Summary of Public Comments and Responses for:
Notice of Opportunity to Comment on a Methodology for Allocating Greenhouse Gas Emissions to a Combined Heat and Power Configuration under the Renewable Fuels Program, and the Application of this Methodology to a Proposed Plant by Dakota Spirit AgEnergy in
Spiritwood, ND

Commenter Name
Commenter Affiliation
Docket ID Number
Floyd Gilzow
Missouri Joint Municipal Electric Utility Commission
EPA-HQ-OAR-2012-0636-0004
Richard Hardegger
Barr Engineering Company
EPA-HQ-OAR-2012-0636-0005
Joseph M. Schmitt
Citizen
EPA-HQ-OAR-2012-0636-0006
Howard J. Feldman
American Petroleum Institute
EPA-HQ-OAR-2012-0636-0007
Dick Munson and Larry Plitch
Recycled Energy Development and Veolia Energy
EPA-HQ-OAR-2012-0636-0008
Rolf Nordstrom
Great Plains Institute
EPA-HQ-OAR-2012-0636-0009
Owen A. Kean
American Chemistry Council
EPA-HQ-OAR-2012-0636-0010
Brad Upton
National Council for Air and Stream Improvement, Inc.
EPA-HQ-OAR-2012-0636-0011
Jan Weinzettel
Citizen
EPA-HQ-OAR-2012-0636-0012

           Applicability of Allocation Method to Other EPA Programs

Commenter Name: Floyd Gilzow
Commenter Affiliation: Missouri Joint Municipal Electric Utility Commission
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: As the owner/operator of two Combined Heat and Power (CHP) Units, both of which have been presented awards by Region VII of the EPA, we are concerned about future application of this approach and its impact on our ability to utilize conventional configurations of on-site CHP in the future for ethanol plants as well as complying with the Tailoring Rule for GHG emissions.  As you may be aware, Missouri has one of the lower rates of CHP use in the country, and that's a ranking we are interested in changing. We encourage the insertion of language to more clearly indicate that the identified approach was selected solely because of the unique set of conditions clearly associated with this installation, and that had other conditions been present, another approach might have been selected.

Commenter Name: Floyd Gilzow
Commenter Affiliation: Missouri Joint Municipal Electric Utility Commission
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: We also encourage the EPA to consider the implications of this rule's interaction with the GHG Tailoring rule and the likelihood that there might be future pressure to use the apportionment approach to keep a power plant under the 100,000 ton CO2e limit or where the approach might push an industrial facility over the 100,000 ton CO2e limit.

Commenter Name: Brad Upton
Commenter Affiliation: National Council for Air and Stream Improvement, Inc.
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: Adoption of a single allocation method for application to all systems may result in unintended consequences relative to policy objectives. EPA should not, therefore, select the work potential method for universal application when allocating emissions from CHP configurations under the RFS system.

Commenter Name: Howard J. Feldman
Commenter Affiliation: American Petroleum Institute
Docket ID Number: EPA-HQ-OAR-2012-0636-0007
Comment: Our principle concern is that if EPA applies the Work Allocation Methodology in this case it could serve as a precedent to be implemented in all other cases, in the RFS program and elsewhere. In this regard, we agree with EPA's comment in the notice: "Since CHP system design and operating characteristics vary so widely, leading organizations in this field have not developed a consensus on one preferred allocation method." EPA, in our view, should remain flexible and allow the use of alternative methodologies that could be equivalent or more appropriate for other cogeneration arrangements. There are pros and cons for each approach and no one "right" methodology is obvious to us.

Commenter Name: Howard J. Feldman
Commenter Affiliation: American Petroleum Institute
Docket ID Number: EPA-HQ-OAR-2012-0636-0007
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Comment: Other methodologies may be more appropriate for other applications, so applying a flexible, multi-methodology approach makes the most sense to us. Again, we request that EPA explicitly indicate that the allocation approach ultimately chosen in this situation does not set precedent for other future applications.
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Response: As EPA stated in its decision on Dakota's petition, EPA must determine emissions associated with imported steam to the Dakota plant in the context of lifecycle emissions accounting. EPA has chosen the work potential methodology due to the specific characteristics of the CHP system configuration outlined in Dakota's petition.  EPA is deciding how to allocate emissions from this specific offsite CHP system for purposes of the RFS program.  EPA is not making any decision at this time as to how offsite CHP emissions should be allocated for purposes of any other regulatory program.

                Methodology for Calculating Lifecycle Emissions

Commenter Name: Howard J. Feldman
Commenter Affiliation: American Petroleum Institute
Docket ID Number: EPA-HQ-OAR-2012-0636-0007
Comment: How does EPA plan to "draw the box" when examining GHG emissions impact? In the case of the Dakota Spirit AgEnergy petition, the Work Allocation methodology applied by EPA leaves a 10 MW shortfall in power generation. The marginal power generator to make up that short fall may create more, or less, GHG emissions than the amount debited to shipping some of the steam offsite. Where does any difference get applied?

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Response: The work potential approach effectively "draws the box" of emissions around the Spiritwood power plant.  Using the work potential allocation method, EPA allocated a portion of Spiritwood's total emissions to the imported steam used at the Dakota plant.  The portion of emissions allocated to Dakota were calculated by taking the GHG emission factor for the Spiritwood power plant without any steam extracted and multiplying that by the amount of electricity that is not generated due to the extraction of steam for the Dakota plant (approximately 10 MW). Effectively, this methodology calculated the emissions associated with an additional 10 MW of power production from the Spiritwood power plant and assigned it to the Dakota plant.  The work potential approach therefore accounts for the emissions associated with a 10 MW reduction in power production.  This is a reasonable approach to defining boundaries for determining the lifecycle emissions associated with the production of fuel at the Dakota facility.
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In any case, the Spiritwood power plant has a GHG emission factor considerably higher than the national average grid electricity emission factor that we calculated for the March 2010 RFS rule, so our approach provided a conservative estimate of lifecycle GHG emissions associated with the Dakota plant. Using an alternative approach could result in underestimating the lifecycle GHG impacts of the Dakota plant.  Using these boundaries, no further consideration of marginal power production by an unidentified, other electric power generator is needed or appropriate.
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Commenter Name: Joseph M. Schmitt
Commenter Affiliation: Citizen
Docket ID Number: EPA-HQ-OAR-2012-0636-0006
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Comment: One must consider the impact of the coal fired plant's emissions in evaluating this proposed Dakota Spirit plant since the coal fired plant would be inoperative but for the proposed plant and other proposed plants being shoved down people's throats in an effort to find enough plants to justify starting the coal fired plant since electricity generation does not justify starting the plant or it would be operating.. To not consider the fact that the coal fired power plant is idle and would otherwise remain idle when considering the impacts of emissions from the proposed Dakota Spirit Ag grossly understates emissions that would result should the ethanol plant be built. The emissions from the power plant should be considered because it will otherwise remain idled, with no emissions.
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Response: Under the RFS program, EPA is required to determine whether the Dakota ethanol plant is able to achieve a 20% reduction in lifecycle GHG emissions compared to the gasoline fuel baseline. As the steam used in the process will be imported from the adjacent Spiritwood power plant, EPA has to determine the emissions associated with it as part of the lifecycle analysis for fuel produced at the Dakota plant.  The work potential approach considers the emissions associated with the Spiritwood station and properly allocates a portion of those to the Dakota plant steam use.
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The determination we have to make is whether the Dakota plant using steam from the Spiritwood station would meet the 20% lifecycle GHG reduction threshold, not what emissions would be if the Dakota plant was not built and operating.  Therefore, the scope of our analysis properly considered the emissions associated with the steam exported to the Dakota plant.  The scope of our analysis starts with the circumstances of fuel production before us, and does not address the situation where the Dakota plant is not built and does not produce fuel, and the Spiritwood station does not operate.  EPA reasonably considered that as outside the scope of our analysis, just as we do not include the emissions associated with the construction of fuel production facilities that have been built or may be built in the future.  Our analysis starts with the assumption of an existing fuel production facility that is operational, and assesses the lifecycle emissions of fuel produced by such a facility.  In these circumstances, EPA reasonably did not include, in the lifecycle analysis of the fuel produced by the operational Dakota facility, a circumstance that would exist if the Dakota plant was never built and did not produce fuel.

                  Choice of Work Potential Allocation Method

Commenter Name: Brad Upton
Commenter Affiliation: National Council for Air and Stream Improvement, Inc.
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: However, in the petition under evaluation the thermal output of the CHP system (steam exported to the corn ethanol plant) will be used for process heating, not for mechanical power. The WRI/WBCSD guidance states that "in cases where steam is used for process heating, the work potential method underestimates the amount of useful energy in the steam and should not be used." Therefore, EPA has misinterpreted the WRI/WBCSD guidance and inappropriately employed the work potential method.

