nullifications while assuring that non-broker-dealer customers will not have their erroneous trades adjusted through their limit price forcing such customer to spend (receive) more (less) money on erroneous transactions. In addition, the proposed changes to the rule will allow any non-professional customer orders to be subject to professional standards if that customer decides to designate an order as such.
Non-broker-dealer customers are typically far less familiar with the day-to-day trading of the markets and are also less likely to be watching trading activity in a particular option throughout the day. Therefore, given the potential for drastic market swings, the Exchange believes that it is fair and reasonable and consistent with statutory standards to change the procedure for obvious errors involving at least one non-broker-dealer customer, and not for other market participants so as not to expose these customers to any additional risk. In addition, as stated above, these customers have the option of indicating they would like the treatment of their orders as if they originated from a professional.
The proposed rule change is a fair way to address the issue of a trade executing through a non-broker-dealer customer's limit order price while balancing the competing interest of certainty that trades stand versus dealing with the true errors. The proposed rule change would continue to entail specific and objective procedures. Furthermore, the proposed rule change more fairly balances the potential windfall to one market participant against the potential reconsidering of a trading decision under the guise of an error. The Exchange also believes it is fair and reasonable to treat all professional market participants equally, e.g., market-makers, broker-dealers, etc.
As stated above, the Exchange believes that non-broker-dealer customers are far less familiar with the day-to-day trading of the markets and are also less likely to be watching trading activity in a particular option throughout the day. Therefore, the Exchange believes that it is fair and reasonable and consistent with statutory standards to change the procedure for obvious errors involving non-broker-dealer customers, and not for other market participants so as not to expose these customers to any additional risk. In addition, as stated above, these customers have the option of indicating they would like the treatment of their orders as if they were from professionals.
Finally, the Exchange believes that the proposal to change the time to ten minutes, instead of fifteen minutes, for professional parties to agree to a different price or nullify the transaction under Exchange Rule 6.25(a)(1)(i) not only gives ample time for review by the parties to the trades, but it more closely aligns the Exchange's rule to other options exchanges.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the proposal to nullify all erroneous transactions in which at least one non-broker-dealer customer is a party to the transaction and adjusting all other trades will help market participants to better hedge risk associated with these potentially erroneous transactions. By nullifying erroneous transactions which involve a non-broker-dealer customer, the Exchange is assuring that these non-professional customers will not receive a trade at a higher (lower) price than a limit price placed upon the transaction. In addition, the proposal is requiring trades in most circumstances to be honored. The proposal also allows for all parties to nullify any erroneous transaction as long as the two parties come to an agreement within ten minutes. The Exchange believes that the shorten time will require the agreement to be made more quickly, and thus a nullification or adjustment to a different price create less of a disruption to the overall market.
The Exchange believes that adjusting all transactions that do not involve a non-broker-dealer customer is just and equitable because professional customers are more sophisticated and familiar with the day to day trading swings. Though, as proposed, a professional that is not a market-maker may be adjusted through its limit price, the Exchange believes these professionals have adequate resources in place to manage this adjustment and would prefer the certainty of the proposed changes and to adjust these transactions (rather than nullify) to continue to hedge their risk. In addition, the Exchange believes that market-makers and other professionals are similarly situated, and, thus, it is
Though the proposal will treat groups of market participants differently, the Exchange believes that the proposal is not unfairly discriminating because it treats similarly situated groups in the same manner. More specifically, all professionals will be treated in a similar manner while non-professional customers will also be left with the choice to designate an order as professional, under Exchange Rule 1.1(fff) and thus have the ability to be treated in the same manner as a professional. With this choice, all groups may be treated in the same manner. In addition, the proposal creates a safeguard for a non-professional customer that may not be as familiar with the specifics of every day trading (and does not choose to be treated as a professional) by nullifying all erroneous transactions in which they are a party.
The Exchange acknowledges that the proposal may allow for some uncertainty to regarding whether a trade will be adjusted or nullified depending upon the nature of the parties to the transaction. More specifically, the contra party will not know the category of the other party. Nonetheless, the Exchange believes the proposal continues to promote just and equitable principles of trade and protect investors and the public interest because it eliminates a more serious uncertainty of price uncertainty which is inherent in the current Exchange rule because the current rule takes the non-broker-dealer customer's limit price into consideration while this proposal does not as it will be nullified unless agreed upon by the two parties. The Exchange also notes that this rule is substantially similar to another option exchange.
CBOE 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. Specifically, the proposal is meant to eliminate market participant confusion along with help market participants to better hedge the risk associated with erroneous options trades. CBOE believes that the proposed rule change will relieve any burden on, or otherwise promote, competition because it creates less uncertainty about the treatment of erroneous trades which may encourage market participants to trade on the Exchange.
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:
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 Rule 6.15 (Obvious Error and Catastrophic Errors). The text of the proposed rule change is available on the Exchange's Web site (
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.
Exchange Rule 6.15 (Obvious Error and Catastrophic Errors) governs the nullification and adjustment of options transactions. The Exchange is proposing to amend Rule 6.15(b)(2) to modify how the Exchange will nullify or adjust an obvious error. The Exchange believes this proposal will also harmonize its rules to more closely align with other options exchanges.
Under the current rule 6.15(b)(2)(A), the Exchange will adjust the price of an erroneous transaction to the Theoretical Price when the transaction is between two market-makers unless such parties agree to adjust the transaction to a different price or bust the trade within ten minutes of being notified by the Help Desk of the error. Pursuant to current Exchange Rule 6.15(b)(2)(B), transactions involving at least one non-C2 market-maker will be nullified unless both parties agree to adjust the transaction within thirty minutes of being notified by the Help Desk of the error.
The Exchange is now proposing to amend Rule 6.15(b)(2) to modify the Exchange obvious error procedures by nullifying trades for transactions involving at least one non-broker-dealer customer and adjusting all other trades between groups that do not fall into this category including for example, a market maker or a broker-dealer.
More specifically, the Exchange is first proposing to include all transactions in which neither party is a non-broker-dealer customer in the current Rule 6.15(b)(2)(A) instead of only including transactions between C2 market-makers. Next, the Exchange is proposing to add a provision to nullify all erroneous transactions between non-broker-dealer customers unless both parties agree to an adjusted price within thirty minutes.
The Exchange believes that the proposal will limit obvious error trade nullification only to transactions involving non-broker-dealer customers. The Exchange believes that this approach will limit the number of nullifications while assuring that non-broker-dealer customers will not have their erroneous trades adjusted through their limit price forcing such customer to spend (receive) more (less) money on erroneous transactions. In addition, the proposed changes to the rule will allow any non-professional customer orders to be subject to professional standards if that customer decides to designate an order as such.
Non-broker-dealer customers are typically far less familiar with the day-to-day trading of the markets and are also less likely to be watching trading activity in a particular option throughout the day. Therefore, given the potential for drastic market swings, the Exchange believes that it is fair and reasonable and consistent with statutory standards to change the procedure for obvious errors involving at least one non-broker-dealer customer, and not for other market participants so as not to expose these customers to any additional risk. In addition, as stated above, these customers have the option of indicating they would like the treatment of their orders as if they originated from a professional.
The proposed rule change is a fair way to address the issue of a trade executing through a non-broker-dealer customer's limit order price while balancing the competing interest of certainty that trades stand versus dealing with the true errors. The proposed rule change would continue to entail specific and objective procedures. Furthermore, the proposed rule change more fairly balances the potential windfall to one market participant against the potential reconsidering of a trading decision under the guise of an error. The Exchange also believes it is fair and reasonable to treat all professional market participants equally, e.g. market-makers, broker-dealers, etc.
As stated above, the Exchange believes that non-broker-dealer customers are far less familiar with the day-to-day trading of the markets and are also less likely to be watching trading activity in a particular option throughout the day. Therefore, the Exchange believes that it is fair and reasonable and consistent with statutory standards to change the procedure for obvious errors involving non-broker-
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the proposal to nullify all erroneous transactions in which at least one non-broker-dealer customer is a party to the transaction and adjusting all other trades will help market participants to better hedge risk associated with these potentially erroneous transactions. By nullifying erroneous transactions which involve a non-broker-dealer customer, the Exchange is assuring that these non-professional customers will not receive a trade at a higher (lower) price than a limit price placed upon the transaction. In addition, the proposal is requiring trades in most circumstances to be honored. The proposal also allows for all parties to nullify any erroneous transaction as long as the two parties come to an agreement.
The Exchange believes that adjusting all transactions that do not involve a non-broker-dealer customer is just and equitable because professional customers are more sophisticated and familiar with the day to day trading swings. Though, as proposed, a professional that is not a market-maker may be adjusted through its limit price, the Exchange believes these professionals have adequate resources in place to manage this adjustment and would prefer the certainty of the proposed changes and to adjust these transactions (rather than nullify) to continue to hedge their risk. In addition, the Exchange believes that market-makers and other professionals are similarly situated, and, thus, it is consistent to treat these groups in the same manner. Moreover, the market benefits from the least amount of nullifications because parties have more certainty about their executions. The Exchange also believes that assessing an adjustment penalty will encourage professionals to adjust and nullify a lesser amount of transactions which will benefit the market as a whole. Thus, the Exchange believes that the treatment of all professional orders in the same manner is consistent with the Act as it will allow the market to suffer fewer disruptions, in the form of adjustments or nullifications of trades after the fact, and treats similarly situated groups, namely market-makers and other professionals, in the same manner. The Exchange also notes that aligning the Exchange with other options exchanges will ensure less disruption to market participants as they will be treated consistently across the markets.
Though the proposal will treat different groups of market participants differently, the Exchange believes that the proposal is not unfairly discriminating because it treats similarly situated groups in the same manner. More specifically, all professionals will be treated in a similar manner while non-professional customers will also be left with the choice to designate an order as professional, under Exchange Rule 1.1 and thus have the ability to be treated in the same manner as a professional. With this choice, all groups may be treated in the same manner. In addition, the proposal creates a safeguard for a non-professional customer that may not be as familiar with the specifics of every day trading (and does not choose to be treated as a professional) by nullifying all erroneous transactions in which they are a party.
The Exchange acknowledges that the proposal may allow for some uncertainty to regarding whether a trade will be adjusted or nullified depending upon the nature of the parties to the transaction. More specifically, the contra party will not know the category of the other party. Nonetheless, the Exchange believes the proposal continues to promote just and equitable principles of trade and protect investors and the public interest because it eliminates a more serious uncertainty of price uncertainty which is inherent in the current Exchange rule because the current rule takes the non-broker-dealer customer's limit price into consideration while this proposal does not as it will be nullified unless agreed upon by the two parties. The Exchange also notes that this rule is substantially similar to another option exchange.
C2 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. Specifically, the proposal is meant to eliminate market participant confusion along with help market participants to better hedge the risk associated with erroneous options trades. C2 believes that the proposed rule change will relieve any burden on, or otherwise promote, competition because it creates less uncertainty about the treatment of erroneous trades which may encourage market participants to trade on the Exchange.
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 Elizabeth M. Murphy, 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 adopt a strategy fee cap applicable to box spreads.
While the changes proposed herein are effective upon filing, the Exchange has designated that the amendments be operative on November 1, 2013.
The text of the proposed rule change is available on the Exchange's Web site 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.
The purpose of this filing is to amend the strategy fee caps which are currently located in Section II, entitled “Multiply Listed Options.”
A box spread strategy synthesizes long and short stock positions to create a profit. Specifically, a long call and short put at one strike is combined with a short call and long put at a different strike to create synthetic long and synthetic short stock positions, respectively. The Exchange proposes to include this definition in Section II of the Pricing Schedule in the section entitled “Strategies Defined.”
The Exchange proposes to offer a strategy cap for box spreads. Today, Specialist,
The Exchange proposes to cap Specialist, Market Maker, Professional, Firm and Broker-Dealer floor option transaction charges in Multiply Listed Options at $700 for box spread strategies executed on the same trading day in the same options class. Further, the Exchange will include box spreads in the Monthly Strategy Cap so that floor option transaction charges in Multiply Listed Options for dividend, merger, short stock interest, reversal and conversion, jelly roll and box spread strategies combined will continue to be capped at $35,000 per member organization, per month when such members are trading in their own proprietary accounts for purposes of the Monthly Strategy Cap, except for a Firm. Similar to reversal and conversion and jelly roll strategy executions, box spreads will not be included in the Monthly Strategy Cap for a Firm. The Exchange proposes to note for purposes of clarity in the Pricing Schedule that, as is the case today for reversal and conversion and jell roll strategy executions, box spreads are included in the Monthly Firm Fee Cap.
In order to receive the applicable strategy caps today, members are required to designate on the trade ticket whether the trade involves a dividend, merger, short stock interest, reversal and conversion or jelly roll strategy by entering the proper code on the trading ticket
The Exchange believes that its proposal to amend its Pricing Schedule is consistent with Section 6(b) of the Act
The Exchange believes that adopting a strategy cap for box spreads is reasonable because it should encourage members and member organizations to transact a greater number of box spread strategies on the Exchange's trading floor in order that they may benefit from the fee cap. The Exchange also believes that it is reasonable to permit box spread strategy executions to count toward the Monthly Strategy Cap when members are trading in their own proprietary account to receive the benefit of the combined executions, which will include the ability to achieve the Monthly Strategy Cap by transacting box spreads as well as dividend, merger, short stock interest, reversal and conversion and jelly roll strategies. In addition, other options exchanges offer fee caps for box spreads, namely NYSE Arca, Inc. (“NYSE Arca”)
The Exchange believes that adopting a strategy cap for box spreads is
The Exchange's proposal to exclude Firm floor options transaction charges related to reversal and conversion strategies, jelly rolls, and now box spreads, from the Monthly Strategy Cap is reasonable because these fees would be capped as part of the Monthly Firm Fee Cap, which applies only to Firms. The Exchange believes that the exclusion of Firm floor options transaction charges related to reversal and conversion strategies, jelly rolls and now box spreads from the Monthly Strategy Cap is equitable and not unfairly discriminatory because Firms, unlike other market participants, have the ability to cap transaction fees up to $75,000 per month with the Monthly Firm Fee Cap. The Exchange would include floor option transaction charges related to box spread strategies in the Monthly Strategy Cap for Professionals, and Broker Dealers, when such members are trading in their own proprietary accounts, because these market participants are not subject to the Monthly Firm Fee Cap or other similar cap. While Specialists and Market Makers are subject to a Monthly Market Maker Cap on both electronic and floor options transaction charges, box spreads would be excluded from the Monthly Market Maker Cap, as all other strategy transactions are excluded from this cap.
The Exchange believes that its proposal to apply box spread fee caps to orders originating from the Exchange floor is reasonable because members pay floor brokers to execute trades on the Exchange floor. The Exchange believes that offering fee caps to members executing floor transactions defrays brokerage costs associated with executing strategy transactions and continues to incentivize members to utilize the floor for certain executions.
The [sic] 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 because the proposed changes apply uniformly to all members that incur transaction charges for box spreads.
The Exchange operates in a highly competitive market, comprised of twelve options exchanges, in which market participants can easily and readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or rebates to be inadequate. Accordingly, the fee caps that are proposed by the Exchange, as described in the proposal, are influenced by these robust market forces and therefore must remain competitive with fees caps at other venues and therefore must continue to be reasonable and equitably allocated to those members that opt to direct orders to the Exchange rather than competing venues.
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.
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 Elizabeth M. Murphy, Secretary,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On September 17, 2013, ICE Clear Credit LLC (“ICC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR–ICC–2013–07 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
ICC proposes to adopt rules that will provide the basis for ICC to clear additional credit default swap contracts. Specifically, ICC is proposing to amend Section 26D of its Rules to provide for the clearance of additional Standard Emerging Sovereign Single Name constituents of the CDX Emerging Markets Index (“SES Contracts”). Currently, ICC clears four Standard Latin America Sovereign Single Name constituents of the CDX Emerging Markets Index. The proposed changes to the ICC Rules would provide for the clearance of Standard Emerging European and Middle Eastern Sovereign Single Name constituents of the CDX Emerging Markets Index, specifically the Republic of Turkey and the Russian Federation (the “SEEME Contracts”). ICC believes the addition of the SEEME Contracts will allow market participants an increased ability to manage risk.
SEEME Contracts have similar terms to the Standard Latin America Sovereign Single Name constituents of the CDX Emerging Markets Index currently cleared by ICC and governed by Section 26D of the ICC rules. Accordingly, the proposed changes to Section 26D of the ICC rules include the addition of “Standard Emerging European and Middle Eastern Sovereign” as a Transaction Type for SES Contracts and the addition of the European Region as the CDS Region for SEEME Contracts.
Rule 26D–102 would be modified to indicate the specific Eligible SES Reference Entities to be cleared by ICC, namely the Federative Republic of Brazil, the United Mexican States, the Bolivian Republic of Venezuela, the Argentine Republic, the Republic of Turkey and the Russian Federation. Rules 26D–303 (SES Contract Adjustments) and 26D–315 (Terms of the Cleared SES Contract) would be modified to incorporate SEEME Contracts as a Transaction Type for SES Contracts. Rule 26D–309 would be modified to state specifically that ICC will not accept a trade for clearance and settlement if at the time of submission or acceptance of the trade or at the time of novation the CDS Participant submitting the trade is domiciled in the country of the Eligible SES Reference Entity for such SES Contract. Rule 26D–315(b) also would be modified to indicate that for purposes of the CDS Committee Rules, for SEEME Contracts the CDS Region is the European Region.
ICC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC, in particular, Section 17(A)(b)(3)(F) of the Act,
Section 19(b)(2)(C) of the Act
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission by the Division of Trading and Markets, pursuant to delegated authority.
On September 16, 2013, the National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change SR–NSCC–2013–10 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change consists of amendments to the Rules and Procedures (“Rules”) of NSCC to decommission the DTCC Trade Risk Pro service (“Trade Risk Pro”), as more fully described below. Trade Risk Pro was designed to allow NSCC Members to monitor intraday trading activity of their organizations and/or their correspondent firms through review of post-trade data.
Section 19(b)(2)(C) of the Act
On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the 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 (the “Act”),
Chicago Board Options Exchange, Incorporated (the “Exchange” or “CBOE”) proposes to amend the fee schedule for the Customized Option Pricing Service (“COPS”) to add a fee for historical COPS data. The text of the proposed rule change is available on the Exchange's Web site (
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
The purpose of the proposed rule change is to amend the fee schedule for the COPS data product.
COPS provides subscribers with an “end-of-day” file
The fees that MDX charges for COPS Data are set forth on the Price List on the MDX Web site (
The Exchange has submitted a separate proposed rule change to make historical COPS data (“Historical COPS Data”) available through MDX.
The Exchange proposes to establish a fee of $75 per day for Historical COPS Data. For example, a Subscriber would pay a total of $750 for 10 days of Historical COPS Data. Market participants would be able to purchase Historical COPS Data through the MDX Web site. The proposed fee would apply equally to all market participants and be effective on November 4, 2013.
The Exchange believes the proposed rule change is consistent with the requirements of Section 6(b) of the Securities Exchange Act of 1934 (“Act”)
For the reasons cited above, the Exchange believes the proposed rule change is equitable, reasonable and not unfairly discriminatory. In addition, the Exchange believes that no substantial countervailing basis exists to support a finding that the proposed fee fails to meet the requirements of the Act.
In accordance with Section 6(b)(8) of the Act,
In addition, in the case of products that are distributed through market data vendors, the market data vendors themselves provide additional price discipline for proprietary data products because they control the primary means of access to certain end users. These vendors impose price discipline based upon their business models. For example, vendors that assess a surcharge on data they sell are able to refuse to offer proprietary products that their end users do not or will not purchase in sufficient numbers. Internet portals, such as Google, impose price discipline by providing only data that they believe will enable them to attract “eyeballs” that contribute to their advertising revenue. Similarly, Customers will not offer COPS data unless this product will help them maintain current users or attract new ones. For example, a broker-dealer will not choose to offer COPS data to its retail customers unless the broker-dealer believes that the retail customers will use and value the data and the provision of such data will help the broker-dealer maintain the customer relationship, which allows the broker-dealer to generate profits for itself. Professional users will not request COPS data from Customers unless they can use the data for profit-generating purposes in their businesses. All of these operate as constraints on pricing proprietary data products.
Analyzing the cost of market data product production and distribution in isolation from the cost of all of the inputs supporting the creation of market data and market data products will inevitably underestimate the cost of the data and data products. Thus, because it is impossible to obtain the data inputs to create market data products without a fast, technologically robust, and well-regulated execution system, system costs and regulatory costs affect the price of both obtaining the market data itself and creating and distributing market data products. It would be equally misleading, however, to attribute all of an exchange's costs to the market data portion of an exchange's joint products. Rather, all of an exchange's costs are incurred for the unified purposes of attracting order flow, executing and/or routing orders, and generating and selling data about market activity. The total return that an exchange earns reflects the revenues it receives from the joint products and the total costs of the joint products.
The level of competition and contestability in the market is evident in the numerous alternative venues that compete for order flow, including 12 options self-regulatory organization (“SRO”) markets, as well as internalizing broker-dealers (“BDs”) and various forms of alternative trading systems (“ATSs”), including dark pools and electronic communication networks (“ECNs”). Competition among trading platforms can be expected to constrain the aggregate return that each platform earns from the sale of its joint products, but different platforms may choose from a range of possible, and equally reasonable, pricing strategies as the means of recovering total costs. For example, some platforms may choose to pay rebates to attract orders, charge relatively low prices for market data products (or provide market data products free of charge), and charge relatively high prices for accessing posted liquidity. Other platforms may choose a strategy of paying lower rebates (or no rebates) to attract orders, setting relatively high prices for market data products, and setting relatively low prices for accessing posted liquidity. In this environment, there is no economic basis for regulating maximum prices for one of the joint products in an industry in which suppliers face competitive constraints with regard to the joint offering.
The existence of numerous alternatives to the Exchange's products, including proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase.
COPS is voluntary on the part of the Exchange, which is not required to offer such services, and voluntary on the part of prospective Customers that are not required to use it. The Exchange believes COPS data offered by MDX will help attract new users and new order flow to the Exchange, thereby improving the Exchange's ability to compete in the market for options order flow and executions.
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 Elizabeth M. Murphy, 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 of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to January 17, 2014.
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Nikki Burley, A/SDBU, SA–6, Room L–500, Washington DC 20522–0602 who may be reached on 703–875–6824 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
Department of State.
Notice of Cancellation of meeting.
The notice references Public Notice 8515 published in the November 12, 2013
Lisa Aguirre, PM/DDTC, SA–1, 12th Floor, Directorate of Defense Trade Controls, Bureau of Political Military Affairs, U.S. Department of State, Washington, DC 20522–0112; telephone (202) 663–2830; FAX (202) 261–8199; or email
The Office of the Assistant Legal Adviser for Private International Law, Department of State, gives notice of a public meeting to discuss a Working Paper prepared by the Secretariat of the United Nations Commission on International Trade Law (UNCITRAL). The public meeting will take place on Monday, December 2, 2013 from 1 p.m. until 3 p.m. EST. This is not a meeting of the full Advisory Committee.
In response to a request from UNCITRAL's Working Group IV (electronic commerce), the UNCITRAL Secretariat has prepared draft provisions on electronic transferable records, which are presented for in the form of a model law to facilitate Working Group discussion. The Working Paper, which is numbered WP.124 and includes WP.124/Add.1, is available online at
The purpose of the public meeting is to obtain the views of concerned stakeholders on the topics addressed in the Working Paper in advance of the meeting of Working Group IV. Those who cannot attend but wish to comment are welcome to do so by email to Michael Coffee at
Data from the public is requested pursuant to Public Law 99–399 (Omnibus Diplomatic Security and Antiterrorism Act of 1986), as amended; Public Law 107–56 (USA PATRIOT Act); and Executive Order 13356. The purpose of the collection is to validate the identity of individuals who enter Department facilities. The data will be entered into the Visitor Access Control System (VACS–D) database. Please see the Security Records System of Records Notice (State-36) at
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before December 18, 2013.
Comments should refer to docket number MARAD–2013–0125. Written comments may be submitted by hand or by mail to the Docket Clerk,
Linda Williams, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–0903, Email
As described by the applicant the intended service of the vessel PURSE PRINCESS is:
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
Maritime Administration, DOT.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before December 18, 2013.
Rodney McFadden, Office of Workforce Development, Maritime Administration, 1200 New Jersey Avenue SE., W23–457, Washington, DC 20590. Telephone: 202–366–2647; or EMAIL:
Send comments regarding the burden estimate, including suggestions for reducing the burden, to the Office of Management and Budget, Attention: Desk Officer for the Office of the Secretary of Transportation, 725 17th Street NW., Washington, DC 20503.
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1:93.
Research and Innovative Technology Administration, DOT.
Notice of Funding Availability.
The United States Department of Transportation is publishing this notice to give eligible nonprofit institutions of higher education located in Federal Regions 3 and 10 advance notice that they will have an opportunity to submit applications for a grant as a Regional Center in the University Transportation Centers (UTCs) program. Funds for this grant program are authorized beginning on October 1, 2012. In the near future, the Department, via the Research and Innovative Technology Administration (RITA), will release a grant solicitation through
Dr. Kevin Womack, Associate Administrator for Research, Development and Technology, mail code RDT–10, Research and Innovative Technology Administration (RITA), 1200 New Jersey Avenue SE., Washington, DC 20590–0001. Telephone Number (202) 366–5306 or Email
The Moving Ahead for Progress in the 21st Century Act (MAP–21, Pub. L. 112–141, Sec. 51001(a)(5)) authorizes $72.5 million for each of the fiscal years 2013 (FY 2013) and 2014 (FY 2014) for up to 35 competitive grants for UTCs. The FY 2013 and FY 2014 funds are subject to an annual obligation limitation. The amount of budget authority available in a given year may be less than the amount authorized for that fiscal year.
