[Federal Register Volume 80, Number 127 (Thursday, July 2, 2015)]
[Notices]
[Pages 38243-38245]
[FR Doc No: 2015-16273]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75315; File No. SR-ISE Gemini-2015-12]

Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the Penny
Pilot Program

June 26, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 22, 2015, ISE Gemini, LLC (the ``Exchange'' or ``ISE Gemini'')
filed with the Securities and Exchange Commission the proposed rule
change as described in Items I and II below, which items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    ISE Gemini proposes to amend its rules relating to a pilot program
to quote and to trade certain options in pennies (``Penny Pilot
Program''). The text of the proposed rule change is available on the
Exchange's Web site www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.

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

1. Purpose
    Under the Penny Pilot Program, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot Program is currently
scheduled to expire on June 30, 2015.\3\ The Exchange proposes to
extend the time period of the Penny Pilot Program through June 30,
2016, and to provide revised dates for adding replacement issues to the
Penny Pilot Program. The Exchange proposes that any Penny Pilot Program
issues that have been delisted may be replaced on the second trading
day following July 1, 2015, and the second trading day following
January 1, 2016.\4\ The replacement issues will be selected based on
trading activity for the six month period beginning 1) December 1,
2014, and ending May 31, 2015, and 2) June 1, 2015, and ending November
30, 2015, respectively. This filing does not propose any substantive
changes to the Penny Pilot Program: All classes currently participating
will remain the same and all minimum increments will remain unchanged.
The Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the increase in quote
traffic.
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    \3\ See Exchange Act Release No. 73756 (Dec. 5, 2014), 79 FR
73652 (Dec. 11, 2014) (SR-ISE Gemini-2014-29).
    \4\ Please note, the month immediately preceding a replacement
class's addition to the Penny Pilot Program will not be used for
purposes of the six month analysis.
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2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Exchange
Act'') for this proposed rule change is found in Section 6(b)(5), in
that the proposed rule change is designed to promote just and equitable
principles of trade, remove impediments to and perfect the mechanism of
a free and open market and a national market system and, in general, to
protect investors and the public interest. In particular, the proposed
rule change, which extends the Penny Pilot Program for an additional
one year, will enable public customers and other market participants to
express their true prices to buy and sell options for the benefit of
all market participants.

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

    This proposed rule change does not impose any burden on
competition. Specifically, the Exchange believes that, by extending the
expiration of the Penny Pilot Program, the proposed rule change will
allow for further analysis of the Penny Pilot Program and a
determination of how the Penny Pilot Program should be structured in
the future. In doing so, the proposed rule change will also serve to
promote regulatory clarity and consistency, thereby reducing burdens on
the marketplace and facilitating investor protection.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \5\ and Rule 19b-4(f)(6) thereunder.\6\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally
does not become operative prior to 30 days after the date of the
filing.\8\ However, pursuant to Rule 19b-4(f)(6)(iii),\9\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior

approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of the Pilot Program.\10\ Accordingly, the Commission designates
the proposed rule change as operative upon filing with the
Commission.\11\
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this pre-filing requirement.
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \11\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    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. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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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 email to<EMAIL_ADDRESS>Please include
File Number SR-ISE Gemini-2015-12 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE Gemini-2015-12. This
file number should be included on the subject line if email 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 20549-1090 on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of the filing will also 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-ISE Gemini-2015-12 and
should be submitted on or before July 23, 2015.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-16273 Filed 7-1-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 193 (Friday, October 8, 2021)]
[Proposed Rules]
[Pages 56225-56227]
[FR Doc No: 2021-21934]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0842; Project Identifier 2019-CE-032-AD]
RIN 2120-AA64

Airworthiness Directives; Stemme AG Gliders

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Stemme AG Model Stemme S 12 gliders. This proposed AD was
prompted by mandatory continuing airworthiness information (MCAI)
issued by the aviation authority of another country to identify and
correct an unsafe condition on an aviation product. The MCAI describes
the unsafe condition as the incorrect installation of an axle
connecting the main landing gear (MLG) to the center steel frame. This
proposed AD would require inspecting the MLG installation. The FAA is
proposing this AD to address the unsafe condition on these products.

DATES: The FAA must receive comments on this proposed AD by November
22, 2021.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact STEMME AG,
Flugplatzstrasse F2, Nr. 6-7, D-15344 Strausberg, Germany; phone: + 49
(0) 3341 3612-0, fax: + 49 (0) 3341 3612-30; email:
<EMAIL_ADDRESS>website: https://www.stemme.com. You may view
this service information at the FAA, Airworthiness Products Section,
Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For
information on the availability of this material at the FAA, call (816)
329-4148.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0842; 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 NPRM, the MCAI,
any comments received, and other information. The street address for
Docket Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Jim Rutherford, Aviation Safety
Engineer, General Aviation & Rotorcraft Section, International
Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2021-0842; Project Identifier
2019-CE-032-AD'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
this proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this NPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to Jim
Rutherford, Aviation Safety Engineer, General Aviation & Rotorcraft
Section, International Validation Branch, FAA, 901 Locust, Room 301,
Kansas City, MO 64106. Any commentary that the FAA receives which is
not specifically designated as CBI will be placed in the public docket
for this rulemaking.

Background

    The European Union Aviation Safety Agency (EASA), which is the
Technical Agent for the Member States of the European Union, has issued
EASA AD 2019-0130-E, dated June 7, 2019 (referred to after this as
``the MCAI''), to address an unsafe condition on Stemme AG Model Stemme
S 12 gliders. The MCAI states:

    Following a production acceptance flight, the pilot noticed that
the aeroplane was in a banked position on the ground. Further
examination determined that an axle, connecting the main landing
gear (MLG) leg to the centre steel frame of the aeroplane, had

been installed incorrectly. Other S12 aeroplanes may also be
affected by this installation error.
    This condition, if not detected and corrected, could lead to
damage to the aeroplane, possibly resulting in injury to occupants.
    To address this unsafe condition, Stemme issued the SB [service
bulletin] to provide inspection instructions.
    For the reason described above, this [EASA] AD requires a one-
time inspection of the MLG installation and, depending on findings,
the accomplishment of applicable corrective action(s).

    You may examine the MCAI in the AD docket at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-
0842.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Stemme Service Bulletin No. P062-980037, Revision
00, dated June 5, 2019 (SB P062-980037). The service information
specifies inspecting and repairing, if necessary, the MLG leg
connection to the center steel frame. 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
ADDRESSES.

FAA's Determination

    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 and
service information referenced above. The FAA is issuing this NPRM
after determining the unsafe condition described previously is likely
to exist or develop on other products of the same type design.

Proposed AD Requirements in This NPRM

    This proposed AD would require inspecting the MLG installation and,
depending on the findings, further inspection of the components,
surrounding structure, and systems for damage and repair.

Differences Between This Proposed AD and the Service Information

    SB P062-980037 allows the pilot/owner to perform the initial
inspection for correct installation, and this proposed AD would not. SB
P062-980037 specifies contacting Stemme AG for certain repair
instructions, while this proposed AD would require repair using a
method approved by the FAA or EASA.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 11 gliders of U.S. registry. The FAA estimates that it would
take 0.5 work hour per glider to inspect the MLG installation. The
average labor rate is $85 per work hour. Based on these figures, the
FAA estimates the cost to inspect the MLG installation on U.S.
operators to be $467.50, or $42.50 per glider.
    In addition, the FAA estimates that further inspection for damage
of an improperly installed MLG would take about 4 work-hours costing
$340 per glider. If any damage is found during this MLG inspection, it
may vary considerably from glider to glider, and the FAA has no way of
estimating a repair cost.
    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected operators.

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

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

Stemme AG: Docket No. FAA-2021-0842; Project Identifier 2019-CE-032-
AD.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by November 22, 2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Stemme AG Model Stemme S 12 gliders, serial
numbers 12-002 through 12-026, inclusive, certificated in any
category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 3200, Landing Gear
System.

(e) Unsafe Condition

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) issued by the aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as incorrect
installation of an axle connecting the main landing gear (MLG) to
the center steel frame of the glider. The FAA is issuing this AD to
prevent failure of the MLG. The unsafe condition, if not addressed,
could result in damage to the glider and possible injury to
occupants.

