[Federal Register Volume 78, Number 50 (Thursday, March 14, 2013)]
[Proposed Rules]
[Pages 16200-16202]
[FR Doc No: 2013-05876]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2013-0240; Directorate Identifier 2011-SW-060-AD]
RIN 2120-AA64

Airworthiness Directives; Eurocopter France Helicopters

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Eurocopter France (Eurocopter) Model AS350 and AS355
helicopters. This proposed AD would require inspecting

the tail rotor control stop screws to determine if they are correctly
aligned and adjusting the screws if they are misaligned. This proposed
AD is prompted by the discovery of a loose nut on the tail rotor
control stop and a misaligned tail rotor control stop screw. The
proposed actions are intended detect a loose nut or a misaligned stop
screw, which, if not corrected, could limit yaw authority, and
consequently, result in a loss of helicopter control.

DATES: We must receive comments on this proposed AD by May 13, 2013.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your
comments electronically.
     Fax:<PHONE_NUMBER>.
     Mail: Send comments to the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Deliver to the ``Mail'' address between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Examing the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the Docket Operations Office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the economic
evaluation, any comments received, and other information. The street
address for the Docket Operations Office (telephone<PHONE_NUMBER>) is in
the ADDRESSES section. Comments will be available in the AD docket
shortly after receipt.
    For service information identified in this proposed AD, contact
American Eurocopter Corporation, 2701 N. Forum Drive, Grand Prairie, TX
75052; telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax<PHONE_NUMBER>;
or at http://www.eurocopter.com/techpub. You may review the referenced
service information at the FAA, Office of the Regional Counsel,
Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas
76137.

FOR FURTHER INFORMATION CONTACT: Matt Fuller, Aviation Safety Engineer,
Continued Operational Safety, Rotorcraft Directorate, FAA, 2601 Meacham
Blvd., Fort Worth, Texas 76137; telephone<PHONE_NUMBER>; email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to participate in this rulemaking by submitting
written comments, data, or views. We also invite comments relating to
the economic, environmental, energy, or federalism impacts that might
result from adopting the proposals in this document. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. To
ensure the docket does not contain duplicate comments, commenters
should send only one copy of written comments, or if comments are filed
electronically, commenters should submit only one time.
    We will file in the docket all comments that we receive, as well as
a report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. Before acting on this proposal, we
will consider all comments we receive on or before the closing date for
comments. We will consider comments filed after the comment period has
closed if it is possible to do so without incurring expense or delay.
We may change this proposal in light of the comments we receive.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA AD
No. 2011-0164, dated August 31, 2011, to correct an unsafe condition
for Eurocopter Model AS350B, AS350BA, AS350BB, AS350B1, AS350B2,
AS350B3, AS350D, AS355E, AS355F, AS355F1, AS355F2, AS355N, and AS355NP
helicopters with either an autopilot or certain modifications
installed. EASA advises that during take-off with a sling load, the
pilot of a Model AS350B3 helicopter reached one of the yaw stops before
its usual position. The inspection that followed revealed that a tail
rotor control stop nut was loose and that the corresponding tail rotor
control stop screw was ``out of adjustment.'' EASA states that this
condition, if not detected and corrected, ``can lead to the loss of
adjustment of the affected stop and consequently limit yaw authority,
possibly resulting in loss of control of the helicopter.''

FAA's Determination

    These helicopters have been approved by the aviation authority of
France and are approved for operation in the United States. Pursuant to
our bilateral agreement with France, EASA, its technical
representative, has notified us of the unsafe condition described in
its AD. We are proposing this AD because we evaluated all known
relevant information and determined that an unsafe condition is likely
to exist or develop on other products of the same type design.

Related Service Information

    Eurocopter has issued Alert Service Bulletin (ASB) No. AS350-
05.00.64 for Model AS350B, BA, BB, B1, B2, B3, and D civil helicopters
and Model AS350L1 military helicopters, and ASB No. AS355-05.00.59 for
Model AS355E, F, F1, F2, N, and NP civil helicopters, both Revision 0
and both dated August 30, 2011. The ASBs specify inspecting the locking
of the stop screws and, if warranted, adjusting the stops, marking the
screw/nut assembly with a red line of paint, and periodically
inspecting the paint line's alignment on the screw/nut assembly.

Proposed AD Requirements

    This proposed AD would require inspecting the locking of the stop
screws within 110 hours time-in-service (TIS). If the stop screw turns,
the proposed AD would require adjusting the stops. After adjusting the
stops or if the screw does not turn, this proposed AD would require
marking a line of red paint on the screw-nut assembly.
    Thereafter, at intervals not to exceed 110 hours TIS, this proposed
AD would require inspecting the locking of the screws and determining
whether the red paint line on the screw and nut is aligned. If not
aligned, this proposed AD would require removing the paint, readjusting
the stops, and marking a new line of paint.

Differences Between This Proposed AD and the EASA AD

    The EASA AD would require contacting Eurocopter if the red paint
line on the screw/nut assembly is not aligned after an inspection. This
proposed AD would not. The EASA AD applies to Eurocopter Model AS350BB
helicopters. This proposed AD would not because Model AS350BB does not
have an FAA type certificate. However, the proposed AD would apply to
Eurocopter Model AS350C and AS350D1 helicopters because they have an
FAA type certificate and because they have similar tail rotor stop
screw assemblies as the other applicable helicopter models. The EASA AD
does not apply to the Model AS350C and AS350D1 helicopters.

Interim Action

    We consider this proposed AD to be an interim action because
Eurocopter is

developing a modification that would address the unsafe condition
identified in this AD. After this modification is developed, approved,
and available, we might consider additional rulemaking.

Costs of Compliance

    We estimate that this proposed AD would affect 911 helicopters of
U.S. Registry and that labor costs average $85 per work-hour. Based on
these estimates, we expect the following costs:
     Inspecting the locking of the stop screws would take about
0.4 hour for a labor cost of about $34 per helicopter and $30,974 for
the U.S. fleet. No parts would be needed.
     Adjusting the stop screws, if needed, would require about
0.2 hour for a labor cost of $17. No parts would be needed.
     Painting the line would require 0.1 hour for a labor cost
of about $9 per helicopter and $8,199 for the U.S. fleet. No parts
would be needed.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

Eurocopter France: Docket No. FAA-2013-0240; Directorate Identifier
2011-SW-060-AD.

(a) Applicability

    This AD applies to the following helicopters, certificated in
any category:
    (1) Model AS350B, AS350BA, AS350B1, AS350B2, AS350C, AS350D,
AS350D1, AS355E, AS355F, AS355F1, and AS355F2 helicopters with an
autopilot installed;
    (2) Model AS350B3 helicopters with an autopilot or modification
073252 installed; and
    (3) Model AS355N and AS355NP helicopters with an autopilot or
modification 071908 installed.

(b) Unsafe Condition

    This AD defines the unsafe condition as a loose nut or
misaligned tail rotor control stop screw (stop screw). This
condition could result in limited yaw authority and subsequent loss
of helicopter control.

(c) Compliance

    You are responsible for performing each action required by this
AD within the specified compliance time unless it has already been
accomplished prior to that time.

(d) Required Actions

    (1) Within 110 hours time-in-service (TIS), inspect the locking
of the stop screws to determine whether the stop screws turn.
    (i) If any stop screw turns, adjust the stop screw.
    (ii) Mark a line of red paint on the screw-nut assembly as
depicted in Section B-B, Figure 1 of Eurocopter Alert Service
Bulletin (ASB) No. AS350-05.00.64 or ASB No. AS355-05.00.59, as
applicable to your model helicopter. Both ASBs are Revision 0 and
dated August 30, 2011.
    (2) Thereafter, at intervals not to exceed 110 hours TIS,
inspect the stop screws to determine whether the paint lines on the
screw and the nut are aligned. If the red paint lines are not
aligned, remove the paint, adjust the stop screw, and mark a new
line of paint on the screw-nut assembly as depicted in Section B-B,
Figure 1 of the ASB applicable to your helicopter model.

