 1  PART A OF THE SUPPORTING STATEMENT 1. Identification of the Information Collection ( a) Title and Number of Information Collection.

" Information Collection Requirements for the Control of Evaporative Emissions from New and In Use Portable Gasoline Containers", The Environmental Protection Agency ( EPA) tracking number for this information collection request ( ICR) is 2213.01. This is a new ICR, OMB No. XXXX XXXX, expiration date MMM DD, 2009.

( b) Short Characterization.

( i) Type of collection.

The information collection covered by this Information Collection is a requirement on the manufactures of new portable gasoline containers for their certification for sale in the United States by EPA. The process of certification is documented in the proposed rule published in 40 CFR XXXX Part 59 Subpart F  CONTROL OF EVAPORATIVE EMISSIONS FROM NEW AND IN USE PORTABLE GASOLINE CONTAINERS. The requested information includes both reports and recordkeeping.

( ii) Content of reports.

All manufacturers of portable gasoline containers subject to the rule mentioned in section ( i) must submit applications and reports to EPA to certify them for sale in the United States. The application information required is described in section ( iii) ( 1) of this document and is required preceding sale of new portable gasoline containers. The second mandatory report is warranty and defect information on these products. The information required in that report is described in section ( iii) ( 9) of this document. The warranty and defect report is required annually in the July of the year following model year the portable gasoline container was certified.

( iii) Recordkeeping requirements.

Respondents must organize and maintain the following records:

( 1) A copy of all applications and any summary information sent to EPA. An application is for an emissions family that describes a single or group of portable gasoline containers that are expected to have similar emission characteristics. In general cans made with similar materials, processes, emission control strategy, and design are subject to pooling into a single emission family. An emissions family is limited to a single model year. The information required in an application is as follows;

a. Description of the emission family's specifications, distinguishable configuration, and other basic parameters of the emission controls b. Explain the method of emission control.

c. Description of the products selected for testing and the reasons for selection.  2  d. Description of the test equipment and procedures used.

e. Specifications of the test fuel used for tests reported in the application.

f. Maintenance and use instructions provided with product to the ultimate purchaser of each new portable gasoline containers.

g. Description of emission control information label.

h. A statement that the application's emissions family products were tested as described and met the requirements of the regulation.

i. The emission data for the application's emissions family products that indicates that it met the applicable emission standards except in the cases where the products only differ in model year from those that were previously certified.

j. Test results from invalid tests or tests that were not conducted as specified in section § 59.650 through 59.653 of the rule.

k. An unconditionally certification by the respondent that all the products in the emissions family comply with the requirements of the rule.

l. Estimates of U. S. directed production volumes.

m. Name of an agent for service of process located in the United States for any action by EPA related to the requirements for the rule.

( 2) The respondent must keep records for each portable gasoline container tested ( emission data unit) for the requirements of the rule. For each emission data unit, that would include the following information a. The emission data unit's construction, including its origin and buildup, steps taken to ensure that it represents production containers, components built specially for it, and all the components you include in the application for certification.

b. All emission tests, including documentation on routine and standard tests, as specified the rule. Each test report shall include i. Test results ii. Purpose of test iii. Date and time of the test.

iv. Test cell ambient conditions during the test such as temperature, barometric pressure, and relative humidity.

v. Diagnostic data indicating test procedure conformance to the rule.

vi. Significant events that may affect the products conformance with the rule.

vii. Production figures for each emissions family divided by assembly plant.

viii. Maintenance instructions for the portable fuel containers in the engine family.

ix. A running list of portable gasoline container identification numbers for all the containers produced under each certificate of conformity  3  x. All the above information must be kept five years after a certificate of conformity is issued for the emissions family in question. Data covering test cell ambient conditions, however, is required to be kept for one year only after a certificate of conformity is issued for the emissions family in question.

( 3) The stored records can be in any format and on any media, as long as it can be promptly delivered to EPA on request.

( 9) Annual successful warranty claims, including the reason for the claim and defect report summarizing by emissions family are to be provided to the agency. These reports are due to EPA by July 1 for the preceding calendar year.

2. Need for and Use of the Collection ( a) Need/ Authority for the Collection. The EPA is required under Section 183( e) of the Clean Air Act ( Act) to regulate VOC emissions from the use of consumer and commercial products. Pursuant to Section 183( e)( 3), the EPA published a list of consumer and commercial products and a schedule for their regulation on March 23, 1995 ( 60 FR 15264). Consumer products were included in Group I of the list, and standards were promulgated on September 11, 1998. In the Administrator's judgment, VOC emissions from the use of consumer products contribute to ground level ozone formation in ozone non attainment areas.

