State Basic Allowance ( Tons) Additional Allowances for Phase I Units ( Tons) Total Annual Allowance ( Tons) Portion of ARP 250,000 tons Set Aside Added Back in New Total Annual Allowance ( Tons) 2010 Annual Budget ( 50% Reduction) ( Tons) 2015 Annual Budget ( 65% Reduction) ( Tons)

ALABAMA 303,781 2,580 306,361 8,897 315,258 157,629 110,340 ARKANSAS 94,682 0 94,682 2,750 97,432 48,716 34,101 DELAWARE 43,569 0 43,569 1,265 44,834 22,417 15,692 DISTRICT OF COLUMBIA 1,375 0 1,375 40 1,415 708 495 FLORIDA 492,741 0 492,741 14,309 507,050 253,525 177,468 GEORGIA 407,677 6,534 414,211 12,029 426,240 213,120 149,184 ILLINOIS 371,340 3,237 374,577 10,878 385,455 192,728 134,909 INDIANA 489,082 5,892 494,974 14,374 509,348 254,674 178,272 IOWA 124,608 0 124,608 3,619 128,227 64,114 44,879 KANSAS 113,350 0 113,350 3,292 116,642 58,321 40,825 KENTUCKY 363,834 3,166 367,000 10,658 377,658 188,829 132,180 LOUISIANA 116,546 0 116,546 3,384 119,930 59,965 41,976 MARYLAND 137,444 0 137,444 3,991 141,435 70,718 49,502 MASSACHUSETTS 160,509 0 160,509 4,661 165,170 82,585 57,810 MICHIGAN 347,232 0 347,232 10,084 357,316 178,658 125,061 MINNESOTA 97,181 0 97,181 2,822 100,003 50,002 35,001 MISSISSIPPI 65,640 0 65,640 1,906 67,546 33,773 23,641 MISSOURI 262,797 3,965 266,762 7,747 274,509 137,255 96,078 NEW JERSEY 62,973 0 62,973 1,829 64,802 32,401 22,681 NEW YORK 262,728 0 262,728 7,630 270,358 135,179 94,625 NORTH CAROLINA 267,011 0 267,011 7,754 274,765 137,383 96,168 NORTH DAKOTA 160,363 0 160,363 4,657 165,020 82,510 57,757 OHIO 639,630 8,778 648,408 18,830 667,238 333,619 233,533 OKLAHOMA 123,082 0 123,082 3,574 126,656 63,328 44,330 PENNSYLVANIA 530,637 5,925 536,562 15,582 552,144 276,072 193,250 SOUTH CAROLINA 111,342 0 111,342 3,233 114,575 57,288 40,101 TENNESSEE 262,449 4,316 266,765 7,747 274,512 137,256 96,079 TEXAS 623,962 0 623,962 18,120 642,082 321,041 224,729 VIRGINIA 123,410 0 123,410 3,584 126,994 63,497 44,448 WEST VIRGINIA 414,095 5,607 419,702 12,188 431,890 215,945 151,162 WISCONSIN 169,653 0 169,653 4,927 174,580 87,290 61,103 TOTAL 7,744,723 50,000 7,794,723 226,361 8,021,084 4,010,546 2,807,380 Total 28 States 3,864,708 2,705,293 NOTES:

1. Values in columns B, C and C are from Table 1.2 of the Technical Documentation for the Final Rule for 1998 Reallocation of Allowances ( 63 FR 2. Column E is a portion of the Title IV 250,000 ton set aside added back in based on the State's proportional share of the total Title IV allowance.

3. Proposed annual budgets in columns G and H are 50% and 65% reductions, respectively, from the values in column F. FR 51705, 9/ 28/ 1998); Table 1.2 can be downloaded from EPA's website at www. epa. gov/ airmarkets/ allocations/ State 1999 Heat Input ( mmBtu) 2000 Heat Input ( mmBtu) 2001 Heat Input ( mmBtu) 2002 Heat Input ( mmBtu) Highest Heat Input ( mmBtu) 30 State 2010 contribution to regionwide budget ( tons)