(e) Special Flight Permit

    A one-time flight permit may be granted, provided that the pilot
has full yaw authority before flight.

(f) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Group, FAA, may approve AMOCs
for this AD. Send your proposal to: Matt Fuller, Aviation Safety
Engineer, Continued Operational Safety, Rotorcraft Directorate, FAA,
2601 Meacham Blvd., Fort Worth, Texas 76137; telephone<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, we suggest that you
notify your principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office or
certificate holding district office before operating any aircraft
complying with this AD through an AMOC.

(g) Additional Information

    The subject of this AD is addressed in the European Aviation
Safety Agency AD No. 2011-0164, dated August 31, 2011.

(h) Subject

    Joint Aircraft Service Component (JASC) Code: 6720, tail rotor
control system.

    Issued in Fort Worth, Texas, on March 6, 2013.
Lance T. Gant,
Acting Directorate Manager, Rotorcraft Directorate, Aircraft
Certification Service.
[FR Doc. 2013-05876 Filed 3-13-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 85, Number 244 (Friday, December 18, 2020)]
[Notices]
[Pages 82472-82473]
[FR Doc No: 2020-27927]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. NJ21-6-000]

City of Riverside, California; Notice of Petition for Declaratory
Order

    Take notice that on December 10, 2020, pursuant to Rules 205 and
207 of the Commission's Rules of Practice and Procedure, 18 CFR
385.205, 385.207, and consistent with the provisions of the
Transmission Owner (TO) Tariff, the City of Riverside, California
(Riverside), submitted a petition for a declaratory order by the
Commission (1) accepting Riverside's annual revision to its
Transmission Revenue Balancing Account Adjustment (TRBAA); (2)
approving Riverside's annual update to the costs of its Existing
Transmission Contracts (ETCs) with Southern California Edison Company
(SCE) for purposes of recovery of such costs through the ETC
Passthrough Clause contained in Riverside's TO Tariff; (3) accepting
revisions to Appendix I to Riverside's TO Tariff to reflect Riverside's
revised TRBAA, ETC costs, and updated Base and High Voltage
Transmission Revenue Requirements (TRRs); (4) to the extent necessary,
waiving the sixty-day notice requirement provided for in the
Commission's regulations at 18 CFR35.3(a); (5) waiving the filing fee
associated with this Petition that is provided for by Rule 207 of the
Commission's Rules of Practice and Procedure, 18 CFR 385.207; and (6)
granting any other relief or waivers necessary or appropriate for
approval and implementation of the revisions to Riverside's Base TRR
(including the updated ETC cost components), TRBAA, High Voltage TRR,
and modifications to Riverside's TO Tariff effective as of January 1,
2021, as more fully explained in the petition.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Petitioner.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the eFiling link at
http://www.ferc.gov. Persons unable to file electronically may mail
similar pleadings to the Federal Energy Regulatory Commission, 888
First Street NE, Washington, DC 20426. Hand delivered submissions in
docketed proceedings should be delivered to Health and Human Services,
12225 Wilkins Avenue, Rockville, Maryland 20852.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://

ferc.gov) using the eLibrary link. Enter the docket number excluding
the last three digits in the docket number field to access the
document. At this time, the Commission has suspended access to the
Commission's Public Reference Room, due to the proclamation declaring a
National Emergency concerning the Novel Coronavirus Disease (COVID-19),
issued by the President on March 13, 2020. For assistance, contact the
Federal Energy Regulatory Commission at<EMAIL_ADDRESS>or
call toll-free,<PHONE_NUMBER> or TYY,<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on December 31, 2020.

    Dated: December 14, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-27927 Filed 12-17-20; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: March 15, 2006 (Volume 71, Number 50)]
[Notices]
[Page 13368-13369]
[DOCID:fr15mr06-76]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-230-000]

Iroquois Gas Transmission System, L.P.; Notice of Filing

March 7, 2006.
    Take notice that on February 16, 2006, Iroquois Gas Transmission
System, L.P. (Iroquois) tendered for filing its schedules which reflect
revised calculations supporting the Measurement Variance/Fuel Use
Factors utilized by Iroquois during the period July 1, 2005 through
December 31, 2005.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the date as indicated
below. Anyone filing an intervention or protest must serve a copy of
that document on the Applicant. Anyone filing an intervention or
protest on or before the intervention or protest date need not serve
motions to intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

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

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

TTY, call<PHONE_NUMBER>.

    Comment Date: 5 p.m. Eastern Time on March 13, 2006.

Magalie R. Salas,
Secretary.
[FR Doc. E6-3659 Filed 3-14-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 39 (Friday, February 27, 2015)]
[Notices]
[Page 10731]
[FR Doc No: 2015-04066]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; 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:
    Form 40-F; SEC File No. 270-335, OMB Control No. 3235-0381.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
    Form 40-F (17 CFR 249.240f) is used by certain Canadian issuers to
register a class of securities under Section 12 of the Securities
Exchange Act of 1934 (``Exchange Act'') (15 U.S.C. 78l) or as an annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (15
U.S.C. 78m(a) or 78o(d)). The information required in the Form 40-F is
used by investors in making investment decisions with respect to the
securities of such Canadian companies. We estimate that Form 40-F takes
approximately 427 hours per response and is filed by approximately 160
respondents. We estimate that 25% of the 427 hours per response (106.75
hours) is prepared by the issuer for a total reporting burden of 17,080
(106.75 hours per response x 160 responses).
    Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden imposed by the collection of information; (c) ways to
enhance the quality, utility, and clarity of the information collected;
and (d) ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted in writing within 60
days of this publication.
    Please direct your written comments to Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549; or send an email
to<EMAIL_ADDRESS>
    Dated: February 23, 2015.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-04066 Filed 2-26-15; 8:45 am]
BILLING CODE 8011-01-P


Ten Largest For-Profit Child Care Companies

What follows is contact information for the 10 largest child care
companies listed in “The Exchange Top 50: North America’s Largest
For Profit Child Care Organizations” in the January/February 2007
issue of the Child Care Information Exchange. For additional information
about the Child Care Information Exchange journal, contact the Child
Care Information Exchange (CCIE) at<PHONE_NUMBER> or visit the Web at
HYPERLINK "http://www.ccie.com"  http://www.ccie.com .

Knowledge Learning Corporation

Elanna Yalow, Ph.D., CEO

650 NE Holladay Street, Suite 1400

P.O. Box 6760

Portland, OR 97228

1-888-525-2780

World Wide Web:   HYPERLINK
"http://www.knowledgelearning.com/index.html"
http://www.knowledgelearning.com/index.html

Centers: 2,526

Capacity: 252,524*

La Petite Academy, Inc.

Gary Graves, CEO

130 South Jefferson, Suite 300

Chicago, IL 60661

800-527-3848

World Wide Web:   HYPERLINK "http://www.lapetite.com"
http://www.lapetite.com

Centers: 643

Capacity: 84,814*

Learning Care Group, Inc.

Bill Davis, CEO

21333 Haggerty Road, Suite 300

Novi, MI  48375

248-697-9000

World Wide Web:   HYPERLINK "http://www.learningcaregroup.com/"
http://www.learningcaregroup.com/

Centers: 520

Capacity: 80,500*

      Bright Horizons Family Solutions, Inc.