MAP–21 authorizes the Secretary of Transportation to make grants to eligible nonprofit institutions of higher education to establish and operate UTCs. RITA will administer the program (49 CFR 1.99(e)). The Department will solicit competitive grant applications for two regional university transportation centers, one each in Federal Regions 3 and 10. Previously, the Department solicited grant applications for these two regions (see 77 FR 60012); however, the Department did not select any of the submitted applications. UTCs will be selected by the Secretary, in consultation as appropriate with the Administrators of the Federal Highway Administration, and the Federal Transit Administration. (49 U.S.C. 5505(b)(4)(B) as amended by Pub. L. 112–141, Sec. 52009 (effective Oct. 1, 2012)).
The Department plans to competitively select two regional UTCs, one each in Federal Regions 3 and 10, with an award of $2,592,500 each.
The role of each university transportation center is to advance transportation expertise and technology in the varied disciplines that comprise the field of transportation through education, research, and technology transfer activities; to provide for a critical transportation knowledge base outside of the Department of Transportation; and to address critical workforce needs and educate the next generation of transportation leaders.
A UTC must be located in the United States or its territories. A UTC may be a single nonprofit institution of higher education, or a consortium of two or more nonprofit institutions of higher education. A regional UTC must be located in the region for which the grant is sought. (49 U.S.C. 5505(c)(3)(A) as amended by Pub. L. 112–141, Sec. 52009 (effective Oct. 1, 2012)). If a regional UTC is a consortium of two or more nonprofit institutions of higher education, then each institution in the consortium must be located in the region for which the grant is sought.
For Region 3, the eligible states are: Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia. For Region 10, the eligible states are: Alaska, Idaho, Oregon, and Washington.
Institutions may collaborate with state DOTs, the private sector, and community, junior, or technical colleges; however, these organizations or others that are not U.S. nonprofit institutions of higher education may not be considered members of a consortium. The grantee institution (lead institution in the case of a consortium of institutions) will be the direct and primary recipient of UTC program funds, and must perform a substantive role in carrying out UTC activities, and not serve merely as a conduit for awards to other parties.
MAP–21 limits the circumstances in which an institution may receive more than one grant. (49 U.S.C. 5505(b)(2) as amended by Pub. L. 112–141, Sec. 52009 (effective Oct. 1, 2012)). These restrictions include:
A lead institution of a consortium that receives a grant for a National Center is not eligible to receive an additional grant as a lead institution or a member of a consortium for a Regional Center.
A member of a consortium that receives a grant for a National Center is not eligible to receive a grant as a sole institution for a Regional Center or as a lead institution for a Regional Center.
Each UTC is required to obtain matching funds from non-federal sources. The amount of matching funds required for a regional UTC is 100%. The matching amounts may include the amounts made available to a grant recipient under 23 U.S.C. 504(b) or 505. (49 U.S.C. 5505(c)(3)(D)(ii) as amended by Pub. L. 112–141, Sec. 52009 (effective Oct. 1, 2012)).
The Department seeks a balanced portfolio of UTCs that supports the Secretary of Transportation's Strategic Goals, contains different types and/or sizes of universities, and focuses on improving overall system performance using multiple transportation resources.
Additional selection criteria applying to regional UTCs are:
The institution (or lead institution in the case of a consortium) must have a well-established, nationally recognized program in research and education, as shown by:
(i) recent expenditures by the institution in highway or public transportation research;
(ii) a historical track record of awarding graduate degrees in professional fields closely related to highways and public transportation; and
(iii) an experienced faculty who specialize in professional fields closely related to highways and public transportation (49 U.S.C. 5505(c)(3)(B) as amended by Pub. L. 112–141 Sec. 52009 (effective Oct. 1, 2012)).
External Stakeholders. The Department will consult with external stakeholders (including the Transportation Research Board of the National Academy of Sciences, among others), to the maximum extent practicable, to evaluate and competitively review all proposals (49 U.S.C. 5505(b)(6) as amended by Pub. L. 112–141, Sec. 52009 (effective Oct. 1, 2012)).
UTCs will be selected by the Secretary, in consultation as appropriate with the Administrators of the Federal Highway Administration and the Federal Transit Administration.
According to the terms of the grant agreement, grantees will have until September 30, 2017 to expend FY 2013 funds and, assuming availability, FY 2014 funds.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before January 17, 2014.
Submit written comments on the collection of information through the Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–3521), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
National Cemetery Administration, Department of Veterans Affairs.
Notice.
The National Cemetery Administration (NCA), Department of
Written comments and recommendations on the proposed collection of information should be received on or before January 17, 2014.
Submit written comments on the collection of information through
Mechelle Powell at (202) 461–4114 or Fax (202) 273–6695.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–3521), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, NCA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of NCA's functions, including whether the information will have practical utility; (2) the accuracy of NCA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
The Department of Veterans Affairs (VA) gives notice under the Federal Advisory Committee Act, 5 U.S.C. App. 2, that a meeting of the Federal Advisory Committee on Prosthetics and Special-Disabilities Programs will be held on December 3–4, 2013, in room 230 at 810 Vermont Avenue NW., Washington, DC. The meeting will convene at 8:30 a.m. on both days, and will adjourn at 4:30 p.m. on December 3 and at 12 noon on December 4. The meeting is open to the public.
The purpose of the Committee is to advise the Secretary of Veterans Affairs on VA's prosthetics programs designed to provide state-of-the-art prosthetics and the associated rehabilitation research, development, and evaluation of such technology. The Committee also provides advice to the Secretary on special-disabilities programs, which are defined as any program administered by the Secretary to serve Veterans with spinal cord injuries, blindness or visual impairments, loss of extremities or loss of function, deafness or hearing impairment, and other serious incapacities in terms of daily life functions.
On December 3, the Committee will receive briefings on Health Care Eligibility, Ophthalmology and Optometry, Polytrauma System of Care, Physical Medicine and Rehabilitation Services, Spinal Cord Injury and Disorders, Orthotic and Prosthetic Program, Clothing Benefits, and Integrated Disability Evaluation System.
On December 4, the Committee will receive a briefing on Rehabilitation Research and Development.
No time will be allocated for receiving oral presentations from the public; however, members of the public may direct questions or submit written statements for review by the Committee in advance of the meeting to Mr. Larry N. Long, Designated Federal Officer, Veterans Health Administration, Patient Care Services, Rehabilitation and Prosthetic Services (10P4RR), VA, 810 Vermont Avenue NW., Washington, DC 20420, or by email at
Commodity Futures Trading Commission.
Final rule.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is adopting new rules and related forms to enhance its identification of futures and swap market participants. These final rules will leverage the Commission's current position and transaction reporting programs by requiring the electronic submission of trader identification and market participant data on amended Forms 102 and 40, and on new Form 71. The new and amended forms require the reporting of certain trading accounts active on reporting markets that are designated contract markets or swap execution facilities. Among other information, the forms collect ownership and control information with respect to both position-based special accounts and trading accounts that meet specified volume-based reporting levels.
Sebastian Pujol Schott, Associate Director, Division of Market Oversight (“DMO”), at 202–418–5641 or
The CFTC's large trader reporting rules (also referred to herein as the “reporting rules”) are contained in parts 15 through 21 of the Commission's regulations.
The amendments to the reporting rules and forms will achieve three primary purposes. First, they will expand and subdivide current Form 102 into a new Form 102 (“New Form 102”), partitioned into three sections: Section 102A for the identification of position-based special accounts (“102A,” “Form 102A,” or “New Form 102A”); section 102B for the collection of ownership and control information from clearing members on volume threshold accounts associated with DCMs or SEFs (“102B,” “Form 102B,” or “New Form 102B”); and section 102S for the submission of 102S filings for swap counterparty and customer consolidated accounts with reportable positions (“102S,” “Form 102S,” or “102S filings”). Second, the amendments will enhance the Commission's surveillance and large trader reporting programs for futures, options on futures, and swaps through a variety of enhancements, including: Requiring the reporting on Form 102A of the trading accounts that comprise each special account; requiring the reporting of certain omnibus account information on Form 71 (“Form 71” or “New Form 71”) upon special call by the Commission;
The benefits of reporting through a dedicated ownership and control report (“OCR”) were discussed in proposed rulemakings that preceded these final rules—specifically, the Advanced Notice of Proposed Rulemaking published in July 2009
As discussed in the NPRM, the final rules respond, in part, to the increased dispersion and complexity of trading in U.S. futures markets following their transition from localized, open-outcry venues to global electronic platforms.
In order to perform effective surveillance, the Commission must receive data sets that contain a sufficient number of reference points for the Commission to uncover relationships between related accounts, and analyze information based on surveillance criteria that are frequently evolving in response to market events. The collection of additional information regarding trading accounts and traders will enable the Commission to perform more efficient and effective surveillance. In particular, the OCR data collection will enable the Commission to link transaction-level data that it receives (which includes trading account numbers, but not traders'
As noted in the NPRM, “Commission staff utilizes two distinct data platforms to conduct market surveillance: The Trade Surveillance System (`TSS') and the Integrated Surveillance System (`ISS'). Broadly speaking, TSS captures transaction-level details of trade data, while ISS facilitates the storage, analysis, and mining of large trader data from a position perspective. One important component of TSS is the Trade Capture Report (`TCR'). Trade Capture Reports contain trade and related order data for every matched trade facilitated by an exchange, whether executed via open-outcry, electronically, or non-competitively. Among the data included in the TCR are trade date, product, contract month, trade time, price, quantity, trade type (
The data collection will also help the Commission to better identify and categorize individual trading accounts and market participants that trigger position or newly-created volume-based reporting thresholds. For example, New Form 102A will require reporting firms to identify the constituent trading accounts of each reported special account. In this manner, New Form 102A will ensure a new level of interoperability between the Commission's TSS trade data and ISS large trader data, and will permit Commission staff to quickly reconstruct trading for any special account. In addition to linking the two databases, New Form 102A will identify both the owners and controllers of such constituent trading accounts, thereby providing the Commission with a new lens through which to identify and surveil market activity that might otherwise appear unrelated to the Commission's surveillance programs.
New Form 102B will, for the first time, require identification of trading accounts based solely on their total trading volume during a single trading day. This new information collection will enhance the Commission's trade practice surveillance program by revealing connections of ownership or control between trading accounts that otherwise appear unrelated in the TCR. More generally, it will facilitate Commission efforts to detect and deter attempted market disruptions that may occur even in the absence of large open positions that are reportable on New Form 102A. Finally, the automated collection of OCR information via electronic forms, rather than through ad-hoc, manual processes, will permit both the Commission and market participants to administer the reporting programs more efficiently and effectively. Additional information on the forms addressed by these final rules is provided in section V below.
The Commission's current reporting rules, and those adopted herein, are primarily implemented by the Commission pursuant to the authority of sections 4a, 4c(b), 4g, and 4i of the Act.
As further discussed in the NPRM, in addition to the CEA sections described above, on July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
As part of the Commission's rulemaking program implementing the Dodd-Frank Act,
Section III below summarizes the current trader and account identification program under Forms 102 and 40, which is also discussed in detail in Section III of the NPRM.
Current § 17.00, in part 17 of the Commission's regulations, forms the basis of the Commission's large trader reporting program.
For each special account identified by an FCM, clearing member, or foreign broker and reported to the Commission in a § 17.00 position report, current § 17.01
As noted above, Form 102 identifies and provides information with respect to special accounts carried by FCMs, clearing members, and foreign brokers. The current form, which will be updated and replaced by these final rules, provides the Commission with contact information for the trader(s) who owns and/or controls trading in each special account included in the daily § 17.00 position reports. The Form 102 questions, as currently detailed in § 17.01(a)–(f),
Based on the Commission's experience in receiving and reviewing Form 102 submissions, and as discussed below in the context of the final rules, the Commission has determined to update Form 102 in order to accommodate more detailed ownership and control information regarding identified special accounts, and to identify underlying trading accounts. In addition, the Commission is implementing an automated transmission process for Form 102 reporting, through either a web portal or secure FTP transmission, so that both the Commission and market participants may benefit from the efficiencies of automation.
Current § 18.04, in part 18 of the Commission's regulations, requires that, after a special call of the Commission, each trader holding or controlling a reportable position file with the Commission a “Statement of Reporting Trader” on current Form 40, at such time and place as directed in the call.
Similar to current § 17.01, current § 18.04 specifically enumerates the data fields required in a Form 40 filing. Section 18.04 and Form 40 require a reporting trader receiving a special call to provide the following principal data points: Name and address; principal business and occupation; type of trader; registration status with the Commission; name and address of other persons whose trading the trader controls; name, address, and phone number for each controller of the reporting trader's trading; name and location of other reporting firms through which the reporting trader has accounts; name and locations of persons guaranteeing the trading accounts of the reporting trader or persons having a 10 percent or greater financial interest in the reporting trader or its accounts; other identification information regarding accounts which the reporting trader guarantees or in which the reporting trader has a financial interest of 10 percent or more; and whether the reporting trader has certain relationships with owners that are foreign governments.
Natural persons completing current Form 40 must also provide the following information, as applicable: A business telephone number; employer and job title; description of trading activity related to physical activity in or commercial use of a commodity; name and address of any organization of which the reporting trader participates in the management, if such organization holds a trading account; the name and address of a partner and/or joint tenant on the account; and the name and address of the partner and/or joint tenant that places orders.
Corporations and other non-natural persons completing current Form 40 must also provide the following information, as applicable: The jurisdiction where the reporting party is organized; names and locations of parent firms and their respective U.S. entity indication; names and locations of all subsidiary firms that trade in commodity futures and options on futures and their respective U.S. entity indication; name and address of person(s) controlling trading, by commodity and transaction type; contact information for a contact person regarding trading; and description of trading activity related to physical activity in, or the commercial use of, a commodity.
As with Form 102, and based on the Commission's experience in calling for and reviewing Form 40 submissions, the Commission has determined to update Form 40 in order to request more detailed information regarding the ownership, control and business activities of reporting traders. In addition, the Commission is implementing an automated transmission process for Form 40 reporting, through either a web portal or secure FTP transmission, so that both the Commission and market participants may benefit from the efficiencies of automation.
As noted above, and discussed in detail in Section III of the NPRM,
Pursuant to § 20.5(a), in part 20 of the Commission's regulations, current 102S filings must be filed by a part 20 reporting party (a swap dealer or clearing firm) for each reportable counterparty consolidated account and “shall consist of the name, address, and contact information of the counterparty and a brief description of the nature of such person's paired swaps and swaptions market activity.”
These final rules update and replace the reporting framework established by part 20. The information requested in new Form 102S also reflects considerations developed in the Swaps Large Trader Guidebook for compliance with part 20.
On July 19, 2010, the Commission published for public comment a Notice of Proposed Rulemaking that proposed to collect certain account ownership and control information for all trading accounts active on U.S. futures
The NPRM proposed new rules and related forms to enhance the Commission's identification of futures and swap market participants, by collecting ownership and control information for certain trading accounts active on reporting markets that are DCMs or SEFs. The rules proposed to leverage the Commission's current position and transaction reporting programs by requiring the electronic submission of trader identification and market participant data on revised Forms 102 and 40, and on New Form 71. The NPRM contained a detailed discussion of the current futures large trader program under Forms 102 and 40,
The Commission invited all interested parties to submit comments on the NPRM, including comments with respect to costs and benefits, within a designated comment window. The Commission received a total of eight comment letters from thirteen interested parties, which are listed below.
The following parties submitted written comments:
1. CME Group Inc. (“CME”)
2. Futures Industry Association (“FIA”)
3. ICE Futures U.S., Inc. (“ICE”)
4. North American Derivatives Exchange, Inc. (“Nadex”)
5. The National Rural Electric Cooperative Association, the Large Public Power Council, and the Electric Power Supply Association (collectively, “Joint Electric Association”)
6. John Hazelwood Estate (“Hazelwood”)
7. Sheila Bailey-Waddell (“Waddell”)
8. Ron Troncatty (“Troncatty”)
The written comments received are summarized in section VII below. In response to the comments received, the Commission has revised and/or eliminated several regulations that were proposed in the NPRM. The Commission also received a number of comments pertaining to the costs and/or benefits of certain proposed regulations. Pursuant to section 15(a) of the CEA, the Commission has considered the costs and benefits of the regulations being adopted in this release, as discussed in more detail in section VIII(B) below. For purposes of these final rules, the Commission has updated the cost estimates that appeared in the NPRM based on the most recent data and statistics available to the Commission.
As noted above, this rulemaking addresses three forms—New Form 102, New Form 71, and New Form 40. New Form 102 is designed as a multi-function form, since the requirement to submit New Form 102 can arise from one of three separate triggers: A special account, volume threshold account, or consolidated account becomes reportable. The data required to be submitted on a New Form 102 is determined by the underlying triggering mechanism. A discussion follows of the three New Form 102 triggering mechanisms, the related sections of the form, and the information required to be provided in each section. The Commission will send New Form 71 via a special call to collect additional information about certain volume threshold accounts identified as omnibus accounts on New Form 102B. New Form 40 will continue to serve its traditional purpose as a tool to be used, at the Commission's discretion, to collect additional information about traders and market participants identified on New Form 102, as well as on New Form 71. New Form 71 and New Form 40 are also described in detail below. In addition, section VII below discusses in detail the version of the forms proposed in the NPRM, the comments received on the forms, and the changes that are being made to the forms in these final rules in response to comments.
As part of its implementation plan related to this rulemaking, and described in more detail below, the Commission has developed both a web-based portal and a secure FTP transmission through which market participates will submit and update their reporting forms. Market participants may provide required information through either submission method. This automated process is intended to cure much of the inefficiency and potential error associated with the current submission process via email, facsimile, or regular mail.
New Form 102A is the section of New Form 102 that will serve a function most analogous to current Form 102. New Form 102A requires an FCM, clearing member, or foreign broker to identify and report its special accounts. As discussed above, a special account is defined in current § 15.00(r), and means any commodity futures or option account in which there is a reportable position.
The Commission notes that under current regulations (§ 17.00(b), citing § 150.4),
Following the implementation of these final rules, reporting parties should continue to report special accounts pursuant to § 17.00 on a disaggregated basis if the parties have been so instructed by the Commission or its designee. All reporting parties should continue to provide position reporting based on control of a special account. As an example, if a special account is controlled by one reporting party but owned by another, such account should be reported only by the reporting party that controls the special account.
Consistent with this guidance, and notwithstanding the requirement on New Form 102A to also report based solely on ownership of a reportable position, the Commission will not require reporting based on this trigger via New Form 102A following the implementation of these final rules. The Commission is retaining the reporting trigger based on ownership of a reportable position in New Form 102A as a placeholder, in the event that the Commission requires 102A reporting based solely on this trigger on a future date.
As compared to current Form 102, the data fields in 102A will include new ownership and control information fields (or, in the case of special accounts that are omnibus accounts, omnibus account originator information fields) for position-based special accounts. Form 102A will also require reporting firms that are clearing members to identify the trading accounts that comprise a position-based special account, and to provide TCR trading account numbers for those trading accounts.
Based on comments received in response to the 2010 OCR NPRM, it is the Commission's understanding that non-clearing FCMs, foreign brokers, and omnibus account originators (collectively, “non-clearing entities”) will generally not have the ability to match/identify a trading account number for their customers or sub-accounts (hereafter, “sub-accounts”) on the TCR.
Notwithstanding these limitations regarding the reporting of trading accounts that comprise a special account, non-clearing entities must continue to report special accounts on Form 102 with respect to their customers/sub-accounts, in the event that such accounts, if carried directly with a clearing member, would be required to be reported as a position-based special account. Current Form 102 requires non-clearing entities to report such special accounts, and New Form 102A does not change that requirement.
New Form 102A will also require reporting firms to indicate whether a special account reported based on ownership or control of a reportable position is a house or customer account of the reporting firm. This indicator will allow the Commission to perform certain financial risk surveillance functions in a more automated and efficient manner, by quickly identifying house positions that potentially create risk for the reporting firm. Finally, 102A requires any reporting firm that indicates on 102A that it is a foreign broker to identify its U.S. FCM.
New Form 102A also includes a question regarding the controllers of trading accounts.
This rulemaking imposes a bifurcated deadline for submitting certain information on New Form 102A. Reporting parties are required to submit a completed Form 102A to the Commission no later than 9 a.m.
The final rules also require reporting parties to submit an updated Form 102A in the event that a change occurs that causes the information submitted on the form to no longer be accurate (“change updates”). Change updates must be submitted according to the bifurcated schedule described in the preceding paragraph. The final rules also include an “on-call” provision, which requires 102A change updates to be submitted on such other date as directed by special call of the Commission.
In addition to change updates, § 17.02(b) requires that, starting on a date specified by the Commission or its designee and at the end of each annual increment thereafter (or such other date specified by the Commission or its designee that is equal to or greater than six months), each FCM, clearing member, or foreign broker resubmit every 102A that it has submitted to the Commission or its designee for each of its special accounts (“refresh updates”). The goal of the refresh update provision for 102A is to establish discrete points in time where all 102A data is considered accurate and reliable, thereby avoiding the data drift that is often associated with long-term data collection efforts.
Both the change update and refresh update provisions of § 17.02(b) include a sunset provision. An FCM, clearing member, or foreign broker may stop providing change updates or refresh updates for a Form 102A that it has submitted to the Commission for any special account upon notifying the Commission or its designee that the account in question is no longer reportable as a special account and has not been reportable as a special account for the past six months. If a reporting party so notifies the Commission, and the special account becomes reportable again at a subsequent date, then the reporting party would be required to file a new Form 102A.
New Form 102B of New Form 102 introduces a new volume-based reporting structure not found in current Form 102. While current Form 102 reporting requirements arise when an account (or collection of related accounts) has a reportable position, 102B reporting is triggered when an individual trading account meets a specified trading volume level in an individual product and, as a result, becomes a “volume threshold account.” Volume threshold account, as defined below in final § 15.00(x), means any trading account that carries reportable trading volume on or subject to the rules of a reporting market that is a DCM or SEF.
As a threshold question, 102B requires that clearing members provide, in response to question 2, the trading account number of any trading account that meets the criteria for a volume threshold account; any related short code(s) for such account; and the name of the reporting market (
Second, 102B requires that clearing members provide, in response to question 3, the volume threshold account's associated special account number, if applicable. This information will permit the Commission to more effectively and efficiently connect position data received via the large trader reporting system and trade data received via the TCR.
Third, 102B requires that clearing members indicate, in response to question 4, whether the volume threshold account is an omnibus account, or used to execute trades for an omnibus account. If the account is an omnibus account or used to execute trades for an omnibus account, question 4 requires clearing members to indicate whether the account is a house or customer omnibus account, and to provide information sufficient to uniquely identify and contact the originator of the account (
Fourth, 102B requires clearing members to provide information, in response to question 5, sufficient to uniquely identify and contact each owner of a volume threshold account that is not an omnibus account (
This rulemaking imposes a bifurcated deadline for submitting certain information on New Form 102B. Reporting parties are required to submit a completed Form 102B to the Commission no later than 9 a.m. on the business day following the date on which the volume threshold account becomes reportable. This form must include all required information, including the names of the owner(s) and controller(s) of each volume threshold account reported on the form that is not an omnibus account. However, the reporting party may provide certain supplemental information regarding such owner(s) and controller(s) on a later date. No later than 9 a.m. on the third business day following the date on which the volume threshold account becomes reportable, the reporting party may update its Form 102 submission to provide information with respect to such owner(s) and controller(s) other than their names (
The final rules also require reporting parties to submit an updated Form 102B in the event that a change occurs that causes the information submitted on the form to no longer be accurate (“change updates”). Change updates must be submitted according to the bifurcated schedule described in the preceding paragraph. The final rules also include an “on-call” provision, which requires 102B change updates to be submitted on such other date as directed by special call of the Commission.
In addition to change updates, § 17.02(c) requires that, starting on a date specified by the Commission or its designee and at the end of each annual increment thereafter (or such other date specified by the Commission or its designee that is equal to or greater than six months), each clearing member resubmit every 102B that it has submitted to the Commission for each of its volume threshold accounts (“refresh updates”). The goal of the refresh update provision for 102B is to establish discrete points in time where all 102B data is considered accurate and reliable, thereby avoiding the data drift that is often associated with long-term data collection efforts.
Both the change update and refresh update provisions of § 17.02(c) include a sunset provision. A clearing member may stop providing change updates or refresh updates for a Form 102B that it has submitted to the Commission for any volume threshold account upon notifying the Commission or its designee that the account in question executed no trades in any product in the past six months on the reporting market at which the volume threshold account reached the reportable trading volume level. If a reporting party so notifies the Commission, and the volume threshold account becomes reportable again at a subsequent date, then the reporting party would be required to file a new Form 102B.
Section 102S of New Form 102 is designed to facilitate the electronic submission of 102S filings. Such filings are currently being submitted to the Commission (pursuant to § 17 CFR 20.5(a)) through a non-automated process. As noted above, pursuant to § 20.5(a), 102S filings must be filed by a part 20 reporting party (a swap dealer or clearing firm) for each reportable counterparty consolidated account when such account first becomes reportable, and “shall consist of the name, address, and contact information of the counterparty and a brief description of the nature of such person's paired swaps and swaptions market activity.”
The timing for submitting new 102S filings will continue to be subject to current § 20.5(a)(3).
Section 20.5(a)(4) of the final rules requires that if any change causes the information filed on a 102S for a consolidated account to no longer be accurate, an updated 102S must be filed with the Commission no later than 9:00 a.m. on the business day after such change occurs, or on such other date as directed by special call of the Commission (“change updates”).
In addition to change updates, final § 20.5(a)(5) requires that, starting on a date specified by the Commission or its designee and at the end of each annual increment thereafter (or such other date specified by the Commission or its designee that is equal to or greater than six months), each clearing member or swap dealer must resubmit every 102S that it has submitted to the Commission for each of its consolidated accounts (“refresh updates”). As with the 102A and 102B, discussed above, the goal of the refresh update provision is to establish discrete points in time where all 102S data is considered accurate and reliable. The Commission is proposing the refresh update provision in an effort to maintain accurate 102S data, and to avoid the data drift which is often associated with long-term data collection efforts.
