[Federal Register Volume 85, Number 246 (Tuesday, December 22, 2020)]
[Notices]
[Pages 83662-83664]
[FR Doc No: 2020-28258]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90701; File No. SR-OCC-2020-806]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Partial Amendment No. 1 and Notice of No Objection
To Advance Notice, as Modified by Partial Amendment No. 1, Related to
Proposed Changes To Update the Options Clearing Corporation's Recovery
and Orderly Wind-Down Plan

December 17, 2020.

I. Introduction

    On October 20, 2020, the Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'')
advance notice SR-OCC-2020-806 (``Advance Notice'')pursuant to Section
806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, entitled Payment, Clearing and Settlement
Supervision Act of 2010 (``Clearing Supervision Act'') \1\ and Rule
19b-4(n)(1)(i) \2\ under the Securities Exchange Act of 1934
(``Exchange Act'') \3\ to make changes to OCC's Recovery and Orderly
Wind-Down Plan (``RWD Plan'').\4\ The Advance Notice was published for
public comment in the Federal Register on November 18, 2020,\5\ and the
Commission has received no comments regarding the changes proposed in
the Advance Notice.\6\ On November 18, 2020, OCC filed a partial
amendment (``Partial Amendment No. 1'') to modify the Advance
Notice.\7\ The Commission is publishing this notice to solicit comments
on Partial Amendment No. 1 from interested persons and, for the reasons
discussed below, is hereby providing notice of no objection to the
Advance Notice.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ 15 U.S.C. 78a et seq.
    \4\ See Notice of Filing infra note 5, at 85 FR 73553.
    \5\ Securities Exchange Act Release No. 90416 (Nov. 13, 2020),
85 FR 73553 (Nov. 18, 2020) (File No. SR-OCC-2020-806) (``Notice of
Filing''). On October 20, 2020, OCC also filed a related proposed
rule change (SR-OCC-2020-013) with the Commission pursuant to
Section 19(b)(1) of the Exchange Act and Rule 19b-4 thereunder
(``Proposed Rule Change''). 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-
4, respectively. In the Proposed Rule Change, which was published in
the Federal Register on November 9, 2020, OCC seeks approval of
proposed changes to its rules necessary to implement the Advance
Notice. Securities Exchange Act Release No. 90315 (Nov. 3, 2020), 85
FR 71384 (Nov. 9, 2020) (File No. SR-OCC-2020-013). The comment
period for the related Proposed Rule Change filing closed on
November 30, 2020.
    \6\ Since the proposal contained in the Advance Notice was also
filed as a proposed rule change, all public comments received on the
proposal are considered regardless of whether the comments are
submitted on the Proposed Rule Change or the Advance Notice.
    \7\ In Partial Amendment No. 1, OCC corrects and updates a
confidential Exhibit 5 to the materials filed on October 20, 2020
regarding File No. SR-OCC-2020-806. Partial Amendment No. 1 corrects
an error in the proposed rule text and updates the list of vendor
agreements attached to the RWD Plan, but did not change the purpose
of or basis for the Advance Notice. References to the Advance Notice
from this point forward refer to the Advance Notice, as amended by
Partial Amendment No. 1.
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II. Background 8
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    \8\ Capitalized terms used but not defined herein have the
meanings specified in OCC's Rules and By-Laws, available at https://www.theocc.com/about/publications/bylaws.jsp.
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    The Advance Notice concerns changes to OCC's RWD Plan. As described
in greater detail below, OCC proposes to (1) update the RWD Plan to
reflect changes to OCC's capital structure resulting from the
disapproval of OCC's previously approved ``Capital Plan'' \9\ and the
subsequent approval of OCC's ``Capital Management Policy,'' \10\ and
(2) implement changes identified during OCC's annual review of the RWD
Plan. The changes arise out of OCC's annual review of the RWD Plan and
include factual updates (e.g., market share and contract volume data)
and streamlined discussions in the RWD Plan (e.g., replacement of
detailed overview of OCC's risk management program with a more concise
summary).
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    \9\ See Securities Exchange Act Release No. 85121 (Feb. 13,
2019), 84 FR 5157 (Feb. 20, 2019) (File No. SR-OCC-2015-02).
    \10\ See Securities Exchange Act Release No. 86725 (Aug. 21,
2019), 84 FR 44952 (Aug. 27, 2019) (File No. SR-OCC-2019-007).
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    Capital Management Policy Updates. As a result of the
implementation of the Capital Management Policy, OCC is proposing
changes to Chapters 2, 5, and 6 of its RWD Plan. In Chapter 2, OCC is
proposing to revise its discussion of fee management for consistency
with the Capital Management Policy. In Chapter 5, OCC is proposing to
(i) replace its discussion of the Replenishment Plan established under
the disapproved Capital Plan with a discussion of the replenishment
structure adopted under the Capital Management Policy; (ii) replace
references to the discretionary use of OCC's current and/or retained
earnings with references to the mandatory contribution--immediately
following the use of margin, deposits in lieu of margin and the
Clearing Fund deposits of the suspended Clearing Member--of OCC's
current and retained earnings greater than 110% of OCC's annually-
established ``Target Capital Requirement;'' (iii) update the
description of how OCC could increase the minimum required cash

