[Federal Register Volume 79, Number 135 (Tuesday, July 15, 2014)]
[Notices]
[Pages 41339-41345]
[FR Doc No: 2014-16501]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72575; File No. SR-FINRA-2014-030]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change Relating to
Quotation Requirements for Unlisted Equity Securities and Deletion of
the Rules Related to the OTC Bulletin Board Service

July 9, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 27, 2014, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    FINRA is proposing amendments regarding quotation requirements for
unlisted equity securities and deleting the rules related to the OTC
Bulletin

Board Service (``OTCBB'' or ``Service'') and ceasing its operation.
    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA, on the
Commission's Web site at http://www.sec.gov, and at the Commission's
Public Reference Room.

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

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

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

1. Purpose
    FINRA is proposing a rule change to: (1) Adopt rules governing the
treatment of quotations in OTC equity securities \3\ by member inter-
dealer quotation systems,\4\ and addressing fair and non-discriminatory
access to such systems; (2) require member inter-dealer quotation
systems to provide FINRA with a written description of quotation-
related data products offered and related pricing information,
including fees, rebates, discounts and cross-product pricing
incentives; (3) expand the reporting requirements related to quotation
information in OTC equity securities; and (4) delete the Rule 6500
Series and related rules and cease operation of the OTCBB.
---------------------------------------------------------------------------

    \3\ FINRA Rule 6420(f) defines ``OTC equity security'' as any
equity security that is not an ``NMS stock'' as that term is defined
in Rule 600(b)(47) of SEC Regulation NMS; provided, however, that
the term ``OTC equity security'' shall not include any Restricted
Equity Security.
    \4\ FINRA Rule 6420(c) defines ``inter-dealer quotation system''
as any system of general circulation to brokers or dealers which
regularly disseminates quotations of identified brokers or dealers.
---------------------------------------------------------------------------

Background
    FINRA's statutory mandate under Section 15A of the Act includes,
among other things, that FINRA's rules must govern the form and content
of quotations relating to securities sold over the counter.\5\ In
furtherance of this mandate, FINRA has adopted rules that are designed
to: (1) Produce fair and informative quotations; (2) prevent fictitious
or misleading quotations; and (3) promote orderly procedures for
collecting, distributing, and publishing quotations.\6\ In particular,
FINRA's Rule 6400 Series (Quoting and Trading in OTC Equity
Securities), among other things, provides a regulatory framework
governing the form and content of quotations in OTC equity securities
and, together with other FINRA rules, including rules in the Rule 5200
Series (Quotation and Trading Obligations and Practices), specifies
provisions directed toward the mandate set forth in Section 15A(b)(11)
of the Act (collectively referred to as the ``Quotation Governance
Rules''). FINRA also operates the OTCBB and has established the Rule
6500 Series, which governs the operation and use of the OTCBB.
---------------------------------------------------------------------------

    \5\ See 15 U.S.C. 78o-3.
    \6\ Section 15A(b)(11) of the Act provides: ``The rules of the
association include provisions governing the form and content of
quotations relating to securities sold otherwise than on a national
securities exchange which may be distributed or published by any
member or person associated with a member, and the persons to whom
such quotations may be supplied. Such rules relating to quotations
shall be designed to produce fair and informative quotations, to
prevent fictitious or misleading quotations, and to promote orderly
procedures for collecting, distributing, and publishing
quotations.'' See 15 U.S.C. 78o-3(b)(11).
---------------------------------------------------------------------------

Current Regulatory Framework for Governing Quotations
    FINRA's Quotation Governance Rules generally prescribe limitations
around the conduct of members that publish quotations in OTC equity
securities, including quotations displayed on inter-dealer quotation
systems. While these rules apply to member quotation activities, they
generally do not include rules specifically directed to the member
inter-dealer quotation systems on or through which such quotation
activity may take place. For example, FINRA Rule 6432 (Compliance with
the Information Requirements of SEA Rule 15c2-11) generally provides
that members may not initiate or resume quotations in any quotation
medium unless the member files a Form 211 with FINRA and complies with
SEA Rule 15c2-11 (Initiation or resumption of quotations without
specific information). Thus, the filing of a Form 211 with FINRA by a
member, and FINRA's review thereof, helps ensure that, prior to
publishing a quotation in an OTC equity security (or submitting a
quotation for publication), members must have in their records the
documents and information specified in SEA Rule 15c2-11 and have a
reasonable basis for believing that the relevant information is
accurate and that the sources of the information are reliable.\7\
---------------------------------------------------------------------------

    \7\ SEA Rule 15c2-11(a) generally provides that, ``[a]s a means
reasonably designed to prevent fraudulent, deceptive, or
manipulative acts or practices, it shall be unlawful for a broker or
dealer to publish any quotation for a security or, directly or
indirectly, to submit any such quotation for publication, in any
quotation medium . . . unless such broker or dealer has in its
records the documents and information required [under this rule],
and, based upon a review of the [required] information . . . has a
reasonable basis under the circumstances for believing that the
[required] information is accurate in all material respects, and
that the sources of the [required] information are reliable.''
---------------------------------------------------------------------------

    In 2010, the SEC approved four new FINRA rules governing quotation
activity generally by prescribing additional requirements for members
entering quotations on inter-dealer quotation systems in OTC equity
securities: (1) Rule 6434 (Minimum Pricing Increment for OTC Equity
Securities); (2) Rule 6437 (Prohibition from Locking or Crossing
Quotations in OTC Equity Securities); (3) Rule 6450 (Restrictions on
Access Fees); and (4) Rule 6460 (Display of Customer Limit Orders).\8\
These rules, known as the ``NMS-Principled Rules,'' extended to the
over-the-counter market certain protections previously applicable only
to exchange-listed securities, and were adopted to enhance market
quality and investor protection in the over-the-counter marketplace.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 62359 (June 22,
2010), 75 FR 37488 (June 29, 2010) (Order Approving File No. SR-
FINRA-2009-054) (the ``NMS-Principled Rules'').
---------------------------------------------------------------------------

    The NMS-Principled Rules, respectively, generally: (1) Provide that
members may not display, rank, or accept a bid or offer, an order, or
an indication of interest in an OTC equity security priced greater than
or equal to $1.00 in an increment less than a penny and, for OTC equity
securities priced under $1.00, an increment less than $0.0001; (2)
require members to implement policies and procedures to reasonably
avoid displaying, or engaging in a pattern or practice of displaying,
locking or crossing quotations in any OTC equity security within an
inter-dealer quotation system; (3) prohibit members from imposing non-
subscriber access or post-transaction fees against published quotations
in any OTC equity security that exceed or accumulate to more than the
limits set forth in the rule; \9\ and (4)

require member OTC market makers displaying priced quotations in an OTC
equity security on an inter-dealer quotation system to publish
immediately a customer limit order that improves the OTC market maker's
priced quotation (or that is equal to the OTC market maker's priced
quotation at the BBO but increases the OTC market maker's posted size
by more than a de minimis amount), subject to enumerated exceptions.
---------------------------------------------------------------------------

    \9\ Rule 6450 (a) and (b) provide that access fees are limited
to (a) $0.003 per share, if the published quotation is priced equal
to or greater than $1.00; or (b) the lesser of 0.3% of the published
quotation price on a per share basis or 30% of the minimum pricing
increment under Rule 6434 (Minimum Pricing Increment for OTC Equity
Securities) relevant to the display of the quotation on a per share
basis if the published quotation is less than $1.00.
---------------------------------------------------------------------------

    FINRA's current Quotation Governance Rules also prescribe the
minimum share size applicable to members' quotations in OTC equity
securities displayed on an inter-dealer quotation system. Specifically,
Rule 6433 (Minimum Pricing Increment for OTC Equity Securities)
generally provides that every member entering quotations in any inter-
dealer quotation system must enter and honor those quotations for at
least the minimum sizes defined in the rule.\10\ The currently
applicable quotation minimums are as follows:
---------------------------------------------------------------------------

    \10\ Depending upon the price level of the quotation, a
different minimum size can apply to each side of the market being
quoted by the member in a given security. Recently, on November 5,
2013, FINRA extended the pilot for an additional year until November
14, 2014. See Securities Exchange Act Release No. 70839 (November 8,
2013), 78 FR 68893 (November 15, 2013) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2013-049).

