[Federal Register Volume 78, Number 38 (Tuesday, February 26, 2013)]
[Notices]
[Pages 13130-13132]
[FR Doc No: 2013-04357]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68955; File No. SR-ICEEU-2012-11]

Self-Regulatory Organizations; ICE Clear Europe Limited; Order
Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto,
Relating to Enhanced Margin Methodology

February 20, 2013.

I. Introduction

    On December 28, 2012, ICE Clear Europe Limited (``ICE Clear
Europe'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change SR-ICEEU-2012-11 pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder.\2\ The proposed rule change was published
for comment in the Federal Register on January 8, 2013.\3\ On February
14, 2013, ICE Clear Europe filed Amendment No. 1 to the proposed rule
change.\4\ The Commission received one comment regarding this
proposal.\5\ For the reasons discussed below, the Commission is
granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 68563 (January 2, 2013),
78 FR 1281 (January 8, 2013).
    \4\ In Amendment No. 1, ICE Clear Europe clarified the
description of the current and proposed approaches to its
concentration charge calculations.
    \5\ See Comment from Mark Sokolow dated January 17, 2013,
available at http://www.sec.gov/comments/sr-iceeu-2012-11/iceeu201211.shtml.
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II. Description

    ICE Clear Europe proposes to implement an enhanced margin
methodology (``Decomp Model'') that addresses the risk of both index
and single-name credit default swaps (``CDS'') cleared by ICE Clear
Europe and permits appropriate portfolio margining between related
index and single-name CDS positions. ICE Clear Europe believes that the
Decomp Model will enhance its own risk management, as discussed below,
and thereby facilitate the prompt and accurate settlement and risk
management of swaps and contribute to the safeguarding of securities
and funds associated with CDS transactions.
    A fundamental aspect of the Decomp Model is the recognition that
index CDS instruments cleared by ICE Clear Europe are essentially a
composition of specific single-name CDS. The Decomp Model includes the
following enhancements to the ICE Clear Europe margin methodology
(``Margin Methodology Enhancements'') for index CDS instruments (which
are already in place for single-name CDS): Replacing standard deviation
with mean absolute deviation (MAD) as a measure of credit spread
variability, use of an auto regressive process to obtain multi-horizon
risk measures, an increased number of spread response scenarios, and
introduction of liquidity requirements. These enhancements and the
enhancements referenced below have been reviewed and/or recommended by
the ICE Clear Europe risk management personnel, risk and model review
working groups and committees, the ICE Clear Europe Risk Committee and
an independent third-party risk expert (Finance Concepts).
Implementation of these enhancements to the ICE Clear Europe risk
methodology will result specifically in a better measurement of the
risk associated with clearing index CDS.
    As a result of the decomposition of the index CDS, ICE Clear Europe
also will be able to (1) incorporate jump-to-default risk as a
component of the risk margin associated with index CDS (which is
already in place for single-name CDS) and (2) provide appropriate
portfolio margin treatment between index CDS and offsetting single-name
CDS positions. Incorporating jump-to-default risk as a component of the
Decomp Model will result in a better measurement of the risk associated
with clearing index CDS (as is already the case for single-name CDS).
Recognizing the highly correlated relationship between long-short
positions in index CDS and the underlying single-name CDS constituents
of an index CDS will provide for fundamental and appropriate portfolio
margin treatment.
    Upon approval of the Decomp Model, ICE Clear Europe would initially
make appropriate portfolio margining available with respect to its
Clearing Members' proprietary positions. ICE Clear Europe does not
currently clear CDS positions of customers of its Clearing Members, but
it plans to introduce customer clearing for CDS upon receipt of
applicable regulatory approvals.\6\ The Commission has granted an
exemptive order permitting ICE Clear Europe to commingle customer
positions in index CDS and single-name CDS carried through FCM/BD
Clearing Members in a single account; \7\ in addition, ICE Clear Europe
has petitioned the Commodity Futures Trading Commission (``CFTC'') to
permit such commingling.\8\ Following the commencement of customer
clearing for CDS, and upon receipt of all necessary regulatory
approvals, ICE Clear Europe would make appropriate portfolio margining
available to commingled customer positions in index and single-name CDS
using the Decomp Model. Accordingly, the Decomp Model is an important
component of ICE Clear Europe's planned customer clearing offering.
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    \6\ The Commission recently approved proposed rule changes by
ICE Clear Europe to implement customer clearing for CDS. See
Securities Exchange Act Release No. 68812 (February 1, 2013), 78 FR
9088 (February 7, 2013).
    \7\ See Securities Exchange Act Release No. 68433 (December 14,
2012), 77 FR 75211 (December 19, 2012).
    \8\ See letter from Paul Swann, President & Chief Operating
Officer, ICE Clear Europe to Mr. David Stawick, Secretary, CFTC,
dated May 31, 2012, available at<EMAIL_ADDRESS>---------------------------------------------------------------------------

    ICE Clear Europe has stated that it does not believe that the
expected phased implementation of the portfolio margining element of
the proposed Decomp Model (commencing with proprietary positions)
raises an issue of unfair discrimination. ICE Clear Europe believes the
portfolio margining aspect of the Decomp Model does not unfairly
discriminate with respect to similarly situated participants because it
is available to any participant for whom ICE Clear Europe is currently
able to provide portfolio margin treatment. Once ICE Clear Europe makes
customer clearing available and obtains all necessary regulatory
approvals, ICE Clear Europe will offer portfolio margining with respect
to its Clearing Members' customer positions. ICE Clear

Europe believes the proposed rule amendments are therefore not designed
to permit unfair discrimination among participants in the use of ICE
Clear Europe's clearing services.
    In addition, as part of the implementation of the proposed Decomp
Model, ICE Clear Europe proposes to (1) reduce the current level of
risk mutualization among ICE Clear Europe's CDS Clearing Members
through the default resources held in the mutualized CDS Guaranty Fund
and significantly increase the level of resources held as initial
margin for CDS Contracts (the ``Guaranty Fund/IM Modification''), (2)
modify the initial margin risk model approach in a manner that will
make it easier for market participants to measure their risks, by
removing the conditional recovery rate stress scenarios and adding a
new recovery rate sensitivity component (the ``IM Recovery Rate
Modification''), (3) modify the concentration charge calculation by
introducing the net notional amount (``NNA'') per single-name/index
calculation and applying the more conservative concentration charge
based on the 5-Year equivalent notional amount (``5Y ENA'') or NNA (the
``IM Concentration Charge Modification''), (4) add a new basis risk
component from single-name CDS positions that are offset by index-
derived single-name CDS positions (the ``IM Basis Risk Modification'')
and (5) combine a single guaranty fund calculation for index CDS and
single-name CDS positions (the ``Guaranty Fund Modification'').
    Currently, ICE Clear Europe maintains a high percentage of its
default resources for CDS Contracts in the CDS Guaranty Fund, as
compared to initial margin for CDS Contracts. This reflects the fact
that the current CDS Guaranty Fund model is designed to cover the
uncollateralized losses that would result from the three single names
that would cause the greatest losses when entering a state of default.
The Guaranty Fund/IM Modification incorporates into the initial margin
risk model \9\ the single name that causes the greatest loss when
entering a state of default (i.e., the single name that results in the
greatest amount of loss when stress-tested to undergo a credit event).
This change effectively collateralizes the loss that would occur from
this single name upon default. Consequently, the amount of
uncollateralized loss that would result from the three single names
causing the greatest losses when entering a state of default is
reduced, thereby reducing the amount of required contributions to the
CDS Guaranty Fund.
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    \9\ The modification applies to the jump-to-default requirements
component of IM.
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    ICE Clear Europe notes that the decrease in the CDS Guaranty Fund
and the increase in initial margin requirements are not equivalent in
terms of magnitudes. Instead, based on current portfolios, it is
expected that for every $1 decrease in the CDS Guaranty Fund
requirement there will be a corresponding increase of approximately $5
in initial margin requirements.
    The IM Recovery Rate Modification modifies the initial margin risk
model by removing the conditional recovery rate stress scenarios and
adding a new recovery rate sensitivity component that is computed by
considering changes in the recovery rate assumptions and their impact
on the net asset value of the CDS portfolio. This modification will
make it easier for market participants to replicate their initial
margin requirements.
    The IM Concentration Charge Modification defines concentration
charge thresholds in terms of NNA as well as 5Y ENA and takes the more
conservative concentration requirement based on either notional amount.
The current concentration charge approach only takes into account 5Y
ENA. This modification captures the risk of large directional CDS
positions that may not be captured by the calculation based on the 5Y
ENA. For example, a set of large NNA positions, whose maturity date is
close to the current date, may not be subject to concentration charges
based on 5Y ENA if the estimated 5Y ENA is below the established
threshold. The alternative NNA-based concentration charge computations
may yield significant additional initial margin requirements as the NNA
exceeds the established threshold.
    As index-derived single-name positions and outright single-name
positions are offset, an additional basis risk requirement is
introduced to account for the fact that the index instruments are more
actively traded than single-name instruments and thus are the preferred
instruments to express changing views about the credit market as a
whole, or even about specific single-name components of the indices.
The IM Basis Risk Modification captures the risk associated with
differences between outright single-name CDS positions and index-
derived single-name CDS positions. In other words, a ``perfectly
hedged'' portfolio consisting of an index CDS position and opposite
index replicating single-name CDS positions will still attract an
initial margin requirement due to the basis risk that exists.
    Currently, ICE Clear Europe estimates separate guaranty fund sizes
for index CDS positions and single-name positions. The Guaranty Fund
Modification takes into account the portfolio benefits between index
and single-name positions, and incorporates the worst 2-member
uncollateralized losses coming from the jump-to-default, spread
response, basis and interest rate stress scenario considerations. As
noted above, the Decomp Model also extends the jump-to-default
calculation to index CDS as well as single-name CDS.