Response: EPA reviewed each emissions allocation approach to see which one most closely captured the Dakota operations. While the Spiritwood power plant operates in a CHP configuration when supplying steam to Dakota, EPA focused on the original purpose of the Spiritwood facility, which is to generate power. EPA carried through this rationale in its choice of the work potential approach. Using the work potential approach, all the benefits of CHP are applied to the steam because the ethanol plant is recovering energy from the steam that the power plant would not have used otherwise (as this energy is typically dissipated in the power plant condenser). EPA, by taking this approach, has appropriately employed the work potential method as outlined in the WRI/WBCSD guidance.  Using any of the other approaches results in additional emissions allocated to the extracted steam and fewer emissions allocated to the remaining power, essentially resulting in a lower emissions factor for the power coming from the power plant for the remaining electricity generation at the Spiritwood power plant in CHP mode than the original emissions factor for electricity generated from the plant in power-only mode, making the power appear to be cleaner than it actually is.
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Commenter Name: Brad Upton
Commenter Affiliation: National Council for Air and Stream Improvement, Inc.
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: EPA rejects both the efficiency and the energy content methods for allocating GHG emissions from CHP plants because they are "based on assumptions." The WRI/WBCSD guidance cited by EPA lists the efficiency method as the preferred approach because it allocates GHG emissions from CHP systems according to the amount of fuel energy used to produce each final energy stream. Although the efficiency method typically relies upon assumed values for characterizing the efficiency of generating steam and electricity, the recommended default values are based on the performance of actual energy conversion systems and reflect that these systems can produce much more thermal energy, from a given quantity of fuel, than electrical energy. The use of assumed efficiencies does not represent a deficiency in the WRI/WBCSD efficiency method. Furthermore, the assumed efficiency values can be replaced with facility-specific values if available.

Response: The WRI/WBSCD guidance outlines the applicability of all three primary approaches (efficiency, work potential and energy content). For the purposes of the WRI/WBSCD guidance, EPA recognizes that the guidance recommends the efficiency method "to insure a consistent approach to CHP allocation". However, the guidance considers each of the approaches to have technical merit as it clearly states that, "While this guidance document and automated calculation worksheets focus on the efficiency method, following the energy content, work potential, or one of the other CHP emission allocation methods may be acceptable as long as the methods used are clearly stated, along with any and all assumptions inherent to the approach adopted".

In reviewing the efficiency method for its use in this particular analysis, EPA recognized that the allocation of emissions would vary based on which heat and power production efficiencies are considered for the CHP system. In addition, as there are several efficiency allocation methods available (by WRI, CARB and others), the selection of one efficiency method amongst them would be difficult to determine as each method is defined by its own set of electrical and thermal efficiencies.  Furthermore, the use of default efficiency values would not be the most representative for the CHP system considered in this petition.  In reviewing the applicability of the energy content method, EPA did not raise concerns over the use of default values.  However, by focusing on the system's energy content alone, the method does not take into consideration the relative value of the outputs or the relative efficiencies of generation that also play a role in the CHP system emissions.
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For the reasons discussed here and in the decision document, EPA considers the work potential approach to be most appropriate method for allocating emissions from this specific offsite CHP system for purposes of the RFS program.
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Commenter Name: Brad Upton
Commenter Affiliation: National Council for Air and Stream Improvement, Inc.
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: The energy content method allocates GHG emissions according to the useful energy contained in each energy stream output from the CHP system. According to WRI/WBCSD it is "best suited where heat can be characterized as useful energy, e.g., for process or district heating." Because the steam exported from the power plant CHP system currently under evaluation by EPA will be used for process heating, use of the energy content method would be more appropriate than use of the work potential method according to the WRI/WBCSD guidance cited by EPA. It is not clear what assumptions EPA attributes to the energy content method when rejecting it in the agency's current evaluation.

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Response: EPA undertook a deliberative process in which numerous methodologies for allocating emissions were reviewed. EPA chose the emissions allocation approach that was most applicable to the CHP system configuration described in the Dakota petition. As the original purpose of the steam was for power generation, EPA estimated the emissions from the steam based on the original intent for the steam and allocated those emissions to the extracted steam.  The energy content method allocates emissions based on the energy content of the power and thermal outputs and makes no allowance for the relative value of the outputs or the relative efficiencies of generation. Instead it allocates emissions based on the relative energy content of each output. It was therefore not considered appropriate for this particular application.
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Commenter Name: Brad Upton
Commenter Affiliation: National Council for Air and Stream Improvement, Inc.
Docket ID Number: EPA-HQ-OAR-2012-0636-0004
Comment: EPA proposes to simply apply the emission factor corresponding to electricity generation when the coal fired power plant is not operated in CHP mode, multiplied by the quantity of electricity not generated due to steam extraction when the power plant is operating in CHP mode, and assign these emissions to the exported steam. EPA characterizes this approach as the work potential method, but it is inconsistent with the work potential method as described in the WRI/WBCSD guidance cited by EPA. The work potential method allocates emissions based on the useful energy represented by electric power and heat, and defines useful energy on the ability of heat to perform work. This useful energy in heat (steam) is calculated from the specific enthalpy and specific entropy of the steam according to thermodynamic principles, and the useful energy in electrical power is equal to the total electricity generated. Total GHG emissions are then allocated to each energy stream in direct proportion to the energy stream's useful energy. Therefore, EPA has incorrectly applied the work potential method.

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Response: EPA disagrees with this comment.  The power not generated by the steam once it is extracted is, by definition in this case, the amount of useful work that the extracted steam represents in this system and is based on the enthalpy drop and entropy change of the steam as it passes through the low-pressure turbine.  EPA has based the work potential on the power the steam would have produced and has made the most practical estimation of work potential based on the petitioner's operating conditions. In this way, EPA's approach is consistent with the concept behind the work potential method defined in the WRI/WBCSD guidance.
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Commenter Name: Dick Munson and Larry Plitch
Commenter Affiliation: Recycled Energy Development and Veolia Energy
Docket ID Number: EPA-HQ-OAR-2012-0636-0008
Comment: That said, it appears EPA, in trying to advance the Work Allocation Method, has misinterpreted the CARB paper, which says "[t]he work potential method may be most appropriate for systems that use heat [thermal energy] to produce mechanical work."1 In this way, the CARB paper suggests determining emissions based on how the thermal energy is used. Here, thermal energy that is exported to the ethanol plant is likely used for process energy, not mechanical energy or electricity. Thus, following the CARB recommendation, it seems the Work Allocation Method is not appropriate at the Spiritwood facility.

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Response: The CARB paper describes the work allocation approach as a method that "allocates emissions based on the useful energy represented by electric power and heat. The work potential method may be most appropriate for systems that use heat to produce mechanical work." The original purpose of the steam extracted from the Spiritwood facility is to generate electricity. EPA undertook a deliberative process in which numerous methodologies for allocating emissions were reviewed. EPA concluded that the work potential approach most closely captures the CHP system configuration described in the Dakota petition.
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Commenter Name: Dick Munson and Larry Plitch
Commenter Affiliation: Recycled Energy Development and Veolia Energy
Docket ID Number: EPA-HQ-OAR-2012-0636-0008
Comment: The Efficiency Allocation Method, as EPA notes, allocates GHG emissions based on the amount of fuel used to produce each final energy stream. Because it is based on the actual efficiency of thermal energy and electricity production, this methodology most accurately calculates the pollution-reduction benefits of CHP. Moreover, because this approach has been endorsed by the Massachusetts Energy Portfolio legislation and the Climate Registry, it offers the consistency and predictability needed by a growing CHP industry. We encourage EPA to maintain that consistency and adopt the Efficiency Allocation Method under the Renewable Fuels Program.

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Response: The Massachusetts energy efficiency approach used in the Massachusetts renewable fuels program is not meant to estimate the allocation of the emissions of a CHP system among its various outputs, but instead is a methodology to estimate the energy savings that CHP represents compared to separate heat and power. The commenters lay out an approach to calculating the energy savings, and by extension GHG savings, that a CHP project would provide compared to separate heat and power that is consistent with the CHP Partnership's recommended methodology.  This is a different objective, however, than allocating the specific emissions of the CHP system itself among the outputs of the CHP project.
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Commenter Name: Jan Weinzettel
Commenter Affiliation: Citizen
Docket ID Number: EPA-HQ-OAR-2012-0636-0012
Comment: The allocation method suggested by EPA favors the steam, since it is claimed that the total emissions from this system are lower than the emissions of two separate systems with these products and the emissions intensity of electricity is not changed by this allocation method from the case in which only electricity is produced. Therefore, only the emissions of heat generation are lower than in the separate system. This is not "fair" as the power generation should also benefit from the lower total emissions in terms of lower emission intensity.