David Lissy, CEO

200 Talcott Avenue, South

Watertown, MA 02472

617-673-8000

World Wide Web:   HYPERLINK "http://www.brighthorizons.com"
http://www.brighthorizons.com

Centers: 640

Capacity: 66,800*

Nobel Learning Communities, Inc.

George Bernstein, CEO

1615 West Chester Pike, Suite 200

West Chester, PA 19382

484-947-2000

World Wide Web:   HYPERLINK "http://www.nobellearning.com/"
http://www.nobellearning.com/

Centers: 160

Capacity: 24,000*

The Sunshine House

Dennis E. Drew, CEO

425 Main Street, Suite 200

Greenwood, SC 29646

864-223-3945

World Wide Web:   HYPERLINK "http://www.sunshinehouse.com"
http://www.sunshinehouse.com

Centers: 148

Capacity: 20,613*

      Childcare Network

J. Scott Cotter, CEO

P.O. Box 2708

Columbus, GA 31902

706-562-8600

World Wide Web:   HYPERLINK "http://www.childcarenetwork.net"
http://www.childcarenetwork.net

Centers: 142

Capacity: 19,200*

      Mini-Skool Early Learning Centers

	Douglas MacKay

	8767 East Via De Ventura

	Scottsdale, AZ 85258

<PHONE_NUMBER>

World Wide Web:   HYPERLINK "http://www.mini-skool.com"
http://www.mini-skool.com

Centers: 106

Capacity: 18,500*

New Horizon Academy

Susan Dunkley, CEO

16355 36th Avenue North, Suite 700

Plymouth, MN 55446

763-557-1111

World Wide Web:   HYPERLINK "http://www.newhorizonchildcare.com"
http://www.newhorizonchildcare.com

Centers: 88

Capacity: 12,640*

      Minnieland Private Day School

Jackie Leopold, CEO

4300 Prince William Parkway

Woodbridge, VA 22192

800-504-2993

World Wide Web:   HYPERLINK "http://www.minnieland.com/"
http://www.minnieland.com

Centers: 98

Capacity: 11,604*

* Capacity refers to the total licensed capacity for all centers as of
January 1, 2007.  Data for “Franchising Organizations” include both
franchised and company owned centers.  Information provided includes
only what was supplied by organizations listed.

  PAGE  1

* Capacity refers to the total licensed capacity for all centers as of
January 1, 2007.  Data for “Franchising Organizations” include both
franchised and company owned centers.  Information provided includes
only what was supplied by organizations listed.

February 2007

  PAGE  3

Month Year

  PAGE  4

The National Child Care Information Center, a service of the Child Care
Bureau, does not endorse any organization, publication, or resource. For
more information, please contact NCCIC:

10530 Rosehaven Street, Suite 400, Fairfax, Virginia 22030; Ph:
800-616-2242; Fax:<PHONE_NUMBER>;

TTY:<PHONE_NUMBER>; E-mail<EMAIL_ADDRESS>Web site:   HYPERLINK
"http://nccic.acf.hhs.gov"  http://nccic.acf.hhs.gov .

National Child Care Information Center

A service of the Child Care Bureau


[Federal Register Volume 77, Number 52 (Friday, March 16, 2012)]
[Notices]
[Pages 15827-15833]
[FR Doc No: 2012-6444]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66577; File No. SR-FINRA-2012-020]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to
Post-Trade Transparency for Agency Pass-Through Mortgage-Backed
Securities Traded TBA

March 12, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on March 1, 2012, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    FINRA is proposing to amend the FINRA Rule 6700 Series and Trade
Reporting and Compliance Engine (``TRACE'') dissemination protocols
regarding the reporting and dissemination of transactions in TRACE-
Eligible Securities that are Agency Pass-Through Mortgage-Backed
Securities that are traded to be announced (``TBA'') (``TBA
transactions''); to amend FINRA Rule 7730 regarding TRACE fees to
provide for data fees for TBA transaction data; and to amend the FINRA
Rule 6700 Series and FINRA Rule 7730 to delete references to a pilot
program that expired on November 18, 2011, and to incorporate other
minor administrative, technical or clarifying changes.\3\
---------------------------------------------------------------------------

    \3\ The terms TRACE-Eligible Security, Agency Pass-Through
Mortgage-Backed Security and TBA are defined in, respectively, Rule
6710(a), Rule 6710(v) and Rule 6710(u).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA and at
the Commission's Public Reference Room.

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

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

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

    1. Purpose
    FINRA proposes amendments to the TRACE rules and dissemination
protocols to provide greater transparency in TBA transactions. First,
FINRA proposes to amend Rule 6730, to establish distinct requirements
for reporting TBA transactions for which good delivery may be made
(``TBA transactions GD'') and for reporting TBA transactions in
products that are not traded for good delivery (``TBA transactions
NGD''), and, in two stages, to reduce the time frames to report each
type of TBA transaction and to make a related amendment to Rule
6710(u), the definition of ``TBA,'' to incorporate the concepts ``for
good delivery'' and ``not for good delivery.'' Second, FINRA proposes
to amend Rule 6750 to provide for the dissemination of TBA transactions
and to establish, as part of TRACE dissemination protocols, a $25
million dissemination cap for TBA transactions GD and a $10 million
dissemination cap for TBA transactions NGD. Third, FINRA proposes to
amend Rule 7730 to establish fees for current market data for TBA
transactions and aged TBA transaction data.\4\ Finally, FINRA proposes
to amend Rule 6730 to delete references to a pilot program that expired
on November 18, 2011, and Rule 6730 and Rule 7730 to incorporate other
minor administrative, technical or clarifying changes as described in
greater detail below.
---------------------------------------------------------------------------

    \4\ The term Historic TRACE Data is defined in Rule 7730(f)(4)
and refers to aged TRACE transaction data, which will include TBA
transaction data.
---------------------------------------------------------------------------

TBA Transactions
    As provided in Rule 6710(u), TBA means

     ``to be announced'' and refers to a transaction in an Agency
Pass-Through Mortgage-Backed Security * * * where the parties agree
that the seller will deliver to the buyer an Agency Pass-Through
Mortgage-Backed Security of a specified face amount and coupon from
a specified Agency or Government-Sponsored Enterprise program
representing a pool (or pools) of mortgages (that are not specified
by unique pool number).\5\
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    \5\ As defined in Rule 6710(v), an Agency Pass-Through Mortgage-
Backed Security means:
    A mortgage-backed security issued by an Agency or a Government-
Sponsored Enterprise, for which the timely payment of principal and
interest is guaranteed by an Agency or a Government-Sponsored
Enterprise, representing ownership interests in a pool or pools of
residential mortgage loans with the security structured to ``pass
through'' the principal and interest payments made by the mortgagees
to the owners of the pool(s) on a pro rata basis.
    The terms Agency and Government-Sponsored Enterprise (``GSE'')
are defined in, respectively, Rule 6710(k) and Rule 6710(n).