III. Comments

    The Commission received one comment on the proposed rule
change.\10\ The commenter queried whether the Commission's exemptive
order permitting ICE Clear Europe to commingle customer positions in
index CDS and single-name CDS carried through FCM/BD Clearing Members
in a single account is in compliance with generally accepted accounting
principles and is in the best interest of customers.\11\ The commenter
also queried whether customers are aware of the commingling and whether
such commingling is industry standard.\12\ The comment is not directly
applicable to the proposed rule change, which relates to ICE Clear
Europe's implementation of an enhanced margin methodology designed to
address the risk of clearing both index and single-name credit default
swaps.\13\
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    \10\ See supra note 5.
    \11\ See supra note 7.
    \12\ Id.
    \13\ The Commission notes that such commingled positions would
be held in a segregated account established and maintained in
accordance with Section 4d(f) of the Commodity Exchange Act, and the
CFTC has adopted rules requiring that cleared swaps customer
collateral be held separately from the FCM's own property and be
accounted for on a customer-by-customer basis (i.e., the collateral
of one cleared swaps customer may not be used to satisfy the losses
of the FCM or any other customer). See Protection of Cleared Swaps
Customer Contracts and Collateral; Conforming Amendments to the
Commodity Broker Bankruptcy Provisions, Final Rule, 77 FR 6336
(February 7, 2012).
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IV. Discussion

    Section 19(b)(2)(C) of the Act \14\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such organization. Section 17A(b)(3)(F) of the Act \15\
requires, among other things, that the rules of a clearing agency be
designed to assure the safeguarding of securities and funds

which are in the custody or control of the clearing agency or for which
it is responsible.
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    \14\ 15 U.S.C. 78s(b)(2)(C).
    \15\ 15 U.S.C. 78q-1(b)(3)(F).
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    The Decomp Model would implement a number of Margin Methodology
Enhancements for index CDS instruments, as described above, which are
already in place for single-name CDS. The decomposition of index CDS
also would permit ICE Clear Europe to incorporate jump-to-default risk
as a component of the risk margin associated with index CDS. The
Commission believes that the Margin Methodology Enhancements and the
incorporation of jump-to-default risk as a component of the index CDS
margin methodology would result in better measurement of the risk
associated with clearing index CDS.
    The proposed rule change also includes modifications to ICE Clear
Europe's initial margin and CDS Guaranty Fund methodologies. The
Guaranty Fund/IM Modification would incorporate into the initial margin
risk model the single name that causes the greatest loss when entering
a state of default, thus requiring Clearing Members to collateralize a
greater portion of the loss resulting from their default. The IM
Recovery Rate Modification would facilitate the ability of market
participants to replicate their initial margin requirements and
evaluate the risk of their CDS clearing portfolio. The IM Concentration
Charge Modification would allow for a potentially more conservative
concentration requirement for large directional CDS positions. The IM
Basis Risk Modification would capture the risk associated with
differences between outright single-name CDS positions and index-
derived single-name CDS positions, such that even ``perfectly hedged''
portfolios will still attract an initial margin requirement due to the
basis risk that exists. Finally, the Guaranty Fund Modification would
combine a single guaranty fund calculation for index CDS and single-
name CDS positions, which takes into account the portfolio benefits
between index and single-name positions and incorporates the worst 2-
member uncollateralized losses coming from the jump-to-default, spread
response, basis and interest rate stress scenario considerations. The
Commission believes that these modifications, and the enhancements
described above, would facilitate the safeguarding of securities and
funds in the custody or control of ICE Clear Europe or for which it is
responsible.
    After considering the proposed changes, including each of the
representations made by ICE Clear Europe in the filing, the Commission
believes that these changes are consistent with the requirements of
Section 17A(b)(3)(F) of the Act,\16\ including ICE Clear Europe's
obligation to ensure that its rules are designed to assure the
safeguarding of securities and funds in the custody or control of the
clearing agency or for which it is responsible.
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
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V. Conclusion

    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 \17\ and the
rules and regulations thereunder.
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    \17\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\18\ that the proposed rule change (File No. SR-ICEEU-2012-11), as
modified by Amendment No. 1, be, and hereby is, approved.\19\
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    \18\ 15 U.S.C. 78s(b)(2).
    \19\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-04357 Filed 2-25-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: September 29, 2008 (Volume 73, Number 189)]
[Notices]
[Page 56572-56578]
[DOCID:fr29se08-70]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8720-7; EPA-HQ-OW-2005-0007]

Final National Pollutant Discharge Elimination System (NPDES)
General Permit for Stormwater Discharges From Industrial Activities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability.

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SUMMARY: EPA Regions 1, 2, 3, 5, 6, 9, and 10 today are finalizing
EPA's NPDES general permit for stormwater discharges from industrial
activity, also referred to as the Multi-Sector General Permit (MSGP).
The MSGP consists of thirty four (34) separate Regional EPA permits
that may vary from each other based on State or Tribal water quality-
based requirements. This permit replaces the existing permits that
expired on October 30, 2005. As with the earlier permits, this permit
authorizes the discharge of stormwater associated with industrial
activities in accordance with the terms and conditions described
therein. Industrial dischargers have the choice to seek coverage under
an individual permit. An individual permit may be necessary if the
discharger cannot meet the terms and conditions or eligibility
requirements in the permit.

DATES: This permit is effective today, September 29, 2008. This
effective date is necessary to provide dischargers with the immediate
opportunity to comply with Clean Water Act requirements in light of the
expiration of the MSGP 2000 on October 30, 2005. In accordance with 40
CFR Part 23, this permit shall be considered issued for the purpose of
judicial review on October 13, 2008. Under section 509(b) of the Clean
Water Act, judicial review of this general permit can be had by filing
a petition for review in the United States Court of Appeals within 120
days after the permit is considered issued for purposes of judicial
review. Under section 509(b)(2) of the Clean Water Act, the
requirements in this permit may not be challenged later in civil or
criminal proceedings to enforce these requirements. In addition, this
permit may not be challenged in other agency proceedings. Deadlines for
submittal of notices of intent are provided in Part 1.4 of the MSGP.
This permit also provides additional dates for compliance with the
terms of these permits.
    EPA will host a Web cast presentation on Wednesday, November 5 from
12 noon to 2 p.m. (Eastern Standard Time) to explain the new permit
requirements.

Registration information will be available on http://www.epa.gov/npdes/
training two weeks before the Web cast.

FOR FURTHER INFORMATION CONTACT: For further information on this final
NPDES general permit, contact the appropriate EPA Regional Office
listed in section I.D, contact Greg Schaner, EPA Headquarters, Office
of Water, Office of Wastewater Management at tel.:<PHONE_NUMBER>, or
send questions via e-mail to EPA's stormwater permit mailbox:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Final Permit Apply To Me?