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Response: The work potential approach used in the Dakota case does indeed apply all the benefits of CHP to the extracted steam; however, as the commenter notes below, this could be considered appropriate for this particular configuration because the steam `would be used for electricity generation if not delivered as by‐product".  In addition, the plant is recovering energy from the steam that the power plant was never able to use (the energy lost in the power plant condenser). The commenter appears to agree with the use of the work potential approach for this particular configuration.
--------------------------------------------------------------------------------

Commenter Name: Jan Weinzettel
Commenter Affiliation: Citizen
Docket ID Number: EPA-HQ-OAR-2012-0636-0012
Comment: Therefore, even if the allocation method based on useful energy sounds appropriate, its application has two errors: first, it is applied at a wrong place in the production chain and second, the value of the useful energy of the steam is underestimated. In order to apply this method correctly, emissions from combustion should be allocated to power generated by the first HPST turbine and the total steam. The useful energy of the steam should be calculated based on theoretical value, not based on the second turbine. Such a modified allocation approach would provide appropriate results.

Response: EPA's application of the work potential method allocated emissions both to steam used to generate power through the high pressure turbine, and to the steam sent to the ethanol process based on the amount of power that would have been provided by the extracted steam in the low-pressure steam turbine.  The commenter appears to suggest that a superior approach would be to calculate the displaced power that the extracted steam represented not by estimating the actual power not generated in the low-pressure turbine, but by using a theoretical generation efficiency.  EPA believes using the specific displaced power of the power plant itself is a more accurate and appropriate method for estimating emissions than attempting to derive a theoretical generation efficiency.


[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Notices]
[Page 65804]
[FR Doc No: 2019-25914]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP19-517-000]

Gulf South Pipeline Company, LP; Notice of Schedule for
Environmental Review of the Lamar County Expansion Project

    On September 30, 2019, Gulf South Pipeline Company, LP (Gulf South)
filed an application in Docket No. CP19-517-000 requesting a
Certificate of Public Convenience and Necessity pursuant to Section
7(c) of the Natural Gas Act to construct and operate certain natural
gas pipeline facilities. The proposed project is known as the Lamar
County Expansion Project (Project) and would provide about 200,000
dekatherms of natural gas per day to Cooperative Energy's generation
facility in Lamar County, Mississippi.
    On October 15, 2019, the Federal Energy Regulatory Commission
(Commission or FERC) issued its Notice of Application for the Project.
Among other things, that notice alerted agencies issuing federal
authorizations of the requirement to complete all necessary reviews and
to reach a final decision on a request for a federal authorization
within 90 days of the date of issuance of the Commission staff's
Environmental Assessment (EA) for the Project. This instant notice
identifies the FERC staff's planned schedule for the completion of the
EA for the Project.

Schedule for Environmental Review

Issuance of EA--February 18, 2020.
90-day Federal Authorization Decision Deadline--May 18, 2020.

    If a schedule change becomes necessary, additional notice will be
provided so that the relevant agencies are kept informed of the
Project's progress.

Project Description

    Gulf South proposes to construct and operate 3.4 miles of 20-inch-
diameter pipeline, a new delivery meter station, and a new 5,000
horsepower compressor station in Lamar and Forrest Counties,
Mississippi. The Project would allow Gulf South to provide up to
200,000 dekatherms per day of new natural gas firm transportation
service from Gulf South's existing Index 299 pipeline to Cooperative
Energy. This service would be primarily utilized for Cooperative
Energy's new 550-megawatt combined cycle gas turbine generation
facility. According to Gulf South, the Project would allow Cooperative
Energy's power plant to switch from coal to natural gas as a power
source.

Background

    On November 4, 2019, the Commission issued a Notice of Intent to
Prepare an Environmental Assessment for the Proposed Lamar County
Expansion Project and Request for Comments on Environmental Issues
(NOI). The NOI was sent to affected landowners; federal, state, and
local government agencies; elected officials; environmental and public
interest groups; Native American tribes; other interested parties; and
local libraries and newspapers. All substantive comments will be
addressed in the EA. No comments have been received at this time.

Additional Information

    In order to receive notification of the issuance of the EA and to
keep track of all formal issuances and submittals in specific dockets,
the Commission offers a free service called eSubscription. This can
reduce the amount of time you spend researching proceedings by
automatically providing you with notification of these filings,
document summaries, and direct links to the documents. Go to
www.ferc.gov/docs-filing/esubscription.asp.
    Additional information about the Project is available from the
Commission's Office of External Affairs at (866) 208-FERC or on the
FERC website (www.ferc.gov). Using the ``eLibrary'' link, select
``General Search'' from the eLibrary menu, enter the selected date
range and ``Docket Number'' excluding the last three digits (i.e.,
CP19-517), and follow the instructions. For assistance with access to
eLibrary, the helpline can be reached at<PHONE_NUMBER>, TTY (202) 502-
8659, or at<EMAIL_ADDRESS>The eLibrary link on the FERC
website also provides access to the texts of formal documents issued by
the Commission, such as orders, notices, and rule makings.

    Dated: November 22, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2019-25914 Filed 11-27-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 138 (Thursday, July 22, 2021)]
[Notices]
[Pages 38733-38734]
[FR Doc No: 2021-15612]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Docket ID FEMA-2021-0019; OMB No. 1660-0068]

Agency Information Collection Activities: Proposed Collection;
Comment Request; Federal Hotel and Motel Fire Safety Declaration Form

AGENCY: Federal Emergency Management Agency, Department of Homeland
Security.

ACTION: Notice of renewal and request for comments.

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SUMMARY: The Federal Emergency Management Agency (FEMA), as part of its
continuing effort to reduce paperwork and respondent burden, invites
the general public to take this opportunity to comment on an extension
without change of a currently approved information collection. In
accordance with the Paperwork Reduction Act of 1995, this notice seeks
comments concerning a list of hotels, motels, and similar places of
public accommodations meeting minimum fire-safety requirements. The
information collected is voluntary and if approved for listing, the
lodging establishment may be used by Federal employees on government
related travel and for Federal agency conferences. As the list is open
to use by the public, non-government travelers may use the list to
identify lodging meeting minimum life-safety criteria from fire.

DATES: Comments must be submitted on or before September 20, 2021.

ADDRESSES: Submit comments at www.regulations.gov under Docket ID FEMA-
2021-0019. Follow the instructions for submitting comments.

    All submissions received must include the agency name and Docket ID
and will be posted, without change, to the Federal eRulemaking Portal
at http://www.regulations.gov, and will include any personal
information you provide. Therefore, submitting this information makes
it public. You may wish to read the Privacy Act notice that is
available on the homepage of www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Teressa Kaas, Fire Program Specialist,
FEMA/U.S. Fire Administration<EMAIL_ADDRESS>or 301-447-
1263 for additional information. You may contact the Information
Management Division for copies of the proposed collection of
information at email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Hotel and Motel Fire Safety Act of 1990
(Pub. L. 101-391) requires FEMA to establish and maintain a list of
hotels, motels, and similar places of public accommodation meeting
minimum requirements for protection of life from fire. This list is
known as the National Master List (NML). This law resulted from a
series of deadly fires in hotels and motels, occurring in the late 70's
and 80's, with high loss of life. The legislative intent of this public
law is to provide all travelers the assurance of fire-safety in
accommodations identified on the NML. Public Law 101-391 further
stipulates that Federal employees on official travel stay in properties
approved by the authority having jurisdiction and listed on the current
NML. For statutory reference see 15 U.S.C. 2224-26.

Collection of Information

    Title: Federal Hotel and Motel Fire Safety Declaration Form.
    Type of Information Collection: Revision of a currently approved
information collection.
    OMB Number: 1660-0068.
    FEMA Form: FEMA Form 516-0-1, Federal Hotel and Motel Fire Safety
Declaration Form.
    Abstract: FEMA Form 516-0-1 collects basic information on life-
safety systems related directly to fire-safety in hotels, motels, and
similar places of accommodations applying for inclusion on the National
Master List in compliance with the Hotel and Motel Fire Safety Act of
1990 (Pub. L. 101-391). Information is published in the National Master
List and is publicly available.
    Affected Public: Business or other for-profit; State, Local or
Tribal Government.
    Estimated Number of Respondents: 2,532.
    Estimated Number of Responses: 3,141.
    Estimated Total Annual Burden Hours: 836 hours.
    Estimated Total Annual Respondent Cost: $38,864
    Estimated Respondents' Operation and Maintenance Costs: $0.
    Estimated Respondents' Capital and Start-Up Costs: $0.
    Estimated Total Annual Cost to the Federal Government: $89,668.