Alabama 828,134,880 883,657,215 845,949,725 901,235,435 901,235,435 67,593 Arkansas 328,738,552 333,982,776 312,646,314 303,031,689 328,738,552 24,655 District of Columbia 3,304,107 2,224,628 2,033,318 3,453,608 3,453,608 259 Delaware 58,793,492 64,581,021 69,180,132 65,983,697 69,180,132 5,189 Florida 1,481,662,456 1,433,457,084 1,465,992,470 1,544,571,965 1,544,571,965 115,843 Georgia 787,655,933 849,463,789 780,513,913 843,964,086 849,463,789 63,710 Iowa 388,147,314 392,397,408 388,839,629 393,183,898 393,183,898 29,489 Illinois 895,604,717 941,011,079 933,356,252 1,007,079,910 1,007,079,910 75,531 Indiana 1,350,676,762 1,356,985,880 1,282,844,557 1,257,543,807 1,356,985,880 101,774 Kansas 398,066,465 417,593,708 398,634,960 449,796,181 449,796,181 33,735 Kentucky 1,020,879,508 1,011,665,182 1,003,452,174 962,466,443 1,020,879,508 76,566 Louisiana 611,697,789 634,461,236 584,969,611 597,500,538 634,461,236 47,585 Massachusetts 270,559,192 237,758,093 246,922,434 251,652,355 270,559,192 20,292 Maryland 379,951,954 338,427,912 325,417,797 321,242,394 379,951,954 28,496 Michigan 803,099,194 769,855,356 757,217,735 758,577,253 803,099,194 60,232 Minnesota 347,233,050 380,527,772 372,834,929 402,764,856 402,764,856 30,207 Missouri 698,030,855 713,202,205 738,990,477 752,062,330 752,062,330 56,405 Mississippi 260,462,442 253,827,792 300,351,770 310,559,858 310,559,858 23,292 North Carolina 714,889,905 726,974,710 695,805,178 723,110,951 726,974,710 54,523 New Jersey 106,503,621 120,853,685 124,963,673 155,305,434 155,305,434 11,648 New York 713,705,400 665,780,803 659,172,421 652,411,448 713,705,400 53,528 North Dakota 345,123,064 341,298,633 337,552,650 339,280,703 345,123,064 25,884 Ohio 1,308,156,996 1,333,059,524 1,254,434,234 1,322,094,442 1,333,059,524 99,979 Oklahoma 509,224,894 529,816,034 519,781,115 559,889,599 559,889,599 41,992 Pennsylvania 1,051,296,286 1,105,470,895 1,078,704,718 1,102,329,711 1,105,470,895 82,910 South Carolina 378,051,402 404,601,354 383,827,374 418,568,466 418,568,466 31,393 Tennessee 578,923,270 633,329,910 605,987,982 630,945,896 633,329,910 47,500 Texas 2,840,541,593 2,931,344,437 2,808,727,320 2,921,984,652 2,931,344,437 219,851 Virginia 386,335,680 395,512,128 411,769,711 401,232,255 411,769,711 30,883 Wisconsin 508,092,322 513,589,824 498,207,478 483,187,294 513,589,824 38,519 West Virginia 917,416,842 893,860,126 788,916,445 900,479,250 917,416,842 68,806 TOTAL 21,270,959,937 21,610,572,199 20,977,998,496 21,737,490,404 22,243,575,294 1,668,268 28 states total 20,416,611,980 20,739,457,532 20,120,664,731 20,838,320,102 NOTES:

1. Annual heat input data is from Acid Rain Program data for years 1999 through 2002.

2. The highest heat input year was selected from each State to calculate a regional total heat input.

3. NOx emission rates of 0.15 lb/ mmBtu and 0.125 lb/ mmBtu were applied to the regional total heat input ( for 2010 and 2015, respectively) to de 4. Regional budget was apportioned based on each State's share of the region's total average annual heat input over years 1999 through 2002. 30 State 2015 contribution to regionwide budget ( tons) Four Year Average Heat Input ( 30 States) ( mmBtu) State Fraction of Total Four Year Average Heat Input ( 30 States) 30 State 2010 State NOx budget ( tons) 30 State 2015 State NOx budget ( tons) 28 State 2010 contribution to regionwide budget ( tons) 28 State 2015 contribution to regionwide budget ( tons)

