[Federal Register Volume 76, Number 8 (Wednesday, January 12, 2011)]
[Notices]
[Pages 2174-2176]
[FR Doc No: 2011-440]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63653; File No. SR-ISE-2011-01]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Establish a $5 Strike Price Program

January 6, 2011.
    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 January 4, 2011, the International Securities Exchange, LLC
(``ISE''or the ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend ISE Rule 504 to allow the Exchange
to list and trade series in intervals of $5 or greater where the strike
price is more than $200 in up to five option classes on individual
stocks. The text of the proposed rule change is available on the
Exchange's Web site http://www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
    The purpose of this proposed rule change is to adopt Supplementary
Material .09 to ISE Rule 504 to allow the Exchange to list and trade
series in intervals of $5 or greater where the strike price is more
than $200 in up to five option classes on individual stocks (``$5
Strike Price Program'') to provide investors and traders additional
opportunities and strategies to hedge high priced securities.
    Currently, Exchange Rule 504(d) permits strike price intervals of
$10 or greater where the strike price is $200 or more,\3\ except the
Exchange may list options classes on individual stocks for which the
interval of strike prices will be $2.50 where the strike price is
greater

than $25 but less than $50 (the ``$2.50 Strike Price Program'').\4\
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    \3\ ISE Rule 504(d) also permits strike price intervals of $5 or
greater where the strike price is greater than $25; and $2.50 or
greater where the strike price is $25 or less.
    \4\ Initially adopted in 1995 as a pilot program, the pilot
$2.50 Strike Price Program allowed options exchanges to list options
with $ 2.50 strike price intervals for options trading at strike
prices greater than $ 25 but less than $ 50 on a total of up to 100
option classes. See Securities Exchange Act Release No. 35993 (July
19, 1995), 60 FR 38073 (July 25, 1995) (approving File Nos. SR-Phlx-
95-08, SR-Amex-95-12, SR-PSE-95-07, SR-CBOE-95-19, and SR-NYSE-95-
12). In 1998, the pilot program was permanently approved and
expanded to allow the options exchanges to select up to 200 option
classes for the $2.50 Strike Price Program. See Securities Exchange
Act Release No. 40662 (November 12, 1998), 63 FR 64297 (November 19,
1998) (approving File Nos. SR-Amex-98-21, SR-CBOE-98-29, SR-PCX-98-
31, and SR-Phlx-98-26). The Exchange lists options with $2.50 strike
price intervals on those classes selected by the other options
exchanges and does not select any class for inclusion in the $2.50
Strike Price Program. See Securities Exchange Act Release No. 52960
(December 15, 2005), 70 FR 76090 (December 22, 2005) (SR-ISE-2005-
59).
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    The Exchange now proposes to list series in intervals of $5 or
greater where the strike price is more than $200 in up to five option
classes on individual stocks.
    The Exchange believes the $5 Strike Price Program would offer
investors a greater selection of strike prices at a lower cost. For
example, if an investor wanted to purchase an option with an expiration
of approximately one month, a $5 strike interval could offer a wider
choice of strike prices, which may result in reduced outlays in order
to purchase the option. By way of illustration, using Google, Inc.
(``GOOG'') as an example, if GOOG would trade at $610 \5\ with
approximately one month remaining until expiration, the front month
(one month remaining) at-the-money call option (the 610 strike) would
trade at approximately $17.50 and the next highest available strike
(the 620 strike) would trade at approximately $13.00. By offering a 615
strike an investor would be able to trade a GOOG front month call
option at approximately $15.25, thus providing an additional choice at
a different price point.
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    \5\ The prices listed in this example are assumptions and not
based on actual prices. The assumptions are made for illustrative
purposes only using the stock price as a hypothetical.
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    Similarly, if an investor wanted to hedge exposure to an underlying
stock position by selling call options, the investor may chose an
option term with two months remaining until expiration. An additional
$5 strike interval could offer additional and varying yields to the
investor. For example if Apple, Inc. (``AAPL'') would trade at $310 \6\
with approximately two months remaining until expiration, the second
month (two months remaining) at-the-money call option (the 310 strike)
would trade at approximately $14.50 and the next highest available
strike (the 320 strike) would trade at $9.90. The 310 strike would
yield a return of 4.67% and the 320 strike would yield a return of
3.20%. If the 315 strike were available, that series would be priced at
approximately $12.20 (a yield of 3.93%) and would minimize the risk of
having the underlying stock called away at expiration.
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    \6\ Id.
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    With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority have the necessary systems capacity
to handle the potential additional traffic associated with the listing
and trading of classes on individual stocks $5 Strike Price Program.
    The proposed $5 Strike Price Program would provide investors
increased opportunities to improve returns and manage risk in the
trading of equity options that overlie high priced stocks. In addition,
the proposed $5 Strike Price Program would allow investors to establish
equity options positions that are better tailored to meet their
investment, trading and risk management requirements.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \7\ in general, and furthers the objectives of Section
6(b)(5) of the Act \8\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
The Exchange believes the $5 Strike Price Program proposal would
provide the investing public and other market participants increased
opportunities because a $5 series in high-priced stocks would provide
market participants additional opportunities to hedge high-priced
securities allowing investors to better manage their risk exposure.
Moreover, the Exchange believes the proposed rule change would benefit
investors by giving them more flexibility to closely tailor their
investment decisions in a greater number of securities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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

    Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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    The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest because the proposal is substantially similar to that of
another exchange that has been approved by the Commission.\11\
Therefore, the Commission designates the proposal operative upon
filing.\12\
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    \11\ See Securities Exchange Act Release No. 63654 (January 6,
2011) (SR-Phlx-2010-158) (order approving establishment of a $5
Strike Price Program).
    \12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2011-01 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2011-01. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. 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-ISE-2011-01 and should be
submitted on or before February 2, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-440 Filed 1-11-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 12, 2008 (Volume 73, Number 49)]
[Rules and Regulations]
[Page 13096-13098]
[DOCID:fr12mr08-10]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2007-29342; Directorate Identifier 2007-SW-08-AD;
Amendment 39-15411; AD 2008-05-17]
RIN 2120-AA64

Airworthiness Directives; MD Helicopters, Inc. Model 600N
Helicopters

AGENCY: Federal Aviation Administration, DOT.

ACTION: Final rule.

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SUMMARY: This document supersedes an existing airworthiness directive
(AD) for MD Helicopters, Inc. (MDHI) Model 600N helicopters. That AD
currently requires interim initial and repetitive inspections of
tailboom parts, installing

six inspection holes in the aft fuselage skin panels, installing
tailboom attachment bolt washers, modifying both access covers, and
replacing broken attachment bolts. The current AD also provides for
modifying the fuselage aft section as an optional terminating action.
This amendment requires modifying the fuselage aft section within the
next 24 months to strengthen the tailboom attachment fittings and upper
longerons. The actions specified by this AD are intended to prevent
failure of the tailboom attachment fittings, separation of the tailboom
from the helicopter, and subsequent loss of control of the helicopter.

DATES: Effective April 16, 2008.
    The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of April 16, 2008.

ADDRESSES: You may get the service information identified in this AD
from MD Helicopters Inc., Attn: Customer Support Division, 4555 E.
McDowell Rd., Mail Stop M615, Mesa, Arizona 85215-9734, telephone 1-
800-388-3378, fax<PHONE_NUMBER>, or on the Internet at http://
www.mdhelicopters.com.

EXAMINING THE DOCKET: You may examine the docket that contains this AD,
any comments, and other information on the Internet at http://
www.regulations.gov or at the Docket Operations office, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington,
DC.