Comments

    Comments may be submitted as indicated in the ADDRESSES caption
above. Comments are solicited to (a) evaluate whether the proposed data
collection is necessary for the proper performance of the agency,
including whether the information shall have practical utility; (b)
evaluate the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (c) enhance the quality, utility, and
clarity of the information to be collected; and (d) minimize the burden
of the collection of information on those who are to respond, including
through the use of appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology, e.g., permitting electronic submission of responses.

Millicent L. Brown,
Senior Manager, Records Management Branch, Office of the Chief
Administrative Officer, Mission Support, Federal Emergency Management
Agency, Department of Homeland Security.
[FR Doc. 2021-15612 Filed 7-21-21; 8:45 am]
BILLING CODE 9111-76-P


[Federal Register Volume 84, Number 102 (Tuesday, May 28, 2019)]
[Notices]
[Pages 24549-24553]
[FR Doc No: 2019-10986]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85907; File No. SR-ICEEU-2019-013]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change, Security-Based Swap Submission or
Advance Notice Relating to the ICE Clear Europe Recovery Plan

May 21, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 10, 2019, ICE Clear Europe Limited (``ICE Clear Europe'' or the
``Clearing House'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule changes described in Items I, II and
III below, which Items have been prepared by ICE Clear Europe. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice

    ICE Clear Europe proposes to adopt a new Recovery Plan (the
``Revised Recovery Plan''). The revisions do not involve any changes to
the ICE Clear Europe Clearing Rules or Procedures.\3\
---------------------------------------------------------------------------

    \3\ Capitalized terms used but not defined herein have the
meanings specified in the ICE Clear Europe Clearing Rules (the
``Rules'').
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission or
Advance Notice

    In its filing with the Commission, ICE Clear Europe 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. ICE Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C) below, of the most significant
aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission or
Advance Notice

(a) Purpose
    ICE Clear Europe is proposing to adopt the Revised Recovery Plan,
which would supersede its current recovery plan (the ``Existing
Recovery Plan'') in order to make certain overall enhancements, as
discussed herein. The Revised Recovery Plan, among other aspects,
identifies certain critical clearing services and addresses the
Clearing House's tools, procedures and options for addressing recovery
from scenarios that threaten its ability to continue to provide
clearing services. The Recovery Plan is based on, and is intended to be
consistent with, the Rules and Procedures, as well as Clearing House's
existing risk management frameworks, policies and procedures.\4\
---------------------------------------------------------------------------

    \4\ The Revised Recovery Plan reflects the amendments to the
Rules and Procedures submitted to the Commission with respect to
default management, recovery and wind-down for the CDS Contract
Category, SR-ICEEU-2019-003 (submitted April 29, 2019).
---------------------------------------------------------------------------

I. Summary of Revisions
    The proposed Revised Recovery Plan is intended to enhance the
Clearing House's recovery plan in the following general respects:
     Specify more clearly ICE Clear Europe's framework for
governance and decision making in recovery scenarios;
     More clearly link the different elements of the plan;
     Present the assessment of recovery tools in a way that
clearly and comprehensively addresses the characteristics set out in
the Committee on Payments and Market Infrastructures and the
International Organization of Securities Commissions Final Report on
Resilience of Central Counterparties (CCPs): Further guidance on the
PFMI dated June 2017 (the ``CPMI-IOSCO recovery guidance'');
     Focus on recovery-specific scenarios and tools, as opposed
to the business as usual (``BAU'') management of risks, which is
addressed in other procedures and policies;
     Address intragroup and external interdependencies in
greater depth;
     Address ICE Clear Europe's plan for communication and
coordination of action to regulators and other stakeholders; and
     Provide for periodic testing of the recovery plan.
    The proposed Revised Recovery Plan would make certain specific
modifications to the Existing Recovery Plan in furtherance of these
general goals, as follows:
    1. The appendices in the Existing Recovery Plan would be removed as
unnecessary, except for the appendices on committee and organizational
structure and stress scenario analysis.
    2. The Revised Recovery Plan would more clearly address decision-
making during recovery. More specifically:
    a. The role and interaction with the Board would be clarified,
requiring (i) the Board to convene before enacting the Revised Recovery
Plan and before deciding to exercise recovery options, or (ii) if the
Board could not be convened in a timely manner, then the President to
convene the Board after the decision for ratification;
    b. Decision-making considerations for each recovery option would be
included, including the management information that would be used, such
as relevant regulatory capital information in a non-default loss
scenario; and
    c. Plans relating to communication with regulators would be
incorporated, including the manner in which ICE Clear Europe would
inform regulators before enacting the plan or exercising recovery
options.
    3. The Revised Recovery Plan would be restructured for ease of use
of the plan by management and the Board in a recovery situation. In
particular:
    a. The plan would include a playbook setting out the progression of
actions in recovery for default loss and non-default loss scenarios,
which would be subject to annual testing; and
    b. The triggers for recovery would be made clear and central to the
plan.
    4. The Revised Recovery Plan would present an assessment of its
recovery tools in a manner that more explicitly and comprehensively
addresses the characteristics set out in the CPMI-IOSCO recovery
guidance.
    5. The Revised Recovery Plan would more clearly focus on recovery-
specific scenarios and tools and would make the

boundary between BAU tools and recovery tools clearer by:
    a. Focusing on situations in which the firm's viability would be
under threat; and
    b. Excluding the operational risk scenarios to ensure the focus is
on recovery, not other business continuity scenarios.
    6. The Revised Recovery Plan would provide increased focus on
intragroup and external interdependencies for critical services and
would document its plans for related communication and coordination of
action through:
    a. Addressing the implications of interdependencies on its critical
services, which primarily relate to its capital replenishment framework
which depends upon continued financial support from the
Intercontinental Exchange, Inc. group (``ICE Group'');
    b. Including further analysis of its dependencies on third-party
services and mitigations, which largely relate to services provided
through ICE Group, but also include SWIFT access;
    c. Describing how potential coordination with other CCPs and
financial market infrastructures (``FMIs'') would be approached (both
for ICE Group CCPs and FMIs and non-ICE Group CCPs and FMIs); and
    d. Giving greater consideration to procyclicality and financial
stability implications for Clearing Members due to ICE Clear Europe's
exercise of its recovery options.
    7. The Revised Recovery Plan would require annual testing of the
plan via a table-top exercise to ensure ICE Clear Europe staff's
understanding of the plan and its implementation. The testing would
work through specific scenarios which would take into consideration the
playbook, management information, practical implementation of recovery
options, communication pathways to be used, the necessity of additional
resources and which systems would be involved in each recovery option.
II. Summary of the Revised Recovery Plan
(i) Overview
    As with the Existing Recovery Plan, the Revised Recovery Plan would
identify the critical services that ICE Clear Europe provides, and the
business functions that support those services. In ICE Clear Europe's
view, its clearing services (for both the F&O and CDS product
categories), and its related treasury and banking services, represent
its critical services. The Revised Recovery Plan would also identify
the market participants that rely on ICE Clear Europe's services and
the service providers supporting its critical services. The Revised
Recovery Plan would also address recovery triggers, scenarios, early-
warning indicators, recovery options, decision-making governance,
limitations, assumptions and testing of the plan. The Revised Recovery
Plan would not incorporate day-to-day risk management processes and
tools already in place in the Rules and Procedures, as those do not
relate to recovery scenarios. Wind-down and resolution scenarios would
be covered in separate policies and procedures. The Revised Recovery
Plan would not address recovery plans for exchanges or markets cleared
by ICE Clear Europe, or the recovery of other FMIs that it interacts
with.
    The recovery options set out in the Revised Recovery Plan are
intended to be extensive, giving the Clearing House the ability to
cover default losses (through eliminating any remaining variation
margin and mark-to-market payment obligations by, in effect, margin
haircutting and tear-up of remaining positions), liquidity shortfalls
(by delaying payment obligations) and investment losses (after a $90
million threshold, by allocating such losses up to the level of margin
and guaranty fund across all Clearing Members). The Revised Recovery
Plan would also take into account the Clearing House's powers of
assessment as well as pre-funded resources.
(ii) Critical Services, Service Providers, and Interdependencies
    The Revised Recovery Plan would identify ICE Clear Europe's
critical services: F&O clearing; CDS clearing; and treasury and banking
services (``TBS''). The plan would describe the entities that depend on
ICE Clear Europe's critical services, the need to consider capital and
liquidity impacts on market participants when assessing the appropriate
recovery options, and the importance of early and ongoing communication
with regulators and other FMIs via regulators.
    The Revised Recovery Plan would also describe the critical services
that the Clearing House relies upon from investment agents, APS banks,
central banks, data providers, custodians, physical delivery agents,
ICE Group exchanges, ICE Group clearing houses and ICE technology and
operations groups. It would detail how the Clearing House mitigates
dependence on service providers through using multiple substitutable
providers, providers who prioritize operational continuity through
multiple levels of resilience and redundancy, and contractual
protections through appropriate termination periods and limiting
clauses that would permit service providers to alter or terminate
contracts if ICE Clear Europe were under financial stress. In general,
under the plan, investment agents, APS banks, central banks and data
providers would not be dependencies because of their substitutability.
If necessary, for such service providers, ICE Clear Europe could run
certain processes itself or apply alternative processes to achieve
similar results.
    The Revised Recovery Plan would address the Clearing House's
dependencies on custodians, physical delivery agents, ICE Group
exchanges, other ICE Group clearing houses, and ICE Group technology
and operations services. The plan would also address key systems and
technological infrastructure on which the Clearing House relies. The
plan would detail how the risk of these services being withdrawn are
mitigated through multiple redundancies, business continuity and
disaster recovery arrangements that are regularly tested, incident
follow-up, regular performance metrics, veto rights over proposed
changes and long notice periods. The plan would further address the
possibility of Clearing Members defaulting on obligations to other ICE
Group CCPs or third party CCPs and would note that ICE Clear Europe
would coordinate with other CCPs through various means.
(iii) Recovery Scenarios, Triggers and Early Warning Indicators
    The Revised Recovery Plan would address two principal recovery
scenarios: (i) Default losses, in which case the plan would be
triggered when the guaranty fund is (or is likely to be) exhausted and
there are still losses to cover; and (ii) non-default losses, in which
case the plan would be triggered when ICE Clear Europe's base capital
is (or is likely to be) breached.
    The Revised Recovery Plan would distinguish between BAU risk
management and recovery scenarios (in which, by definition, BAU risk
management is insufficient to address the relevant losses), and
relevant options and tools available for each. The Revised Recovery
Plan would also address scenarios in which operational events (which
are normally addressed through business continuity and disaster
recovery plans) could trigger operation of the recovery plan, such as
if the capital that ICE Clear Europe needs to fix an operational or
technology problem breaches, or is likely to breach, its base capital
and hit the non-default loss trigger.