    In a TBA transaction, the parties agree on a price for delivering a
given volume of Agency Pass-Through Mortgage-Backed Securities at a
specified future date. The distinguishing feature of a TBA transaction
is that the actual identity of the securities to be delivered at
settlement is not specified on the date of execution (``Trade Date'').
Instead, the parties to the trade agree on only five general parameters
of the securities to be delivered: issuer, mortgage type, maturity,
coupon, and month of settlement.
    TBA transactions are ``for good delivery'' (``GD'') or ``not for
good delivery'' (``NGD''). The GD and NGD distinctions and
classifications are based on market standards and conventions that
identify which mortgage pools (or combinations of mortgage pools)
satisfy ``good delivery'' requirements, which were developed to
facilitate the securitization of common

mortgage products, and to enhance and maintain the liquidity in the TBA
market for such mortgage-backed securities. The conventions and
standards for TBA transactions GD are set forth in the ``Uniform
Practices for the Clearance and Settlement of Mortgage-Related
Securities and Other Related Securities'', and particularly in Chapter
8 (``Standard Requirements for Delivery on Settlements of Fannie Mae,
Freddie Mac and Ginnie Mae Securities'') (``Good Delivery
Guidelines'')).\6\ For a TBA transaction to be GD, it must conform to
certain GSE or Ginnie Mae program requirements regarding the mortgage
loans and also meet certain other requirements, such as those regarding
variance in the actual principal amount delivered compared to the
principal amount of the trade, the number of pools that may be
delivered at settlement, minimum original face amount of a pool, and
final maturity guidelines regarding the maturity of the mortgage loans
underlying the security, among others.\7\ Products traded TBA but that
are not eligible according to the Good Delivery Guidelines are
considered ``not for good delivery.''
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    \6\ ``Uniform Practices for the Clearance and Settlement of
Mortgage-Backed Securities and Other Related Securities'' (``Uniform
Practices Guidelines'') is published by the Securities Industry and
Financial Markets Association (``SIFMA'').
    \7\ Pooled mortgage loans that are traded GD include, but are
not limited to, those conforming to the Fannie Mae and Freddie Mac
``Single Family'' programs (i.e., single family mortgages identified
by coupon ranges and maturities), and certain other products
conforming to Fannie Mae, Freddie Mac or GNMA programs (e.g., the
Gold Single Family, Balloon, Gold Balloon and Jumbo programs). Most
newly issued Agency Pass-Through Mortgage-Backed Securities are
eligible to be sold as TBA transactions GD. Examples of mortgage
products not eligible for good delivery to settle a TBA transaction
include, but are not limited to, interest only mortgages, project/
construction loans, and certain non-conforming mortgages on single
family residences.
---------------------------------------------------------------------------

    The vast majority of loans eligible for inclusion in TBA-delivered
pools traded GD are known as standard loans. They are 15- and 30-year
fixed-rate single-family loans with certain general characteristics set
forth in the Good Delivery Guidelines.\8\ Other loans that are eligible
for good delivery upon meeting specific criteria set forth in the Good
Delivery Guidelines include Fannie Mae 11th District Cost of Funds
Index (``COFI'') adjusted rate mortgages (``ARMs'') and Ginnie Mae
ARMs. Also, TBA identification numbers assigned by the CUSIP Service
Bureau distinguish the issuers and the various pool types, among other
things, providing another means of identifying a transaction as a TBA
transaction GD or a TBA transaction NGD.\9\
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    \8\ See Good Delivery Guidelines, Section 11 (``General
Characteristics of Standard Loans for 15 and 30yr Fixed-Rate Single-
Family TBA-eligible Pools,'' listing 14 general characteristics of
standard 15-year or 30-year loans (e.g., fixed rate, first lien, and
level payment).)
    \9\ CUSIP means Committee on Uniform Security Identification
Procedures. A CUSIP consists of nine characters. Positions 1 and 2
denote the product type (for example, 01 refers to single family
loans, 06 refers to balloon loans, and 16 refers to ARMs), and
Position 3 identifies the Agency or GSE (F denotes Fannie Mae, R
denotes Freddie Mac, N denotes GNMA I and H denotes GNMA II).
Positions 4 through 8 are used to identify coupon, maturity in years
and settlement month, and Position 9 is a check digit (i.e., a
mathematical formula that checks the accuracy of the previous 8
digits).
---------------------------------------------------------------------------

    Together, the securitization process and the TBA market transform
what is a fundamentally heterogeneous universe of individual mortgages
and mortgage pools (with myriad credit and prepayment characteristics)
into groups of fungible--and therefore liquid--fixed-income
instruments.\10\
---------------------------------------------------------------------------

    \10\ James Vichery and Joshua Wright, TBA Trading and Liquidity
in the Agency MBS Market, Federal Reserve Bank of New York Staff
Reports, no. 468 (August 2010), available at http://www.newyorkfed.org/research/staff_reports/sr468.pdf.
---------------------------------------------------------------------------

Reduction of TBA Transaction Reporting Period
     Currently, Asset-Backed Securities transactions (except certain
pre-issuance transactions in collateralized mortgage obligations
(``CMOs'') and real estate mortgage investment conduits (``REMICs''))
that are executed on a business day through 5:00 p.m. Eastern Time must
be reported to TRACE on the Trade Date during TRACE System Hours, as
provided in Rule 6730(a)(3)(A)(ii).\11\ In contrast, secondary market
transactions in all other TRACE-Eligible Securities must be reported
within 15 minutes of the Time of Execution.\12\ With certain
exceptions, transaction information on such TRACE-Eligible Securities
is disseminated as soon as the transaction is reported, and the 15-
minute reporting requirement results in meaningful price transparency
for market participants trading such securities.\13\
---------------------------------------------------------------------------

    \11\ In general, Asset-Backed Securities must be reported to
TRACE under Rules 6730(a)(3)(A) and (B). Rule 6730(a)(3)(B)(i)
addresses reporting requirements for Asset-Backed Securities
transactions executed after 5:00 p.m. Eastern Time on a business
day, and Rule 6730(a)(3)(B)(ii) addresses reporting requirements for
Asset-Backed Securities transactions executed after TRACE System
Hours, or on a weekend or a holiday, or other day on which the TRACE
system is not open at any time during that day. However, for certain
pre-issuance transactions in CMOs and REMICs, the applicable
reporting provisions are set forth in Rule 6730(a)(3)(C), and Rules
6730(a)(3)(A) and (B) do not apply. The terms Asset-Backed Security
and TRACE System Hours are defined in, respectively, Rule 6710(m)
and Rule 6710(t).
    \12\ The term Time of Execution is defined in Rule 6710(d).
    \13\ Currently, transaction information on all types of
securities that are TRACE-Eligible Securities, except Asset-Backed
Securities, is disseminated as provided in Rule 6750(a). However,
FINRA does not disseminate information on a transaction in a TRACE-
Eligible Security that is (1) effected pursuant to Securities Act
Rule 144A (17 CFR 239.144A) under Rule 6750(b)(1); (2) a transfer of
proprietary securities positions where the transfer (A) is effected
in connection with a merger or direct or indirect acquisition and
(B) is not in furtherance of a trading or investment strategy under
Rule 6750(b)(2); or (3) a List or Fixed Offering Price Transaction
or a Takedown Transaction under Rule 6750(b)(3). The terms List or
Fixed Offering Price Transaction and Takedown Transaction are
defined in, respectively, Rule 6710(q) and Rule 6710(r).
---------------------------------------------------------------------------

    In connection with proposing that TBA transactions be disseminated,
FINRA proposes to reduce the reporting time frames for TBA transactions
GD to provide market participants meaningful and timely price
information about the more liquid and active TBA market segment. The
proposed rule change also will reduce the reporting period for the less
liquid and active TBA transactions NGD, but to a lesser extent, as
discussed in greater detail below. In addition, FINRA proposes to
reduce the reporting time frames proposed for TBA transactions GD and
TBA transactions NGD in two stages to permit industry participants to
adjust policies and procedures and to make required technological
changes.
    TBA Transactions For Good Delivery. Proposed Rule 6730(a)(3)(D)
sets forth the requirements to report TBA transactions GD. First, for a
pilot program of approximately 180 days duration, the reporting period
for TBA transactions GD would be reduced from no later than the close
of the TRACE system on Trade Date to no later than 45 minutes from the
Time of Execution (``TBA GD Pilot Program''), as set forth in proposed
Rule 6730(a)(3)(D)(i).\14\ Minor exceptions to the general requirements
are set forth in proposed Rule 6730(a)(3)(D)(i)a., c. and d.\15\