Both the change update and refresh update provisions of § 20.5(a) include a sunset provision. A clearing member or swap dealer may stop providing change updates or refresh updates for a Form 102S that it has submitted to the Commission for any consolidated account upon notifying the Commission or its designee that the account in question is no longer reportable as a consolidated account and has not been reportable as a consolidated account for the past six months. If a reporting party so notifies the Commission, and the consolidated account becomes reportable again at a subsequent date, then the reporting party would be required to file a new Form 102S.
New Form 71 (“Identification of Omnibus Accounts and Sub-Accounts”) will be sent, in the Commission's discretion, in the event that a volume threshold account is identified as a customer omnibus account on Form 102B. The Commission will send New Form 71 via a special call to the originating firm of such an account. The Commission will provide the relevant account number and reporting market reported on the 102B when sending the Form 71. Recipients of a Form 71 will be required to provide information regarding any account to which the customer omnibus account allocated trades that resulted in reportable trading volume for the account receiving such allocations (a “reportable sub-account”) on a specified trading date.
If a reportable sub-account identified on Form 71 is not an omnibus sub-account, then the originating firm will be required to identify the owner(s) and controller(s) of the non-omnibus reportable sub-account. A New Form 40 will be sent, via a special call at the discretion of the Commission, to such owner(s) and controller(s). Form 71 will therefore enable the Commission to collect the same level of information regarding owners and controllers (via a subsequent New Form 40) that the Commission will collect with respect to a non-omnibus volume threshold account identified on 102B. The key data points to be collected in Form 71 are summarized below.
As a threshold question, section A of Form 71 requires the originator of an omnibus volume threshold account or a reportable sub-account to confirm certain identifying information regarding the originator. Such information would have been reported to the Commission by an omnibus account carrying firm on Form 102B or on a preceding Form 71 (
Second, section B of Form 71 requires the originator to provide certain information regarding the allocation of trades from a specified account number, and on a specified date and reporting market, to another account (called a “recipient account”). Specifically, the originator is required to indicate whether: (1) It allocated trades from the specified account number on the specified date and reporting market that resulted in reportable trading volume for a recipient account; (2) it allocated trades from the specified account number on the specified date and reporting market, but the allocations did not sum to reportable trading volume for a recipient account on such date; or (3) it did not allocate any trades from the specified account number on the specified date and reporting market.
If condition (1) is met, the originator is required to indicate in section B whether the reportable sub-account is an omnibus reportable sub-account. If so, the originator is required to indicate whether the omnibus reportable sub-account is a house or customer omnibus account, and to provide information sufficient to identify and contact the originator of the sub-account (
If the reportable sub-account is not an omnibus sub-account, the originator is
In these final rules, the Commission adopts a revised Form 40 that will be sent, on special call of the Commission, to individuals and other entities identified on any of 102A, 102B, and Form 71. As adopted herein, New Form 40, still referred to as the “Statement of Reporting Trader,” will continue to serve the function traditionally met by current Form 40. New Form 40 will provide the Commission with detailed information regarding both the business activities and the ownership and control structure of a reporting trader identified in the Commission's Form 102 program (as updated by these final rules). New Form 40 will also be the vehicle through which market participants subject to 17 CFR 20.5(b) submit their 40S filings, and will be used to collect additional information regarding the owners and controllers of non-omnibus volume threshold accounts identified by Form 71. Those entities required to complete a New Form 40 will be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of the information submitted on New Form 40 by periodically updating the information on the New Form 40 web portal or by periodically resubmitting New Form 40 by secure FTP transmission.
Among other data, New Form 40 will request the following regarding the reporting trader: Contact information for the individual(s) responsible for the reporting trader's trading activities, risk management operations, and the information on the New Form 40; if applicable, omnibus account information, foreign government affiliation information, and an indication regarding the reporting trader's status as a domestic or non-domestic entity; information regarding the reporting party's ownership structure in connection with its parents and subsidiaries; information regarding the reporting trader's control relationships with other entities; information regarding other relationships with persons that influence or exercise authority over the trading of the reporting trader; an indication regarding swap dealer status and major swap participant status; an indication of all commodity groups and individual commodities that the reporting trader presently trades, or expects to trade in the near future, in derivatives markets; and other indications regarding the nature of the reporting trader's derivatives trading activity. The form includes definitions of certain terms, including parent, subsidiary, and control, to be used for the purpose of completing New Form 40.
New Form 40 will also require reporting traders who engage in commodity index trading (“CIT”), as defined in the new form, to identify themselves to the Commission.
During the comment period of the NPRM, the Commission's data and technology staff worked with potential reporting parties and other market participants to address the information technology standards associated with the rules proposed by the NPRM.
When a reporting party identifies a new account on New Form 102A, 102B or 102S, the Commission will evaluate the account to determine whether to request a New Form 40/40S or New Form 71 via a special call. If the Commission determines to send a New Form 40/40S or New Form 71 to the applicable reporting trader or account originator, the Commission will contact the reporting party (generally via email, using the email address provided on the New Form 102). The Commission will provide instructions for submitting the applicable form through either the web-based portal or secure FTP data feed. Depending on the information provided in New Form 71, the Commission may require a New Form 40 or New Form 71 from additional persons or entities identified in the New Form 71, using the same process described above.
As noted above, these final rules include separate “effective” and “compliance” dates:
• The effective date of these final rules will be February 18, 2014.
• The compliance date, however, will be delayed by an additional 180 days, with the result that the compliance date of these final rules will be August 15, 2014.
Between the publication of these final rules and the effective date, reporting parties should work with the Commission's data and technology staff
Proposed § 15.00(q) revised the definition of “reporting market” in current § 15.00(q) to replace the provision's cross-reference to section 1a(29) of the Act with a cross-reference to § 1a(40). The proposed rule also revised current § 15.00(q) to remove the provision's reference to derivatives transaction execution facilities (“DTEFs”).
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.00(q) without modification.
Proposed § 15.00(t) added “control” to the list of defined terms in § 15.00.
FIA commented that it would be difficult and/or meaningless to provide the requested control information, because the individuals responsible for trading an account within a special account or a volume threshold account can change often, even within the same trading day.
The Commission is adopting proposed § 15.00(t) without modification. At the same time, the Commission is modifying the instructions on Form 102 in response to comments that discussed the difficulty of identifying individuals that exercise control on a transient basis, such as individuals operating an automated trading system (“ATS”) during a daily shift. The instructions for Form 102A and Form 102B have been revised to state that respondents should report all individuals who qualify as “trading account controllers” or “volume threshold account controllers,” as defined in § 15.00(bb) and (cc), respectively.
Volume threshold accounts, omnibus volume threshold accounts, omnibus reportable sub-accounts, and reportable sub-accounts all reflect accounts that execute (or receive via allocation or give-up) “reportable trading volume.” Proposed § 15.00(u) defined reportable trading volume as contract trading volume that meets or exceeds the level specified in proposed § 15.04. Section 15.04, in turn, provided that reportable trading volume for a trading account is trading volume of 50 or more contracts, during a single trading day, on a single
See below the discussion of comments received regarding the reportable trading volume level proposed by § 15.04. No comments were received pertaining specifically to proposed § 15.00(u), and the Commission is adopting § 15.00(u) without modification.
Proposed § 15.00(v) defined direct market access (“DMA”) as “a connection method that enables a market participant to transmit orders to a DCM's electronic trade matching system without re-entry by another person or entity, or similar access to the trade execution platform of a SEF.” Pursuant to the proposed definition, such access could be provided directly by a DCM or SEF, or by a 3rd-party platform. Proposed Forms 102A and 102B required an FCM to indicate whether a trading account or volume threshold account has been granted DMA to the trade matching system or the respective reporting system of the applicable reporting market.
FIA, CME and ICE commented that the definition of DMA was overbroad, and FIA predicted that “virtually all customers for which a Form 102 would be required to be filed will have been granted DMA.”
In response to CME's comment regarding the relevance of DMA information, the Commission has concluded that the OCR reporting forms are not the appropriate vehicle for reporting information regarding connectivity. The Commission is therefore not adopting proposed § 15.00(v), and will not include a question regarding DMA in Form 102.
Proposed § 15.00(w) (re-ordered in the final rules as § 15.00(v)) defined omnibus account as any trading account that one FCM, clearing member or foreign broker carries for another and in which the transactions of multiple individual accounts are combined. The identities of the holders of the individual accounts are not generally known or disclosed to the carrying firm.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.00(w) (re-ordered in the final rules as § 15.00(v)) without modification.
Proposed § 15.00(x) (re-ordered in the final rules as § 15.00(w)) defined omnibus account originator as any FCM, clearing member or foreign broker that executes trades for one or more customers via one or more accounts that are part of an omnibus account carried by another FCM, clearing member or foreign broker.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.00(x) (re-ordered in the final rules as § 15.00(w)) without modification.
Proposed § 15.00(y) (re-ordered in the final rules as § 15.00(x)) defined volume threshold account as any trading account that executes, or receives via allocation or give-up, reportable trading volume on or subject to the rules of a reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act.
In the case of a give-up trade, this NPRM definition was intended to require reporting by: (i) The carrying firm of the original executing account; (ii) the carrying firm of any intervening account(s); and (iii) the carrying firm of the account to which the give-up trade was ultimately allocated. Question 10 in Section VII of the NPRM emphasized the broad scope of the definition: “The Commission intends that the definition of `volume threshold account' captures all possible categories of accounts with reportable trading volume. . . . The Commission requests public comment regarding whether the proposed definition of `volume threshold account' achieves this purpose.”
In response to this question, CME commented that volume-based accounts should be reported at the carrying broker level, and noted that, “this is where the account ownership and control information resides, not at executing brokers.”
The Commission is adopting proposed § 15.00(y) (re-ordered in the final rules as § 15.00(x)) with one modification. The definition of volume threshold account is being scaled back in the final rules, to capture a smaller number of volume threshold accounts than under the NPRM proposal. The definition is being modified to: “any trading account that carries reportable trading volume on or subject to the rules of a reporting market that is a [DCM or SEF].”
• In a give-up scenario, this definition will require reporting by the carrying firm of the account to which the trade is ultimately allocated. Reporting will not be required, however, by the carrying firm of the original executing account, or by the carrying firm of any intervening account(s) prior to the account to which the trade is ultimately allocated.
• In a non-give-up scenario, there will be no change to the number of reportable volume threshold accounts. Under both the original and revised definition, reporting will be required by the carrying firm of the account in which the trade is both executed and cleared.
The Commission believes that this approach will be more efficient and less
Proposed § 15.00(z) (re-ordered in the final rules as § 15.00(y)) defined omnibus volume threshold account as any trading account that, on an omnibus basis, executes, or receives via allocation or give-up, reportable trading volume on or subject to the rules of a reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act.
See the discussion above regarding CME's comment on the definition of “volume threshold account.”
The Commission is adopting proposed § 15.00(z) (re-ordered in the final rules as § 15.00(y)) with one modification, consistent with the change to the definition of volume threshold account described above. Under the final rules, omnibus volume threshold account means “any trading account that, on an omnibus basis, carries reportable trading volume on or subject to the rules of a reporting market that is a [DCM or SEF].”
Proposed § 15.00(aa) (re-ordered in the final rules as § 15.00(z)) defined omnibus reportable sub-account as any trading sub-account of an omnibus volume threshold account, which sub-account executes reportable trading volume on an omnibus basis. Omnibus reportable sub-account also means any trading account that is itself an omnibus account, executes reportable trading volume, and is a sub-account of another omnibus reportable sub-account.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.00(aa) (re-ordered in the final rules as § 15.00(z)) without modification.
Proposed § 15.00(bb) (re-ordered in the final rules as § 15.00(aa)) defined reportable sub-account as any trading sub-account of an omnibus volume threshold account or omnibus reportable sub-account, which sub-account executes reportable trading volume.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.00(bb) (re-ordered in the final rules as § 15.00(aa)) without modification.
The Commission proposed to separately define the concept of control in the context of trading accounts, volume threshold accounts, and reportable sub-accounts. For these accounts, “control” may only be exercised by natural persons. Accordingly, proposed § 15.00(cc), (dd), and (ee) (re-ordered in the final rules as § 15.00(bb), (cc), and (dd)) defined trading account controllers, volume threshold account controllers, and reportable sub-account controllers, respectively, as “a natural person who by power of attorney or otherwise actually directs the trading of a [trading account, volume threshold account, or reportable sub-account].” Each account type may have more than one controller. The proposed definitions in § 15.00(cc), (dd), and (ee) are relevant to the submission of New Forms 102A (trading accounts), 102B (volume threshold accounts), and 71 (reportable sub-accounts), respectively.
See above the discussion of comments received regarding the definition of control proposed by § 15.00(t).
The Commission is adopting proposed § 15.00(cc), (dd), and (ee) (re-ordered in the final rules as § 15.00(bb), (cc), and (dd)) without modification. See the discussion of § 15.00(t) above regarding the modifications to the Form 102 instructions that will be made in response to comments received regarding the definition of control.
The introduction of new account and controller types in New Forms 102A, 102B, and 71 will result in a corresponding expansion in the categories of persons required to provide New Form 40 reports. Accordingly, the Commission proposed to amend § 15.01(c), which currently requires Form 40 reports only from persons who hold or control reportable positions.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.01(c) without modification.
Current § 15.02 contains a list of the forms contained in parts 15 through 19, and 21.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 15.02 without modification.
Proposed § 15.04 provided that reportable trading volume for a trading account is trading volume of 50 or more contracts, during a single trading day,
Notably, proposed § 15.04 addressed trading volume, not open positions, and required that purchases and sales by a trading account be summed to determine whether such account has reached the reportable trading volume. Section 15.04 also stipulates that reportable trading volume should encompass all instruments that the reporting market designates with the same product identifier.
FIA, CME and ICE commented that the reportable trading volume level (“RTVL”), as proposed, would generate an excessive amount of data that may not be meaningful to the Commission's trade practice and market surveillance programs.
FIA and ICE both recommended that the Commission phase in a descending RTVL until the optimum level is reached.
Nadex recommended that a different RTVL should be applied to contracts with small notional values, as compared to contracts with larger, traditional notional values. “For any contract with a notional value of $1,000 or less, the RTVL could be increased to 5,000 (
Although the Commission acknowledges comments received regarding the appropriate RTVL, the Commission is adopting proposed § 15.04 without modification.
As indicated in the NPRM, the RTVL is based on Commission staff's analysis of DCM trade data received through the trade capture report from a sample of DCMs during a recent six-month period. The 50-contract RTVL is calibrated to identify a critical mass of the trading accounts active in Commission- regulated markets, measured not only by the percentage of trading volume for which those accounts are responsible, but also by the absolute number of accounts identified. The 50-contract RTVL identifies approximately 85 percent of trading volume in approximately 90 percent of the products sampled by the Commission over the six-month sample period. The 50-contract RTVL also identifies approximately one-third of the trading accounts in the sample set. As a result, the 50-contract RTVL will capture both: (1) Those accounts responsible for the large majority of trading volume; and (2) a meaningful absolute number of the trading accounts active in Commission-regulated markets. The Commission believes that (1) and (2) are both equally important in improving the Commission's ability to perform robust and comprehensive market and trade practice surveillance. While the 50-contract RTVL achieves the Commission's regulatory objectives, it is nonetheless also calibrated to minimize the regulations' impact on low-volume accounts whose trading activity does not warrant inclusion in the reporting regime.
Furthermore, the Commission also reiterates that volume threshold account reporting, through Form 102B, is a transaction-based reporting regime rather than a position-based regime. A fundamental purpose of volume-based reporting on Form 102B is to identify trading accounts based solely on their trading volume, independently of such accounts' contribution to open interest. The Commission's intent in this rulemaking is to achieve a comprehensive identification of the participants in regulated derivatives markets regardless of the trading strategies they may pursue.
For these reasons, the Commission declines to accept proposals that could reduce the trading volume or absolute number of accounts identified, including FIA's proposal that the final rules switch to an RTVL that descends from 1,000 contracts to 750 contracts, or proposals that would change the basis of measurement, including CME's proposal to use an RTVL of 250 contracts bought or sold per week. In addition, the Commission also declines to accept recommendations that would result in an impracticable administrative burden, including Nadex's recommendation that a different RTVL should be applied to contracts with small notional values. The Commission believes it would be inefficient for both the Commission and various reporting parties to create a reporting regime for its regulated markets that is differently scaled across multiple products, in response to the fact that trading volume varies from one product to the next.
The NPRM proposed to apply the same RTVL (50 contracts) to volume threshold accounts associated with both DCMs and SEFs. Because the RTVL is based on the Commission's experience with DCMs, the NPRM asked for comment whether the 50-contract RTVL was also appropriate for the reporting of accounts associated with SEFs—and if not, what changes would be appropriate for reporting with regard to SEFs. The Commission did not receive any comments in response to this question. As a result, the Commission will apply the same RTVL (50 contracts) to volume threshold accounts associated with both DCMs and SEFs in the final rules, as contemplated by the NPRM.
In the event that trading activity in the SEF marketplace is lower than in the futures marketplace, the Commission expects that the 50 contract RTVL will likely identify a smaller percentage of volume threshold accounts associated with SEFs. The 50 contract RTVL for
Proposed § 17.01(a) required reporting parties to identify special accounts on New Form 102A, and referred reporting parties directly to the new form for the required data points.
Efficiency of Forms. FIA and CME both commented that the use of multiple reporting forms (
In order to eliminate redundant requests on the forms for contact information, FIA suggested creating a “Reporting Contact Reference Database,” where contact information would be stored once for each special account number.
Efficiency of Forms. In response to comments regarding the efficiency of the electronic submission process, the Commission is creating a contact reference database so that respondents will not need to enter contact information each time they manually complete a 102A, 102B or 102S through the web portal. For example, the respondent would enter the account number for the applicable form, and the Web portal page would automatically populate the contact information for that account number which the respondent had most recently provided. The Commission expects that this solution may be particularly helpful to small entities, which are likely to manually complete forms through the web portal. Larger firms, by contrast, are more likely to completely automate the process.
Burden of Collecting Information for Certain Fields. CME recommended that the data fields collected on any automated form should be limited to those records that an FCM obtains in its regular onboarding processes.
FIA proposed that the three sections of the proposed 102 be consolidated into a single Form 102, a draft of which is attached to the FIA comment letter (the “FIA consolidated form”).
Burden of Collecting Information for Certain Fields. The Commission declines to accept the proposal to create a single, consolidated Form 102 based on the FIA consolidated form. The FIA consolidated form is missing a number of key data fields, the absence of which would undermine the goals of the Commission's data collection effort.
However, the Commission is accommodating FIA's comments in a more limited fashion, by clarifying in the instructions to the new forms that the NFA ID and Web site (the two examples of problematic fields cited by FIA) are only required to be reported to the extent the respondent has this information available in its records. There is no affirmative obligation for respondents to poll customers or other parties for the NFA ID and Web site if this information has not been previously collected.
Identification of Special Account Owners. FIA noted that the current Form 102 requires that a special account be identified only by account controller (who may also be the account owner).
Identification of Special Account Owners. The Commission declines to modify the reporting forms in response to comments regarding the identification of account owners. The Commission notes that FIA's comment that FCMs may be required to file two Form 102s for the same account appears to be based upon a misunderstanding of the New Form 102 filing procedure. Regardless of whether a Form 102A is filed as a result of ownership of a reportable position, control of a reportable position, or both ownership and control of a reportable position,
As discussed above, FIA commented on the difficulty of collecting information regarding the direct owners of an account. However, the Commission notes that New Form 102 is identical to current Form 102 in that it requires respondents to determine which party directly owns a special account. The New Form 102 is not more burdensome in this regard. As a result, the Commission is not, pursuant to these final rules, requiring respondents to change their current practices with respect to the manner in which they identify owners for purposes of 102 reporting.
Finally, FIA discussed the difficulty of maintaining accurate information regarding the indirect owners of an account. The Commission notes that the New Form 102 requests information regarding only the direct owners of trading accounts, not the indirect owners.
Sharing of Information With Regulatory and Self-Regulatory Authorities. FIA and CME recommended that the information collected via the revised forms should be made available to “appropriate regulatory and self-regulatory authorities” (FIA) and “relevant SROs” (CME).
Sharing of Information With Regulatory and Self-Regulatory Authorities. The Commission is not modifying the final rules to provide for the sharing of information collected via the forms with the parties proposed by commenters, such as regulatory and self-regulatory authorities. The Commission believes that it would be costly and overly burdensome for the Commission to distribute the collected information to external parties; furthermore, distribution to external parties would not be consistent with the scope of the Commission's responsibilities. The Commission notes that DCMs and SEFs may also implement rules requiring market participants to submit ownership and control information directly to them, if DCMs and SEFs determine that such reporting would be beneficial.
Proposed § 17.01(b) subjects volume threshold accounts to an account identification regime comparable to the position-based regime already existing for special accounts. Proposed § 17.01(b) specifically requires clearing firms to identify volume threshold accounts on New Form 102B.
See the discussion of § 17.01(a) above, which describes comments received regarding the identification of special accounts and volume threshold accounts on Forms 102A and 102B, respectively.
The Commission is adopting proposed § 17.01(b) without modification.
Proposed § 17.01(c) subjected omnibus accounts to their own volume-based account identification regime.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 17.01(c) without modification.
Proposed § 17.01(d) required reporting markets that list exclusively self-cleared contracts to file § 17.01(a) and § 17.01(b) reports as if they were clearing members. Proposed § 17.01(d) reflects the requirements of current § 17.01(h) with respect to special accounts, but also incorporates the new volume threshold accounts added by these final rules.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 17.01(d) without modification.
The Commission proposed to introduce a new § 17.01(e) that would extend the Commission's special call authority—currently applicable to special accounts—to also include volume threshold accounts, omnibus volume threshold accounts and reportable sub-accounts.
No comments were received pertaining to the proposed rule, and the Commission is adopting proposed § 17.01(e) without modification.
Section 17.02(b)
First, as explained above, the Commission proposed to strike current § 17.02(b)(1) and to shift its special call requirements to proposed § 17.01(e). Second, the Commission proposed to strike current § 17.02(b)(2) and to replace its Form 102 submission requirements with a new § 17.02(b)(1)–(4) to address the form and manner of New Form 102A filings for special accounts. Proposed § 17.02(b)(1) directed reporting parties to the Commission's Web site (
§ 17.02(b)(2)–(3) (new 102A filings and change 102A filings). Proposed § 17.02(b)(2)–(3) required firms to file a new Form 102A by 9:00 a.m. ET the following business day after a special account becomes reportable; similarly, changes to a previously submitted Form 102A were required to be reported by 9:00 a.m. ET the following business day. FIA stated that obtaining all the information required by Form 102A (including, for example, the trading accounts that comprise a special account) can take several days.
§ 17.02(b)(4) (refresh 102A filings). Proposed § 17.02(b)(4) required firms to resubmit the Form 102A every six months for each special account, in order to ensure that the information reported is frequently updated. Refresh updates were also required under this proposed rule on such later date (
§ 17.02(b)(3)–(4) (when 102A accounts are no longer reportable). Proposed § 17.02(b)(3)–(4) provided that an FCM may stop reporting a change update or refresh update with respect to a special account upon notifying the Commission or its designee that the account in question is no longer reportable. FIA stated that “the Commission provides no guidance on when an FCM may reasonably conclude that an account is no longer reportable. A customer may fall below and rise above the reportable position level frequently during the course of its relationship with an FCM.”
No comments were received pertaining to proposed § 17.02(b)(1), and the Commission is adopting this proposed rule without modification. In light of the comments received, the Commission is making the following modifications to § 17.02(b)(2)–(4) and to new Form 102A:
§ 17.02(b)(2)–(3) (new 102A filings and change 102A filings). New Form 102A requests information regarding both special accounts and the trading accounts that comprise a special account. The Commission is modifying the reporting deadline for new and changed Form 102A filings, specifically with respect to the reporting of non-omnibus trading accounts that comprise a special account. Respondents are required to provide the names of such trading account owners and controllers by 9:00 a.m. the following business day. However, respondents are required to provide the other contact details with respect to such trading account owners and controllers (address, telephone
In addition, the final rules will reduce the burden on reporting parties by clarifying that all Form 102 reporting deadlines in the final rules are eastern time for information concerning markets located in that time zone, and central time for information concerning all other markets.
§ 17.02(b)(4) (refresh 102A filings). Refresh filings for special accounts will be required once per year, as opposed to once each six months (as proposed in the NPRM).
§ 17.02(b)(3)–(4) (when 102A special accounts are no longer reportable). In response to FIA's comment, pursuant to these final rules, reporting parties may stop providing Form 102A change updates and refresh updates for a special account if the account is no longer reportable as a special account and has not been reportable as a special account for the past six months. This change is intended to substantively replicate § 17.02(c)(3)–(4), which provide that clearing members may stop providing Form 102B change updates and refresh updates, respectively, upon notifying the Commission or its designee that the relevant volume threshold account executed no trades in any product in the past six months on the reporting market at which the volume threshold account reached the reportable trading volume level.
Sections 17.02(b)(3) and (4) have also been modified to enable reporting parties to notify the Commission “or its designee” that an account is no longer reportable as a special account, based on the criteria described in these sections.
To address New Form 102B filings for volume threshold accounts, the Commission proposed to codify a new § 17.02(c). Proposed § 17.02(c) followed a structure similar to that of proposed § 17.02(b), with § 17.02(c)(1) directing reporting parties to
§ 17.02(c)(2)–(3) (new 102B filings and change 102B filings). Proposed § 17.02(c)(2)–(3) required firms to file a new Form 102B by 9:00 a.m. ET the following business day after the account becomes a volume threshold account; similarly, changes to a previously submitted Form 102B were required to be reported by 9:00 a.m. ET the following business day. See the discussion above of the comments received regarding Form 102A filings required by § 17.02(b)(2)–(3), which are also relevant to the new 102B and change 102B reporting obligations.