    If a discharger chooses to seek coverage under this MSGP to be
authorized to discharge stormwater from industrial activities, the MSGP
provides specific requirements for preventing contamination of
stormwater discharges from industrial facilities listed in the sectors
shown below:

Sector A--Timber Products.
Sector B--Paper and Allied Products Manufacturing.
Sector C--Chemical and Allied Products Manufacturing.
Sector D--Asphalt Paving and Roofing Materials Manufactures and
Lubrican Manufacturers.
Sector E--Glass, Clay, Cement, Concrete, and Gypsum Product
Manufacturing.
Sector F--Primary Metals.
Sector G--Metal Mining (Ore Mining and Dressing).
Sector H--Coal Mines and Coal Mining-Related Facilities.
Sector I--Oil and Gas Extraction and Refining.
Sector J--Mineral Mining and Dressing.
Sector K--Hazardous Waste Treatment Storage or Disposal.
Sector L--Landfills and Land Application Sites.
Sector M--Automobile Salvage Yards.
Sector N--Scrap Recycling Facilities.
Sector O--Steam Electric Generating Facilities.
Sector P--Land Transportation.
Sector Q--Water Transportation.
Sector R--Ship and Boat Building or Repairing Yards.
Sector S--Air Transportation Facilities.
Sector T--Treatment Works.
Sector U--Food and Kindred Products.
Sector V--Textile Mills, Apparel, and other Fabric Products
Manufacturing.
Sector W--Furniture and Fixtures.
Sector X--Printing and Publishing.
Sector Y--Rubber, Miscellaneous Plastic Products, and Miscellaneous
Manufacturing Industries.
Sector Z--Leather Tanning and Finishing.
Sector AA--Fabricated Metal Products.
Sector AB--Transportation Equipment, Industrial or Commercial
Machinery.
Sector AC--Electronic, Electrical, Photographic and Optical Goods.
Sector AD--Reserved for Facilities Not Covered Under Other Sectors and
Designated by the Director.

B. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established an official public docket for this
action under Docket ID No. OW-2005-0007. Publicly available docket
materials are available either electronically through http://
www.regulations.gov or in hard copy at the Water Docket in the EPA
Docket Center, (EPA/DC) EPA West, Room 3334, 1301 Constitution Ave.,
NW., Washington, DC 20460. Publicly available docket materials are
available in hard copy at the EPA Docket Center Public Reading Room,
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The telephone number for the Public Reading Room is
(202) 566-1744, and the telephone number for the Water Docket is (202)
566-2426.
    2. Electronic Access. You may access this Federal Register document
electronically through the EPA Internet under the Federal Register
listings at http://www.epa.gov/fedrgstr/.
    Electronic versions of the final permit and fact sheet are
available at EPA's Web site http://www.epa.gov/npdes/stormwater/msgp.
    An electronic version of the public docket is available through
EPA's electronic public docket and comment system, EPA Dockets. You may
use EPA Dockets at http://www.regulations.gov/fdmspublic/component/main
view public comments, access the index listing of the contents of the
official public docket, and to access those documents in the public
docket that are available electronically. Once in the system, select
``search'', then key in the appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets.
Information claimed as CBI and other information whose disclosure is
restricted by statute, which is not included in the official public
docket, will not be available for public viewing in EPA's electronic
public docket. EPA policy is that copyrighted material will not be
placed in EPA's electronic public docket but will be available only in
printed, paper form in the official public docket. Although not all
docket materials may be available electronically, you may still access
any of the publicly available docket materials through the docket
facility identified in section I.B.1.
    Response to public comments. EPA received 92 comments on the
proposed permit from industry (52), government (20), and the public
(20). EPA has responded to all significant comments received and has
included these responses in a separate document in the public docket
for this permit. See the document titled Proposed MSGP: EPA's Response
to Public Comments.

C. Public Meeting

    EPA held an informal public meeting at EPA headquarters in
Washington, DC, on December 20, 2005. The public meeting was attended
by a wide variety of stakeholders including representatives from
industry, government agencies, and environmental organizations. The
public meeting included a presentation covering the major provisions of
the proposed permit and a question and answer session. The presentation
can be found in the public docket for this permit.

D. Who Are the EPA Regional Contacts for This Permit?

For EPA Region 1, contact Thelma Murphy at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>For EPA Region 2, contact Stephen Venezia at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>or for Puerto Rico, Sergio Bosques at
tel.:<PHONE_NUMBER> or e-mail at<EMAIL_ADDRESS>For EPA Region 3, contact Garrison Miller at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>For EPA Region 5, contact Brian Bell at tel.:<PHONE_NUMBER> or e-mail
at<EMAIL_ADDRESS>For EPA Region 6, contact Brent Larsen at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>For EPA Region 9, contact Eugene Bromley at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>For EPA Region 10, contact Misha Vakoc at tel.:<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>
II. Background

    Section 405 of the Water Quality Act of 1987 (WQA) added section
402(p) of the Clean Water Act (CWA), which directed the Environmental
Protection Agency (EPA) to develop a phased approach to regulate
stormwater discharges under the National Pollutant Discharge
Elimination System (NPDES) program. EPA published a final regulation on
the first phase on this program on November 16, 1990,

establishing permit application requirements for ``stormwater
discharges associated with industrial activity.'' See 55 FR 48063. EPA
defined the term ``stormwater discharge associated with industrial
activity'' in a comprehensive manner to cover a wide variety of
facilities. See 40 CFR 122.26(b)(14). EPA is issuing the MSGP under
this statutory and regulatory authority.
    Dischargers choosing to be covered by the MSGP must certify in
their notice of intent (NOI) that they meet the requisite eligibility
requirements, described in Part 1 of the permit. In addition,
dischargers must install and implement control measures to meet the
effluent limits required in Part 2 and develop a stormwater pollution
prevention plan (SWPPP) consistent with Part 5 describing their control
measures used to achieve the effluent limits. Under the MSGP, a
facility is required to take corrective action (Part 3) to modify or
replace control measures in order to eliminate certain unauthorized
releases, or conditions giving rise to violations of effluent limits or
exceedances above applicable water quality standards. Facilities are
also required to conduct quarterly site inspections (Part 4.1),
quarterly visual assessments of the stormwater discharge (Part 4.2),
and annual comprehensive site inspections (Part 4.3). Permitted
facilities are required to submit to EPA quarterly benchmark monitoring
results (Part 6.2.1), and, where applicable, stormwater effluent data
relating to impaired waters (Part 6.2.4) and compliance with numeric
effluent limitations guidelines (Part 6.2.2). EPA notes that Part 6.2.1
emphasizes that the benchmark thresholds used for monitoring are not
effluent limits, but rather information that is primarily for the use
of the industrial facility to determine the overall effectiveness of
the control measures and to assist in understanding when corrective
action(s) may be necessary. In addition, permittees are required to
submit an annual report that includes the findings of the facility's
comprehensive site inspection and a summary of any corrective actions
required during the past year.

III. Scope and Applicability of the Multi-Sector General Permit

    The MSGP 2000 expired at midnight, October 30, 2005. Dischargers
that were previously covered by the MSGP 2000 have been covered by an
administrative continuance in the interim period until they are
authorized for coverage under this permit.

A. Geographic Coverage

    This permit provides coverage for sectors of industrial point
source discharges that occur in areas not covered by an approved State
NPDES program. The geographic coverage of this permit is listed in
Appendix C of this permit. EPA notes that unlike the MSGP 2000,
facilities located in Regions 4 and 8 will not be covered by this
permit because they are issuing their own NPDES general permit. EPA
also notes that because certifications required by section 401 of the
Clean Water Act were not received in time, coverage under this permit
is not yet available in the following areas:
     The State of Alaska, except Indian Country lands;
     The State of Idaho, except Indian Country lands;
     Indian Country lands within the State of Idaho, except
Duck Valley Reservation lands;
     Indian Country lands within the State of Oregon, except
Fort McDermitt Reservation lands;
     Indian Country lands within the State of Washington; and
     Federal facilities in the State of Washington, except
those located on Indian Country lands.

EPA will announce the availability of coverage under the MSGP for these
areas in a separate Federal Register notice as soon as possible after
the certifications are completed.

B. Categories of Facilities Covered

    This permit regulates stormwater discharges from industrial
facilities in 29 sectors, as shown above in section I.A., in the five
states and other areas (e.g., federal facilities, Indian Country lands,
and U.S. territories) where EPA remains the permitting authority. See
Appendix D of the final MSGP and the MSGP fact sheet for more complete
information.