(f) Compliance

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

(g) Required Actions

    (1) Before further flight after the effective date of this AD,
visually inspect the MLG

left-hand and right-hand legs for proper installation as depicted in
Figure 3 of Stemme Service Bulletin No. P062-980037, Revision 00,
dated June 5, 2019 (SB P062-980037).
    (2) If the MLG installation is not as depicted in Figure 3 of SB
P062-980037, before further flight, inspect the MLG installation for
damage in accordance with the Actions section, Action 2, in SB P062-
980037, except you are not required to contact Stemme if there is
damage. Instead, repair any damage using a method approved by the
FAA or the European Union Aviation Safety Agency (EASA).

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the certification office, send it to the
attention of the person identified in paragraph (i)(1) of this AD or
email<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(i) Related Information

    (1) For more information about this AD, contact Jim Rutherford,
Aviation Safety Engineer, General Aviation & Rotorcraft Section,
International Validation Branch, FAA, 901 Locust, Room 301, Kansas
City, MO 64106; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) Refer to EASA AD 2019-0130-E, dated June 7, 2019, for more
information. You may examine the EASA AD in the AD docket at https://www.regulations.gov by searching for and locating it in Docket No.
FAA-2021-0842.
    (3) For service information identified in this AD, contact
STEMME AG, Flugplatzstrasse F2, Nr. 6-7, D-15344 Strausberg,
Germany; phone: +49 (0) 3341 3612-0, fax: +49 (0) 3341 3612-30;
email<EMAIL_ADDRESS>website: https://www.stemme.com. You
may view this service information at the FAA, Airworthiness Products
Section, Operational Safety Branch, 901 Locust, Kansas City, MO
64106. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.

    Issued on September 30, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-21934 Filed 10-7-21; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 86 (Thursday, May 3, 2018)]
[Rules and Regulations]
[Pages 19427-19429]
[FR Doc No: 2018-09350]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 83, No. 86 / Thursday, May 3, 2018 / Rules
and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 23

[Docket No. FAA-2018-0374; Special Conditions No. 23-288-SC]

Special Conditions: St. Louis Helicopter, LLC; Textron Aviation
B300, B300C, B300C (MC-12W), and B300C (UC-12W) Airplanes; Installation
of Rechargeable Lithium Batteries

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final special conditions; request for comments.

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SUMMARY: These special conditions are issued for the Textron Aviation
models B300, B300C, B300C (MC-12W), and B300C (UC-12W) series
airplanes. The airplane, as modified by St. Louis Helicopter LLC, will
have a novel or unusual design feature associated with the installation
of a rechargeable lithium battery. The applicable airworthiness
regulations do not contain adequate or appropriate safety standards for
this design feature. These special conditions contain the additional
safety standards the Administrator considers necessary to establish a
level of safety equivalent to that established by the existing
airworthiness standards.

DATES: The effective date of these special conditions is May 3, 2018.
    We must receive your comments by June 18, 2018.

ADDRESSES: Send comments identified by docket number FAA-2018-0374
using any of the following methods:
     Federal eRegulations Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30, U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room
W12-140, West Building Ground Floor, Washington, DC, 20590-0001.
     Hand Delivery of Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: The FAA will post all comments it receives, without
change, to http://regulations.gov, including any personal information
the commenter provides. Using the search function of the docket
website, anyone can find and read the electronic form of all comments
received into any FAA docket, including the name of the individual
sending the comment (or signing the comment for an association,
business, labor union, etc.). DOT's complete Privacy Act Statement can
be found in the Federal Register published on April 11, 2000 (65 FR
19477-19478), as well as at http://DocketsInfo.dot.gov.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Ruth Hirt, Federal Aviation
Administration, Aircraft Certification Service, Small Airplane
Directorate, AIR-694, 901 Locust, Room 301, Kansas City, MO; telephone
(816) 329-4108; facsimile<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The FAA has determined that notice and
opportunity for prior public comment hereon are impracticable because
these procedures would significantly delay issuance of the approval
design and thus delivery of the affected aircraft. In addition, the FAA
has determined, in accordance with 5 U.S.C. 553(b)(3)(B) and 553(d)(3),
that notice and opportunity for prior public comment hereon are
unnecessary because the substance of these special conditions has been
subject to the public comment process in several prior instances with
no substantive comments received. The FAA therefore finds that good
cause exists for making these special conditions effective upon
issuance.

------------------------------------------------------------------------
         Special conditions No.               Company/airplane model
------------------------------------------------------------------------
23-15-01-SC \1\........................  Kestrel Aircraft Company/Model
                                          K-350.
23-09-02-SC \2\........................  Cessna Aircraft Company/Model
                                          525C (CJ4).
23-08-05-SC \3\........................  Spectrum Aeronautical, LLC/
                                          Model 40.
------------------------------------------------------------------------

Comments Invited

    We invite interested people to take part in this rulemaking by
sending written comments, data, or views. The most helpful comments
reference a specific portion of the special conditions, explain the
reason for any recommended change, and include supporting data. We ask
that you send us two copies of written comments.
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    \1\ http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/39B156C006EB842E86257EF3004BB13C?OpenDocument&Highlight=installation%20of%20rechargeable%20lithium%20battery.
    \2\ http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/902232309C19F0D4862575CB0045AC0D?OpenDocument&Highlight=installation%20of%20rechargeable%20lithium%20battery.
    \3\ http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSC.nsf/0/28E630294DCC27B986257513005968A3?OpenDocument&Highlight=installation%20of%20rechargeable%20lithium%20battery.
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    We will consider all comments we receive on or before the closing
date for comments. We will consider comments filed late if it is
possible to do so without incurring expense or delay. We may change
these special conditions based on the comments we receive.

Background

    On May 23, 2017, St. Louis Helicopter LLC (St. Louis Helicopter)
applied for a supplemental type certificate (STC) to install a
rechargeable lithium battery on the Textron Aviation, models B300,
B300C, B300C (MC-12W), and B300C (UC-12W) airplanes. These are commuter
category airplanes with a maximum of 17 seats (including crew), maximum
operating altitude of 35,000 feet, and powered by two Pratt & Whitney
Canada PT6A-60 engines or two PT6A-67 engines, with 15,000 pounds
maximum takeoff weight.
    The current regulatory requirements for part 23 airplanes do not
contain adequate requirements for use of rechargeable lithium batteries
in

airborne applications. This type of battery possesses certain failure
and operational characteristics with maintenance requirements that
differ significantly from that of the nickel-cadmium (Ni-Cd) and lead-
acid rechargeable batteries currently approved in other normal,
utility, acrobatic, and commuter category airplanes. Therefore, the FAA
is proposing this special condition to address--
     All characteristics of the rechargeable lithium batteries
and their installation that could affect safe operation of the modified
B300, B300C, B300C (MC-12W), and B300C (UC-12W) airplanes; and
     Appropriate Instructions for Continued Airworthiness (ICA)
that include maintenance requirements to ensure the availability of
electrical power from the batteries when needed.

Type Certification Basis

    Under the provisions of Sec.  21.101, St. Louis Helicopter must
show that the B300, B300C, B300C (MC-12W), and B300C (UC-12W)
airplanes, as changed, continue to meet the applicable provisions of
the regulations incorporated by reference in Type Certificate Data
Sheet No. A24CE \4\ or the applicable regulations in effect on the date
of application for the change. The regulations incorporated by
reference in the type certificate are commonly referred to as the
``original type certification basis.'' The regulations incorporated by
reference are located on pages 35 through 37 in A24CE.
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    \4\ http://rgl.faa.gov/Regulatory_and_Guidance_Library/
rgMakeModel.nsf/0/c76fc5b6f3cf8a82862582560060751e/$FILE/
A24CE_Rev_119.pdf.
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    If the Administrator finds that the applicable airworthiness
regulations (i.e., 14 CFR part 23) do not contain adequate or
appropriate safety standards for the B300, B300C, B300C (MC-12W), and
B300C (UC-12W) airplanes because of a novel or unusual design feature,
special conditions are prescribed under the provisions of Sec.  21.16.
    The FAA issues special conditions, as defined in Sec.  11.19, under
Sec.  11.38 and they become part of the type certification basis under
Sec.  21.101.
    Special conditions are initially applicable to the models for which
they are issued. Should the applicant apply for an STC to modify any
other model(s) included on the same type certificate to incorporate the
same novel or unusual design feature, the FAA would apply these special
conditions to the other model(s) under Sec.  21.101.