§ 17.02(c)(4) (refresh 102B filings). Proposed § 17.02(c)(4) required firms to resubmit the Form 102B every six months for each volume threshold account, in order to ensure that the information reported is frequently updated. Refresh updates were also required under this proposed rule on such later date (
No comments were received pertaining to proposed § 17.02(c)(1), and the Commission is adopting this proposed rule without modification. In light of the comments received, the Commission is making the following modifications to § 17.02(c)(2)–(4) and to new Form 102B:
§ 17.02(c)(2)–(3) (new 102B filings and change 102B filings). The Commission is modifying the reporting deadline for new and changed Form 102B filings, specifically with respect to the reporting of non-omnibus volume threshold accounts. Respondents are required to provide the names of non-omnibus volume threshold account owners and controllers reported on 102B by 9:00 a.m. the following business day. Respondents are required to provide the other contact details reported on 102B with respect to such parties (
§ 17.02(c)(4) (refresh 102B filings). Refresh filings for volume threshold accounts will be required once per year, as opposed to once each six months (as proposed in the NPRM). In light of this change, the final rules provide that refresh updates are required on such other date specified by the Commission or its designee that is equal to or greater than six months, which is consistent with the alternative deadline language in proposed §§ 17.02 and 20.5.
Sections 17.02(c)(3) and (4) have also been modified to enable reporting
In the NPRM, the Commission proposed a number of new and revised provisions relating to the delegation of authority to solicit information on the OCR reporting forms. First, the Commission proposed to codify a new § 17.03(e) that provided the Director of ODT with delegated authority to make special calls to solicit information from omnibus volume threshold account originators and omnibus reportable sub-account originators on New Form 71. The Commission also proposed to codify (a) a new § 17.03(f) that provided the Director of DMO with delegated authority to determine the date on which each FCM, clearing member, or foreign broker shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its special accounts and (b) a new § 17.03(g) that provided the Director of DMO with delegated authority to determine the date on which each clearing member shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its volume threshold accounts.
Second, the Commission proposed to revise current § 17.03(a), which grants the Director of DMO the authority to determine whether FCMs, clearing members and foreign brokers can report certain information on series `01 forms, or can use some other format upon a determination that such person is unable to report the information using the standard transmission format.
Third, the Commission proposed to revise current § 17.03(b), which grants the Director of DMO the authority to approve the late submission of position reports and Form 102.
Fourth, the Commission proposed to revise current § 17.03(c), which grants the Director of DMO the authority to permit reporting parties filing Form 102 to authenticate it through a means other than signing the form.
Finally, the Commission proposed to revise current § 17.03(d), which grants the Director of DMO the authority to approve a format and coding structure other than that set forth in § 17.00(g).
No comments were received pertaining to the proposed rules, and the Commission is adopting proposed § 17.03(a)–(g) without modification.
Current § 18.04 (the “Statement of Reporting Trader”) requires every trader who holds or controls a reportable position to file a Form 40 upon special call by the Commission or its designee and to provide on Form 40 information required by current § 18.04(a)–(c).
First, and consistent with its approach to New Form 102, the Commission proposed to transition current § 18.04(a)–(c)'s detailed form content requirements from the regulatory text to New Form 40. Second, the Commission proposed to codify a new § 18.04(a) that, as with current § 18.04, would require every trader who holds or controls a reportable position to file a New Form 40 upon special call by the Commission or its designee. Finally, to accommodate volume threshold accounts and reportable sub-accounts identified on New Forms 102 and 71, the Commission proposed to codify a new § 18.04(b) that would require volume threshold account controllers, persons who own a volume threshold account, reportable sub-account controllers, and persons who own a reportable sub-account to file New Form 40 upon special call by the Commission or its designee.
FIA and Joint Electric Association stated that the Form 40 (and the corresponding Form 40S) is overly complicated and extensive without a justified regulatory need.
Joint Electric Association expressed concern that its members, which often enter into energy commodity swaps to hedge commercial risks, will not understand the terminology and purpose of the Form 40S.
FIA recommended that, instead of requiring identification of indirect owners that have an ownership interest of 10 percent or more, “Form 40 be revised to require identification of indirect owners that have an ownership interest of 25 percent or more. Setting different indirect ownership levels for related purposes imposes an unnecessary operational burden on firms that must develop systems and procedures to assure compliance with these reporting requirements.”
Joint Electric Association recommended that various terms in the Form 40S (such as “reportable position,” “swap dealer” and “major swap participant”) should be clarified and made more understandable to a commercial end user of energy commodity swaps.
The Commission is adopting proposed § 18.04 without modifications.
The current Form 40 asks whether any person has a financial interest of 10 percent or more in the reporting trader. The Commission believes that it is appropriate to maintain the 10 percent threshold for reporting based on ownership that appears in current Form 40. The 10 percent threshold in current Form 40 allows the Commission to receive reporting on a greater number of ownership relationships than a 25 percent threshold would require, thereby benefiting the Commission's surveillance capabilities. The 10 percent threshold is also consistent with other Commission regulations, such as the aggregation requirements (based on 10 percent or greater ownership or equity interest) in § 150.4(b)–(c). The Commission notes that the 25 percent reporting threshold recommended by FIA reflects the definition of control for purposes of assigning legal entity identifiers (“LEIs”) to swap counterparties, a regulatory objective unrelated to the Form 40's objective of obtaining ownership and control information with regard to reporting traders.
The questions added to New Form 40 will provide the Commission with crucial information regarding reporting traders' ownership and control relationships and business activities. The Commission will utilize this information to perform more comprehensive oversight and surveillance of regulated derivatives markets, including by better understanding relationships that may exist among market participants, and to facilitate analysis of potentially disruptive or manipulative trading activity. The definitions of “swap dealer” and “major swap participant,” which are the subject of a comment by Joint Electric Association, have now been finalized.
Finally, the Commission declines to accept the proposal by Joint Electric Association that respondents retain the option to file by paper, facsimile or email. The Commission believes that the automation of Form 40, and the use of auto-population on the web-based Form, will result in increased efficiencies for the Commission and the majority of reporting parties. As noted in section VIII(A) below, the Commission expects that the majority of reporting parties will submit Form 40 via the web-based portal, as opposed to via an FTP data feed. The auto-population of certain data fields on the portal will reduce the burden and complexity of the submission process. As a result, the Commission estimates that the time required to update information contained in New Form 40 using the web-based portal will be
Current § 18.05 requires traders who hold or control reportable positions to maintain books and records regarding all positions and transactions in the commodity in which they have reportable positions.
No comments were received pertaining to the proposed rule. As noted above, the Commission proposed to expand § 18.05 to impose books and records requirements on volume threshold account controllers and owners of volume threshold accounts reported on New Form 102B and reportable sub-account controllers and persons who own a reportable sub-account reported on New Form 71. The Commission also notes that the definition of reportable trading volume encompasses trading on both DCMs and SEFs. Accordingly, the Commission is adopting § 18.05 as proposed, with the clarification that the books and records required to be kept by volume threshold
As with Forms 102 and 40, the Commission proposed to transfer the list of data points required in Form 102S from the relevant regulatory text (
FIA commented on the utility of Form 102S, which requires swap dealers and clearing members to identify and report a swap counterparty or customer consolidated account with a reportable position. FIA stated that the information that will be reported to swap data repositories under part 45 would provide the Commission with access to essentially the same information that proposed Form 102S will require.
See the discussion of § 17.02(b) above for a summary of the comments received on change and refresh obligations related to the Form 102, which are relevant to Form 102S.
The Commission acknowledges the comments of FIA and CME regarding the Form 102S. Contrary to commenters' claims, however, SDRs will not, in all cases, be able to provide the ownership and control information requested on 102S. For example, the Commission anticipates that swap dealers and clearing members (the 102S reporting parties) will be able to consistently provide the contact information for owners and controllers of consolidated accounts on the 102S, based on the records these entities maintain. Part 45 reporting, by contrast, is based on counterparty data. This counterparty data may, in some cases, overlap with the owners and controllers of consolidated accounts reported on 102S. However, counterparty data will not, in all cases, overlap with 102S reporting and provide the ownership and control information required by 102S. As a result, the Commission cannot rely on SDR reporting under part 45 as a substitute for 102S. In addition, SDRs would not have a proactive obligation to send swap account information to the Commission; in contrast, 102S places an affirmative obligation on respondents to provide swap counterparty consolidated account information to the Commission.
Such differences notwithstanding, in developing New Form 102, the Commission has endeavored to identify and eliminate any duplicative reporting obligations that may arise from these final rules. For example, New Form 102 requires respondents to provide the legal entity identifiers (LEI) and related information (
More generally, staff is considering recommending that the Commission issue an Advanced Notice of Proposed Rulemaking seeking public input on possible revisions to part 45 that could increase efficiencies in reporting swap data and mitigate the burden on market participants. As markets, market participants, and trading conventions adapt to the swap data recordkeeping and reporting requirements under part 45, staff will review these requirements to ensure that they continue to fulfill their regulatory objectives in light of the evolving swaps marketplace. For the reasons discussed above, the Commission is implementing 102S reporting pursuant to the final rules.
The Commission is adopting proposed § 20.5(a)(1)–(2) without modification. In response to comments received with respect to § 17.02(b), the Commission is making the following modifications to proposed § 20.5(a)(4)–(5) and to Form 102S:
§ 20.5(a)(5) (refresh 102S filings). The discussion of § 17.02(b) above contains a summary of the comments received on change and refresh obligations related to the Form 102, which are relevant to Form 102S. In response to FIA's comments, refresh filings for consolidated accounts will be required once per year, as opposed to once each six months (as proposed in the NPRM). In light of this change, the final rules provide that refresh updates are required on such other date specified by the Commission or its designee that is equal to or greater than six months, which is consistent with the alternative deadline language in proposed §§ 17.02 and 20.5.
§ 20.5(a)(4)–(5) (when 102S consolidated accounts are no longer reportable). Reporting parties may stop providing Form 102S change updates and refresh updates for a consolidated account if the account is no longer reportable as a consolidated account and has not been reportable as a consolidated account for the past six months. This change is intended to
Sections 20.5(a)(4) and (5) have also been modified to enable reporting parties to notify the Commission “or its designee” that an account is no longer reportable as a consolidated account, based on the criteria described in these sections.
The Paperwork Reduction Act (“PRA”)
The rulemaking will create new information collection requirements via §§ 17.01, 18.04, 18.05, and 20.5. Currently, OMB control number 3038–0009 covers, among other things, the collection requirements arising from current §§ 17.01, 18.04, and 18.05.
Section 17.01, as revised by this rulemaking, will result in the collection of information regarding the following types of accounts: (a) Special accounts (as defined in current § 15.00(r));
1. pursuant to § 17.01(a), FCMs, clearing members, and foreign brokers will identify new special accounts to the Commission on New Form 102A;
2. pursuant to § 17.01(b), clearing members will identify volume threshold accounts to the Commission on New Form 102B;
3. pursuant to § 17.01(c), omnibus volume threshold account originators and omnibus reportable sub-account originators will identify reportable sub-accounts to the Commission on New Form 71 when requested via a special call by the Commission or its designee.
Additional reporting requirements will arise from § 18.04, which will result in the collection of information from and regarding traders who own, hold, or control reportable positions; volume threshold account controllers; persons who own volume threshold accounts; reportable sub-account controllers; and persons who own reportable sub-accounts. Specifically, § 18.04 will provide for the filing of New Form 40, as follows:
1. pursuant to § 18.04(a), a trader who owns, holds, or controls a reportable position will file New Form 40, when requested via a special call by the Commission or its designee; and
2. pursuant to § 18.04(b), a volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, and person who owns a reportable sub-account will file New Form 40 when requested via a special call by the Commission or its designee.
Reporting requirements will also arise from § 20.5(a), which will require all reporting entities to submit New Form 102S for swap counterparty or customer consolidated accounts with reportable positions.
In addition to the reporting requirements summarized above, § 18.05 will impose recordkeeping requirements upon: (1) Traders who own, hold, or control a reportable futures or options on futures position (who are subject to current § 18.05); (2) volume threshold account controllers; (3) persons who own volume threshold accounts; (4) reportable sub-account controllers; and (5) persons who own reportable sub-accounts. These provisions extend the recordkeeping requirements of current § 18.05, which are applicable to traders who hold or control a reportable futures or options on futures position, to owners and controllers of accounts with reportable trading volume.
Set forth below is the estimated total annual industry cost for affected participants to (i) Complete Forms 102A and 102S and any resulting Form 40s, (ii) complete Forms 102B and 71 for volume threshold accounts associated with DCMs and SEFs and any resulting Form 40s, and (iii) comply with the books and records obligations arising from revised § 18.05:
Total reporting and recordkeeping costs for the final rules reflect the sum of estimated burdens, multiplied by the wage rate provided below,
The Commission estimated the reporting burden associated with each filing obligation below by considering the two distinct filing methods that it will accommodate pursuant to these final rules (via FTP or via the web portal). With two methods of submission, reporting parties will have the flexibility to select the submission method that works best with their existing data and technology infrastructure and the number of filings they expect to make. While the NPRM contemplated that certain forms (Forms 40/S and 71) could be submitted only via the web portal, these final rules provide that all forms may be submitted either via the web portal or via FTP, in order to provide additional flexibility to reporting parties. In general, the Commission believes that FTP submission will be more cost effective for reporting parties with a large number of filings, while submission through the web-based portal will be more cost effective for reporting parties with a small number of filings.
As noted above, the Commission has calculated the total estimated industry cost for submitting each form via FTP or via the web portal. These calculations represent the total industry cost if all reporting parties submit information via one method—as compared to the total industry cost if all parties submit via the other method. For example, the 102A calculations below represent the total estimated industry cost if all reporting parties submit 102A via FTP ($1,931,129), or if all parties submit 102A via the web portal ($5,954,969). The Commission recognizes that, even if it is less expensive for the industry as a whole to submit 102A via FTP, it may be less expensive for certain individual reporting parties to submit 102A via the web portal. This may be due to the limited number of forms these parties expect to submit, their technology infrastructure, or other factors.
To expand on this example, if a new reporting party anticipates that it will submit only two 102A filings per year, it might logically conclude that it would be less expensive to submit its two filings via the web portal than to incur the development costs associated with establishing an FTP link to the Commission. In this instance, the Commission has estimated that the reporting party would incur 20 hours of initial development burden for each of the two records submitted via the web portal, or a total initial development burden of 40 hours. Accordingly, the reporting party may conclude that submitting its 102A filings via the web portal is more cost-effective than submitting the same information via FTP, which the Commission has estimated would require an initial development burden of 264 hours per entity (regardless of the number of forms submitted).
All burden estimates assume that information required by each form is generally available within the reporting party; however, in preparing its estimates, the Commission did make an effort to account for the added burden associated with assembling data distributed among multiple systems and/or databases within a reporting party. Finally, the cost estimates in section VIII(A) and (B) assume that all market participants will start from the same point in developing the systems required to implement OCR reporting. Accordingly, to the extent that current reporting parties leverage their existing reporting systems
For the following additional reasons, the Commission anticipates that total reporting and recordkeeping costs to the industry are likely to be lower than the sum of the costs associated with each form individually, as the Commission has calculated herein.
First, the Commission notes that reporting and recordkeeping burdens arising from each regulation and associated form were estimated independently of the requirements of the other regulations and associated forms, and that substantial synergies are likely to exist across the systems and data necessary to meet the reporting requirements. As a result, the total reporting and recordkeeping costs to the industry for the final rules are likely to be substantially lower than estimated. For example, many reporting firms submitting New Form 102A will also submit New Form 102B, and will be able to leverage systems and information necessary for submitting one form to meet the requirements of the other.
Second, the Commission responded to several proposals by commenters to modify the reporting requirements in order to reduce the requirements' burdens and associated costs. Commenters did not quantify the magnitude of the potential cost savings from their alternative proposals. The final rules adopt a number of these proposals in modified fashion in order to reduce the rules' burden and costs, while also maintaining their regulatory benefits. The Commission has taken a conservative approach and made no downward adjustment for cost savings attributable to modifications that the Commission has made to the final rules to accommodate commenters' proposals.
An assessment of Commission data collection efforts demonstrated that the Commission received Form 102 submissions from 260 reporting parties in 2012. The Commission anticipates that it will receive New Form 102A submissions from a similar number of reporting parties each year. Assuming all New Form 102A reporting parties utilize Method 1, the Commission estimates that the total annual industry burden for New Form 102A will equal 27,560 hours. Using an estimated wage rate of $70.07 per hour,
In connection with the introduction of New Form 102A pursuant to this rulemaking, the Commission notes that (except as otherwise instructed by the Commission or its designee) its regulations require reporting firms to separately aggregate positions by common ownership and by common control for the purpose of identifying and reporting special accounts.
Notwithstanding this estimate, which is based on the requirements of §§ 17.00 and 150.4, reporting parties should continue to report special accounts pursuant to § 17.00 on a disaggregated basis following the implementation of these final rules, if the parties have been so instructed by the Commission or its designee. All reporting parties should continue to provide position reporting based on control of a special account. As an example, if a special account is controlled by one reporting party but owned by another, such account should be reported only by the reporting party that controls the special account. Consistent with this guidance, and notwithstanding the requirement on New Form 102A to also report based solely on ownership of a reportable position, the Commission will not require reporting based on this trigger via New Form 102A following the implementation of these final rules. Because the Commission will not require reporting on New Form 102A based solely on ownership of a reportable position, the Commission anticipates that the number of New Form 102A records it receives per year is likely to be lower than the estimated 7,726 records.
Because New Form 102B provides a new volume-based reporting structure not found in current Form 102, the Commission is unable to refer to historical reporting statistics to directly estimate the number of New Form 102B reporting parties. Instead, based on a review of transaction volume across a sample of several DCMs from the second half of 2011, the Commission estimated the number of trading accounts that the Commission anticipates will qualify as volume threshold accounts. The Commission estimated the number of DCM-related New Form 102B reporting parties by calculating the number of clearing members associated with these projected volume threshold accounts.
• For volume threshold accounts associated with DCMs, the Commission anticipates that it will receive New Form 102B submissions from approximately 100 reporting parties annually. Assuming that all such reporting parties utilize Method 1, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 10,600 hours.
• In estimating the number of reporting parties that will submit New Form 102B for volume threshold accounts associated with SEFs, the Commission has made an assumption that trading activity in the SEF marketplace will be lower than in the futures marketplace. For volume threshold accounts associated with SEFs, the Commission anticipates that it will receive New Form 102B submissions from approximately 75 reporting parties annually. Assuming that all such reporting parties utilize Method 1, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 7,950 hours.
Collectively, annual industry costs for 102B filings made pursuant to Method 1 are estimated at $1,299,799.
Because New Form 102B provides a new volume-based reporting structure
• For volume threshold accounts associated with DCMs, the Commission anticipates that it will receive approximately 126,000 New Form 102B records annually. Assuming each such record is provided via Method 2, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 1,386,000 hours. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 2 are estimated at $97,117,020.
• For volume threshold accounts associated with SEFs, the Commission anticipates that it will receive approximately 62,015 New Form 102B records annually. Assuming each such record is provided via Method 2, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 682,165 hours. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 2 are estimated at $47,799,302.
Collectively, annual industry costs for 102B filings made pursuant to Method 2 are estimated at $144,916,322.
As discussed above, while the Commission estimates that establishing an FTP link will require an initial development burden of 264 hours, the Commission also believes that submission via FTP will virtually eliminate the ongoing marginal costs associated with each additional submission or each additional record contained in a submission. For this reason, the Commission believes that FTP submission will be more cost effective for reporting parties making a large number of filings. The Commission expects that a significant majority of New Form 102B reporting parties will be making a large number of filings. Therefore, when estimating the industry-wide costs, the Commission has made the simplifying assumption that all reporting parties will use the FTP submission method when submitting New Form 102B.
Given the cost estimates for the two individual methods discussed above, the Commission anticipates the annual cost to the industry of filing DCM and SEF-related 102B will be approximately $1,299,799 (Method 1—FTP submission), the lower of the two estimated filing methods. Notwithstanding the preceding discussion regarding submission via FTP by New Form 102B reporting parties, the Commission recognizes that reporting parties, given their own individualized needs, will make the most cost-effective choice for them, which may be either of the two submission methods.
The number of New Form 71 filings per year will vary according to the number of special calls for the form made by the Commission. In order to estimate the annual number of New Form 71 filings (
Because the Commission does not presently receive filings pertaining to SEF-related omnibus volume threshold accounts, the Commission is unable to refer to historical reporting statistics to calculate the number of applicable reporting parties. To estimate the number of Form 71 reporting parties for omnibus volume threshold accounts associated with SEFs, the Commission assumed that SEF transactions will likely be intermediated to a lesser extent than DCM transactions. The Commission estimates that there may be 35 percent as many SEF-related omnibus volume threshold accounts as DCM-related omnibus volume threshold accounts. Accordingly, the Commission estimates that there will be 198 SEF-related omnibus volume threshold accounts, and an equal number of reporting parties (198).
The Commission notes that the final rules do not require change or refresh updates of New Form 71. Accordingly, the burdens and costs associated with such updates in the case of other forms described herein are not relevant to the calculation of burdens and costs for
• Based on an estimated 564 DCM-related New Form 71 reporting parties per year, the Commission estimates an aggregate reporting burden of 59,784 hours annually for DCM-related New Form 71 filings via Method 1. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 1 are estimated at $4,189,065.
• Based on an estimated 198 SEF-related New Form 71 reporting parties per year, the Commission estimates an aggregate reporting burden of 20,988 hours annually for SEF-related New Form 71 filings via Method 1. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 1 are estimated at $1,470,629.
Collectively, annual industry costs for New Form 71 filings made pursuant to Method 1 are estimated at $5,659,694.
As discussed above, the Commission expects approximately 564 DCM-related New Form 71 filings per year, and 198 SEF-related New Form 71 filings per year.
• Based on an estimated 564 DCM-related New Form 71 filings per year, the Commission estimates an aggregate reporting burden of 4,512 hours annually for such filings via Method 2. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 2 are estimated at $316,156.
• Based on an estimated 198 SEF-related New Form 71 filings per year, the Commission estimates an aggregate reporting burden of 1,584 hours annually for such filings via Method 2. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 2 are estimated at $110,991.
Collectively, annual industry costs for New Form 71 filings made pursuant to Method 2 are estimated at $427,147.
As noted above, in connection with the introduction of New Form 102A pursuant to this rulemaking, the Commission notes that (except as otherwise instructed by the Commission or its designee) its regulations require reporting firms to separately aggregate positions by common ownership and by common control for the purpose of identifying and reporting special accounts.
Entities required to complete a New Form 40 will be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of the information they provide. Entities can update this information by either visiting the online New Form 40 portal to review, verify, and/or update their information, or by submitting updated information via FTP. Regardless of whether entities update the information contained in New Form 40 via the web or FTP, the Commission believes that the time required to provide this information will be
Assuming all 5,250 New Form 40 reporting parties utilize Method 1, the Commission estimates that the total annual industry burden for New Form 40, as a result of New Form 102A, will equal 514,500 hours. Using an estimated wage rate of $70.07 per hour, annual industry costs for such New Form 40 filings made pursuant to Method 1 are estimated at $36,051,015.
The Commission estimates that each of the 5,250 New Form 40 records will require three hours to complete.
New Form 40—§ 18.04(b) (arising from New Form 102B and New Form 71):
New Form 40 must be provided in response to a special call by the Commission or its designee. Method 1 assumes that each New Form 40 reporting party will use an automated program to submit its forms (arising from New Form 102B and New Form 71) via secure FTP. The Commission estimates that the total initial development burden will average 224 hours per reporting party. The Commission further estimates that the ongoing operation and maintenance burden will average 53 hours per year no matter how many records are contained in a submission. The total Method 1 annualized initial development burden and the ongoing operation and maintenance burden (total yearly burden) will equal approximately 98 hours per reporting party.
In estimating the number of anticipated New Form 40 special calls arising from both DCM-related and SEF-related New Form 102B and New Form 71, the Commission first considered the number of Form 40 special calls made in 2012 (approximately 3,000). The Commission sent some of these special calls to a subset of the 260 special account owners and controllers identified via existing DCM-related
Form 40s Arising From DCM-related New Form 102B and New Form 71. To estimate the number of Form 40 special calls arising from DCM-related New Form 102B and New Form 71, the Commission first calculated the number of anticipated reporting parties for each form: 100 reporting parties for DCM-related New Form 102B, and 564 reporting parties for DCM-related New Form 71, or 664 in total. Based on the special call ratio calculations performed above with respect to the Commission's 2012 special call practices, the Commission estimated that it will send special calls to approximately 7,662 recipients per year in connection with DCM-related New Form 102B and New Form 71.
Form 40s Arising From SEF-related New Form 102B and New Form 71. The Commission applied the same rationale to calculate the number of anticipated New Form 40 filings arising from SEF-related New Form 102B and New Form 71. The Commission first calculated the number of anticipated reporting parties for each form: 75 reporting parties for SEF-related New Form 102B, and 198 reporting parties for SEF-related New Form 71, or 273 in total. Based on the special call ratio calculations performed above with respect to the Commission's 2012 special call practices, the Commission estimated that it will send special calls to approximately 3,149 recipients per year in connection with SEF-related New Form 102B and New Form 71.
As discussed above, the Commission estimates that the time required to update information contained in New Form 40, whether submitted via the web or FTP, will be
• Based on an estimated 13,409 DCM-related New Form 40 reporting parties per year, the Commission estimates an aggregate reporting burden of 1,314,082 hours annually for DCM-related New Form 40 filings, arising from New Form 102B and New Form 71, via Method 1. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 1 are estimated at $92,077,726.