------------------------------------------------------------------------
                                                               Minimum
                   Price  (bid or offer)                      quote size
------------------------------------------------------------------------
0.0001-0.0999..............................................       10,000
0.10-0.1999................................................        5,000
0.20-0.5099................................................        2,500
0.51-0.9999................................................        1,000
1.00-174.99................................................          100
175.00+....................................................            1
------------------------------------------------------------------------

The current rule, which was revised as a pilot in November 2012,
amended the tier sizes to, among other things, simplify the tier
structure and facilitate the display of customer limit orders pursuant
to Rule 6460.
    The FINRA Rule 5200 Series also includes rules that govern members'
quotation activity in OTC equity securities. For example, Rule 5210
(Publication of Transactions and Quotations) provides, among other
things, that members are prohibited from publishing or circulating (or
causing to be published or circulated) any notice or communication of
any kind which purports to quote the bid price or asked price for any
security, unless such member believes that such quotation represents a
bona fide bid for, or offer of, such security (i.e., the ``fictitious
quotation'' prohibition). In addition, Rule 5220 (Offers at Stated
Prices) generally prohibits members from making an offer to buy from or
sell to any person any security at a stated price unless such member is
prepared to purchase or sell, as the case may be, at such price and
under such conditions as are stated at the time of such offer to buy or
sell (i.e., the ``firm quote'' requirement).

Proposed Requirements for Member Inter-Dealer Quotation Systems

    As described above, FINRA's existing Quotation Governance Rules
explicitly regulate the activities of OTC market makers \11\ and other
members that display quotations on inter-dealer quotation systems, but
generally do not directly provide quotation governance standards for
the member inter-dealer quotation systems itself on or through which
such quotations are displayed. Given the significant role of inter-
dealer quotation systems in the over-the-counter markets in terms of
both quotation transparency and resultant trading activity, FINRA
believes it is appropriate to adopt new rules directly tailored to such
systems to ensure they have in place minimum standards regarding the
treatment of quotations received and governing fair access. Consistent
with the goals and objectives of Section 17B of the Act \12\ regarding
the facilitation of widespread dissemination of reliable and accurate
quotation information in penny stocks, FINRA is proposing to complement
the existing framework governing the form and content of quotations.
FINRA is proposing to require that a member inter-dealer quotation
system: (1) Adopt and provide to FINRA written policies and procedures
relating to the collection and dissemination of quotation information
in OTC equity securities, (2) establish and provide to FINRA fair and
non-discriminatory written standards for granting access to quoting and
trading on its system, and (3) provide to FINRA for regulatory purposes
a written description of each quotation-related data product offered by
such member inter-dealer quotation system and related pricing
information, including fees, rebates, discounts and cross-product
pricing incentives.\13\
---------------------------------------------------------------------------

    \11\ FINRA Rule 6420(g) defines ``OTC Market Maker'' as a member
of FINRA that holds itself out as a market maker by entering
proprietary quotations or indications of interest for a particular
OTC equity security in any inter-dealer quotation system, including
any system that the SEC has qualified pursuant to Section 17B of the
Act. A member is an OTC market maker only in those OTC equity
securities in which it displays market making interest via an inter-
dealer quotation system.
    \12\ See 15 U.S.C. 78q-2. Section 17B was enacted by Congress as
part of the Securities Enforcement Remedies and Penny Stock Reform
Act of 1990 (``Penny Stock Act''). Pub. L. No. 101-429, 104 Stat.
931 (1990).
    \13\ As further discussed below, a member also would be required
to provide FINRA with any changes to these required submissions
within five business days.
---------------------------------------------------------------------------

Proposed Quotation Collection and Dissemination Policies and Procedures
Requirement

    FINRA is proposing a new rule to require that a member inter-dealer
quotation system (whether or not also an alternative trading system or
``ATS'' as defined by Rule 300(a) of SEC Regulation ATS) that permits
quotation updates on a real-time basis establish, maintain and enforce
fair and reasonable written policies and procedures relating to the
collection and dissemination of quotation information in OTC equity
securities on or through its system. Such policies and procedures must
ensure that quotations received are treated fairly and consistently,
including by establishing fair and non-discretionary methods under
which quotations are prioritized and displayed and such standards must
be fully disclosed to subscribers. For example, a member inter-dealer
quotation system would be required to address its methodology for
ranking quotations, including at a minimum, addressing factors such as
price (including any applicable quote access fee), size, time, capacity
and type of quotation (such as unpriced quotes and bid/offer wanted
quotations). The member inter-dealer quotation system also would be
required to include any other factors relevant to the ranking and
display of quotations (e.g., reserve sizes, quotation updates,
treatment of closed quotations, and quotation information imported from
other systems).
    FINRA believes that requiring member inter-dealer quotation systems
to establish fair and reasonable written policies and procedures and
provide such procedures to FINRA will, among other things, further
promote orderly procedures for collecting, distributing, and publishing
quotations submitted to inter-dealer quotation systems in securities
traded over the counter. FINRA also is proposing that a member inter-
dealer quotation system provide FINRA with a copy of its written
policies and procedures relating to the collection and dissemination of
quotation information, and any material updates, modifications and
revisions thereto, within five business days following the member's
establishment of the written policy or procedure or

implementation of the material change.\14\
---------------------------------------------------------------------------

    \14\ A member that is an inter-dealer quotation system at the
time of the effective date of this proposed rule change would
provide the required information upon the effective date and,
thereafter, any material update, modification or revision thereto
must be provided to FINRA within five business days of its
implementation.
---------------------------------------------------------------------------

Proposed Written Standards Governing System Access Requirement

    FINRA is proposing that a member inter-dealer quotation system
establish fair and non-discriminatory written standards for granting
access to quoting and trading on the system that do not unreasonably
prohibit or limit any person in respect to access to services offered
by such inter-dealer quotation system.\15\ This proposed requirement is
consistent with the ``fair access'' requirements of Regulation ATS but
would apply to quoting and trading in all OTC equity securities on the
member inter-dealer quotation system, irrespective of the percentage of
average daily volume that such inter-dealer quotation system had in the
security.\16\ FINRA believes that these proposed amendments are
necessary and appropriate to further the mandates of Section 15A of the
Act.
---------------------------------------------------------------------------

    \15\ FINRA proposes that a member inter-dealer quotation system
also must make and keep records of all grants of access including
(for all subscribers) the reasons for granting such access and all
denials or limitations of access and reasons (for each applicant)
for denying or limiting access. A policy prohibiting or limiting
access to services offered by the member inter-dealer quotation
system due to non-payment by a subscriber would not be prohibited
under the proposed rule.
    \16\ Regulation ATS's ``fair access'' requirements apply with
respect to securities where the ATS's trading accounted for 5% or
more of the reported average daily trading volume (ADTV) in the
security. The proposal would apply the fair access standards with
respect to all securities quoted on the inter-dealer quotation
system (not just those meeting the minimum 5% (or other) threshold).
---------------------------------------------------------------------------

    Further, the proposed rule would require that a member inter-dealer
quotation system provide FINRA with a copy of its written standards for
granting access to quoting and trading on its system and any material
updates, modifications and revisions thereto within five business days
following: (a) The date of the member's establishment of the written
standard, and (b) the date of the material update, modification or
revision to the written standard.

Proposed Quotation-Related Data Product and Pricing Provision
Requirement

    FINRA is proposing to require a member inter-dealer quotation
system to provide FINRA with a written description of each quotation-
related data product offered by such member inter-dealer quotation
system and related pricing information, including fees, rebates,
discounts and cross-product pricing incentives, and any changes
thereto, within five business days following: (a) The date of the
establishment of the quotation-related data product or date of any
change thereto (including discontinuance of the offering of the
quotation-related data product), and (b) the date of the establishment
of the quotation-related data product price, including a fee, rebate,
discount and cross-product pricing incentive, or change thereto.
    FINRA believes that the proposed changes described above will
facilitate the objectives of the Act, including Section 17B of the Act,
by helping ensure that disseminated quotations are reliable and
accurate and will provide FINRA with useful information to ensure
compliance with FINRA rules and to monitor the widespread availability
of quotation information to investors and market participants through
non-SRO sources.