contribution to the Clearing Fund to reflect enhancements to OCC's
liquidity risk management framework that the Commission approved in
2020; \11\ and (iv) include a discussion of the mandatory contribution
of any unvested portions of OCC's Executive Deferred Compensation Plan
(``EDCP'') in proportion to any charges against the mutualized portion
of OCC's Clearing Fund. OCC also proposes to revise the list of
``Recovery Trigger Events'' in Chapter 5 to: (a) Delete one of the
Recovery Trigger Events that was derived from a defined term in the
Capital Plan; (b) consolidate two other Recovery Trigger Events into a
single, operational loss-related recovery trigger; and (c) add a
qualification onto an existing liquidity loss-related recovery trigger.
In Chapter 6, OCC is proposing to update discussion of the tools by
which OCC could recapitalize in certain recovery and wind-down
scenarios. Further, OCC is proposing to revise the list of Wind-Down
Plan Trigger Events (``WDP Triggers''). Specifically, OCC proposes to
consolidate two current WDP Triggers into a single WDP Trigger related
to OCC's financial resource requirements and to consolidate two other
WDP Triggers into a single WDP Trigger related to operational
disruption. Similar to the changes OCC proposes in Chapter 5, the
changes proposed in Chapter 6 would be designed to reflect OCC's
current replenishment plan under the Capital Management Policy.
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    \11\ See Securities Exchange Act Release No. 89014 (Jun. 4,
2020), 85 FR 35446 (Jun. 10, 2020) (File No. SR-OCC-2020-003).
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    Annual Review Updates. As a result of its annual review and update
process, OCC is proposing changes to Chapters 2, 3, 5, 6, 7, and 8 of
its RWD Plan. In Chapter 2, OCC is proposing to update (i) market share
and contract volume data; (ii) lists of the securities options
exchanges and other markets for which OCC provides clearing services;
(iii) organizational charts, headcount numbers, discussions of OCC's
management structure and descriptions of management roles and
responsibilities; (iv) updated descriptions of OCC's Board's
responsibilities and procedures, lists of Board members and
descriptions of OCC's Board committees' roles and responsibilities; and
(v) graphs of total monthly deposits to OCC's Clearing Fund. OCC is
also proposing revisions to reflect certain program changes that have
occurred at OCC since the initial approval of the RWD Plan in 2018
(e.g., changes to cross-margining arrangements, credit facilities,
investment counterparties, and vendors) as well as changes to OCC's
retirement plan obligations. In Chapter 3, the RWD Plan lists OCC's
internal support functions. OCC is proposing the addition of two new
internal support functions to that list and the removal of the Office
of the Corporate Executive from the list. The net result of the
proposed changes would bring the total number of internal support
functions listed from fourteen to sixteen. OCC also proposes to update
the descriptions of all OCC's internal support functions so they align
with OCC's internal descriptions of such functions.
    In Chapter 6, OCC is proposing to (i) update references to OCC's
internal support functions; and (ii) certain references to headcount.
In Chapter 7, OCC is proposing to update staff titles to reflect
changes in related office titles. In Chapter 8, OCC is proposing to
update lists of (i) Clearing Members; (ii) Board participation; (iii)
settlement bank and letter of credit bank; (iv) OCC's vendors and
service providers; (v) updates to the extreme hypothetical scenarios
designed by OCC that, if such scenarios occurred, could cause OCC to
activate the RWD Plan; and (vi) key agreements.
    Administrative and Streamlining Changes. In addition to the updates
described above, OCC is also proposing several administrative and
streamlining changes throughout the RWD Plan. OCC proposes to align the
executive summary and overview section of the RWD Plan with the changes
described above. OCC also proposes moving annual report excerpts from
Chapter 2 to an appendix to the RWD Plan, replace the current overview
of OCC's risk management program with a more concise summary, and
update a summary description of OCC's interconnections with external
vendors and a list of vendors that provide OCC critical technology and
information reporting services. In Chapter 4, OCC proposes to update
certain factual references and make other minor changes to reflect the
use of a single term for Critical Services that are currently
identified separately. OCC also proposes to revise the mapping of
Critical Services to Support Functions in Chapter 4 to reflect the
categorization of Support Functions as either ``primary,''
``secondary,'' or ``non-critical.'' In Chapter 5, OCC proposes to (i)
clean up references to its by-laws that are now rules; (ii) consolidate
two recovery triggers into a single, operational loss-related recovery
trigger; and (iii) add qualifying language to an existing liquidity
loss-related recovery trigger.