Statutory authority for the portable gasoline container controls is found in sections 183( e) and 111, 42 U. S. C. sections 7511b( e) and 7411. This authority was granted to regulate Volatile Organic Compounds emissions ( VOCs) from the use of consumer and commercial products. Portable gasoline containers are a consumer product which in and of itself do not emit large amounts of VOCs. However, they have been shown to be deficient in preventing VOCs in the form of gasoline vapors from being emitted into the air. This Information Collection Request ( ICR) is part of the certification of new portable gasoline containers that will significantly lower VOC emissions nation wide.

The record keeping in an application for an emissions family of portable gasoline containers is necessary to prove to the agency that the emissions family meets the emission standard in the regulation. The items specified in ( iii)( 1) for the application are specific enough to provide enough information to allow the agency to issue a certificate of compliance for the emissions family covered in application.

The information in the application is sufficient to allow the manufacture to aggregate containers of like design into one emission family. This saves the manufacturer the expense of testing models of similar but not identical design. The information is also detailed enough to allow recertification for subsequent new model years where the only difference containers of the current and future model years is only the model year itself. The emissions family collection for similar containers and the carry over provisions are seen as a reasonable approach to simplify and lower the cost of gasoline container certification program for the manufacture.

The warranty and defect reports provided by the manufactures to the agency are needed to assure that the containers survive normal use and provides to EPA confidence that they are minimally meeting the emission standards. Cans showing excessive warranty claims or high  4  defect rates could be candidates for in use testing by EPA. Though EPA does not have the authority to recall portable fuel containers the warranty and defect information along with in use testing by EPA could be used as grounds to withhold subsequent certification of containers that are not operating as required by the regulation.

( b) Use/ Users of the Information.

Agency enforcement personnel will use the information collected to;

  Determine if a manufacture's portable gasoline containers meet the emission standard when new.

  Allow the agency to issue a certificate of compliance to the manufacturer so that they can market the approved containers.

  Allow the agency to issue certificates in successive model years to containers that differ only in model year to manufactures and waiving the testing process required for a new design.

  Allow the agency to issue certificates to the manufacture for containers that are substantially similar to the tested prototype and waive the testing process required for a new design.

  Provide information to the agency to indicate that the portable gasoline containers are meeting the standard in use.

  Provide information to the agency that a portable gasoline container design is not meeting the standard in use and provides a basis on which to reject a manufactures application for that design in subsequent model years.

3. Non duplication, Consultations, and Other Collection Criteria ( a) Non duplication.

The information collected pursuant to the regulation is product and manufacturing specifications, testing, successful warranty claims, and defect data concerning portable gasoline containers. Similar information will be collected by the state of California for their Portable Fuel Container regulation1. However, the California regulation is different in several key areas that make the information unsuitable for information collection required for Federal rule. These are all due to differences in the standards and certification requirements in the two rules.

  The test fuel and the temperature cycles used in the Federal program are more in keeping with nation wide ambient temperatures and fuels while those required in the California regulation are more suitable to California fuels and ambient conditions.

1 " Certification Procedure for Portable Fuel Containers and Spill Proof Spouts", California Air Resources Board July 22, 2005  5    The California regulation requires that the containers be spill proof. The federal regulation does not.

  The Federal rule requires the reporting of successful warranty claims and defect reports concerning fuel containers sold as certified under the rule. While the California regulation does require that the manufacturer issue warranties, it does not require them to report on the outcomes of successful claims against them.

These differences make the California data unsuitable for the Federal rule on fuel containers.

( b) Public Notice Required Prior to ICR Submission to OMB The proposed information collection represented by this ICR is included in the notice of proposed rule making, " Control of Hazardous Air Pollutants from Mobile Source", 40 CFR Parts 59, 80, 85 and 86,[ EPA HQ OAR 2005 0036; FRL XXXX X], RIN 2060 AK70. A copy of the proposed rule is available in this docket and it will be submitted for publication in the Federal Register.

( c) Consultations EPA has had ongoing discussions with the gasoline container manufactures concerning the gasoline container rule and its impact on their business. The dates and method of contact are listed below Organization Consultation Blitz USA: Meetings on: 3/ 23/ 04, 4/ 15/ 04, 9/ 29/ 05 Phone discussions on: 2/ 17/ 04, 5/ 5/ 04, 5/ 13/ 04, 9/ 16/ 04, 3/ 22/ 05 Scepter Meeting on: 11/ 9/ 04 Phone discussions on: 6/ 3/ 04, 4/ 27/ 05, 8/ 26/ 05 Wedco Phone discussions on: 5/ 28/ 04, 4/ 19/ 05 Midwest Can Company Phone discussions on: 6/ 21/ 05, 7/ 28/ 05 No Spill Research Phone discussions on: 7/ 21/ 04 Industry wide Conference call: 11/ 17/ 04 ( d) Effects of Less Frequent Collection.

