[Federal Register Volume 88, Number 48 (Monday, March 13, 2023)]
[Notices]
[Pages 15495-15499]
[FR Doc No: 2023-05033]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97053; File No. SR-NYSEARCA-2023-20]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Adopt New NYSE Arca Rule 5.3-E(p) To
Establish Listing Standards Related to Recovery of Erroneously Awarded
Incentive-Based Executive Compensation

March 7, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on February 24, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.

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

    The Exchange proposes to adopt new Rule 5.3-E(p) to require issuers
to develop and implement a policy providing for the recovery of
erroneously awarded incentive-based compensation received by current or
former executive officers. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    On October 26, 2022, the Securities and Exchange Commission
(``SEC'') adopted a new rule and rule amendments \4\ to implement
Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (``Dodd-Frank Act''),\5\ which added Section 10D
to the Act.\6\ In accordance with Section 10D of the Act, the final
rules direct the national securities exchanges and associations that
list securities to establish listing standards that require each issuer
to develop and implement a policy providing for the recovery, in the
event of a required accounting restatement, of incentive-based
compensation received by current or former executive officers where
that compensation is based on the erroneously reported financial
information. The listing standards must also require the disclosure of
the policy. Additionally, the final rules require a listed issuer to
file the policy as an exhibit to its annual report and to include other
disclosures in the event a recovery analysis is triggered under the
policy.
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    \4\ See Release Nos. 33-11126; 34-96159; IC- 34732; File No. S7-
12-15; 87 FR 73076 (November 28, 2022).
    \5\ 2 Public Law 111-203, 124 Stat. 1900 (2010).
    \6\ 15 U.S.C. 78j-4.
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    Specifically, the rule amendments the SEC adopted pursuant to
Section 10D of the Act \7\ require specific disclosure of the listed
issuer's policy on recovery of incentive-based compensation and
information about actions taken pursuant to such recovery policy. Rule
10D-1 requires listing exchanges to require that listed issuers file
all disclosures with respect to their recovery policies in accordance
with the requirements of the Federal securities laws, including the
disclosures required by the applicable SEC filings. The rule amendments
require listing exchanges to require each listed issuer to: (i) file
their written recovery policies as exhibits to their annual reports;
(ii) indicate by check boxes on their annual reports whether the
financial statements included in the filings reflect correction of an
error to previously issued financial statements and whether any of
those error corrections are restatements that required a recovery
analysis; and (iii) disclose any actions they have taken pursuant to
such recovery policies.
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    \7\ See footnote 5 supra.
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    Rule 10D-1 requires that the issuer will recover reasonably
promptly the amount of erroneously awarded incentive-based compensation
in the event that the issuer is required to prepare an accounting
restatement due to the material noncompliance of the issuer with any
financial reporting requirements under the securities laws. In the
adopting release for Rule 10D-1, the SEC states that the issuer and its
directors and officers must comply with this requirement in a manner
that is consistent with the exercise of their fiduciary duty to
safeguard the assets of the issuer (including the time value of any
potentially recoverable compensation). The issuer's obligation to
recover erroneously awarded incentive based compensation reasonably
promptly will be assessed on a holistic basis with respect to each such
accounting restatement prepared by the issuer. In evaluating whether an
issuer is recovering erroneously awarded incentive-based compensation
reasonably promptly, the Exchange will consider whether the issuer is
pursuing an appropriate balance of cost and speed in determining the
appropriate means to seek recovery, and whether the issuer is securing
recovery through means that are appropriate based on the particular
facts and circumstances of each executive officer that owes a
recoverable amount.
    Rule 10D-1 became effective on January 27, 2023. Exchanges are
required to file proposed listing standards no later than February 27,
2023, and the listing standards must be effective no later than
November 28, 2023. Issuers subject to such listing standards will be
required to adopt a recovery policy no later than 60 days following the
date on which the applicable listing standards become effective.
Proposed NYSE Arca Rule
    NYSE Arca proposes to comply with Rule 10D-1 by adopting proposed
Rule 5.3-E(p). Proposed Rule 5.3-E(p) is designed to conform closely to
the applicable language of Rule 10D-1. Proposed Rule 5.3-E(p) would
prohibit the initial or continued listing of any security of an issuer
that is not in compliance with the requirements of any portion thereof.
Implementation
    Proposed Rule 5.3-E(p)(B) would establish the timeframe within
which listed companies must comply with proposed Rule 5.3-E(p).
Specifically:
     Each listed issuer must adopt the recovery policy required
by proposed Rule 5.3-E(p) (``Recovery Policy'') no later than 60 days
from the adoption of the proposed listing standard (``Effective
Date'').
     Each listed issuer must comply with its Recovery Policy
for all incentive-based compensation Received (as such term is defined
in proposed Rule 5.3-E(p)(E) as set forth below) by executive officers
on or after the Effective Date that results from attainment of a
financial reporting measure based on or derived from financial
information for any fiscal period ending on or after the Effective
Date.
     Each listed issuer must provide the required disclosures
in the applicable SEC filings required on or after the Effective Date.
Requirements of Proposed Rule
    The requirements of proposed Rule 5.3-E(p) would be as follows:
     The issuer must adopt and comply with a written Recovery
Policy providing that the issuer will recover reasonably promptly the
amount of erroneously awarded incentive-based compensation in the event
that the issuer is required to prepare an accounting restatement due to
the material noncompliance of the issuer with any financial reporting
requirement under the securities laws, including any required
accounting restatement to correct an error in