FOR FURTHER INFORMATION CONTACT: Jon Mowery, Aviation Safety Engineer,
FAA, Los Angeles Aircraft Certification Office, Airframe Branch, 3960
Paramount Blvd., Lakewood, California 90712, telephone<PHONE_NUMBER>,
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: A proposal to amend 14 CFR part 39 by
superseding AD 2006-08-12, Amendment 39-14569 (71 FR 24808, April 27,
2006), which superseded AD 2001-24-51, Amendment 39-12706 (67 FR 17934,
April 12, 2002), for the specified MDHI model helicopters was published
in the Federal Register on October 19, 2007 (72 FR 59227). The action
proposed to require modifying the fuselage aft section within the next
24 months to strengthen the tailboom attachment fittings and upper
longerons.
    On January 12, 2004, MDHI issued Technical Bulletin (TB) TB600N-007
specifying procedures, tooling, replacement parts, and supplies needed
for modifying the fuselage aft section and tailboom. TB600N-007R1,
dated April 13, 2006, superseded TB600N-007 to correct some tooling,
replacement parts, and supplies. TB600N-007R2, dated October 5, 2006,
superseded TB600N-007R1 to correct tooling part numbers and re-sequence
some assembly steps. These TBs specify that any aircraft complying with
any of these revisions meets the intent of the other TBs.
    In AD 2006-08-12, we incorporated by reference TB600N-007R1, dated
April 13, 2006. Since issuing that AD, MDHI has issued TB600N-007R2,
dated October 5, 2006 (TB), which updates previous issues by further
specifying procedures for modifying the fuselage aft section to
strengthen the tailboom attachment fittings and upper longerons. This
latest revision continues to caution that a high level of sheet metal
expertise and experience is required to perform this modification.
    Interested persons have been afforded an opportunity to participate
in the making of this amendment. No comments were received on the
proposal or the FAA's determination of the cost to the public. The FAA
has determined that air safety and the public interest require adopting
the rule as proposed.
    The FAA estimates that this AD will affect 18 helicopters of U.S.
registry, and the required actions will take about 322 work hours to
modify each helicopter at an average labor rate of $80 per work hour.
Required parts will cost about $14,960 per helicopter. The manufacturer
states in its TB that those complying with the TB within 3 years of the
issue date are eligible for special pricing and technical assistance.
Based on these figures, we estimate the total cost impact of the AD on
U.S. operators to be $732,960, assuming no special pricing from the
manufacturer.

Regulatory Findings

    We have determined that this AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national Government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that the 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); and
    3. 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 AD. See the AD docket to examine the economic evaluation.

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.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (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. Section 39.13 is amended by removing Amendment 39-14569 (71 FR
24808, April 27, 2006) and by adding a new airworthiness directive
(AD), Amendment 39-15411, to read as follows:

2008-05-17 MD Helicopters, Inc.: Amendment 39-15411, Docket No. FAA-
2007-29342, Directorate Identifier 2007-SW-08-AD. Supersedes AD
2006-08-12, Amendment 39-14569, Docket No. FAA-2006-24518,
Directorate Identifier 2006-SW-10-AD.

    Applicability: Model 600N helicopters, serial numbers with a
prefix ``RN'' and 003 through 058, that have not been modified in

the fuselage aft section to strengthen the tailboom attachments and
longerons per MD Helicopters (MDHI) Technical Bulletin (TB) TB600N-
007, dated January 12, 2004; TB600N-007R1, dated April 13, 2006, or
TB600N-007R2, dated October 5, 2006, certificated in any category.
    Compliance: Required within the next 24 months, unless
accomplished previously.
    To prevent failure of the tailboom attachment fittings,
separation of the tailboom from the helicopter, and subsequent loss
of control of the helicopter, do the following:
    (a) Modify the fuselage aft section to strengthen the tailboom
attach fittings and upper longerons by following paragraph 2,
Accomplishment Instructions, of MDHI TB600N-007R2, dated October 5,
2006, except you are not required to contact the manufacturer. This
modification to the fuselage aft section is terminating action for
the requirements of this AD.
    (b) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Contact the Manager, Los Angeles Aircraft Certification Office, FAA,
Attn: Jon Mowery, Aviation Safety Engineer, Airframe Branch, 3960
Paramount Blvd., Lakewood, California 90712, telephone (562) 627-
5322, fax<PHONE_NUMBER>, for information about previously approved
alternative methods of compliance.
    (c) Modifying the fuselage aft section shall be done by
following the specified portions of MD Helicopters Technical
Bulletin (TB) TB600N-007R2, dated October 5, 2006. The Director of
the Federal Register approved this incorporation by reference in
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be
obtained from MD Helicopters Inc., Attn: Customer Support Division,
4555 E. McDowell Rd., Mail Stop M615, Mesa, Arizona 85215-9734,
telephone 1-800-388-3378, fax<PHONE_NUMBER>, or on the Internet at
http://www.mdhelicopters.com. Copies may be inspected at the FAA,
Office of the Regional Counsel, Southwest Region, 2601 Meacham
Blvd., Room 663, Fort Worth, Texas or at the National Archives and
Records Administration (NARA). For information on the availability
of this material at NARA, call<PHONE_NUMBER>, or go to: http://
www.archives.gov/federal_register/code_of_federal_regulations/
ibr_locations.html.
    (d) This amendment becomes effective on April 16, 2008.

    Issued in Fort Worth, Texas, on February 27, 2008.
Mark R. Schilling,
Acting Manager, Rotorcraft Directorate, Aircraft Certification Service.
 [FR Doc. E8-4489 Filed 3-11-08; 8:45 am]

BILLING CODE 4910-13-P


Puddle Algorithm Keep it simple Input to other Terrestrial Level II Models by puddle algorithm

Duration of water standing in puddle

Pesticide concentration in puddle Pesticide Concentration in Puddle

Approximately equal to average pesticide concentration in surface mixing zone after runoff starts ( i. e.,

p> Ia)

C M W t I W p Ia W a =

      exp( ) exp exp µ Assumes that the water in the puddle is small compared to the total that runs in There are better ways for calculating initial abstraction than 0.2S Input to other Terrestrial Level II Models by puddle algorithm

Duration of water in puddle

Pesticide concentration in puddle Time that water stands in puddle water depth in puddle Time = infilt rate + evaporation rate Water Depth in Puddle Maximum depth of puddle for large storms For smaller storms contributing area Depth = q pond area Puddle Algorithm summary Hydrology for puddle algorithm can be simple.

Large storms all puddles are filled independent of model chosen

Small storms calculate initial abstraction and runoff PUDDLES!!

There are large regional differences between puddles N Y State ( Variable) Puddles New England ( Variable) Puddles puddles

High groundwater table

Compacted soil due to traffic on field

Variable source area hydrology as a consequence of topography 0% probability of ponding March July October > 90% probability of ponding Puddles Conclusions Keep the hydrology simple and allow for regional differences in puddle formation


[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Notices]
[Pages 37373-37378]
[FR Doc No: 2019-16312]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86488; File No. SR-OCC-2019-804]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Advance Notice Related to The Options Clearing
Corporation's Vanilla Option Model and Smoothing Algorithm

July 26, 2019.
    Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, entitled Payment, Clearing
and Settlement Supervision Act of 2010 (``Clearing Supervision Act'')
\1\ and Rule 19b-4(n)(1)(i) \2\ under the Securities Exchange Act of
1934 (``Act'' or ``Exchange Act''),\3\ notice is hereby given that on
June 28, 2019, the Options Clearing Corporation (``OCC'') filed with
the Securities and Exchange Commission (``Commission'') an advance
notice as described in Items I, II and III below, which Items have been
prepared by OCC. The Commission is publishing this notice to solicit
comments on the advance notice from interested persons.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ 15 U.S.C. 78a et seq.
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I. Clearing Agency's Statement of the Terms of Substance of the Advance
Notice

    This advance notice is filed in connection with proposed changes to
formalize and update OCC's models for: (1) Generating theoretical
values, implied volatilities and certain risk sensitivities for plain
vanilla listed options (``Vanilla Option Model'') and (2) estimating
fair or ``smoothed'' prices of plain vanilla listed options based on
their bid and ask price quotes (``Smoothing Algorithm'').
    The proposed changes to Chapter 17 (Vanilla Option Model) and
Chapter 18 (Smoothing Algorithm) of OCC's Margins Methodology are
contained in confidential Exhibits 5A and 5B of the filing. Material
proposed to be added is marked by underlining and material proposed to
be deleted is marked by strikethrough text. OCC also has included
backtesting and impact analysis of the proposed model changes in
confidential Exhibit 3. All terms with initial capitalization that are
not otherwise defined herein have the same meaning as set forth in the
OCC By-Laws and Rules.\4\
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    \4\ OCC's By-Laws and Rules can be found on OCC's public
website: http://optionsclearing.com/about/publications/bylaws.jsp.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice

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

(A) Clearing Agency's Statement on Comments on the Advance Notice
Received From Members, Participants or Others

    Written comments were not and are not intended to be solicited with
respect to the proposed change and none have been received. OCC will
notify the Commission of any written comments received by OCC.