III. Commission Findings and Notice of No Objection

    Although the Clearing Supervision Act does not specify a standard
of review for an advance notice, the stated purpose of the Clearing
Supervision Act is instructive: To mitigate systemic risk in the
financial system and promote financial stability by, among other
things, promoting uniform risk management standards for SIFMUs and
strengthening the liquidity of SIFMUs.\12\
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    \12\ See 12 U.S.C. 5461(b).
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    Section 805(a)(2) of the Clearing Supervision Act authorizes the
Commission to prescribe regulations containing risk management
standards for the payment, clearing, and settlement activities of
designated clearing entities engaged in designated activities for which
the Commission is the supervisory agency.\13\ Section 805(b) of the
Clearing Supervision Act provides the following objectives and
principles for the Commission's risk management standards prescribed
under Section 805(a): \14\
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    \13\ 12 U.S.C. 5464(a)(2).
    \14\ 12 U.S.C. 5464(b).
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     To promote robust risk management;
     to promote safety and soundness;
     to reduce systemic risks; and
     to support the stability of the broader financial system.
    Section 805(c) provides, in addition, that the Commission's risk
management standards may address such areas as risk management and
default policies and procedures, among other areas.\15\
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    \15\ 12 U.S.C. 5464(c).
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    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act and Section 17A of the
Exchange Act (the ``Clearing Agency Rules'').\16\ The Clearing Agency
Rules require, among other things, each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures that are reasonably designed to meet certain minimum
requirements for its operations and risk management practices on an
ongoing basis.\17\ As such, it is appropriate for the Commission to
review advance notices against the Clearing Agency Rules and the
objectives and principles of these risk management standards as
described

in Section 805(b) of the Clearing Supervision Act. As discussed below,
the Commission believes the changes proposed in the Advance Notice are
consistent with the objectives and principles described in Section
805(b) of the Clearing Supervision Act,\18\ and in the Clearing Agency
Rules, in particular Rule 17Ad-22(e)(3)(ii).\19\
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    \16\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release No.
68080 (Oct. 22, 2012), 77 FR 66220 (Nov. 2, 2012) (S7-08-11). See
also Covered Clearing Agency Standards, 81 FR 70786. The Commission
established an effective date of December 12, 2016 and a compliance
date of April 11, 2017 for the Covered Clearing Agency Standards.
OCC is a ``covered clearing agency'' as defined in Rule 17Ad-
22(a)(5).
    \17\ 17 CFR 240.17Ad-22.
    \18\ 12 U.S.C. 5464(b).
    \19\ 17 CFR 240.17Ad-22(e)(3)(ii).
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A. Consistency With Section 805(b) of the Clearing Supervision Act