• Based on an estimated 5,511 SEF-related New Form 40 reporting parties per year, the Commission estimates an aggregate reporting burden of 540,078 hours annually for SEF-related New Form 40 filings, arising from New Form 102B and New Form 71, via Method 1. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made pursuant to Method 1 are estimated at $37,843,265.
Collectively, annual industry costs for New Form 40 filings (arising from New Form 102B and New Form 71) made pursuant to Method 1 are estimated at $129,920,991.
Method 2 assumes that each reporting party filing New Form 40 as a result of New Form 102B and New Form 71 (
As discussed above, the Commission anticipates that it will receive approximately 13,409 DCM-related New Form 40 filings annually and approximately 5,511 SEF-related New Form 40 filings annually, in each case arising from New Form 102B and New Form 71.
• The Commission estimates that the total annual industry burden for reporting on New Form 40, as a result of New Form 102B and New Form 71, will equal 40,227 hours for DCM-related New Form 40 filings. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings arising from volume threshold accounts and reportable sub-accounts are estimated at $2,818,706.
• The Commission estimates that the total annual industry burden for reporting on New Form 40, as a result of New Form 102B and New Form 71, will equal 16,533 hours for SEF-related New Form 40 filings. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings arising from volume threshold accounts and reportable sub-accounts are estimated at $1,158,467.
Collectively, annual industry costs for New Form 40 filings, as a result of New Form 102B and New Form 71, are estimated at $3,977,173.
The 102S filing requirements in current § 20.5
An assessment of Commission data collection efforts demonstrated that the Commission received approximately 2,508 102S records in 2012. The Commission anticipates that it will receive a similar number of 102S records each year. Assuming each of the estimated 2,508 102S records are provided via Method 2, the Commission estimates that the total annual industry burden for New Form 102S will equal 25,080 hours. Using an estimated wage rate of $70.07 per hour, annual industry costs for New Form 102S filings made pursuant to Method 2 are estimated at $1,757,356.
New Form 40S—§ 20.5(b):
Current § 20.5(b),
Current § 18.05 requires traders who hold or control reportable positions to maintain books and records regarding all positions and transactions in the commodity in which they have reportable positions.
The Commission sent 59 special calls pursuant to § 18.05 in 2012, 42 of which were based on trade data reflected in the TCR data feed.
This estimate reflects only special calls sent pursuant to § 18.05 as a result of information collected via the volume-based reporting regime (
The current rules and forms, which these final rules update, require FCMs, clearing members, and foreign brokers to identify special account traders to the Commission via Form 102.
The final rules establish the information architecture necessary for the Commission to efficiently identify and categorize individual trading accounts and market participants that trigger position or newly-created volume-based reporting thresholds. By requiring the collection of ownership and control information via the new and amended forms, the Commission will be able to efficiently and effectively monitor risk exposure by institution, market class, and asset class over an extended period of time. To accomplish this, the final rules modify current Forms 102 and 40 to require additional information, require additional reporting via New Form 71, and modify the timing and method by which market participants are required to submit these forms to the Commission. New Form 102 will now be divided into three sections: 102A, 102B, and 102S. Section 102A captures information that must be reported when a trading account exceeds open position thresholds (a “special account”); section 102B, which is new in its entirety, will capture information that must be reported when a trading account exceeds a specified volume threshold during a single trading day (a “volume threshold account”); and section 102S will capture information that must be reported for consolidated accounts and swap counterparties that have a reportable position in swaps. The following summarizes each of the new and amended forms that will take the place of current Form 102 and 40 pursuant to these final rules.
New Form 102A. As noted above, Form 102A is a position-based reporting form, which requires the reporting of both special accounts and the trading accounts that comprise special accounts. This reporting will allow the Commission to link special accounts holding reportable positions to the transactions (and associated trading accounts) identified on daily trade capture reports received by the Commission. By illustrating the connections between end-of-day position reporting via Form 102 and daily trade capture reports, the final rules will enable the Commission to perform a more accurate and timely accounting of market position at the level of individual trading accounts, thereby improving the Commission's surveillance capabilities.
New Form 102B. While Form 102A requires the reporting of large trader positions that remain open at the end of the day, Form 102B requires the reporting of trading accounts that exceed a stated volume threshold during a single trading day, regardless of whether these positions remain open at the end of the day. This will identify traders whose end-of-day open interest does not reach reportable levels on Form 102A, but whose intra-day trading reaches the volume threshold, thus enabling the Commission to monitor trading that could potentially impact markets during concentrated periods of intra-day trading. The Commission expects that the addition of volume-based reporting will provide much needed information about high-frequency traders and other market participants using algorithmic systems, whose activities are not typically captured by the current position-based reporting regime. When combined with the position data reported on Form 102A, New Form 102B will improve the Commission's ability to: (i) Aggregate accounts under common ownership and/or control; (ii) better understand how certain market segments may affect the process of price formation; (iii) efficiently analyze trading behavior surrounding price spikes and other pricing anomalies throughout the day; and (iv) detect and investigate disruptive trading activities, including intraday speculative position limit violations and wash trades.
New Form 71. The Commission will send Form 71, in its discretion via a special call, to collect additional information on omnibus volume threshold accounts identified on Form 102B (or on another Form 71). Form 71 is designed to permit originating firms to report the required information directly to the Commission without requiring such firms to disclose information regarding customers to potential competitors. Form 71 illustrates the `nested' structure of omnibus accounts and underlying omnibus sub-accounts that are volume threshold accounts, and identifies the ultimate owner and controller of these accounts. Form 71 will provide crucial ownership and control information to the Commission that is not collected under the current reporting regime. The Commission will use this ownership information to aggregate and analyze all trading by a market participant for surveillance purposes, irrespective of whether this trading is conducted through a single account, or through a number of accounts maintained by one or more intermediaries.
New Form 102S. Form 102S is designed to facilitate the electronic submission of 102S filings. Such filings are currently being submitted to the Commission (pursuant to 17 CFR 20.5(a)) through a non-automated process. Form 102S will provide position-based reporting of consolidated accounts in the swaps market. The form expands the current 102S reporting regime to require the reporting of ownership and control information with respect to such accounts. Swap reporting on Form 102S significantly improves the Commission's surveillance capabilities, by enabling it to track the market activity of a specific trader, including traders that may be dividing risk exposure between both on-exchange and off-exchange instruments. Swap reporting will also enable the Commission to more efficiently aggregate position exposure in a particular product or commodity group. Such reporting also aligns with the Commission's recently finalized rules on real-time public and regulatory reporting of swap trades, and improves transparency into markets that, historically, have often been opaque and/or over-the-counter.
New Form 40/40S. Each of the 102 forms and Form 71 requires respondents to identify the parties that the Commission should contact (such as the account owner, controller, and related contact persons) if the Commission requires additional information regarding traders or trading accounts identified on the forms. The
Responses to these questions will improve the Commission's ability to perform effective surveillance, by enabling it to better understand the ownership and control structure of reporting traders, and the extent of their business activities across multiple markets and product groups. The Commission will, furthermore, be able to use information reported on New Form 40 to cross-check several of the ownership and control data fields reported on New Form 102. The additional information requested on New Form 40 will improve the quality of data published in the Commission's reports, including the classifications in the Commitments of Traders Report. Finally, the Commission will be able to compare the trading goals that a respondent reports on New Form 40 to its subsequent market activity. If the two do not correspond, the Commission will request additional information from the respondent in order to maintain accuracy in Commission databases and reports, or take other appropriate action.
In sum, the final rules will build upon the Commission's existing market and trade practice surveillance programs for futures, options on futures, and swaps, by improving the Commission's understanding of the impact of special accounts, consolidated accounts, and newly designated volume threshold accounts on market activity. In turn, this will allow the Commission to better perform risk-based monitoring and surveillance among related accounts; efficiently monitor risk exposure by institution, market class, and asset class; facilitate investigations into disruptive trading activity by Commission enforcement staff; and expand the Commission's ability to research and analyze how a wide-ranging variety of market participants impact market behavior.
Section 15(a) of the CEA
As a general matter, the Commission considers the incremental costs and benefits of these rules, that is the costs and benefits that are above the standard established by the Commission's existing regulations.
The Commission requested comment on a variety of cost and benefit metrics in the NPRM. As a general matter, the Commission requested that commenters provide data and any other information or statistics that they relied on to reach conclusions on the Commission's cost and benefit estimates. The Commission also requested comment, including specific quantitative estimates, on the expected costs related to upgrading or obtaining systems to implement and comply with the reporting requirement under the proposed new and revised forms, as well as the impact of the proposed rules (or the relative impact of any alternative rules) on the section 15(a) factors. Although some commenters stated that the NPRM understated the total cost to the industry, no commenter provided specific quantitative cost or benefit estimates, or other information to more precisely estimate costs beyond those presented in the NPRM.
In the absence of specific quantitative estimates or alternative cost proposals by commenters, the Commission performed its own analysis in updating the NPRM cost benefit considerations for these final rules. As explained below, for purposes of these final rules, the Commission has updated the cost estimates that appeared in the NPRM based on the most recent data and statistics available to the Commission. In this section VIII(B), the Commission has also calculated an estimated range of 25 percent below and 25 percent above the estimated total annual industry cost for each form. The Commission has applied these ranges because reporting costs will differ among market participants based on a variety of factors, including the state of their current technology systems, and their differing levels of market and reporting experience. The upper end of the ranges also responds to comments stating that the cost estimates in the NPRM understated the total cost to the industry (without expressing by how much, or to what degree).
As discussed above, the Commission has calculated the total estimated industry cost for submitting each form via FTP or via the web portal. For each form, these calculations represent the total industry cost if all reporting parties submit information via one method—as compared to the total industry cost if all parties submit via the other method. For example, the 102A estimates described in sections VIII(A) and (B) represent the total estimated industry cost if all reporting parties submit 102A via FTP ($1,931,129), or if all parties submit 102A via the web portal ($5,954,969). The Commission recognizes that, even if it is less expensive for the industry as a whole to submit 102A via FTP, it may be less expensive for certain individual reporting parties to submit 102A via the web portal. This may be due to the limited number of forms these parties
To expand on this example, if a new reporting party anticipates that it will submit only two 102A filings per year, it might logically conclude that it would be less expensive to submit its two filings via the web portal than to incur the development costs associated with establishing an FTP link to the Commission. In this instance, the Commission has estimated that the reporting party would incur 20 hours of initial development burden for each of the two records submitted via the web portal, or a total initial development burden of 40 hours. Accordingly, the reporting party may conclude that submitting its 102A filings via the web portal is more cost-effective than submitting the same information via FTP, which the Commission has estimated would require an initial development burden of 264 hours per entity (regardless of the number of forms submitted).
The cost estimates in section VIII(A) and (B) assume that all market participants will start from the same point in developing the systems required to implement OCR reporting. Accordingly, to the extent that current reporting parties leverage their existing reporting systems
For the following additional reasons, the Commission anticipates that total reporting and recordkeeping costs to the industry are likely to be lower than the sum of the costs associated with each form individually, as the Commission has calculated herein.
First, the reporting and recordkeeping burdens arising from each regulation and associated form were estimated independently of the requirements of the other regulations and associated forms. The Commission anticipates that substantial synergies are likely to exist across the systems and data necessary to meet the reporting requirements. For example, many reporting firms submitting New Form 102A via FTP (which the Commission believes is the more cost-effective submission method for the industry as a whole) will also submit New Form 102B via FTP, and will be able to leverage systems and information necessary for submitting one form to meet the requirement to submit the other.
Second, the Commission has incorporated a number of proposals made by commenters that are intended to reduce the reporting burden and associated costs to market participants. These proposals are described in section VII above and section VIII(B)(vii) below. While the Commission has updated the cost estimates that appeared in the NPRM based on the most recent data and statistics available to the Commission, in order to generate more conservative cost estimates, the Commission has not reduced the cost estimates in these final rules to account for the incorporation of these cost-saving proposals.
The discussion below considers the anticipated costs and benefits to the industry of New Form 102A, New Form 102B, New Form 71, New Form 40, New Form 102S, New Form 40S, and the reporting and recordkeeping requirements of revised § 18.05.
New Form 102A, which identifies owners and controllers of special accounts and other related information, is based on the Form 102 currently in use. These final rules do not modify the definition of what constitutes a “special account” for reporting purposes.
The reporting of trading accounts that comprise a special account will provide common reference points between TSS and ISS data, thereby enabling the Commission to efficiently compare end-of-day reportable positions with intra-day account activity.
The Commission assumes that each New Form 102A reporting party will submit New Form 102A via secure FTP, which the Commission believes is the more cost-effective of the two filing methods for the industry as a whole. Each FTP submission will likely contain numerous 102A records. The Commission estimates that the total initial development burden will average 264 hours per reporting party. The Commission also estimates that the highly automated nature of this option will virtually eliminate the marginal costs associated with each additional submission or each additional record contained in a submission. Accordingly, the Commission estimates that 102A change and refresh updates will not increase a reporting party's burden when using the FTP submission method. The Commission further estimates that the ongoing operation and maintenance burden will average 53 hours per year no matter how many records are contained in a submission. The total annualized initial development burden and the ongoing operation and maintenance burden (total yearly burden) will equal approximately 106 hours per reporting party.
An assessment of Commission data collection efforts demonstrated that the Commission received Form 102 submissions from 260 reporting parties in 2012. The Commission anticipates that it will receive New Form 102A submissions from a similar number of reporting parties each year. Assuming all New Form 102A reporting parties utilize the FTP submission method, the Commission estimates that the total annual industry burden for New Form 102A will equal 27,560 hours. Using an estimated wage rate of $70.07 per hour,
As indicated throughout this section VIII(B), the Commission has used the same wage rate of $70.07 when calculating the cost of submission via both the web portal and FTP. Each submission method will, nonetheless, require a different
New Form 102B provides a new volume-based reporting structure not found in current Form 102. While current Form 102 reporting requirements arise when an account (or collection of related accounts) has a reportable position, 102B reporting is triggered when an individual trading account meets a specified trading volume level in an individual product and, as a result, becomes a “volume threshold account.” As noted above, volume threshold accounts could reflect, without limitation, trading in futures, options on futures, swaps, and any other product traded on or subject to the rules of a DCM or SEF.
The current position-based reporting regime captures over 90 percent of open interest in many markets regulated by the Commission. Nonetheless, the current system is not specifically designed to identify market participants using algorithmic systems, whose activities have been opaque under the position-based reporting regime. These traders typically enter and exit a given market position within very brief periods intraday, and are therefore rarely captured by end-of-day position reports. In highly liquid markets, participants of this type can make up a meaningful percentage of market activity. The addition of volume-based reporting, which identifies intra-day trading activity meeting a volume threshold regardless of whether positions continue to be held at the end of day, will enable the Commission to better understand the behavior and evolution of this rapidly growing market segment. Reporting on 102B will also enable the Commission to identify other types of high-volume traders that may hold positions for longer periods of time than is characteristic of high-frequency traders, but nonetheless enter and exit positions intraday.
While the Commission is able to view intraday transactions via the Commission's trade capture report, this report does not provide ownership or control information regarding the relevant trading accounts. Because the Commission lacks the information necessary to efficiently link transaction and account data, the Commission is unable to aggregate the positions of individual trading accounts, or associate trading accounts with special accounts in a timely fashion. The addition of volume-based reporting via New Form 102B will remedy this, by providing the Commission with an efficient means to collect the information required to aggregate positions, detect intra-day position limit violations, and calculate market share. When analyzing periods of elevated volatility—especially at significant trading times such as market open and close—the ability to aggregate intra-day trading behavior by owner/controller is crucial to understanding whether a trader has adversely affected (or has the potential to affect) market quality or price discovery.
In sum, the information collected on new Form 102B will significantly improve the efficiency and performance of the Commission's market and trade practice surveillance program. The Commission anticipates that New Form 102B will allow the Commission to perform more comprehensive surveillance, by identifying over 90 percent of market activity in many significant products that are traded intra-day but not held overnight, mirroring the level of account identification under the current end-of-day position-based reporting regime. In so doing, it will improve the integrity of financial markets, protecting market participants and the public from the costs of disruptive trading practices and other market abuses. Improving the Commission's surveillance program will also support the Commission's enforcement efforts to investigate such market abuses. Finally, the ability to more efficiently identify and aggregate trading activity will improve the Commission's research capabilities as well as its forensic analysis of disruptive market events, even when prohibited practices are not involved. For example, the Commission's efforts to identify and aggregate trading activity were shown to be particularly helpful in diagnosing events such as the Flash Crash of 2010.
The Commission assumes that each New Form 102B reporting party will submit New Form 102B via secure FTP, which the Commission believes is the more cost-effective of the two filing methods for the industry as a whole. Each FTP submission will likely contain numerous 102B records. The Commission estimates that the total initial development burden should average 264 hours per reporting party. The Commission also estimates that the highly automated nature of this option will virtually eliminate the marginal costs associated with each additional submission or each additional record contained in a submission. Accordingly, the Commission estimates that 102B change and refresh updates will not increase a reporting party's burden when using the FTP submission method. The Commission further estimates that the ongoing operation and maintenance burden will average 53 hours per year no matter how many records are contained in a submission. The total annualized initial development burden and the ongoing operation and maintenance burden (total yearly burden) equals approximately 106 hours per reporting party.
Because New Form 102B provides a new volume-based reporting structure not found in current Form 102, the Commission is unable to refer to historical reporting statistics to directly estimate the number of New Form 102B reporting parties. Instead, the Commission estimated the number of New Form 102B reporting parties by estimating the number of clearing members associated with trading accounts that the Commission projects will qualify as volume threshold accounts.
• For volume threshold accounts associated with DCMs, the Commission anticipates that it will receive New Form 102B submissions from approximately 100 reporting parties annually. Assuming that all such reporting parties utilize the FTP submission method, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B will equal 10,600 hours.
• For volume threshold accounts associated with SEFs, the Commission anticipates that it will receive New Form 102B submissions from approximately 75 reporting parties annually. Assuming that all such reporting parties utilize the FTP submission method, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B will equal 7,950 hours.
Collectively, annual industry costs for 102B filings made pursuant to the FTP submission method are estimated at $1,299,799.
New Form 71 (“Identification of Omnibus Accounts and Sub-Accounts”) will be sent, in the Commission's discretion, in the event that a volume threshold account is identified as a customer omnibus account on Form 102B. The Commission will send New Form 71 via a special call to the originating firm of such an account. If the originating firm indicates that this account is itself an omnibus account (an “omnibus reportable sub-account”), then the originating firm will be required to indicate whether the omnibus reportable sub-account is a house or customer omnibus account and identify the originator of the omnibus reportable sub-account. Another Form 71 will be sent, at the discretion of Commission staff, to the originator of a customer omnibus reportable sub-account identified on Form 71. At its discretion, the Commission will continue to reach through layered customer omnibus reportable sub-accounts via successive Form 71s until reaching all reportable sub-accounts, if any, that are not omnibus sub-accounts. Form 71 therefore illustrates the `nested' structure of omnibus accounts and underlying omnibus sub-accounts that are volume threshold accounts, and identifies the ultimate owner and controller of these accounts.
Without the information provided on New Form 71, the Commission is unable to determine whether trading activity in omnibus accounts is attributable to accounts under common ownership or control, or whether it simply represents the combined trading activity of multiple traders acting independently of one another. Similar to the benefits of New Form 102B, the ability to aggregate trading activity will enable the Commission to better identify manipulative and disruptive trading activity, regardless of whether this activity is conducted through a single account, or spread across a number of omnibus accounts and sub-accounts.
The Commission assumes that each New Form 71 reporting party (
As discussed in section VIII(A) above, the Commission expects approximately 564 DCM-related New Form 71 filings per year, and 198 SEF-related New Form 71 filings per year.
• Based on an estimated 564 DCM-related New Form 71 filings per year, the Commission estimates an aggregate reporting burden of 4,512 hours annually for such filings via the web-based portal. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made via the web-based portal are estimated at $316,156.
• Based on an estimated 198 SEF-related New Form 71 filings per year, the Commission estimates an aggregate reporting burden of 1,584 hours annually for such filings via the web-based portal. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings made via the web-based portal are estimated at $110,991.
Collectively, annual industry costs for New Form 71 filings made via the web-based portal are estimated at $427,147.
New Form 40 will be sent, on special call of the Commission, to individuals and other entities identified on any of 102A, 102B, and Form 71. New Form 40, still referred to as the “Statement of Reporting Trader,” will continue to serve the function traditionally met by current Form 40. At the same time, New Form 40 will provide the Commission with more detailed information than current Form 40 regarding both the business activities and the ownership and control structure of a reporting trader identified in the Commission's Form 102 program (as updated by these final rules). New Form 40 will also be the vehicle through which market participants subject to 17 CFR 20.5(b) submit their 40S filings (discussed below), and will be used to collect additional information regarding the owners and controllers of non-omnibus volume threshold accounts identified by Form 71. Those entities required to complete a New Form 40 will be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of the information submitted on New Form 40 by periodically updating the information on the New Form 40 web portal or by periodically resubmitting New Form 40 by secure FTP transmission.
Among other requested data fields, New Form 40: asks if the respondent is engaged in commodity index trading (as that term is defined in the form) (a question that does not appear on current Form 40); requires the respondent to identify all the business sectors that pertain to its business activities or occupation (a question that has been expanded on New Form 40); requires the respondent to identify all commodity groups and individual commodities that it presently trades, or expects to trade in the near future, in derivatives markets (a question that has been expanded on New Form 40); and requires the respondent to indicate the business purpose for which it uses derivatives markets (a question that has been expanded on New Form 40).
The expanded Form 40 will improve the Commission's ability to perform effective surveillance, by providing the Commission with more detailed data on reporting traders, including: information regarding reporting traders' control relationships with other entities; other relationships with persons that influence or exercise authority over the trading of a reporting trader; and more detailed information regarding the business activities of the reporting trader. Responses to the questions above will enable the Commission to better understand the ownership and control structure of reporting traders, and the extent of their business activities across multiple markets and product groups. This enhanced visibility will, in turn, improve the Commission's ability to respond to market disruptions, which can come at a high cost to the investing and general public. The Commission will also be able to use information reported on New Form 40 to cross-check several of the ownership and control data fields reported on New Form 102. The Commission will be able to compare the trading goals that a respondent reports on New Form 40 to its subsequent market activity. If the two do not correspond, the Commission will request additional information from the respondent in order to maintain accuracy in Commission databases and reports, or take other appropriate action.
Currently, Form 40s (as well as Form 102s) are submitted to the Commission via facsimile, email, and physical mail. The Commission converts these submissions into an electronic format, and loads them into the Commission's Integrated Surveillance System. Automating Form 40 submission will improve efficiency by eliminating this additional layer of transcription. As a result, these final rules will reduce the likelihood of input errors. The rules will also reduce the burden and costs that arise when Commission staff must contact reporting parties to request additional information or clarification due to errors arising from mistaken inputs. The more accurate data reported via the automated Form 40 will, in turn, improve the quality of the Commission's published reports, such as the classifications in the Commitments of Traders report.
New Form 40 Submissions Resulting from New Form 102A. The Commission assumes that each reporting party filing New Form 40 as a result of New Form 102A (
As discussed in section VIII(A) above, the Commission expects approximately 5,250 New Form 40 records filings per year arising from New Form 102A filings. The Commission estimates that each of the 5,250 New Form 40 records will require three hours to complete.
New Form 40 Submissions Resulting from New Form 102B and New Form 71. The Commission also assumes that each reporting party filing New Form 40 as a result of New Form 102B and New Form 71 (
As discussed in section VIII(A) above, the Commission anticipates that it will receive approximately 13,409 DCM-related New Form 40 filings annually and approximately 5,511 SEF-related New Form 40 filings annually, in each case arising from New Form 102B and New Form 71.
• The Commission estimates that the total annual industry burden for reporting on New Form 40, as a result of New Form 102B and New Form 71, will equal 40,227 hours for DCM-related New Form 40 filings. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings arising from volume threshold accounts and reportable sub-accounts are estimated at $2,818,706.
• The Commission estimates that the total annual industry burden for reporting on New Form 40, as a result of New Form 102B and New Form 71, will equal 16,533 hours for SEF-related New Form 40 filings. Using an estimated wage rate of $70.07 per hour, annual industry costs for such filings arising from volume threshold accounts and reportable sub-accounts are estimated at $1,158,467.
Collectively, annual industry costs for New Form 40 filings, as a result of New Form 102B and New Form 71, are estimated at $3,977,173.
Section 102S of
Form 102S will require reporting parties to identify swap counterparty or customer consolidated accounts with reportable positions. Swap reporting on Form 102S significantly improves the Commission's surveillance capabilities, by enabling it to track the market activity of a specific trader, including traders that may be dividing risk exposure between both on-exchange and off-exchange instruments. Swap reporting will also enable the Commission to more efficiently aggregate position exposure in a particular product or commodity group. The reporting of swap activity on Form 102S aligns with the Commission's recently finalized rules on real-time public and regulatory reporting of swap trades, and provides further transparency into markets that, historically, have often been opaque and/or over-the-counter.