Proposed Amendments to the Quotation Recording and Reporting
Requirements

    FINRA Rule 6431 (Recording of Quotation Information) was
implemented in 2003 to provide FINRA with access to quotation data
displayed on non-SRO sponsored and non-member systems so that FINRA
could assess member compliance with applicable rules and regulations
and, when necessary, to reconstruct market activity.\17\ FINRA is
proposing to update and expand the rule to better reflect the current
quoting structure of the OTC equity market. First, FINRA is proposing
to expand the scope of the rule beyond quotations displayed on an
inter-dealer quotation system by OTC market makers to include
quotations displayed by any FINRA member, including ATSs. Since the
initial adoption of this rule, quoting in OTC equity securities by ATSs
and other members that are not OTC market makers has increased and
FINRA believes Rule 6431's recording and reporting requirements should
apply equally to all such quotes displayed on inter-dealer quotation
systems.
---------------------------------------------------------------------------

    \17\ See Securities Exchange Act Release No. 47587 (March 27,
2003), 68 FR 16328 (April 3, 2003) (Order Approving File No. SR-
NASD-2000-042). See also Notice to Members 03-28 (June 2003).
---------------------------------------------------------------------------

    Second, FINRA is proposing minor amendments to the items of
information required to be recorded and reported under the rule.
Specifically, the new rule would require the following items of
quotation information:
    (1) MPID of quoting member (the current rule asks for ``submitting
firm'');
    (2) Inter-dealer quotation system (the current rule asks members to
specify the inter-dealer quotation system or ``medium'');
    (3) Date of quotation (the current rule asks for ``trade date'');
    (4) Time quotation displayed (expressed in hours, minutes, seconds
and milliseconds if the reporting member's system captures time in
milliseconds) (the current rule asks for time expressed in hours,
minutes and seconds, but not milliseconds);
    (5) Security name and symbol (FINRA is not proposing amendments to
this item of information);
    (6) Bid and bid quotation size (if applicable) (FINRA is not
proposing amendments to this item of information);
    (7) Offer and offer quotation size (if applicable) (FINRA is not
proposing amendments to this item of information);
    (8) Prevailing Inside Bid (FINRA is not proposing amendments to
this item of information); and
    (9) Prevailing Inside Offer (FINRA is not proposing amendments to
this item of information).
    Finally, at the time of the adoption of this rule, FINRA had
determined not to apply the requirements to inter-dealer quotation
systems that were FINRA members and, rather, to obtain quotation
information directly from the FINRA member as needed pursuant to Rule
8210. However, since the adoption of the rule, the primary inter-dealer
quotation system from which FINRA receives quotation information (as
reporting agent on behalf of member firms) has become a FINRA member
firm and, therefore, FINRA believes the exception for quotations
displayed on systems operated by a FINRA member no longer should
apply.\18\ Instead, the proposed rule would directly require member
inter-dealer quotation systems to report each attributed quotation
displayed on the system by a broker-dealer. In the event that a FINRA
member displays a quotation on a non-member inter-dealer quotation
system, the member must record and report to FINRA the required
information regarding the quotations displayed by such member.
---------------------------------------------------------------------------

    \18\ FINRA has continued to receive quotation information on a
weekly basis following the inter-dealer quotation system becoming a
FINRA member.
---------------------------------------------------------------------------

    FINRA believes that these amendments to the quotation recording and
reporting requirements simplify and streamline the process of obtaining
quotation information for regulatory purposes by directly requiring
that member inter-dealer quotation systems report subscribing members'
quotation

information to FINRA.\19\ Thus, individual quoting members no longer
are required to report or arrange to have reported to FINRA the items
of quotation information specified in the rule, unless such member is
displaying a quotation on a non-member inter-dealer quotation system.
The rule would continue to permit the use of a reporting agent by
either a member inter-dealer quotation system or a member displaying a
quotation on a non-member inter-dealer quotation system.\20\
---------------------------------------------------------------------------

    \19\ Currently the reporting obligation is imposed on the
quoting member itself, though, in practice, quoting members have
used the inter-dealer quotation system to which their quotation is
submitted and displayed as reporting agent for purposes of meeting
the Rule 6431 reporting obligation.
    \20\ A ``reporting agent'' is a third party that enters into any
agreement with a member pursuant to which such third party agrees to
fulfill such member's obligations under Rule 6431.
---------------------------------------------------------------------------

Proposed Deletion of OTCBB-Related Rules

    Finally, FINRA is proposing to delete the FINRA Rule 6500 Series,
which governs the operation of the OTC Bulletin Board Service and cease
operation of the OTCBB. FINRA previously proposed to delete the OTCBB
rules and discontinue operation of the Service as part of a separate
rule filing, the ``QCF Proposal.'' \21\ As discussed in the QCF
Proposal, the level of transparency in OTC equity securities
facilitated by the operation of the OTCBB has been declining
significantly for years as other quotation venues have emerged. In
fact, since the filing of the QCF Proposal on November 6, 2009, the
amount of quotation information widely available to investors relying
on OTCBB BBO data has further declined and has become negligible. Thus,
FINRA believes that the remaining OTCBB information being disseminated
to investors is so incomplete as to be potentially misleading with
respect to the current pricing in these securities.
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release No. 60999 (November 13,
2009), 74 FR 61183 (November 23, 2009) (Notice of Filing of File No.
SR-FINRA-2009-077). FINRA intends to withdraw the currently pending
QCF Proposal if the instant proposed rule change is approved by the
Commission.
---------------------------------------------------------------------------

    For example, of the approximately 10,000 OTC equity securities
quoted over the counter on the largest inter-dealer quotation system,
less than 10% of those issues also are eligible to be quoted on
OTCBB.\22\ In addition, less than twelve securities out of the 10,000
OTC equity securities are quoted solely on OTCBB. Furthermore, based
upon a sample of 20 days in 2013, the OTCBB only disseminated an
average of 27 computed BBOs, which means that OTCBB BBO quotation
information was available through Level 1 on less than 0.3% of the
10,000 OTC equity security symbols.\23\
---------------------------------------------------------------------------

    \22\ Of the over 10,000 symbols quoted over the counter, as of
December 17, 2013, 836 symbols were eligible to be quoted on the
OTCBB, and we estimate that less than a dozen of those issues were
being quoted solely on the OTCBB.
    \23\ During the week of December 2nd, there were a total of 14
symbols for which an OTCBB BBO was calculated and disseminated.
---------------------------------------------------------------------------

    Therefore, FINRA does not believe that the discontinuance of the
OTCBB as an inter-dealer quotation system will have an appreciable
impact on issuers, investors or member firms.\24\ For the same reasons,
FINRA does not believe that the OTCBB, in its current form and with
current levels of participation, furthers the goals and objectives of
Section 17B of the Act \25\ and, therefore, does not meet the
characteristics of a system described in Section 17B of the Act
regarding the widespread dissemination of reliable and accurate
quotation information with respect to ``penny stocks.'' \26\ However,
FINRA notes that, since the inception of the OTCBB, non-self-regulatory
organization (``SRO'') entities have increased their participation in
the collection and dissemination of quotation information in OTC equity
securities, including for those OTC equity securities meeting the
definition of ``penny stock,'' and have made such quotation information
available to investors and market participants. Thus, FINRA believes
that discontinuance of the OTCBB as an inter-dealer quotation system
will not have an appreciable impact on the current level of quotation
transparency for OTC equity securities. In addition, the proposed rule
change is intended to facilitate the widespread availability of
reliable and accurate quotation information through non-SRO sources.
---------------------------------------------------------------------------

    \24\ As part of the QCF Proposal, FINRA notes that no concerns
were raised by commenters with respect to the portion of the QCF
Proposal that would have deleted the OTCBB rules and discontinued
operation of the Service.
    \25\ Section 17B of the Act provides, among other things, that
the Commission shall facilitate the widespread dissemination of
reliable and accurate last sale and quotation information with
respect to penny stocks.
    \26\ Under SEC Rule 3a51-1, ``penny stock'' is defined to, among
other things, exclude securities that have a price of five dollars
or more as determined either on a per transaction basis or, in the
absence of a transaction, on the basis of the inside bid quotation
for the security displayed on an automated quotation system that has
the characteristics set forth in Section 17B(b)(2) of the Act or any
other system that is designated by the Commission. See 17 CFR
240.3a51-1.
---------------------------------------------------------------------------

    Importantly, FINRA will continue to centralize last sale
transaction reporting through the FINRA OTC Reporting Facility
(``ORF'') and, therefore, will continue to operate a system that
collects and disseminates transaction information on, and provides
widespread dissemination of reliable and accurate last sale information
with respect to, OTC equity securities, including penny stocks.\27\
Thus, the objectives of Section 17B of the Act relating to the
provision of price and volume information to investors and market
participants will continue to be satisfied through FINRA's operation of
the ORF.
---------------------------------------------------------------------------

    \27\ FINRA members are required to report substantially all
trades in OTC equity securities to ORF within 10 seconds of
execution and FINRA widely disseminates this transaction information
in real-time.
---------------------------------------------------------------------------

    As was the case with the QCF Proposal, in advance of the
discontinuance of the OTCBB, FINRA will take steps to ensure a smooth
transition for issuers and members. Specifically, FINRA will publicize
announcements through the FINRA.org and OTCBB.com Web sites; directly
contact active OTCBB market makers; notify and educate the few
remaining OTCBB-only issuers; and email dually quoted issuers about the
cessation of quoting on the OTCBB. Thereafter, FINRA will continue to
assess the widespread availability of quotation transparency to
investors and market participants through non-SRO sources on a regular
basis. If the availability of quotation information to investors
significantly declines, FINRA will revisit and, if necessary, file a
proposed rule change to establish an SRO-operated inter-dealer
quotation system (or other measure) to facilitate the type of
widespread quotation transparency described in Section 17B of the
Act.\28\
---------------------------------------------------------------------------

    \28\ Should FINRA determine it is necessary to recommence the
operation of a system to facilitate quotation transparency, FINRA
also would revisit at that time the necessity of the proposals
described herein requiring inter-dealer quotation systems to provide
FINRA specified policies and procedures, written standards,
quotation-related data product descriptions and related pricing
information.
---------------------------------------------------------------------------

    FINRA discussed the concepts described in this proposed rule change
with several of FINRA's industry advisory committees in developing its
approach. The committees supported the proposed amendments and did not
believe that compliance with the proposal would be burdensome for
firms.
    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be no later than 180 days
following Commission approval.