56,327 864,744,314 0.04 67,415 56,179 67,593 56,327 20,546 319,599,833 0.01 24,916 20,763 24,655 20,546 216 2,753,915 0.00 215 179 259 216 4,324 64,634,586 0.00 5,039 4,199 5,189 4,324 96,536 1,481,420,994 0.07 115,490 96,242 115,843 96,536 53,091 815,399,430 0.04 63,568 52,973 63,710 53,091 24,574 390,642,062 0.02 30,454 25,378 29,489 24,574 62,942 944,262,990 0.04 73,614 61,345 75,531 62,942 84,812 1,312,012,752 0.06 102,283 85,236 101,774 84,812 28,112 416,022,829 0.02 32,433 27,027 33,735 28,112 63,805 999,615,827 0.05 77,929 64,941 76,566 63,805 39,654 607,157,294 0.03 47,333 39,445 47,585 39,654 16,910 251,723,018 0.01 19,624 16,353 20,292 16,910 23,747 341,260,014 0.02 26,604 22,170 28,496 23,747 50,194 772,187,384 0.04 60,199 50,166 60,232 50,194 25,173 375,840,152 0.02 29,300 24,417 30,207 25,173 47,004 725,571,467 0.03 56,565 47,137 56,405 47,004 19,410 281,300,466 0.01 21,930 18,275 23,292 19,410 45,436 715,195,186 0.03 55,756 46,463 54,523 45,436 9,707 126,906,603 0.01 9,894 8,245 11,648 9,707 44,607 672,767,518 0.03 52,448 43,707 53,528 44,607 21,570 340,813,763 0.02 26,570 22,141 83,316 1,304,436,299 0.06 101,693 84,744 99,979 83,316 34,993 529,677,910 0.02 41,293 34,411 69,092 1,084,450,403 0.05 84,543 70,452 82,910 69,092 26,161 396,262,149 0.02 30,892 25,744 31,393 26,161 39,583 612,296,764 0.03 47,734 39,778 47,500 39,583 183,209 2,875,649,501 0.13 224,183 186,819 219,851 183,209 25,736 398,712,443 0.02 31,083 25,903 30,883 25,736 32,099 500,769,230 0.02 39,040 32,533 38,519 32,099 57,339 875,168,166 0.04 68,227 56,856 68,806 57,339 1,390,223 21,399,255,259 1.00 1,668,268 1,390,223 1,600,392 1,333,660 determine total NOx mass. 28 State Four Year Average Heat Input ( 28 States) ( mmBtu) Fraction of Total Four Year Average Heat Input ( 28 States) 28 State 2010 State NOx budget ( tons) 28 State 2015 State NOx budget ( tons)

864,744,314 0.04 67,414 56,178 319,599,833 0.02 24,916 20,763 2,753,915 0.00 215 179 64,634,586 0.00 5,039 4,199 1,481,420,994 0.07 115,489 96,241 815,399,430 0.04 63,567 52,973 390,642,062 0.02 30,454 25,378 944,262,990 0.05 73,613 61,344 1,312,012,752 0.06 102,283 85,235 416,022,829 0.02 32,433 27,027 999,615,827 0.05 77,929 64,940 607,157,294 0.03 47,333 39,444 251,723,018 0.01 19,624 16,353 341,260,014 0.02 26,604 22,170 772,187,384 0.04 60,199 50,165 375,840,152 0.02 29,300 24,417 725,571,467 0.04 56,564 47,137 281,300,466 0.01 21,930 18,275 715,195,186 0.03 55,756 46,463 126,906,603 0.01 9,893 8,245 672,767,518 0.03 52,448 43,707 0.00 0 0 1,304,436,299 0.06 101,692 84,743 0.00 0 0 1,084,450,403 0.05 84,542 70,452 396,262,149 0.02 30,892 25,743 612,296,764 0.03 47,734 39,778 2,875,649,501 0.14 224,181 186,818 398,712,443 0.02 31,083 25,903 500,769,230 0.02 39,039 32,533 875,168,166 0.04 68,227 56,856 20,528,763,586 1.00 1,600,392 1,333,660 Ozone Season Heat Input ( mmBtu) Ozone Season 2010 Budget ( Tons) Ozone Season 2015 Budget ( Tons) Annual Heat Input ( mmBtu) Annual 2010 Budget ( Tons) Annual 2015 Budget ( Tons)

58,130,519 4,360 3,633 123,767,311 9,283 7,735 NOTES:

1. Connecticut heat input values are from 1999 Acid Rain Program data.

3. NOx emission rates of 0.15 lb/ mmBtu and 0.125 lb/ mmBtu were applied to the heat input ( for 2010 and 2015, respectively) to determi mine total NOx mass.


[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Notices]
[Pages 29861-29864]
[FR Doc No: 2021-11606]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92038; File No. SR-OCC-2021-003]

Self-Regulatory Organizations; The Options Clearing Corporation;
Order Approving Proposed Rule Change To Establish OCC's Persistent
Minimum Skin-In-The-Game

May 27, 2021.