    The Commission believes that the proposal contained in OCC's
Advance Notice is consistent with the stated objectives and principles
of Section 805(b) of the Clearing Supervision Act. Specifically, as
discussed below, the Commission believes that the changes proposed in
the Advance Notice are consistent with promoting robust risk
management, promoting safety and soundness, reducing systemic risks,
and supporting the stability of the broader financial system.\20\
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    \20\ 12 U.S.C. 5464(b).
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    The Commission believes that the proposed changes to OCC's RWD Plan
are consistent with promoting robust risk management, in particular
risks arising out of severe financial or operational stress that could
be presented to OCC as well as promoting safety and soundness, reducing
systemic risk, and supporting the broader financial system. As a
central counterparty and SIFMU,\21\ it is imperative for OCC to have a
plan in place to address extreme stresses or crises with the aim of
maintaining OCC's viability and ability to provide critical services.
In the event that OCC's recovery efforts are not successful, the RWD
Plan would seek to increase the possibility that a resolution of OCC's
operations could be conducted in an orderly manner. The Commission
continues to believe that OCC specifying the steps that it would take
in either a recovery or orderly wind-down would enhance OCC's ability
to address circumstances specific to an extreme stress event.\22\ The
Commission also continues to believe that, by increasing the likelihood
that recovery would be orderly, efficient, and successful, the RWD Plan
enhances OCC's ability to maintain the continuity of its critical
services (including clearance and settlement services) during, through,
and following periods of extreme stress giving rise to the need for
recovery.\23\
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    \21\ See Financial Stability Oversight Council (``FSOC'') 2012
Annual Report, Appendix A, available at https://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf.
    \22\ See Securities Exchange Act Release No. 83918 (Aug. 23,
2018), 83 FR 44091, 44094 (Aug. 29, 2018) (File No. SR-OCC-2017-
021); Securities Exchange Release No. 83928 (Aug. 23, 2018), 83 FR
44109, 44112 (Aug. 29, 2018) (File No. SR-OCC-2017-810).
    \23\ See id.
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    As described above, OCC proposes to (1) update the RWD Plan to
reflect changes to OCC's capital structure resulting from the
disapproval of OCC's previously approved ``Capital Plan'' \24\ and the
subsequent approval of OCC's ``Capital Management Policy,'' \25\ and
(2) implement changes identified during OCC's annual review of the RWD
Plan. Consistent with the Commission's prior statements regarding
disclosure of documents describing a covered clearing agency's recovery
and wind-down plans, the Commission believes that such recovery and
wind-down plans should be updated regularly or more frequently as
necessary.\26\ OCC also proposes to update and streamline the data and
descriptions provided in the RWD Plan.\27\ The Commission believes that
keeping the RWD Plan updated with current information, and refining the
descriptions to make it more concise, makes it a more accurate and
useful document. As such, the Commission believes that the proposal
would promote both robust risk management and safety and soundness,
reduce systemic risk, and support the broader financial system
consistent with Section 805(b) of the Clearing Supervision Act.\28\
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    \24\ See Securities Exchange Act Release No. 85121 (Feb. 13,
2019), 84 FR 5157 (Feb. 20, 2019) (File No. SR-OCC-2015-02).
    \25\ See Securities Exchange Act Release No. 86725 (Aug. 21,
2019), 84 FR 44952 (Aug. 27, 2019) (File No. SR-OCC-2019-007).
    \26\ See Securities Exchange Act Release No. 34-78961 (Oct. 13,
2016), 81 FR 70786, 70808 (Oct. 13, 2016) (File No. S7-03-14).
    \27\ For example, OCC is proposing to update its market share
and contract volume data, lists of the securities options exchanges
and other markets for which OCC provides clearing services,
organizational charts, and headcount numbers. OCC also proposes to
replace the detailed overview of OCC's risk management program with
a more concise summary.
    \28\ 12 U.S.C. 5464(b).
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    Accordingly, and for the reasons stated above, the Commission
believes the changes proposed in the Advance Notice are consistent with
Section 805(b) of the Clearing Supervision Act.\29\
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    \29\ 12 U.S.C. 5464(b).
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B. Consistency With Rule 17Ad-22(e)(3)(ii) Under the Exchange Act