 Second, after approximately 180 days, the TBA GD Pilot Program would
expire and the reporting period would be reduced from no later than 45
minutes from the Time of Execution to no later than 15 minutes from the
Time of Execution, as set forth in proposed Rule 6730(a)(3)(D)(ii).
Again, FINRA proposes to include certain limited exceptions to the
reporting time frames for TBA transactions executed shortly before the
TRACE system closes and when the TRACE system is closed.\16\
---------------------------------------------------------------------------

    \14\ To accommodate member requests that rule changes requiring
technology changes occur on a Friday, if possible, the proposed TBA
GD Pilot Program and a similar pilot program for TBA transactions
NGD will expire on a Friday (i.e., on the 180th day, if a Friday,
or, if the 180th day is not a Friday, on the Friday next occurring
that the TRACE system is open).
    \15\ Minor exceptions to the general requirement to report TBA
transactions GD no later than 45 minutes from the Time of Execution
are set forth in proposed Rule 6730(a)(3)(D)(i)a., c. and d. Under
proposed Rule 6730(a)(3)(D)(i)a., transactions executed on a
business day at or after 12:00 a.m. Eastern Time through 7:59:59
a.m. Eastern Time must be reported the same day no later than 45
minutes after the TRACE system opens. Under proposed Rule
6730(a)(3)(D)(i)c., transactions executed on a business day less
than 45 minutes before 6:30 p.m. Eastern Time (the time the TRACE
system closes) must be reported no later than 45 minutes after the
TRACE system opens the next business day (T + 1), and if reported on
T + 1, designated ``as/of'' and include the date of execution. Under
proposed Rule 6730(a)(3)(D)(i)d., transactions executed on a
business day at or after 6:30 p.m. Eastern Time through 11:59:59
p.m. Eastern Time or on a Saturday, a Sunday, a federal or religious
holiday or other day on which the TRACE system is not open at any
time during that day (determined using Eastern Time) must be
reported the next business day (T + 1), no later than 45 minutes
after the TRACE system opens, designated ``as/of'' and include the
date of execution.
    \16\ After the TBA GD Pilot Program expires, proposed Rule
6730(a)(3)(D)(ii), which incorporates by reference Rule 6730(a)(1),
requires generally that TBA transactions be reported no later than
15 minutes from the Time of Execution, with certain minor exceptions
for transactions executed near the end of the TRACE System Hours,
before and after TRACE System Hours, and on weekends and certain
federal and religious holidays. See, e.g., Rule 6730(a)(1)(C) and
Rule 6730(a)(1)(D). The exceptions are the same as those that apply
to members reporting transactions in corporate bonds and Agency Debt
Securities to TRACE.
---------------------------------------------------------------------------

    TBA Transactions Not For Good Delivery. The proposed reporting
requirements that would apply to TBA transactions NGD are set forth in
proposed Rule 6730(a)(3)(E). FINRA has been informed that TBA
transactions NGD are in certain cases less automated and more
operationally challenging, wherefore FINRA proposes a longer reporting
time frame than for TBA transactions GD. First, for a pilot program of
approximately 180 days duration, the reporting period for TBA
transactions NGD would be reduced from no later than the close of the
TRACE system on Trade Date to no later than 120 minutes from the Time
of Execution (``TBA NGD Pilot Program''), as set forth in proposed Rule
6730(a)(3)(E)(i). Minor exceptions to the general requirements would be
set forth in proposed Rule 6730(a)(3)(E)(i)a., c. and d.\17\ Second,
after approximately 180 days, the TBA NGD Pilot Program would expire
and the reporting period would be reduced from no later than 120
minutes from the Time of Execution to no later than 60 minutes from the
Time of Execution, as set forth in proposed Rule 6730(a)(3)(E)(ii). The
provision also would include certain limited exceptions for TBA
transactions executed shortly before the TRACE system closes and when
the TRACE system is closed.\18\ After the 60-minute reporting
requirement is implemented, FINRA will continue to review the reporting
of TBA transactions NGD and may recommend further reductions in the
reporting period.
---------------------------------------------------------------------------

    \17\ Minor exceptions to the general requirement to report TBA
transactions NGD no later than 120 minutes from the Time of
Execution are set forth in proposed Rule 6730(a)(3)(E)(i)a., c. and
d. Under proposed Rule 6730(a)(3)(E)(i)a., transactions executed on
a business day at or after 12:00 a.m. Eastern Time through 7:59:59
a.m. Eastern Time must be reported the same day no later than 120
minutes after the TRACE system opens. Under proposed Rule
6730(a)(3)(E)(i)c., transactions executed on a business day less
than 120 minutes before 6:30 p.m. Eastern Time (the time the TRACE
system closes) must be reported no later than 120 minutes after the
TRACE system opens the next business day (T + 1), and if reported on
T + 1, designated ``as/of'' and include the date of execution. Under
proposed Rule 6730(a)(3)(E)(i)d., transactions executed on a
business day at or after 6:30 p.m. Eastern Time through 11:59:59
p.m. Eastern Time or on a Saturday, a Sunday, a federal or religious
holiday or other day on which the TRACE system is not open at any
time during that day (determined using Eastern Time) must be
reported the next business day (T + 1), no later than 120 minutes
after the TRACE system opens, designated ``as/of'' and include the
date of execution.
    \18\ After the TBA NGD Pilot Program expires, there are minor
exceptions to the 60-minute reporting time frame set forth in
proposed Rule 6730(a)(3)(E)(ii) for TBA transactions NGD executed
near the end of the TRACE System Hours, before and after TRACE
System Hours, and on weekends and certain federal and religious
holidays. See proposed Rule 6730(a)(3)(E)(ii)a., c. and d. The
exceptions are structured similarly to the exceptions to 15-minute
reporting that FINRA proposes to apply to TBA transactions GD.
    Guidance previously published regarding reporting transactions
in Asset-Backed Securities as soon as practicable, rather than
queuing such reports until the end of the reporting time period,
applies to members' reporting obligations under the time frames
proposed herein. See Trade Reporting Notice, dated May 10, 2011.
---------------------------------------------------------------------------

    TBA Definition. In connection with establishing separate reporting
requirements, and as discussed infra, separate dissemination caps for
TBA transactions GD and TBA transactions NGD, FINRA proposes to amend
the definition of ``TBA'' in Rule 6710(u) to incorporate the concepts
that TBA transactions may be traded GD or NGD. FINRA also incorporates
minor, technical changes to the defined term. As amended, Rule 6710(u)
would provide as follows:

    ``To Be Announced'' (``TBA'') means a transaction in an Agency
Pass-Through Mortgage-Backed Security as defined in paragraph (v)
where the parties agree that the seller will deliver to the buyer an
Agency Pass-Through Mortgage-Backed Security of a specified face
amount and coupon from a specified Agency or Government-Sponsored
Enterprise program representing a pool (or pools) of mortgages (that
are not specified by unique pool number), and includes TBA
transactions ``for good delivery'' (``GD'') and TBA transactions
``not for good delivery'' (``NGD'').