C. Summary of Significant Changes from 2000 Multi-Sector General Permit

    This permit replaces the MSGP 2000 that was issued for a five-year
term on October 30, 2000 (65 FR 64746). The MSGP 2000 was subsequently
corrected on January 9, 2001 (66 FR 1675-1678) and March 23, 2001 (66
FR 16233-16237). On April 16, 2001 (66 FR 19483-19485), EPA re-issued
the permit, as corrected, for facilities in certain areas of Regions 8
and 10.
    This permit is structured in nine parts: General requirements that
apply to all facilities (e.g., eligibility of discharges, effluent
limitations, storm water pollution prevention plan (SWPPP)
requirements, monitoring and reporting requirements (Parts 1-7)),
industrial sector-specific conditions (Part 8), and specific
requirements applicable to facilities within individual States or on
Indian Country lands (Part 9). Additionally, the appendices provide
forms for the Notice of Intent (NOI), the Notice of Termination, the
Conditional No Exposure Exclusion, and the annual report, as well as
step-by-step procedures for determining eligibility with respect to
protecting historic properties and endangered species, and for
calculating site-specific, hardness-dependent benchmarks.
    EPA made a number of changes to the permit from the MSGP 2000.
These changes are summarized below and are discussed in more detail in
the MSGP fact sheet.

Distinction Between Effluent Limits and SWPPP Requirements

    The permit clearly distinguishes between the effluent limitations
(or effluent limits) from the requirements relating to the development
of the SWPPP. Effluent limits (in Part 2, and for select industrial
sectors, in Part 8) are qualitative and quantitative control
requirements to which all permittees are subject, while the SWPPP is a
planning document that must be prepared by all facility operators that
describes the site and the pollutants potentially discharged in
stormwater, and documents the control measures selected, designed,
installed, and implemented to meet the effluent limitations.
Additionally, the SWPPP requirements were modified to separate the
provisions required for the initial document developed prior to NOI
submittal and the requirements for the additional documentation of
actions taken (e.g., inspections, training, correction actions, etc.)
during the permit term. Finally, the effluent limits themselves were
reorganized to more clearly distinguish those that are technology-based
from those that are water quality-based.

Discharge Authorization Time Frame

    The waiting period for operators who have correctly completed and
submitted their NOIs is 30 days (or, in some cases, 60 days) to provide
for sufficient review by the Fish & Wildlife Service and/or the
National Marine Fisheries Service to determine if the permit's
authorization to a particular discharger raises any significant
concerns with respect to any federally-listed species or critical
habitat. During this period, the public may review this information as
well. The waiting period begins after EPA posts the operator's NOI on
the eNOI Web site. The duration of the waiting

period depends on when the operator commenced or proposes to commence
discharging.

Electronic Systems for Submittal of Notices of Intent (NOIs), Water
Locator Tool, and Reporting of Monitoring Data

    EPA is launching an updated electronic system for submitting NOIs.
This ``eNOI'' system is available to all operators, and can be accessed
at http://www.epa.gov/npdes/eNOI. The system helps industrial operators
fill in answers quickly and correctly, and should better facilitate an
operator's coverage under the permit. EPA encourages all operators to
use this system. Authorized permittees will be notified by email of
their authorization and their specific monitoring requirements.
    EPA has added a new web-based tool, the Water Locator, that will
help operators determine their latitude and longitude, their receiving
water, relevant total maximum daily loads (TMDLs), and pollutants of
particular concern (i.e., those for which there is a specific criterion
in the receiving water, and those for which a receiving water is
impaired). The Water Locator can be accessed at http://www.epa.gov/
npdes/stormwater/msgp.
    In addition, operators will now be able to report all monitoring
data electronically through the eNOI system. This system for electronic
reporting will be available in the next 6 months. All electronic
reporting will be through EPA's on-line eNOI system, available at
http://www.epa.gov/npdes/eNOI. EPA has delayed implementation of
required monitoring for 6 months to ensure that the electronic
reporting system is ready when monitoring begins.

Information Required for Notices of Intent (NOIs)

    This permit specifies the information that is required to be
provided in NOIs so that EPA can determine whether any further water
quality-based requirements are necessary and to enable the eNOI system
to automatically inform the operator of its specific monitoring
requirements. Operators are required to provide more specific
information regarding their receiving waterbody, including whether the
waterbody is impaired, and, if so, for which pollutant it is impaired
and whether there is an approved or established TMDL for the waterbody,
and whether the waterbody is designated by a State or Tribal Authority
as Tier 2 or 2.5 for antidegradation purposes. The operator also needs
to identify if it is a new discharger, the size of its property, and
which effluent guidelines it is subject to (if any). In addition, to
enhance protection of endangered species, if the operator is certifying
eligibility under Criterion E of Appendix E, then he/she will need to
provide additional information supporting this certification. In
addition, the operator is asked to specify if its facility will be
inactive and unstaffed during the permit term, and, if so, for how
long.

Water Quality-Based Effluent Limits

    The permit contains water quality-based effluent limits (WQBELs) to
ensure that discharges are controlled as necessary to meet water
quality standards in receiving waters.
     Discharges to Impaired Waters--The permit contains
different requirements for new and existing dischargers and for those
that are discharging to impaired waters with a completed total maximum
daily load (TMDL) as compared to those without a TMDL. New dischargers
are only eligible for discharge authorization if they document that
either there is no exposure to stormwater of the pollutant for which
the water is impaired at the site, or the impairment pollutant is not
present at the operator's site, or that the discharge is not expected
to cause or contribute to a water quality standards exceedance. For
existing discharges to impaired waters with a completed TMDL, EPA will
inform the operator of any additional effluent limits or controls that
are necessary for the discharge to be consistent with the assumptions
of any available wasteload allocation in the TMDL. The permittee is
also required to monitor its discharge for any pollutant(s) for which
the waterbody is impaired. For existing discharges to impaired waters
without a completed TMDL, the permittee is required to control its
discharge as necessary to meet water quality standards and to monitor
for the pollutant(s) causing the impairment.
     Antidegradation Requirements--EPA has clarified how
operators can meet antidegradation requirements in order to be
authorized to discharge. If an NOI indicates that an operator is
seeking coverage for a new discharge to a Tier 2 water (or a water
considered to be a Tier 2.5 water), EPA will then determine if
additional requirements are necessary to be consistent with the
applicable antidegradation requirements, or if an individual permit
application is necessary. Furthermore, operators are not eligible for
coverage under this permit if they are discharging to waters designated
by a State or Tribe as Tier 3 for antidegradation purposes.

Protection of Endangered Species

    During EPA's consultation with the Fish & Wildlife Service and
National Marine Fisheries Service (``the Services'') pursuant to
section 7(a)(2) of the Endangered Species Act (ESA), modifications have
been made to the directions provided to operators in Appendix E
regarding steps that must be followed to properly certify eligibility
under Part <IP_ADDRESS> (Endangered and Threatened Species and Critical
Habitat Protection). In addition, certain benchmarks have been revised
to provide greater protection to listed species. EPA revised the
ammonia benchmark from 19 mg/L to 2.14 mg/L to provide a better
indicator of the adverse impact to endangered mussel species. EPA
selected this benchmark based on a level that is considered protective
of mussel species in waters up to pH 8; it will also be protective of
other species in waters with a pH up to 8.5.
    Also, EPA adjusted the benchmarks for six hardness-dependent metals
(i.e., silver, cadmium, lead, nickel, copper, and zinc) so that the
benchmark concentrations are site-specific depending on the hardness
levels in the receiving water. This change affects 12 sectors. Where a
permittee is required to monitor for a hardness-dependent metal, he/she
must first determine the hardness value of the receiving water. The
benchmark concentration is then determined by comparing the table of
hardness ranges (see Appendix J) to the actual, measured value for
hardness in the receiving water. This change will provide better
protection to some listed species and will further ensure that
discharges do not cause or contribute to exceedances of water quality
standards with numeric criteria expressed as hardness-dependent values.

Corrective Actions

    This permit specifies corrective actions required of permittees.
The provisions in Part 3 specify the types of conditions at the site
that trigger corrective action requirements, what must be done to
address such conditions and ensure that the permittee remains in
compliance with the permit, or promptly returns to compliance in the
case of violations, and the deadlines for completing corrective action.
The permit also clarifies that not conducting required corrective
action is a permit violation in and of itself, in addition to any
underlying violation that may have triggered the requirement for
corrective action. A summary of all corrective actions initiated and/or
completed each year must be reported to EPA in the

annual comprehensive site inspection report.