    The Revised Recovery Plan considers cases where ICE Clear Europe's
early warning metrics and indicators may indicate that a recovery
trigger would be hit. Early warning indicators for default loss
scenarios would be based on default management information showing the
size of the Clearing Members' exposures compared to the collateral ICE
Clear Europe holds against them and the size and complexity of their
positions, which, together with market volatility information, would
help ICE Clear Europe assess whether auctions would be likely to be
successful in balancing the book before running the auctions. With
respect to non-default losses, ICE Clear Europe would monitor its
eligible capital against target thresholds each day through risk
appetite metrics, which provide alerts and escalation to management or
the ICE Clear Europe Board before ICE Clear Europe breaches its base
capital.
(iv) Recovery Options
    ICE Clear Europe's recovery options are generally set out in the
Rules and Procedures. The Revised Recovery Plan would describe key
aspects of these options as follows:
     Powers of assessment (``PoA'') (Rules 909)--which enables
ICE Clear Europe to require Clearing Members to pay additional funds to
further mutualize default losses, up to the cap specified in the Rules.
PoA can only be used in a default loss scenario.
     Reduced Gains Distribution (``RGD'') (Rule 914)--which
allows ICE Clear Europe to withhold mark-to-market margin gains instead
of paying them out to the relevant Clearing Members, in order to cover
losses. This would likely need to be used in conjunction with other
recovery options as it would not remove the source of the risk. This
could only be used in a default loss scenario and only after PoA have
been called.
     Partial Tear-Ups (Rule 915)--which allows ICE Clear Europe
to `tear up' positions, in effect cancelling them or reducing or
removing the payment obligations due on those positions. This could
only be used in a default loss scenario and only after an auction has
been attempted.
     Payment Delays (Rule 110)--which allows ICE Clear Europe
to delay transfers, deposits and payments to help alleviate liquidity
shortfalls and likely needs to be used in conjunction with other
recovery options. This could be used in both default and non-default
loss scenarios.
     Investment Loss Allocation (Rule 919)--which allows ICE
Clear Europe to allocate investment losses to Clearing Members provided
it has invested in accordance with its investment management policy.
This could only be used where there are investment losses.
     Invoicing Back (Rule 104)--which allows ICE Clear Europe
to cancel positions in certain non-default loss situations, limited to
force majeure, illegality and impossibility.
     Capital Replenishment Framework (``CRF'')--which covers
ICE Clear Europe's options for replenishing capital, including raising
additional capital through the ICE Group and third parties, as well as
insurance coverage. This could be used in both default and non-default
loss scenarios. The timing of receipt of additional capital would
depend on the specific source of additional capital and would not be
guaranteed.
    The proposed Revised Recovery Plan would describe the goals and
procedures for designing recovery options, including that recovery
options are designed to be comprehensive, effective, transparent,
measurable, manageable and controllable. They are intended to create
appropriate incentives and minimize negative impact. The plan would
also describe the governance process for development of recovery
options that impact Clearing Members. The process would include input
from stakeholders, including Clearing Members, customers, regulators
and ICE Clear Europe's shareholder. The plan also reflects the existing
governance procedures for changes to the Rules (including recovery
options therein).
    The Revised Recovery Plan would discuss the manner in which ICE
Clear Europe's recovery options meet its standards for being
comprehensive and effective, reliable, enforceable, transparent and
measurable and for creating appropriate incentives and minimizing
negative impact both individually and collectively, as they would give
ICE Clear Europe the ability to fully cover default losses, liquidity
shortfalls and investment losses (above the relevant threshold).
    The plan would also set out in detail the decision-making
considerations for each recovery option. These include the scenarios in
which recovery options may be used and the expected effectiveness or
scope of coverage for those options, whether the option can be used
alone or in conjunction with other options, the time at which use of
the option may be considered, expected impacts on market participants
and others and effects on confidence in ICE Clear Europe or its
clearing system, among other considerations.
(v) Decision-Making, Governance and Communications
    The Revised Recovery Plan would require that the President attempt
to convene the Board for approval of material recovery decisions and
keep regulators informed in advance of material decisions, assuming
this could be done in a timely manner. If the Board could not be
convened in advance of such a decision, it would be convened thereafter
to ratify or modify the decision. The President would be supported by
the Default Management Committees in a default loss scenario and by the
Executive Risk Committee in a non-default loss scenario. Consistent
with the Rules and Procedures, exercising the recovery options would
not require the approval of Clearing Members, exchanges or any other
external stakeholders. In making decisions regarding the use of
recovery options, however, the President and the Board would need to
take into consideration the interests of ICE Clear Europe, Clearing
Members, customers, other stakeholders and the broader goal of
providing safe and sound CCP services to reduce systemic risk in an
efficient and legally compliant manner.
    The Revised Recovery Plan would state ICE Clear Europe's
communication and coordination objectives in recovery to (i) provide
Clearing Members, regulators and the wider market with timely and
accurate information and (ii) ensure effective coordination and
escalation across affiliated ICE Group exchanges, clearing houses and
FMIs. The Revised Recovery Plan would also address coordination with
other ICE Group exchanges, clearing houses and FMIs. The plan would
also contemplate wider communications with Clearing Members and other
market participants.
    ICE Clear Europe would aim to keep regulators informed in advance
of triggering the Revised Recovery Plan or exercising recovery options,
while being mindful of the need to take timely action. ICE Clear Europe
would seek to maintain close and continuous engagement with the
regulators during the implementation of the Revised Recovery Plan until
ICE Clear Europe returns to normal operational conditions or activates
the Wind-Down Plan (in which case other regulatory coordination
procedures apply). ICE Clear Europe would participate in coordination
and communication with other relevant stakeholders organized by the
regulators.
(vi) Recovery Playbook
    The Revised Recovery Plan would set out the recovery approach in a
default