Novel or Unusual Design Features

    The Textron Aviation B300, B300C, B300C (MC-12W), and B300C (UC-
12W) airplanes will incorporate the following novel or unusual design
features:
    The installation of a rechargeable lithium battery as a main or
engine start aircraft battery.

Discussion

    The applicable regulations governing the installation of batteries
in general aviation airplanes were derived from CAR 3 as part of the
recodification that established 14 CFR part 23. The battery
requirements identified in Sec.  23.1353 were a rewording of the CAR
requirements. Additional rulemaking activities--resulting from
increased incidents of Ni-Cd battery fire or failures--incorporated
Sec.  23.1353(f) and (g), amendments 23-20 and 23-21, respectively. The
FAA did not envision the introduction of lithium battery installations
at the time these regulations were published.
    The proposed use of rechargeable lithium batteries prompted the FAA
to review the adequacy of these existing regulations. We determined the
existing regulations do not adequately address the safety of lithium
battery installations.
    Current experience with rechargeable lithium batteries in
commercial or general aviation is limited. However, other users of this
technology--ranging from personal computers, to wireless telephone
manufacturers, to the electric vehicle industry--have noted safety
problems with rechargeable lithium batteries. These problems include
overcharging, over-discharging, flammability of cell components, cell
internal defects, and those resulting from exposure to extreme
temperatures as described in the following paragraphs.
    1. Overcharging: In general, rechargeable lithium batteries are
significantly more susceptible than their Ni-Cd or lead-acid
counterparts to thermal runway, which is an internal failure that can
result in self-sustaining increases in temperature and pressure. This
is especially true for overcharging, which causes heating and
destabilization of the components of the cell, leading to the formation
(by plating) of highly unstable metallic lithium. The metallic lithium
can ignite, resulting in a self-sustaining fire or explosion. Finally,
the severity of thermal runaway due to overcharging increases with
increasing battery capacity due to the higher amount of electrolyte in
large batteries.
    2. Over-discharging: Discharge of some types of rechargeable
lithium battery cells beyond the manufacturer's recommended
specification can cause corrosion of the electrodes of the cell,
resulting in loss of battery capacity that cannot be reversed by
recharging. This loss of capacity may not be detected by the simple
voltage measurements commonly available to flight crews as a means of
checking battery status--a problem shared with Ni-Cd batteries. In
addition, over-discharging has the potential to lead to an unsafe
condition (creation of dendrites that could result in internal short
circuit during the recharging cycle).
    3. Flammability of Cell Components: Unlike Ni-Cd and lead-acid
batteries, some types of rechargeable lithium batteries use liquid
electrolytes that are flammable. The electrolyte can serve as a source
of fuel for an external fire, if there is a breach of the battery
container.
    4. Cell Internal Defects: The rechargeable lithium batteries and
rechargeable battery systems have a history of undetected cell internal
defects. These defects may or may not be detected during normal
operational evaluation, test, and validation. This may lead to an
unsafe condition during in service operation.
    5. Extreme Temperatures: Exposure to an extreme temperature
environment has the potential to create major hazards. Care must be
taken to ensure that the lithium battery remains within the
manufacturer's recommended specification.

Applicability

    As discussed above, these special conditions are applicable to the
B300, B300C, B300C (MC-12W), and B300C (UC-12W) airplanes. Should St.
Louis Helicopter apply at a later date for an STC to modify any other
model included on the same type certificate to incorporate the same
novel or unusual design feature, the FAA would apply these special
conditions to that model as well.

Conclusion

    This action affects only certain novel or unusual design features
on the B300, B300C, B300C (MC-12W), and B300C (UC-12W) airplanes. It is
not a rule of general applicability and affects only the applicant who
applied to the FAA for approval of these features on the airplane.
    The substance of these special conditions has been subjected to the
notice and comment period in several prior instances and has been
derived without substantive change from those

previously issued. It is unlikely that prior public comment would
result in a significant change from the subject contained herein.
Therefore, notice and opportunity for prior public comment hereon are
unnecessary and the FAA finds good cause, in accordance with 5 U.S.C.
553(b)(3)(B) and 553(d)(3), making these special conditions effective
upon issuance. The FAA is requesting comments to allow interested
persons to submit views that may not have been submitted in response to
the prior opportunities for comment described above.

List of Subjects in 14 CFR Part 23

    Aircraft, Aviation safety, Signs and symbols.

Citation

0
The authority citation for these special conditions is as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701-44702, 44704;
Pub. L. 113-53, 127 Stat 584 (49 U.S.C. 44704) note; 14 CFR 21.16
and 21.101; and 14 CFR 11.38 and 11.19.

The Special Conditions

0
Accordingly, pursuant to the authority delegated to me by the
Administrator, the following special conditions are issued as part of
the type certification basis for Textron Aviation B300, B300C, B300C
(MC-12W), and B300C (UC-12W) airplanes modified by St. Louis
Helicopter, LLC.

1. Installation of Lithium Battery

    The FAA adopts that the following special conditions be applied to
lithium battery installations on the Textron Aviation models B300,
B300C, B300C (MC-12W), and B300C (UC-12W) airplanes in lieu of the
requirements Sec.  23.1353 (a), (b), (c), (d), and (e), amendment 23-
49.
    Lithium battery installations on the models B300, B300C, B300C (MC-
12W), and B300C (UC-12W) airplanes must be designed and installed as
follows:
    (1) Safe cell temperatures and pressures must be maintained
during--
    i. Normal operations;
    ii. Any probable failure conditions of charging or discharging or
battery monitoring system; and
    iii. Any failure of the charging or battery monitoring system not
shown to be extremely remote.
    (2) The rechargeable lithium battery installation must be designed
to preclude explosion or fire in the event of 1(1)ii and 1(1)iii
failures.
    (3) Design of the rechargeable lithium batteries must preclude the
occurrence of self-sustaining, uncontrolled increases in temperature or
pressure.
    (4) No explosive or toxic gasses emitted by any rechargeable
lithium battery in normal operation or as the result of any failure of
the battery charging system, monitoring system, or battery
installation, which is not shown to be extremely remote, may accumulate
in hazardous quantities within the airplane.
    (5) Installations of rechargeable lithium batteries must meet the
requirements of Sec.  23.863(a) through (d), amendment 23-34.
    (6) No corrosive fluids or gases that may escape from any
rechargeable lithium battery, may damage surrounding structure or any
adjacent systems, equipment, electrical wiring, or the airplane in such
a way as to cause a major or more severe failure condition, in
accordance with Sec.  23.1309, amendment 23-49, and applicable
regulatory guidance.
    (7) Each rechargeable lithium battery installation must have
provisions to prevent any hazardous effect on structure or essential
systems that may be caused by the maximum amount of heat the battery
can generate during a short circuit of the battery or of its individual
cells.
    (8) Rechargeable lithium battery installations must have--
    i. A system to automatically control the charging rate of the
battery to prevent battery overheating and overcharging; and either
    ii. A battery temperature sensing and over-temperature warning
system with a means for automatically disconnecting the battery from
its charging source in the event of an over-temperature condition; or
    iii. A battery failure sensing and warning system with a means for
automatically disconnecting the battery from its charging source in the
event of battery failure.
    (9) Any rechargeable lithium battery installation, the function of
which is required for safe operation of the aircraft, must incorporate
a monitoring and warning feature that will provide an indication to the
appropriate flight crewmembers whenever the state of charge of the
batteries has fallen below levels considered acceptable for dispatch
(see note 1) of the aircraft.

    Note 1: Reference Sec.  23.1353(h) for dispatch consideration.

    (10) The Instructions for Continued Airworthiness (ICA) required by
Sec.  23.1529 must contain maintenance requirements (see note 2) to
assure that the battery has been sufficiently charged (see note 3) at
appropriate intervals specified by the battery manufacturer and the
equipment manufacturer that contain the rechargeable lithium battery or
rechargeable lithium battery system. The lithium rechargeable batteries
and lithium rechargeable battery systems must not degrade below
specified ampere-hour levels sufficient to power the aircraft system.
The ICA must also contain procedures for the maintenance of replacement
batteries (see note 4) to prevent the installation of batteries that
have degraded charge retention ability or other damage due to prolonged
storage at a low state of charge. Replacement batteries must be of the
same manufacturer and part number as approved by the FAA.