The requirement of the portable fuel container regulation is that information is submitted on a yearly basis coinciding with the manufacturer's " model year." The certificate of conformity is effective until December 31of the model year for which it was issued. For these reasons, a collection frequency longer than a model year is not possible. However, when a fuel container design is " carried over" or a new version of a container that is for all intents purposes substantially similar to a current container, the amount of new information required is  6  substantially reduced. The manufactures can modify the terms for certification under § 59.621 which could conceivably effect the frequency of data collection. However, changes would have to be approved by EPA and can not lead to less effective emission control.

( e) General Guidelines.

This ICR adheres to the guidelines for Federal data requesters, as provided at 5 CFR 1320.6. The regulation requires that records concerning the application for certification be maintained for 5 years and testing data for 1 year. Successfully awarded warranty information and product defect reports are required for the preceding model by July 1rst of the following year. There is no requirement to report unsuccessful claims against container warranties and after the reporting of the data to EPA. There is no requirement by EPA for the manufactures to retain that information. These periods of record retention are consistent with other ongoing and similar programs. They are necessary to allow enough record history for the agency to adequately monitor compliance.

( f) Confidentiality.

Any information submitted to EPA for which a claim of confidentiality is made will be safeguarded according to EPA regulations at 40 C. F. R. 2.201 et. seq.

( g) Sensitive Questions.

This section is not applicable because this ICR does not involve matters of a sensitive nature.

4. The Respondents and the Information Requested ( a) Respondents/ SIC and NAICS Codes.

Respondents to this information collection are manufacturers of portable fuel containers. They fall within standard industrial classification ( SIC) 3411 and within the North American Industrial Classification System ( NAICS) code of 324110.

( b) Information Requested.

( i) Data items.

Table 2, Source Data and Information Requirements, summarizes the recordkeeping and reporting requirements.  7  TABLE 2 SOURCE DATA AND INFORMATION REQUIREMENTS Group Item Sub Item Requirement Application ( Report) Emissions Family Specification Physical Configurations § 59.623 Application ( Report) Emissions Family Specification Method of Emission Control § 59.623 Application ( Report) Emissions Family Specification Container Models § 59.623 Application ( Report) Testing Test Equipment § 59.623 Application ( Report) Testing Test Methods § 59.623 Application ( Report) Testing Test Fuels § 59.623 Application ( Report) Testing Emission Test Data § 59.623 Application ( Report) Compliance Statement of Compliance of Tests § 59.623 Application ( Report) Compliance Maintenance and Use Instructions to Users § 59.623 Application ( Report) Compliance Description of Emissions Control Label § 59.623 Application ( Report) Compliance Statement of Compliance of Member Containers to Emissions Family § 59.623 Application ( Report) Compliance Name of Agent of Process for the Application § 59.623 Application ( Report) Impact Estimate of US Sales § 59.623 In Use Report Awarded Warranty Information Reasons for Claim § 59.628 In Use Report Defect List and number of defects by emissions family § 59.628 Record Keeping Application ( Report) § 59.628 Record Keeping Annual In Use Report § 59.628 Record Keeping Emission Data Unit ( prototype test container) Configuration and Components § 59.628 Record Keeping Emission Data Unit ( prototype test container) Build Information § 59.628 Record Keeping Emission Data Unit ( prototype test container) Representativeness to Production Version § 59.628 Record Keeping Emission Data Unit ( prototype test container) All Emission Test Data for Emission Data Unit § 59.628 Record Keeping Emission Data Unit ( prototype test container) Date and Time for § 59.628 Record Keeping Emission Data Unit ( prototype test container) Ambient Test Cell Conditions § 59.628 Record Keeping Production Figures By Emissions Family and Assembly Plant § 59.628 Record Keeping Unique Container Serial Numbers By Certificate of Conformity § 59.628  8  ( ii) Respondent Activities.

The respondent will have to document fuel container specifications in detail such as physical size, shapes, materials, quality of component fit, and production methods. There respondent shall have to keep records on testing that was performed to assure compliance with the fuel container regulation. The respondent must collect and keep warranty and defect information for annual reporting on in use survival of their products in the hands of consumers to EPA. The respondent must also retain records on the units produced, apply serial numbers to individual containers, and track the serial numbers to their certificates of conformance. Many of these activities are those performed in the production of any modern consumer product, but clearly some of the information is uniquely required to the fuel container regulation 5. The Information Collected Agency Activities, Collection Methodology, and Information Management.

( a) Agency Activities.

A significant portion of EPA's activity for the fuel container regulation will be spent reviewing applications to verify that the correct tests have been conducted and necessary information submitted. Running change submissions must also be reviewed for possible impacts and manufacturers' evaluations thereof. A part of this process involves determining if " carry over" of data from a previous model year or addition of a new container model to an existing emissions family is appropriate, or if new testing will be required. EPA has the right to select a number of containers for testing to confirm that the cans are indeed meeting the emissions standards.