Monitoring

    Several of the changes made in this permit to the monitoring
requirements of the MSGP 2000 are listed below.
     Inactive and unstaffed sites may exercise a waiver for
benchmark monitoring and quarterly visual assessments as long as there
are no industrial materials or activities exposed to stormwater at the
sites. Because of the difficulty of accessing remote sites, operators
of mining operations that are inactive and unstaffed may continue to
exercise this waiver without demonstrating that its industrial
materials or activities are not exposed to stormwater, but EPA may
impose alternate, site-specific requirements where necessary for the
protection of water quality standards.
     Unless subject to a waiver, or an alternative schedule for
climates with irregular stormwater runoff, permittees must monitor
quarterly during year 1 for benchmarks. Following 4 quarters of
benchmark monitoring, if the average of the 4 monitoring values does
not exceed the benchmark for that specific parameter, the permittee has
fulfilled his/her benchmark monitoring requirements for that parameter
for the permit term. If the average of the 4 quarters of monitoring
values exceeds the benchmark, the permittee is required to perform
corrective action and conduct an additional 4 quarters of monitoring,
unless, the permittee determines (and documents in the SWPPP) that no
further pollutant reductions are technologically available and
economically practicable and achievable in light of best industry
practice to meet the effluent limits in Part 2 of the permit. If such a
determination is made, the permittee may reduce monitoring for that
pollutant to once-per-year for the duration of the permit term. At any
time prior to completion of the first 4 quarters of monitoring, if the
permittee determines that it is mathematically certain that his/her
average after 4 quarters will exceed the benchmark (e.g., the sum of
results to date exceeds 4 times the benchmark), the permittee must
review its control measures and perform any required corrective action
immediately (or document why no corrective action is required), without
waiting for the full 4 quarters of monitoring data. If after the
permittee has modified his/her control measures and conducted 4
additional quarters of monitoring, the average still exceeds the
benchmark (or if an exceedance of the benchmark by the four quarter
average is mathematically certain prior to conducting the full 4
additional quarters of monitoring), the permittee must again review
his/her control measures and either resample an additional 4 times or
document that no further pollutant reductions are technologically
available and economically practicable and achievable in light of best
industry practice to meet the effluent limits in Part 2 of the permit.
     A permittee who discharges a pollutant causing an
impairment to an impaired waterbody must monitor once-per-year for that
pollutant during a stormwater event if there is no TMDL for the
waterbody. Monitoring may be waived after one year if the pollutant was
not detected in the sample and the permittee documents that the
pollutant is not exposed to stormwater at the site. Monitoring may also
be waived if the permittee documents that the presence of a pollutant
of concern in its discharge is attributable to natural background
pollutant levels in stormwater runoff, and not to the activities of the
permittee. If the discharge is to a waterbody for which a TMDL has
established a WLA applicable to the facility, EPA will inform the
permittee of specific monitoring instructions, including the
pollutant(s) for which monitoring is to be conducted and the required
frequency.
     Follow-up monitoring requirements have been added when
results indicate a permittee's discharge exceeds a numeric effluent
limitation to verify that control measures have been modified to
control the discharge as necessary to meet the effluent limit. If the
follow-up monitoring also exceeds the limit, the permittee must submit
an exceedance report to EPA within 30 days of receiving the analytical
data, documenting the reason for the exceedance and the corrective
action taken to eliminate it, including a corrective action schedule
where applicable.
     EPA has added provisions enabling dischargers to avoid
corrective action and subsequent monitoring requirements if the
exceedance of a benchmark is attributable solely to natural background
levels of that pollutant in stormwater runoff. In order to use this
provision, the discharger must: (1) Have benchmark results that show
pollutant levels are less than or equal to the concentration of that
pollutant in the natural background; (2) document the supporting
rationale for concluding that benchmark exceedances are attributable
solely to natural background pollutant levels; and (3) notify EPA in
the fourth benchmark monitoring report that benchmark exceedances are
attributable solely to natural background pollutant levels.

Annual Report

    Permittees are now required to submit to EPA an annual report that
includes the findings from their annual comprehensive site inspection
report and a summary of corrective actions required and taken during
the reporting period. EPA has provided a recommended form for each
permittee to use in filing its annual report. See Appendix I.

Industry Sector-Specific Requirements

    The following key elements of the permit are included in Part 8,
which describes requirements specific to particular industry sectors:
     For many sectors, general requirements to address
pollutant discharges from materials handling areas, fueling areas, etc.
were consolidated in the technology-based effluent limits in Part 2.1
that are applicable to all sectors.
     Mining Sectors G, H, and J--The permit now specifically
includes coverage for construction and exploration activities under
this permit, where in the past those activities were required to be
covered separately under the Construction General Permit (CGP). To
facilitate such coverage, additional requirements have been added
regarding site map preparation; management, inspection, maintenance,
and cessation of clearing, grading, and excavation activities;
monitoring frequency; and temporary and final stabilization. These new
requirements largely mirror those in the CGP for these activities. The
scope of coverage has also been clarified, and an exception provided to
the requirement that inactive and unstaffed sites have no industrial
materials or activities exposed to stormwater in order to exercise
applicable monitoring and inspection waivers.
     Sector P--Text has been added to include illicit plumbing
connections among the potential pollutant sources addressed, and a
requirement has been added to document specific good housekeeping
control measures used in each of the facility areas.
     Sector S--Requirements have been added emphasizing control
measures, facility inspections, good housekeeping, vehicle and
equipment washwater, and monitoring during the deicing season and for
implementing controls to collect or contain contaminated melt water
from collection areas used for disposal of contaminated snow.

     Sector AC--Electrical and electronic equipment and
components has been added as a new subsector.

D. Permit Appeal Procedures

    In accordance with 40 CFR part 23, this permit shall be considered
issued for the purpose of judicial review on October 13, 2008. Under
section 509(b) of the Clean Water Act, judicial review of this general
permit can be had by filing a petition for review in the United States
Court of Appeals with 120 days after the permit is considered issued
for purposes of judicial review. Under section 509(b)(2) of the Clean
Water Act, the requirements in this permit may not be challenged later
in civil or criminal proceedings to enforce these requirements. In
addition, this permit may not be challenged in other agency
proceedings. In addition, rather than submitting an NOI to be covered
under this permit, persons may apply for an individual permit as
specified at 40 CFR 122.21 (and authorized at 40 CFR 122.28), and then
petition the Environmental Appeals Board to review any conditions of
the individual permit (40 CFR 124.19 as modified on May 15, 2000, 65 FR
30886).