    Note 2: Maintenance requirements include procedures that--
    (a) Check battery capacity, charge degradation at manufacturers
recommended inspection intervals; and
    (b) Replace batteries at manufacturers recommended replacement
schedule/time to prevent age related degradation.

    Note 3: The term ``sufficiently charged'' means that the battery
must retain enough charge, expressed in ampere-hours, to ensure that
the battery cells will not be damaged.

    A battery cell may be damaged by low charge (i.e., below certain
level), resulting in a reduction in the ability to charge and retain a
full charge. This reduction would be greater than the reduction that
may result from normal operational degradation.

    Note 4: Replacement battery in spares storage may be subject to
prolonged storage at a low state of charge.

    Issued in Kansas City, Missouri on April 23, 2018.
Pat Mullen,
Manager, Small Airplane Standards Branch, Aircraft Certification
Service.
[FR Doc. 2018-09350 Filed 5-2-18; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 116 (Friday, June 15, 2018)]
[Notices]
[Pages 27983-27984]
[FR Doc No: 2018-12861]

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ENVIRONMENTAL PROTECTION AGENCY

[ER-FRL-9039-8]

Environmental Impact Statements; Notice of Availability

    Responsible Agency: Office of Federal Activities, General
Information<PHONE_NUMBER> or https://www2.epa.gov/nepa/.

Weekly receipt of Environmental Impact Statements
Filed 06/04/2018 Through 06/08/2018
Pursuant to 40 CFR 1506.9.

Notice

    Section 309(a) of the Clean Air Act requires that EPA make public
its comments on EISs issued by other Federal agencies. EPA's comment
letters on EISs are available at: https://cdxnodengn.epa.gov/cdx-enepa-public/action/eis/search.

EIS No. 20180129, Final, FTA, CA, Geary Corridor Bus Rapid Transit
Project, Under 23 U.S.C. 139(n)(2), FTA has issued a single document
that consists of a final environmental impact statement and record of

decision. Therefore, the 30-day wait/review period under NEPA does not
apply to this action. Contact: Alex Smith<PHONE_NUMBER>
EIS No. 20180130, Draft, USFS, MT, Gold Butterfly, Comment Period Ends:
07/30/2018, Contact: Tami Sabol<PHONE_NUMBER>
EIS No. 20180131, Draft, FTA, OR, Southwest Corridor Light Rail Project
Draft Environmental Impact Statement, Comment Period Ends: 07/30/2018,
Contact: Mark Assam<PHONE_NUMBER>
EIS No. 20180132, Final, NY, State Governor's Office of Storm Recovery,
NY, Coastal and Social Resiliency Initiatives for Tottenville
Shoreline, Review Period Ends: 07/16/2018, Contact: Daniel Greene 212-
480-2321

Amended Notice

    Revision to the Federal Register Notice published 05/04/2018,
extend comment period from 06/18/2018 to 06/29/2018.

EIS No. 20180078, Draft, TxDOT, TX, Oakhill Parkway, Contact: Carlos
Swonke<PHONE_NUMBER>

Adoption

    EPA has adopted EIS 20180075, Pure Water San Diego Program, North
City Project, Final, BR, CA. EPA was a cooperating agency on this
project; therefore, recirculation is not necessary under Section
1506.3(c) of the CEQ NEPA regulations. Contact: Danusha Chandy 202-566-
2165.

    Dated: June 12, 2018.
Robert Tomiak,
Director, Office of Federal Activities.
[FR Doc. 2018-12861 Filed 6-14-18; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 49 (Monday, March 14, 2016)]
[Notices]
[Page 13363]
[FR Doc No: 2016-05645]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-RCRA-2015-0731; FRL-9943-64-OEI]

Information Collection Request Submitted to OMB for Review and
Approval; Comment Request; Generator Standards Applicable to
Laboratories Owned by Eligible Academic Entities (Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency has submitted an
information collection request (ICR), ``Generator Standards Applicable
to Laboratories Owned by Eligible Academic Entities (Renewal)'' (EPA
ICR No. 2317.03, OMB Control No. 2050-0204) to the Office of Management
and Budget (OMB) for review and approval in accordance with the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.). This is a proposed
extension of the ICR, which is currently approved through March 31,
2016. Public comments were previously requested via the Federal
Register (80 FR 76467) on December 9, 2015 during a 60-day comment
period. This notice allows for an additional 30 days for public
comments. A fuller description of the ICR is given below, including its
estimated burden and cost to the public. An Agency may not conduct or
sponsor and a person is not required to respond to a collection of
information unless it displays a currently valid OMB control number.

DATES: Additional comments may be submitted on or before April 13,
2016.

ADDRESSES: Submit your comments, referencing Docket ID Number EPA-HQ-
RCRA-2015-0731, to (1) EPA online using www.regulations.gov (our
preferred method), by email to<EMAIL_ADDRESS>or by mail to: EPA
Docket Center, Environmental Protection Agency, Mail Code 28221T, 1200
Pennsylvania Ave. NW., Washington, DC 20460, and (2) OMB via email to
<EMAIL_ADDRESS>Address comments to OMB Desk Officer for
EPA.
    EPA's policy is that all comments received will be included in the
public docket without change including any personal information
provided, unless the comment includes profanity, threats, information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute.

FOR FURTHER INFORMATION CONTACT: Josh Smeraldi, Office of Resource
Conservation and Recovery (mail code 5304P), Environmental Protection
Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Supporting documents which explain in detail
the information that the EPA will be collecting are available in the
public docket for this ICR. The docket can be viewed online at
www.regulations.gov or in person at the EPA Docket Center, WJC West,
Room 3334, 1301 Constitution Ave. NW., Washington, DC. The telephone
number for the Docket Center is<PHONE_NUMBER>. For additional
information about EPA's public docket, visit http://www.epa.gov/dockets.
    Abstract: The EPA has finalized an alternative set of generator
requirements applicable to laboratories owned by eligible academic
entities, as defined in the final rule. The rule, which establishes a
Subpart K within 40 CFR part 262, provides a flexible and protective
set of regulations that address the specific nature of hazardous waste
generation and accumulation in laboratories owned by colleges and
universities, and teaching hospitals and non-profit research institutes
that are either owned by or formally affiliated with a college or
university. In addition, the rule allows colleges and universities and
these other eligible academic entities formally affiliated with a
college or university the discretion to determine the most appropriate
and effective method of compliance with these requirements by allowing
them the choice of managing their hazardous wastes in accordance with
the alternative regulations as set forth in Subpart K or remaining
subject to the existing generator regulations.
    Form Numbers: None.
    Respondents/affected entities: Private colleges and universities as
well as State, Local, or Tribal Governments.
    Respondent's obligation to respond: Required to obtain or retain a
benefit (Sections 2002, 3001, 3002, 3004 of RCRA).
    Estimated number of respondents: 132.
    Frequency of response: On occasion.
    Total estimated burden: 35,813 hours (per year). Burden is defined
at 5 CFR 1320.03(b).
    Total estimated cost: $1,806,663 (per year), includes $138,687
annualized capital or operation & maintenance costs.
    Changes in the estimates: There is an increase of 8,094 hours in
the total estimated respondent burden compared with the ICR currently
approved by OMB. This increase is due to an increase in the number of
respondents from 99 to 132.