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\29\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed amendments will
promote just and equitable principles of trade by helping ensure that
subscribers (and potential subscribers) are afforded fair and non-
discriminatory access to the quotation system of a member-inter-dealer
quotation system, and that the standards required for access be fully
disclosed. In addition, the proposed provision requiring a member
inter-dealer quotation system to provide FINRA with a copy of such
written standards (and material updates, modifications and revisions
thereto) within five business days is consistent with Section 15A(b)(6)
of the Act in that it furthers FINRA's ability to review for compliance
with the underlying provisions requiring fair access to the member's
system.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    FINRA also believes that the proposed rule change is consistent
with the provisions of Section 15A(b)(11) of the Act.\30\ Section
15A(b)(11) requires that the rules of the association include
provisions governing the form and content of quotations relating to
securities sold otherwise than on a national securities exchange which
may be distributed or published by any member or person associated with
a member, and the persons to whom such quotations may be supplied.\31\
Specifically, FINRA believes that the proposed amendment requiring
member-inter-dealer quotation systems to adopt policies and procedures
addressing the collection and dissemination of quotations in OTC equity
securities is consistent with Section 15A(b)(11) of the Act in that the
amendments further govern the form and content of quotations relating
to securities sold otherwise than on a national securities exchange
which may be distributed or published by any member or person
associated with a member, and the persons to whom such quotations may
be supplied.\32\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78o-3(b)(11).
    \31\ See 15 U.S.C. 78o-3(b)(11).
    \32\ See 15 U.S.C. 78o-3(b)(11).
---------------------------------------------------------------------------

    FINRA also believes that the proposed new rules for member inter-
dealer quotation systems requiring them to establish, maintain and
enforce fair and reasonable written policies and procedures relating to
the collection and dissemination of quotations in OTC equity securities
on or through their systems, and to ensure that such quotations are
treated fairly and consistently, are consistent with the Act by
promoting orderly procedures for collecting, distributing, and
publishing quotations. Similarly, the proposed provision requiring a
member inter-dealer quotation system to provide FINRA with a copy of
such written policies and procedures (and any material updates,
modifications and revisions thereto) within five business days is
consistent with Section 15A(b)(11) of the Act in that it provides FINRA
with timely notification of material changes to the member's quotation
collection and dissemination policies and procedures, which facilitates
FINRA's ability to perform its oversight functions in this area.
    FINRA believes that the proposed amendments to the quotation
recording and reporting requirements of Rule 6431 streamline, clarify
and simplify the items of information and process for reporting
quotation data to FINRA for regulatory purposes, such as for use in
conducting reviews of over-the-counter market activity and surveillance
of member conduct, consistent with FINRA's statutory mandate under the
Act.\33\
---------------------------------------------------------------------------

    \33\ See 15 U.S.C. 78o-3.
---------------------------------------------------------------------------

    FINRA also believes that the proposed rule change will protect
investors and the public interest by discontinuing the dissemination of
potentially incomplete, inaccurate and misleading best bid and offer
quotation data in OTC equity securities, as discussed above, by
deleting the OTCBB rules and discontinuing operation of the Service.
Further, FINRA believes that the proposed rule change is consistent
with Section 17B of the Act.\34\ Section 17B was enacted by Congress as
part of the Penny Stock Act, which was designed to remedy
inefficiencies and address regulatory concerns caused by the lack of
reliable market information on penny stocks traded over the counter
and, in connection with this initiative, the Commission designated the
OTCBB as a Qualifying Electronic Quotation System (``QEQS'') for
purposes of the penny stock rules.\35\
---------------------------------------------------------------------------

    \34\ See 15 U.S.C. 78q-2.
    \35\ See Securities Exchange Act Release No. 30608 (April 20,
1992), 57 FR 18004 (April 28, 1992) (``Penny Stock Release'')
(adopting seven rules (the ``penny stock rules'') under the Act
requiring broker-dealers engaging in certain transactions in low-
priced, over the counter securities to provide customers with
specified information).
---------------------------------------------------------------------------

    Due to the decline of OTCBB, as discussed previously, FINRA is
concerned that OTCBB is no longer a reliable source of complete
quotation information for OTC equity securities and, therefore,
operation of the Service no longer furthers the purposes of Section 17B
of the Act. However, FINRA believes that discontinuing dissemination of
potentially incomplete and misleading quotation information from the
marketplace by ceasing operation of the OTCBB, coupled with the
proposed changes to improve the governance of inter-dealer quotation
systems on or through which quotations in OTC equity securities are
displayed, best serves and promotes the goals of Section 17B of the Act
with respect to the widespread availability of quotation information in
penny stocks. In addition, to the extent necessary, FINRA requests that
the Commission consider granting an exemption from Section 17B of the
Exchange Act in connection with its consideration of this proposed rule
change.
    Finally, the proposed requirement that a member inter-dealer
quotation system provide FINRA with a written description of each
quotation-related data product it offers and related pricing
information, including fees, rebates, discounts and cross-product
pricing incentives (and any changes thereto) within five business days,
provides FINRA with useful information to ensure compliance with FINRA
rules and to monitor the widespread availability of quotation
information to investors and market participants through non-SRO
sources, and to determine whether proposing the reestablishment of an
SRO-operated inter-dealer quotation system (or other measure) to
facilitate the type of quotation transparency described in Section 17B
of the Act, is necessary. The FINRA ORF continues to provide for the
reporting of the volume of penny stock transactions, including
comprehensive last sale reporting and dissemination, consistent with
Section 17B of the Act.

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

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed amendments to
require a member inter-dealer quotation system to establish fair and
non-discriminatory written standards for granting access to quoting and
trading would apply to all members meeting the Rule 6420 definition of
``inter-dealer quotation system,'' and therefore do not

disparately impose requirements on similarly situated members.
    In addition, the proposed amendments to require a member inter-
dealer quotation system to establish, maintain and enforce fair and
reasonable written policies and procedures relating to the collection
and dissemination of quotations in OTC equity securities are important
to facilitate an orderly environment around quotation activity in OTC
equity securities. Furthermore, the proposal provides for a ``policies
and procedures'' approach and, therefore, affords all members within
its scope a degree of flexibility in implementing measures to comply
with the proposed rule.
    FINRA also does not believe that the proposed requirement that
members provide copies of the aforementioned written policies,
procedures and standards (and material updates, modifications and
revisions thereto) results in an unwarranted burden on competition
because the member inter-dealer quotation system would be permitted to
proceed with the implementation of desired changes to its written
policies, procedures and standards, as long as it notifies FINRA within
five business days following the implementation of the changes.
    The proposal requiring a member inter-dealer quotation system to
provide FINRA with a written description of each quotation-related data
product offered by such member and related pricing information,
including fees, rebates, discounts and cross-product pricing incentives
(and any changes thereto) within five business days is essential to
FINRA's ongoing monitoring of the widespread availability of quotation
information on OTC equity securities. FINRA also does not believe that
this requirement imposes an unwarranted burden on competition because
the proposed rule would permit the member inter-dealer quotation system
to launch a new quotation-related data product or related price (or
change an existing data product or related price) without delay,
followed by timely notification to FINRA. This proposed amendment would
apply to all members meeting the Rule 6420 definition of ``inter-dealer
quotation system,'' and therefore would not disparately impose
requirements on similarly situated members.
    The proposed clarification and streamlining of the quotation
recording and reporting requirements are minor and generally consistent
with current practice; therefore, FINRA anticipates that members would
need to make very few changes to comply with the revised regime. Thus,
any burden associated with the rule change is negligible and its impact
on competition nonexistent. Finally, FINRA does not believe that the
proposed deletion of the OTCBB-related rules and the discontinuance of
the operation of the Service would impose any burden on competition
because the Service currently operates as a transparency utility and,
therefore, its closure would not burden competition and in no way would
hinder the ability of new competitors to enter the market.