I. Introduction

    On February 10, 2021, the Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-OCC-2021-003, (``Proposed Rule Change'')
pursuant to Section 19(b) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 \2\ thereunder to establish a
persistent minimum level of skin-in-the-game that OCC would contribute
to cover default losses or liquidity shortfalls.\3\ The Proposed Rule
Change was published for public comment in the Federal Register on
March 2, 2021.\4\ The Commission has received comments regarding the
proposal described in the Proposed Rule Change.\5\ This Order approves
the Proposed Rule Change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Notice of Filing infra note 4, 86 FR at 12237.
    \4\ Securities Exchange Act Release No. 91199 (Feb. 24, 2021),
86 FR 12237 (Mar. 2, 2021) (File No. SR-OCC-2021-003) (``Notice of
Filing''). OCC also filed a related advance notice (SR-OCC-2021-801)
(``Advance Notice'') with the Commission pursuant to Section
806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, entitled the Payment, Clearing, and
Settlement Supervision Act of 2010 and Rule 19b-4(n)(1)(i) under the
Exchange Act. 12 U.S.C. 5465(e)(1). 15 U.S.C. 78s(b)(1) and 17 CFR
240.19b-4, respectively. The Advance Notice was published in the
Federal Register on March 1, 2021. Securities Exchange Act Release
No. 91184 (Feb. 23, 2021), 86 FR 12057 (Mar. 1, 2021) (File No. SR-
OCC-2021-801). A Notice of No Objection to the Advance Notice was
published in the Federal Register on April 12, 2021. See Securities
Exchange Act Release No. 91491 (Apr. 7, 2021), 86 FR 19061 (Apr. 12,
2021) (File No. SR-OCC-2021-801).
    \5\ Comments on the Proposed Rule Change are available at
https://www.sec.gov/comments/sr-occ-2021-003/srocc2021003.htm.
    Since the proposal contained in the Proposed Rule Change was
also filed as an advance notice, all public comments received on the
proposal are considered regardless of whether the comments are
submitted on the Proposed Rule Change or the Advance Notice.
Comments on the Advance Notice are available at https://www.sec.gov/comments/sr-occ-2021-801/occ2021801.htm.
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II. Background 6
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    \6\ Capitalized terms used but not defined herein have the
meanings specified in OCC's Rules and By-Laws, available at https://www.theocc.com/about/publications/bylaws.jsp.
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    ``Skin-in-the-game,'' as a component of financial risk management,
entails a covered clearing agency choosing, upon the occurrence of a
default or series of defaults and application of all available assets
of the defaulting participant(s), to apply its own capital contribution
to the relevant clearing or guaranty fund in full to satisfy any
remaining losses prior to the application of any (a) contributions by
non-defaulting members to the clearing or guaranty fund, or (b)
assessments that the covered clearing agency require non-defaulting
participants to contribute following the exhaustion of such
participant's funded contributions to the relevant clearing or guaranty
fund.\7\
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    \7\ See Securities Exchange Act Release No. 78961 (Sep. 28,
2016), 81 FR 70786, 70806 (Oct. 13, 2016) (S7-03-14) (``Covered
Clearing Agency Standards'').
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    OCC's skin-in-the-game component of its financial risk management
regime is described in its current rules, which provide for the use of
OCC's own capital to mitigate losses arising out of a Clearing Member
default.\8\ Specifically, OCC's rules provide for the offsetting of
default losses remaining after the application of a defaulted Clearing
Member's margin deposits and Clearing Fund contributions with OCC's
capital in excess of 110 percent of the Target Capital Requirement at
the time of the default.\9\ OCC's rules also provide for charging
losses remaining after the application of OCC's excess capital to OCC
senior management's deferred

compensation \10\ as well as non-defaulting Clearing Members.\11\
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    \8\ See Securities Exchange Release No. 88029 (Jan. 24, 2020),
85 FR 5500, 5502 (Jan. 30, 2020) (File No. SR-OCC-2019-007) (``CMP
Approval Order'').
    \9\ See OCC Rule 1006(e), available at https://www.theocc.com/getmedia/9d3854cd-b782-450f-bcf7-33169b0576ce/occ_rules.pdf (last
visited Mar. 16, 2021). See also CMP Approval Order at 5502.
    \10\ Such deferred compensation is in trust with respect to
OCC's Executive Deferred Compensation Plan (``EDCP''). See OCC Rule
101(e)(1), available at available at https://www.theocc.com/getmedia/9d3854cd-b782-450f-bcf7-33169b0576ce/occ_rules.pdf (last
visited Mar. 16, 2021). The specific EDCP funds that comprise a
portion of OCC's skin-in-the-game are referred to in OCC's rules as
the ``EDCP Unvested Balance.'' See id.
    \11\ See OCC Rule 1006(b), available at https://www.theocc.com/getmedia/9d3854cd-b782-450f-bcf7-33169b0576ce/occ_rules.pdf (last
visited Mar. 16, 2021). See also CMP Approval Order at 5502. The
application the EDCP Unvested Balance in parallel with non-
defaulting Clearing Members' Clearing Fund contributions would
necessarily occur before assessments related to the exhaustion of
OCC's Clearing Fund.
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    OCC reviewed feedback received in connection with the initial
filing of its current rules, relevant papers from industry participants
and stakeholders concerning skin-in-the-game, and regulatory regimes in
jurisdictions outside the United States.\12\ OCC's current rules do
not, however, dedicate OCC's excess capital for use solely as skin-in-
the-game, or guaranty that OCC maintain a minimum amount of skin-in-
the-game.\13\
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    \12\ See Notice of Filing, 86 FR at 12238-39. For example, OCC
is cognizant of the European Market Infrastructure Regulation's
expectation that skin-in-the-game be a minimum of 25 percent of the
central counterparty's regulatory capital requirement. See Notice of
Filing, 86 FR at 12239.
    \13\ See Notice of Filing, 86 FR at 12239.
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    Establishing the Minimum Corporate Contribution. OCC proposes to
establish a persistent minimum level of skin-in-the-game that OCC would
contribute to cover default losses or liquidity shortfalls. Such skin-
in-the-game would consist of a minimum amount of OCC's own pre-funded
resources that OCC would contribute prior to charging a loss to the
Clearing Fund (the ``Minimum Corporate Contribution'') and the EDCP
Unvested Balance.\14\ As proposed, funds comprising the Minimum
Corporate Contribution would be excluded from OCC's liquid net assets
funded by equity (``LNAFBE'') for purposes of meeting OCC's Target
Capital Requirement to ensure that OCC may maintain the Minimum
Corporate Contribution exclusively for default management.\15\
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    \14\ OCC does not propose altering its rules regarding the use
or sizing of the EDCP Unvested Balance.
    \15\ In addition to the Minimum Corporate Contribution, OCC
would continue to commit its LNAFBE greater than 110 percent of its
Target Capital Requirement prior to charging a loss to the Clearing
Fund. As proposed, OCC would apply the Minimum Corporate
Contribution to address default losses before applying its excess
LNAFBE.
---------------------------------------------------------------------------