loss and non-default loss scenario through a recovery playbook. The
playbook is intended as an example for how recoveries might progress,
rather than a prescriptive instruction manual for all recovery
situations. The playbook identifies key steps in the recovery process,
including declaring a default event and determining the likely scope of
losses, Board consultation, triggering the plan, communicating with
regulators, and selecting the particular recovery options.
(vii) Limitations and Assumptions
    The Revised Recovery Plan would identify the key assumptions and
limitations that could reduce its effectiveness and may fall outside of
ICE Clear Europe's control. These include the following: (i) The plan
is based on legal certainty of the framework in which the Clearing
House operates; (ii) the plan relies on market infrastructure ICE Clear
Europe does not control and for which there are no practical
alternatives; (iii) the plan assumes (for the most part) the continued
support of ICE Inc.; and (iv) certain recovery options are time limited
or time dependent. The plan would review the reasons why these
assumptions and limitations are appropriate, and certain determinations
it has made in respect thereof.
(viii) Appendices
    The Revised Recovery Plan would include the following appendices:
(i) ICE Clear Europe Committee Structure setting out board and
executive level governance; and (ii) stress scenario analysis.
(b) Statutory Basis
    ICE Clear Europe believes that the Revised Recovery Plan is
consistent with the requirements of Section 17A of the Act \5\ and the
regulations thereunder applicable to it, including the standards under
Rule 17Ad-22.\6\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
    \6\ 17 CFR 240.17Ad-22.
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act \7\ requires, among other things,
that the rules of a clearing agency be designed to promote the prompt
and accurate clearance and settlement of securities transactions and,
to the extent applicable, derivative agreements, contracts, and
transactions, the safeguarding of securities and funds in the custody
or control of the clearing agency or for which it is responsible, and
the protection of investors and the public interest. In addition, Rule
17Ad-22(e)(3)(ii) \8\ requires that each covered clearing agency shall
establish, implement, maintain and enforce written policies and
procedures reasonably designed to, as applicable, maintain a sound risk
management framework for comprehensively managing legal, credit,
liquidity, operational, general business, investment, custody, and
other risks that arise in or are borne by the covered clearing agency,
which includes plans for the recovery and orderly wind-down of the
covered clearing agency necessitated by credit losses, liquidity
shortfalls, losses from general business risk, or any other losses.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ 17 CFR 240.17Ad-22(e)(3)(ii).
---------------------------------------------------------------------------

    The Revised Recovery Plan is intended to meet the requirements of
Rule 17Ad-22(e)(3)(ii), and be consistent with the requirements of
Section 17A(b)(3)(F) of the Act. The Revised Recovery Plan is designed
to enhance the Clearing House's Existing Recovery Plan, among other
matters, by being clearer and easier to apply, more clearly
distinguishing recovery scenarios from BAU scenarios, addressing
governance requirements generally and for particular recovery options,
and more clearly addressing certain critical dependencies faced by the
Clearing House. The Revised Recovery Plan does not itself modify the
recovery options themselves, which are largely set out in the Clearing
House's Rules and Procedures. The Revised Recovery Plan, like the
Existing Recovery Plan, would build on these provisions of the Rules
and Procedures to set out the recovery options that may be used to
address both default loss scenarios and non-default loss scenarios
(such as liquidity shortfalls, investment losses and losses from
general business risk), so that the Clearing House could restore normal
clearing operations. The plan would address coordination with
regulators and other stakeholders. Overall, the plan would form a key
part of the risk management of the Clearing House, and build on the
existing risk management processes and procedures applicable to BAU
scenarios. As a result, in ICE Clear Europe's view, the Revised
Recovery Plan would satisfy the requirements of Rule 17Ad-
22(e)(3)(ii).\9\ The plan would also further the Clearing House's
ability to maintain the prompt and accurate clearance and settlement of
transactions and the safeguarding of securities and funds in the
custody or control of the Clearing House or for which it is
responsible, including in severe default and non-default loss
scenarios, and thereby promote the protection of investors and the
public interest, within the meaning of Section 17A(b)(3)(F) of the
Act.\10\
---------------------------------------------------------------------------

    \9\ 17 CFR 270.17Ad-22(e)(3)(ii).
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    ICE Clear Europe further notes the requirement in Rule 17Ad-
22(e)(15) \11\ to hold sufficient liquid net assets funded by equity to
cover potential general business losses so that the covered clearing
agency can continue operations and services as a going concern if those
losses materialize, including by (i) determining the amount of liquid
net assets funded by equity based upon its general business risk
profile and the length of time required to achieve a recovery or
orderly wind-down, as appropriate, of its critical operations and
services if such action is taken, and (ii) holding liquid net assets
funded by equity equal to the greater of either (x) six months of the
covered clearing agency's current operating expenses, or (y) the amount
determined by the board of directors to be sufficient to ensure a
recovery or orderly wind-down of critical operations and services of
the covered clearing agency, as contemplated by the recovery and wind-
down plans established under Rule 17Ad-22(e)(3)(ii).
---------------------------------------------------------------------------

    \11\ 17 CFR 240.17Ad-22(e)(15).
---------------------------------------------------------------------------

    ICE Clear Europe has determined that it holds equity capital at
least sufficient to cover the costs of a recovery of its critical
clearing services under the Revised Recovery Plan, consistent with the
requirements of Rule 17Ad-22(e)(15).\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.17Ad-22(e)(15).
---------------------------------------------------------------------------

    In compliance with Rules 17Ad-22(e)(2),\13\ the proposed Revised
Recovery Plan would provide greater detail with respect to decision-
making during recovery as well as the role and interaction with the
Board, other executives, regulators and other stakeholders, providing
greater clarity with respect to ICE Clear Europe's governance
arrangements and lines of

responsibility and ensuring that the interests of other stakeholders
are considered.
---------------------------------------------------------------------------

    \13\ 17 CFR 270.17Ad-22(e)(2). Rule 17Ad-22(e)(2) requires the
covered clearing agency to establish, implement, maintain and
enforce written policies and procedures reasonably designed to
provide for governance arrangements that:
    (i) Are clear and transparent;
    (ii) Clearly prioritize the safety and efficiency of the covered
clearing agency;
    (iii) Support the public interest requirements in Section 17A of
the Act (15 U.S.C. 78q-1) applicable to clearing agencies, and the
objectives of owners and participants;
    (iv) Establish that the board of directors and senior management
have appropriate experience and skills to discharge their duties and
responsibilities;
    (v) Specify clear and direct lines of responsibility; and
    (vi) Consider the interests of participants' customers,
securities issuers and holders, and other relevant stakeholders of
the covered clearing agency.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Europe does not believe the proposed Revised Recovery
Plan would have any impact, or impose any burden, on competition not
necessary or appropriate in furtherance of the purposes of the Act. The
Revised Recovery Plan would provide greater clarity and make certain
enhancements with respect to ICE Clear Europe's recovery planning. The
plan does not itself change the rights or obligations of the Clearing
House or Clearing Members, and is based on the recovery options
established in the Rules and Procedures. The Revised Recovery Plan has
been designed to meet specific regulatory requirements concerning
recovery planning, and is applicable to all clearing activities. ICE
Clear Europe does not believe the amendments would impact competition
among Clearing Members or other market participants, or affect the
ability of market participants to access clearing generally. While
implementation of the Recovery Plan, and in particular implementation
of the plan in a severe loss scenario, would likely impose costs on
Clearing Members or other market participants, such costs are
consistent with the Rules and Procedures, and are, in ICE Clear
Europe's view, appropriate in light of the goals of recovery and
maintenance of critical clearing service in accordance with applicable
regulations.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others

    Written comments relating to the proposed amendments have not been
solicited or received by ICE Clear Europe. ICE Clear Europe will notify
the Commission of any written comments received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change, Security-Based
Swap Submission and Advance Notice and Timing for Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, security-based swap submission or advance notice 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-ICEEU-2019-013 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-ICEEU-2019-013. 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 website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change, security-based
swap submission or advance notice that are filed with the Commission,
and all written communications relating to the proposed rule change,
security-based swap submission or advance notice 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 website viewing and printing in the Commission's Public Reference
Room, 100 F Street NE, Washington, DC 20549, on official business days
between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filings
will also be available for inspection and copying at the principal
office of ICE Clear Europe and on ICE Clear Europe's website at https://www.theice.com/clear-credit/regulation. All comments received will be
posted without change. Persons submitting comments are cautioned that
we do not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
ICEEU-2019-013 and should be submitted on or before June 18, 2019.
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10986 Filed 5-24-19; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]
[Page 5774-5775]
[DOCID:fr07fe07-157]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55217; File No. SR-FICC-2006-16]

Self-Regulatory Organizations; The Fixed Income Clearing
Corporation; Order Approving Proposed Rule Change To Replace the
Government Securities Division Clearing Fund Calculation Methodology
With a Yield-Driven Value-at-Risk Methodology

January 31, 2007.