(B) Advance Notices Filed Pursuant to Section 806(e) of the Payment,
Clearing, and Settlement Supervision Act

Description of the Proposed Change
    OCC's margin methodology, the System for Theoretical Analysis and
Numerical Simulations (``STANS''), is OCC's proprietary risk management
system that calculates Clearing Member margin requirements.\5\ STANS
utilizes large-scale Monte Carlo simulations to forecast price and
volatility movements in determining a Clearing Member's margin
requirement.\6\ The STANS margin requirement is calculated at the
portfolio level of Clearing Member legal entity marginable net
positions tier account (tiers can be customer, firm, or market marker)
and consists of an estimate of a 99% two-day expected shortfall (``99%
Expected Shortfall'') and an add-on for model risk (the concentration/
dependence stress test charge). The STANS methodology is used to
measure the exposure of portfolios of options and futures cleared by
OCC and cash instruments in margin collateral.
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    \5\ See Securities Exchange Act Release No. 53322 (February 15,
2006), 71 FR 9403 (February 23, 2006) (SR-OCC-2004-20). A detailed
description of the STANS methodology is available at http://optionsclearing.com/risk-management/margins/.
    \6\ See OCC Rule 601.
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    STANS margin requirements are comprised of the sum of several
components, each reflecting a different aspect of risk. The base
component of the STANS margin requirement for each account is obtained
using a risk measure known as 99% Expected Shortfall. Under the 99%
Expected Shortfall calculation, an account has a base margin excess
(deficit) if its positions in cleared products, plus all existing
collateral--whether of types included in the Monte Carlo simulation or
of types subjected to traditional ``haircuts'' -- would have a positive
(negative) net worth after incurring a loss equal to the average of all
losses beyond the 99% value at risk (or ``VaR'') point. This base
component is then adjusted by the addition of a stress test component,
which is obtained from consideration of the increases in 99% Expected
Shortfall that would arise from market movements that are especially
large and/or in which various kinds of risk factors exhibit perfect or
zero correlations in place of their correlations estimated from
historical data, or from extreme adverse idiosyncratic movements in
individual risk factors to which the account is particularly
exposed.\7\
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    \7\ STANS margins may also include other add on charges, which
are considerably smaller than the base and stress test components,
and many of which affect only a minority of accounts.
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    Two primary components of STANS are the Vanilla Option Model, which
is used to generate theoretical values, implied volatilities, and
certain risk sensitivities for plain vanilla listed options, and the
Smoothing Algorithm, which is used to estimate fair prices of listed
option contracts based on their bid and ask price quotes. OCC's current
Vanilla Option Model and Smoothing Algorithm and proposed changes
thereto are discussed in detail below.
Vanilla Option Model
    The Vanilla Option Model is OCC's model for generating theoretical
values, implied volatilities and certain risk sensitivities for plain
vanilla listed options.\8\ The theoretical values generated by OCC's
Vanilla Option Model are the estimated values (as opposed to current
market prices) of plain vanilla options derived from algorithms that
use a series of predetermined inputs, such as the price of the stock or
index underlying the option, the option's exercise price, the risk-free
interest rate, the amount of time until the option's expiration and the
volatility of the option. For European options (including FLEX
options), the Vanilla Option Model generates theoretical values using a

pricing algorithm that is based on the Black-Scholes formula. For
American options, the Vanilla Option Model generates theoretical values
using a modified Jarrow-Rudd (``JR'') binomial tree.\9\
---------------------------------------------------------------------------

    \8\ With respect to the Vanilla Option Model, ``plain vanilla
listed options'' are (1) all listed vanilla European and American
options on equities, exchange traded funds and exchange traded notes
(collectively, ``ETPs''), equity indices, futures on equity indices,
currencies or commodities, and (2) vanilla flexible exchange options
(``vanilla FLEX options''). Collectively, these plain vanilla
options account for about 95 percent of the total contracts cleared
by OCC.
    \9\ OCC uses a modified JR binomial tree for American options
because the algorithm based on the Black-Scholes formula does not
work for valuing American options, due to their early exercise
feature.
---------------------------------------------------------------------------

    The implied volatility of an option is a measure of the expected
future volatility of the option's underlying security at expiration,
which is reflected in the current option premium in the market. The
implied volatilities are used in STANS to generate price scenarios for
estimating potential losses of clearing members' portfolios. Given the
current market price for a plain vanilla option, the aforementioned
pricing algorithms for European and American options will generate the
implied volatility of the price of the option's underlying asset.
    The risk sensitivities calculated by the Vanilla Option Model are
certain values--namely, Delta, Gamma and Vega--that measure the risk of
a plain vanilla option in relation to underlying variables.\10\
---------------------------------------------------------------------------

    \10\ ``Delta'' measures the change in the option value with
respect to a change in the price of an underlying asset. ``Gamma''
measures the change in Delta in response to a 1% change in the price
of the underlying asset. ``Vega'' measures the change in the option
value corresponding to a 1% change in the underlying asset's
volatility.
---------------------------------------------------------------------------

Smoothing Algorithm
    In the absence of OCC's Smoothing Algorithm, the end-of-day ``fair
price'' of a plain vanilla listed option contract would simply be the
closing mid-point price (i.e., the mid-point between the bid and ask
prices) for such contract. However, there often is a wide difference
between the closing bid and ask price quotes for option contracts,
which could result in a closing mid-point price that may contain
arbitrage opportunities. Closing bid and ask price quotes also tend to
be ``noisy,'' meaning that quotes can fluctuate randomly in a way that
is not reflective of the contract's fair value, which similarly could
result in a closing mid-point price that may contain arbitrage
opportunities. Therefore, OCC uses its Smoothing Algorithm in an
attempt to minimize the impact of wide and/or noisy closing price
quotes on individual plain vanilla listed option contracts, thereby
producing a more fair or ``smoothed'' price. The Smoothing Algorithm
works by attempting to simultaneously estimate fair values for put and
call prices on all plain vanilla listed options included in the Vanilla
Option Model, as well as options on non-equity securities,\11\ with the
same underlying and expiration date.
---------------------------------------------------------------------------

    \11\ E.g., the Cboe Volatility (VIX) Index.
---------------------------------------------------------------------------

    The Smoothing Algorithm consists of four steps. The first step is a
preprocessing procedure, which is used to filter out ``bad'' price
quotes.\12\ The second step is an implied forward price calculation,
which estimates the forward prices of securities underlying the options
by using the prices from the near-the-money options on the same
securities at all tenors or expiration dates. The third step \13\
performs the smoothing, in which theoretical prices are generated for
all plain vanilla listed options at all strikes by using corresponding
bid and ask price quotes and forward prices (which were calculated in
step two).\14\ The fourth step consists of constructing a volatility
surface \15\ based on linear interpolation \16\ of total variance \17\
among the smoothed prices and performing any necessary post-
processing.\18\
---------------------------------------------------------------------------

    \12\ The Smoothing Algorithm filters out certain poor-quality
price quotes. The price quotes are excluded from the algorithm if
they meet one or more of the following conditions: (i) Prices for
options that expired or have a remaining maturity of less than a
certain number of days, where that number is specified by a control
parameter; (ii) prices for options that have only ``one-sided
contracts'' (i.e., contracts for which prices exist only for either
the call or the put, but not for both); (iii) prices for options
whose ask prices are zero; (iv) prices for options with negative bid
and ask spreads; or (v) prices for any American options if the ask
price is less than the intrinsic value of the option.
    \13\ The third step as described applies to European options.
For American options, the Smoothing Algorithm first extracts the
European option prices from the American prices (or ``de-
Americanizes'' the prices) using the Vanilla Option Model, then
performs smoothing on the resultant European prices, and finally
converts the smoothed European prices into American prices (or ``re-
Americanizes'' the prices) using the Vanilla Option Model.
    \14\ The theoretical prices in step three are generated by
solving an optimization problem, which ensures that the theoretical
prices generated satisfy both arbitrage-free conditions and bid and
ask spread constraints.
    \15\ A ``volatility surface'' is a three-dimensional graph
showing the levels of the implied volatilities for all the options
listed on the same underlying security with different strikes or
maturity dates.
    \16\ ``Linear interpolation'' is a mathematical method of curve
fitting by using linear polynomials to construct new data points
within the range of a discrete set of known data points.
    \17\ The ``total variance'' of a random variable is defined as
the sum of the variances over a given period of time. If the
variance is a constant, the total variance is a simple product of
its value and length of the time period.
    \18\ Post-processing addresses contracts that are filtered out
of the smoothing process during pre-processing due to either bad or
missing price quotes. In post-processing, the theoretical prices for
these contracts are approximated from the implied volatility data
that are already obtained by the smoothing algorithm.
---------------------------------------------------------------------------