Dissemination of TBA Transaction Data

    Although members began reporting transactions in Asset-Backed
Securities to TRACE on May 16, 2011, FINRA currently does not
disseminate publicly any of the Asset-Backed Securities transaction
data reported to TRACE. Specifically, Rule 6750(b)(4) provides that
transaction information on TRACE-Eligible Securities that are Asset-
Backed Securities will not be disseminated.
    However, when FINRA proposed the dissemination restrictions in Rule
6750(b)(4) regarding Asset-Backed Securities, FINRA represented that it
would study the Asset-Backed Securities data after transaction
reporting began. In the Commission's order approving the proposed rule
change to define Asset-Backed Securities as TRACE-Eligible Securities
and require reporting of Asset-Backed Securities transactions, the
Commission noted FINRA's intent to study Asset-Backed Securities
dissemination issues prior to making any proposal to disseminate some
or all of such information, and the Commission's historical support of
efforts to improve post-trade transparency in the fixed income markets:

    FINRA believes that information on Asset-Backed Securities
transactions should be collected and analyzed before making any
decision regarding the utility of such information for transparency
purposes or the consequences of dissemination on this market. FINRA
has stated that, after a period of study, it would file a proposed
rule change if it determined that its study of the trading data
provides a reasonable basis to seek dissemination of transaction
information on Asset-Backed Securities. The Commission has
historically been supportive of efforts to improve post-trade
transparency in the fixed income markets and encourages FINRA to
carry out that study.\19\
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release No. 61566 (February 22,
2010), 75 FR 9262, 9265 (March 1, 2010) (Order Approving File No.
SR-FINRA-2009-065).

    Since reporting began on May 16, 2011, FINRA has reviewed Asset-
Backed Securities transaction data. The reported Asset-Backed
Securities transaction data, as well as input from market participants
as FINRA prepared to expand TRACE to include Asset-Backed Securities,
suggests that real-time disseminated TRACE transaction data should be
expanded to include transaction information on TBA transactions.
    First, at the launch of Asset-Backed Securities reporting, certain
market participants noted that TBA transactions

trade in a very liquid market and suggested that FINRA consider
transparency in such transactions. Second, as FINRA reviewed and
continues to review the data reported for Asset-Backed Securities,
including TBA transactions, and studies the total volume of TBA
transactions, the concentration of trading in such securities, and the
pricing disparity among various types of Agency Pass-Through Mortgage-
Backed Securities traded TBA to understand their liquidity and
fungibility, the data supports FINRA's proposal to disseminate TBA
transactions GD and TBA transactions NGD to increase transparency in
this market.
    The market activity reported and reviewed reveals that the TBA
market is generally active and liquid. In addition, the degree of
fungibility is high, with substantial trading concentrated among a
relatively small universe of securities as identified by a unique CUSIP
number (hereinafter, ``CUSIP'' means the specific security identified
by the unique CUSIP number). The TBA market has an average daily volume
of $248 billion traded in close to 8,000 average daily trades,\20\ and
the average daily volume of all TBA transactions is approximately ten
times the average daily volume of the entire corporate bond market.\21\
The vast majority of TBA transactions occur in TBA GD, accounting for
99.36 percent of all TBA transactions (correspondingly, TBA
transactions NGD account for 0.64 percent of all TBA transactions). The
correlation among the prices of various TBA CUSIPs is high, and the
price of one TBA transaction may be derived using available prices for
TBA transactions for a different issuer, a different coupon rate,
maturity, or a combination thereof.\22\
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    \20\ The information is based upon FINRA's review of all TBA
transactions reported to TRACE from May 16, 2011 through October 28,
2011.
    \21\ The information is based upon FINRA's review of
transactions in all TRACE-Eligible Securities, other than Agency
Debt Securities, reported to TRACE from May 16, 2011 through October
28, 2011.
    \22\ From a review of all TBA transactions reported to TRACE
from May 16, 2011 through July 31, 2011, the data shows that TBA
transactions (with different issuers, different coupon rates, and
different maturities) were priced consistently, relative to each
other.
---------------------------------------------------------------------------

FINRA Rule 6750

    Rule 6750(b)(4) currently provides that transactions in Asset-
Backed Securities are not subject to dissemination. FINRA proposes to
amend the rule to disseminate information on TBA transactions GD and
TBA transactions NGD, which would occur immediately upon receipt of a
transaction report.\23\ Thus, information would be disseminated on TBA
transactions GD within 45 minutes, or, after the expiration of the TBA
GD Pilot Program, within 15 minutes of the Time of Execution, and, on
TBA transactions NGD, within 120 minutes, or, after the expiration of
the TBA NGD Pilot Program, within 60 minutes of the Time of
Execution.\24\
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    \23\ Rule 6750(b) would be amended to provide that FINRA will
not disseminate information on a transaction in a TRACE-Eligible
Security that is
    (4) An Asset-Backed Security, except an Agency Pass-Through
Mortgage-Backed Security traded to be announced (``TBA'') (``TBA
transaction'').
    \24\ FINRA continues to review Asset-Backed Security transaction
information in other sectors of the Asset-Backed Securities market
and, at a later date, may propose that transactions in other Asset-
Backed Securities be disseminated.
---------------------------------------------------------------------------

Dissemination Caps

    Currently, there are two TRACE dissemination protocols in place,
referred to as dissemination caps, under which the actual size of a
transaction over a certain par value is not displayed in disseminated
TRACE transaction data. For TRACE-Eligible Securities that are rated
Investment Grade, the dissemination cap is $5 million (``$5MM''), and
the size of transactions in excess of $5MM is displayed as ``$5MM+.''
For TRACE-Eligible Securities that are rated Non-Investment Grade, the
dissemination cap is $1 million (``$1MM''), and the size of a
transaction in excess of $1MM is displayed as ``$1MM+.'' \25\
---------------------------------------------------------------------------

    \25\ The terms Investment Grade and Non-Investment Grade are
defined in, respectively, Rule 6710(h) and Rule 6710(i).
---------------------------------------------------------------------------

    FINRA has analyzed the distribution of TBA transactions GD and TBA
transactions NGD to determine an appropriate cap for these
transactions. FINRA proposes to set a dissemination cap for a TBA
transaction GD initially at $25 million. Accordingly, the size of a TBA
transaction GD greater than $25 million would be displayed in
disseminated data as ``$ 25MM+.'' At this level, approximately 20
percent of trades in TBA transactions NG [sic] representing
approximately 84 percent of total volume traded would be disseminated
subject to the cap.\26\ For a TBA transaction NGD, FINRA proposes to
set a $10 million dissemination cap initially, with size displayed in
disseminated data as ``$10MM+,'' if the size of the TBA transaction NGD
exceeded $10 million. At this level, approximately 42 percent of TBA
transactions NGD representing approximately 85 percent of total volume
traded would be disseminated subject to the cap.
---------------------------------------------------------------------------

    \26\ In contrast, the existing caps for corporate Investment
Grade bonds limit the display of actual size for approximately 1.6
percent of trades representing approximately 48 percent of total par
value traded, and, for Agency Debt Securities, approximately six
percent of trades representing approximately 74 percent of total par
value traded. The information is based on a review of all TBA
transactions, and transactions in Investment Grade corporate bonds
and Agency Debt Securities reported to TRACE from May 16, 2011
through January 4, 2012. The term Agency Debt Security is defined in
Rule 6710(l).
---------------------------------------------------------------------------

    The $25 million dissemination cap for TBA transactions GD and the
$10 million dissemination cap for multiple types of less liquid and
active TBA transactions are more conservative than the $50 million
dissemination cap FINRA initially considered.\27\ FINRA believes that
the more conservative caps will allow the marketplace time to adjust to
the new levels of transparency. In setting these dissemination caps,
FINRA took into account the liquidity and trading activity differences
within each segments [sic] of TBA GD and TBA NGD. FINRA notes that most
TBA transactions are for good delivery, and even with setting a
dissemination cap at $25 million for such transactions, and a $10
million cap for a smaller and generally somewhat less liquid segment of
the TBA market, price transparency in the TBA market will improve
significantly.
---------------------------------------------------------------------------

    \27\ See Item II.C. for a discussion of SR-FINRA-2011-069.
---------------------------------------------------------------------------

    As dissemination of TBA transactions GD and TBA transactions NGD is
implemented, FINRA will continue to review the volume of and liquidity
in TBA transactions GD and TBA transactions NGD, and may recommend that
the dissemination caps be set at higher levels to provide additional
transparency to market participants.