    OCC proposes to define the Minimum Corporate Contribution to mean
the minimum level of OCC's own funds maintained exclusively to cover
credit losses or liquidity shortfalls, the level of which OCC's Board
of Directors (the ``Board'') shall determine from time to time. To
facilitate implementation of OCC's proposal, the Board approved an
initial Minimum Corporate Contribution at such a level that OCC's total
skin-in-the-game (i.e., the sum of the Minimum Corporate Contribution
and OCC's current EDCP Unvested Balance) would equal 25 percent of
OCC's Target Capital Requirement. OCC stated that, in setting the
initial Minimum Corporate Contribution, the Board considered factors
including, but not limited to, the regulatory requirements in each
jurisdiction in which OCC is registered or in which OCC is actively
seeking recognition, the amount similarly situated central
counterparties commit of their own resources to address participant
defaults, the EDCP Unvested Balance, OCC's LNAFBE greater than 110
percent of its Target Capital Requirement, projected revenue and
expenses, and other projected capital needs.\16\
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    \16\ See Notice of Filing, 86 FR at 12239-40.
---------------------------------------------------------------------------

    Replenishing the Minimum Corporate Contribution. OCC proposes that,
in the event it were to apply a portion of the Minimum Corporate
Contribution to address losses or shortfalls arising out of a Clearing
Member default, the size of the Minimum Corporate Contribution would be
temporarily reduced, for a period of 270 days, to the amount remaining
after its application.\17\ Each application of the Minimum Corporate
Contribution would trigger a new 270-day period.\18\ Under the
proposal, OCC would be obligated to notify Clearing Members of any such
reduction of the Minimum Corporate Contribution. OCC believes that 270
calendar days, or approximately nine months, is sufficient time for OCC
to accumulate the funds necessary to reestablish the Minimum Corporate
Contribution.\19\
---------------------------------------------------------------------------

    \17\ For example, if the Minimum Corporate Contribution were
$100 million and OCC applied $25 million to address default losses,
then the Minimum Corporate Contribution would be temporarily set at
$75 million.
    \18\ For example, if OCC were to contribute a portion of the
Minimum Corporate Contribution on day 1 and another portion 100 days
later, the Minimum Corporate Contribution would remain temporarily
reduced until day 370.
    \19\ See Notice of Filing, 86 FR at 12240. OCC stated that the
analysis on which its belief is based is the same analysis on which
OCC relied to set various thresholds related to OCC's plan for
replenishing its regulatory capital. See id.
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    OCC proposes change to its Rules, Capital Management Policy,
Default Management Policy, Clearing Fund Methodology Policy, and
Recovery and Orderly Wind-Down Plan to effectuate the changes described
above.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Exchange Act directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to such organization.\20\ After carefully
considering the Proposed Rule Change, the Commission finds that the
proposal is consistent with the requirements of the Exchange Act and
the rules and regulations thereunder applicable to OCC. More
specifically, the Commission finds that the proposal is consistent with
Section 17A(b)(3)(F) of the Exchange Act \21\ and Rule17Ad-22(e)(2)
thereunder.\22\
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    \20\ 15 U.S.C. 78s(b)(2)(C).
    \21\ 15 U.S.C. 78q-1(b)(3)(F).
    \22\ 17 CFR 240.17Ad-22(e)(2).
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    Before addressing the relevant portions of the Exchange Act and
rules and regulations thereunder, however, we address a part of the
comment submitted by Susquehanna International Group (``SIG'') not
related to Section 17A(b)(3)(F) of the Exchange Act or Rule17Ad-
22(e)(2) thereunder.\23\ SIG argued, as one of its concerns, that OCC's
fees, dues, and other charges would be per se unreasonable, and
therefore inconsistent with Section 17A(b)(3)(D) of the Exchange Act,
because funding the proposal with clearing fees would facilitate a
shareholder windfall.\24\ We do not address these issues in this order
because OCC has not proposed to change any fees, dues, or other charges
in the Proposed Rule Change.\25\ The