Courtney Kerwin,
Acting Director, Collection Strategies Division.
[FR Doc. 2016-05645 Filed 3-11-16; 8:45 am]
 BILLING CODE 6560-50-P


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<META name="generator" content="Document">
<META name="creation-date" content="06/10/2008 03:09:40 ">
<TITLE>Document</TITLE>

65034
Federal Register/Vol. 72, No. 222 /Monday, November 19, 2007 /Notices
agencies to provide a 60-day notice in
the Federal Register concerning each
proposed collection of information,
including each proposed extension of an
existing collection of information,
before submitting the collection to OMB
for approval. To comply with this
requirement, FDA is publishing notice
of the proposed collection of
information set forth in this document.
With respect to the following
collection of information, FDA invites
comments on these topics: (1) Whether
the proposed collection of information
is necessary for the proper performance
of FDA’s functions, including whether
the information will have practical
utility; (2) the accuracy of FDA’s
estimate of the burden of the proposed
collection of information, including the
validity of the methodology and
assumptions used; (3) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (4)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques,
when appropriate, and other forms of
information technology.
Recordkeeping and Records Access
Requirements for Food Facilities—21
CFR 1.337, 1.345, and 1.352 (OMB
Control Number 0910–0560)—Extension
The Public Health Security and
Bioterrorism Preparedness and
Response Act of 2002 (the Bioterrorism
Act) added section 414 of the Federal
Food, Drug, and Cosmetic Act (the act)
(21 U.S.C. 350c), which requires that
persons who manufacture, process,
pack, hold, receive, distribute, transport,
or import food in the United States
establish and maintain records
identifying the immediate previous
sources and immediate subsequent
recipients of food. Sections 1.326
through 1.363 (21 CFR 1.326 through
1.363) of FDA’s regulations set forth the
requirements for recordkeeping and
records access. The requirement to
establish and maintain records improves
FDA’s ability to respond to, and further
contain, threats of serious adverse
health consequences or death to humans
or animals from accidental or deliberate
contamination of food.
Description of Respondents: Persons
that manufacture, process, pack, hold,
receive, distribute, transport, or import
food in the United States are required to
establish and maintain records,
including persons that engage in both
interstate and intrastate commerce.
FDA’s regulations require that records
for non-transporters include the name
and full contact information of sources,
recipients, and transporters, an adequate
description of the food including the
quantity and packaging, and the receipt
and shipping dates (§§1.337 and 1.345).
Required records for transporters
include the names of consignor and
consignee, points of origin and
destination, date of shipment, number
of packages, description of freight, route
of movement and name of each carrier
participating in the transportation, and
transfer points through which shipment
moved (§1.352). Existing records may
be used if they contain all of the
required information and are retained
for the required time period.
FDA estimates the burden of this
collection of information as follows:
TABLE 1.—ESTIMATED ANNUAL RECORDKEEPING BURDEN
1
21 CFR Section
No. of
Recordkeepers
Annual Frequency
of Recordkeeping
Total Annual
Records
Hours per
Record
Total Hours
1.337, 1.345, and 1.352
(records maintenance)
379,493
1
379,493
13.228
5,020,000
1.337, 1.345, and 1.352
(learning for new firms)
18,975
1
18,975
4.790
90,890
Total
5,110,890
1
There are no capital costs or operating and maintenance costs associated with this collection of information.
This estimate is based on FDA’s
estimate of the number of facilities
affected by the final rule entitled
‘‘Establishment and Maintenance of
Records Under the Public Health
Security and Bioterrorism Preparedness
and Response Act of 2002,’’ published
in the Federal Register of December 9,
2004 (69 FR 71562 at 71630). With
regard to records maintenance, FDA
estimates that approximately 379,493
facilities will spend 13.228 hours
collecting, recording, and checking for
accuracy of the limited amount of
additional information required by the
regulations, for a total of 5,020,000
hours annually. In addition, FDA
estimates that new firms entering the
affected businesses will incur a burden
from learning the regulatory
requirements and understanding the
records required for compliance. In this
regard, the agency estimates the number
of new firms entering the affected
businesses to be five percent (5%) of
379,493, or 18,975 firms. Thus, FDA
estimates that approximately 18,975
facilities will spend 4.790 hours
learning about the recordkeeping and
records access requirements, for a total
of 90,890 hours annually. Therefore, the
total annual recordkeeping burden is
estimated to be 5,110,890 hours.
Dated: November 13, 2007.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E7–22480 Filed 11–16–07; 8:45 am]
BILLING CODE 4160–01–S
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. 1999D–2013]
Agency Information Collection
Activities; Submission for Office of
Management and Budget Review;
Comment Request; Draft Guidance for
Industry: Cooperative Manufacturing
Arrangements for Licensed Biologics
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
SUMMARY:
The Food and Drug
Administration (FDA) is announcing
that a proposed collection of
information has been submitted to the
Office of Management and Budget
(OMB) for review and clearance under
the Paperwork Reduction Act of 1995.
VerDate Aug<31>2005
20:17 Nov 16, 2007
Jkt 214001
PO 00000
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65035
Federal Register/Vol. 72, No. 222 /Monday, November 19, 2007 /Notices
DATES:
Fax written comments on the
collection of information by December
19, 2007.
ADDRESSES:
To ensure that comments on
the information collection are received,
OMB recommends that written
comments be faxed to the Office of
Information and Regulatory Affairs,
OMB, Attn: FDA Desk Officer, FAX:
202
–395–6974, or e-mailed to
<FONT STYLE="font-size<EMAIL_ADDRESS>All comments
should be identified with the OMB
control number 0910–NEW and title
‘‘Draft Guidance for Industry:
Cooperative Manufacturing
Arrangements for Licensed Biologics.’’
Also include the FDA docket number
found in brackets in the heading of this
document.
FOR FURTHER INFORMATION CONTACT:
Jonna Capezzuto, Office of the Chief
Information Officer (HFA–250), Food
and Drug Administration, 5600 Fishers
Lane, Rockville, MD 20857, 301–827–
4659.
SUPPLEMENTARY INFORMATION:
In
compliance with 44 U.S.C. 3507, FDA
has submitted the following proposed
collection of information to OMB for
review and clearance.
Draft Guidance for Industry:
Cooperative Manufacturing
Arrangements for Licensed Biologics—
(OMB Control Number 0910–NEW)
The draft guidance document, when
finalized, will provide information
concerning cooperative manufacturing
arrangements applicable to biological
products subject to licensure under
section 351 of the U.S. Public Health
Service Act. The draft guidance
addresses several types of
manufacturing arrangements (i.e., short
supply arrangements, divided
manufacturing arrangements, shared
manufacturing arrangements, and
contract manufacturing arrangements)
and describes certain reporting and
recordkeeping responsibilities,
associated with these arrangements, for
the licensed manufacturer(s), contract
manufacturer(s), and final product
manufacturer(s) including the following:
(1) Notification of any proposed change
in the product, production process,
quality controls or facilities; (2)
notification of results of tests and
investigations related to or impacting
the product; (3) notification of products
manufactured in a contract facility; and
(4) standard operating procedures.
A. Notification of Any Proposed Change
in the Product, Production Process,
Quality Controls or Facility
Each licensed manufacturer in a
divided manufacturing arrangement or
shared manufacturing arrangement must
notify the appropriate FDA Center
regarding proposed changes in the
manufacture, testing, or specifications of
its product, in accordance with §601.12
(21 CFR 601.12). In the draft guidance,
we recommend that each licensed
manufacturer that proposes such a
change should inform other
participating licensed manufacturer(s)
of the proposed change.
For contract manufacturing
arrangements, we recommend that the
contract manufacturer should share
with the license manufacturer all
important proposed changes to
production and facilities (including
introduction of new products or at
inspection). The license holder is
responsible for reporting these changes
to FDA (§601.12).
B. Notification of Results of Tests and
Investigations Related to or Impacting
the Product
In the draft guidance, we recommend
the following for contract manufacturing
arrangements:
•
The contract manufacturer should
fully inform the license manufacturer of
the results of all tests and investigations
regarding or possibly having an impact
on the product; and
•
The license manufacturer should
obtain assurance from the contractor
that any FDA list of inspectional
observations will be shared with the
license manufacturer to allow
evaluation of its impact on the purity,
potency, and safety of the license
manufacturer’s product.
C. Notification of Products
Manufactured in a Contract Facility
In the draft guidance, we recommend
for contract manufacturing
arrangements that a license
manufacturer cross reference a contract
manufacturing facility’s Master Files
only in circumstances involving certain
proprietary information of the contract
manufacturer such as a list of all
products manufactured in a contract
facility. In this situation the license
manufacturer should be kept informed
of the types or categories of all products
manufactured in the contract facility.
D. Standard Operating Procedures
In the draft guidance, we remind the
license manufacture that the license
manufacturer assumes responsibility for
compliance with the applicable product
and establishment standards (§600.3(t))
(21 CFR 600.3(t)). Therefore, if the
license manufacturer enters into an
agreement with a contract
manufacturing facility, the license
manufacturer must ensure that the
facility complies with the applicable
standards. An agreement between a
license manufacturer and a contract
manufacturing facility normally
includes procedures to regularly assess
the contract manufacturing facility’s
compliance. These procedures may
include, but are not limited to, review
of records and manufacturing deviations
and defects, and periodic audits.
For shared manufacturing
arrangements, each manufacturer must
submit a separate biologics license
application describing the
manufacturing facilities and operations
applicable to the preparation of that
manufacturer’s biological substance or
product (§601.2(a)) (21 CFR 601.2(a)). In
this draft guidance, we expect the
manufacturer that prepares (or is
responsible for the preparation of) the
product in final form for commercial
distribution to assume primary
responsibility for providing data
demonstrating the safety, purity, and
potency of the final product. We also
expect the licensed finished product
manufacturer to be primarily
responsible for any postapproval
obligations, such as postmarketing
clinical trials, additional product
stability studies, complaint handling,
recalls, postmarket reporting of the
dissemination of advertising and
promotional labeling materials as
required under §601.12(f)(4) and
adverse experience reporting. We
recommend that the final product
manufacturer establish a procedure with
the other participating manufacturer(s)
to obtain information in these areas.
Description of Respondents: The
recordkeeping and reporting
recommendations described in this
document affect the participating
licensed manufacturer(s), final product
manufacturer(s), and contract
manufacturer(s) associated with
cooperative manufacturing
arrangements.
Burden Estimate: We believe that the
information collection provisions in the
draft guidance do not create a new
burden for respondents. We believe the
reporting and recordkeeping provisions
are part of usual and customary
business practice. Licensed
manufacturers would have contractual
agreements with participating licensed
manufacturers, final product
manufacturers, and contract
manufacturers, as applicable for the
type of cooperative manufacturing
arrangement, to address all these
information collection provisions.
This draft guidance also refers to
previously approved collections of
information found in FDA regulations at
parts 201, 207, 211, 600, 601, 606, 607,
VerDate Aug<31>2005
20:17 Nov 16, 2007
Jkt 214001
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E:\FR\FM\19NON1.SGM
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65036
Federal Register/Vol. 72, No. 222 /Monday, November 19, 2007 /Notices
610, 660, 803, and 807 (21 CFR parts
201, 207, 211, 600, 601, 606, 607, 610,
660, 803, and 807). The collections of
information in §§606.121, 606.122, and
610.40 have been approved under OMB
Control No. 0910–0116; §610.2 has been
approved under OMB Control No. 0910–
0206; §§600.12(e) and 600.80 have been
approved under OMB Control No. 0910–
0308; §§601.2(a), 601.12, 610.60,
610.61, 610.62, 610.67, 660.2(c),
660.28(a) and (b), 660.35(a), (c) through
(g), and (i) through (m), 660.45, and
660.55(a) and (b) have been approved
under OMB Control No. 0910–0338;
§§803.20, 803.50, and 803.53 have been
approved under OMB Control No. 0910–
0437; and §§600.14 and 606.171 have
been approved under OMB Control No.
0910
–0458. The current good
manufacturing practice regulations for
finished pharmaceuticals (part 211)
have been approved under OMB Control
No. 0910–0139; the establishment
registration regulations (parts 207, 607,
and 807) have been approved under
OMB Control Nos. 0910–0045, 0910–
0052, and 0910–0387; and the labeling
regulations (part 201) have been
approved under OMB Control Nos.
0910
–0340 and 0910–0370.
In the Federal Register of July 23,
2007 (72 FR 40157), FDA published a
60-day notice requesting public
comment on the information collection
provisions. No comments were received
on the information collection.
Dated: November 13, 2007.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E7–22489 Filed 11–16–07; 8:45 am]
BILLING CODE 4160–01–S
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. 2007N–0325]
Agency Information Collection
Activities; Submission for Office of
Management and Budget Review;
Comment Request; Medical Devices:
Recommended Glossary and
Educational Outreach to Support Use
of Symbols on Labels and in Labeling
of In Vitro Diagnostic Devices Intended
for Professional Use
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice.
SUMMARY:
The Food and Drug
Administration (FDA) is announcing
that a proposed collection of
information has been submitted to the
Office of Management and Budget
(OMB) for review and clearance under
the Paperwork Reduction Act of 1995.
DATES:
Fax written comments on the
collection of information by December
19, 2007.
ADDRESSES:
To ensure that comments on
the information collection are received,
OMB recommends that written
comments be faxed to the Office of
Information and Regulatory Affairs,
OMB, Attn: FDA Desk Officer, FAX:
202
–395–6974, or e-mailed to
<FONT STYLE="font-size<EMAIL_ADDRESS>All comments
should be identified with the OMB
control number 0910–0553. Also
include the FDA docket number found
in brackets in the heading of this
document.
FOR FURTHER INFORMATION CONTACT:
Denver Presley, Jr., Office of Chief
Information Officer (HFA–250), Food
and Drug Administration, 5600 Fishers
Lane, Rockville, MD 20857, 301–827–
1472.
SUPPLEMENTARY INFORMATION:
In
compliance with 44 U.S.C. 3507, FDA