( b) Collection Methodology and Management As noted in section 2( b) of this ICR, the information collected is a necessary part of compliance determination for model year 2009 therefore, the information collected under this rule will not be collected until calendar year 2008. A database shall be developed to store the information at that time.

( c) Small Entity Flexibility.

Under the rule, there are provisions for small entity flexibility. Respondents can apply for extension of deadlines, including new container designs under existing emissions families. Hardship exceptions are provided when a manufacture is facing issues of solvency due to circumstances beyond their control such as a natural disaster, a part supplier not meeting contractual obligations, or the cost of conformance to the rule.

( d) Collection Schedule.

The portable fuel container regulation applies to all fuel containers manufacture on or after January 1, 2009. Containers excluded from the rule are those specified in § 59.699. Information collections are on a model year basis. Model years end on December 31 of the model year certified.

6. Estimating the Burden and Cost of the Collection  9  These estimates represent the average annual burden that will be incurred by the affected industry during the 3 year period beginning in 2008. It is believed that most of the record keeping and reporting costs will shall be done at start up in 2008.

( a) Estimating Respondent Burden.

The average annual labor burden estimates for reporting and recordkeeping requirements for all manufacturers presented in Table 3.

Table 3   Estimated Annual Respondent Burden and Costs for labor Salaries Management Hours Technical Hours Clerical Hours Total Hours Costs Application 9 24 9 42 $ 2,499 Record Keeping 9 12 15 36 $ 2,071 Testing 9 84 9 102 $ 5,883 Defect and Warranty Reporting 9 9 18 36 $ 2,027 Annual totals 36 129 51 216 $ 12,480 ( b) Estimating Respondent Costs.

( i) Estimating Labor Costs Table 3 also presents estimated labor costs for the required recordkeeping and reporting activities. Industry labor rates are based on Bureau of Labor Statistics2 for a manager product inspector and office and administrative support book keeping clerical. Overhead of 100 percent was added, resulting in the following labor rates: management ($ 85.68); technical ($ 56.40); and clerical ($ 41.56).

( ii) Estimating Capital and Operations and Maintenance Costs EPA estimates ongoing O& M costs associated with the reporting and recordkeeping requirements for the portable gasoline container rule. These costs will be associated with communication of information with EPA. Those costs are found in Table 4. Respondents have indicated that they do not plan on building their own facilities to perform the required testing for the gasoline container regulation. They shall contract out the work to existing testing laboratories.

( iii) Estimating Start Up Capital and Operations and Maintenance Costs 2 http:// stats. bls. gov/ news. release/ ecec. t02. htm  10  Start up capitol costs for the respondents are presented in Table 4. These costs are associated with the development of the appropriate information technology to store and report the required information.  11  Table 4 Capitol, Operating and Maintenance Costs Activity Average Number per Year per Respondent Total Costs Per Year Familiarize with reporting requirements One time amortized cost $ 300 Update data collection Software One time amortized cost $ 119 Communication with EPA 5 $ 100 Totals $ 519 ( c) Estimating Agency Burden and Cost.

Agency burden and costs associated with the data collection are presented in Table 4.

Table 5  Estimated Agency Burden and Cost Collection Activity Burden Hours Frequency Annual Burden Hours Annual Costs Modify database to manage the collected data, maintenance & computer time [ 1] 4 1 4 $ 236.63 Answer Respondent Questions 3 5 15 $ 907.99 Review and Approve Can Manufacturers Application and Certification Data 20 20 400 $ 24,213.12 Enter Data 1 20 20 $ 1,210.66 Annual Report 16 1 16 $ 968.52 Totals 455 $ 27,536.93 Labor rates and associated costs are based on Office of Personnel Management Table SALARY TABLE 2006 GS3. Overhead of 60 per cent was added, resulting in the following labor rates: management ( GS15 Step 5  $ 79.50); technical ( GS13 Step 5  $ 57.20); and clerical ( GS7 Step 5  $ 27.12). The number of management hours is assumed to equal 5 percent of the number of technical hours; the number of clerical hours is assumed to equal 1 percent of the number of technical hours ( d) Estimating the Respondent Universe and Total Burden and Costs The following assumptions were used to estimate the respondent universe and total burden and costs for industry to comply with the various requirements of the rule:

  There are five manufactures of fuel containers for the domestic market 3 http:// www. opm. gov/ oca/ 06tables/ pdf/ gs_ h. pdf  12    The average number of emission families that will be produced per manufacture in the first five years of the rule will be five.

  Many of the families will be carried over from successive model years.

  Manufactures will produce designs that will meet the standards.

( e) Bottom Line Burden Hours and Cost Tables.

( i) Respondent Tally The bottom line respondent burden hours and cost, presented in Table 3, are calculated by summing the person hours column and by summing the cost column. The annual burden and cost averaged over the 5 years beginning in the year 2008 are 216 hours, $ 12,999 in wages, capitol, and operating and maintenance costs. The average burden equals the total burden ( 216 hours) divided by the number of respondents ( 5 respondents), or about 43 hours per respondent.