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

    Not applicable.

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) ; or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2014-030 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-FINRA-2014-030. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2014-030 and should be
submitted on or before August 5, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-16501 Filed 7-14-14; 8:45 am]
BILLING CODE 8011-01-P


3M General Offices 3M 3M Center St. Paul, MN 55144 1000 651733 1110 July 7, 2000 7 `8 +t~ a26 0~ 6~ 70 +t~ a26 0~ 6~ 70 Charles Auer (E403C) Director, Chemical Control Division Office of Pollution Prevention and Toxics Office of Prevention, Pesticides and Toxic Substances US Environmental Protection Agency 401 M. Street, SW Washington, DC Re: Phase out Plan for POSF Based Products Dear Mr. Auer:

As you know, on May l& 2000 3M announced that it will be phasing out manufacture of products based on perfluorooctanyl chemistry. In that announcement, 3M indicated that production of these materials would be substantially discontinued by the end of 2000 and that the company would work with its customers to implement an orderly phase out.

EPA has asked 3M to submit a detailed plan explaining how it intends to filtill these commitments. This letter and attachments are provided in response to EPA's request. As discussed with the Agency, 3M's initial plan focuses on products derived from perfluorooctanesulfonyl fluoride (POSF); these products constitute over 95 percent of 3M's total production of perfluorooctanyl chemistries. Other products covered by 3M's May 16 announcement, including perfluorooctanoic acid (PFOA), will be separately discussed with EPA.

We appreciated the opportunity to discuss our phase out plan with EPA staff on June 20. The Agency's comments at the meeting and in subsequent conversations were very helpful and are reflected in this letter and attachments. We have also continued to refine our plan on the basis of updated information. Because of these modifications, our latest submission reflects 3M's current S E phase out plan and therefore supersedes our letters of June 16 and 23.

INTRODUCTION AND OVERVIEW 2 . _1_.

i<

During the past two years, 3M has communicated extensively with EPA about fluorochemical 2s (FC) issues. We informed EPA management of our phase out decision before it was announced 23 ** publicly and EPA is familiar with the considerations on which that decision was based. In 0 .r summary, 3M is discontinuing manufacture of perfluorooctanyl materials because of its commitment to responsible environmental management and sound business principles. 3M concluded that, in light of the persistence of certain FCs and their detection at extremely low levels in the blood of the general population and wildlife, other business opportunities were more deserving of the company's energies and attention than perfluorooctanyl based chemistries. As Page 2 July 7, 2000 3M has repeatedly emphasized, all existing knowledge indicates that the presence of these chemistries in people and wildlife at the low levels detected does not pose a health or environmental risk.

In deciding how to implement its phase out decision, 3M has been guided by two objectives. First, we wish to fulfill our commitment to accomplish a substantial phase out of production as expeditiously as practicable. Second, we want to minimize marketplace disruption and provide for an orderly transition away from POSF based products by the business sectors that depend on perfluorooctanyl chemistries. Balancing these considerations is extremely challenging because our POSF based products are used in a wide range of applications with impacts on numerous segments of the economy.

We are still receiving and evaluating the information necessary to balance these complex considerations. However, this letter and attachments provide our best current understanding of how we will implement our phase out plan for POSF based products. As illustrated in Attachment I, 3M's plan will result in a substantial reduction in production and import volumes after December 3 1, 2000. Limited further production, at significantly lower levels, will continue through the end of 2002. As shown in Attachment 2, production of POSF derived materials will be reduced in 200 1 to 12.3 percent of the projected 2000 baseline and would decline to 4.5 percent of the baseline in 2002. 3M anticipates that manufacture and import of affected products will cease entirely at the end of 2002. Thereafter, 3M will continue to distribute small volumes of certain previously manufactured products to specific customers.

After the end of the year, 3M manufacturing capacity will be committed entirely to certain proposed "extended phase out" applications for POSF based products by our customers or other 3M businesses. These applications are identified in Attachments 3, 4 and 5. [These attachments are CBI.] They were selected on the basis of a careful evaluation process within 3M. We understand from our discussions with the Agency that EPA believes that 3M's initial judgments are reasonable. However, we urge EPA to solicit public comment on extended phaseout applications for POSF based chemistries when it proposes regulations applicable to these chemistries later this summer so that 3M customers and other interested parties can provide input to EPA.

As you know, 3M is developing substitutes for certain products that will require Premanufacture Notice (PMN) submissions before commercialization. We are pleased that EPA and 3M have begun a dialogue on these substitute chemistries. This ongoing dialogue, which we hope will continue during the PMN review process, will help 3M provide informed guidance to our customers on substitution options at the earliest possible date so that they can switch to acceptable alternates with minimum delay.

The remainder of this letter addresses five aspects of 3M's phase out plan:

+ Scope of the plan + Details of production scale down + Proposed extended phase out applications + Proposed substitutes for POSF based products 2 Page 3 July 7, 2000 + 3M stewardship actions during the phase out period SCOPE OF 3M'S PLAN Global Impacts. 3M's phase out plan is global in scope. In developing the plan, we have applied a consistent framework to production and use activities within and outside the US. 3M recognizes that EPA does not have jurisdiction over manufacture and use of POSF based products outside the US, but we want the Agency to be informed about our phase out actions on a worldwide basis.

Attachment 2 provides projected Year 2000 production volumes for POSF based products for the US and entire world, 3M management is in the process of determining which manufacturing locations in the US and Europe will be used for production during 2001 and 2002. It is possible that all production will be consolidated at a single facility in order to reduce costs and re deploy manufacturing resources efficiently. We will keep EPA informed of our manufacturing plans as they evolve.

Status ofFDA Regulated Products. The 3M phase out plan includes products used in food packaging, medical devices and other applications regulated by the Food and Drug Administration (FDA). For purposes of comparison, we have provided a breakout of FDAregulated applications and associated production volumes. 3M will be informing FDA of our phase out plans for products within that agency's jurisdiction.

Inclusion of Additional Chemistries. Following our initial announcement, 3M has decided to discontinue manufacture of products based on C 6 and C 10 homologs of POSF. We made this decision because, in management's judgment, the rationale for our phase out decision applied to these products as well as to our C 8 sulfonated materials. The C 6 and C 10 products represent relatively small volumes and are highlighted in the attachments to this letter.

DETAILS OF PRODUCTION SCALE DOWN Baseline Inventory ofAffected Products. To establish a baseline for phase out decisions, 3M inventoried all POSF based products currently manufactured by the company. This inventory is presented in Attachment 6. [Attachment 6 is CBI] The Attachment groups these products by use category and then lists individual products in each category by 3M product code, CAS Number, chemical name and the percentage of fluorochemicals (FCs) present in the product, In addition, the Attachment provides projected Year 2000 production totals for each individual product and use category.

Since six months remain in Year 2000, 3M used updated business forecasts prepared at the end of 1999 to estimate production volumes for the remainder of the year. These estimated volumes are presented for both the FC portion of the product and the entire product formulation (FC plus other components). The FC poundages represent total solids (including reactants combined with the FC starting material) and do not represent the POSF molecule itself.

3 Page 4 July 7, 2000 Year 2000 Ordering Process. 3M has asked customers to place final orders by October 1,200O. We are informing customers that final order amounts cannot exceed 50 percent of their purchase volumes during 1999. Our intention is to meet customer requirements with product manufactured during this calendar year. Depending on the size of the orders we receive, total production volumes for 2000 could exceed the forecasted levels reflected in Attachment 6.

Production of Starting Materials and Intermediates. 3M has previously identified to EPA the different raw materials and intermediates (including POSF itself) used in the manufacture of POSF based products. 3M was required to provide 1997 production volumes for several of these chemicals under the 1998 TSCA Inventory Update Rule (RJR). Attachment 7 provides these IUR production figures, corrected to reflect a recent reanalysis of 1997 production data. The Attachment shows 1997 U. S. production volumes for POSF of 4,083, OOO lbs. For year 2000, a 1.5% decrease is anticipated from that number, which would be 4,022, OOO lbs. Because the IUR submissions only include U. S, production and importation, a further adjustment is needed to reflect POSF production at 3M's Antwerp facility. After accounting for Antwerp operations, we estimate that total worldwide POSF production in 2000 will be 8,100, OOO lbs.