Data and Fees

    FINRA proposes to amend Rule 7730 to make available the real-time
disseminated TBA transaction data and the Historic TRACE Data for TBA
transactions, and to establish the fees for such TBA transaction data.
First, FINRA proposes to amend Rule 7730(c) to establish the Asset-
Backed Security data set (``ABS Data Set'') as the third Real-Time
TRACE market data set. The ABS Data Set will be limited to information
disseminated immediately upon receipt of a transaction report for
either a TBA transaction GD or a TBA transaction NGD. The market data
fee rates currently in effect for similar Real-Time TRACE market data
sets (i.e., for the Corporate Bond Data Set and the Agency Data Set) in
Rule 7730(c) would be extended to the ABS Data Set.
    Second, FINRA proposes to amend Rule 7730(d) to establish a third
historic

data product for TBA transactions (``Historic ABS Data Set'') similar
to the data sets for corporate bonds (``Historic Corporate Bond Data
Set'') and Agency Debt Securities (``Historic Agency Data Set'')
referenced in the rule. FINRA also proposes to establish fees for the
Historic ABS Data Set at the same rates currently in effect in Rule
7730(d) for the Historic Corporate Bond Data Set and the Historic
Agency Data Set. The Historic ABS Data Set would include all TBA
transactions effected as of or after May 16, 2011, and, among other
things, would include uncapped volume information. However, like all
other Historic TRACE Data, TBA transaction data included in the
Historic ABS Data Set would be released subject to a delay of
approximately 18 months from the date of the transaction.\28\
---------------------------------------------------------------------------

    \28\ Reporting of Asset-Backed Securities transactions began on
May 16, 2011. Given the 18-month delayed release of Historic TRACE
Data, Historic ABS Data would become available for the first time in
early 2013.
---------------------------------------------------------------------------

Other Rule Changes

    FINRA proposes to delete references to a pilot program that expired
on November 18, 2011 in Rule 6730, and to incorporate other minor
administrative, technical or clarifying changes in Rule 6730 and Rule
7730, as discussed below.
    FINRA Rule 6730. FINRA proposes to add the sentence ``Transactions
in Asset-Backed Securities must be reported as provided in this
paragraph (a)(3).'' as the introductory sentence to Rule 6730(a)(3),
and ``General Reporting Requirements'' as the caption for Rule
6730(a)(3)(A). FINRA also proposes to add the phrase, ``Except as
provided in paragraphs (a)(3)(C), (a)(3)(D) and (a)(3)(E),'' as
introductory text to Rule 6730(a)(3)(A), to indicate that Asset-Backed
Securities must be reported as provided in subparagraph (A) of Rule
6730(a)(3), with the exceptions to the general requirements set forth
in subparagraphs (C), (D) and (E) of Rule 6730(a)(3).
    FINRA proposes to consolidate and otherwise amend Rule
6730(a)(3)(A) and (B) as follows: (a) To delete Rule 6730(a)(3)(A)(i),
the pilot program for Asset-Backed Securities transaction reporting
that expired on November 18, 2011 (``ABS Pilot Program''); (b) to
delete a clause referencing the ABS Pilot Program and Rule
6730(a)(3)(C), and to delete ``(ii)'' and renumber the retained text as
Rule 6730(a)(3)(A)(i); and (c) to delete the text in Rule
6730(a)(3)(B), except subparagraphs (i) and (ii) of Rule 6730(a)(3)(B),
and renumber Rule 6730(a)(3)(B)(i) and (ii) as Rule 6730(a)(3)(A)(ii)
and (iii).
    FINRA proposes to amend Rule 6730(a)(3)(C) as follows: (a) To add a
caption, ``Collateralized Mortgage Obligation and Real Estate Mortgage
Investment Conduit Transactions;'' (b) to delete the provisions
relating to the ABS Pilot Program (i.e., Rule 6730(a)(3)(C)(i),
including subparagraphs a. and b.); (c) to add an introductory clause
providing: ``Transactions in Asset-Backed Securities that are
collateralized mortgage obligations (``CMOs'') or real estate mortgage
investment conduits (``REMICS'') that are executed before the issuance
of the security must be reported the earlier of:''; (d) to retain in
Rule 6730(a)(3)(C)(ii) subparagraphs a. and b. and the final sentence
of Rule 6730(a)(3)(C)(ii), and renumber subparagraphs a. and b. as
subparagraphs (i) and (ii) of Rule 6730(a)(3)(C); and (e) to delete, in
Rule 6730(a)(3)(C)(ii), ``(ii)'' and the phrase ``After the expiration
of the Pilot Program in paragraph (a)(3)(A)(i), such transactions must
be reported the earlier of:.''
    FINRA Rule 7730. In Rule 7730, FINRA proposes to add, in paragraphs
(d)(1)(A)(ii) and (d)(1)(B)(ii) regarding Historic TRACE Data, a
sentence to clarify that the 2011 Historic Agency Data Set also will
include the 2010 Historic Agency Data Set, and the 2013 Historic ABS
Data Set also will include the 2012 Historic ABS Data Set.\29\ FINRA
also proposes minor technical amendments to Rule 7730(c) and (d) to
reflect that the number of Data Sets and Historic Data Sets will
increase from two to three, and other minor technical amendments to
Rule 7730(b)(1) and Rule 7730(c) and (d).
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    \29\ FINRA proposes not to add the clarification to the fee
chart in Rule 7730. Also, FINRA proposes to delete a similar
statement--``The 2003 Historic Corporate Bond Data Set also includes
the 2002 Historic Corporate Bond Data Set.''--in two sections of the
fee chart in Rule 7730 summarizing Historic TRACE Data fees. Also,
FINRA proposes to delete ``BTDS'' in two sections of the fee chart
in Rule 7730 summarizing market data fees.
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    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be no earlier than August
1, 2012 and no later than 180 days following publication of the
Regulatory Notice announcing Commission approval.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\30\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest, and Section 15A(b)(5) of the Act,\31\ which requires,
among other things, that FINRA rules provide for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system that FINRA
operates or controls. FINRA believes that the proposed rule change to
increase fixed income market transparency is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and, generally to protect investors and
the public because transparency in TBA transactions will enhance the
ability of investors and other market participants to identify and
negotiate fair and competitive prices for Agency Pass-Through Mortgage-
Backed Securities, and because the dissemination of price and other TBA
transaction information publicly will promote just and equitable
principles of trade among participants in the more transparent market,
and will aid in the prevention of fraudulent and manipulative acts and
practices in the TBA market.
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    \30\ 15 U.S.C. 78o-3(b)(6).
    \31\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    On November 22, 2011, FINRA filed with the SEC SR-FINRA-2011-069
(``November 2011 Filing''), a proposed rule change to amend the Rule
6700 Series and TRACE dissemination protocols regarding the reporting
and dissemination of TBA transactions. Specifically, FINRA proposed to
disseminate TBA transactions immediately upon FINRA's receipt of a TBA
transaction report, and to establish a $50 million dissemination cap
such that when transactions over $50 million were disseminated, the
size displayed for such transactions would be capped at $50 million and
displayed as ``$50MM+.'' In connection with proposing to disseminate
TBA transactions, FINRA proposed to reduce the period to report TBA
transactions to 15 minutes, in two stages. First, for a