    OCC's Smoothing Algorithm is intended to ensure that the option
prices generated are smooth, free of arbitrage opportunities and within
bid and ask price spreads. The fair value prices that result from the
Smoothing Algorithm are used by OCC in calculating margin requirements,
risk sensitivities, stress testing and calculation of the Clearing
Fund. In addition, the end-of-day fair value prices of options
contracts produced by the Smoothing Algorithm are published to all
Clearing Members, as well as to other market participants.
Proposed Changes
    OCC is proposing to enhance its margin methodology by addressing a
series of limitations that presently exist in each of the Vanilla
Option Model and the Smoothing Algorithm, as described below.
Vanilla Option Model Proposed Changes
    The Vanilla Option Model has five limitations that would be
addressed by the proposed changes. First, the Vanilla Option Model uses
constant interest rates--the published London Inter-bank Offered Rate
(``LIBOR'') for maturities up to 12 months and published swap rates
from maturities two to ten years--as opposed to an interest rate yield
curve.\19\ By using constant interest rates, the Vanilla Option Model
assumes that interest rates remain constant during the lifetime of an
option (i.e., the interest rates remain constant at each time-step or
node in the JR binomial tree). To address this limitation, OCC proposes
to change the Vanilla Option Model to instead use an interest rate
curve generated by using OCC's chosen benchmark rate(s) (currently
LIBOR), Eurodollar futures prices and swap rates. The use of an
interest rate curve will allow the Vanilla Option Model to assume
variable interest rates over the lifetime of an option (i.e., interest
rates can vary at each time-step or node in the binomial tree).
---------------------------------------------------------------------------

    \19\ The ``swap rate'' is the fixed interest rate that a swap
counterparty demands in exchange for the uncertainty of having to
pay the short-term floating rate over time.
---------------------------------------------------------------------------

    Second, the Vanilla Option Model uses either a constant yield (for
index options for all tenors) or a constant projection (for single-name
stock options for all tenors) determined by the issuer's last paid or
announced dividend. However, an issuer's last paid or announced
dividend is not always an accurate prediction of an issuer's future
dividends, whereas forecasted dividends are the result of a more
comprehensive analysis of the issuer's fundamentals, resulting in a
dividend projection that is more sensitive to the

particular issuer's circumstances. To address this limitation, OCC
proposes to change the Vanilla Option Model to use a schedule of
forecasted dividends, received from an established industry data
service provider, instead of relying on the issuer's last paid or
announced dividend.\20\
---------------------------------------------------------------------------

    \20\ In the event the primary data source for these dividends is
unavailable, OCC has a backup data provider for forecasted
dividends.
---------------------------------------------------------------------------

    Third, the Vanilla Option Model currently does not use borrowing
costs,\21\ which could allow for potential inconsistencies in implied
volatilities for calls and puts in options with the same strike and
tenor. To address this limitation, OCC proposes to modify the Vanilla
Option Model to use borrowing costs as an input in the valuation of
plain vanilla options.\22\
---------------------------------------------------------------------------

    \21\ Borrowing costs are the costs that may be incurred by an
option buyer or seller to borrow the underlying security of the
option.
    \22\ The borrowing costs used by the Vanilla Option Model would
be calculate from market prices of options or futures.
---------------------------------------------------------------------------

    Fourth, as stated above, for pricing American options the Vanilla
Option Model is based on a 49-step modified JR binomial tree; however,
the fixed number of steps is not large enough for accurately evaluating
long-dated options (e.g., FLEX options). To address this limitation,
OCC proposes that the Vanilla Option Model instead price American
options using a variable number of steps \23\ that increases linearly
with the expiration of the option. In addition, OCC proposes to replace
the JR binomial tree with the Leisen-Reimer (``LR'') binomial tree,
which has a higher rate of convergence than the JR binomial tree.
---------------------------------------------------------------------------

    \23\ The number of LR tree steps would vary between minimum and
maximum parameters, depending on an option's tenor. OCC would
initially set these minimum and maximum parameters at 51 and 501,
respectively, and they would be subject to change based on OCC's
determination. OCC would modify the minimum and maximum parameters
to achieve a balance between pricing accuracy and speed of pricing
calculations. The larger the number of the steps, the more accurate
the pricing, but the longer the calculation time. For example, OCC's
initial choice of a maximum 1001 steps did not result in an optimal
balance between accuracy and speed; therefore, OCC reduced the
maximum number of steps to 501.
---------------------------------------------------------------------------

    Fifth, the Vanilla Option Model only calculates a limited number of
risk sensitivities for the price of options (i.e., Delta, Gamma and
Vega) with respect to market variables; the model, however, is limited
in that it does not calculate Theta and Rho.\24\ The proposed
enhancements to the Vanilla Option Model would enable the model to
calculate Theta and Rho, in addition to Delta, Gamma and Vega.\25\
---------------------------------------------------------------------------

    \24\ ``Theta'' measures the change in the option value for a one
day change in the time to expiration of the option. ``Rho'' measures
the change in the option value with respect to a 1 basis point
change in the interest rate.
    The Vanilla Option Model has a further limitation in that it
relies on a perturbation method of calculating Delta and Gamma,
which is less efficient than calculating Delta and Gamma from the
same tree.
    \25\ The Vanilla Option Model presently calculates Delta and
Gamma using the perturbation method. The perturbation method
requires the use of two binomial trees, which introduces instability
issues. The proposed changes would result in Delta and Gamma being
calculated from a single binomial tree, which results in improved
stability.
---------------------------------------------------------------------------

Smoothing Algorithm Enhancements
    Presently, the Smoothing Algorithm has five limitations that would
be addressed by the proposed enhancements. First, though the Smoothing
Algorithm uses the Vanilla Option Model as a component for generating
smoothed prices, the Smoothing Algorithm uses a LR binomial tree,
whereas the Vanilla Option Model uses a JR binomial tree. The JR
binomial tree used in the current Vanilla Option Model does not account
for implied forward prices as generated in the Smoothing Algorithm.
This inconsistency in binomial trees allows for unequal put and call
volatilities and thus for potential violations of put and call parity
in margin calculations. The proposed change to the Vanilla Option Model
to use a LR binomial tree, as previously described, would not only
enhance the Vanilla Option Model but would eliminate the current
inconsistency between the Vanilla Option Model and Smoothing Algorithm
by using a LR binomial tree for both models.
    Second, the Smoothing Algorithm uses index futures to approximate
theoretical spot prices for the plain vanilla listed options on certain
indices, but this method suffers from the absence of synchronization
between the futures market and the market for the underlying
indices.\26\ Trading in the underlying indices closes at 3:00 p.m.
Central Time, but trading in the index futures and plain vanilla listed
options on those indices closes at 3:15 p.m. The difference in closing
times could result in poorly smoothed prices whenever the options
trading between 3:00 p.m. and 3:15 p.m. is volatile. Poorly smoothed
prices could result in implied volatilities of poorer quality, and this
could create problems in OCC's margin and risk calculations. In order
to address this limitation, the Smoothing Algorithm would use basis
futures on the same indices to approximate theoretical spot prices.
Trading in basis futures has the benefit of closing at 3:00 p.m., which
would allow OCC to use a reported closing price.\27\ Basis futures
prices represent the spreads between the futures prices and the
underlying price; these spreads are relatively stable throughout the
day, including between their closing at 3:00 p.m. and the closing of
the index options market at 3:15 p.m., thereby providing a better
approximation of the theoretical sport prices in the plain vanilla
options at 3:15 p.m.
---------------------------------------------------------------------------