( ii) Agency Tally The bottom line Agency burden and cost are presented in Table 4. Agency cost for each activity is calculated by summing the technical, management, and clerical costs for each burden item. The estimated annual burden and cost averaged over the 3 years beginning in October 2008 are 455 hours and $ 27,536.93.

( iii) Variations in the annual bottom line.

The EPA does not anticipate any significant annual variations in the bottom line after the first year the rule is in effect.

( f) Reasons for Change in Burden.

The burden reported in this ICR is attributed to a new regulation.

( g) Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to average 43 hours and $ 2,599.80 per respondent. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.  13  To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID No. OAR 2005 0036, which is available for public viewing at the Air and Radiation Docket and Information Center Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is ( 202) 566 1744, and the telephone number for the Air and Radiation Docket and Information Center is ( 202) 566 1742. An electronic version of the public docket is available through EPA Dockets ( EDOCKET) at http:// www. epa. gov/ edocket. Use EDOCKET to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. Once in the system, select " search," then key in the docket ID number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Please include the EPA Docket ID No. ( OAR 2005 0036) and OMB control number ( XXXX XXXX) in any correspondence.


[Federal Register: January 3, 2008 (Volume 73, Number 2)]
[Notices]
[Page 527-528]
[DOCID:fr03ja08-60]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57044; File No. SR-CBOE-2007-130]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change, as Modified by
Amendment No. 1, Relating to Anti-Money Laundering Program Rule 4.20

December 27, 2007.

I. Introduction

    On November 2, 2007, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change relating to amendments to CBOE
Rule 4.20. On November 9, 2007, CBOE file Amendment No. 1 to the
proposed rule change. The proposed rule change, as modified by
Amendment No. 1, was published for comment in the Federal Register on
November 26, 2007.\3\ The Commission received no comments on the
proposal. This order approves the proposed rule change, as modified by
Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56816 (Nov. 19,
2007); 72 FR 66006 (Nov. 26, 2007) (``Notice'').
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II. Description of the Proposed Rule Change

    The proposed rule change amends CBOE's Anti-Money Laundering
Compliance Program (``the AML Program'') as codified in CBOE Rule 4.20
(``the Anti-Money Laundering Compliance Rule''), to: (1) Establish that
independent testing for compliance must be conducted at least annually
by members with a public business, or every two years if no public
business is conducted; and (2) clarify the persons designated to
implement and monitor the Anti-Money Laundering Compliance Rule. The
amendments also establish a standard to determine who is adequately
qualified and sufficiently independent to conduct the required testing.
In addition, the amendment clarifies that the person designated to
implement and monitor the Anti-Money Laundering Compliance Rule must be
an associated person of the Exchange member.

Background and Detail

    Financial institutions, including broker-dealers, must develop and
implement AML Programs pursuant to the Bank Secrecy Act,\4\ as amended
by the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of
2001 (``PATRIOT Act'').\5\ Consistent with the Department of Treasury's
(``Treasury'') regulation 31 CFR 103.120 under the Bank Secrecy Act,
CBOE Rule 4.20 requires each member organization and each member not
associated with a member organization to develop and implement a
written AML program and specifies the minimum requirements for these
programs.
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    \4\ 31 U.S.C. 5311 et seq.
    \5\ Pub. L. No. 107-56, 115 Stat. 272 (2001).
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    The AML program must include the development of internal policies,
procedures and controls; the designation of a person to implement and
monitor the day-to-day operations and internal controls of the program
(commonly referred to as an ``AML Officer''); ongoing training for
appropriate persons; and an independent testing function for overall
compliance.
    In order to provide interpretive clarity to the requirements under
CBOE Rule 4.20 with respect to independent testing and AML Officers, as
well as to clarify references to the Bank Secrecy Act, CBOE proposed
the following amendments to CBOE Rule 4.20.

References to Bank Secrecy Act

    The proposed rule change would delete references to certain
sections of the Bank Secrecy Act and a reference to the USA PATRIOT Act
to more clearly reflect the requirements under CBOE Rule 4.20.

Timeframes for Independent Testing

    The proposed rule change would require that independent testing of
AML programs be conducted, at a minimum, on an annual (calendar-year)
basis by members or member organizations, unless the member or member
organization does not execute transactions for customers or otherwise
hold customer accounts or act as an introducing broker with respect to
customer accounts (e.g., engages solely in proprietary trading, or
conducts business only with other broker-dealers), in which case such
independent testing would be required every two years (on a calendar-
year basis). CBOE believes these timeframes are reasonable in that they
require more frequent testing of AML programs designed to monitor a
business with customers from the general public, which may be more
susceptible to money laundering schemes than a strictly proprietary
business involving transactions with other broker-dealers. Further, the
one-year time frame for testing is consistent with standard industry
practice in that it is similar to generally accepted guidelines for
conducting tests in the context of, for instance, general audits and
branch office visits. However, the proposed rule change establishes
only a minimum requirement, and makes clear that members should
undertake more frequent testing when circumstances warrant (e.g.,
should the business mix of the member or member organization materially
change; in the event of a merger or acquisition; in light of systemic
weaknesses uncovered via testing of the AML Program; or in response to
any other ``red flags'').