pilot period of approximately 180 days, FINRA proposed to require
members to report TBA transactions no later than 45 minutes from the
Time of Execution, and after the pilot period expired, to report no
later than 15 minutes from the Time of Execution. FINRA proposed to
announce the effective date of the proposed rule change in a Regulatory
Notice to be published no later than 60 days following Commission
approval, and that the effective date would be no later than 180 days
following publication of the Regulatory Notice announcing Commission
approval.\32\ A copy of the Form 19b-4 and original Exhibit 5 of the
November 2011 Filing is attached as Exhibit 2a.
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    \32\ FINRA also proposed to amend Rule 7730 regarding TRACE fees
to provide for data fees for TBA transaction data, Rule 6730 to
delete references to a pilot program that expired on November 18,
2011, and Rule 6730 and Rule 7730 to incorporate other minor
administrative, technical or clarifying changes.
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    On December 8, 2011, the November 2011 Filing was published for
comment in the Federal Register.\33\ A copy of the Federal Register
release is attached as Exhibit 2b. The SEC received one comment letter
in response,\34\ a copy of which is attached as Exhibit 2c. The
commenter raised concerns regarding: (1) The proposed $50 million
dissemination cap and its potential impact on various segments of the
TBA market; (2) the proposed reporting time frames; and (3) the
implementation time frame for the proposed rule change.
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    \33\ See Securities Exchange Act Release No. 65877 (December 2,
2011), 76 FR 76777 (December 8, 2011) (Notice of Filing of File No.
SR-FINRA-2011-069). The comment period closed on December 29, 2011.
    \34\ See Letter from Chris Killian, Managing Director,
Securitization, Securities Industry and Financial Markets
Association (``SIFMA''), to Elizabeth M. Murphy, Secretary, SEC,
dated December 22, 2011.
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    FINRA withdrew the November 2011 Filing on March 1, 2012, prior to
filing a response to comments. Accordingly, the comments to the
November 2011 Filing and FINRA's responses are discussed below.

Dissemination Cap

    The commenter states that the TBA market is a collection of
distinct trading markets for distinct trading products, with material
differences in liquidity. For example, the commenter stated that in
products such as ARMs, mortgages with 40-year maturities, and project
loans, the volume issued is very low in comparison to standard 30-year
fixed rate mortgages that trade for good delivery, and consequently,
liquidity in TBA transactions backed by such products is lower. In
addition, the commenter states that a volume cap of $50 million is
generally too high for even the most liquid segments of the TBA market,
and recommends that FINRA adopt a $25 million dissemination cap (or a
lesser cap) for the most liquid TBA products (pools to be comprised of
standard, 30-year, fixed rate mortgages for good delivery), a $10
million dissemination cap for pools of 15-year mortgages, and a $1
million to $5 million cap for other products traded TBA (e.g., pools of
high coupon fixed rate mortgages, ARMs, project loans, jumbo loans and
reverse mortgages). The commenter notes that, in making its
recommendations, it does not have access to the transaction data cited
by FINRA regarding trading volume.
    After careful consideration of the commenter's concerns, FINRA
proposes two lower dissemination caps herein. Based on FINRA's review
of the TBA trading data, discussions with member firms, and the
commenter's concern that liquidity may be adversely affected if the
originally proposed dissemination cap is adopted, FINRA has proposed to
lower the dissemination cap to $25 million for all TBA transactions GD
and to $10 million for all TBA transactions NGD. Although the commenter
recommends multiple dissemination caps based upon factors such as
mortgage maturity and coupon, FINRA believes that the commenter's
approach would result in investor confusion and operational
complexities that are unnecessary to address the issues raised by the
commenter. FINRA's proposal to adopt a two-pronged approach to the
dissemination caps for products traded TBA is much less complex and, at
the same time, allows FINRA to address most of the commenter's concerns
regarding liquidity, providing a lower dissemination cap for those
products that generally are the least liquid, without establishing
multiple caps and standards. The reduction of the dissemination cap to
$25 million for TBA transactions GD, and for multiple types of less
liquid TBA transactions NGD to $10 million is a more conservative
metric than initially proposed, which FINRA believes is appropriate at
the onset. In setting these dissemination caps, FINRA took into account
the liquidity and activity differences in coupons and maturities within
each segments [sic] of TBA transactions GD and TBA transactions
NGD.\35\ FINRA notes that even with the reduction of the dissemination
cap for TBA transactions GD from $50 million to $25 million for such
transactions, and a $10 million cap for a small and generally somewhat
less liquid segment, price transparency in the TBA market will improve
significantly.
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    \35\ For example, at the proposed cap of $25 million,
approximately 21 percent of trades and approximately 85 percent of
volume would be capped for transactions in TBA transactions GD
backed by eligible 30-year mortgage loans, approximately 15 percent
of trades and approximately 78 percent of volume would be capped for
transactions in TBA transactions GD backed by eligible 15-year
mortgage loans, and approximately 20 percent of trades and
approximately 67 percent of volume would be capped for transactions
in TBA transactions GD backed by other types of eligible loans
having other maturities.
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Reporting Time Frames

    The commenter states that the proposed time frames for reporting
certain less liquid products, such as ARMs, project loans and reverse
mortgages, within the proposed accelerated time frames will not be
possible absent a cumbersome and potentially risky manual trade
reporting process. The commenter notes that manual processing raises
compliance, audit and workflow related concerns, and may result in
additional TRACE reporting errors. For these reasons, the commenter
recommends that the reporting deadline for these products remain at the
close of business on the date of execution.
    In response to the commenter's concerns regarding reporting
transactions in instruments such as certain ARMS, project loans and
reverse mortgages, FINRA proposes to modify the reporting requirements
herein. Specifically, for TBA transactions NGD, FINRA proposes to
extend the previously proposed time frames to report (i.e., 45 minutes
from the Time of Execution, then after expiration of a pilot program,
15 minutes from the Time of Execution). In this proposed rule change,
FINRA proposes to require members to report such transactions initially
no later than two hours from the Time of Execution, then, after
expiration of the proposed TBA NGD Pilot Program, no later than one
hour from the Time of Execution. FINRA retains the reporting time frame
initially proposed for TBA transactions GD. FINRA believes that
proposing the longer reporting time frames for TBA transactions NGD
will facilitate timely trade reporting, and accommodate current
differences in members' systems, trade processing and other work flows.
However, given that more than half of TBA transactions NGD currently
are reported within one hour from the time of execution, FINRA believes
that in the long term members will be able to report all TBA
transactions within 15 minutes from the Time of Execution.

Implementation

    The commenter requested that the effective date of the November
2011 Filing be no earlier than August 1, 2012, to allow members to make
necessary changes to internal systems, policies and procedures. FINRA
intends to take into account the operational challenges associated with
the proposal in establishing the effective date of this proposed rule
change and will work with members to minimize the operational burdens
of implementation. FINRA also has amended the stated implementation
period to provide that FINRA will announce the effective date of the
proposed rule change in a Regulatory Notice to be published no later
than 60 days following Commission approval. The effective date will be
no earlier than August 1, 2012 and no later than 180 days following
publication of the Regulatory Notice announcing Commission approval.

III. Date of Effectiveness of the Proposed Rule Change 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 (i) as the Commission may
designate up to 90 days of such date 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 such 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 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-FINRA-2012-020 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2012-020. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of FINRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2012-020 and should be
submitted on or before April 6, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6444 Filed 3-15-12; 8:45 am]
BILLING CODE 8011-01-P