previously issued financial statements that is material to the
previously issued financial statements, or that would result in a
material misstatement if the error were corrected in the current period
or left uncorrected in the current period.
     The issuer's Recovery Policy must apply to all incentive-
based compensation received by a person:
    [cir] After beginning service as an executive officer;
    [cir] Who served as an executive officer at any time during the
performance period for that incentive-based compensation;
    [cir] While the issuer has a class of securities listed on a
national securities exchange or a national securities association; and
    [cir] During the three completed fiscal years immediately preceding
the date that the issuer is required to prepare an accounting
restatement as described in paragraph (C)(1) of proposed Rule 5.3-E(p).
In addition to these last three completed fiscal years, the Recovery
Policy must apply to any transition period (that results from a change
in the issuer's fiscal year) within or immediately following those
three completed fiscal years. However, a transition period between the
last day of the issuer's previous fiscal year end and the first day of
its new fiscal year that comprises a period of nine to 12 months would
be deemed a completed fiscal year. An issuer's obligation to recover
erroneously awarded compensation is not dependent on if or when the
restated financial statements are filed.
     For purposes of determining the relevant recovery period,
the date that an issuer is required to prepare an accounting
restatement as described in paragraph (C)(1) of Rule 5.3-E(p) is the
earlier to occur of:
    [cir] The date the issuer's board of directors, a committee of the
board of directors, or the officer or officers of the issuer authorized
to take such action if board action is not required, concludes, or
reasonably should have concluded, that the issuer is required to
prepare an accounting restatement as described in paragraph (C)(1) of
proposed Rule 5.3-E(p); or
    [cir] The date a court, regulator, or other legally authorized body
directs the issuer to prepare an accounting restatement as described in
paragraph (C)(1) of proposed Rule 5.3-E(p).
     The amount of incentive-based compensation that must be
subject to the issuer's Recovery Policy (``erroneously awarded
compensation'') is the amount of incentive-based compensation received
that exceeds the amount of incentive-based compensation that otherwise
would have been received had it been determined based on the restated
amounts, and must be computed without regard to any taxes paid. For
incentive-based compensation based on stock price or total shareholder
return, where the amount of erroneously awarded compensation is not
subject to mathematical recalculation directly from the information in
an accounting restatement:
    [cir] The amount must be based on a reasonable estimate of the
effect of the accounting restatement on the stock price or total
shareholder return upon which the incentive-based compensation was
received; and
    [cir] The issuer must maintain documentation of the determination
of that reasonable estimate and provide such documentation to the
Exchange.
     The issuer must recover erroneously awarded compensation
in compliance with its Recovery Policy except to the extent that the
conditions in one of the three bullets set forth below are met, and the
issuer's committee of independent directors responsible for executive
compensation decisions, or in the absence of such a committee, a
majority of the independent directors serving on the board, has made a
determination that recovery would be impracticable.
    [cir] The direct expense paid to a third party to assist in
enforcing the policy would exceed the amount to be recovered. Before
concluding that it would be impracticable to recover any amount of
erroneously awarded compensation based on expense of enforcement, the
issuer must make a reasonable attempt to recover such erroneously
awarded compensation, document such reasonable attempt(s) to recover,
and provide that documentation to the Exchange.
    [cir] Recovery would violate home country law where that law was
adopted prior to November 28, 2022. Before concluding that it would be
impracticable to recover any amount of erroneously awarded compensation
based on violation of home country law, the issuer must obtain an
opinion of home country counsel, acceptable to the Exchange, that
recovery would result in such a violation, and must provide such
opinion to the Exchange.
    [cir] Recovery would likely cause an otherwise tax-qualified
retirement plan, under which benefits are broadly available to
employees of the registrant, to fail to meet the requirements of 26
U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.
     The issuer is prohibited from indemnifying any executive
officer or former executive officer against the loss of erroneously
awarded compensation.
Disclosure in SEC Filings
    The issuer must file all disclosures with respect to such Recovery
Policy in accordance with the requirements of the Federal securities
laws, including the disclosure required by the applicable Commission
filings.
General Exemptions
    The requirements of proposed Rule 5.3-E(p) would not apply to the
listing of:
     A security futures product cleared by a clearing agency
that is registered pursuant to section 17A of the Act \8\ or that is
exempt from the registration requirements of section 17A(b)(7)(A); \9\
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    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78q-1(b)(7)(A).
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     A standardized option, as defined in 17 CFR 240.9b-
1(a)(4), issued by a clearing agency that is registered pursuant to
section 17A of the Act; \10\
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    \10\ 15 U.S.C. 78q-1.
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     Any security issued by a unit investment trust, as defined
in 15 U.S.C. 80a-4(2); (4) Any security issued by a management company,
as defined in 15 U.S.C. 80a-4(3), that is registered under section 8 of
the Investment Company Act of 1940,\11\ if such management company has
not awarded incentive-based compensation to any executive officer of
the company in any of the last three fiscal years, or in the case of a
company that has been listed for less than three fiscal years, since
the listing of the company.
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    \11\ 15 U.S.C. 80a-8.
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Definitions Under Proposed Rule 5.3-E(p)
    Unless the context otherwise requires, the following definitions
apply for purposes of proposed Rule 5.3-E(p):
    Executive Officer. An executive officer is the issuer's president,
principal financial officer, principal accounting officer (or if there
is no such accounting officer, the controller), any vice-president of
the issuer in charge of a principal business unit, division, or
function (such as sales, administration, or finance), any other officer
who performs a policy-making function, or any other person who performs
similar policy-making functions for the issuer. Executive officers of
the issuer's parent(s) or subsidiaries are deemed executive officers of
the issuer if they perform such policy making functions for the issuer.
In addition, when the issuer is a limited partnership, officers or
employees of the general partner(s) who perform policy-making functions