Qualification and Independence Standards for Testing

    The proposed rule change would further require that testing be
conducted by a designated person with a working knowledge of applicable
requirements under the Bank Secrecy Act and its implementing
regulations. Such person need not be an employee of the member or
member organization since the responsibility is essentially an auditing
function and, as such, it would not be unusual or ineffective for it to
be performed by an independent outside party.
    The proposed rule change does not preclude an employee of the
member or member organization from conducting the required independent
testing of the AML Program; however the proposed ``independence''
standard would prohibit testing from being conducted by a person who
performs the functions being tested, by the designated AML Officer or
by a person who reports toeither.
    The proposed rule change would be generally consistent with the
approach taken by the regulatory arms of the New York Stock Exchange
(``NYSE'') and the National Association of Securities Dealers
(``NASD''), n/k/a the Financial Industry Regulatory Authority, Inc.,
(``FINRA''),\6\ regarding independent testing of AML Programs, with
variations where necessary to account for the differences in CBOE
membership--in particular, differences

in firm size, types of businesses conducted, and overall business
models. It should be noted that the over whelming majority of CBOE's
membership consists of broker-dealers that are not members of either
NYSE or FINRA and that conduct business only with other broker-dealers.
---------------------------------------------------------------------------

    \6\ On July 26, 2007, the Commission approved a proposed rule
change filed by NASD to amend NASD's Certificate of Incorporation to
reflect its name change to Financial Industry Regulatory Authority
Inc., or FINRA, in connection with the consolidation of the member
firm regulatory functions of NASD and NYSE Regulation, Inc. See
Securities Exchange Act Release No. 56146 (July 26, 2007); 72 FR
42190 (Aug. 1, 2007).
---------------------------------------------------------------------------

AML Officer

    The proposed rule change would also clarify that the AML Officer(s)
must be an associated person of the member. This would not prohibit a
member that is part of a diversified financial institution from
designating an AML Officer that is employed by the member's parent
company, sister company, or other affiliate. However, if such a person
is designated as a member's AML Officer, CBOE would consider that
person to be an associated person of the member with respect those
activities performed on behalf of the member.

III. Discussion and Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Exchange Act and the
rules and regulations thereunder applicable to a national securities
exchange, and in particular, with the requirements of Section 6(b)(5)
\7\ of the Exchange Act.\8\ Section 6(b)(5) requires, among other
things, that the rules of an exchange be designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and national market system, and in
general, to protect investors and the public interest. The Commission
believes that the proposed rule change is designed to accomplish these
ends by requiring members to conduct periodic tests of their AML
compliance programs, preserve the independence of their testing
personnel, and ensure the accuracy of their AML compliance programs.
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    \7\ 15 U.S.C. 78f(b)(5).
    \8\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

IV. Conclusions

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change, as amended (SR-CBOE-2007-130),
be, and hereby is, approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-25507 Filed 1-2-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 157 (Tuesday, August 14, 2012)]
[Rules and Regulations]
[Pages 48420-48423]
[FR Doc No: 2012-19420]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2012-0332; Directorate Identifier 2011-NM-130-AD;
Amendment 39-17155; AD 2012-16-08]
RIN 2120-AA64

Airworthiness Directives; BAE Systems (Operations) Limited
Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for certain

BAE SYSTEMS (OPERATIONS) LIMITED Model BAe 146 and Avro 146-RJ series
airplanes. This AD was prompted by reports of cracking and surface
anomalies of the fuselage skin at the water trap/air dryer unit of the
forward discharge valve due to corrosion. This AD requires repetitive
detailed inspections for bulging, surface anomalies, and cracking of
the fuselage skin adjacent to the discharge valves, repair if
necessary, and application of additional sealant in the affected area
if necessary. We are issuing this AD to detect and correct bulging,
surface anomalies, and cracking that could propagate towards the
forward discharge valve outlet, which could result in the failure of
the fuselage skin, leading to a possible sudden loss of cabin pressure.

DATES: This AD becomes effective September 18, 2012.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of September 18,
2012.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 98057-3356.

FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, Washington 98057-3356; phone 425-227-
1175; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on April 5, 2012 (77 FR
20572). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    An operator has reported the cracking and surface anomalies
(bulges and/or dents) of the fuselage skin at the water trap/air
drier unit of the forward discharge valve located between Frames 22
and 23 and between stringers 22 and 23.
    Further investigation established that these surface anomalies
(bulges and/or dents) were due to corrosion beneath the water trap/
air drier unit that has resulted in cracking of the fuselage skin. A
crack at the subject location could propagate towards the forward
discharge valve outlet and result in the failure of the fuselage
skin leading to a possible sudden loss of cabin pressure.
    For the reasons described above, this [EASA] AD mandates an
initial and repetitive [detailed] inspections [for bulging, surface
anomalies, and cracking] of the fuselage skin adjacent to the front
and rear discharge valves, the accomplishment of the associated
correctives actions [repair] if applicable and the application of an
additional sealant in the affected area.

    You may obtain further information by examining the MCAI in the AD
docket.

Comments

    We gave the public the opportunity to participate in developing
this AD. We received no comments on the NPRM (77 FR 20572, April 5,
2012) or on the determination of the cost to the public.

Explanation of Change Made to This AD

    We have revised one of the part numbers contained in paragraph (h)
of this AD from PR1764-2 to PR1764B-2 due to a typographic error; this
change does not change the intent of that paragraph.

Conclusion

    We reviewed the available data and determined that air safety and
the public interest require adopting the AD with the change described
previously--and minor editorial changes. We have determined that these
minor changes:
     Are consistent with the intent that was proposed in the
NPRM (77 FR 20572, April 5, 2012) for correcting the unsafe condition;
and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (77 FR 20572, April 5, 2012).

Costs of Compliance

    We estimate that this AD will affect 1 product of U.S. registry. We
also estimate that it will take about 8 work-hours per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour. Based on these figures, we estimate the cost of
this AD to the U.S. operators to be $680 or $680 per product. We have
no way of determining the number of products that may need these
actions.

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

Examining 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 the NPRM (77 FR 20572, April 5, 2012),
the regulatory evaluation, any comments received, and other
information. The street address for the Docket Operations office
(telephone<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2012-16-08 BAE Systems (Operations) Limited: Amendment 39-17155.
Docket No. FAA-2012-0332; Directorate Identifier 2011-NM-130-AD.

(a) Effective Date

    This airworthiness directive (AD) becomes effective September
18, 2012.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to BAE SYSTEMS (OPERATIONS) LIMITED Model BAe
146-100A, -200A, and -300A airplanes, and Model Avro 146-RJ70A, 146-
RJ85A, and 146-RJ100A airplanes, certificated in any category; all
models, and all serial numbers except airplanes that have
incorporated auto-pressurization modification HCM50259A during
production.

(d) Subject

    Air Transport Association (ATA) of America Code 21: Air
Conditioning.

(e) Reason

    This AD was prompted by reports of cracking and surface
anomalies of the fuselage skin at the water trap/air dryer unit of
the forward discharge valve due to corrosion. We are issuing this AD
to detect and correct bulging, surface anomalies, and cracking that
could propagate towards the forward discharge valve outlet, which
could result in the failure of the fuselage skin, leading to a
possible sudden loss of cabin pressure.

(f) Compliance

    You are responsible for having the actions required by this AD
performed within the compliance times specified, unless the actions
have already been done.

(g) Detailed Inspection of External Fuselage Skin

    Within 12 months after the effective date of this AD, do a
detailed inspection to check for bulging, surface anomalies, and
cracking of the fuselage skin adjacent to the discharge valve
outlets (one frame fore and aft, one stringer above and below), in
accordance with the Accomplishment Instructions of BAE SYSTEMS
(OPERATIONS) LIMITED Inspection Service Bulletin ISB.21-162,
Revision 1, dated September 16, 2010. Repeat the inspection
thereafter at intervals not to exceed 24 months.
    (1) If any bulging, surface anomalies, or cracking of the
fuselage skin is found to be within the criteria defined in Subject
53-00-00, ``Fuselage, General--Description,'' of Chapter 53,
``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO 146-RJ Series
Structural Repair Manual for Series 100-200, Revision 66, dated
October 15, 2011 (for Model 146-100A and -200A, and Avro 146-RJ70A
and 146-RJ85A airplanes); or Subject 53-00-00, ``Fuselage, General--
Description,'' of Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe
146 Series/AVRO 146-RJ Series Structural Repair Manual for Series
300, Revision 44, dated October 15, 2011 (for Model 146-300A and
Avro 146-RJ100A airplanes): Before further flight, repair the
damage, in accordance with the Accomplishment Instructions of BAE
SYSTEMS (OPERATIONS) LIMITED Inspection Service Bulletin ISB.21-162,
Revision 1, dated September 16, 2010.
    (2) If any bulging, surface anomalies, or cracking of the
fuselage skin is found exceeding the criteria defined in Subject 53-
00-00, ``Fuselage, General--Description,'' of Chapter 53,
``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO 146-RJ Series
Structural Repair Manual for Series 100-200, Revision 66, dated
October 15, 2011 (for Model 146-100A and -200A, and Avro 146-RJ70A
and 146-RJ85A airplanes); or Subject 53-00-00, ``Fuselage, General--
Description,'' of Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe
146 Series/AVRO 146-RJ Series Structural Repair Manual for Series
300, Revision 44, dated October 15, 2011 (for Model 146-300A and
Avro 146-RJ100A airplanes): Before further flight, repair the damage
according to a method approved by the Manager, International Branch,
ANM-116, Transport Airplane Directorate, FAA, or European Aviation
Safety Agency (EASA) or its delegated agent.