[Federal Register Volume 80, Number 236 (Wednesday, December 9, 2015)]
[Notices]
[Pages 76602-76605]
[FR Doc No: 2015-30971]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76548; File No. SR-OCC-2015-804]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of No Objection to Advance Notice Filing to Modify The Options
Clearing Corporation's Margin Methodology by Incorporating Variations
in Implied Volatility

December 3, 2015.
    On October 5, 2015, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
advance notice SR-OCC-2015-804 pursuant to section 806(e)(1) of the
Payment, Clearing, and Settlement Supervision Act of 2010 (``Payment,
Clearing and Settlement Supervision Act'') \1\ and Rule 19b-4(n)(1)(i)
under the Securities Exchange Act of 1934 (`` Exchange Act'').\2\ The
advance notice was published for comment in the Federal Register on
November 17, 2015.\3\ The Commission did not receive any comments on
the advance notice publication. This publication serves as a notice
that the Commission does not object to the changes set forth in the
advance notice.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 5465(e)(1). The Financial Stability Oversight
Council designated OCC a systemically important financial market
utility on July 18, 2012. See Financial Stability Oversight Council
2012 Annual Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, OCC is
required to comply with the Payment, Clearing, and Settlement
Supervision Act and file advance notices with the Commission. See 12
U.S.C. 5465(e).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ Securities Exchange Act Release No. 76421 (November 10,
2015), 80 FR 71900 (November 17, 2015) (SR-OCC-2015-804). OCC also
filed a proposed rule change with the Commission pursuant to section
19(b)(1) of the Exchange Act and Rule 19b-4 thereunder, seeking
approval of changes to its rules necessary to implement the
proposal. 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4, respectively.
See Exchange Act Release 76128 (October 13, 2015), 80 FR 63264
(October 19, 2015) (SR-OCC-2015-016). The Commission did not receive
any comments on the proposed rule change.
---------------------------------------------------------------------------

I. Description of the Advance Notice

    According to OCC, it is modifying its margin methodology by more
broadly incorporating variations in implied volatility within OCC's
System for Theoretical Analysis and Numerical Simulations
(``STANS'').\4\ As explained below, OCC believes that expanding the use
of variations in implied volatility within STANS for substantially all
\5\ option contracts available to be cleared by OCC that have a
residual tenor \6\ of less than three years (``Shorter Tenor Options'')
will enhance OCC's ability to ensure that option prices and the margin
coverage related to such positions more appropriately reflect possible
future market value fluctuations and better protect OCC in the event it
must liquidate the portfolio of a suspended clearing member.
---------------------------------------------------------------------------

    \4\ This proposal did not propose any changes concerning
futures. According to OCC, OCC uses a different system to calculate
initial margin requirements for segregated futures accounts:
Standard Portfolio Analysis of Risk Margin Calculation System.
    \5\ According to OCC, it proposes to exclude: (i) Binary
options, (ii) options on energy futures, and (iii) options on U.S.
Treasury securities. OCC excluded them because: (i) They are new
products that were introduced as OCC was completing this proposal
and (ii) OCC did not believe that there was substantive risk if they
were excluded at this time because they only represent a de minimis
open interest. According to OCC, it plans to modify its margin
methodology to accommodate these new products.
    \6\ According to OCC, the ``tenor'' of an option is the amount
of time remaining to its expiration.
---------------------------------------------------------------------------