IV. Compliance with the Regulatory Flexibility Act for General Permits

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    The legal question of whether a general permit (as opposed to an
individual permit) qualifies as a ``rule'' or as an ``adjudication''
under the Administrative Procedure Act (APA) has been the subject of
periodic litigation. In a recent case, the court held that the CWA
section 404 Nationwide general permit before the court did qualify as a
``rule'' and therefore that the issuance of the general permit needed
to comply with the applicable legal requirements for the issuance of a
``rule.'' National Ass'n of Home Builders v. U.S. Army Corps of
Engineers, 417 F.3d 1272, 1284-85 (DC Cir. 2005) (Army Corps general
permits under section 404 of the Clean Water Act are rules under the
APA and the Regulatory Flexibility Act; ``Each NWP [nationwide permit]
easily fits within the APA's definition of a `rule.'* * * As such, each
NWP constitutes a rule * * *'').
    As EPA stated in 1998, ``the Agency recognizes that the question of
the applicability of the APA, and thus the RFA, to the issuance of a
general permit is a difficult one, given the fact that a large number
of dischargers may choose to use the general permit.'' 63 FR 36489,
36497 (July 6, 1998). At that time, EPA ``reviewed its previous NPDES
general permitting actions and related statements in the Federal
Register or elsewhere,'' and stated that ``[t]his review suggests that
the Agency has generally treated NPDES general permits effectively as
rules, though at times it has given contrary indications as to whether
these actions are rules or permits.'' Id. at 36496. Based on EPA's
further legal analysis of the issue, the Agency ``concluded, as set
forth in the proposal, that NPDES general permits are permits [i.e.,
adjudications] under the APA and thus not subject to APA rulemaking
requirements or the RFA.'' Id. Accordingly, the Agency stated that
``the APA's rulemaking requirements are inapplicable to issuance of
such permits,'' and thus ``NPDES permitting is not subject to the
requirement to publish a general notice of proposed rulemaking under
the APA or any other law * * * [and] it is not subject to the RFA.''
Id. at 36497.
    However, the Agency went on to explain that, even though EPA had
concluded that it was not legally required to do so, the Agency would
voluntarily perform the RFA's small-entity impact analysis. Id. EPA
explained the strong public interest in the Agency following the RFA's
requirements on a voluntary basis: ``[The notice and comment] process
also provides an opportunity for EPA to consider the potential impact
of general permit terms on small entities and how to craft the permit
to avoid any undue burden on small entities.'' Id. Accordingly, with
respect to the NPDES permit that EPA was addressing in that Federal
Register notice, EPA stated that ``the Agency has considered and
addressed the potential impact of the general permit on small entities
in a manner that would meet the requirements of the RFA if it
applied.'' Id.
    Subsequent to EPA's conclusion in 1998 that general permits are
adjudications, rather than rules, as noted above, the DC Circuit
recently held that Nationwide general permits under section 404 are
``rules'' rather than ``adjudications.'' Thus, this legal question
remains ``a difficult one'' (supra). However, EPA continues to believe
that there is a strong public policy interest in EPA applying the RFA's
framework and requirements to the Agency's evaluation and consideration
of the nature and extent of any economic impacts that a CWA general
permit could have on small entities (e.g., small businesses). In this
regard, EPA believes that the Agency's evaluation of the potential
economic impact that a general permit would have on small entities,
consistent with the RFA framework discussed below, is relevant to, and
an essential component of, the Agency's assessment of whether a CWA
general permit would place requirements on dischargers that are
appropriate and reasonable. Furthermore, EPA believes that the RFA's
framework and requirements provide the Agency with the best approach
for the Agency's evaluation of the economic impact of general permits
on small entities. While using the RFA framework to inform its
assessment of whether permit requirements are appropriate and
reasonable, EPA will also continue to ensure that all permits satisfy
the requirements of the Clean Water Act.
    Accordingly, EPA hereby commits that the Agency will operate in
accordance with the RFA's framework and requirements during the
Agency's issuance of CWA general permits (in other words, the Agency
commits that it will apply the RFA in its issuance of general permits
as if those permits do qualify as ``rules'' that are subject to the
RFA). In satisfaction of this commitment, during the course of this
MSGP permitting proceeding, the Agency conducted the analysis and made
the appropriate determinations that are called for by the RFA. In
addition, and in satisfaction of the Agency's commitment, EPA will
apply the RFA's framework and requirements in any future MSGP
proceeding as well as in the Agency's issuance of other NPDES general
permits. EPA anticipates that for most general permits the Agency will
be able to conclude that there is not a significant economic impact on
a substantial number of small entities. In such cases, the requirements
of the RFA framework are fulfilled by including a statement to this
effect in the permit fact sheet, along with a statement providing the
factual basis for the conclusion. A quantitative analysis of impacts
would only be required for permits that may affect a substantial number
of small entities, consistent with EPA guidance regarding RFA
certification \1\.
---------------------------------------------------------------------------

    \1\ EPA's current guidance, entitled Final Guidance for EPA
Rulewriters: Regulatory Flexibility Act as Amended by the Small
Business Regulatory Enforcement and Fairness Act, was issued in
November 2006 and is available on EPA's Web site: http://
www.epa.gov/sbrefa/documents/rfafinalguidance06.pdf. After
considering the Guidance and the purpose of CWA general permits, EPA
concludes that general permits affecting less than 100 small
entities do not have a significant economic impact on a substantial
number of small entities.

---------------------------------------------------------------------------

V. Quantitative Analysis of Economic Impacts of the MSGP

    EPA has determined, in consideration of the discussion in section
IV above, that the issuance of the MSGP potentially could affect a
substantial number of small entities. Therefore, to determine what, if
any, economic impact this permit may have on small businesses, EPA
conducted an economic assessment of this general permit. Based on this
assessment, EPA concludes that this permit will not have a significant
economic impact on a substantial number of businesses, including small
businesses. The estimated increased compliance cost per permittee
ranges from a low of $8.37 per year to a high of $28.27 per year. All
cost estimates are presented in 2005 dollars. As a percentage of annual
sales, the expected incremental burden of these estimated costs is
small. The cost-to-sales ratios are small across all MSGP sectors, with
the largest impacts observed in Sectors I (0.003 percent) and P (0.003
percent).
    These cost estimates reflect the incremental monitoring,
documentation and reporting costs imposed by this permit, relative to
the comparable costs for compliance with MSGP 2000. They do not include
the costs of additional control measures that may be required as a
result of more rigorous documentation and reporting requirements (e.g.,
for corrective action). EPA recognizes that these costs may be
significant for some facilities, but believes that relatively few
facilities will have significantly increased costs relative to MSGP
2000 because in most cases the underlying standards of control have not
changed. EPA was unable to quantify these costs because EPA is not able
to predict what site-specific additional control measures may be
necessary in these limited cases.
    Based on EPA's analysis, the Agency concludes that this permit will
not result in a significant economic impact on a substantial number of
small businesses. The factual basis for this conclusion is included in
the economic analysis for the permit, available as part of the docket
for this permit, and summarized above.

    1. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 17, 2008.
Robert W. Varney,
Regional Administrator, EPA Region 1.

    2. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 17, 2008.
Carl-Axel P. Soderberg,
Division Director, Caribbean Environmental Protection Division, EPA
Region 2.

    3. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 16, 2008.
Jon M. Capacasa,
Director, Water Protection Division, EPA Region 3.

    4. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 16, 2008.
Timothy C. Henry,
Acting Director, Water Division, EPA Region 5.

    5. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 17, 2008.
Miguel I. Flores,
Director, Water Quality Protection Division, EPA Region 6.

    6. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 16, 2008.
Alexis Strauss,
Director, Water Division, EPA Region 9.

    7. Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
    Dated: September 16, 2008.
Christine Psyk,
Deputy Director, Office of Water and Watersheds, EPA Region 10.
[FR Doc. E8-22555 Filed 9-26-08; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register Volume 88, Number 137 (Wednesday, July 19, 2023)]
[Rules and Regulations]
[Pages 46066-46068]
[FR Doc No: 2023-15224]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-0929; Project Identifier MCAI-2022-01401-T;
Amendment 39-22481; AD 2023-12-22]
RIN 2120-AA64

Airworthiness Directives; BAE Systems (Operations) Limited
Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
BAE Systems (Operations) Limited Model 4101 airplanes. This AD was
prompted by in-service cracking of the passenger door edge member, seal
carrier, and inner skin, adjacent to the roller guide bracket. This AD
requires a one-time inspection of the external visible surface of the
inner skin, door edge member, and seal carrier adjacent to the roller
bracket attachment brackets; and the inner skin, door edge member, and
seal carrier at the roller bracket attachment bore, and repair if
necessary. The FAA is issuing this AD to address the unsafe condition
on these products.

DATES: This AD is effective August 23, 2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of August 23,
2023.

ADDRESSES:
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2023-0929; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this final rule, the mandatory continuing airworthiness
information (MCAI), any comments received, and other information. The
address for Docket Operations is U.S. Department of Transportation,
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue SE, Washington, DC 20590.
    Material Incorporated by Reference:
     For service information identified in this final rule,
contact BAE Systems (Operations) Limited, Customer Information
Department, Prestwick International Airport, Ayrshire, KA9 2RW,
Scotland, United Kingdom; telephone +44 1292 675207; fax +44 1292
675704; email [email protected]; website regional-services.com.
     You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available at
regulations.gov under Docket No. FAA-2023-0929.

FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aviation Safety
Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590;
telephone<PHONE_NUMBER>; email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all BAE Systems
(Operations) Limited Model 4101 airplanes. The NPRM published in the
Federal Register on April 14, 2023 (88 FR 22920). The NPRM was prompted
by AD G-2022-0019, dated October 31, 2022, issued by The Civil Aviation
Authority (CAA), which is the aviation authority for the United Kingdom
(U.K.) (referred to after this as the MCAI). The MCAI states that in-
service cracking occurred on the Jetstream 41 passenger door edge
member, seal carrier, and inner skin, adjacent to the roller guide
bracket. BAE Systems (Operations) Limited reviewed the fatigue test
data and existing inspection requirements, and concluded a new
inspection is needed to address this potential unsafe condition.
    In the NPRM, the FAA proposed to require a one-time inspection of
the external visible surface of the inner skin, door edge member, and
seal carrier adjacent to the roller bracket attachment brackets; and
the inner skin, door edge member, and seal carrier at the roller
bracket attachment bore, and repair if necessary. The FAA is issuing
this AD to address undetected cracking of the

passenger door. The unsafe condition, if not addressed, could result in
a partial failure of the passenger door, and consequent reduced
structural integrity of the passenger door.
    You may examine the MCAI in the AD docket at regulations.gov under
Docket No. FAA-2023-0929.