    \26\ Using the 3:00 p.m. index futures price suffers from
another shortcoming in that the 3:00 p.m. price is not an official
closing price, but rather it is the last trade price before 3:00
p.m. (as observed in a manual process by OCC employees).
    \27\ By using the reported closing price for basis futures, the
proposed changes to the Smoothing Algorithm also would eliminates
the algorithm's reliance on a manual process to observe pre-close
futures prices.
---------------------------------------------------------------------------

    Third, the Smoothing Algorithm deals with unacceptably high
volatilities that are sometimes generated in the out-of-the-money
regions by capping these volatilities to a lower value. This leads to a
jump in the rate of change of the volatility with respect to the strike
and may create negative convexity of the option prices versus strike,
i.e., butterfly arbitrage opportunities. The proposed changes to the
Smoothing Algorithm would still cap unacceptably high volatilities
generated in out-of-the-money regions to a lower value, but the capping
would be done in a more gradual manner. By capping unacceptable high
volatilities in a more gradual manner, changes in the convexity of
prices would not be as discontinuous as in the current Smoothing
Algorithm, which would eliminate the opportunities for butterfly
arbitrage.
    Fourth, to generate prices for short-dated FLEX options, the
Smoothing Algorithm combines the prices calculated from the prior day's
implied volatilities for all FLEX options with current market prices.
By combining the prior day's implied volatilities with current market
prices, the Smoothing Algorithm may not generate prices that are
consistent with then-current market prices.\28\ In order to address
this limitation, OCC proposes to change the Smoothing Algorithm to use
volatilities implied from current market prices of plain vanilla listed
options to price short-dated FLEX options.\29\
---------------------------------------------------------------------------

    \28\ The reason that the Smoothing Algorithm uses the prior
day's implied volatilities is that the implied volatilities are
received from a third-party data service provider; the provider's
quotes are delayed by one day.
    \29\ The Smoothing Algorithm for long-dated FLEX options would
remain unchanged.
---------------------------------------------------------------------------

    Fifth, the Smoothing Algorithm currently does not have the ability
to use borrowing costs as an independent

input.\30\ To address this limitation, OCC proposes to modify the
Smoothing Algorithm to provide for the ability to use borrowing costs
as an independent input in the pricing of plain vanilla listed options.
Under the proposed changes, the borrowing costs for each underlying
security would be implied from at-the-money (or near at-the-money)
options listed on such security.
---------------------------------------------------------------------------

    \30\ The Smoothing Algorithm currently combines borrowing costs
and dividends into a single input, referred to as ``implied
dividends,'' which is then used to price plain vanilla listed
options. However, the combined ``implied dividends'' input can
differ from the actual dividend, and this difference can result in
potential mispricing of certain types of options.
---------------------------------------------------------------------------

Clearing Member Outreach
    To inform Clearing Members of the proposed change, OCC has provided
overviews of the proposed changes to its Financial Risk Advisory
Council \31\ and, prior to implementing the proposed change, will
provide overviews to the OCC Roundtable,\32\ as well as through
Information Memoranda to all Clearing Members describing the proposed
change.
---------------------------------------------------------------------------

    \31\ The Financial Risk Advisory Council is a working group
comprised of exchanges, Clearing Members and indirect participants
of OCC.
    \32\ The OCC Roundtable was established to bring Clearing
Members, exchanges and OCC together to discuss industry and
operational issues. It is comprised of representatives of the senior
OCC staff, participant exchanges and Clearing Members, representing
the diversity of OCC's membership in industry segments, OCC-cleared
volume, business type, operational structure and geography.
---------------------------------------------------------------------------

    Given that changes in margins are expected,\33\ OCC expects to
conduct an extended parallel implementation for Clearing Members prior
to implementation. Additionally, OCC will perform targeted and direct
outreach with Clearing Members that would be most impacted by the
proposed change and would work closely with such Clearing Members to
coordinate the implementation and associated funding for such Clearing
Members resulting from the proposed change.\34\
---------------------------------------------------------------------------

    \33\ OCC expects that the proposed changes, in aggregate, would
reduce total margins by a small amount. In particular, margin
reductions are expected for Clearing Members who hold risk
offsetting positions. However, the ultimate impact on any particular
Clearing Member's margin requirements would necessarily vary based
on trading strategies and market conditions. More specifically,
backtesting results for the period from March 2018 through February
2019 showed small reductions to total margins, in aggregate, with an
average difference of 1.3% between the proposed model and the
production model. At the Clearing Member level, the difference in
margin requirements between the proposed model and the production
model for Clearing Members comprising 99% of OCC's total daily
margin (such Clearing Members, the ``top Clearing Members'') on most
days of the backtesting period was less than 10%. The largest
increase and decrease to daily margin requirements observed within
top Clearing Members during the backtesting period was 42% and 30%,
respectively. On average, only 5% of the top Clearing Members
experienced a daily margin decrease or increase of 10% or greater
under the proposed model over the same period.
    \34\ Specifically, OCC will discuss with those Clearing Members
how they plan to satisfy any increase in their margin requirements
associated with the proposed change.
---------------------------------------------------------------------------

Implementation Timeframe
    OCC expects to implement the proposed changes to the Vanilla Option
Model and Smoothing Algorithm no sooner than August 1, 2019 and no
later than one hundred eighty (180) days from the date OCC receives all
necessary regulatory approvals for the filings. OCC will announce the
implementation date of the proposed change by an Information Memo
posted to its public website no less than 6 weeks prior to
implementation.
Expected Effect on and Management of Risk
    OCC believes that the proposed changes would reduce the nature and
level of risk presented by OCC because they would enhance two of the
primary components of OCC's STANS methodology by addressing five
limitations of the Vanilla Option Model and five limitations of the
Smoothing Algorithm.
    With respect to the Vanilla Option Model, the proposed changes
would incorporate interest rate yield curves, forecasted dividends and
borrowing costs into the theoretical pricing of plain vanilla listed
options. Including these three inputs improves the Vanilla Option
Model's theoretical pricing and helps to preserve the consistency
between implied call volatility and implied put volatility in options
at the same strike price and same maturity. The proposed changes also
would introduce the LR binomial tree to replace the fixed, 49-step JR
binomial tree for pricing of American options. The LR binomial tree
would use a variable number of steps that increases linearly with the
expiration of an option, to more accurately price long-dated American
options. The LR binomial tree also converges at a considerably higher
rate than the JR binomial tree. The proposed changes would also enable
OCC to calculate two additional risk sensitivities--namely, Theta and
Rho--for plain vanilla listed options.
    With respect to the Smoothing Algorithm, the proposed changes would
improve implied volatility smoothing by eliminating the inconsistency
between the binomial trees used by the Vanilla Option Model and the
Smoothing Algorithm and by eliminating the synchronization issue from
using the 3:00 p.m. index futures price to approximate theoretical spot
prices for plain vanilla listed options on certain indices. The
proposed changes also would improve the Smoothing Algorithm by more
gradually capping unacceptably high volatilities sometimes generated in
the out-of-the-money regions, which would eliminate the opportunities
for butterfly arbitrage, and by using borrowing costs in the pricing of
plain vanilla listed options.
    The proposed model would be used by OCC to calculate margin
requirements designed to limit its credit exposures to participants,
and OCC uses the margin it collects from a defaulting Clearing Member
to protect other Clearing Members from losses as a result of the
default and ensure that OCC is able to continue the prompt and accurate
clearance and settlement of its cleared products. Accordingly, OCC
believes the proposed changes would promote robust risk management for
plain vanilla listed options and promote safety and soundness
consistent with the objectives and principles of Section 805(b) of the
Clearing Supervision Act.\35\
---------------------------------------------------------------------------