reasonability of OCC's existing fees, dues, or other charges pursuant
to Section 17A(b)(3)(D) of the Exchange Act is therefore beyond the
scope of this Proposed Rule Change.
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    \23\ See letter from Richard J. McDonald, SIG, dated March 30,
2021, to Vanessa Countryman, Secretary, Commission (``SIG Letter''),
available at https://www.sec.gov/comments/sr-occ-2021-003/srocc2021003.htm. In its comment letter, SIG argues that the
Proposed Rule Change is inconsistent with Sections 17A(b)(3)(D) and
(F) of the Exchange Act. The Commission's consideration of SIG's
concerns pertaining to Section 17A(b)(3)(F) is addressed in section
III.A. below.
    \24\ SIG Letter at 3-4.
     SIG also (i) expresses concern regarding OCC's current
retention of $325 million in capital; (ii) indicates that OCC should
focus on reducing clearing fee rates; and (iii) suggests that the
current organization of OCC's shareholders as for profit entities
creates a misalignment of interests. SIG Letter at 2. Because these
issues do not bear on the grounds for approval or disapproval
applicable to the Proposed Rule Change, the Commission does not
address them in this order.
    \25\ Another commenter read SIG's comment to imply that the
inclusion of fees as part of the proposed skin-in-the-game would
incentivize OCC members to increase their charges for providing
clearing services as a method of mitigating the risk of their actual
skin-in-the-game. See comment submitted by CJ Chou (April 8, 2021),
available at https://www.sec.gov/comments/sr-occ-2021-003/srocc2021003.htm. As the Commission understands it, SIG's argument
pertains to the size and use of OCC's fees, not changes in fees
imposed on clients by the Clearing Members absent a fee increase by
OCC.
    The commenter also expressed difficulty in obtaining
quantitative data regarding clearing fee refunds and how much,
proportionally, fees would contribute to the minimum skin-in-the-
game under the Proposed Rule Change. Id. With regard to quantitative
data describing clearing fee refunds, the audited financial
statements that OCC posts annually include a line item for
refundable clearing fees where applicable. See e.g., OCC's 2020
Financials at page 5, available at https://www.theocc.com/getattachment/9f5d22ff-d810-4690-948d-f9a207df083d/attachment.aspx.
With regard to how much, proportionally, fees would contribute to
the minimum skin-in-the-game under the Proposed Rule Change, the
Commission t notes that OCC has publically stated that its revenues
primarily consist of clearing fee revenues. Id. at 7.
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A. Consistency With Section 17A(b)(3)(F) of the Exchange Act

    Section 17A(b)(3)(F) of the Exchange Act requires, among other
things, that the rules of a clearing agency be designed to assure the
safeguarding of securities and funds which are in the custody or
control of the clearing agency or for which it is responsible and, in
general, to protect investors and the public interest.\26\ Based on its
review of the record, the Commission finds the proposal is consistent
with Section 17A(b)(3)(F) of the Exchange Act.
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    \26\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission continues to regard skin-in-the-game as a potential
tool to align the various incentives of a covered clearing agency's
stakeholders, including management and clearing members.\27\ OCC's
current rules provide for the application of excess capital as skin-in-
the-game. The Commission believes that OCC's proposal to set aside
capital to maintain a minimum amount of skin-in-the-game strengthens
OCC's existing skin-in-the-game rules. OCC's current rules align senior
management's personal economic incentives with OCC's overall risk
management incentives,\28\ but do not guaranty that an amount of OCC
capital would be set aside to ensure a pre-determined minimum level of
skin-in-the-game.
---------------------------------------------------------------------------

    \27\ Covered Clearing Agency Standards, 81 FR at 70805-06.
    \28\ See Securities Exchange Act Release No. 87257 (Oct. 8,
2019), 84 FR 55194, 55199 (Oct. 15, 2019) (File No. SR-OCC-2019-
805).
---------------------------------------------------------------------------