Discussion of Final Airworthiness Directive

Comments

    The FAA received no comments on the NPRM or on the determination of
the cost to the public.

Conclusion

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI
referenced above. The FAA reviewed the relevant data and determined
that air safety requires adopting this AD as proposed. Accordingly, the
FAA is issuing this AD to address the unsafe condition on this product.
Except for minor editorial changes, this AD is adopted as proposed in
the NPRM. None of the changes will increase the economic burden on any
operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed BAe JETSTREAM Series 4100 Service Bulletin J41-52-
065, Revision 1, dated June 8, 2022. This service information specifies
procedures for a one-time eddy current inspection of the external
visible surface of the inner skin, door edge member, and seal carrier
adjacent to the roller bracket attachment brackets for cracking; a one-
time eddy current inspection of the inner skin, door edge member, and
seal carrier at the roller bracket attachment bores for cracking; and
repair.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Costs of Compliance

    The FAA estimates that this AD affects 12 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
2 work-hours x $85 per hour = Up to $170.....................              $0             $170           $2,040
----------------------------------------------------------------------------------------------------------------

    The FAA has received no definitive data on which to base the cost
estimates for the on-condition actions specified in this 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.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 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 adding the following new airworthiness
directive:

2023-12-22 BAE Systems (Operations) Limited: Amendment 39-22481;
Docket No. FAA-2023-0929; Project Identifier MCAI-2022-01401-T.

(a) Effective Date

    This airworthiness directive (AD) is effective August 23, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all BAE Systems (Operations) Limited Model
4101 airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 52, Doors.

(e) Unsafe Condition

    This AD was prompted by in-service cracking of the passenger
door edge member, seal carrier, and inner skin, adjacent to the
roller guide bracket. The FAA is issuing this AD to address
undetected cracking of the passenger door. The unsafe condition, if
not addressed, could result in a partial failure of the passenger
door, and consequent reduced structural integrity of the passenger
door.

(f) Compliance

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

(g) Inspections

    At the applicable time specified in paragraph (g)(1) or (2) of
this AD, accomplish an eddy current inspection of the external
visible surface of the inner skin, door edge member, and seal
carrier adjacent to the roller bracket attachment brackets for
cracking; and an eddy current inspection of the inner skin, door
edge member, and seal

carrier at the roller bracket attachment bores for cracking, in
accordance with paragraph 2.B. of the Accomplishment Instructions of
BAe JETSTREAM Series 4100 Service Bulletin J41-52-065, Revision 1,
dated June 8, 2022.
    (1) For airplanes that have accumulated 18,000 total flight
cycles or fewer as of the effective date of this AD: Accomplish the
inspections prior to the accumulation of 20,000 total flight cycles.
    (2) For airplanes that have accumulated more than 18,000 total
flight cycles as of the effective date of this AD: Accomplish the
inspections within 2,000 flight cycles after the effective date of
this AD.

(h) Corrective Actions

    If, during any inspection required by paragraph (g) of this AD,
any crack is detected: Before further flight, repair using a method
approved by the Manager, International Validation Branch, FAA; or
the United Kingdom Civil Aviation Authority (U.K. CAA); or BAE
Systems (Operations) Limited's U.K. CAA's (DOA). If approved by the
DOA, the approval must include the DOA-authorized signature.

(i) No Reporting Requirement

    Although BAe JETSTREAM Series 4100 Service Bulletin J41-52-065,
Revision 1, dated June 8, 2022, specifies to submit certain
information to the manufacturer, this AD does not include that
requirement.

(j) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Validation Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or responsible Flight Standards Office, as
appropriate. If sending information directly to the manager,
International Validation Branch, mail it to the address identified
in paragraph (k)(2) of this AD or email to: [email protected]. If mailing information, also submit information by
email. Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, International
Validation Branch, FAA; or the U.K. CAA; or BAE Systems (Operations)
Limited's U.K. CAA's Design Organization Approval (DOA). If approved
by the DOA, the approval must include the DOA-authorized signature.

(k) Additional Information

    (1) Refer to U.K. CAA G-2022-0019, dated October 31, 2022, for
related information. This U.K. CAA AD may be found in the AD docket
at regulations.gov under Docket No. FAA-2023-0929.
    (2) For more information about this AD, contact Todd Thompson,
Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone<PHONE_NUMBER>; email
[email protected].

(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) BAe JETSTREAM Series 4100 Service Bulletin J41-52-065,
Revision 1, dated June 8, 2022.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact BAE
Systems (Operations) Limited, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
[email protected]; website regional-services.com.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email [email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on July 13, 2023.
Victor Wicklund,
Deputy Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-15224 Filed 7-18-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: January 26, 2007 (Volume 72, Number 17)]
[Notices]
[Page 3828]
[DOCID:fr26ja07-94]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AC07-61-000]

Williston Basin Interstate Pipeline Company; Notice of Filing

January 17, 2007.
    Take notice that on December 20, 2006, Williston Basin Interstate
Pipeline Company tendered for filing a request to establish a new
depreciation rate for Account 336, Purification Equipment.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding
    The Commission encourages electronic submission of protests in lieu
of paper using the ``eFiling'' link at http://www.ferc.gov. Persons

unable to file electronically should submit an original and 14 copies
of the protest to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on January 31, 2007.

Magalie R. Salas,
Secretary.
 [FR Doc. E7-1155 Filed 1-25-07; 8:45 am]

BILLING CODE 6717-01-P


APPENDIX 1 Memo from John S. Seitz, Director, Office of Air Quality Planning and Standards, U. S. EPA, to EPA Air Directors, " Boundary Guidance on Air Quality Designations for the 8 Hour Ozone National Ambient Air Quality Standards ( NAAQS or Standard)", March 28, 2000


[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Notices]
[Pages 35493-35495]
[FR Doc No: 2011-15041]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64656; File No. SR-NYSEAmex-2011-36]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Amex Options Fee Schedule To Adopt a Monthly Fee Cap and Related
Service Fee for All Member Firm Proprietary Transactions Executed in
Open Outcry and To Increase Both the Existing Monthly Fee Cap and a
Related Trading Volume Threshold Applicable to Market Makers

June 13, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on June 1, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Options Fee Schedule (the
``Schedule'') by adopting (i) A monthly fee cap of $100,000 per month
for member firms on all proprietary trading in open outcry, with
certain exclusions, and (ii) a related service fee of $.01 per contract
for volumes in excess of the cap. The Exchange also proposes to amend
the monthly fee cap that is currently applicable to market makers by
increasing it from $250,000 to $350,000 for all trades with certain
exclusions, while raising the threshold at which capped market makers
begin to pay $.01 per contract from 2,500,000 contracts to 3,500,000
contracts. The proposed changes will be operative on June 1, 2011. The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and http://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposal is to cap all member firm proprietary
transactions executed in open outcry at $100,000 per month, with
certain exclusions. Once the monthly fee cap has been reached, member
firm proprietary transactions in open outcry will be subject to a $.01
per contract service fee for all volumes in excess of the cap.\3\ For
example, the

member firm rate per contract for open outcry executions is $.25 per
contract. Therefore, a member firm will cap once they have executed
400,000 contracts in proprietary transactions in open outcry, and at
that point in time all subsequent proprietary transactions executed in
open outcry by that member firm will be subject to a $.01 per contract
service fee. The proposed service fee is being instituted to defray the
Exchange's costs of providing services to members, which include trade
matching and processing, post trade allocation, submission for clearing
and customer service activities related to trading activity on the
Exchange.
---------------------------------------------------------------------------

    \3\ The Exchange trades several products subject to Royalty
Fees, which are fees charged by the owner of the intellectual
property rights associated with an index for the right to trade
options on the index. Royalty Fees are not subject to the proposed
monthly firm fee cap, and a capped firm will continue to pay Royalty
Fees at the rate(s) stated in the Schedule. In addition, Firm
Facilitation trades will continue to be executed at a rate of $0.00
per contract regardless of whether a firm is capped or not.
---------------------------------------------------------------------------