I. Introduction

    On October 4, 2006, the Fixed Income Clearing Corporation
(``FICC'') filed with the Securities and Exchange Commission
(``Commission'') and on November 14, 2006, amended proposed rule change
SR-FICC-2006-16 pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'').\1\ Notice of the proposal was published in the
Federal Register on December 27, 2006.\2\ The Commission received no
comment letters in response to the proposed rule change. For the
reasons discussed below, the Commission is approving the proposed rule
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 54964 (December 19,
2006), 71 FR 77835 (SR-FICC-2006-16).
---------------------------------------------------------------------------

II. Description

    FICC seeks to replace the Government Securities Division (``GSD'')
margin calculation methodology with a value-at-risk (``VaR'')
methodology.
    Netting members of FICC's GSD are required to maintain clearing
fund deposits. Each member's required clearing fund deposit is
calculated daily to ensure that enough funds are available to cover the
risks associated with that member's activities. The purposes served by
the clearing fund are to: (i) Have on deposit at FICC funds from each
member sufficient to satisfy any losses that may be incurred by FICC or
its members resulting from the default by a member and the resultant
close out of that member's settlement positions and (ii) ensure that
FICC has sufficient liquidity at all times to meet its payment and
delivery obligations.
    FICC proposes to replace the current clearing fund methodology used
at GSD, which uses haircuts and offsets, with a yield-driven VaR
methodology that is expected to better reflect market volatility and
more thoroughly distinguish the levels of risk presented by individual
securities. VaR is defined to be the maximum amount of money that may
be lost on a portfolio over a given period of time within a given level
of confidence. With respect to the GSD, FICC will use a 99 percent
three-day VaR.\3\
---------------------------------------------------------------------------

    \3\ Category 2 Dealers and Category 2 Futures Commission
Merchants will be subject to higher confidence levels than other
Netting Members.
---------------------------------------------------------------------------

    The changes to the components that comprise the current clearing
fund methodology compared to the proposed VaR methodology in relation
to the risks addressed by the components are summarized below.
---------------------------------------------------------------------------

    \4\ Under the current GSD rules, Category 1 Inter-Dealer Brokers
are subject to a flat $5 million clearing fund requirement. This
proposed rule change does not alter that requirement.
    \5\ FICC will have the discretion to not apply the interest rate
model to classes of securities whose volatility is less amenable to
statistical analysis, which is usually due to a lack of pricing
history. In lieu of such a calculation, the required charge with
respect to such positions will be determined based on a historic
index volatility model.
    \6\ FICC is adopting a new definition for ``Term Repo
Transaction'' to clarify the types of transactions covered by this
component. As proposed, Term Repo Transaction will mean, on any
particular Business Day, a Repo Transaction for which settlement of
the Close Leg ``is scheduled to occur two or more Business Days
after the scheduled settlement of the Start Leg.'' In addition, the
existing definition for ``Term GCF Repo Transaction'' is being
revised to conform to the language for ``Term Repo Transaction'' as
the new definition provides greater clarity as to transactions
covered.

------------------------------------------------------------------------
                                                    Proposed methodology
    Existing methodology         Risk addressed              \4\
------------------------------------------------------------------------
Receive/Deliver component     Fluctuation in        Interest rate or
 using margin factors.         security prices.      index-driven model,
                                                     as appropriate.\5\
Repo Volatility component...  Fluctuation in repo   Repo index-driven
                               interest rates.       model.\6\
Funds Adjustment Deposit      Uncertainty of        Margin Requirement
 component (based on the       whether a member      Differential
 average size of the           will satisfy its      (``MRD'') (a
 member's 20 highest funds-    funds-only            portion of which is
 only settlement amounts       settlement            based on the
 over the most recent 75       obligation.           historical size of
 business days).                                     a member's funds-
                                                     only settlement
                                                     obligation).
Average Post Offset Margin    Uncertainty of        MRD (a portion of
 Amount component (based on    whether a member      which is based on
 the 20 highest margin         will satisfy its      the historical
 amounts derived from all      next clearing fund    variability of a
 outstanding net settlement    call.                 member's clearing
 positions over the most                             fund requirement).
 recent 75 business days).
Not specifically covered....  Intraday risk and     Coverage Component
                               additional exposure   (if necessary,
                               due to portfolio      applies additional
                               variation and         minimum charge to
                               potential loss in     bring coverage to
                               unlikely situations   the applicable
                               beyond the model's    confidence level).
                               effective range.
------------------------------------------------------------------------

    In addition, FICC will be able to include in a member's clearing
fund requirement a ``special charge'' based on such factors as FICC
determines to be appropriate from time to time. Such factors may
include, but are not limited to, such things as price fluctuation,
volatility, or lack of liquidity.
    The proposed VaR methodology will necessitate a change to FICC's
risk management consequences of the late allocation of repo
substitution collateral. Because offset classes and margin rates will
no longer be present in the revised GSD rules, FICC will base the
margining for such a generic CUSIP on the same calculation as that used
for securities whose volatility is less amenable to statistical
analysis.\7\
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 53534 (March 21, 2006),
71 FR 15781 (March 29, 2006) (File No. SR-FICC-2005-18). This rule
change created a generic CUSIP offset and applicable margin rate for
determining clearing fund consequences for such late allocations.
---------------------------------------------------------------------------

    The VaR methodology will not include calculations that are
incorporated in the GSD's current cross-margining programs with The
Clearing Corporation (``TCC'') and with the Chicago Mercantile Exchange
(``CME''). In order to provide for continuity of cross-margining
following the implementation of the VaR methodology and because certain
key calculations required for cross-margining are unique to cross-
margining, FICC will continue to perform the applicable cross-margining
calculations outside of the VaR model. FICC will then adjust the cross-
margining clearing fund calculation using a scaling ratio of the VaR
clearing fund calculation to the cross-margining clearing fund
calculation so that the clearing fund amount available for cross-
margining is appropriately aligned with the VaR model. The proposed
changes described herein will necessitate amendments to FICC's cross-
margining agreements with TCC and with CME as follows:
    1. The definition of FICC's ``Margin Rate'' in each of the
agreements will be amended to reflect that the margin rate will no
longer be based on margin factors published in the current rules (as
these will no longer be applied under the VaR methodology). Instead,
they will be determined based on a percentage that will be determined
using the same parameters and data (e.g., confidence level and historic
indices) as those used to generate margin factors in the current rules.
    2. Section 5(a) of each cross-margining agreement will be amended
to state that FICC's residual margin amount will be calculated as
specified in the agreement and will be adjusted, if necessary, to
correct for differences between the methodology of calculating the
residual margin amount as described in the agreement and the VaR
methodology. This change will be necessary to account for the deletion
of relevant margin factors and disallowance schedules (which, like the
margin factors, are incorporated into the agreements by reference) from
GSD rules and to adjust for the possibility that the new VaR
methodology could generate a charge that would otherwise allow for a
cross-margining reduction that is greater than the margin requirement.

III. Discussion

    Section 19(b) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to such
organization. Section 17A(b)(3)(F) of the Act requires that the rules
of a clearing agency be designed to assure the safeguarding of
securities and funds in FICC's custody or control or for which it is
responsible.\8\ Because FICC's proposed rule change implements a VaR
methodology that should better reflect market volatility and should
more thoroughly distinguish the levels of risk presented by individual
securities, FICC should be able to more accurately calculate the risk
presented by each of its member's activity and to collect clearing fund
to protect against that risk. As a result, FICC should be in a better
position to assure the safeguarding of securities and funds in its
custody or control or for which it is responsible.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act and the rules and regulations
thereunder. In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and capital
formation.\9\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-FICC-2006-16) be and hereby
is approved.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1948 Filed 2-6-07; 8:45 am]

BILLING CODE 8010-01-P


										March 1, 2007

Kenneth Feith

Office of Air & Radiation

U.S. Environmental Protection Agency

1200 Pennsylvania Ave NW

Washington, DC   20004-2403

Dear Mr. Feith,

We enjoyed the opportunity to join you at the recent EPA Advisory
Meeting in January to discuss upcoming changes to EPA’s hearing
protector regulations (40 CFR Part 211, Subpart B).  The discussion was
valuable and timely, and we applaud EPA’s desire to “do it right,
considering the updated regulations will likely be around a long
time,” as you stated.  As the world leader in the design, manufacture
and sale of personal protective equipment, Bacou-Dalloz (makers of the
Howard Leight and Bilsom line of hearing protection) eagerly supports
EPA’s efforts to update the testing and labeling regulations for
protectors.  In response to your request for constructive contributions
in drafting proposed rulemaking, we offer the following comments.