Implied Volatility in STANS Generally

    According to OCC, STANS is OCC's proprietary risk management system
that calculates clearing members' margin requirements. According to
OCC, the STANS methodology uses Monte Carlo simulations to forecast
price movement and correlations in determining a clearing member's
margin requirement. According to OCC, under STANS, the daily margin
calculation for each clearing member account is constructed to ensure
OCC maintains sufficient financial resources to liquidate a defaulting
member's positions, without loss, within the liquidation horizon of two
business days.
    As described by OCC, the STANS margin requirement for an account is
composed of two primary components: A base component and a stress test
component. According to OCC, the base component is obtained from a risk

measure of the expected margin shortfall for an account that results
under Monte Carlo price movement simulations. For the exposures that
are observed regarding the account, the base component is established
as the estimated average of potential losses higher than the 99% VaR
\7\ threshold. In addition, OCC augments the base component using the
stress test component. According to OCC, the stress test component is
obtained by considering increases in the expected margin shortfall for
an account that would occur due to: (i) Market movements that are
especially large and/or in which certain risk factors would exhibit
perfect or zero correlations rather than correlations otherwise
estimated using historical data or (ii) extreme and adverse
idiosyncratic movements for individual risk factors to which the
account is particularly exposed.
---------------------------------------------------------------------------

    \7\ The term ``value at risk'' or ``VaR'' refers to a
statistical technique that, generally speaking, is used in risk
management to measure the potential risk of loss for a given set of
assets over a particular time horizon.
---------------------------------------------------------------------------

    According to OCC, including variations in implied volatility within
STANS is intended to ensure that the anticipated cost of liquidating
each Shorter Tenor Option position in an account recognizes the
possibility that implied volatility could change during the two
business day liquidation time horizon in STANS and lead to
corresponding changes in the market prices of the options. According to
OCC, generally speaking, the implied volatility of an option is a
measure of the expected future volatility of the value of the option's
annualized standard deviation of the price of the underlying security,
index, or future at exercise, which is reflected in the current option
premium in the market. Using the Black-Scholes options pricing model,
the implied volatility is the standard deviation of the underlying
asset price necessary to arrive at the market price of an option of a
given strike, time to maturity, underlying asset price and given the
current risk-free rate. In effect, the implied volatility is
responsible for that portion of the premium that cannot be explained by
the then-current intrinsic value \8\ of the option, discounted to
reflect its time value. According to OCC, it currently incorporates
variations in implied volatility as risk factors for certain options
with residual tenors of at least three years (``Longer Tenor
Options'').
---------------------------------------------------------------------------

    \8\ According to OCC, generally speaking, the intrinsic value is
the difference between the price of the underlying and the exercise
price of the option.
---------------------------------------------------------------------------

Implied Volatility for Shorter Tenor Options

    OCC is proposing certain modifications to STANS to more broadly
incorporate variations in implied volatility for Shorter Tenor Options.
Consistent with its approach for Longer Tenor Options, OCC will model a
volatility surface \9\ for Shorter Tenor Options by incorporating into
the econometric models underlying STANS certain risk factors regarding
a time series of proportional changes in implied volatilities for a
range of tenors and absolute deltas. Shorter Tenor Option volatility
points will be defined by three different tenors and three different
absolute deltas, which produce nine ``pivot points.'' In calculating
the implied volatility values for each pivot point, OCC will use the
same type of series-level pricing data set to create the nine pivot
points that it uses to create the pivot points used for Longer Tenor
Options, so that the nine pivot points will be the result of a
consolidation of the entire series-level dataset into a smaller and
more manageable set of pivot points before modeling the volatility
surface.
---------------------------------------------------------------------------

    \9\ According to OCC, the term ``volatility surface'' refers to
a three-dimensional graphed surface that represents the implied
volatility for possible tenors of the option and the implied
volatility of the option over those tenors for the possible levels
of ``moneyness'' of the option. According to OCC, the term
``moneyness'' refers to the relationship between the current market
price of the underlying interest and the exercise price.
---------------------------------------------------------------------------

    According to OCC, it considered incorporating more than nine pivot
points but concluded that would not be appropriate for Shorter Tenor
Options because: (i) Back-testing results, from January 2008 to May
2013, revealed that using more pivot points did not produce more
meaningful information (i.e. more pivot points produced a comparable
number of under-margined instances) and (ii) given the large volume of
Shorter Tenor Options, using more pivot points could increase
computation time and, therefore, would impair OCC from making timely
calculations.
    Under OCC's model for Shorter Tenor Options, the volatility
surfaces will be defined using tenors of one month, three months, and
one year with absolute deltas, in each case, of 0.25, 0.5, and
0.75,\10\ thus resulting in the nine implied volatility pivot points.
OCC believes that it is appropriate to focus on pivot points
representing at- and near-the-money options because prices for those
options are more sensitive to variations in implied volatility over the
liquidation time horizon of two business days. According to OCC, four
factors explain 99% variance of implied volatility movements: (i) A
parallel shift of the entire surface; (ii) a slope or skewness with
respect to delta; (iii) a slope with respect to time to maturity; and
(iv) a convexity with respect to the time to maturity. According to
OCC, the nine correlated pivot points, arranged by delta and tenor,
give OCC the flexibility to capture these factors.
---------------------------------------------------------------------------

    \10\ According to OCC, given that premiums of deep-in-the-money
options (those with absolute deltas closer to 1.0) and deep-out-of-
the-money options (those with absolute deltas closer to 0) are
insensitive to changes in implied volatility, in each case
notwithstanding increases or decreases in implied volatility over
the two business day liquidation time horizon, those higher and
lower absolute deltas have not been selected as pivot points.
---------------------------------------------------------------------------

    According to OCC, it first will use its econometric models to
jointly simulate changes to implied volatility at the nine pivot points
and changes to underlying prices.\11\ For each Shorter Tenor Option in
the account of a clearing member, changes in its implied volatility
then will be simulated according to the corresponding pivot point and
the price of the option will be computed to determine the amount of
profit or loss in the account under the particular STANS price
simulation. Additionally, as OCC does today, it will continue to use
simulated closing prices for the assets underlying options in the
account of a clearing member that are scheduled to expire within the
liquidation time horizon of two business days to compute the options'
intrinsic value and use those values to help calculate the profit or
loss in the account.\12\
---------------------------------------------------------------------------

    \11\ According to OCC, STANS relies on 10,000 price simulation
scenarios that are based generally on a historical data period of
500 business days, which is updated monthly to keep model results
from becoming stale.
    \12\ For such Shorter Tenor Options that are scheduled to expire
on the open of the market rather than the close, OCC will use the
relevant opening price for the underlying assets.
---------------------------------------------------------------------------

Effects of the Proposed Change and Implementation

    OCC believes that the proposed change will enhance OCC's ability to
ensure that STANS appropriately takes into account normal market
conditions that OCC may encounter in the event that, pursuant to OCC
Rule 1102, it suspends a defaulted clearing member and liquidates its
accounts.\13\ Accordingly, OCC believes that the change will promote
OCC's ability to

ensure that margin assets are sufficient to liquidate the accounts of a
defaulted clearing member without incurring a loss.
---------------------------------------------------------------------------

    \13\ According to OCC, under authority in OCC Rules 1104 and
1106, OCC has authority to promptly liquidate margin assets and
options positions of a suspended clearing member in the most orderly
manner practicable, which might include, but would not be limited
to, a private auction.
---------------------------------------------------------------------------

    OCC estimates that this change generally will increase margin
requirements overall, but will decrease margin requirements for certain
accounts with certain positions. Specifically, OCC expects this change
to increase aggregate margins by about 9% ($1.5 billion). OCC also
estimates the change will most significantly affect customer accounts
and least significantly affect firm accounts, with the effect on market
maker accounts falling in between.
    According to OCC, it expects customer accounts to experience the
largest margin increases because positions considered under STANS for
customer accounts typically consist of more short than long options
positions, and therefore reflect a greater magnitude of directional
risk than other account types. According to OCC, positions considered
under STANS for customer accounts typically consist of more short than
long options positions to facilitate clearing members' compliance with
Commission requirements for the protection of certain customer property
under Exchange Act Rule 15c3-3(b).\14\ Therefore, OCC segregates the
long option positions in the customer accounts of each clearing member
and does not assign the long option positions any value when
determining the margin for the customer account, resulting in higher
margin.\15\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.15c3-3(b).
    \15\ See OCC Rule 601(d)(1). According to OCC, pursuant to OCC
Rule 611, however, a clearing member, subject to certain conditions,
may instruct OCC to release segregated long option positions from
segregation. Long positions may be released, for example, if they
are part of a spread position. Once released from segregation, OCC
receives a lien on each unsegregated long securities option carried
in a customers' account and therefore OCC permits the unsegregated
long to offset corresponding short option positions in the account.
---------------------------------------------------------------------------