    The proposed fee cap is functionally similar to the ``Multiply-
Listed Option Fee Cap'' in place at the Chicago Board Options Exchange
(``CBOE''),\4\ the ``Firm Related Equity Option Cap'' in place at
NASDAQ OMX PHLX, Inc. (``PHLX''),\5\ and a monthly firm proprietary fee
cap on the International Securities Exchange (``ISE'') that features a
service fee.\6\ The Exchange believes the proposed new fee cap would
create an incentive for members to continue to send order flow to the
Exchange. The Exchange is limiting the proposed new fee cap to manual
firm proprietary orders in order to attract large block order flow to
the floor of the Exchange, where such orders can be better handled in
comparison with electronic orders that are not negotiable. The Exchange
notes that NYSE Arca, Inc. also recently established a fee cap of
$75,000 per month that is applicable only to manual firm proprietary
trades in options.\7\
---------------------------------------------------------------------------

    \4\ The CBOE fees are capped at $75,000. See CBOE Fees Schedule,
May 2, 2011, Section 1 (Equity Options Fees) on page 2 of 15 at
http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf.
    \5\ PHLX Firms are subject to a maximum fee of $75,000. See PHLX
Fee Schedule, May 19, 2011, Section II (Equity Options Fees) on page
8 of 42 at http://www.nasdaqtrader.com/content/marketregulation/membership/phlx/feesched.pdf.
    \6\ ISE firms are capped at $100,000 with certain exclusions and
subject to a service fee on all volumes once the cap has been
reached. See ISE Schedule of Fees, April 11, 2011, footnote 1 on
page 15 of 17 at http://www.ise.com/assets/documents/OptionsExchange/legal/fee/fee_schedule.pdf.
    \7\ See Securities Exchange Act Release No. 63471 (December 8,
2010), 75 FR 77928 (December 14, 2010) (File No. SR-NYSEArca-2010-
108).
---------------------------------------------------------------------------

    The Exchange also proposes to amend the current fee cap applicable
to market makers \8\ by increasing it from $250,000 per month to
$350,000 per month and at the same time increasing the threshold from
2,500,000 contracts per month to 3,500,000 contracts per month, at
which point the capped market makers will pay $.01 per contract for all
subsequent volumes executed that month, subject to certain
exclusions.\9\ The Exchange is making this change as overall industry
volumes and resultant volume on the Exchange have grown. In keeping up
with this growth the Exchange is continually enhancing our systems to
provide our market makers with the bandwidth necessary to quote
competitively, and The Exchange believes that adjusting the fee cap
upwards is appropriate given the ongoing costs of providing the
throughput needed by high volume market makers.
---------------------------------------------------------------------------

    \8\ This category includes Specialists, eSpecialists, and NYSE
Amex Options Market Makers (both Directed and Non-Directed).
    \9\ The Exchange notes that the current market maker fee cap is
exclusive of Royalty Fees charged for transactions in products
subject to Royalty Fees. No change is occurring with respect to
this, and capped market makers will continue to be subject to the
Royalty Fees stated in the Schedule. Similarly, any fees or volume
associated with a Strategy Trade will not be counted towards either
the $350,000 cap or the volume threshold of 3,500,000 contracts.
Additionally, the charge for all non-Public Customers who transact
in the electronic Complex Order Book is $.05 per contract, and
capped market makers trading in the Complex Order Book will continue
to pay $.05 per contract.
---------------------------------------------------------------------------

    The proposed changes will be operative on June 1, 2011.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\10\ in general, and Section 6(b)(4) of the Act,\11\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that adopting the proposed new fee cap for
manual firm proprietary trades is reasonable because it will
potentially lower transaction fees for members providing liquidity on
the Exchange. Members who reach the fee cap during a month will not
have to pay regular transaction fees and thus will be able to lower
their monthly fees.
    The Exchange believes that this proposed new fee cap is not
unfairly discriminatory because all member firms are eligible to reach
the cap. In addition, the Exchange believes that the proposed monthly
fee cap, which applies only to manual firm proprietary trades, is not
unfairly discriminatory to other market participants because its
purpose is to attract large block order flow to the floor of the
Exchange, where such orders can be better handled in comparison with
electronic orders that are not negotiable. To the extent that this
purpose is achieved, all of the Exchange's market participants should
benefit from the improved market liquidity. The Exchange has previously
adopted other incentive programs targeting other business areas: no
fees for customer orders \12\ and fee caps for market makers.\13\
---------------------------------------------------------------------------

    \12\ See NYSE Amex Options Fee Schedule as of May 11, 2011,
Customer Electronic and Customer Manual charges on pages 2-3 of 10
at http://www.nyse.com/pdfs/NYSEAmex_Options_Fee_Schedule_CLEAN_05_11_11_Effective_Date.pdf.
    \13\ See id. at footnote 5 on page 9 of 10.
---------------------------------------------------------------------------

    The Exchange further believes the proposal to adopt the fee cap is
equitable because it would uniformly apply to all member firms engaged
in manual proprietary trading in option classes traded on the Exchange.
As noted, market makers currently receive the benefit of a fee
reduction once they reach a volume threshold.
    The Exchange believes that adopting the service fee is reasonable
because it will also potentially lower transaction fees for member
firms. Member firms who reach the fee cap during a month will pay the
service fee instead of the regular transaction fees and thus will be
able to lower their monthly fees. The Exchange believes that charging a
service fee is also reasonable because it will allow the Exchange to
recoup the costs incurred in providing certain services, which include
trade matching and processing, post trade allocation, submission for
clearing and customer service activities related to trading activity on
the Exchange. The Exchange believes the proposed fee change will
attract additional order flow to the Exchange and thereby will benefit
all market participants.
    The Exchange believes the proposal to adopt the service fee is
equitable and not unfairly discriminatory because it would uniformly
apply to all member firms engaged in manual proprietary trading. The
proposed fee is designed to give member firms that trade a lot on the
Exchange a benefit by way of a lower transaction fee.
    The Exchange believes the proposed service fee change will benefit
market participants by potentially lowering their fees while allowing
the Exchange to remain competitive with other exchanges that offer
similar fee cap programs. The Exchange notes that the proposed service
fee is similar to fees other exchanges charge for providing certain
services to their members. For example, ISE's monthly firm proprietary
fee cap described above features a service fee that is applicable in

conjunction with the cap.\14\ The proposed service fee is also similar
to the incremental charge of $.01 per contract that the Exchange
currently charges on market maker volume executed in excess of
2,500,000 contracts per month.\15\
---------------------------------------------------------------------------

    \14\ See supra note 6 (describing the operation of the ISE
service fee).
    \15\ See supra note 13 (describing the operation of the $.01
incremental charge).
---------------------------------------------------------------------------

    The Exchange believes the proposal to amend the monthly market
maker fee cap is equitable and not unfairly discriminatory because it
would uniformly apply to all market makers. Market maker fee caps
generally are designed to give market makers who provide substantial
liquidity on the Exchange a benefit by way of a lower transaction fee.
The Exchange notes that other exchanges, notably the CBOE,\16\
PHLX,\17\ and ISE \18\ offer volume discounts and/or fee caps for
market makers transacting business on their exchanges. The Exchange
believes that the proposed increase in the amount of the fee cap is
reasonable because of the additional costs being incurred by the
Exchange in enhancing its systems to provide our market makers with the
increased bandwidth needed to quote competitively, given the growth in
overall industry volumes and resultant increased volume on the
Exchange. The Exchange notes further that even at the newly proposed
$350,000 level, the market maker fee cap would be substantially less
than similar caps on PHLX (which offers a cap of $550,000 per month
including only certain symbols) \19\ and CBOE (which requires a
$8,446,400 annual prepayment, equivalent to over $700,000 per month, in
order to attain a rate of $0.03 per contract).\20\
---------------------------------------------------------------------------

    \16\ See CBOE Fees Schedule--Liquidity Provider Scale on page 2
of 15 and related footnote 10 on page 4 of 15.
    \17\ See PHLX Fee Schedule--Section II (Equity Options Fees) on
page 8 of 42.
    \18\ See ISE Schedule of Fees--ISE Market Maker sliding scale on
page 4 of 17.
    \19\ See supra note 17.
    \20\ See supra note 16, footnote 10 on page 4 of 15.
---------------------------------------------------------------------------

    For the reasons noted above, the Exchange believes that the
proposed fees are fair, equitable and not unfairly discriminatory.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \21\ of the Act and subparagraph (f)(2) of Rule
19b-4 \22\ thereunder, because it establishes a due, fee, or other
charge imposed by NYSE Amex.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAmex-2011-36 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEAmex-2011-36. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEAmex-2011-36 and should be submitted on or before July 8, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15041 Filed 6-16-11; 8:45 am]
BILLING CODE 8011-01-P