    \35\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    For the foregoing reasons, OCC believes that the proposed change
would enhance OCC's management of risk and reduce the nature or level
of risk presented to OCC.
Consistency With the Clearing Supervision Act
    The stated purpose of the Clearing Supervision Act is to mitigate
systemic risk in the financial system and promote financial stability
by, among other things, promoting uniform risk management standards for
systemically important financial market utilities and strengthening the
liquidity of systemically important financial market utilities.\36\
Section 805(a)(2) of the Clearing Supervision Act \37\ also authorizes
the Commission to prescribe risk management standards for the payment,
clearing and settlement activities of designated clearing entities,
like OCC, for which the Commission is the supervisory agency. Section
805(b) of the Clearing Supervision Act \38\ states that the objectives
and principles for risk management standards prescribed under Section
805(a) shall be to:
---------------------------------------------------------------------------

    \36\ 12 U.S.C. 5461(b).
    \37\ 12 U.S.C. 5464(a)(2).
    \38\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     Promote robust risk management;
     Promote safety and soundness;
     Reduce systemic risks; and

     Support the stability of the broader financial system.
    OCC believes the proposed changes are consistent with the
objectives and principles of Section 805(b) of the Clearing Supervision
Act.\39\ As described above, STANS margin requirements are comprise of
the sum of several components, each reflecting a different aspect of
risk. Two primary components of STANS are the Vanilla Option Model,
which is used to generate theoretical values, implied volatilities and
certain risk sensitivities for plain vanilla listed options, and the
Smoothing Algorithm, which is used to estimate fair prices of listed
option contracts based on their bid and ask price quotes. As explained
above, OCC proposes certain changes to address certain existing
limitations in the Vanilla Option Model and the Smoothing Algorithm. By
addressing the aforementioned limitations of the Vanilla Option Model,
OCC believes that the model will produce more accurate theoretical
valuations of plain vanilla listed options, including improved
theoretical valuations for long-dated American options. By addressing
the aforementioned limitations of the Smoothing Algorithm, OCC believes
that the proposed change will enhance implied volatility smoothing,
improve the approximate theoretical spot prices for plain vanilla
listed options on certain indices and eliminate opportunities for
butterfly arbitrage. As a result, OCC believes the proposed change
would promote robust risk management and safety and soundness while
reducing systemic risks and would thereby support the stability of the
broader financial system.
---------------------------------------------------------------------------

    \39\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act and the Act, which include
Commission Rules 17Ad-22(b)(2) and (e)(6).\40\
---------------------------------------------------------------------------

    \40\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release
Nos. 68080 (October 22, 2012), 77 FR 66220 (November 2, 2012) (S7-
08-11) (``Clearing Agency Standards''); 78961 (September 28, 2016,
81 FR 70786 (October 13, 2016) (S7-03-14) (``Standards for Covered
Clearing Agencies''). The Standards for Covered Clearing Agencies
became effective on December 12, 2016. OCC is a ``covered clearing
agency'' as defined in Rule 17Ad-22(a)(5) and therefore OCC must
comply with section (e) of Rule 17Ad-22.
---------------------------------------------------------------------------

    Rule 17Ad-22(b)(2) \41\ requires, in part, that a registered
clearing agency that performs central counterparty services establish,
implement, maintain and enforce written policies and procedures
reasonably designed use margin requirements to limit its credit
exposures to participants under normal market conditions and use risk-
based models and parameters to set margin requirements. As noted above,
OCC uses STANS as its risk-based margin methodology. The proposed
changes would enhance STANS by addressing several limitations in two of
the primary components of STANS: The Vanilla Option Model and the
Smoothing Algorithm. With respect to the Vanilla Option Model, OCC
believes the proposed changes would enable the model to produce more
accurate theoretical valuations of plain vanilla listed options, and
for American options, would enable the mode to more accurately evaluate
long-dates options. With respect to the Smoothing Algorithm, OCC
believes the proposed changes will enhance the model's implied
volatility smoothing by improving the approximate theoretical spot
prices for plain vanilla listed options on certain indices and by
eliminating opportunities for butterfly arbitrage. Accordingly, OCC
believes the proposed changes would improve the methodology used to
calculate margin requirements designed to limit OCC's credit exposures
to participants under normal market conditions in a manner consistent
with Rule 17Ad-22(b)(2).\42\
---------------------------------------------------------------------------

    \41\ 17 CFR 240.17Ad-22(b)(2).
    \42\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(i) and (iii) \43\ further requires OCC to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to cover its credit exposures to its
participants by establishing a risk-based margin system that: (1)
Considers, and produces margin levels commensurate with, the risks and
particular attributes of each relevant product, portfolio, and market
and (2) calculates margin sufficient to cover its potential future
exposure to participants in the interval between the last margin
collection and the close out of positions following a participant
default. As noted above, the proposed changes would address certain
existing limitations in the Vanilla Option Model and the Smoothing
Algorithm, each of which is a primary component of OCC's STANS
methodology. By addressing the aforementioned limitations of the
Vanilla Option Model, OCC believes that the model will produce more
accurate theoretical valuations of plain vanilla listed options,
including improved theoretical valuations for long-dated American
options. By addressing the aforementioned limitations of the Smoothing
Algorithm, OCC believes that the proposed changes will enhance implied
volatility smoothing, improve the approximate theoretical spot prices
for plain vanilla listed options on certain indices and eliminate
opportunities for butterfly arbitrage. Accordingly, OCC believes the
proposed changes are consistent with Rule 17Ad-22(e)(6)(i) and
(iii).\44\
---------------------------------------------------------------------------

    \43\ 17 CFR 240.17Ad-22(e)(6)(i) and (iii).
    \44\ Id.
---------------------------------------------------------------------------

    The changes are not inconsistent with the existing rules of OCC,
including any other rules proposed to be amended.

III. Date of Effectiveness of the Advance Notice and Timing for
Commission Action

    The proposed change may be implemented if the Commission does not
object to the proposed change within 60 days of the later of (i) the
date the proposed change was filed with the Commission or (ii) the date
any additional information requested by the Commission is received. OCC
shall not implement the proposed change if the Commission has any
objection to the proposed change.
    The Commission may extend the period for review by an additional 60
days if the proposed change raises novel or complex issues, subject to
the Commission providing the clearing agency with prompt written notice
of the extension. A proposed change may be implemented in less than 60
days from the date the advance notice is filed, or the date further
information requested by the Commission is received, if the Commission
notifies the clearing agency in writing that it does not object to the
proposed change and authorizes the clearing agency to implement the
proposed change on an earlier date, subject to any conditions imposed
by the Commission.
    OCC shall post notice on its website of proposed changes that are
implemented.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the advance
notice is consistent with the Clearing Supervision 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-OCC-2019-804 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2019-804. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the advance notice that are filed with the
Commission, and all written communications relating to the advance
notice between the Commission and any person, other than those that may
be withheld from the public in accordance with the provisions of 5
U.S.C. 552, will be available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the self-regulatory
organization.
    All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2019-804 and
should be submitted on or before August 15, 2019.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-16312 Filed 7-30-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 217 (Tuesday, November 10, 2015)]
[Rules and Regulations]
[Page 69588]
[FR Doc No: 2015-28286]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 734

Scope of the Export Administration Regulations

CFR Correction

    In Title 15 of the Code of Federal Regulations, Parts 300 to 799,
revised as of January 1, 2015, on page 233, in Sec.  734.4, in
paragraph (a)(4), add the term ``ECCN'' before ``9E003.a.1''.