Production of starting materials and intermediates for POSF based products will necessarily decline very significantly in 200 1 and 2002 because of the substantial scale down in production of the end products themselves. However, the precise volumes of POSF and its derivatives produced during these years will depend on the chemical compositions and quantities of the extended phase out products which 3M continues to manufacture. Once the mix of these products is finalized, 3M will be in a position to determine anticipated production levels for the corresponding raw materials. 3M will assemble this information if EPA believes it is needed to to develop regulations applicable to POSF based chemistries.

PROPOSED EXTENDED PHASE OUT APPLICATIONS Processfor Selection. To identify product uses for which production would continue after the end of 2000, 3M screened its entire product line using three criteria:

1. Does the end use product provide environmental, health or safety benefits to which the fluorochemical component makes a substantial contribution? 2 . Does the end use product perform a unique or important function which is lost without the fluorochemical component and is there either no technically acceptable substitute available for the fluorochemical or is additional time needed to qualify or prove out such a substitute? 3. Is use of the product specified by a federal or state agency or would governmental activities (such as national defense) be affected if the product were no longer available?

Products meeting one or more of these criteria were assigned to the extended phase out category and deemed suitable for production following December 3 1, 2000.

Attachment 3 provides background on extended phase out products identified during 3M's screening process. The Attachment sorts these products into three categories based on 3M's 4 Page 5 July 7, 2000 criteria for extending production beyond 2000. Where more than one criterion applies, the product has been classified on the basis of the predominant rationale for extended phase out. For each affected product, the Attachment also provides a detailed description of the technological complexities or other factors that preclude immediate availability of an acceptable substitute. Attachment 4 complements this information by providing CAS numbers, chemical compositions and projected volumes for the extended phase out products. Finally, Attachment 5 indicates the intended distribution of the extended phase out products to different global markets.

The three Attachments should be reviewed in conjunction with the more detailed use profiles for POSF based products provided in 3M's May 26, 1999 white paper entitled Fluorochemical Use, Distribution and Release Overview. EPA should also note that the CAS names that appear in Attachment 4 are those that are specifically tied to 3M's proposed extended phase out products. Additional extended phase out products that are identified subsequent to the date of this submission may require limited production of chemicals not shown in the CAS names column.

Attachments I and 2 indicate the small volumes that 3M will produce for extended phase out applications during 2001 and 2002 in the aggregate and by product category. Anticipated production volumes in 2001 should be 12.3 percent of the projected 2000 baseline on a global basis. In 2002, global production should decline to 4.5percent of the 2000 baseline, with no production currently anticipated in 2003.

Needfor Further Input on Selection of Extended Phase out Products. It is important to keep in mind that the judgments reflected in Attachment 3, 4 and 5 are preliminary and were based on information currently available to 3M regarding the applications in which POSF based products are used. 3M necessarily has incomplete knowledge of the end use products and processes of its customers and, therefore, cannot make definitive judgments about the availability of substitute materials or the precise impacts of phasing out specific products. We also made the decision not to consult extensively with our customer base until we had reviewed our phase out plan with EPA. For this reason, our screening process has not fully captured customer views on extended phase out applications. To permit users of POSF based products or other interested parties to address this subject, we would encourage EPA to solicit public comment at the earliest possible date.

Surfactant Properties of POSF Based Materials. As Attachment 3 illustrates, the great majority of the proposed extended phase out products identified by 3M are in the industrial surfactant category, which represents roughly 10 percent of projected Y2000 production of POSF based materials. Surfactants are crucial additives in many formulator applications used widely in transportation, construction, electronic, oil and other market segments. They provide value through two basic modes of operation. First is their ability to lower surface tension of liquids and/ or solids. Second is their ability to emulsify and disperse a host of materials. These surfactant characteristics are typically achieved at very low concentrations within a formulation due to the surfactant's ability to migrate to interfaces and surfaces.

The scientific literature documents that the lowest surface tensions attainable are derived from the use of fluorosurfactants (perfluoro containing surfactants). This is because the unique physicochemical characteristics of perfluorinated compounds give them greater surface tension 5 Page 6 July 7, 2000 reduction capability than other surfactants, such as silicone or hydrocarbon oils. Accordingly, while fluorosurfactants may not be essential in some applications, they are irreplaceable in many others. For these applications, 3M is proposing to continue production through 2002 while 3M works [CBQ While Attachments 3 and 4 list extended phase out applications known to 3M at this time, we expect that more will be identified as 3M's customer base focuses on the implications of our phase out announcement. To address this possibility, we urge that any regulation developed by EPA allow additional extended phase out uses during 2001 2002 if such uses are identified by 3M or its customers. To place limits on such uses, this regulation might include an annual cap on total production of POSF based products during 2001 and 2002. Assuming that production does not exceed this cap, 3M could market these products for additional uses first identified after December 3 1, 2000 if 3M or its customer files a notice with EPA confirming that the use meets the criteria for extended phase out.

INTRODUCTION OF SUBSTITUTES FOR POSF BASED PRODUCTS At the current time, 3M is planning [CBI.]

3M STEWARDSHIP ACTIONS DURING THE PHASE OUT PERIOD Environmental Controls. Since 1997, manufacturing releases of perfluorooctanyl chemistries at 3M's Decatur facility have been reduced by 50 percent for wastewater discharges and 40 percent for air emissions. During the phase out of POSF based products, 3M will continue to implement these emission reduction programs, These include source reduction and recycle, off site disposal of designated waste streams, and end of pipe treatment. Drying systems have been installed and are operating at all 3M manufacturing facilities to recover and reuse POSF. Designated wastewater streams are being collected and transported off site for disposal at permitted hazardous waste thermal treatment facilities. These practices will continue during production phase out and additional waste streams continue to be included in this program. 3M will also be utilizing carbon adsorption systems to recover POSF from more dilute wastewater streams. Systems have been installed and are operating in both Antwerp, Belgium and Decatur, Alabama. Carbon adsorption has been shown to be effective in the removal of POSF and POSF based compounds.

Continuation of Research Program. As previously discussed with EPA, 3M is committed to continuing its ongoing research program on the environmental fate and distribution, ecotoxicity and human health effects. We plan to share new data when it becomes available and to continue our scientific dialogue with EPA on the interpretation of key studies.

* * * * J *

6 Page 7 July 7, 2000 We look forward to continuing dialogue with EPA on our phase out plan. We expect to be refining the information in the attachments based on further feedback from our own organization and customers and will submit updated attachments to EPA as appropriate.

We appreciate EPA's cooperation on this matter.

William A. Weppner, Ph. D. Director Environmental, Health, Safety and Regulatory Affairs Specialty Materials Markets Group 3M Center, Bldg. 236 lB 10 St. Paul, MN 55144 M 1 . d POSF Containing Chemistry Production Phase Out I 3000 = 2500 % of 2000 Baseline 2000 ) 1500 1000 500 0 60%

40%

VY, 20% 3n7 3n7 136 136 88 88 0 4th Qtr 1st Qtr 2000 2001 2nd Qtr 2001 3rd Qtr 2001 4th Qtr 2001 1st Qtr 2002 2nd Qtr 2002 3rd Qtr 2002 4th Qtr 2002 1st Qtr 2003 f ` Summary of the Phase Out Plan for the production of POSFContaining Chemistry Attachment 2 This summary presents total estimated production for 2000, which is useful as a baseline for comparing production levels in subsequent plan years. The summary also presents projected production levels for 2001 and 2002. Extended transition period uses requiring production in 2001 and 2002 are included on Attachment 3.

Total 3M POSF Containiw Chemistrv manufactured Y2000 Baseline Y2000' POSF containing chemistry pounds produced globally: 9,895,500 Y2000 POSF containing chemistry pounds produced in US: 6,490, OOO Other Information for Baseline comparison 1999 POSF containing chemistry pounds imported into the US: 239,900 Y2000 POSF containing chemistry pounds used for FDA applications are 3,532, OOO Y2001 Y2001 POSF containing chemistry pounds to be produced globally: 1,215,300 or 12.3% of 2000 base line. See categories below for US production numbers. Y2001 POSF containing chemistry pounds used for FDA applications will be 300,000.

Y2002 Y2002 POSF containing chemistry pounds to be produced globally: 447,900 or 4.5% of 2000 base line. See categories below for US production numbers. Y2002 POSF containing chemistry pounds used for FDA applications will be zero.