    OCC expects margin requirements to decrease for accounts with
underlying exposure and implied volatility exposure in the same
direction, such as concentrated call positions, due to the negative
correlation typically observed between these two factors. According to
OCC, over the back-testing period, about 28% of the observations for
accounts on the days studied had lower margins under the proposed
methodology and the average reduction was about 2.7%. Parallel results
will be made available to the membership in the weeks ahead of
implementation.
    To help clearing members prepare for the proposed change, OCC has
provided clearing members with an information memorandum explaining the
proposal, including the planned timeline for its implementation, and
discussed with certain other clearinghouses the likely effects of the
change on OCC's cross-margin agreements with them. OCC also published
an information memorandum to notify clearing members of the submission
of this filing to the Commission. Subject to all necessary regulatory
approvals regarding the proposed change, OCC intends to begin making
parallel margin calculations with and without the changes in the margin
methodology. The commencement of the calculations will be announced by
an information memorandum, and OCC will provide the calculations to
clearing members each business day. OCC also will provide at least
thirty days prior notice to clearing members before implementing the
change. OCC believes that clearing members will have sufficient time
and data to plan for the potential increases in their respective margin
requirements.

II. Discussion and Commission Findings

    Although the Payment, Clearing and Settlement Supervision Act does
not specify a standard of review for an advance notice, its stated
purpose is instructive.\16\ The stated purpose is to mitigate systemic
risk in the financial system and promote financial stability by, among
other things, promoting uniform risk management standards for
systemically important financial market utilities and strengthening the
liquidity of systemically important financial market utilities.\17\
Section 805(a)(2) of the Payment, Clearing and Settlement Supervision
Act \18\ authorizes the Commission to prescribe risk management
standards for the payment, clearing, and settlement activities of
designated clearing entities and financial institutions engaged in
designated activities for which it is the Supervisory Agency or the
appropriate financial regulator. Section 805(b) of the Payment,
Clearing and Settlement Supervision Act \19\ states that the objectives
and principles for the risk management standards prescribed under
section 805(a) shall be to:
---------------------------------------------------------------------------

    \16\ See 12 U.S.C. 5461(b).
    \17\ Id.
    \18\ 12 U.S.C. 5464(a)(2).
    \19\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     Promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    The Commission has adopted risk management standards under section
805(a)(2) of the Payment, Clearing and Settlement Supervision Act \20\
and the Exchange Act (``Clearing Agency Standards'').\21\ The Clearing
Agency Standards require registered clearing agencies to establish,
implement, maintain, and enforce written policies and procedures that
are reasonably designed to meet certain minimum requirements for their
operations and risk management practices on an ongoing basis.\22\
Therefore, it is appropriate for the Commission to review advance
notices against these Clearing Agency Standards and the objectives and
principles of these risk management standards as described in section
805(b) of the Payment, Clearing and Settlement Supervision Act.\23\
---------------------------------------------------------------------------

    \20\ 12 U.S.C. 5464(a)(2).
    \21\ See 17 CFR 240.17Ad-22. Securities Exchange Act Release No.
68080 (October 22, 2012), 77 FR 66220 (November 2, 2012) (S7-08-11).
    \22\ Id.
    \23\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    The Commission believes that the proposal in the advance notice is
consistent with the Clearing Agency Standards, in particular, Rule
17Ad-22(b)(2) under the Exchange Act.\24\ Rule 17Ad-22(b)(2) under the
Exchange Act \25\ requires OCC to establish, implement, maintain and
enforce written policies and procedures reasonably designed to use
margin requirements to limit its credit exposures to participants under
normal market conditions and use risk-based models and parameters to
set margin requirements, among other things. Through this proposal, OCC
is modifying its margin methodology, which is designed to use margin
requirements to limit its credit exposures to clearing members holding
Shorter Tenor Options under normal market conditions. Specifically, OCC
is modifying its risk-based model, STANS, to set margin requirements in
a way that includes changes in implied volatility for Shorter Tenor
Options. With this change in place, STANS is now designed to recognize
a range of possible changes in implied volatility during the two
business day liquidation time horizon that could lead to corresponding
changes in the market prices of Shorter Tenor Options. Therefore, OCC's
change is consistent with Rule 17Ad-22(b)(2) under the Exchange
Act.\26\
---------------------------------------------------------------------------

    \24\ 17 CFR 240.17Ad-22(b)(2).
    \25\ Id.
    \26\ Id.
---------------------------------------------------------------------------

    The Commission believes that OCC's proposal is consistent with the
objectives and principles described in

section 805(b) of the Payment, Clearing and Settlement Supervision
Act,\27\ including that it is consistent with promoting robust risk
management and promoting safety and soundness. The Commission believes
that the proposal is consistent with promoting risk management because,
with this change, STANS is now designed to recognize the possibility
that implied volatility could change during the two business day
liquidation time horizon and lead to corresponding changes in the
market prices of the options. This change to STANS is consistent with
promoting robust risk management because it is designed so that OCC now
will be less likely to face operational disruption in the event of a
participant default.
---------------------------------------------------------------------------

    \27\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    This change also is consistent with promoting safety and soundness
of OCC. As a result of this proposal, STANS is now designed to
recognize a range of possible changes in implied volatility during the
two business day liquidation time horizon that could lead to
corresponding changes in the market prices of Shorter Tenor Options.
This change is designed to enable OCC to more accurately calculate the
amount of margin a member must post, and, therefore, make it less
likely, in the event of a member default, that OCC will need to access
mutualized clearing fund deposits to cover losses associated with such
member's default, which is consistent with promoting safety and
soundness.
    For these reasons, the Commission does not object to the advance
notice.

III. Conclusion

    It is therefore noticed, pursuant to section 806(e)(1)(I) of the
Payment, Clearing and Settlement Supervision Act,\28\ that the
Commission does not object to the proposed change, and authorizes OCC
to implement the change in this advance notice (SR-OCC-2015-804) as of
the date of this notice or the date of an order by the Commission
approving a proposed rule change that reflects rule changes that are
consistent with this advance notice (SR-OCC-2015-016), whichever is
later.
---------------------------------------------------------------------------

    \28\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30971 Filed 12-8-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 238 (Wednesday, December 13, 2023)]
[Notices]
[Pages 86325-86326]
[FR Doc No: 2023-27334]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER24-561-000]

VESI 23 LLC; Supplemental Notice That Initial Market-Based Rate
Filing Includes Request for Blanket Section 204 Authorization

    This is a supplemental notice in the above-referenced proceeding of
VESI 23 LLC's application for market-based rate authority, with an
accompanying rate tariff, noting that such application includes a
request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888

First Street NE, Washington, DC 20426, in accordance with Rules 211 and
214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211
and 385.214). Anyone filing a motion to intervene or protest must serve
a copy of that document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is December 27, 2023.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically may mail similar pleadings to
the Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426. Hand delivered submissions in docketed
proceedings should be delivered to Health and Human Services, 12225
Wilkins Avenue, Rockville, Maryland 20852.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov) using
the ``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. At this time,
the Commission has suspended access to the Commission's Public
Reference Room, due to the proclamation declaring a National Emergency
concerning the Novel Coronavirus Disease (COVID-19), issued by the
President on March 13, 2020. For assistance, contact the Federal Energy
Regulatory Commission at [email protected] or call toll-free,
(886) 208-3676 or TTY,<PHONE_NUMBER>.
    The Commission's Office of Public Participation (OPP) supports
meaningful public engagement and participation in Commission
proceedings. OPP can help members of the public, including landowners,
environmental justice communities, Tribal members and others, access
publicly available information and navigate Commission processes. For
public inquiries and assistance with making filings such as
interventions, comments, or requests for rehearing, the public is
encouraged to contact OPP at<PHONE_NUMBER> or [email protected].

    Dated: December 7, 2023.
Kimberly D. Bose,
Secretary.
[FR Doc. 2023-27334 Filed 12-12-23; 8:45 am]
BILLING CODE 6717-01-P