As further changes arise in the commodity swap market, such as the introduction of SEFs, the identification of both special accounts (via 102A) and consolidated accounts (via 102S) will enable the Commission to monitor a broad range of market activity across traditional futures exchanges and SEFs. This will enable the Commission to quantify the amount of activity in a given product across different execution platforms, and monitor changes in this amount over time. The Commission's expanded view of the marketplace will enable it to more quickly and efficiently identify disruptive market activity occurring across multiple trading facilities (similar to the transmission effects that occurred during the Flash
The Commission assumes that each New Form 102S reporting party will submit New Form 102S via secure FTP, which the Commission believes is the more cost-effective of the two filing methods for the industry as a whole. Each FTP submission will likely contain numerous 102S records. The Commission estimates that the total initial development burden will average 264 hours per reporting party. The Commission also estimates that the highly automated nature of this option will virtually eliminate the marginal costs associated with each additional submission or each additional record contained in a submission. The Commission believes that the timing requirements for 102S filings in current § 20.5(a)(3),
The 102S filing requirements in current § 20.5
New Form 40 will be the vehicle through which market participants subject to 17 CFR 20.5(b) submit New Form 40S. As a result, New Form 40 and New Form 40S are substantively identical. New Form 40S will be sent, on special call of the Commission, to individuals and other entities identified on Form 102S. New Form 40S will continue to serve the function traditionally met by current Form 40S. New Form 40S will provide the Commission with detailed information regarding both the business activities and the ownership and control structure of a reporting trader identified in the Commission's Form 102S program (as updated by these final rules). As noted above, a reporting party (a swap dealer or clearing firm) must submit a Form 102S for each reportable counterparty consolidated account when such account first becomes reportable. Those entities required to complete a New Form 40S will be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of the information submitted on New Form 40S by periodically updating the information on the New Form 40S web portal or by periodically resubmitting New Form 40S by secure FTP transmission.
The expanded Form 40S will provide the Commission with more detailed data on reporting traders, including information regarding reporting traders' control relationships with other entities, and other relationships with persons that influence or exercise authority over the trading of a reporting trader. The expanded form also collects more detailed information regarding the business activities of the reporting trader. For example, New Form 40S:
Responses to the questions above will improve the Commission's ability to perform effective surveillance, by enabling it to better understand the ownership and control structure of reporting traders, and the extent of their business activities across multiple markets and product groups. The collection of the information described above will improve the Commission's ability to analyze and/or respond to market disruptions, which can exact a high cost to the investing and general public. The Commission will also be able to use information reported on New Form 40S to cross-check several of the ownership and control data fields reported on New Form 102S. The Commission will be able to compare the trading goals that a respondent reports on New Form 40S to its subsequent market activity. If the two do not correspond, the Commission will request additional information from the respondent in order to maintain accuracy in Commission databases and reports, or take other appropriate action.
The Commission assumes that each New Form 40S reporting party will complete and submit its forms online via a secure web-based portal provided by the Commission, which the Commission believes is the more cost-effective of the two filing methods for the industry as a whole. As discussed in section VIII(A) above, the Commission anticipates that it will receive approximately 2,508 102S records per year, and the Commission estimates that it will make approximately the same number of 40S special calls each year (2,508). Each response is estimated to require three hours,
Current § 18.05 requires traders who hold or control reportable positions to maintain books and records regarding all positions and transactions in the commodity in which they have reportable positions.
As a result of the final rules, the four new categories of persons identified above will have the same books and records requirements as traders who hold or control a reportable futures or options on futures position, and are therefore required to maintain books and records under current § 18.05. When the Commission identifies potential instances of manipulative or abusive practices via the new and amended Forms 102, 40 and 71, or in the daily trade capture reports received by the Commission, it may request additional information via special call regarding traders' positions, transactions or activities. The § 18.05 special call enables the Commission to analyze a trader's activities in Commission-regulated markets and related cash markets, as well as the trader's other commercial activity. By requiring all persons subject to the revised reporting regime to provide detailed books and records to the Commission upon its request, the Commission will strengthen its ability to conduct surveillance and pursue enforcement actions in the event
As noted above, revised § 18.05 will likely impose a recordkeeping burden on a larger number of persons than current § 18.05. The Commission anticipates that additional persons subject to § 18.05 will likely be able to rely on books and records already kept in the ordinary course of business to meet the requirements of the final regulation. This is due, in part, to the fact that § 18.05 requires traders to maintain fairly limited information regarding their trading activity. Section 18.05(a), for example, requires that, “Every trader who holds or controls a reportable futures or option position shall keep books and records showing all details concerning all positions and transactions in the commodity” on certain enumerated trading markets. Furthermore, the Commission assumes that some parties required to maintain books and records pursuant to revised § 18.05 are likely required to maintain books and records under current § 18.05, because they hold or control reportable positions (
The Commission sent 59 special calls pursuant to § 18.05 in 2012, 42 of which were based on trade data reflected in the TCR data feed.
This estimate reflects only special calls sent pursuant to § 18.05 as a result of information collected via the volume-based reporting regime (
As previously noted, the NPRM requested comment on many aspects of the proposed rules, including the Commission's evaluation of the rules' costs and benefits.
ICE's comments are consistent with other supportive comments received in response to the 2009 NPRM.
Other NPRM commenters, however, asserted that the Commission's cost
In the absence of specific quantitative estimates or alternative cost proposals by commenters, the Commission performed its own analysis in updating the NPRM cost benefit considerations for these final rules. As noted above, for purposes of these final rules, the Commission has updated the cost estimates that appeared in the NPRM based on the most recent data and statistics available to the Commission. The Commission has also calculated the total initial development burden on a non-annualized basis for each reporting form, as applicable, and presented cost ranges below and above each estimate in this section VIII(B). The high end of the cost ranges responds to comments stating that the cost estimates in the NPRM understated the total cost to the industry (without expressing by how much, or to what degree).
Commenters asserting that certain requirements imposed costs unwarranted by the magnitude of anticipated benefits, and/or that certain requirements would not provide meaningful benefits, typically proposed an alternative approach, such as removing a question on the reporting forms, or modifying a reporting deadline. Such comments are addressed in the consideration of alternatives below. In addition, section VII above contains a detailed discussion of the comments received in response to the NPRM, the Commission's response to comments, and any changes made to the final rules in response to comments.
Commenters suggested a number of alternatives to the rules proposed in the NPRM for purposes of minimizing the cost to market participants. The final rules incorporate a number of these alternative proposals, or otherwise modify the proposed rules where doing so reduces costs without sacrificing benefits.
FIA commented that requiring firms to potentially submit three separate forms (102A, 102B and 102S) for the same customer “will create unnecessary work and be more challenging to keep current.”
Section 15.00(t), as proposed in the NPRM, added “control” to the list of defined terms in § 15.00.
As noted in section VII, these final rules adopt proposed § 15.00(t) without modification. At the same time, the Commission is modifying the instructions on Form 102 in response to comments that discussed the difficulty of identifying individuals that exercise control on a transient basis, such as individuals operating an automated trading system (“ATS”) during a daily shift. The instructions for Form 102A and Form 102B have been revised to state that respondents should report all individuals who qualify as “trading account controllers” or “volume threshold account controllers,” as defined in § 15.00(bb) and (cc), respectively.
The NPRM defined a volume threshold account as any trading account that executes, or receives via allocation or give-up, reportable trading volume on or subject to the rules of a reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act.
In the case of a give-up trade, this NPRM definition was intended to require reporting by: (i) The carrying firm of the original executing account; (ii) the carrying firm of any intervening account(s); and (iii) the carrying firm of the account to which the give-up trade was ultimately allocated. Question 10 in Section VII of the NPRM emphasized the broad scope of the definition: “The Commission intends that the definition of `volume threshold account' captures all possible categories of accounts with reportable trading volume . . . The Commission requests public comment regarding whether the proposed definition of `volume threshold account' achieves this purpose.” In response to this question, CME commented that volume-based accounts should be reported at the carrying broker level, and noted that, “this is where the account ownership and control information resides, not at executing brokers.”
As noted in section VII above, the Commission is adopting the definition of volume threshold account with one modification.
• In a give-up scenario, this definition will require reporting by the carrying firm of the account to which the trade is ultimately allocated. Reporting will not be required, however, by the carrying firm of the original executing account, or by the carrying firm of any intervening account(s).
• In a non-give-up scenario, there will be no change to the number of reportable volume threshold accounts. Under both the original and revised definition, reporting will be required by the carrying firm of the account in which the trade is both executed and cleared.
The Commission believes that this approach, which incorporates CME's comment, will be more efficient (and less burdensome and costly) for reporting parties than the approach proposed in the NPRM. At the same time, it captures a sufficient number of volume threshold accounts to advance the Commission's surveillance objectives.
Section 15.04, as proposed in the NPRM, provided that reportable trading volume for a trading account is trading volume of 50 or more contracts, during a single trading day, on a single reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act, in all instruments that such reporting market designates with the same product identifier (including purchases and sales, and inclusive of all expiration months). Relative to alternatives proposed by commenters, the Commission has determined—as shown through its analysis of sample DCM trade data received through the TCR during a recent six-month period— that the 50-contract threshold represents the level that best optimizes visibility into both trading volume and the absolute number of trading accounts. Both components are fundamental to the volume-based reporting regime established by Form 102B. At the same time, the RTVL is calibrated to minimize the impact of the volume-based reporting requirements on low-volume accounts whose trading activity would not meaningfully advance the Commission's volume-based surveillance goals.
Several commenters criticized the 50-contract RTVL, and proposed alternatives to it. FIA, CME and ICE commented that the RTVL, as proposed, would generate an excessive amount of data that may not be meaningful to the Commission's trade practice and market surveillance programs.
Nadex recommended that a different RTVL should be applied to contracts with small notional values, as compared to contracts with larger, traditional notional values. “For any contract with a notional value of $1,000 or less, the
Compared to these various alternatives, the 50-contract RTVL—which the Commission's analysis has shown to identify approximately 85 percent of trading volume in approximately 90 percent of the products sampled, and approximately one-third of the trading accounts in the sample set—best achieves the regulatory objective and design-purpose of Form 102B. That objective is to identify a critical mass of the trading accounts active in its regulated markets through 102B reporting, measured not only by the percentage of trading volume for which those accounts are responsible, but also by the number of accounts identified. This objective is independent of whether the identified accounts hold reportable positions and what trading strategies market participants may pursue. The 50-contract RTVL achieves this objective by capturing both: (1) Those accounts responsible for the majority of trading volume; and (2) a meaningful number of the trading accounts active in the Commission's regulated markets. The Commission seeks to identify a meaningful number of such trading accounts in order to improve its ability to protect market participants from instances of fraudulent or deceptive trading practices, regardless of the amount of trading volume that such practices represent, or their impact on the overall market. In determining the optimal threshold level, the Commission gave equal weight to the twin objectives of the volume-based reporting regime—trading volume and trading account identification. In its analysis, the Commission found that although higher RTVLs, such as those proposed by commenters, may have a relatively minor impact on the identification of trading volume in a particular market, they would likely lead to a disproportionately large exclusion of the number of trading accounts, thus rendering the RTVL ineffective to achieve the Commission's objective.
Furthermore, if the Commission were to substitute an alternative RTVL, in response to commenter proposals, that does not identify a sufficient percentage of trading volume or absolute number of trading accounts, the Commission would, in effect, partially transform 102B into another vehicle for identifying trading accounts associated with reportable positions. Form 102A will accomplish this objective separately.
Finally, even if modifying the RTVL to make fewer accounts reportable were consistent with the Commission's regulatory objectives (which it is not), doing so is unlikely to result in significant cost savings to market participants. As explained above, FTP submission of New Form 102B will be most cost-effective for the industry as a whole. Furthermore, the ongoing operation and maintenance burden for FTP submission of New Form 102B will average the same number of hours per year (53 hours) irrespective of how many records are contained in a submission.
The Commission also considered the alternative of adopting threshold levels that distinguish on the basis of notional value, such as proposed by Nadex, and/or other contract or market characteristics. The Commission recognizes that the uniform 50-contract threshold will capture a relatively small degree of market activity that is less significant for purposes of its Form 102B regulatory objectives. However, an alternative that would appropriately filter for such less-significant contracts would be administratively impracticable for the Commission and increase the administrative burden for some, if not many, reporting parties. For example, in the five year period from January 1, 2008 through December 31, 2012, the Commission received from DCMs self-certifications or requests for approval for approximately 5,400 new products, or an average of almost 21 new products per week. It is simpler, and far superior in terms of administrative cost and burden to set a single RTVL level, above which all parties report, than to determine differing levels for different markets/products, monitor the appropriateness of such levels and adjust them as circumstances warrant over time, and effectively communicate such differing levels and their periodic adjustments to the trading community. Moreover, the cost of determining whether parties were compliant with the reporting requirements and enforcing those requirements would place further burden upon the Commission and reporting parties.
In sum, the Commission believes that it is has achieved an appropriate balance by implementing a uniform 50-contract RTVL rather than a product-by-product RTVL. While the uniform RVTL may capture a small number of additional accounts, representing a relatively small degree of market activity that is less significant for purposes of its Form 102B regulatory objectives, it avoids the administrative complexity of a product-by-product RTVL, which carries the potential to hobble Form 102B's regulatory effectiveness.
CME commented on a question in proposed Forms 102A and 102B, discussed in more detail in section VII above, which asks whether certain trading accounts have been granted direct market access (DMA).
FIA commented that obtaining all the information required by the Form 102 could potentially take longer than the
The Commission is also modifying the reporting deadline for new and changed Form 102B filings, specifically with respect to the reporting of non-omnibus volume threshold accounts. Respondents are required to provide the names of non-omnibus volume threshold account owners and controllers reported on 102B by 9:00 a.m. the following business day. Consistent with the change described above, respondents are required to provide the other contact details reported on 102B with respect to such parties (
FIA commented that the refresh filing deadline proposed by the NPRM, which required firms to resubmit the Form 102 for each special account, volume threshold account and consolidated account every six months, was too short. FIA stated that this six-month schedule “will impose a significant operational and financial burden on reporting firms,” and recommended that refresh updates instead be required every two years.
FIA commented on the utility of Form 102S, which requires swap dealers and clearing members to identify and report a swap counterparty or customer consolidated account with a reportable position. FIA stated that the information that will be reported to swap data repositories under part 45 would provide the Commission with access to essentially the same information that proposed Form 102S will require.
In light of FIA and CME's comments regarding the Form 102S, the Commission considered, but rejected, the alternative of omitting Form 102S from the final rules. Contrary to commenters' claims, SDRs will not, in all cases, be able to provide the ownership and control information requested on 102S. For example, the Commission anticipates that swap dealers and clearing members (the 102S reporting parties) will be able to consistently provide the contact information for owners and controllers of consolidated accounts on the 102S, based on the records these entities maintain. Part 45 reporting, by contrast, is based on counterparty data. This counterparty data may, in some cases,
For purposes of reducing the costs to reporting parties, and alleviating perceived inefficiencies in the forms proposed in the NPRM, FIA recommended consolidating the proposed forms into a single Form 102.
The Commission notes that FIA's description of New Form 102A, 102B and 102S as inefficient and overlapping appears to arise from a presumption that reporting parties will print and complete each form as a separate paper filing. The forms included in the Appendix to these final rules are visual representations of reporting forms that will be completed through the Commission's web-based portal. In such an electronic environment, it will not be more burdensome for reporting parties to enter information via separate screens on a web portal (for 102A, 102B and 102S), as compared to via a single screen.
The Commission does not consider the FIA consolidated form an acceptable alternative, because it is missing a number of key data fields that appear on Forms 102A, 102B, and 102S. As discussed in more detail below, while the list of data fields that the FIA consolidated form is missing is not extensive, the absence of these data fields would create gaps in the reporting of ownership and control information. These gaps would prevent the Commission from realizing the goals of the OCR data collection. If the missing data fields were added back to FIA consolidated form, then the FIA form would be substantively identical to the forms adopted in these final rules.
The FIA consolidated form does not include the following data fields collected on New Forms 102A, 102B and 102S:
• The FIA consolidated form does not require respondents to state the reporting trigger.
• The FIA consolidated form does not require respondents to identify the originator of a consolidated account that is also an omnibus account, and provide contact information for this originator.
• Similarly, the FIA consolidated form does not require respondents to state whether a volume threshold account is an omnibus account—and if so, to identify the originator of the omnibus account and provide contact information for this originator.
As discussed above, FIA commented that requiring respondents to potentially submit three separate forms (102A, 102B and 102S) for the same customer is inefficient. FIA proposed its consolidated form in an attempt to address this overlap, reduce the costs to reporting parties, and alleviate other perceived inefficiencies in the forms proposed in the NPRM.
The data collection requirements under these final rules will support the Commission in its mission to protect market participants and the public, by significantly improving the Commission's visibility with respect to market participants and their activities across derivatives markets. Specifically, the final rules build upon the Commission's existing market and trade practice surveillance programs for futures, options on futures, and swaps, by providing for the timely and efficient analysis of market data related to special accounts, consolidated accounts, and newly designated volume threshold accounts. The rules implement these goals in a manner designed to reduce costs to reporting entities. Improving the capabilities of the Commission's market and trade practice surveillance programs will support the integrity of financial markets, and protect market participants and the public from the costs of disruptive trading practices and other market abuses.
New Form 102A. As an example of these benefits, New Form 102A requires reporting of ownership and control information for the trading accounts that constitute special accounts. This will allow the Commission to more efficiently link special accounts holding reportable positions to the transactions (and associated trading accounts) identified on daily trade capture reports received by the Commission.
New Form 102B. New Form 102B institutes a reporting requirement for trading accounts that exceed a specific volume threshold on any single trading day, regardless of whether the account maintains open positions at the end of the day. The addition of volume-based reporting will provide the Commission with an efficient means to collect the information required to aggregate positions, detect intra-day position limit violations, and calculate market share. When analyzing periods of elevated volatility—especially at significant trading times such as market open and close—the ability to aggregate intra-day trading behavior by owner/controller is crucial to understanding whether a trader has adversely affected (or has the potential to affect) market quality or price discovery.
New Form 102S. New Form 102S will improve upon the current 102S reporting system by providing detailed ownership and control information regarding consolidated accounts. The information collected via Form 102S will allow the Commission's market and trade practice surveillance programs to track the market activity of traders that may be dividing risk exposure between both on-exchange and off-exchange instruments. In addition to the ability to track individual traders, swap reporting will also enable the Commission to aggregate exposure in a particular product or commodity group. The reporting of swap activity on Form 102S aligns with the Commission's recently finalized rules on real-time public and regulatory reporting of swap trades, and provides further transparency into markets that, historically, have often been opaque and/or over-the-counter.
Collectively, the ownership and control information on New Forms 102A/102B/102S, 40/40S and 71 will improve the Commission's ability to analyze and/or respond to market disruptions, which can come at a high cost to the investing and general public. The information will also enable the Commission to perform more robust research and analytics, encompassing a significantly greater segment of market activity on a more diverse set of platforms, as well as improve its classification of traders in Commission publications, such as the Commitments of Traders report. Finally, the Commission will be able to perform data integrity checks within and between its databases using the additional fields collected on the revised forms.
The collection of ownership and control information via the new and amended forms will enable the Commission to better perform risk-based monitoring and surveillance among related accounts, and monitor risk exposure by institution, market class, and asset class. For example, the rules will enable the Commission to more efficiently link end-of-day position reporting and the trade capture reports received by the Commission. Accordingly, the rules will allow the Commission to aggregate respondents' positions across multiple products and markets, assess their potential market impact with respect to disruptive or manipulative activities during important periods, and analyze their compliance with speculative position limits at any time during the trading day. In the event the Commission identifies trading activity requiring further investigation, the Commission will be able to contact market participants more quickly and efficiently using the ownership and control information collected through the OCR reporting process.
The final rules will also promote resource allocation efficiency by automating the submission process, eliminating an additional layer of transcription and reducing the likelihood of input errors and/or the need to revert back to reporting parties for further explanation. In addition, the final rules permit respondents to use either of two available submission methods (FTP or web portal), thereby allowing respondents to select the method that is most economical in light of the number of filings they expect to make, and that integrates most efficiently with their existing data and technology infrastructure. These improvements in resource efficiency and data quality will also improve the Commission's published reports, such as the classifications in the Commitments of Traders report. Finally, the Commission will be able to perform data integrity checks within and between its databases using the additional data fields collected on the revised forms.
The Commission believes that market integrity is essential to fair and orderly markets that serve as effective centers for price discovery and risk management. By promoting these important goals, the final rules will help promote the utility of Commission-regulated markets.
The Commission does not view the costs and benefits of the final rules as impacting price discovery in markets that it regulates.
The final rules establish the information architecture necessary to support Dodd-Frank's objectives of reducing risk, increasing transparency, and promoting market integrity within the financial system. The expanded reporting requirements will significantly improve the Commission's ability to perform risk-based monitoring of trading activity spread across multiple platform types but directed or controlled by individual entities. Such
The Commission does not view the costs and benefits of the final rules as impacting other public interest considerations beyond those discussed above.
The Regulatory Flexibility Act (“RFA”) requires that agencies consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis regarding the impact.
The final rules require FCMs, clearing members, foreign brokers, swap dealers and other reporting traders (including natural persons) to complete New Forms 102 or 71, and to submit them to the Commission as specified in the final rules, or upon special call by the Commission. The Commission has previously determined that FCMs, clearing members, foreign brokers, and swap dealers are not small entities for purposes of the RFA.
The final rules also require certain reporting traders to complete and submit New Form 40 upon special call by the Commission. Some of these reporting traders may be “small entities” under the RFA. In 2012, the Commission received approximately 3,123 completed Form 40s, from a total population of approximately 10,000 reporting traders. Of these 3,123 Form 40s, approximately 2,500 were completed by institutions, a portion of which could potentially be small entities under the RFA. For example, the Commission has received comments on its Dodd-Frank Act rulemakings indicating that certain entities that may be required to comply with the reporting and recordkeeping requirements in the final rules have been determined by the Small Business Administration to be small entities. In particular, the Commission understands that some not-for-profit electric generators, transmitters, and distributors that may be required to comply with the proposed rules have been determined to be small entities by the SBA, because they are “primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and [their] total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.”
The Commission believes that, due to the limited number of institutions likely to receive a New Form 40 request in any given year, as well as the limited nature of the New Form 40 reporting burden, the final rules with respect to New Form 40 will not have a significant economic impact on a substantial number of small entities. New Form 40 will not be required on a routine and ongoing basis, but rather will be sent by the Commission on a discretionary basis in response to the reporting of an account that reaches a minimum position or volume threshold. As summarized above, in 2012 the Commission made Form 40 requests to only 25 percent of all reporting traders that could potentially be small entities; furthermore, some of these reporting traders were not in fact small entities. As a result, New Form 40 should be expected to affect only a small subset of the entities that may be small entities under the RFA. In addition, New Form 40 is not lengthy or complex, and will require reporting traders to provide only limited information to the Commission. As discussed above, the Commission estimates that a reporting trader submitting New Form 40 via the web-based portal will require only three hours, on an annualized basis, to complete the form.
The final rules regarding revised § 18.05 will also impose books and records obligations upon a new category of market participants—specifically, certain owners (but not controllers) of a volume threshold account or a reportable sub-account. Such owners may be small entities under the RFA. The Commission does not believe that the obligation to maintain books and records under revised § 18.05 will impose significant costs on the additional small entities subject to the recordkeeping requirements of such section. The Commission expects that such account owners may largely rely on the books and records that they maintain in the ordinary course of business to fulfill the requirements of revised § 18.05. The Commission also expects that a portion of the account owners subject to revised § 18.05 are subject to the position-based recordkeeping requirements of current § 18.05,
Brokers, Commodity futures, Reporting and recordkeeping requirements.
Brokers, Commodity futures, Reporting and recordkeeping requirements.
Commodity futures, Reporting and recordkeeping requirements.
Physical commodity swaps, Swap dealers, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Commodity Futures Trading Commission amends 17 CFR parts 15, 17, 18, and 20 as follows:
7 U.S.C. 2, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 7, 7a, 9, 12a, 19, and 21, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376 (2010).
(q)
(t)
(u)
(v)
(w)
(x)
(y)
(z)
(aa)
(bb)
(cc)
(dd)
(c) As specified in part 18 of this chapter:
(1) Traders who own, hold, or control reportable positions;
(2) Volume threshold account controllers;
(3) Persons who own volume threshold accounts;
(4) Reportable sub-account controllers; and
(5) Persons who own reportable sub-accounts.
Forms on which to report may be obtained from any office of the Commission or via the Internet (
(Approved by the Office of Management and Budget under control numbers 3038–0007, 3038–0009, and 3038–0103.)
The volume quantity for the purpose of reports filed under parts 17 and 18 of this chapter is trading volume of 50 or more contracts, during a single trading day, on a single reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act, in all instruments that such reporting market designates with the same product identifier (including purchases and sales, and inclusive of all expiration months).
7 U.S.C. 2, 6a, 6c, 6d, 6f, 6g, 6i, 6t, 7, 7a, and 12a, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376 (2010).
(g) * * *
(2) * * *
(iii)
(a)
(b)
(c)
(d)
(e)
Unless otherwise instructed by the Commission or its designee, the reports required to be filed by reporting markets, futures commission merchants, clearing members, and foreign brokers under §§ 17.00 and 17.01 shall be filed as specified in paragraphs (a) through (c) of this section.
(b)
(1)
(2)
(i) The applicable reporting party shall submit a completed Form 102 to the Commission no later than 9 a.m. on the business day following the date on which the special account becomes reportable, or on such other date as directed by special call of the Commission or its designee, and as periodically required thereafter by paragraphs (b)(3) and (4) of this section. Such form shall include all required information, including the names of the owner(s) and controller(s) of each trading account that is not an omnibus account, and that comprises a special account reported on the form,
(ii) With respect to the owner(s) and controller(s) of each trading account that is not an omnibus account, and that comprises a special account reported on Form 102, information other than the names of such parties must be provided on Form 102 no later than 9 a.m. on the third business day following the date on which the special account becomes reportable, or on such other date as directed by special call of the Commission or its designee, and as periodically required thereafter by paragraphs (b)(3) and (4) of this section. Unless otherwise specified by the Commission or its designee, the stated time is eastern time for information concerning markets located in that time zone, and central time for information concerning all other markets.