SORTED BY CATEGORY Paper & Packaeing Categom Global Y2000 POSF containing chemistry pounds produced: Y2001 POSF containing chemistry pounds to be produced:

US Onlv 3,297,200 zero Y2000 POSF containing chemistry pounds produced: 2,670,700 Y2001 POSF containing chemistry pounds to be produced: zero ' Estimation based on Y2000 forecasts from customers before phase out plan announcement. * This estimate includes total solid pounds of fluorochemical containing compound and has not been broken down to the POSF molecule. 3 Imports are not included in 2000 production totals. 3M is presenting 1999 import figures because projections for 2000 are not available.

Page 1 of2 9 L Global Y2000 POSF containing chemistry pounds produced: Y2001 POSF containing chemistry pounds to be produced: Y2002 POSF containing chemistry pounds to be produced: Textile, Leather, and Carpet Treatment Cateporv This category includes Apparel h Leather, Aftermarket (sold as part of commercial warranty packages), Carpet, Fabric & Upholstery, and Commercial Care (consumer andprofessional) Fabric Protectors. Global Y2000 POSF containing chemistry pounds produced: 4,762,900 Y2001 POSF containing chemistry pounds to be produced: zero US Only Y2000 POSF containing chemistry pounds produced: Y200 1 POSF containing chemistry pounds to be produced: 2,356,700 zero Industrial Surfactants, Additives and Coatiws CatePory This category includes the External sales of Coatings, Electroplating & Etching Surfactants, Household Additives, Insecticides, Intermediates, and Mining & Oil and Internal 3M Applications Global Y2000 POSF containing chemistry pounds produced: 1,501,800 Y2001 POSF containing chemistry pounds to be produced: 881,700 Y2002 POSF containing chemistry pounds to be produced: 432,600 US Only Y2000 POSF containing chemistry pounds produced: Y200 1 POSF containing chemistry pounds to be produced: Y2002 POSF containing chemistry pounds to be produced: I ,259, OOO 808,400 428,400 Fire Fbhtiw Foams Cateeorv 333,600 333,600 15,300 US Onlv Y2000 POSF containing chemistry pounds produced: 203,500 Y200 1 POSF containing chemistry pounds to be produced: 203,500 Y2002 POSF containing chemistry pounds to be produced: 15,300 Page 2 of 2 /D CAS#

307 35 7 754 91 6 2991 51 7 4151 50 2 31506 32 8 1691 99 2 24448 09 7 423 82 5 25268 77 3 376 l 4 7 `I 4650 24 g 423 50 7 I Hexanesulfonyl fluoride, 1,1,2,2,3,3,4,4,5,5,6,6,6 tridecafluoro 501,634 307 51 7 Attachment 7 POSF and Core Reactant Product Volumes 7991 us Production as 1997 us Reported in Production 1998 IUR based on May Submission 2000 rework CAS Name I Octanesulfonyl fluoride, 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8 heptadecafluoro (Ibs) (Ibs)

3,492, ooo 4,083, OOt I Octanesulfonamide, 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8

heptadecafluoroGlycine N ethyl N[( heptadecafluorooctyl) sulfonyl], potassium salt I Octanesulfonamide, N ethyl 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8

heptadecafluoroI Octanesulfonamide, 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8 heptadecafluoro N methyl 0 12,180 31,081 48,300 I Octanesulfonamide, N ethyl 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8 heptadecafluoro N( 2 hydroxyethyl)

I Octanesulfonamide, 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,8 heptadecafluoro N( 2 hydroxyethyl) N methyl 2,149, ooo 1,861,000 2 Propenoic acid, 2 [ethyl[( heptadecafluorooctyl) sulfonyl] amino] ethyl ester 2 Propenoic acid, 2 [[( heptadecafluorooctyl) sulfonyl] methylamino] ethyl ester 2 Propenoic acid, 2 methyl, 2 [ethyl[( heptadecafluorooctyl) sulfonyl] amino] ethyl ester 2 Propenoic acid, 2 methyl, 2 [[( heptadecafluorooctyl) sulfonyl] methylaminoJethyl ester 7,678 777,765 53,507 36,327 I Decanesulfonyl fluoride, 1,1,2,2,3,3,4,4,5,5,6,6,7,7,8,8,9,9,10,10,1O heneicosafluoro 24,171 07/ 07/ 2000 // Page 1


[Federal Register Volume 82, Number 212 (Friday, November 3, 2017)]
[Proposed Rules]
[Pages 51175-51177]
[FR Doc No: 2017-23201]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-1011; Product Identifier 2017-SW-004-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Helicopters Deutschland GmbH
(Type Certificate Previously Held by Eurocopter Deutschland GmbH)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to supersede Airworthiness Directive (AD) 2013-16-
14 for Eurocopter Deutschland GmbH (now Airbus Helicopters Deutschland
GmbH) Model EC 135 P1, P2, P2+, T1, T2, and T2+ helicopters. AD 2013-
16-14 currently requires installing a washer in and modifying the main
transmission filter housing upper part. Since we issued AD 2013-16-14,
Airbus Helicopters Deutschland GmbH has extended the overhaul interval
for the main transmission and determined that other models may have the
same unsafe condition. This proposed AD would retain the requirements
of AD 2013-16-14, add models to the applicability, and revise the
required compliance time for the modification. The actions of this
proposed AD are intended to correct an unsafe condition on these
products.

DATES: We must receive comments on this proposed AD by January 2, 2018.

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

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-
1011; or in person at the Docket Operations Office between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the European Aviation Safety Agency (EASA)
AD, the economic evaluation, any comments received and other
information. The street address for the Docket Operations Office
(telephone<PHONE_NUMBER>) is in the ADDRESSES section. Comments will be
available in the AD docket shortly after receipt.
    For service information identified in this proposed rule, contact
Airbus Helicopters, 2701 N. Forum Drive, Grand Prairie, TX 75052;
telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax<PHONE_NUMBER>; or at
http://www.airbushelicopters.com/website/technical-expert/.
    You may review service information at the FAA, Office of the
Regional

Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-321, Fort
Worth, TX 76177.

FOR FURTHER INFORMATION CONTACT: Rao Edupuganti, Aviation Safety
Engineer, Regulations and Policy Section, Rotorcraft Standards Branch,
FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone (817) 222-
5110; email [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

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

Discussion

    We issued AD 2013-16-14, Amendment 39-17552 (78 FR 54383, September
4, 2013) (AD 2013-16-14) for Eurocopter Deutschland GmbH (now Airbus
Helicopters Deutschland GmbH) Model EC135 P1, P2, P2+, T1, T2, and T2+
helicopters with a certain serial-numbered main transmission FS108
housing upper part (upper part), part number (P/N) 4649 301 034. AD
2013-16-14 requires installing a corrugated washer in the filter
housing of the upper part and modifying each affected upper part by
machining the oil filter bypass inlet. AD 2013-16-14 was prompted by AD
No. 2010-0213, dated October 14, 2010, issued by EASA, which is the
Technical Agent for the Member States of the European Union. EASA
issued AD No. 2010-0213 to correct an unsafe condition for Eurocopter
Deutschland GmbH Model EC 135 and EC635 helicopters. EASA advised that
a recent inspection on some upper parts for the main transmission FS108
revealed the bypass inlet in the oil filter area had not been
manufactured in accordance with the applicable design specifications.
EASA advised that this condition, if not detected and corrected, could
adversely affect the oil-filter bypass function, which is essential for
continued safe flight. The EASA AD required a temporary modification of
the upper part by installing a corrugated washer, and then a ``rework''
of the oil filter area to bring the affected parts within the
applicable design specifications.

Actions Since AD 2013-16-14 Was Issued

    Since we issued AD 2013-16-14, EASA has issued AD 2017-0002, dated
January 9, 2017 (AD 2017-0002), which superseded EASA AD 2010-0213.
EASA advises that some affected upper parts have been re-identified
with P/N 4649 301 067 or P/N 4649 301 088 without changing the serial
number. EASA further advises that Airbus Helicopters has extended the
compliance time to retrofit the housing to 5,150 hours to coincide with
the extended interval between transmission overhauls. Accordingly, AD
2017-002 continues to require installing a corrugated washer in the
upper part and modifying the upper part at the next overhaul; expands
the applicability to include Model EC135P3, Model EC135T3, P/N 4649 301
067, and P/N 4649 301 088; extends the compliance time for machining
the upper part; and makes minor editorial changes for clarity.