[FR Doc. 2015-28286 Filed 11-9-15; 8:45 am]
BILLING CODE 1505-01-D


[Federal Register Volume 77, Number 210 (Tuesday, October 30, 2012)]
[Notices]
[Pages 65676-65678]
[FR Doc No: 2012-26591]

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 DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 14447-000]

L.S. Starrett Company; Notice of Application Accepted for Filing
With the Commission, Intent To Waive Scoping, Soliciting Motions To
Intervene and Protests, Ready for Environmental Analysis, Soliciting
Comments, Terms and Conditions, and Recommendations, and Establishing
An Expedited Schedule for Processing

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection.
    a. Type of Application: Exemption from Licensing.
    b. Project No.: P-14447-000.

    c. Date filed: August 15, 2012.
    d. Applicant: L.S. Starrett Company.
    e. Name of Project: Crescent Street Dam Hydroelectric Project.
    f. Location: On Millers River, in the Town of Athol, Worcester
County, Massachusetts. The project would not occupy lands of the United
States.
    g. Filed Pursuant to: Public Utility Regulatory Policies Act of
1978, 16 U.S.C. 2705, 2708.
    h. Applicant Contact: Steve Walsh, L.S. Starrett Company, 121
Crescent Street, Athol, MA 01331;<PHONE_NUMBER> ext. 229.
    i. FERC Contact: Tom Dean,<PHONE_NUMBER><EMAIL_ADDRESS>    j. Deadline for filing motions to intervene and protests, comments,
terms and conditions, and recommendations: Due to the small size and
particular location of this existing project and the close coordination
with state and federal agencies during the preparation of the
application, the 60-day timeframe in 18 CFR 4.34(b) is shortened.
Instead, motions to intervene and protests, comments, terms and
conditions, and recommendations will be due 30 days from the issuance
date of this notice. All reply comments must be filed with the
Commission within 45 days from the date of this notice.
    All documents may be filed electronically via the Internet. See 18
CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web
site http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit
brief comments up to 6,000 characters, without prior registration,
using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the
end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>or toll free at 1-866-208-3676,
or for TTY,<PHONE_NUMBER>. Although the Commission strongly encourages
electronic filing, documents may also be paper-filed. To paper-file,
mail an original and seven copies to: Kimberly D. Bose, Secretary,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426.
    The Commission's Rules of Practice require all intervenors filing
documents with the Commission to serve a copy of that document on each
person on the official service list for the project. Further, if an
intervenor files comments or documents with the Commission relating to
the merits of an issue that may affect the responsibilities of a
particular resource agency, they must also serve a copy of the document
on that resource agency.
    k. The application has been accepted for filing and is now ready
for environmental analysis.
    l. The proposed Crescent Street Dam Hydroelectric Project consists
of: (1) An existing 28-foot-high, 127-foot-long concrete and masonry
dam with a 98-foot-long spillway topped with a 3-foot-high bascule
gate; (2) an existing 4.5-acre impoundment with a normal water surface
elevation of 541.3 feet National Geodetic Vertical Datum of 1929; (3)
existing generation facilities on the right side of the dam that
include: (a) an intake structure equipped with a 7-foot-high, 7-foot-
wide head gate and a 14-foot-high, 17.5-feet-wide trashrack with 1.25-
inch clear bar spacing; (b) a 25-foot-long, 7-foot-diameter penstock;
(c) a 44-foot-long, 28-foot-wide powerhouse containing a 250 kilowatt
(kW) turbine generating unit; (d) a 7-foot-diameter, 47-foot-long
bypass outlet conduit equipped with a 7-foot-high, 7-foot-wide gate;
(e) a 16-foot-wide, 4-foot-deep, 200-foot-long tailrace; and (f) three
existing 180-foot-long, 600 volt transmission lines; (4) existing
generation facilities on the left side of the dam that include: (a) an
18-foot-long weir equipped with a 6-foot-high, 6-foot-wide slide gate
and a 12-foot-high, 13.5-foot-wide trashrack with [frac34]-inch clear
bar spacing; (b) a 55-foot-long, 6-foot-diameter penstock; (c) a 37-
foot-long, 37-foot-wide powerhouse containing a 198 kW turbine
generating unit; (d) a 14-foot-wide, 9-foot-deep, 100-foot-long
tailrace; and (e) six 900-foot-long, 600 volt transmission lines; and
(5) appurtenant facilities. The project would have an estimated average
annual generation of 1,729.2 megawatt-hours. The applicant proposes to
construct downstream and upstream fish passage facilities, a plunge
pool, and upstream eel passage facility if required by fish and
wildlife agencies, and operate the project in a run-of-river mode.
    m. Due to the project works already existing and the limited scope
of proposed modifications to the project site described above, the
applicant's close coordination with federal and state agencies during
the preparation of the application, and agency recommended preliminary
terms and conditions, we intend to waive scoping and expedite the
exemption process. Based on a review of the application, resource
agency consultation letters, Commission staff intends to prepare a
single environmental assessment (EA). Commission staff determined that
the issues that need to be addressed in the EA have been adequately
identified during the pre-filing period, which included a public
meeting and site visit, and no new issues are likely to be identified
through additional scoping. The EA will consider assessing the
potential effects of project construction and operation on aquatic,
terrestrial, threatened and endangered species, recreation and land
use, aesthetic, and cultural and historic resources.
    n. A copy of the application is available for review at the
Commission in the Public Reference Room or may be viewed on the
Commission's Web site at http://www.ferc.gov using the ``eLibrary''
link. Enter the docket number excluding the last three digits in the
docket number field to access the document. For assistance, contact
FERC Online Support. A copy is also available for inspection and
reproduction at the address in item h above.
    Register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.
    o. Any qualified applicant desiring to file a competing application
must submit to the Commission, on or before the specified intervention
deadline date, a competing development application, or a notice of
intent to file such an application. Submission of a timely notice of
intent allows an interested person to file the competing development
application no later than 120 days after the specified intervention
deadline date. Applications for preliminary permits will not be
accepted in response to this notice.
    A notice of intent must specify the exact name, business address,
and telephone number of the prospective applicant, and must include an
unequivocal statement of intent to submit a development application. A
notice of intent must be served on the applicant(s) named in this
public notice.
    Anyone may submit comments, a protest, or a motion to intervene in
accordance with the requirements of Rules of Practice and Procedure, 18
CFR 385.210, .211, .214. In determining the appropriate action to take,
the Commission will consider all protests or other comments filed, but
only those who file a motion to intervene in accordance with the
Commission's Rules may become a party to the proceeding. Any comments,
protests, or motions to intervene must be received on or before the
specified comment date for the particular application.
    All filings must: (1) Bear in all capital letters the title
``PROTEST'', ``MOTION TO INTERVENE'', ``NOTICE OF INTENT TO FILE
COMPETING APPLICATION,'' ``COMPETING

APPLICATION,'' ``COMMENTS,'' ``REPLY COMMENTS,'' ``RECOMMENDATIONS,''
or ``TERMS AND CONDITIONS;'' (2) set forth in the heading the name of
the applicant and the project number of the application to which the
filing responds; (3) furnish the name, address, and telephone number of
the person protesting or intervening; and (4) otherwise comply with the
requirements of 18 CFR 385.2001 through 385.2005. All comments,
recommendations, or terms and conditions must set forth their
evidentiary basis and otherwise comply with the requirements of 18 CFR
4.34(b). Agencies may obtain copies of the application directly from
the applicant. A copy of any protest or motion to intervene must be
served upon each representative of the applicant specified in the
particular application. A copy of all other filings in reference to
this application must be accompanied by proof of service on all persons
listed in the service list prepared by the Commission in this
proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
    p. Procedural schedule: The application will be processed according
to the following procedural schedule. Revisions to the schedule may be
made as appropriate.

------------------------------------------------------------------------
                 Milestone                           Target date
------------------------------------------------------------------------
Notice of the availability of the EA.......  March 2013
------------------------------------------------------------------------

    Dated: October 23, 2012.
Kimberly D. Bose,
 Secretary.
[FR Doc. 2012-26591 Filed 10-29-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: December 23, 2009 (Volume 74, Number 245)]
[Notices]
[Page 68263]
[DOCID:fr23de09-54]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER09-1728-002]

Midwest Independent Transmission, System Operator, Inc. and
ALLETE, Inc.; Notice of Filing

December 15, 2009.
    Take notice that on December 10, 2009, the Midwest Independent
Transmission System Operator, Inc. and ALLETE, Inc., filed in
compliance with the Commission November 24, 2009 Order, revisions to
their September 21, 2009, joint filing.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on December 18, 2009.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-30452 Filed 12-22-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 34 (Tuesday, February 23, 2021)]
[Rules and Regulations]
[Pages 10818-10819]
[FR Doc No: 2021-03251]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 510, 520, and 522

[Docket No. FDA-2019-N-5405]

New Animal Drug Applications; Beta-Aminopropionitrile Fumarate;
n-Butyl Chloride; Cupric Glycinate Injection; Dichlorophene and
Toluene; Orgotein for Injection; Tetracycline Tablets

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule, technical amendment.

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

SUMMARY: The Food and Drug Administration (FDA) is amending the animal
drug regulations to reflect the withdrawal of approval of seven new
animal drug applications (NADAs) for lack of compliance with the
reporting requirements in an FDA regulation.