for the limited partnership are deemed officers of the limited
partnership. When the issuer is a trust, officers, or employees of the
trustee(s) who perform policy-making functions for the trust are deemed
officers of the trust. Policy-making function is not intended to
include policy-making functions that are not significant.
Identification of an executive officer for purposes of Rule 5.3-E(p)
would include at a minimum executive officers identified pursuant to 17
CFR 229.401(b).
    Financial reporting measures. Financial reporting measures are
measures that are determined and presented in accordance with the
accounting principles used in preparing the issuer's financial
statements, and any measures that are derived wholly or in part from
such measures. Stock price and total shareholder return are also
financial reporting measures. A financial reporting measure need not be
presented within the financial statements or included in a filing with
the Commission.
    Incentive-based compensation. Incentive-based compensation is any
compensation that is granted, earned, or vested based wholly or in part
upon the attainment of a financial reporting measure.
    Received. Incentive-based compensation is deemed received in the
issuer's fiscal period during which the financial reporting measure
specified in the incentive-based compensation award is attained, even
if the payment or grant of the incentive-based compensation occurs
after the end of that period.
Delisting
    The Exchange proposes to adopt new Rule 5.3-E(p)(F)
(``Noncompliance with Rule 5.3-E(p) (Erroneously Awarded
Compensation)'').
    Proposed Rule 5.3-E(p)(F)(i) would provide that in any case where
the Exchange determines that a listed issuer has not recovered
erroneously-awarded compensation as required by its Recovery Policy
reasonably promptly after such obligation is incurred, trading in all
listed securities of such listed issuer would be immediately suspended
and the Exchange would immediately commence delisting procedures with
respect to all such listed securities. Rule 10D-1 does not specify the
time by which the issuer must complete the recovery of excess
incentive-based compensation, NYSE Arca would however determine whether
the steps an issuer is taking constitute compliance with its
compensation Recovery Policy. A listed issuer will be subject to the
procedures outlined in Rule 5.5-E(a) with respect to such a delisting
determination.
    Proposed Rule 5.3-E(p)(F)(ii) would deem a listed issuer to be
below standards in the event of any failure by such listed issuer to
adopt its required Recovery Policy by the Effective Date (a ``Late
Recovery Policy Adoption Delinquency''). The listed issuer would be
required to notify the Exchange in writing within five days of the
Effective Date if it fails to adopt its Recovery Policy by that date.
    Upon the occurrence of a Late Recovery Policy Adoption Delinquency,
the Exchange will promptly send written notification (the ``Late
Recovery Policy Adoption Delinquency Notification'') to a listed issuer
of the procedures set forth below. Within five days of the date of the
Late Recovery Policy Adoption Delinquency Notification, the listed
issuer will be required to (a) contact the Exchange to discuss the
status of the delayed Recovery Policy and (b) issue a press release
disclosing the occurrence of the Late Recovery Policy Adoption
Delinquency, the reason for the Late Recovery Policy Adoption
Delinquency and, if known, the anticipated date such Late Recovery
Policy Adoption Delinquency will be cured. If the listed issuer has not
issued the required press release within five days of the date of the
Late Recovery Policy Adoption Delinquency Notification, the Exchange
will issue a press release stating that the issuer has incurred a Late
Recovery Policy Adoption Delinquency.
    During the six-month period from the date of the Late Recovery
Policy Adoption Delinquency (the ``Initial Late Recovery Policy
Adoption Cure Period''), the Exchange will monitor the listed issuer
and the status of the delayed Recovery Policy, including through
contact with the company, until the Late Recovery Policy Adoption
Delinquency is cured. If the listed issuer fails to cure the Late
Recovery Policy Adoption Delinquency within the Initial Late Recovery
Policy Adoption Cure Period, the Exchange may, in the Exchange's sole
discretion, allow the company's securities to be traded for up to an
additional six-month period (the ``Additional Late Recovery Policy
Adoption Cure Period'') depending on the company's specific
circumstances. If the Exchange determines that an Additional Late
Recovery Policy Adoption Cure Period is not appropriate, suspension and
delisting procedures will commence in accordance with the procedures
set out in Rule 5.5-E(a). Notwithstanding the foregoing, however, the
Exchange may in its sole discretion decide (i) not to afford a listed
issuer any Initial Late Recovery Policy Adoption Cure Period or
Additional Late Recovery Policy Adoption Cure Period, as the case may
be, at all or (ii) at any time during the Initial Late Recovery Policy
Adoption Cure Period or Additional Late Recovery Policy Adoption Cure
Period, to truncate the Initial Cure Period or Additional Cure Period,
as the case may be, and immediately commence suspension and delisting
procedures if the listed issuer is subject to delisting pursuant to any
other provision of the Rules, including if the Exchange believes, in
the Exchange's sole discretion, that continued listing and trading of a
company's securities on the Exchange is inadvisable or unwarranted. The
Exchange may also commence suspension and delisting procedures without
affording any cure period at all or at any time during the Initial Late
Recovery Policy Adoption Cure Period or Additional Late Recovery Policy
Adoption Cure Period if the Exchange believes, in the Exchange's sole
discretion, that it is advisable to do so on the basis of an analysis
of all relevant factors.
    In determining whether an Additional Late Recovery Policy Adoption
Cure Period after the expiration of the Initial Late Recovery Policy
Adoption Cure Period is appropriate, the Exchange will consider the
likelihood that the delayed Recovery Policy can be adopted during the
Additional Late Recovery Policy Adoption Cure Period. If the Exchange
determines that an Additional Late Recovery Policy Adoption Cure Period
is appropriate and the listed issuer fails to adopt a Recovery Policy
by the end of such Additional Late Recovery Policy Adoption Cure
Period, suspension and delisting procedures will commence immediately
in accordance with the procedures set out in Rule 5.5-E(a). In no event
will the Exchange continue to trade a company's securities if that
listed issuer has failed to cure its Late Recovery Policy Adoption
Delinquency on the date that is twelve months after the commencement of
the company's Late Recovery Policy Adoption Delinquency.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \13\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged

in regulating, clearing, settling, processing information with respect
to, and facilitating transactions in securities, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange believes that
proposed new Rule 5.3-E(p) is consistent with the protection of
investors and the public interest because it furthers the goal of
ensuring the accuracy of the financial disclosure of listed issuers.
Specifically, the Exchange believes the recovery requirement may
provide executive officers with an increased incentive to take steps to
reduce the likelihood of inadvertent misreporting and will reduce the
financial benefits to executive officers who choose to pursue
impermissible accounting methods, which we expect will further
discourage such behavior. The Exchange believes that these increased
incentives may improve the overall quality and reliability of financial
reporting, which further benefits investors. The new proposed Rule 5.3-
E(p) is also consistent with the requirements of Section 10D of the Act
and Rule 10D-1 thereunder, as it would establish a listing standard
that is consistent with the requirements of Rule 10D-1.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange proposes to adopt continued listing standards for
proposed Rule 5.3-E(p) in proposed Rule 5.3-E(p)(F). Pursuant to
proposed Rule 5.3-E(p)(F)(i), a listed issuer would be subject to
immediate suspension and delisting without eligibility for cure periods
if the Exchange has determined that the listed issuer has failed to
recover reasonably promptly erroneously-awarded compensation as
requited by its Recovery Policy. Proposed Rule 5.3-E(p)(F)(ii) would
provide compliance periods of up to 12 months for a listed issuer that
is delayed in adopting its Recovery Policy. The Exchange believes that
the compliance procedures set forth in proposed Rule 5.3-E(p)(F) are
appropriately rigorous and are consistent with the public interest and
the interests of investors.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange notes that Rule
10D-1 under the Act requires all listing exchanges to adopt rules with
respect to the recovery of erroneously awarded compensation that are
substantively identically to proposed Rule 5.3-E(p).

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

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

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change 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 protected]. Please include
File Number SR-NYSEARCA-2023-20 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2023-20. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change 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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEARCA-2023-20, and should be
submitted on or before April 3, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-05033 Filed 3-10-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 215 (Tuesday, November 6, 2018)]
[Rules and Regulations]
[Pages 55486-55488]
[FR Doc No: 2018-24213]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-84511; File No. S7-24-18]
RIN 3235-AL10

Commission Statement on Certain Provisions of Business Conduct
Standards for Security-Based Swap Dealers and Major Security-Based Swap
Participants

AGENCY: Securities and Exchange Commission.

ACTION: Commission statement.

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SUMMARY: The Commission is issuing a statement regarding certain
provisions of its Business Conduct Standards for Security-Based Swap
Dealers and Major Security-Based Swap Participants. The statement sets
forth the Commission's position, for five years after the compliance
date for the security-based swap dealer and major security-based swap
participant registration rules, that certain actions with respect to
provisions of the Commission's business conduct standards will not
provide a basis for a Commission enforcement action.

DATES: The Commission's statement is effective November 6, 2018.

FOR FURTHER INFORMATION CONTACT: Lourdes Gonzalez, Assistant Chief
Counsel; Joanne Rutkowski, Assistant Chief Counsel; Devin Ryan, Senior
Special Counsel; Kelly Shoop, Special Counsel; or Neel Maitra, Special
Counsel, at<PHONE_NUMBER>, in the Division of Trading and Markets,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549.

SUPPLEMENTARY INFORMATION:

I. Introduction

    In 2012 the U.S. Commodity Futures Trading Commission (``CFTC'')
adopted business conduct rules for swap dealers and major swap
participants (``CFTC's Business Conduct Rules'').\1\ To assist the
swaps industry in implementing and complying with the CFTC's Business
Conduct Rules, industry participants developed standardized
counterparty

relationship documentation that has been in force since 2012, and is
currently used by over 22,000 counterparties.\2\
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    \1\ Business Conduct Standards for Swap Dealers and Major Swap
Participants with Counterparties, 77 FR 9734 (Feb. 17, 2012).
    \2\ See International Swaps and Derivatives Association, Inc.
(``ISDA'') DF Protocol, List of Adhering Parties, available at
https://www.isda.org/protocol/isda-august-2012-df-protocol/adhering-parties.
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    In 2016, pursuant to Section 15F of the Securities Exchange Act of
1934 (``Exchange Act''),\3\ the Commission adopted final rules imposing
business conduct standards (the ``SEC's Business Conduct Rules'') for
security-based swap dealers (``SBS Dealers'') and major security-based
swap participants (``Major SBS Participants'' and, together with SBS
Dealers, ``SBS Entities'').\4\ As noted in the Commission's Adopting
Release, the Commission endeavored to harmonize its rules with
analogous CFTC requirements where possible to create efficiencies for
entities that have already established infrastructure for compliance
with analogous CFTC requirements.\5\ In certain instances, however, the
Commission's requirements, and the associated representations that
would be required under standardized counterparty relationship
documentation, diverge from those of the analogous CFTC requirements,
which are reflected in existing standardized counterparty relationship
documentation. Market participants have expressed concerns about
practical compliance difficulties presented by certain of these
differences.\6\
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    \3\ In this document, all references to ``Rules'' shall mean
those under the Exchange Act.
    \4\ Business Conduct Standards for Security-Based Swap Dealers
and Major Security-Based Swap Participants, 81 FR 29960 (May 13,
2016) (``Adopting Release''). Although the rules are now effective,
the Commission determined not to require compliance with them until
entities are required to register as SBS Dealers or Major SBS
Participants. See id. at 30081.
    \5\ Id. at 29964.
    \6\ See, e.g., Letter from Securities Industry and Financial
Markets Association (``SIFMA'') and Institute of International
Bankers, June 21, 2018 (``SIFMA June 2018 Letter''); Letter from
Church Alliance to Brett Redfearn, June 26, 2018 (``Church Alliance
June 2018 Letter'').
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    The Commission is mindful of the time and costs that may be
associated with a documentation initiative that would be undertaken
solely to address the SEC's Business Conduct Rules. Therefore, to
minimize potential market disruptions to existing counterparty
relationships resulting solely from documentation implementation issues
(upon their compliance date when compliance will first be required),
for a limited time period, the Commission takes the position that
certain actions with respect to provisions of the SEC's Business
Conduct Rules will not provide a basis for a Commission enforcement
action, as set forth below.\7\
---------------------------------------------------------------------------