Objectives of New Regulation

We join with EPA in seeking new testing and labeling regulations with
the following objectives:

▪  A user-friendly primary label, possibly utilizing a two-number
range that expresses the 20th and 80th percentile of attenuation among
users

▪  A secondary label that can be easily accessed by users for
additional information.  That secondary information may be accessible to
end users on a website, or by phone/fax.

▪  The new rating should require no de-rating by OSHA

▪  The new rating should be designed in its primary form to be
subtracted from A-weighted noise levels.  In a secondary form, users may
be able to subtract a modified rating from C-weighted noise levels.

▪  The new rating should be able to accommodate non-standard hearing
protectors, such as active noise reduction or level-dependent
protectors, perhaps indicated by special icons on the label

▪ Periodic retesting of hearing protectors by manufacturers

▪ A reasonable phase-in period for manufacturers to retest and deplete
existing packaging inventory

▪ A compliance audit provision for any claimed discrepancies in
published attenuation

Laboratory Test Method

The Howard Leight Acoustical Test Lab in San Diego participated in the
recent NIOSH Interlaboratory Study, and is an active participant in ANSI
WG11.  While there is no consensus “best practice” as
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▪ Ideally, the method best suited to evaluate HPDs will have low
between-subject and between-lab variability.  Among the two methods
proposed in ANSI S12.6-1997, Method A exhibits lower between-subject
variability, while Method B exhibits lower between-lab variability.
Another option to consider is the ISO 4869-1 test method, bringing the
U.S. more in line with accepted international practice.

▪  The use of naïve test subjects (as required in Method B)
artificially deflates attenuation, using contrived subject pools to
drive the NRR to a ‘worst-case’ real-world value.  We concur with
EPA, that the Agency has no obligation to seek a rating number that
reflects these kinds of worst-case numbers, and that the Agency cannot
take responsibility for the level of protection achieved by uninformed
users who fit the HPD poorly.  We consider it unconscionable to use a
naïve deviant population, as defined in Method B, to determine the
performance ratings of HPDs for regulatory purposes.

▪  As manufacturers of personal protective equipment, we are concerned
at the abdication of responsibility presumed by a naïve subject fit
test method.  Adopting a Method B-based rating number on our packaging
would imply endorsement of irresponsible usage, essentially telling our
end-users, “We don’t believe you will use our product properly, and
we condone the fact that you will not use it properly.”  We support a
testing method that utilizes a supervised fit (similar to Method A or
the ISO 4869-1 standard).  This supervised fit method replicates the
best practice mandated by safety regulations worldwide.

RATING METHOD AND LABEL

▪ We concur that a two-number rating range can accurately display the
attenuation capabilities of HPDs, so long as the explanatory information
is understandable to end-users.  Such a range will correctly divert
attention away from insignificant one- or two-decibel differences
between HPDs, and focus attention on obtaining a proper fit.

▪ While standard passive HPDs constitute the vast majority of the
market, end-users would be well-served by icons on the primary label to
indicate special-use HPDs.  Three special-use categories to consider are
the following:

Special Use	Examples of HPD	Possible Icon	Explanatory

ž

½

ž

Ÿ

½

¾

\

^

ed for use to optimize speech communication in noise

A possible mock-up of a primary label containing the attenuation range
and sample icon is shown below:

		Fig. 1.  Mock-up of possible new EPA label for hearing protectors.

▪ Secondary label may include other useful information:  how to check
the fit of HPD, intended usage, octave band mean attenuation and
standard deviation, helpful information in applying the rating numbers,
and encouragement to train users in proper fit.

▪ Efforts to statistically manipulate the rating of HPDs to more
closely match real-world usage is counter-productive, and not in the
best interest of the Agency, nor the end-user.  If there are problems in
the proper fit and use of personal protective equipment, we strongly
support improved end-user training and motivation, rather than
statistical “dumbing-down” of the rating number to improve
real-world performance.  In this point, we concur with the statement in
the Introduction to ANSI S12.6-1997 (section 0.3):  “It makes no sense
to excessively derate hearing protector performance to estimate
worst-case attenuation values, since worst-case values are much more
heavily influenced by factors other than the hearing protectors
themselves.”  We believe user training and motivation are
overwhelmingly two of those factors.

▪ We support the proposal by EPA/NIOSH to use an on-line NRR
Calculator to capture attenuation data and recommended usage from each
manufacturer, effectively creating a Hearing Protector Data Sheet,
similar in function to an MSDS.  Users could then access the EPA-hosted
website to review or download any of these PDF data sheets.  This
captured data would constitute EPA’s official file of approved HPDs in
the U.S. market, thus preserving the integrity of quality products
available to end-users.

We laud EPA’s initiative in tackling this long-overdue update to
hearing protector regulations, and we look forward to being active
participants in the Agency’s efforts in promulgating and supporting a
world-class regulation that contributes to the prevention of
noise-induced hearing loss.

Sincerely,

	Mark Hampton		Steve Gilder			Brad Witt

	Sr. Vice President		Director of R&D		Audiology Manager

	Head Protection			Howard Leight Industries	Howard Leight Industries

	Bacou-Dalloz

BACOU-DALLOZ : 7828 Waterville Road - San Diego, CA 92154 - USA


[Federal Register Volume 84, Number 150 (Monday, August 5, 2019)]
[Notices]
[Page 38086]
[FR Doc No: 2019-16601]

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

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-19, OMB Control No. 3235-0012]

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

Extension:
    Rule 15b1-1/Form BD

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and
Exchange Commission (``Commission'') has submitted to the Office of
Management and Budget (``OMB'') a request for approval of extension of
the previously approved collection of information provided for in Rule
15b1-1(17 CFR 240.15b1-1) and Form BD (17 CFR 249.501) under the
Securities Exchange Act of 1934 (17 U.S.C. 78a et seq.).
    Form BD is the application form used by firms to apply to the
Commission for registration as a broker-dealer, as required by Rule
15b1-1. Form BD also is used by firms other than banks and registered
broker-dealers to apply to the Commission for registration as a
municipal securities dealer or a government securities broker-dealer.
In addition, Form BD is used to change information contained in a
previous Form BD filing that becomes inaccurate.
    The total industry-wide annual time burden imposed by Form BD is
approximately 4,118.07 hours, based on approximately 11,137 responses
(183 initial filings + 10,954 amendments). Each application filed on
Form BD requires approximately 2.75 hours to complete and each amended
Form BD requires approximately 20 minutes to complete. (183 x 2.75
hours = 503.25 hours; 10,954 x 0.33 hours = 3,614.82 hours; 503.25
hours + 3,614.82 hours = 4,118.07 hours.) The staff believes that a
broker-dealer would have a Compliance Manager complete and file both
applications and amendments on Form BD at a cost of $314/hour.
Consequently, the staff estimates that the total internal cost of
compliance associated with the annual time burden is approximately
$1,293,073.98 per year ($314 x 4,118.07). There is no external cost
burden associated with Rule 15b1-1 and Form BD.
    The Commission uses the information disclosed by applicants in Form
BD: (1) To determine whether the applicant meets the standards for
registration set forth in the provisions of the Exchange Act; (2) to
develop a central information resource where members of the public may
obtain relevant, up-to-date information about broker-dealers, municipal
securities dealers, and government securities broker-dealers, and where
the Commission, other regulators, and SROs may obtain information for
investigatory purposes in connection with securities litigation; and
(3) to develop statistical information about broker-dealers, municipal
securities dealers, and government securities broker-dealers. Without
the information disclosed in Form BD, the Commission could not
effectively implement policy objectives of the Exchange Act with
respect to its investor protection function.
    Completing and filing Form BD is mandatory in order to engage in
broker-dealer activity. Compliance with Rule 15b1-1 does not involve
the collection of confidential information.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    The public may view background documentation for this information
collection at the following website: http://www.reginfo.gov. Comments
should be directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503 or by sending an email to:
<EMAIL_ADDRESS>and (ii) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o
Candace Kenner, 100 F Street NE, Washington, DC 20549 or by sending an
email to<EMAIL_ADDRESS>Comments must be submitted within 30 days
of this notice.

    Dated: July 30, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-16601 Filed 8-2-19; 8:45 am]
 BILLING CODE 8011-01-P