(3)
(4)
(c)
(1)
(2)
(i) The clearing member shall submit a completed Form 102 to the Commission no later than 9 a.m. on the business day following the date on which the volume threshold account becomes reportable, or on such other date as directed by special call of the Commission or its designee, and as periodically required thereafter by paragraphs (c)(3) and (4) of this section. Such form shall include all required information, including the names of the owner(s) and controller(s) of each volume threshold account reported on the form that is not an omnibus account,
(ii) With respect to the owner(s) and controller(s) of each volume threshold account reported on Form 102 that is not an omnibus account, information other than the names of such parties must be provided on Form 102 no later than 9 a.m. on the third business day following the date on which the volume threshold account becomes reportable, or on such other date as directed by special call of the Commission or its designee, and as periodically required thereafter by paragraphs (c)(3) and (4) of this section. Unless otherwise specified by the Commission or its designee, the stated time is eastern time for information concerning markets located in that time zone, and central time for information concerning all other markets.
(3)
(4)
The Commission hereby delegates, until the Commission orders otherwise, the authority set forth in the paragraphs below to either the Director of the Office of Data and Technology or the Director of the Division of Market Oversight, as indicated below, to be exercised by such Director or by such other employee or employees of such Director as designated from time to time by such Director. The Director of the Office of Data and Technology or the Director of the Division of Market Oversight may submit to the Commission for its consideration any matter which has been delegated to such Director in this paragraph. Nothing in this paragraph prohibits the Commission, at its election, from exercising the authority delegated in this paragraph.
(a) Pursuant to § 17.00(a) and (h), the authority shall be designated to the Director of the Office of Data and Technology to determine whether futures commission merchants, clearing members and foreign brokers can report the information required under § 17.00(a) and (h) on series `01 forms or using some other format upon a determination that such person is unable to report the information using the format, coding structure or electronic data transmission procedures otherwise required.
(b) Pursuant to § 17.02, the authority shall be designated to the Director of the Office of Data and Technology to instruct or approve the time at which the information required under §§ 17.00 and 17.01(a) and (b) must be submitted by futures commission merchants, clearing members and foreign brokers provided that such persons are unable to meet the requirements set forth in § 17.02.
(c) Pursuant to § 17.01, the authority shall be designated to the Director of the Office of Data and Technology to determine whether to permit an authorized representative of a firm filing the Form 102 or person filing the Form 71 to use a means of authenticating the report other than by signing the Form 102 or Form 71 and, if so, to determine the alternative means of authentication that shall be used.
(d) Pursuant to § 17.00(a), the authority shall be designated to the Director of the Office of Data and Technology to approve a format and coding structure other than that set forth in § 17.00(g).
(e) Pursuant to § 17.01(c), the authority shall be designated to the Director of the Office of Data and Technology to make special calls on omnibus volume threshold account originators and omnibus reportable sub-account originators for information as set forth in § 17.01(c).
(f) Pursuant to § 17.02(b)(4), the authority shall be designated to the Director of the Division of Market Oversight to determine the date on which each futures commission merchant, clearing member, or foreign broker shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its special accounts.
(g) Pursuant to § 17.02(c)(4), the authority shall be designated to the Director of the Division of Market Oversight to determine the date on which each clearing member shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its volume threshold accounts.
This Appendix is a representation of the final reporting form, which will be submitted in an electronic format pursuant to the rules in part 17, either via the Commission's web portal or via XML-based, secure FTP transmission.
This Appendix is a representation of the final reporting form, which will be submitted in an electronic format pursuant to the rules in Part 17, either via the Commission's web portal or via XML-based, secure FTP transmission.
7 U.S.C. 2, 4, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 6t, 12a, and 19, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376 (2010).
(a) Every trader who owns, holds, or controls a reportable futures and option position shall after a special call upon such trader by the Commission or its designee file with the Commission a “Statement of Reporting Trader” on the Form 40, to be completed in accordance with the instructions thereto, at such time and place as directed in the call.
(b) Every volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, and person who owns a reportable sub-account shall after a special call upon such person by the Commission or its designee file with the Commission a “Statement of Reporting Trader” on the Form 40, to be completed in accordance with the instructions thereto, at such time and place as directed in the call.
(a) Every volume threshold account controller; person who owns a volume threshold account; reportable sub-account controller; person who owns a reportable sub-account; and trader who owns, holds, or controls a reportable futures or option position shall keep books and records showing all details concerning all positions and transactions in the commodity or swap:
(b) Every such volume threshold account controller; person who owns a volume threshold account; reportable sub-account controller; person who owns a reportable sub-account; and trader who owns, holds, or controls a reportable futures or option position shall also keep books and records showing all details concerning all positions and transactions in the cash commodity or swap, its products and byproducts, and all commercial activities that it hedges in the futures, option, or swap contract in which it is reportable.
(c) Every volume threshold account controller; person who owns a volume threshold account; reportable sub-account controller; person who owns a reportable sub-account; and trader who owns, holds, or controls a reportable futures or option position shall upon request furnish to the Commission any pertinent information concerning such positions, transactions, or activities in a form acceptable to the Commission.
This Appendix is a representation of the final reporting form, which will be submitted in an electronic format pursuant to the rules in Part 18, either via the Commission's web portal or via XML-based, secure FTP transmission.
Who Must File a Form 40—17 CFR 18.04(a) requires every person who owns or controls a reportable position to file a Form 40—Statement of Reporting Trader with the Commission. 17 CFR 18.04(b) requires every volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, and person who owns a reportable sub-account to file a Form 40—Statement of Reporting Trader with the Commission. 17 CFR 20.5 requires every person subject to books or records under 17 CFR 20.6 to file a 40S filing
When to file—A reporting trader must file a Form 40 on call by the Commission or its designee.
Where to file—The Form 40 should be submitted (a) via the CFTC's web-based Form 40 submission process at
When to update—A reporting trader required to complete a Form 40 will be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of the information it provides. Reporting traders can update this information by either visiting the CFTC's web-based Form 40 portal to review, verify, and/or update their information, or by submitting updated information via FTP.
Signature—Each Form 40 submitted to the Commission must be signed or otherwise authenticated by either (1) the reporting trader submitting the form or (2) an individual that is duly authorized by the reporting trader to provide the information and representations contained in the form.
What to File—All reporting traders that are filing a Form 40 pursuant to either 17 CFR 18.04(a) (
Please be advised that pursuant to 5 CFR 1320.5(b)(2)(i), you are not required to respond to this collection of information unless it displays a currently valid OMB control number.
Before proceeding with your submission, please check this box to indicate that you have read the definitions for the following terms—as they are used in the Form 40: ☐
Commodity (or commodities)—generally, all goods and articles (except onions and motion picture box office receipts, or any index, measure, value, or data related to such receipts), and all services, rights, and interests (except motion picture box office receipts, or any index, measure, value, or data related to such receipts) in which contracts for future delivery are presently or in the future dealt in (
Commodity Index Trading (“CIT”)—means:
a. An investment strategy that consists of investing in an instrument (
b. An investment strategy that consists of entering into one or more derivative contracts to track the performance of a published index that is based on the price of one or more commodities, or commodities in combination with other securities.
Control—as used in this Form, “control” means to actually direct, by power of attorney or otherwise, the trading of a special account or a consolidated account. A special account or a consolidated account may have more than one controller.
Derivatives—futures, options on futures, and swaps.
Omnibus volume threshold account—means any trading account that, on an omnibus basis, carries reportable trading volume on or subject to the rules of a reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act.
Parent—for purposes of Form 40, a person is a parent of a reporting trader if it has a direct or indirect controlling interest in the reporting trader; and a person has a controlling interest if such person has the ability to control the reporting trader through the ownership of voting equity, by contract, or otherwise.
Person—an individual, association, partnership, corporation, trust, or government agency and/or department.
Reportable sub-account—means any trading sub-account of an omnibus volume threshold account or omnibus reportable sub-account, which sub-account executes reportable trading volume.
Reportable sub-account controller—means a natural person who by power of attorney or otherwise actually directs the trading of a reportable sub-account. A reportable sub-account may have more than one controller.
Reportable trading volume—means contract trading volume that meets or exceeds the level specified in 17 CFR 15.04.
Reporting trader—a person who must file a Form 40, whether pursuant to 17 CFR 18.04(a), 17 CFR 18.04(b), or 17 CFR 20.05.
Subsidiary—for purposes of Form 40, a person is a subsidiary of a reporting trader if the reporting trader has a direct or indirect controlling interest in the person; and a reporting trader has a controlling interest if such reporting trader has the ability to control the person through the ownership of voting equity, by contract, or otherwise.
Volume threshold account—means any trading account that carries reportable trading volume on or subject to the rules of a reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act.
Volume threshold account controller—means a natural person who by power of attorney or otherwise actually directs the trading of a volume threshold account. A volume threshold account may have more than one controller.
For question 1, please provide the name, contact information and other requested information regarding the reporting trader. If the reporting trader is an individual, provide their full legal name and the name of the reporting trader's employer.
1. Indicate whether the reporting trader is a legal entity or a natural person:
For questions 2, 3, and 4, provide the name and contact information as requested.
2. Individual to contact regarding the derivatives trading of the reporting trader (this individual should be able to answer specific questions about the reporting trader's trading activity when contacted by Commission staff):
Check here if this individual has the same contact information as that of the reporting trader.
3. Individual to contact regarding the risk management operations of the reporting trader (this individual should be able to answer specific questions about the reporting trader's risk management operations, including account margining, when contacted by Commission staff):
Check here if this individual has the same contact information as that of the reporting trader.
4. Individual responsible for the information on the Form 40 (this individual should be able to verify, clarify, and explain the answers submitted by a reporting trader on the Form 40):
Check here if this individual has the same contact information as that of the reporting trader.
For question 5, indicate whether the reporting trader has a customer omnibus account with a futures commission merchant, clearing member, or foreign broker (NOTE: For the purpose of this question, an omnibus account is an account that one futures commission merchant, clearing member or foreign broker carries for another in which the transactions of multiple individual accounts are combined. The identities of the holders of the individual accounts are not generally known or disclosed to the carrying firm. In addition, the Commission has traditionally identified omnibus accounts as either
5. Does the reporting trader have a customer omnibus account with a futures commission merchant, clearing member, or foreign broker? YES/NO
IF YES, Give the name(s) of the futures commission merchant, clearing member, or foreign broker carrying the account(s) of the reporting trader.
For question 6, please complete the following (NOTE: For the purpose of this question, affiliation can include, but is not limited to, a situation (1) where the foreign government directly or indirectly controls the reporting trader's assets, operations, and/or derivatives trading, or (2) where the reporting trader operates as a direct or indirect subsidiary of a foreign government, its agencies or departments, or any investment program of the foreign government):
6. Is the reporting trader directly or indirectly affiliated with a government other than that of the United States? YES/NO
IF YES, give the name of the government(s).
IF YES, explain the nature of the affiliation between the reporting trader and the government(s) listed above.
For question 7, if the Reporting Trader is a legal entity, please complete the following.
7. Is the reporting trader organized under the laws of a country other than the United States? YES/NO
IF YES, give the name of the country or countries under whose laws the reporting trader is organized.
For questions 8 and 9, provide the requested ownership information only as applicable.
If the Reporting Trader is a commodity pool, also provide the requested information in questions 8i, 8ii, and 8iii. If the Reporting Trader is reporting commodity pools in which it has an ownership interest, also provide the requested information in questions 9i, 9ii, and 9iii.
8. List all the parents of the reporting trader (including the immediate parent and any parent(s) of its parent) and, separately, all persons that have a 10 percent or greater ownership interest in the reporting trader (commodity pool investors are deemed to have an ownership interest in the pool). For each such parent or 10 percent or greater owner include the following information:
Indicate whether the party identified below is a legal entity or a natural person:
8i. For each person identified in question 8 that is a limited partner, shareholder, or other similar type of pool participant, indicate if they are a principal or affiliate of the operator of the commodity pool.
8ii. For each person identified in question 8 that is a limited partner, shareholder, or other similar type of pool participant, indicate if they are also a commodity pool operator of the pool.
8iii. For each person identified in question 8 that is a limited partner, shareholder, or other similar type of pool participant and where the operator of the commodity pool is exempt from registration under § 4.13 of the Commission's regulations, indicate if that person has an ownership or equity interest of 25 percent or greater in the commodity pool.
9. List all the subsidiaries of the reporting trader (including the immediate subsidiary and any subsidiaries of those subsidiaries) and, separately, all persons in which the reporting trader has a 10 percent or greater ownership interest (including a 10 percent or greater interest in a commodity pool(s)). Only list subsidiaries and persons that engage in derivatives trading. For each such subsidiary and/or person include the following information:
Indicate whether the party identified below is a legal entity or a natural person:
9i. For each person identified in question 9 that is a commodity pool and for which you are a limited partner, shareholder or other similar type of pool participant, indicate if you are a principal or affiliate of the operator of the commodity pool.
9ii. For each person identified in question 9 that is a commodity pool and for which you are a limited partner, shareholder or other similar type of pool participant, indicate if you are the commodity pool operator for the pool.
9iii. For each person identified in question 9 that is a commodity pool and for which you are a limited partner, shareholder or other similar type of pool participant and for which the operator of the commodity pool is exempt from registration under § 4.13 of the Commission's regulations, indicate if you have an ownership or equity interest of 25 percent or greater in the commodity pool.
For questions 10, 11, 12, and 13 provide the requested control information only as applicable.
10. List all persons outside of the reporting trader that control some or all of the derivatives trading of the reporting trader (including persons that may have been previously identified as a parent, above):
Indicate whether the party identified below is a legal entity or a natural person:
11. List all persons for which the reporting trader controls some or all of the derivatives trading (including persons that may have been previously identified as a subsidiary, above):
Indicate whether the party identified below is a legal entity or a natural person:
12. List any other person(s) that directly or indirectly influence, or exercise authority over, some or all of the trading of the reporting trader, but who do not exercise “control” as defined in this Form: Indicate whether the party identified below is a legal entity or a natural person:
13. Is some or all of the derivatives trading of the reporting trader subject to an express or implied agreement or understanding with any other person(s) not addressed in questions 10, 11, or 12, above? YES/NO
If yes, provide the following information:
Indicate whether the party identified below is a legal entity or a natural person:
For question 14, please answer the following:
14i. Is the reporting trader engaged in commodity index trading as defined in paragraph (a) of the definition of CIT above? YES/NO
14ii. Is the reporting trader engaged in commodity index trading as defined in paragraph (b) of the definition of CIT above? YES/NO
a. If the reporting trader is engaged in CIT (as defined in paragraph (b)) with respect to one or more commodities or commodity groups appearing on Supplemental List II, indicate whether the reporting trader is, in the aggregate, pursuing long exposure or short exposure with respect to such commodities or commodity groups. It is not necessary to respond to this question with respect to CIT that tracks the performance of multiple unrelated commodities or commodity groups (
14iii. If the reporting trader is currently engaged in commodity index trading as defined in paragraphs (a) or (b) of the CIT definition above, indicate the month and year on which the reporting trader first became engaged in commodity index trading.
For questions 15 and 16, please indicate if the reporting trader meets the specified definition:
15. Is the reporting trader a Swap Dealer, as defined in § 1.3(ppp) of regulations under the Commodity Exchange Act? YES/NO
16. Is the reporting trader a Major Swap Participant, as defined in § 1.3(qqq) of regulations under the Commodity Exchange Act? YES/NO
For questions 17, 18, and 19 provide the requested information only as applicable.
17. Select all business sectors and subsectors that pertain to the business activities or occupation of the reporting trader. If more than one business subsector is selected, indicate which business subsector primarily describes the nature of the reporting trader's business.
18. Select all commodity groups and individual commodities that the reporting trader presently trades or expects to trade in the near future in derivative markets.
19. For each selected individual commodity identified in question 18, indicate the business purpose(s) for which the reporting trader uses derivative markets.
20. Please sign/authenticate the Form 40 prior to submitting.
Signature/Electronic Authentication:
Using derivative markets for commodities that are direct inputs or purchases for your business so as to offset price risk associated with your purchase of these inputs.
E.g. You are a grain processor, so you use wheat futures to offset the price risk incidental to your cash purchases of wheat.
Using derivative markets for commodities that are direct outputs or sales of your business so as to offset price risk associated with your sale of these outputs.
E.g. You are a gasoline refiner, so you use gasoline futures to offset price risk associated with your production of gasoline.
Using derivative markets for a commodity that is not a direct input or output of your business, but which has significant price correlations with the direct inputs or outputs of your business.
E.g. You manufacture ethanol which is used as an additive in and competitor for gasoline as a combustive fuel. While you neither directly consume nor produce gasoline, you may find that the price you receive for your ethanol product is highly correlated with the price of gasoline, and therefore you reduce ethanol price risk by using gasoline futures contracts.
Managing other price risks incidental to the operation of your business or physical assets through the use of commodity derivative markets.
E.g. You are a manufacturer with significant international sales, so you use foreign currency futures to offset risks associated with changes in the competitiveness of your exports and therefore the value of your physical assets such as production plants, land, machinery, etc.
Fulfilling customer/client desire for portfolio diversification or exposure to various asset classes through your activity as a Commodity Pool Operator, Commodity Trading Advisor, or other similar role.
E.g. You collect funds and execute trading strategies through the use of futures/options on futures markets at the expressed intent and for the sole benefit of clients.
Reducing risk stemming from holding or executing swaps contracts on behalf of clients or customers through the use of futures/options on futures markets.
E.g. You sell crude oil swaps to a client and agree to accept the risk inherent in the index price. You offset this risk through purchases of crude oil futures, in effect transferring price risk from the client to another market participant.
Engaging in derivatives transactions to assume risk and help transfer ownership of derivative positions from one market participant to another, realizing the bid-ask spread as the return.
E.g. You accept risk by buying and selling futures/options on futures contracts so that other traders can move into and out of positions when they wish. You then find other traders willing to take the other side of those transactions.
Using derivative markets as part of a strategy designed to realize risk-free profit from pricing anomalies.
E.g. You realize that the wheat futures contract is trading at a discount (even after considering storage, transport, etc.) relative to the wheat cash price, and therefore find it profitable to purchase the wheat futures contract, take delivery, and then resell the wheat in the cash market for a risk-free profit.
Using derivative markets as a way to express your belief in the future movement of market prices. This strategy does not involve offsetting risks incidental to your business, but instead involves directional trading.
E.g. You conduct research and believe that crude oil prices are due to rise, so you take long futures positions in crude oil to profit from your predictions.
Using derivatives to diversify, rebalance, or otherwise allocate financial assets so that risks to the value of the investment portfolio are reduced. This strategy is used by entities such as pension funds and endowments to manage overall risk to their financial portfolios.
E.g. You hold Treasury bonds as a component of your investment portfolio, and use futures contracts to reduce overall portfolio risk that would result from falling bond prices.
Reducing risk stemming from your proprietary holding or execution of swaps contracts through the use of futures/options on futures markets.
E.g. You trade interest rate swaps as part of your business or investment strategy, and offset some of the risk inherent in those swaps through your use of Eurodollar futures markets.
List and explain your business purpose if the above categories do not adequately describe the reason you trade in a particular commodity derivative market.
7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f, 6g, 6t, 12a, 19, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376 (2010).
The revisions and additions to read as follows:
(a) * * *
(1) When a counterparty consolidated account first becomes reportable, the reporting entity shall submit a 102S filing, in accordance with the form instructions and as specified in this section.
(2) A reporting entity may submit a 102S filing only once for each counterparty, even if such persons at various times have multiple reportable positions in the same or different paired swaps or swaptions.
(4)
(5)
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Gensler and Commissioners Chilton, O'Malia, and Wetjen voted in the affirmative; no Commissioner voted in the negative.
I support the final rule on ownership and control reporting as it provides the Commission with greater detail on both who owns accounts and who controls accounts in the futures, options on futures, and swaps markets.
The reforms require, for the first time, that accounts which trade more than a certain volume in a day have to disclose who owns or controls them. Previously, the Commission only had a window into the ownership of those accounts that had large positions at the end of the day. This new information is critical in today's world of high frequency trading, as many accounts trade often throughout the day but end the day without reportable positions. Thus, with these reforms, the Commission will get additional tools to oversee the markets' largest day traders and high frequency traders.
There is also flexibility built into the rule such that if some of the required information on accounts has already been reported through a legal entity identifier, the market participant does not have to submit it twice.
Further this rule modernizes the reporting by requiring electronic submission of information, rather than by mailing or faxing forms.
These reforms enhance the Commission's ability to oversee the markets, as well as detect market manipulation and abusive or disruptive trading practices.
Defense Acquisition Regulations System, Department of Defense (DoD).
Interim rule.
DoD is issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011, as amended by the NDAA for FY 2013. This interim rule allows DoD to consider the impact of supply chain risk in specified types of procurements related to national security systems.
Submit comments identified by DFARS Case 2012–D050, using any of the following methods:
○
○
○
○
Comments received generally will be posted without change to
Dustin Pitsch, Defense Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301–3060, telephone 571–372–6090.
This interim rule amends the DFARS to implement section 806 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111–383), entitled “Requirements for Information Relating to Supply Chain Risk,” as amended by section 806 of the NDAA for FY 2013 (Pub. L. 112–239), and allows DoD to consider the impact of supply chain risk in specified types of procurements related to national security systems. Section 806 defines supply chain risk as “the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a covered system so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system.”
This DFARS change is necessary to implement the authorities provided to DoD by section 806, enabling DoD to establish a pilot program to mitigate supply chain risk, which is set to expire on September 30, 2018. These authorities are in addition to other available mitigations, which may not be adequate to protect against the malicious actions referred to in the definition of supply chain risk.
Section 806 actions are permitted in procurements related to National Security Systems (NSS) (see 44 U.S.C. 3542(b)) that include a requirement relating to supply chain risk. This rule implements section 806's three supply-chain risk-management approaches as follows:
(1) The exclusion of a source that fails to meet qualification standards established in accordance with the requirements of 10 U.S.C. 2319, for the purpose of reducing supply chain risk in the acquisition of covered systems.
(2) The exclusion of a source that fails to achieve an acceptable rating with regard to an evaluation factor providing for the consideration of supply chain risk in the evaluation of proposals for the award of a contract or the issuance of a task or delivery order.
(3) The decision to withhold consent for a contractor to subcontract with a particular source or to direct a contractor for a covered system to exclude a particular source from consideration for a subcontract under the contract.
The rule establishes a new provision and clause (see DFARS 239.7306) for inclusion in all solicitations and contracts, including contracts for commercial items or commercial off-the-shelf items involving the development or delivery of any information technology, whether acquired as a service or as a supply, because portions of these contracts may be used to support or link with one or more NSS. Another reason for including the provision and clause in all DoD solicitations and contracts for information technology is to manage the operational security risks of including the provision and clause only in procurements for very sensitive DoD procurements, thereby identifying those very procurements as a target for the risk section 806 aims to deter.
However, several limiting provisions exist before the Government can exercise its authorities under section 806. First, use of section 806 authorities is limited to the procurement of NSS or of covered items of supply used within NSS. Section 806 defines a “covered item of supply” as “an item of information technology . . . that is purchased for inclusion in (an NSS), and the loss of integrity of which could result in a supply chain risk” to the entire system. Therefore, though the clause will be inserted in all information-technology contracts, these authorities will not be able to be utilized for all information and communication technology in all systems, but rather only in those meeting the criteria stated above.
Second, the decision to exclude a source under section 806 can only be made by the “head of a covered agency,” limited by definition to the Secretary of Defense and the Secretaries of the military departments with delegation limited to officials at or above the level of the service acquisition executive for the agency.
Third, the head of a covered agency seeking to exercise the authority of section 806 must obtain a joint recommendation from the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) and the Chief Information Officer of the Department of Defense (DoD CIO), based on a risk assessment from the Under Secretary of Defense for Intelligence
Fourth, the head of a covered agency, with the concurrence of the USD(AT&L), must make a written determination that the use of section 806 authority is “necessary to protect national security by reducing supply chain risk” and that “less intrusive measures are not reasonably available to reduce such supply chain risk.”
Fifth, notice of each determination to exercise section 806 authorities must be provided in advance to the appropriate congressional committees.
Finally, section 806 expires on September 30, 2018 (see section 806 of FY 2013 NDAA, Public Law 112–239).
Section 806 also provides that the head of a covered agency may “limit, notwithstanding any other provision of law, in whole or in part, the disclosure of information relating to the basis for carrying out a covered procurement action” if the head of a covered agency, with the concurrence of the USD (AT&L), determines in writing that “the risk to national security due to disclosure of such information outweighs the risk due to not disclosing such information.”
If the Government exercises the authority provided to limit disclosure of information, no action undertaken by the Government under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court.
Executive Orders (E.O.s) 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 effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
DoD does not expect this interim rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because companies have an existing interest in having a supply chain that it can rely on to provide it with material and supplies that allow the contractor to ultimately supply its customers with products that are safe and that do not impose threats or risks to government information systems.
However, an Initial Regulatory Flexibility Analysis (IRFA) has been prepared because there is a growing interest by both the Government and industry in establishing cost efficient ways to protect the supply chain related to information technology purchases. Congress has recognized a growing concern for risks to the supply chain for technology contracts supporting the Department of Defense (DoD). Congress has defined supply chain risk as “the risk that an adversary may sabotage, maliciously introduce unwanted function, or otherwise subvert the design, integrity, manufacturing, production, distribution, installation, operation, or maintenance of a covered system so as to surveil, deny, disrupt, or otherwise degrade the function, use, or operation of such system.” (See section 806(e)(4) of Pub. L. 111–383.)
The objective of this rule is to protect DoD against risks arising out of the supply chain.
The legal basis for this rule is section 806 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2011 (Pub. L. 111–383), as amended by section 806 of the NDAA for FY 2013 (Pub. L. 112–239). Additionally, the Department of Defense Instruction (DoDI) 5200.44, Protection of Mission Critical Functions to Achieve Trusted Systems and Networks (TSN), recognizes the need to improve supply chain risk management (SCRM). In doing so, the DoDI requires, among other things, implementation of section 806 in the DFARS and in appropriate solicitation and contract language.