    \7\ To the extent there are additional differences between the
CFTC's Business Conduct Rules and the SEC's Business Conduct Rules
that otherwise present documentation implementation difficulties
that could result in potential for market disruption, the Commission
encourages market participants to provide that information to the
Commission.
---------------------------------------------------------------------------

II. Commission Position

    The Commission's position \8\ is expressly limited to the SEC's
Business Conduct Rules, 17 CFR 240.15Fh-1 (Rule 15Fh-1) through
240.15Fh-6 (Rule 15Fh-6), set forth below. The Commission emphasizes
that its position is limited to the Commission's enforcement discretion
with respect to Rules 15Fh-1 through 15Fh-6, and does not modify or
change any contractual rights between counterparties to security-based
swaps. Further, nothing in the Commission's position excuses compliance
with Rule 15Fh-1(b), under which an SBS Entity cannot rely on a
representation if it has information that would cause a reasonable
person to question the accuracy of the representation.\9\ Unless
specified below, all terms shall have the definitions set forth in
Exchange Act Section 15F(h) and Rules 15Fh-1 through 15Fh-6. Finally,
the Commission's position applies only to the exercise of its
enforcement discretion as set forth in subsections A. through D. below,
and only until five years after the compliance date for the SBS Entity
registration rules.
---------------------------------------------------------------------------

    \8\ The Commission's position is an agency statement of general
applicability with future effect designed to implement, interpret,
or prescribe law or policy.
    \9\ See Section II.D., infra, for the Commission's position on
written representations that were previously obtained in connection
with swaps.
---------------------------------------------------------------------------

A. Non-ERISA Employee Benefit Plans

    For purposes of the provisions relating to special entities under
Rules 15Fh-1 through 15Fh-6, it would not provide a basis for an
enforcement action if an SBS Entity considers an employee benefit plan
as defined in Rule 15Fh-2(d)(4) \10\ not to be a special entity where:
(i) The plan has previously represented in writing to the SBS Entity
that it is not a special entity for swap purposes under the CFTC's
Business Conduct Rules; (ii) at a reasonably sufficient time \11\ prior
to entering into a security-based swap with the plan, the SBS Entity
notifies the plan in writing that it may opt into special entity status
under Rule 15Fh-2(d)(4); \12\ and (iii) the plan does not opt into
special entity status.
---------------------------------------------------------------------------

    \10\ Rule 15Fh-2(d)(4) defines ``special entity'' to include:
``An employee benefit plan as defined in section 3 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002) and not
otherwise defined as a special entity, unless such employee benefit
plan elects not to be a special entity by notifying a security-based
swap dealer or major security-based swap participant of its election
prior to entering into a security-based swap with the particular
security-based swap dealer or major security-based swap
participant.''
    \11\ See, e.g., Adopting Release, 81 FR at 29982 (``[I]t is
important that the required disclosures be made at a reasonably
sufficient time before the execution of the transaction to allow the
counterparty to assess the disclosures.'').
    \12\ This notification requirement mirrors the approach set
forth in CFTC Regulation at 17 CFR 23.401(c)(6).
---------------------------------------------------------------------------

B. Written Representations: SBS Dealers Not Acting as Advisors

    Reliance on the representations described below during the five
years in which this Commission position is in effect would not provide
a basis for an enforcement action:
     An SBS Dealer seeking to establish that it is not acting
as an advisor to a special entity within the meaning of Rule 15Fh-2(a)
relies on a written representation that a special entity will not rely
on recommendations provided by the SBS Dealer \13\ instead of having
the special entity represent in writing that it acknowledges that the
SBS Dealer is not acting as an advisor when the SBS Dealer recommends a
security-based swap or a trading strategy that involves the use of a
security-based swap to the special entity.\14\
---------------------------------------------------------------------------

    \13\ This written representation mirrors the requirement set
forth in CFTC Regulation at 17 CFR 23.440(b)(2)(ii), the analogous
provision to Rule 15Fh-2(a)(2)(i)(A).
    \14\ See Rule 15Fh-2(a)(2)(i)(A).
---------------------------------------------------------------------------

     With respect to a special entity as defined in Rule 15Fh-
2(d)(3) (e.g., an employment plan subject to Title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002) (``ERISA
Special Entity'')), an SBS Dealer relies on a representation from the
ERISA Special Entity's fiduciary that such fiduciary is not relying on
recommendations provided by the SBS Dealer \15\ instead of having the
fiduciary represent in writing that it acknowledges that the SBS Dealer
is not acting as an advisor when it recommends a security-based swap or
a trading strategy that involves the use of a security-based swap to
the ERISA Special Entity.\16\
---------------------------------------------------------------------------