(h) Application of Sealant

    Within 24 months after the effective date of this AD, unless a
repair has already been accomplished in accordance with paragraph
(g) of this AD: Apply additional PR1422A-2 or PR1764B-2 edge sealant
between the water trap/air dryer and the fuselage skin, in
accordance with the Accomplishment Instructions of BAE SYSTEMS
(OPERATIONS) LIMITED Inspection Service Bulletin ISB.21-162,
Revision 1, dated September 16, 2010. Application of additional
sealant does not constitute terminating action for the repetitive
detailed inspections required by paragraph (g) of this AD.
Accomplishment of a repair as required by paragraph (g) of this AD
terminates the repetitive inspection requirements of this AD.

(i) Credit for Previous Actions

    (1) This paragraph provides credit for inspections and sealant
applications required by paragraphs (g) and (h) of this AD, if those
actions were performed before the effective date of this AD using
BAE SYSTEMS (OPERATIONS) LIMITED Inspection Service Bulletin ISB.21-
162, dated June 7, 2010.
    (2) This paragraph provides credit for using criteria defined in
the following subject of the applicable structural repair manual, as
required by paragraphs (g)(1) and (g)(2) of this AD, if that
criteria was used before the effective date of this AD using Subject
53-00-00, ``Fuselage, General--Description,'' of Chapter 53,
``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO 146-RJ Series
Structural Repair Manual for Series 100-200, Revision 65, dated
September 15, 2010 (for Model 146-100A and -200A, and Avro 146-RJ70A
and 146-RJ85A airplanes); or Subject 53-00-00, ``Fuselage, General--
Description,'' of Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe
146 Series/AVRO 146-RJ Series Structural Repair Manual for Series
300, Revision 43, dated September 15, 2010 (for Model 146-300A and
Avro 146-RJ100A airplanes).

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. In accordance with 14 CFR
39.19, send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Branch, send it to ATTN: Todd
Thompson, Aerospace Engineer, International Branch, ANM-116,
Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; phone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
Information may be emailed to<EMAIL_ADDRESS>
Before using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
local flight standards district office/certificate holding district
office. The AMOC approval letter must specifically reference this
AD.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

(k) Related Information

    Refer to MCAI EASA Airworthiness Directive 2011-0099, dated May
26, 2011, and the service information identified in paragraphs
(k)(1), (k)(2), and (k)(3) of this AD, for related information.
    (1) BAE SYSTEMS (OPERATIONS) LIMITED Inspection Service Bulletin
ISB.21-162, Revision 1, dated September 16, 2010.
    (2) Subject 53-00-00, ``Fuselage, General--Description,'' of
Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO
146-RJ Series Structural Repair Manual for Series 100-200, Revision
66, dated October 15, 2011.
    (3) Subject 53-00-00, ``Fuselage, General--Description,'' of
Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO
146-RJ Series Structural Repair Manual for Series 300, Revision 44,
dated October 15, 2011.

(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference

(IBR) of the following service information under 5 U.S.C. 552(a) and
1 CFR part 51.
    (2) You must use the following service information to do the
actions required by this AD, unless the AD specifies otherwise.
    (i) BAE SYSTEMS (OPERATIONS) LIMITED Inspection Service Bulletin
ISB.21-162, Revision 1, dated September 16, 2010.
    (ii) Subject 53-00-00, ``Fuselage, General--Description,'' of
Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO
146-RJ Series Structural Repair Manual for Series 100-200, Revision
66, dated October 15, 2011. The revision level of this document is
specified only in the Letter of Transmittal.
    (iii) Subject 53-00-00, ``Fuselage, General--Description,'' of
Chapter 53, ``Fuselage,'' of the BAE SYSTEMS BAe 146 Series/AVRO
146-RJ Series Structural Repair Manual for Series 300, Revision 44,
dated October 15, 2011. The revision level of this document is
specified only in the Letter of Transmittal.
    (3) For service information identified in this AD, contact BAE
SYSTEMS (OPERATIONS) LIMITED, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
<EMAIL_ADDRESS>Internet http://www.baesystems.com/Businesses/RegionalAircraft/index.htm.
    (4) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.
    (5) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at an NARA facility, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on July 31, 2012.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2012-19420 Filed 8-13-12; 8:45 am]
BILLING CODE 4910-13-P