    The Commission believes that holding a defined Minimum Corporate
Contribution, as opposed to an undefined amount of excess capital,
would incentivize OCC further to maintain the appropriate amount of
resources to manage a Clearing Member default because failure to do so
would result in a direct cost to OCC. Incentivizing OCC to maintain an
appropriate amount of resources, in turn, could reduce the potential
losses charged to the Clearing Fund contributions of non-defaulting
Clearing Members in the event of a Clearing Member default, which in
turn would help assure the safeguarding of the Clearing Fund
contributions of non-defaulting Clearing Members.
    In its comment letter, SIG argues that the Proposed Rule Change
contravenes the protection of investors and the public interest.\29\
SIG states that OCC was established as a monopoly organization in order
to serve as a market utility \30\ and that it has always been
recognized and accepted by concerned parties that monies held as excess
OCC capital are excess fees not yet rebated, as opposed to retained
earnings.\31\ In support of its argument that OCC should not retain
earnings generated through clearing fees, SIG states that OCC has not
previously had to draw on such funds to address a shortfall.\32\
---------------------------------------------------------------------------

    \29\ SIG Letter at 4.
    \30\ SIG Letter at 1.
    \31\ SIG Letter at 2.
    \32\ SIG Letter at 2.
---------------------------------------------------------------------------

    The Commission is not persuaded by SIG's arguments with regard to
Section 17A(b)(3)(F). As discussed above, the Commission believes that
holding a defined Minimum Corporate Contribution would incentivize OCC
further to maintain the appropriate amount of resources to manage a
Clearing Member default. Aligning OCC's incentives with risk management
considerations, such as default management, supports the public
interest because it supports OCC's role as a utility for clearing and
settling U.S. listed options. Further, OCC's rules do not require OCC
to distribute retained earnings in excess of expenses.\33\
---------------------------------------------------------------------------

    \33\ If OCC's capital exceeds 110 percent of its Target Capital
Requirement, rules authorize, but does not require, OCC's Board to
reduce the cost of clearing. See Securities Exchange Act Release No.
88029 (Jan. 24, 2020), 85 FR 5500, 5502 (Jan. 30, 2020) (File No.
SR-OCC-2019-007). If the Board chooses to reduce the cost of
clearing, it is authorized to do so by lowering fees or declaring a
fee holiday as well as issuing refunds. See Id.
---------------------------------------------------------------------------

    In addition to providing those services customarily provided by
clearing houses of national securities exchanges,\34\ OCC is a Covered
Clearing Agency registered with the Commission.\35\ As a Covered
Clearing Agency, OCC is obligated to comply with risk management
standards that the Commission adopted under Section 805(a)(2) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 \36\
and Section 17A of the Exchange Act (the ``Clearing Agency
Rules'').\37\ The Clearing Agency Rules address having policies and
procedures regarding, inter alia, the maintenance of assets to address
losses attributable to Clearing Member defaults \38\ as well as general
business risk losses.\39\
---------------------------------------------------------------------------

    \34\ See Fourth Amended and Restated Certificate of
Incorporation of OCC, Section III, available at https://www.theocc.com/getmedia/9d7754f6-99ca-4d69-a934-a6fa996c9c16/OCC_Certificate_of_Incorporation.pdf.
    \35\ 17 CFR 240.17Ad-22(a)(15).
    \36\ 12 U.S.C. 5464(a)(2).
    \37\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release No.
68080 (Oct. 22, 2012), 77 FR 66220 (Nov. 2, 2012) (S7-08-11). See
also Covered Clearing Agency Standards, 81 FR 70786. OCC is a
``covered clearing agency'' as defined in Rule 17Ad-22(a)(5).
    \38\ See 17 CFR 240.17Ad-22(e)(4).
    \39\ See 17 CFR 240.17Ad-22(e)(15).
---------------------------------------------------------------------------

    SIG argues further that OCC's proposal puts only the public's skin
in the game. SIG states that market participants bear the risk
imprudent decisions by the exchanges in their capacity as the OCC
shareholders and of their designee board members because such
participants would be denied a rebate of excess fees.\40\
---------------------------------------------------------------------------

    \40\ SIG Letter at 3.
---------------------------------------------------------------------------

    The Commission is not persuaded by this argument either. SIG's
argument assumes that OCC's Clearing Members have a right to clearing
fee revenues not applied to operating costs in a given year, but, as
noted above in this section, OCC's rules, as approved by the
Commission, do not require OCC to distribute retained earnings in
excess of expenses. SIG's argument also assumes, without support, that
OCC's five Exchange Directors would not only be willing to make
``imprudent decisions to the detriment of OCC's Clearing Members,'' but
that the Exchange Directors would be able to enlist sufficient support
among OCC's nine Member Directors to force such ``imprudent decisions''
through the Board approval process.
    Based on the foregoing, the Commission believes that the Proposed
Rule Change is consistent with the requirements of Section 17A(b)(3)(F)
of the Exchange Act.\41\
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