    \15\ This written representation mirrors the requirement set
forth in CFTC Regulation 23.440(b)(1)(ii), the analogous provision
to Rule 15Fh-2(a)(1)(ii).
    \16\ See Rule 15Fh-2(a)(1)(ii).
---------------------------------------------------------------------------

     An SBS Dealer relies on a written representation from the
ERISA Special Entity that any recommendation it receives from the SBS
Dealer materially affecting a security-based swap transaction will be
evaluated by a

fiduciary before the transaction occurs, instead of having an ERISA
Special Entity represent in writing that any recommendation it receives
from the SBS Dealer involving a security-based swap transaction will be
evaluated by a fiduciary before the transaction is entered into.\17\
---------------------------------------------------------------------------

    \17\ See Rule 15Fh-2(a)(1)(iii)(B). This written representation
mirrors the requirement set forth in CFTC Regulation 23.440(b), the
analogous provision to Rule 15Fh-2(a)(1)(iii)(B).
---------------------------------------------------------------------------

C. Safe Harbor for SBS Dealers and Major SBS Participants Acting as
Counterparties to Special Entities

    Rule 15Fh-5(b) provides a safe harbor for SBS Entities acting as
counterparties to a special entity other than an ERISA Special Entity.
As set forth in Rule 15Fh-5(b)(1)(ii)(B), to avail itself of the safe
harbor the SBS Entity must among other things, obtain written
representations from the representative of the special entity (the
``qualified independent representative'') that such representative: (1)
Meets the independence test as required by Rule 15Fh-5(a)(1)(vii); (2)
has the knowledge required under Rule 15Fh-5(a)(1)(i); (3) is not
subject to a statutory disqualification under Rule 15Fh-5(a)(1)(ii);
(4) undertakes a duty to act in the best interests of the special
entity as required by Rule 15Fh-5(a)(1)(iii); and (5) is subject to the
requirements regarding political contributions, as applicable, under
Rule 15Fh-5(a)(1)(vi).
    It would not provide a basis for an enforcement action with respect
to relying on the safe harbor in Rule 15Fh-5(b)(1)(ii)(B) if, during
the five years in which this Commission position is in effect, instead
of obtaining these written representations, an SBS Entity relies on a
written representation from the qualified independent representative
that the representative has written policies and procedures reasonably
designed to ensure that the representative satisfies the requirements
for acting as a qualified independent representative.\18\ This position
is applicable only to the written representations set forth in Rule
15Fh-5(b)(1)(ii)(B) and is only applicable where the SBS Entity meets
all other Commission requirements as set forth in Rule 15Fh-5(b).
---------------------------------------------------------------------------

    \18\ The Commission notes that this written representation is
already required by Rule 15Fh-5(b)(1)(ii)(A), and mirrors the
analogous requirement set forth in CFTC Regulation at 17 CFR
23.450(d)(1)(ii)(A).
---------------------------------------------------------------------------

D. Reliance on Previously-Obtained Written Representations

    Finally, Rule 15Fh-1(b), as noted above, permits an SBS Entity to
rely on written representations from the counterparty or its
representative to satisfy its due diligence requirements under Rules
15Fh-1 through 15Fh-6, unless the SBS Entity has information that would
cause a reasonable person to question the accuracy of the
representation. As the Commission stated when adopting the rule, the
question of whether reliance on representations that had been obtained
with respect to the CFTC's Business Conduct Rules would satisfy an SBS
Entity's obligations under the SEC's Business Conduct Rules will depend
on the facts and circumstances of the particular matter.\19\ The
Commission's position is that, for purposes of Rule 15Fh-1(b), it would
not provide a basis for an enforcement action if, during the five years
in which this Commission position is in effect, an SBS Dealer relies on
representations from a counterparty or representative that were
previously provided in relation to swaps if the SBS Dealer is not aware
of information that would cause a reasonable person to question the
accuracy of the representation if the representation were given in
relation to security-based swaps.\20\
---------------------------------------------------------------------------

    \19\ See Adopting Release, 81 FR at 29976.
    \20\ This position applies equally to the written
representations addressed in Sections II.B. and C., supra.

---------------------------------------------------------------------------
    By the Commission.

    Dated: October 31, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018-24213 Filed 11-5-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)]
[Notices]
[Pages 3407-3408]
[FR Doc No: 2016-01114]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #2