FAA's Determination

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

Related Service Information Under 1 CFR Part 51

    We reviewed Airbus Helicopters Alert Service Bulletin (ASB) EC135-
63A-017, Revision 2, dated December 5, 2016 (ASB EC135-63A-017), for
Model EC135 T1, T2, T2+, T3, P1, P2, P2+, P3, and 635 T1, T2+, T3, P2+,
and P3 helicopters. This service information specifies removing the oil
filter element and installing a corrugated washer. ASB EC135-63A-017
also specifies reworking the affected upper part at the next repair or
overhaul of the main transmission, no later than 5,150 flight hours
after receipt of the service bulletin. EASA classified this ASB as
mandatory and issued AD 2017-0002 to ensure the continued airworthiness
of these helicopters.
    We also reviewed ZF Luftfahrttechnik GmbH Service Instruction No.
EC135FS108-1659-1009, dated September 14, 2010, which specifies
procedures for repairing the main transmission upper housing, and
includes dimensions and tolerances for machining the upper part.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Other Related Service Information

    We reviewed Eurocopter Alert Service Bulletin EC135-63A-017,
Revision 0, dated October 11, 2010, for Model EC135 T1, T2, T2+, P1,
P2, P2+, and 635 T1, T2+, and P2+ helicopters. This service information
specifies the same Accomplishment Instructions as ASB EC135-63A-017,
Revision 2, except with a shorter compliance time to rework the
affected upper part.

Proposed AD Requirements

    This proposed AD would retain the requirements of AD 2013-16-14 for
installing a corrugated washer and modifying the upper part. This
proposed AD would add Airbus Helicopters Deutschland Model EC135P3 and
Model EC135T3 helicopters to the applicability requirements, add upper
parts P/N 4649 301 067 and P/N 4649 301 088 to the applicability,
revise the compliance time for installing a corrugated washer to within
50 hours time-in-service (TIS) or 3 months, whichever occurs earlier,
and extend the compliance time for machining the upper part to 5,150
hours TIS.

Costs of Compliance

    We estimate that this proposed AD would affect 236 helicopters of
U.S. Registry. Based on an average labor rate of $85 per work hour, we
estimate that operators may incur the following costs in order to
comply with this proposed AD. Installing the corrugated washer would
require about .5 work hour, and required parts would cost about $10,
for a cost per helicopter of about $53, and a cost to the U.S. operator
fleet of $12,508. Machining the housing upper part would require about
5 work-hours and required parts would cost about

$73, for a cost per helicopter of $498, and a total cost to U.S.
operators of $117,528. Based on these figures, we estimate the total
cost of this proposed AD to be $130,036 for the U.S. operator fleet or
$551 per helicopter.
    According to Airbus Helicopters' service information some of the
costs of this proposed AD may be covered under warranty, thereby
reducing the cost impact on affected persons. We do not control
warranty coverage by Airbus Helicopters. Accordingly, we have included
all costs in our cost estimate.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2013-16-14, Amendment 39-17552 (78 FR 54383, September 4, 2013), and
adding the following new AD:

Airbus Helicopters Deutschland GmbH (Type Certificate Previously
Held by Eurocopter Deutschland GmbH): Docket No. FAA-2017-1011;
Product Identifier 2017-SW-004-AD.

(a) Applicability

    This AD applies to Model EC135 P1, P2, P2+, P3, T1, T2, T2+, and
T3 helicopters with a main transmission FS108 housing upper part,
part number (P/N) 4649 301 034, 4649 301 067, or 4649 301 088 and a
serial number listed in Table 1 of Airbus Helicopters Alert Service
Bulletin EC135-63A-017, Revision 2, dated December 5, 2016 (ASB
EC135-63A-017), certificated in any category.

(b) Unsafe Condition

    This AD defines the unsafe condition as an improperly
manufactured bypass inlet in the oil filter area. This condition
could adversely affect the oil-filter bypass function, resulting in
failure of the main transmission and subsequent loss of control of
the helicopter.

(c) Affected ADs

    This AD supersedes AD 2013-16-14, Amendment 39-17552 (78 FR
54383, September 4, 2013).

(d) Comments Due Date

    We must receive comments by January 2, 2018.

(e) Compliance

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

(f) Required Actions

    (1) Within 3 months, remove the oil filter element and install a
corrugated washer, P/N<PHONE_NUMBER>, in the middle of the filter
housing of the housing upper part as depicted in Figure 2 of ASB
EC135-63A-017.
    (2) Within 5,150 hours time-in-service or at the next main
transmission repair or overhaul, whichever occurs first, machine the
main transmission housing upper part in accordance with Annex A of
ZF Luftfahrttechnik GmbH Service Instruction No. EC135FS108-1659-
1009, dated September 14, 2010.
    (3) Do not install a main transmission upper part, P/N 4649 301
034, 4649 301 067, or 4649 301 088, on any helicopter unless it has
been modified as required by paragraphs (f)(1) through (f)(2) of
this AD.

(g) Credit for Previous Actions

    Actions accomplished before the effective date of this AD in
accordance with the procedures specified in Eurocopter Alert Service
Bulletin EC135-63A-017, Revision 0, dated October 11, 2010, are
considered acceptable for compliance with the corresponding actions
specified in paragraph (f) of this AD.

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Section, FAA, may approve
AMOCs for this AD. Send your proposal to: Rao Edupuganti, Aviation
Safety Engineer, Regulations and Policy Section, Rotorcraft
Standards Branch, FAA, 10101 Hillwood Pkwy, Fort Worth, TX 76177;
telephone<PHONE_NUMBER>; email [email protected].
    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, we suggest that you
notify your principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office or
certificate holding district office before operating any aircraft
complying with this AD through an AMOC.

(i) Additional Information

    (1) Eurocopter Alert Service Bulletin EC135-63A-017, Revision 0,
dated October 11, 2010, which is not incorporated by reference,
contains additional information about the subject of this AD. For
service information identified in this AD, contact Airbus
Helicopters, 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone
(972) 641-0000 or<PHONE_NUMBER>; fax<PHONE_NUMBER>; or at http://www.airbushelicopters.com/website/technical-expert/. You may review
a copy of the service information at the FAA, Office of the Regional
Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-321, Fort
Worth, TX 76177.
    (2) The subject of this AD is addressed in European Aviation
Safety Agency (EASA) AD No. 2017-0002, dated January 9, 2017. You
may view the EASA AD on the Internet at http://www.regulations.gov
in the AD Docket.

(j) Subject

    Joint Aircraft Service Component (JASC) Code: 6320 Main Rotor
Gearbox.

    Issued in Fort Worth, Texas, on October 16, 2017.
James A. Grigg,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2017-23201 Filed 11-2-17; 8:45 am]
BILLING CODE 4910-13-P


Placeholder: confidential business information item

Comment from United Suppliers of America, Inc. undated (pre-comment
period)

For more information please contact Ross Brennan by phone at
202-343-9226 or by email at   HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>


Summary of EPA Meeting with

Environment Canada

June 13, 2007

On Wednesday, June 13, 2007, representatives from the Office of Solid
Waste (OSW) met with Environment Canada to discuss the Definition of
Solid Waste (DSW) Rulemaking as part of two-day Canada-U.S. Bilateral
Meeting on the transboundary movement of waste.

After a brief overview of the DSW 2007 proposal, EPA answered questions
from Environment Canada (EC) on how the proposal manages exports. EPA
explained that excluded hazardous secondary materials must have notice
and consent prior to exporting, similar to the existing export
provisions for cathode ray tubes. EC also asked how EPA rationalized the
proposal with the Organisation for Economic Co-operation and Development
(OECD) 2001 decision regarding the transboundary movement of wastes. To
this, EPA noted that the OECD decision allows member countries to define
wastes differently within their domestic regulations. Since hazardous
secondary materials excluded under the proposal are not solid wastes,
they are also not hazardous wastes and thus not subject to domestic OECD
requirements. EPA assured EC that exports, although excluded in the
U.S., would still be subject to all regulations of the importing country
upon reaching the border.  For example, excluded hazardous secondary
materials would not need a manifest within the U.S. but could be subject
to manifesting at the Canadian border if required by Canadian
regulations.

Bob Dellinger		Environmental Protection Agency

Betsy Devlin		Environmental Protection Agency

Frank Mcalister		Environmental Protection Agency

Rick Picardi		Environmental Protection Agency

Tracy Atagi		Environmental Protection Agency

Laura Coughlan		Environmental Protection Agency

Marilyn Goode		Environmental Protection Agency

Amanda Geldard	Environmental Protection Agency

Cynthia Merse		Environmental Protection Agency

Elle Kanipe		Environmental Protection Agency

Carolyne Blain		Environment Canada

Joe Wittwer		Environment Canada

Martin Sirois		Environment Canada

Nabila Elsaadi		Environment Canada