This rule applies to contractors involved in the development or delivery of any information technology, whether acquired by DoD as a service or as a supply. This includes commercial purchases as well as purchases of commercial off-the-shelf (COTS) services or supplies.
This rule does not require any specific reporting, recordkeeping or compliance requirements. It does, however, recognize the need for information technology contractors to implement appropriate safeguards and countermeasures to minimize supply chain risk. This rule, by itself, does not require contractors to deploy additional supply chain risk protections, but leaves it up to the individual contractors to take the steps they think are necessary to maintain existing or otherwise required safeguards and countermeasures as necessary for their own particular industrial methods to protect their supply chain.
The rule does not duplicate, overlap, or conflict with any other Federal rules.
Consistent with the stated objectives of section 806 and the DoDI, no viable alternatives exist.
Possible alternatives considered included having all contractors report, on all contracts, the nature of the supply chain risk mitigation efforts they have applied to their manufacturing processes. This would be unduly burdensome for both contractors and the Government.
Another alternative is not to have section 806 clauses apply to commercial and COTS items or purchases below the simplified acquisition threshold. However, the requirements of section 806 should apply to contracts and subcontracts at or below the simplified acquisition threshold because the malicious introduction of unwanted functions may occur at any dollar threshold. Therefore, it would not be in the best interest of the Federal Government to exempt contracts and subcontracts at or below the simplified acquisition threshold from this requirement.
In a like manner, the requirements of section 806 should apply to the procurement of commercial items (including COTS items) because the intent of the statute is to protect the supply chain which in turn protects all NSS. Commercial and COTS information technology supplies and services often become part of NSSs. Protection of the NSSs using the authority of section 806 requires application in all information technology supply and services contacts. Therefore, exempting commercial (including COTS) items from application of the statute would negate the intended effect of the statute.
DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2012–D050) in correspondence.
The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the
A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because of the urgent need to protect the National Security Systems (NSS) and the integrity of the supply chain to NSS. It is necessary to reduce supply chain risk in the acquisition of sensitive information technology systems that are used for intelligence or cryptologic activities; used for command and control of military forces; or from an integral part of a weapon system by avoiding sabotage, maliciously introducing unwanted functions, or other subversion of the design, integrity, manufacturing, production, installation, operation or maintenance of systems. Such acquisition decisions are made daily and, like other cybersecurity measures, the costs to mitigate supply chain risk after a system is already in operation can be very high. In addition, as this is a pilot authority set to expire on September 30, 2018, and the Congress has requested a report on the effectiveness of the authority not later than January 1, 2017, therefore DoD must make this tool available immediately to begin the pilot program and gather feedback for the report to Congress.
The globalization of information technology has increased the vulnerability of DoD to attacks on its systems and networks. Failure to implement this rule may cause harm to the Government and to individuals relying on the integrity of NSS, for example, the risk of allowing the malicious insertion of software code or an unwanted function designed to degrade DOD's sensitive systems. DoD has proceeded cautiously to ensure that this rule very closely mirrors the authorities provided in the statute and has little leeway to vary from those terms. However, pursuant to 41 U.S.C. 1707 and FAR 1.501–3(b), DoD will consider public comments received in response to this interim rule in the formation of the final rule.
Government procurement.
Therefore, 48 CFR parts 208, 212, 215, 233, 239, 244, and 252 are amended as follows:
41 U.S.C. 1303 and 48 CFR Chapter 1.
In all orders and blanket purchase agreements involving the development or delivery of any information technology, whether acquired as a service or as a supply, consider the need for an evaluation factor regarding supply chain risk (see subpart 239.73).
(1) * * *
(2) In all orders and blanket purchase agreements involving the development or delivery of any information technology, whether acquired as a service or as a supply, consider the need for an evaluation factor regarding supply chain risk (see subpart 239.73).
Revision and additions to read as follows:
(f) * * *
(xiv) Use the provision 252.215–7008, Only One Offer, as prescribed at 215.408(4);
(xv) Use the clause at 252.219–7003, Small Business Subcontracting Plan (DoD Contracts), as prescribed in 219.708(b)(1)(A)(
(liv) Use the provision at 252.239–7017, Notice of Supply Chain Risk, as prescribed in 239.7306(a), to comply with section 806 of Public Law 111–383, in all solicitations for contracts involving the development or delivery of any information technology, whether acquired as a service or as a supply.
(lv) Use the clause at 252.239–7018, Supply Chain Risk, as prescribed in 239.7306(b), to comply with section 806 of Public Law 111–383, in all solicitations and contracts involving the development or delivery of any information technology, whether acquired as a service or as a supply.
(c) * * *
(v) In all solicitations and contracts involving the development or delivery of any information technology, whether acquired as a service or as a supply, consider the need for an evaluation factor regarding supply chain risk (see subpart 239.73).
If the Government exercises the authority provided in 239.7305(d), the notifications to unsuccessful offerors, either preaward or postaward, shall not reveal any information that is determined to be withheld from disclosure in accordance with section 806 of the National Defense Authorization Act for Fiscal Year 2011, as amended by section 806 of the
(e) If the Government exercises the authority provided in 239.7305(d), the debriefing shall not reveal any information that is determined to be withheld from disclosure in accordance with section 806 of the National Defense Authorization Act for Fiscal Year 2011, as amended by section 806 of the National Defense Authorization Act for Fiscal Year 2013 (see subpart 239.73).
If the Government exercises the authority provided in 239.7305(d) to limit disclosure of information, no action undertaken by the Government under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court (see subpart 239.73).
(a) This subpart implements section 806 of the National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111–383) and elements of DoD Instruction 5200.44, Protection of Mission Critical Functions to Achieve Trusted Systems and Networks (TSN), at (
(b) The authority provided in this subpart expires on September 30, 2018 (see section 806(a) of Pub. L. 112–239).
Notwithstanding FAR 39.001, this subpart shall be applied to acquisition of information technology for national security systems, as that term is defined at 44 U.S.C. 3542(b), for procurements involving—
(a) A source selection for a covered system or a covered item involving either a performance specification (see 10 U.S.C. 2305(a)(1)(C)(ii)), or an evaluation factor (see 10 U.S.C. 2305(a)(2)(A)), relating to supply chain risk;
(b) The consideration of proposals for and issuance of a task or delivery order for a covered system or a covered item where the task or delivery order contract concerned includes a requirement relating to supply chain risk (see 10 U.S.C. 2304c(d)(3) and FAR 16.505(b)(1)(iv)(D)); or
(c) Any contract action involving a contract for a covered system or a covered item where such contract includes a requirement relating to supply chain risk.
As used in this subpart—
(1) The function, operation, or use of which—
(i) Involves intelligence activities;
(ii) Involves cryptologic activities related to national security;
(iii) Involves command and control of military forces;
(iv) Involves equipment that is an integral part of a weapon or weapons system; or
(v) Is critical to the direct fulfillment of military or intelligence missions but this does not include a system that is to be used for routine administrative and business applications, including payroll, finance, logistics, and personnel management applications; or
(2) Is protected at all times by procedures established for information that have been specifically authorized under criteria established by an Executive order or an Act of Congress to be kept classified in the interest of national defense or foreign policy.
(a) Subject to 239.7304, the following individuals are authorized to take the actions authorized by 239.7305:
(1) The Secretary of Defense.
(2) The Secretary of the Army.
(3) The Secretary of the Navy.
(4) The Secretary of the Air Force.
(b) The individuals authorized at paragraph (a) may not delegate the authority to take the actions at 239.7305 or the responsibility for making the determination required by 239.7304 to an official below the level of—
(1) For the Department of Defense, the Under Secretary of Defense for Acquisition, Technology, and Logistics; and,
(2) For the military departments, the senior acquisition executive for the department concerned.
The individuals authorized in 239.7303 may exercise the authority provided in 239.7305 only after—
(a) Obtaining a joint recommendation by the Under Secretary of Defense for Acquisition, Technology, and Logistics and the Chief Information Officer of the Department of Defense, on the basis of a risk assessment by the Under Secretary of Defense for Intelligence, that there is a significant supply chain risk to a covered system;
(b) Making a determination in writing, in unclassified or classified form, with the concurrence of the Under Secretary of Defense for Acquisition, Technology, and Logistics, that—
(1) Use of the authority in 239.7305(a)(b) or (c) is necessary to protect national security by reducing supply chain risk;
(2) Less intrusive measures are not reasonably available to reduce such supply chain risk; and
(3) In a case where the individual authorized in 239.7303 plans to limit disclosure of information under 239.7305(d), the risk to national security due to the disclosure of such information outweighs the risk due to not disclosing such information; and
(c)(1) Providing a classified or unclassified notice of the determination made under paragraph (b) of this section—
(i) In the case of a covered system included in the National Intelligence Program or the Military Intelligence Program, to the Select Committee on Intelligence of the Senate, the Permanent Select Committee on Intelligence of the House of Representatives, and the congressional defense committees; and
(ii) In the case of a covered system not otherwise included in paragraph (a) of this section, to the congressional defense committees; and
(2) The notice shall include—
(i) The following information (see 10 U.S.C. 2304(f)(3)):
(A) A description of the agency's needs.
(B) An identification of the statutory exception from the requirement to use competitive procedures and a demonstration, based on the proposed contractor's qualifications or the nature of the procurement, of the reasons for using that exception.
(C) A determination that the anticipated cost will be fair and reasonable.
(D) A description of the market survey conducted or a statement of the reasons a market survey was not conducted.
(E) A listing of the sources, if any, that expressed in writing an interest in the procurement.
(F) A statement of the actions, if any, the agency may take to remove or overcome any barrier to competition before a subsequent procurement for such needs;
(ii) The joint recommendation by the Under Secretary of Defense for Acquisition, Technology, and Logistics and the Chief Information Officer of the Department of Defense as specified in paragraph (a);
(iii) A summary of the risk assessment by the Under Secretary of Defense for Intelligence that serves as the basis for the joint recommendation specified in paragraph (a); and
(iv) A summary of the basis for the determination, including a discussion of less intrusive measures that were considered and why they were not reasonably available to reduce supply chain risk.
Subject to 239.7304, the individuals authorized in 239.7303 may, in the course of conducting a covered procurement—
(a) Exclude a source that fails to meet qualification standards established in accordance with the requirements of 10 U.S.C. 2319, for the purpose of reducing supply chain risk in the acquisition of covered systems;
(b) Exclude a source that fails to achieve an acceptable rating with regard to an evaluation factor providing for the consideration of supply chain risk in the evaluation of proposals for the award of a contract or the issuance of a task or delivery order;
(c) Withhold consent for a contractor to subcontract with a particular source or direct a contractor for a covered system to exclude a particular source from consideration for a subcontract under the contract; and
(d) Limit, notwithstanding any other provision of law, in whole or in part, the disclosure of information relating to the basis for carrying out any of the actions authorized by paragraphs (a) through (c) of this section, and if such disclosures are so limited—
(1) No action undertaken by the individual authorized under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court; and
(2) The authorized individual shall—
(i) Notify appropriate parties of a covered procurement action and the basis for such action only to the extent necessary to effectuate the covered procurement action;
(ii) Notify other Department of Defense components or other Federal agencies responsible for procurements that may be subject to the same or similar supply chain risk, in a manner and to the extent consistent with the requirements of national security; and
(iii) Ensure the confidentiality of any such notifications.
(a) Insert the provision at 252.239–7017, Notice of Supply Chain Risk, in all solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, that involve the development or delivery of any information technology whether acquired as a service or as a supply.
(b) Insert the clause at 252.239–7018, Supply Chain Risk, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, that involve the development or delivery of any information technology whether acquired as a service or as a supply.
In all solicitations and contracts involving the development or delivery of any information technology, whether acquired as a service or as a supply, consider the need for a consent to subcontract requirement regarding supply chain risk (see subpart 239.73).
As prescribed in 239.7306(a), use the following provision:
(a)
(b) In order to manage supply chain risk, the Government may use the authorities provided by section 806 of Public Law 111–383. In exercising these authorities, the Government may consider information, public and non-public, including all-source intelligence, relating to an offeror and its supply chain.
(c) If the Government exercises the authority provided in section 806 of Pub. L. 111–383 to limit disclosure of information, no action undertaken by the Government under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court.
As prescribed in 239.7306(b), use the following clause:
(a)
(1) For purposes of this definition, equipment is used by an agency if the equipment is used by the agency directly or is used by a contractor under a contract with the agency that requires—
(i) Its use; or
(ii) To a significant extent, its use in the performance of a service or the furnishing of a product.
(2) The term “information technology” includes computers, ancillary equipment
(3) The term “information technology” does not include any equipment acquired by a contractor incidental to a contract.
(b) The Contractor shall maintain controls in the provision of supplies and services to the Government to minimize supply chain risk.
(c) In order to manage supply chain risk, the Government may use the authorities provided by section 806 of Public Law 111–383. In exercising these authorities, the Government may consider information, public and non-public, including all-source intelligence, relating to a Contractor's supply chain.
(d) If the Government exercises the authority provided in section 806 of Public Law 111–383 to limit disclosure of information, no action undertaken by the Government under such authority shall be subject to review in a bid protest before the Government Accountability Office or in any Federal court.
(e) The Contractor shall include the substance of this clause, including this paragraph (e), in all subcontracts involving the development or delivery of any information technology, whether acquired as a service or as a supply.
Defense Acquisition Regulations System, Department of Defense (DoD).
Final rule.
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to add a new subpart and associated contract clause to address requirements for safeguarding unclassified controlled technical information.
Mr. Dustin Pitsch, Defense Acquisition Regulations System, OUSD(AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301–3060. Telephone 571–372–6090; facsimile 571–372–6101.
DoD published a proposed rule in the
Controlled technical information is technical data, computer software, and any other technical information covered by DoD Directive 5230.24, Distribution Statements on Technical Documents, at
Forty-nine respondents submitted public comments in response to the proposed rule.
DoD reviewed the public comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments is provided, as follows:
• The final rule reflects changes to subpart 204.73, in lieu of 204.74 as stated in the proposed rule, to conform to the current DFARS baseline numbering sequence. Subpart 204.73 is now titled “Safeguarding Unclassified Controlled Technical Information”.
• New definitions are included for: “controlled technical information”, “cyber incident” and “technical information”.
• These definitions published in the proposed rule are no longer included: “authentication,” “clearing information,” “critical program information,” “cyber,” “data,” “DoD information,” “Government information,” “incident,” “information,” “information system,” “intrusion,” “nonpublic information,” “safeguarding,” “threat,” and “voice”.
• DFARS 204.7302 is modified to account for the reduced scope to limit the application of safeguarding controls to unclassified controlled technical information, which is marked in accordance with DoD Instruction 5230.24, Distribution Statements on Technical Documents.
• The “procedures” section, previously at DFARS 204.7403 in the proposed rule, is no longer included.
• DFARS 204.7303, Contract Clause, prescribes only one clause, 252.204–7012, Safeguarding of Unclassified Controlled Technical Information, which is a modification of the previously proposed “Enhanced” safeguarding clause. The previously proposed “Basic” safeguarding clause is removed and the proposed controls will be implemented through FAR case 2011–020, Basic Safeguarding of Contractor Information Systems.
• A list is added specifying the 13 pieces of information required for reporting.
• The time period a contractor must retain incident information to allow for DoD to request information necessary to conduct a damage assessment or decline interest is set at 90 days in the clause at 252.204–7012(d)(4)(iii).
• Additional information regarding DoD's damage assessment activities is added at 252.204–7012(d)(5).
DoD will not modify the Disclosure of Information clause at DFARS 252.204–7000 in this rule. The clause at 252.204–7012 has been revised to apply to all contracts expected to be dealing with controlled technical information. Implementation of the rule does not direct modification of existing contracts. The clause does not apply to voice information, because voice information does not fall within the definition of controlled technical information.
The final rule adds a new subpart at 204.73, Safeguarding Unclassified Controlled Technical Information, to conform to the current DFARS baseline. The proposed rule had anticipated adding the new subpart at 204.74.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is
A final regulatory flexibility analysis has been prepared consistent with the Regulatory Flexibility Act, 5 U.S.C. 601,
The objective of this rule is for DoD to avoid compromise of unclassified computer networks on which DoD controlled technical information is resident on or transiting through contractor information systems, and to prevent the exfiltration of controlled technical information on such systems. The benefit of tracking and reporting DoD information compromises is to—
• Assess the impact of compromise;
• Facilitate information sharing and collaboration; and
• Standardize procedures for tracking and reporting compromise of information.
Several respondents stated that this rule will be financially burdensome for small businesses, two respondents stated that the numbers used in the Initial Regulatory Flexibility Analysis grossly underestimate the number of businesses the rule will affect and the cost as a percentage of revenue that will be required to meet the requirements of the new rule, and one respondent suggested that a gradually phased-in approach to implement these safeguards would ease the significant financial burden they impose.
No changes were made to the final rule as a result of these comments. The estimated burden in the final regulatory flexibility analysis has been reduced because the scope of the rule was modified to reduce the categories of information covered and only addresses safeguarding requirements that cover the unclassified controlled technical information and reporting the compromise of unclassified controlled technical information. The final rule is drafted with the aim of minimizing the burden of compliance on contractors while implementing the necessary safeguarding requirements.
This final rule requires information assurance planning, including reporting of information compromise for DoD contractors that handle DoD unclassified controlled technical information. This requirement flows down to subcontracts. DoD believes that most information passed down the supply chain will not require special handling and recognizes that most large contractors handling sensitive information already have sophisticated information assurance programs and can take credit for existing controls with minimal additional cost. However, most small businesses have less sophisticated programs and will realize costs meeting the additional requirements.
Based on figures from the Defense Technical Information Center it is estimated that 6,555 contractors would be handling unclassified controlled technical information and therefore affected by this rule. Of the 6,555 contractors it is estimated that less than half of them are small entities. For the affected small entities a reasonable rule of thumb is that information technology security costs are approximately 0.5% of total revenues. Because there are economies of scale when it comes to information security, larger businesses generally pay only a fraction of that amount.
The rule contains information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). OMB has cleared this information collection under OMB Control Number 0704–0478, titled: Defense Federal Acquisition Regulation Supplement; Safeguarding Unclassified Controlled Technical Information.
Government procurement.
Therefore, 48 CFR parts 204, 212, and 252 are amended as follows:
41 U.S.C. 1303 and 48 CFR Chapter 1.
(a) This subpart applies to contracts and subcontracts requiring safeguarding of unclassified controlled technical information resident on or transiting through contractor unclassified information systems.
(b) This subpart does not abrogate any existing contractor physical, personnel, or general administrative security operations governing the protection of unclassified DoD information, nor does it impact requirements of the National Industrial Security Program.
As used in this subpart—
(a) DoD and its contractors and subcontractors will provide adequate security to safeguard unclassified controlled technical information on their unclassified information systems from unauthorized access and disclosure.
(b) When safeguarding is applied to controlled technical information resident on or transiting contractor unclassified information systems—
(1) Contractors must report to DoD certain cyber incidents that affect unclassified controlled technical information resident on or transiting contractor unclassified information systems. Detailed reporting criteria and requirements are set forth in the clause at 252.204–7012, Safeguarding of Unclassified Controlled Technical Information.
(2) A cyber incident that is properly reported by the contractor shall not, by itself, be interpreted under this clause as evidence that the contractor has failed to provide adequate information safeguards for unclassified controlled technical information, or has otherwise failed to meet the requirements of the clause at 252.204–7012. When a cyber incident is reported, the contracting officer shall consult with a security manager of the requiring activity prior to assessing contractor compliance. The contracting officer shall consider such cyber incidents in the context of an overall assessment of the contractor's compliance with the requirements of the clause at 252.204–7012.
Use the clause at 252.204–7012, Safeguarding of Unclassified Controlled Technical Information, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items.
(f) * * *
(vi) Use the clause at 252.204–7012, Safeguarding of Unclassified Controlled Technical Information, as prescribed in 204.7303.
As prescribed in 204.7303, use the following clause: SAFEGUARDING OF UNCLASSIFIED CONTROLLED TECHNICAL INFORMATION (NOV 2013)
(a)
(b)
(1) Implement information systems security in its project, enterprise, or company-wide unclassified information technology system(s) that may have unclassified controlled technical information resident on or transiting through them. The information systems security program shall implement, at a minimum—
(i) The specified National Institute of Standards and Technology (NIST) Special Publication (SP) 800–53 security controls identified in the following table; or
(ii) If a NIST control is not implemented, the Contractor shall submit to the Contracting Officer a written explanation of how—
(A) The required security control identified in the following table is not applicable; or
(B) An alternative control or protective measure is used to achieve equivalent protection.
(2) Apply other information systems security requirements when the Contractor reasonably determines that information systems security measures, in addition to those identified in paragraph (b)(1) of this clause, may be required to provide adequate security in a dynamic environment based on an assessed risk or vulnerability.
Minimum required security controls for unclassified controlled technical information requiring safeguarding in accordance with paragraph (d) of this clause. (A description of the security controls is in the NIST SP 800–53, “Security and Privacy Controls for Federal Information Systems and Organizations” (
(c)
(d)
(1)
(i) Data Universal Numbering System (DUNS).
(ii) Contract numbers affected unless all contracts by the company are affected.
(iii) Facility CAGE code if the location of the event is different than the prime Contractor location.
(iv) Point of contact if different than the POC recorded in the System for Award Management (address, position, telephone, email).
(v) Contracting Officer point of contact (address, position, telephone, email).
(vi) Contract clearance level.
(vii) Name of subcontractor and CAGE code if this was an incident on a subcontractor network.
(viii) DoD programs, platforms or systems involved.
(ix) Location(s) of compromise.
(x) Date incident discovered.
(xi) Type of compromise (e.g., unauthorized access, inadvertent release, other).
(xii) Description of technical information compromised.
(xiii) Any additional information relevant to the information compromise.
(2)
(i) A cyber incident involving possible exfiltration, manipulation, or other loss or compromise of any unclassified controlled technical information resident on or transiting through Contractor's, or its subcontractors', unclassified information systems.
(ii) Any other activities not included in paragraph (d)(2)(i) of this clause that allow unauthorized access to the Contractor's unclassified information system on which unclassified controlled technical information is resident on or transiting.
(3)
(4)
(i) Conduct further review of its unclassified network for evidence of compromise resulting from a cyber incident to include, but is not limited to, identifying compromised computers, servers, specific data and users accounts. This includes analyzing information systems that were part of the compromise, as well as other information systems on the network that were accessed as a result of the compromise;
(ii) Review the data accessed during the cyber incident to identify specific unclassified controlled technical information associated with DoD programs, systems or contracts, including military programs, systems and technology; and
(iii) Preserve and protect images of known affected information systems and all relevant monitoring/packet capture data for at least 90 days from the cyber incident to allow DoD to request information or decline interest.
(5)
(e)
(f) Nothing in this clause limits the Government's ability to conduct law enforcement or counterintelligence activities, or other lawful activities in the interest of homeland security and national security. The results of the activities described in this clause may be used to support an investigation and prosecution of any person or entity, including those attempting to infiltrate or compromise information on a contractor information system in violation of any statute.
(g)
(End of clause)
Defense Acquisition Regulations System, Department of Defense (DoD).
Final rule.
DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to remove coverage on contractors performing private security functions that is now covered in the FAR.
Ms. Meredith Murphy, telephone 571–372–6098.
DoD implemented section 862 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2008 (Pub. L. 110–181), as amended by section 853 of the NDAA for FY 2009 (Pub. L. 110–417) and sections 831 and 832 of the NDAA for FY 2011 (Pub. L. 111–383), at DFARS section 225.370 and the clause at 252.225–7039, both entitled “Contractors Performing Private Security Functions.” The DFARS interim rule was published at 76 FR 52133, effective August 19, 2011, and the final rule was published at 77 FR 35883 on June 15, 2012.
These same statutory provisions were subsequently implemented in the FAR at 25.302 and 52.225–26, both entitled “Contractors Performing Private Security Functions Outside the United States,” in FAC 2005–067, issued June 21, 2013. The FAR changes regarding private security contractors were effective on July 22, 2013 (see 78 FR 37670). Therefore, there is no need to retain the duplicative DFARS coverage applicable solely to DoD.
This final rule removes DFARS 225.370 and the clause at 252.225–7039, effective upon publication. In all applicable cases (see FAR 25.302–3, Applicability), the FAR shall be used.
“Publication of proposed regulations”, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment because DFARS 225.370 and the clause at 252.225–7039 are duplicative of the FAR. Using the FAR clause instead of the DFARS clause should, in effect, be transparent to contractors because the requirements are the same for both clauses.
Executive Orders (E.O.s) 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 effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant DFARS revision within the meaning of FAR 1.501–1 and 41 U.S.C. 1707 does not require publication for public comment.
This rule affects the information collection requirements in the provisions at DFARS 225.370 and 252.225–7039, currently approved under OMB Control Number 0704–0460, titled Synchronized Predeployment and Operational Tracker (SPOT) System, in accordance with the Paperwork Reduction Act (44 U.S.C. chapter 35). The information collection requirements associated with OMB 0704–0460 are broader than those applicable only to private security contractors, and the majority of the 0704–0460 requirements (i.e., those not associated with private security contractors) will continue to apply to DoD contractors under the clause at DFARS 252.225–7040. The information collection requirements associated with contractor employees performing private security functions will continue to apply to DoD contracts in accordance with the clause at FAR 52.225–26 (which cites to OMB 0704–0460). The information collection requirements for private security contractors under contracts with non-DoD agencies are addressed under a separate information collection, 9000–0180. There is no net impact of this final rule on the information collection requirements for OMB 0704–0460.
Government procurement.
Therefore, 48 CFR parts 225 and 252 are amended as follows:
41 U.S.C. 1303 and 48 CFR Chapter 1.