DATES: This rule is effective February 23, 2021.

FOR FURTHER INFORMATION CONTACT: David Alterman, Center for Veterinary
Medicine (HFV-212), Food and Drug Administration, 7519 Standish Pl.,
Rockville, MD 20855,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Elsewhere in this issue of the Federal Register, FDA gave notice
that approval of the seven NADAs listed in table 1, and all supplements
and amendments thereto, is withdrawn, effective February 23, 2021, for
lack of compliance with reporting requirements in 21 CFR 514.80. As
provided in the regulatory text of this document, the animal drug
regulations are amended to reflect withdrawal of approval of the
following applications and a current format. Withdrawal of approval of
NADA 065-067 for Tetracycline Hydrochloride (HCl) Tablets did not
require amending the regulations.

             Table 1--NADAs for Which Approval Is Withdrawn
------------------------------------------------------------------------
                          Trade name
   Application No.          (drug)          Sponsor       21 CFR section
------------------------------------------------------------------------
031-971..............  CUPRATE (cupric  Walco                    522.518
                        glycinate).      International,
                                         Inc., 15 West
                                         Putnam,
                                         Porterville,
                                         CA 93257.
045-863..............  PALOSEIN         OXIS                    522.1620
                        (orgotein).      International,
                                         Inc., 6040 N
                                         Cutter Circle,
                                         Suite 317,
                                         Portland, OR
                                         97217-3935.
046-922..............  SERGEANTS SURE   ConAgra Pet              520.260
                        SHOT             Products Co.,
                        (n[dash]butyl    3902
                        chloride)        Leavenworth
                        Capsules.        St., Omaha, NE
                                         68105.
046-923..............  SERGEANTS (n-    ConAgra Pet              520.260
                        butyl            Products Co.,
                        chloride)        3902
                        Puppy Worm       Leavenworth
                        Capsules.        St., Omaha, NE
                                         68105.
065-067..............  Tetracycline     Premo               Not codified
                        HCl Tablets.     Pharmaceutical
                                         Laboratories,
                                         Inc., 111
                                         Leuning St.,
                                         South
                                         Hackensack, NJ
                                         07606.
140-850..............  ELITE            RSR                      520.580
                        (dichlorophene   Laboratories,
                        and toluene)     Inc., 501
                        Dog and Cat      Fifth St.,
                        Wormer.          Bristol, TN
                                         37620.
141-107..............  BAPTEN for       Alaco, Inc.,              522.84
                        Injection        1500 North
                        ([szlig][dash]   Wilmot Rd.,
                        aminopropionit   Suite 290-C,
                        rile fumarate).  Tucson, AZ
                                         85712.
------------------------------------------------------------------------

    Following these withdrawals of approval, Alaco, Inc.; ConAgra Pet
Products Co.; OXIS International, Inc.; RSR Laboratories, Inc.; and
Walco International, Inc., are no longer the sponsors of an approved
application. Accordingly, 21 CFR 510.600(c) is being amended to remove
the entries for these firms.

II. Legal Authority

    This rule sets forth technical amendments to the regulations to
codify recent actions on approved new animal drug applications and
corrections to improve the accuracy of the regulations, and as such
does not impose any burden on regulated entities. This rule is issued
under section 512(i) of the Federal Food, Drug, and Cosmetic Act (FD&C
Act) (21 U.S.C. 360b(i)), which requires Federal Register publication
of the conditions of use of an approved or conditionally approved new
animal drug and the name and address of the drug's sponsor in a
``notice, which upon publication shall be effective as a regulation.''
A notice published pursuant to section 512(i) is not subject to the
notice-and-comment rulemaking requirements of the Administrative
Procedure Act, 5 U.S.C. 551 et seq. See section 512(i) of the FD&C Act
(21 U.S.C. 360b(i)); 21 CFR 10.40(e)(3); S. Rep. 90-1308, at 5 (1968).
    This document does not meet the definition of ``rule'' in 5 U.S.C.
804(3)(A) because it is a ``rule of particular applicability.''
Therefore, it is not subject to the congressional review requirements
in 5 U.S.C. 801-808. Likewise, this is not a rule subject to Executive
Order 12866, which defines a rule as ``an agency statement of general
applicability and future effect, which the agency intends to have the
force and effect of law, that is designed to implement, interpret, or
prescribe law or policy or to describe the procedure or practice
requirements of an agency.''

List of Subjects

21 CFR Part 510

    Administrative practice and procedure, Animal drugs, Labeling,
Reporting and recordkeeping requirements.

21 CFR Parts 520 and 522

    Animal drugs.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR parts
510, 520, and 522 are amended as follows:

PART 510--NEW ANIMAL DRUGS

0
1. The authority citation for part 510 continues to read as follows:

    Authority:  21 U.S.C. 321, 331, 351, 352, 353, 360b, 371, 379e.

Sec.  510.600  [Amended]

0
2. In Sec.  510.600, in the table in paragraph (c)(1), remove the
entries for ``Alaco, Inc.'', ``OXIS International, Inc.'', ``RSR
Laboratories, Inc.'', and ``Walco International, Inc.''; and in the
table in paragraph (c)(2), remove the entries for ``024991'',
``049185'', ``058670'', and ``064146''.

PART 520--ORAL DOSAGE FORM NEW ANIMAL DRUGS

0
3. The authority citation for part 520 continues to read as follows:

    Authority:  21 U.S.C. 360b.

0
4. Revise Sec.  520.260 to read as follows:

Sec.  520.260   n-Butyl chloride.

    (a) Specifications. Each capsule contains 221, 442, 884, or 1,768
milligrams (mg); or 4.42 grams of n-butyl chloride.
    (b) Sponsors. See sponsors in Sec.  510.600(c) of this chapter:
    (1) No. 023851 for capsules containing 221, 442, 884, or 1,768 mg,
or 4.42 grams (g); and
    (2) No. 054771 for capsules containing 221 mg.
    (c) Conditions of use in dogs--(1) Amount. Administer capsules
orally based on body weight as follows:
    (i) Capsules containing 221 mg: Under 5 pounds, 1 capsule per 1\1/
4\ pounds of body weight.
    (ii) Capsules containing 442 mg: Under 5 pounds, 1 capsule per 2\1/
2\ pounds of body weight.
    (iii) Capsules containing 884 mg:
    (A) Under 5 pounds, 1 capsule;
    (B) 5 to 10 pounds, 2 capsules;
    (C) 10 to 20 pounds, 3 capsules;
    (D) 20 to 40 pounds, 4 capsules;
    (E) Over 40 pounds, 5 capsules.
    (iv) Capsules containing 1,768 mg: Dogs weighing 5 to 10 pounds, 1
capsule.
    (v) Capsules containing 4.42 g: Dogs weighing 40 pounds or over, 1
capsule.
    (2) Indications for use. For the removal of ascarids (Toxocara
canis and Toxascaris leonina) and hookworms (Ancylostoma caninum,
Ancylostoma braziliense, and Uncinaria stenocephala) from dogs.
    (3) Limitations. Dogs should not be fed for 18 to 24 hours before
being given the drug. Administration of the drug should be followed in
\1/2\ to 1 hour with a mild cathartic. Normal feeding may be resumed 4
to 8 hours after treatment. Animals subject to reinfection may be
retreated in 2 weeks. A veterinarian should be consulted before using
in severely debilitated dogs.

Sec.  520.580  [Amended]

0
5. In Sec.  520.580, in paragraph (b)(1), remove ``Nos. 017135, 023851,
and 058670'' and in its place add ``Nos. 017135 and 023851''.

PART 522--IMPLANTATION OR INJECTABLE DOSAGE FORM NEW ANIMAL DRUGS

0
6. The authority citation for part 522 continues to read as follows:

    Authority:  21 U.S.C. 360b.

Sec.  522.84  [Removed]

0
7. Remove Sec.  522.84.

Sec.  522.518  [Removed]

0
8. Remove Sec.  522.518.

Sec.  522.1620  [Removed]

0
9. Remove Sec.  522.1620.

    Dated: February 11, 2021.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2021-03251 Filed 2-22-21; 8:45 am]
BILLING CODE 4164-01-P