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-2822-008; ER12-2076-005; ER11-2462-006; ER11-
2463-006; ER11-2112-007; ER12-2077-005; ER12-2078-005; ER10-2828-003;
ER11-2464-006; ER10-3158-006; ER10-2942-005; ER12-2081-005; ER12-2083-
005; ER12-2084-005; ER10-2423-006; ER10-2404-006; ER12-2086-005; ER12-
2649-003; ER10-1725-003; ER11-2465-007; ER14-2676-002; ER10-2994-013;
ER11-2466-006; ER11-2467-006; ER11-2468-006; ER11-2469-006; ER11-2470-
006; ER11-2471-006; ER11-2472-006; ER10-3001-004; ER10-3002-003; ER10-
3004-004; ER12-308-006; ER12-2108-005; ER12-2097-005; ER12-2101-005;
ER10-3162-006; ER12-422-005; ER12-2102-006; ER12-2109-005; ER11-2473-
006; ER10-3010-003; ER12-2106-005; ER11-2196-007; ER10-3161-006; ER12-
96-005; ER11-2474-008; ER10-3031-003; ER12-2107-005; ER11-2475-006;
ER10-2285-005; ER10-2301-003; ER10-2306-003; ER10-3160-002; ER10-2812-
013; ER10-1291-020; ER10-2843-012.
    Applicants: Atlantic Renewables Projects II LLC, Barton Windpower
LLC, Big Horn Wind Project LLC, Big Horn II Wind Project LLC, Blue
Creek Wind Farm LLC, Buffalo Ridge I LLC, Buffalo Ridge II LLC,
Casselman Windpower LLC, Colorado Green Holdings LLC, Dillon Wind LLC,
Elk River Windfarm, LLC, Elm Creek Wind, LLC, Elm Creek Wind II LLC,
Farmers City Wind, LLC, Flat Rock Windpower LLC, Flat Rock Windpower II
LLC, Flying Cloud Power Partners, LLC, Groton Wind, LLC, Hardscrabble
Wind Power LLC, Hay Canyon Wind LLC, Iberdrola Arizona Renewables, LLC,
Iberdrola Renewables, LLC, Juniper Canyon Wind Power LLC, Klamath
Energy LLC, Klamath Generation LLC, Klondike Wind Power LLC, Klondike
Wind Power II LLC, Klondike Wind Power III LLC, Leaning Juniper Wind
Power II LLC, Lempster Wind, LLC, Locust Ridge Wind Farm, LLC, Locust
Ridge II, LLC, Manzana Wind LLC, MinnDakota Wind LLC, Moraine Wind LLC,
Moraine Wind II LLC, Mountain View Power Partners III, LLC, New England
Wind, LLC, New Harvest Wind Project LLC, Northern Iowa Windpower II
LLC, Pebble Springs Wind LLC, Providence Heights Wind, LLC, Rugby Wind
LLC, San Luis Solar LLC, Shiloh I Wind Project, LLC, South Chestnut
LLC, Star Point Wind Project LLC, Streator-Cayuga Ridge Wind Power LLC,
Trimont Wind I LLC, Twin Buttes Wind LLC, Central Maine Power Company,
New York State Electric & Gas Corporation, Rochester Gas & Electric
Corporation, The United Illuminating Company, GenConn Devon LLC,
GenConn Energy LLC, GenConn Middletown LLC.
    Description: Notice of Change in Status of the AVANGRID MBR
Sellers.
    Filed Date: 1/14/16.
    Accession Number: 20160114-5314.
    Comments Due: 5 p.m. ET 2/4/16.

    Docket Numbers: ER12-1895-000; EL12-110-000; ER11-3657-000; EL11-
64-000.
    Applicants: Entergy Services, Inc.
    Description: Entergy Services, Inc. submits tariff filing per
35.19a(b): Refund Report to be effective N/A.
    Filed Date: 1/14/16.
    Accession Number: 20160114-5336.
    Comments Due: 5 p.m. ET 2/4/16.

    Docket Numbers: ER15-762-006; ER15-760-005; ER15-1579-004; ER 15-
1582-005; ER15-1914-006; ER15-1896-004.
    Applicants: Sierra Solar Greenworks LLC, Western Antelope Blue Sky
Ranch A LLC, 67RK 8me LLC, 65HK 8me LLC, 87RL 8me LLC, Eden Solar, LLC.
    Description: Notice of Non-Material Change in Status of Sierra
Solar Greenworks LLC, et. al.
    Filed Date: 1/14/16.
    Accession Number: 20160114-5315.
    Comments Due: 5 p.m. ET 2/4/16.

    Docket Numbers: ER16-731-000.
    Applicants: Green Country Energy, LLC.
    Description: Market-Based Triennial Review Filing: Green Country
Energy

Triennial MBR Update in Docket No. ER10-3063 to be effective 3/14/2016.
    Filed Date: 1/14/16.
    Accession Number: 20160114-5363.
    Comments Due: 5 p.m. ET 3/14/16.

    Docket Numbers: ER16-732-000.
    Applicants: Consolidated Edison Company of New York, Inc.
    Description: Sec.  205(d) Rate Filing: Surcharge--Targeted Demand
Management Program and Demo Projects to be effective 1/15/2016.
    Filed Date: 1/14/16.
    Accession Number: 20160114-5378.
    Comments Due: 5 p.m. ET 2/4/16.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: January 14, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-01114 Filed 1-20-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 78 (Monday, April 23, 2018)]
[Rules and Regulations]
[Pages 17621-17623]
[FR Doc No: 2018-08413]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2018-0154]
RIN 1625-AA08

Special Local Regulation; USS PORTLAND Commissioning, Portland,
OR

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a temporary regulated area for
certain waters of the Willamette River. This action is necessary to
provide for the safety of life on these navigable waters near Port of
Portland Terminal 2, Portland, OR, during a naval vessel commissioning
ceremony on April 14 through 23, 2018. This regulation prohibits
persons and vessels from being in the regulated area unless authorized
by the Captain of the Port Columbia River or a designated
representative.