    Rule 17Ad-22(e)(3)(ii) under the Exchange Act requires that a
covered clearing agency establish, implement, maintain, and enforce
written policies and procedures reasonably designed to maintain a sound
risk management framework for comprehensively managing legal, credit,
liquidity, operational, general business, investment, custody, and
other risks that arise in or are borne by the covered clearing agency,
which includes plans for the recovery and orderly wind-down of the
covered clearing agency necessitated by credit losses, liquidity
shortfalls, losses from general business risk, or any other losses.\30\
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    \30\ 17 CFR 240.17Ad-22(e)(3)(ii).
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    The Commission continues to believe that the RWD Plan (i) clearly
describes OCC's recovery tools, which enhance OCC's ability to recover
from credit losses, liquidity shortfalls, general business risk losses,
or other losses, consistent with Rule 17Ad-22(e)(3)(ii); and (ii)
supports OCC's ability to use risk management and recovery tools
effectively to bring about a recovery by identifying in advance which
tools may be most effective for different situations or needs,
consistent with Rule 17Ad-22(e)(3)(ii).\31\ As described above, the RWD
Plan sets forth OCC's plans to recover or wind-down its operations as a
result of severe financial or operational stress in an orderly fashion.
The proposed updates will make the information provided in the RWD Plan
more accurate and useful. The revised RWD Plan would, in turn, provide
a more accurate and usable playbook for OCC or source of information
for a resolution authority. Accordingly, the Commission believes that
the proposed changes to the RWD Plan are consistent with Rule 17Ad-
22(e)(3)(ii) under the Exchange Act.\32\
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    \31\ See Securities Exchange Act Release No. 83918 (Aug. 23,
2018), 83 FR 44091, 44095 (Aug. 29, 2018) (File No. SR-OCC-2017-
021); Securities Exchange Release No. 83928 (Aug. 23, 2018), 83 FR
44109, 44113 (Aug. 29, 2018) (File No. SR-OCC-2017-810).
    \32\ 17 CFR 240.17Ad-22(e)(3)(ii).
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IV. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act, that the Commission does not object to
Advance Notice (SR-OCC-2020-806) and that OCC is authorized to
implement the proposed change as of the date of this notice or the date
of an order by the Commission approving proposed rule change SR-OCC-
2020-013, as modified by Partial Amendment No. 1, whichever is later.

    By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-28258 Filed 12-21-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 71 (Tuesday, April 14, 2015)]
[Proposed Rules]
[Pages 19892-19895]
[FR Doc No: 2015-08071]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-0824; Directorate Identifier 2013-NM-191-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to supersede Airworthiness Directive (AD) 98-20-27,
for all Airbus Model A300 B4-600, B4-600R, and F4-600R series
airplanes, and Model A300 C4-605R Variant F airplanes (collectively
called Model A300-600 series airplanes). AD 98-20-27 currently requires
repetitive inspections to detect fatigue cracking of the wing top skin
at the front spar joint; and a follow-on eddy current inspection and
repair, if necessary. Since we issued AD 98-20-27, we have received
reports of cracking of the wing top skin in an area not required for
inspection by AD 98-20-27. This proposed AD would reduce the inspection
compliance time and intervals, and extend the inspection area of the
wing top skin at the front spar joint. We are proposing this AD to
detect and correct fatigue cracking of the wing top skin at the front
spar joint, which could result in reduced structural integrity of the
airplane.

DATES: We must receive comments on this proposed AD by May 29, 2015.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Airbus SAS, Airworthiness Office--EAW, 1 Rond Point Maurice Bellonte,
31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61
93 44 51; email<EMAIL_ADDRESS>Internet http://www.airbus.com. You may view this referenced service information at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA, call
425-227-1221.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
0824; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2015-0824;
Directorate Identifier 2013-NM-191-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    On September 16, 1998, we issued AD 98-20-27, Amendment 39-10793
(63 FR 50981, September 24, 1998). AD 98-20-27 requires actions
intended to address an unsafe condition on all Airbus Model A300 B4-
600, B4-600R, and F4-600R series airplanes, and Model A300 C4-605R
Variant F airplanes (collectively called Model A300-600 series
airplanes).
    Since we issued AD 98-20-27, Amendment 39-10793 (63 FR 50981,
September 24, 1998): The European Aviation Safety Agency (EASA), which
is the Technical Agent for the Member States of the European Union, has
issued EASA Airworthiness Directive 2013-0232R1, dated October 2, 2013
(referred to after this as the Mandatory Continuing Airworthiness
Information, or ``the MCAI''), to correct an unsafe condition. The MCAI
states:

    During full-scale fatigue testing conducted in the early 1990's,
cracks were found on the top skin of the wing between Ribs 1 and 7,
starting at the front spar fastener holes.
    This condition, if not detected and corrected, could adversely
affect the structural integrity of the wing.
    Consequently, Airbus issued Service Bulletin (SB) A300-57-6045
and DGAC [Direction G[eacute]n[eacute]rale de l'Aviation Civile]
France issued AD 97-374-238 [http://ad.easa.europa.eu/blob/19973740tb_superseded.pdf/AD_F-1997-374-238_2] for A300-600
aeroplanes and AD 1999-008-020 [http://ad.easa.europa.eu/blob/19980080tb_superseded.pdf/AD_F-1999-008-020_2] for A300-600ST
aeroplanes to require repetitive detailed inspections of the wing
top skin and, in case of findings, an Eddy Current (EC) inspection,
and, depending on the size of the cracks, repair.
    After those [DGAC] ADs were issued, further cracks to the wing
top skin were reported by operators, within an area not covered by
the existing [DGAC] ADs. To address this potential unsafe condition,
Airbus revised SB A300-57-6045 to extend the area to be inspected.
    In addition, a fleet survey and updated Fatigue and Damage
Tolerance analyses were performed in order to substantiate the
second A300-600 Extended Service Goal (ESG2) exercise. The results
of these analyses have determined that the inspection thresholds and
intervals must be reduced to allow timely detection of these cracks
and the accomplishment of applicable corrective action(s).
    As the ESG2 exercise is only applicable to A300-600 aeroplanes,
A300-600ST aeroplanes are now addressed through new Airbus SB A300-
57-9026.
    For the reasons described above, this [EASA] AD retains the
requirements of DGAC France AD 97-374-238(B) [http://ad.easa.europa.eu/blob/19973740tb_superseded.pdf/AD_F-1997-374-238_2] [which corresponds to FAA AD 98-20-27, Amendment 39-10793 (63
FR 50981, September 24, 1998)] and [DGAC] AD 1999-008-020(B) [http://ad.easa.europa.eu/blob/19980080tb_superseded.pdf/AD_F-1999-008-020_2], which are superseded, but requires

those actions, for A300-600 aeroplanes only, within reduced
thresholds and intervals.

* * * * *
    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
0824.

Related Service Information Under 1 CFR Part 51

    Airbus has issued Service Bulletin A300-57-6045, Revision 10, dated
November 13, 2013. The service information describes inspection
procedures for fatigue cracking of the wing top skin at the front spar
joint between ribs 1 and 7. The actions described in this service
information are intended to correct the unsafe condition identified in
the MCAI. This service information is reasonably available; see
ADDRESSES for ways to access this service information.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Differences Between This Proposed AD and the MCAI or Service
Information

    Unlike the procedures described in the MCAI and Airbus Service
Bulletin A300-57-6045, Revision 10, dated November 13, 2013, this
proposed AD would not permit further flight if cracks are detected in
the wing top skin at the front spar joint. We have determined that,
because of the safety implications and consequences associated with
that cracking, any cracked wing top skin at the front spar joint must
be repaired before further flight. This difference has been coordinated
with the EASA.

Costs of Compliance

    We estimate that this proposed AD affects 130 airplanes of U.S.
registry.
    The actions that are required by AD 98-20-27, Amendment 39-10793
(63 FR 50981, September 24, 1998), and retained in this proposed AD
take about 2 work-hours per product, at an average labor rate of $85
per work-hour. Based on these figures, the estimated cost of the
actions that are required by AD 98-20-27 is $170 per product.
    We also estimate that it would take about 2 work-hours per product
to comply with the basic requirements of this proposed AD. The average
labor rate is $85 per work-hour. Based on these figures, we estimate
the cost of this proposed AD on U.S. operators to be $22,100, or $170
per product.
    We have received no definitive data that would enable us to provide
cost estimates for the on-condition actions specified in this proposed
AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
98-20-27, Amendment 39-10793 (63 FR 50981, September 24, 1998), and
adding the following new AD:

Airbus: Docket No. FAA-2015-0824; Directorate Identifier 2013-NM-
191-AD.

(a) Comments Due Date

    We must receive comments by May 29, 2015.

(b) Affected ADs

    This AD replaces AD 98-20-27, Amendment 39-10793 (63 FR 50981,
September 24, 1998).

(c) Applicability

    This AD applies to the Airbus airplanes identified in paragraphs
(c)(1) through (c)(4) of this AD, certificated in any category, all
manufacturer serial numbers.
    (1) Airbus Model A300 B4-601, B4-603, B4-620, and B4-622
airplanes.
    (2) Airbus Model A300 B4-605R and B4-622R airplanes.
    (3) Airbus Model A300 F4-605R and F4-622R airplanes.
    (4) Airbus Model A300 C4-605R Variant F airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

(e) Reason

    This AD was prompted by reports of cracking of wing top skin in
an area not required for inspection by AD 98-20-27, Amendment 39-
10793 (63 FR 50981, September 24, 1998). We are issuing this AD to
detect and correct fatigue cracking of the wing top skin at the
front spar joint, which could result in reduced structural integrity
of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Retained Repetitive Inspections, With Revised Service Information