DATES: This rule is effective from 12:01 a.m. to 11:59 p.m. on April
23, 2018. For the purposes of enforcement, actual notice will be used
from 11:59 p.m. on April 14, 2018, until April 23, 2018.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2018-0154 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email LCDR Laura Springer, MSU Portland Waterways; telephone
503-240-9319, email [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    From April 14 through 23, 2018, the U.S. Navy will be conducting
ceremonial activities for the commissioning of the USS PORTLAND. The
commissioning activities will take place at the Port of Portland
Terminal 2.
    In response, on March 21, 2018, the Coast Guard published a notice
of proposed rulemaking (NPRM) titled ``Special Local Regulation; USS
PORTLAND Commissioning, Portland, OR'' (83 FR 12303). There we proposed
to establish a regulated area extending approximately 500 yards on each
side of the naval vessel on the Willamette River in Portland, OR during
the commissioning ceremonies and invited comments on our proposed
regulatory action related to this event. During the comment period that
ended April 5, 2018, we received 3 comments.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Delaying the effective date of
this rule would be impracticable because it needs to be effective
starting April 14, 2018 to ensure the safety of vessels and the
navigable waters within the regulated area during the ceremonial
activities and to prevent any disruption to the commissioning
ceremonies.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C.
1233. The Captain of the Port Sector Columbia River (COTP) has
determined that to provide for the safety of participants, spectators,
support and transiting vessels, it is necessary to temporarily restrict
vessel traffic from April 14 through 23, 2018. The purpose of this rule
is to ensure the safety of vessels and the navigable waters within the
regulated area, during, and after the scheduled event and to prevent
any disruption to the commissioning ceremonies.

IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received three comments on our NPRM published
March 21, 2018 (83 FR 12303). The first comment was in support of the
regulated area. The second comment was from a yacht club requesting
clarification for transiting the regulated area. Vessels desiring to
transit the regulated area will be able with approval from the patrol
commander. This issue was addressed in the published proposed
regulatory text. Procedures for transiting the area will also be
published in the Local Notice to Mariners. The third comment was beyond
the scope of this rulemaking. We made no changes in the regulatory text
from what we proposed in the NPRM.
    This rule establishes a regulated area from 11:59 p.m. on April 14,
2018, to 11:59 p.m. on April 23, 2018. The

regulated area will cover navigable waters at Port of Portland Terminal
2 on the Willamette River. Specifically, the navigable waters bounded
by the following points: 45[deg]33.34' N, 122[deg] 42.34' W;
45[deg]33.12' N, 122[deg]42.51' W; 45[deg]32.71' N, 122[deg]41.37' W;
and 45[deg]32.58' N, 122[deg]41.54' W. The duration of the regulated
area is intended to ensure the safety of vessels, bystanders, and the
navigable waters and to prevent any disruption of the events associated
with the commissioning ceremony of the USS PORTLAND. The Coast Guard,
at its discretion, would allow the passage of affected vessels. But no
vessel or person will be permitted to enter the regulated area without
obtaining permission from the COTP or a designated representative.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This rule has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, this rule has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.
    This regulatory action determination is based on the size,
location, and duration of the regulated area. Although this proposal
would prevent traffic from transiting portions of the Willamette River,
the effect of this regulation would not be significant due to the
limited duration that the regulated area would be in effect and would
allow waterway users to enter or transit through the area when deemed
safe by the on-scene patrol commander. Moreover, the Coast Guard would
issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 and
publish information in the Local Notice to Mariners about the regulated
area.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    While some owners or operators of vessels intending to transit the
regulated area may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Directive 023-01, which guides the Coast Guard in complying with the
National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and
have determined that this action is one of a category of actions that
do not individually or cumulatively have a significant effect on the
human environment. This rule involves a regulated area lasting less
than 10 days that would limit entry within approximately 500 yards of
the USS PORTLAND. It is categorically excluded from further review
under paragraph L61 of Appendix A, Table 1 of DHS Instruction Manual
023-01-001-01, Rev. 01. A Memorandum for Record supporting this
determination is available in the docket where indicated under
ADDRESSES.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without

jeopardizing the safety or security of people, places or vessels.

List of Subjects in 33 CFR Part 100

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority:  33 U.S.C. 1233; 33 CFR 1.05-1.

0
2. Add Sec.  100.T13-0154 to read as follows:

Sec.  100.T13-0154   Special Local Regulations; USS PORTLAND
Commissioning, Portland, OR.

    (a) Regulated area. The following area is designated as a regulated
area: All navigable waters of the Willamette River within 500 yards of
the USS PORTLAND while moored at the Port of Portland Terminal 2,
specifically the navigable waters bounded by the following points:
45[deg]33.34' N, 122[deg]42.34' W; 45[deg]33.12' N, 122[deg]42.51' W;
45[deg]32.71' N, 122[deg]41.37' W; and 45[deg]32.58' N, 122[deg]41.54'
W.
    (b) Special local regulations. (1) The Coast Guard may patrol the
regulated area under the direction of a designated Coast Guard Patrol
Commander (PATCOM). PATCOM may be contacted on Channel 16 VHF-FM (156.8
MHz) by the call sign ``PATCOM.'' Official patrol vessels may consist
of any Coast Guard, Coast Guard Auxiliary, state, or local law
enforcement vessels assigned or approved by the Captain of the Port,
Sector Columbia River.
    (2) Entrance into the regulated area is prohibited unless
authorized by the PATCOM. The PATCOM may control the movement of all
vessels in the regulated area. When hailed or signaled to stop by an
official patrol vessel, a vessel must come to an immediate stop and
comply with the lawful directions issued. Failure to comply with a
lawful direction may result in expulsion from the area, citation for
failure to comply, or both.
    (3) All vessels permitted to transit the regulated area must
maintain a separation of at least 100 yards away from the USS PORTLAND.
    (c) Enforcement period. This regulated area is subject to
enforcement from 11:59 p.m. on April 14, 2018 to 11:59 p.m. on April
23, 2018.

    Dated: April 11, 2018.
D.G. Throop,
Rear Admiral, U.S. Coast Guard, Commander, Thirteenth Coast Guard
District.
[FR Doc. 2018-08413 Filed 4-20-18; 8:45 am]
 BILLING CODE 9110-04-P