    This paragraph restates the requirements of paragraph (a) of AD
98-20-27, Amendment

39-10793 (63 FR 50981, September 24, 1998), with revised service
information. Prior to the accumulation of 22,000 total flight
cycles, or within 2,000 flight cycles after October 29, 1998 (the
effective date of AD 98-20-27), whichever occurs later: Perform a
detailed visual inspection to detect fatigue cracking of the wing
top skin at the front spar joint, in accordance with Airbus Service
Bulletin A300-57-6045, Revision 1, dated August 3, 1994, including
Appendix 1, Revision 1, dated August 3, 1994; Airbus Service
Bulletin A300-57-6045, Revision 02, dated April 21, 1998, including
Appendix 1, Revision 02, dated April 21, 1998; or Airbus Service
Bulletin A300-57-6045, Revision 10, dated November 13, 2013. Repeat
the detailed visual inspection thereafter at intervals not to exceed
8,000 flight cycles.

(h) Retained Inspection and Repair, With Revised Service Information

    This paragraph restates the requirements of paragraph (b) of AD
98-20-27, Amendment 39-10793 (63 FR 50981, September 24, 1998), with
revised service information. If any cracking is suspected or
detected during any inspection required by paragraph (g) of this AD:
Prior to further flight, perform an eddy current inspection to
confirm the findings of the visual inspection, in accordance with
Airbus Service Bulletin A300-57-6045, Revision 01, dated August 3,
1994, including Appendix 1, Revision 01, dated August 3, 1994;
Airbus Service Bulletin A300-57-6045, Revision 02, dated April 21,
1998, including Appendix 1, Revision 02, dated April 21, 1998; or
Airbus Service Bulletin A300-57-6045, Revision 10, dated November
13, 2013. If any cracking is detected during any eddy current
inspection, prior to further flight, repair using a method approved
by the Manager, International Branch, ANM-116, FAA, Transport
Airplane Directorate; or the Direction G[eacute]n[eacute]rale de
l'Aviation Civile (or its delegated agent).

(i) New Requirement of This AD: Initial Inspection

    At the applicable time specified in paragraph (i)(1) or (i)(2)
of this AD: Do a detailed inspection of the wing top skin between
ribs one and seven for cracking, in accordance with the
Accomplishment Instructions of Airbus Service Bulletin A300-57-6045,
Revision 10, dated November 13, 2013. Accomplishment of the initial
inspection required by this paragraph terminates the requirements of
paragraph (g) of this AD.
    (1) For Model A300 B4-601, B4-603, B4-620, and B4-622 airplanes,
Model A300 B4-605R and B4-622R airplanes, and Model A300 C4-605R
Variant F airplanes: At the later of the times specified in
paragraphs (i)(1)(i) and (i)(1)(ii) of this AD.
    (i) Before the accumulation of 17,100 total flight cycles or
38,400 total flight hours, whichever occurs first.
    (ii) Within 1,000 flight cycles or 2,200 flight hours, whichever
occurs first after the effective date of this AD.
    (2) For Model A300 F4-605R and F4-622R airplanes: At the later
of the times specified in paragraphs (i)(2)(i) and (i)(2)(ii) of
this AD.
    (i) Before the accumulation of 22,000 total flight cycles or
49,500 total flight hours, whichever occurs first.
    (ii) Within 1,300 flight cycles or 2,800 flight hours, whichever
occurs first after the effective date of this AD.

(j) New Requirement of This AD: Repetitive Inspections

    Repeat the inspection required by paragraph (i) of this AD
thereafter at the applicable time and intervals specified in
paragraphs (j)(1) and (j)(2) of this AD.
    (1) For Model A300 B4-601, B4-603, B4-620, and B4-622 airplanes,
Model A300 B4-605R and B4-622R airplanes, and Model A300 C4-605R
Variant F airplanes: At the applicable time specified in paragraph
(j)(1)(i) or (j)(1)(ii) of this AD.
    (i) For airplanes that have an average flight time (AFT) that is
equal to or more than one and one-half hours: At intervals not to
exceed 5,100 flight cycles or 11,000 flight hours, whichever occurs
first.
    (ii) For airplanes that have an AFT that is less than one and
one-half hours: At intervals not to exceed 5,500 flight cycles or
8,300 flight hours, whichever occurs first.
    (2) For Model A300 F4-605R and F4-622R airplanes: At the
applicable time specified in paragraph (j)(2)(i) or (j)(2)(ii) of
this AD.
    (i) For airplanes that have an AFT that is equal to or more than
one and one-half hours: At intervals not to exceed 6,500 flight
cycles or 14,100 flight hours, whichever occurs first.
    (ii) For airplanes that have an AFT that is less than one and
one-half hours: At intervals not to exceed 7,000 flight cycles or
10,600 flight hours, whichever occurs first.

(k) New Requirement of This AD: Repair of Cracking

    (1) If any crack in the top skin in the area forward of the
front spar attachment is found during any inspection required by
paragraph (i) of this AD: Before further flight, repair using a
method approved by the Manager, International Branch, ANM-116,
Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.
    (2) If any crack or sign of a crack is found in the top skin at
or aft of the spar attachment during any inspection required by
paragraph (i) of this AD: Before further flight, do an eddy current
inspection of the cracks or of the signs of cracking to confirm the
findings of the detailed inspection, in accordance with the
Accomplishment Instructions of Airbus Service Bulletin A300-57-6045,
Revision 10, dated November 13, 2013. If there are any cracks at or
aft of the spar attachment, before further flight, repair using a
method approved by the Manager, International Branch, ANM-116,
Transport Airplane Directorate, FAA; EASA; or Airbus's EASA DOA.

(l) No Terminating Action

    Accomplishment of any repair required by paragraph (k) this AD
does not constitute terminating action for the repetitive
inspections required by paragraph (j) of this AD.

(m) No Reporting Required

    Although Airbus Service Bulletin A300-57-6045, Revision 10,
dated November 13, 2013, specifies to submit certain information to
the manufacturer, this AD does not include that requirement.

(n) Credit for Previous Actions

    This paragraph provides credit for actions required by
paragraphs (i), (j) and (k) of this AD, if those actions were
performed before the effective date of this AD using the Airbus
service bulletins specified in paragraphs (n)(1) through (n)(10) of
this AD, which are not incorporated by reference in this AD.
    (1) Airbus Service Bulletin A300-57-6045, dated March 18, 1993.
    (2) Airbus Service Bulletin A300-57-6045, Revision 01, dated
August 3, 1994.
    (3) Airbus Service Bulletin A300-57-6045, Revision 02, dated
April 21, 1998.
    (4) Airbus Service Bulletin A300-57-6045, Revision 03, dated
October 25, 1999.
    (5) Airbus Service Bulletin A300-57-6045, Revision 04, dated
January 13, 2002.
    (6) Airbus Service Bulletin A300-57-6045, Revision 05, dated
June 13, 2003.
    (7) Airbus Service Bulletin A300-57-6045, Revision 06, dated
January 13, 2005.
    (8) Airbus Service Bulletin A300-57-6045, Revision 07, dated
August 14, 2008.
    (9) Airbus Service Bulletin A300-57-6045, Revision 08, dated
June 6, 2011.
    (10) Airbus Service Bulletin A300-57-6045, Revision 09, dated
May 21, 2013.

(o) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, FAA, has the authority to approve AMOCs for
this AD, if requested using the procedures found in 14 CFR 39.19. In
accordance with 14 CFR 39.19, send your request to your principal
inspector or local Flight Standards District Office, as appropriate.
If sending information directly to the International Branch, send it
to ATTN: Dan Rodina, Aerospace Engineer, International Branch, ANM-
116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW.,
Renton, WA 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
Information may be emailed to<EMAIL_ADDRESS>    (i) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office. The AMOC approval letter must specifically
reference this AD.
    (ii) AMOCs approved previously for AD 98-20-27, Amendment 39-
10793 (63 FR 50981, September 24, 1998), are approved as AMOCs for
the corresponding provisions of this AD.
    (2) Contacting the Manufacturer: As of the effective date of
this AD, for any requirement in this AD to obtain corrective actions
from a manufacturer, the action must be accomplished using a method
approved by the Manager, International Branch, ANM-116, Transport
Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA. If
approved by the DOA, the approval must include the DOA-authorized
signature.

(p) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2013-0232R1, dated October 2,
2013, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2015-0824.
    (2) For service information identified in this AD, contact
Airbus SAS, Airworthiness Office--EAW, 1 Rond Point Maurice
Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96;
fax +33 5 61 93 44 51; email<EMAIL_ADDRESS>
Internet http://www.airbus.com. You may view this service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on March 27, 2015.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-08071 Filed 4-13-15; 8:45 am]
 BILLING CODE 4910-13-P