B. Consistency With Rule 17Ad-22(e)(2) Under the Exchange Act

    Rule 17Ad-22(e)(2) under the Exchange Act requires that a covered
clearing agency establish, implement, maintain, and enforce written
policies and procedures reasonably designed to provide for governance
arrangements

that, among other things, are clear and transparent; clearly prioritize
the safety and efficiency of the covered clearing agency; and support
the public interest requirements of the Exchange Act.\42\ In adopting
Rule 17Ad-22(e)(2), the Commission discussed comments it received
regarding the concept of skin-in-the-game as a potential tool to align
the various incentives of a covered clearing agency's stakeholders,
including management and clearing members.\43\ And, while the
Commission declined to include a specific skin-in-the-game requirement
in the rule, it stated its belief that ``the proper alignment of
incentives is an important element of a covered clearing agency's risk
management practices,'' and noted that skin-in-the-game ``may play a
role in those risk management practices in many instances.'' \44\ OCC's
current rules require the application management compensation and
excess capital as skin-in-the-game, which in turn should help further
align the interests of OCC's stakeholders, including OCC management and
Clearing Members.\45\
---------------------------------------------------------------------------

    \42\ 17 CFR 240.17Ad-22(e)(2).
    \43\ Covered Clearing Agency Standards, 81 FR at 70805-06.
    \44\ Covered Clearing Agency Standards, 81 FR at 70806.
    \45\ See CMP Approval Order at 5507.
---------------------------------------------------------------------------

    As described above, OCC's proposal would not reduce the resources
OCC would apply to address default losses or remove the current skin-
in-the-game component of OCC's rules. Rather, OCC proposes to set aside
a defined amount of capital for the sole purpose of absorbing losses
and shortfalls arising out of a Clearing Member default. OCC has
clearly stated the factors that the Board would consider when
determining the amount of resources to hold as skin-in-the-game, a
portion of which would comprise the Minimum Corporate Contribution. OCC
also proposes to establish a clear process for addressing reductions in
the Minimum Corporate Contribution arising out of a Clearing Member's
default. Accordingly, the Commission believes that the proposed changes
to establish a persistent minimum level of skin-in-the-game are
consistent with Rule 17Ad-22(e)(2) under the Exchange Act.\46\
---------------------------------------------------------------------------

    \46\ 17 CFR 240.17Ad-22(e)(2).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
Proposed Rule Change is consistent with the requirements of the
Exchange Act, and in particular, the requirements of Section 17A of the
Exchange Act \47\ and the rules and regulations thereunder.
---------------------------------------------------------------------------

    \47\ In approving this Proposed Rule Change, the Commission has
considered the proposed rules' impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\48\ that the Proposed Rule Change (SR-OCC-2021-003) be,
and hereby is, approved.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
---------------------------------------------------------------------------

    \49\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11606 Filed 6-2-21; 8:45 am]
BILLING CODE 8011-01-P


From:
<EMAIL_ADDRESS><EMAIL_ADDRESS>Sent:
Tuesday, August 02, 2016 2:55 PM
To:
Jones, DonnaLee<EMAIL_ADDRESS>Cc:
<EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS>Subject:
2015 Semi-Annual NESHAP Reports

Chris Potts
Senior Environmental Engineer
AK Steel Middletown Works
office:<PHONE_NUMBER>
cell:<PHONE_NUMBER>
fax:<PHONE_NUMBER>

<< 1H 2015 Coke Plant 5C Report.pdf >>
<< 1H 2015 Coke Plant 1L Report.pdf >>
<< 1H 2015 Benzene NESHAP Report.pdf >>
<< 2H 2015 Benzene NESHAP Report.pdf >>
<< 2H 2015 Coke Plant 1L Report.pdf >>
<< 2H 2015 Coke Plant 5C Report.pdf >>


[Federal Register: October 30, 2008 (Volume 73, Number 211)]
[Notices]
[Page 64609-64610]
[DOCID:fr30oc08-38]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

October 27, 2008.
    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:
    Docket Numbers: RP96-200-175.
    Applicants: CenterPoint Energy Gas Transmission Co.
    Description: CenterPoint Energy Gas Transmission Company submits a
notice of the termination of negotiated rate agreement with Anadarko
Energy Services Company, effective 10/31/08.
    Filed Date: 10/21/2008.
    Accession Number: 20081022-0323.
    Comment Date: 5 p.m. Eastern Time on Monday, November 03, 2008.

    Docket Numbers: RP99-176-169.
    Applicants: Natural Gas Pipeline Co of America LLC.
    Description: Natural Gas Pipeline Company of America LLC submits
First Revised Sheet 34C to FERC Gas Tariff, Seventh Revised Volume 1,
effective 11/1/08.
    Filed Date: 10/21/2008.
    Accession Number: 20081022-0324.
    Comment Date: 5 p.m. Eastern Time on Monday, November 03, 2008.

    Docket Numbers: RP09-29-000.
    Applicants: Questar Overthrust Pipeline Company.
    Description: Questar Overthrust Pipeline Company submits First
Revised Sheet 3 to its FERC Gas Tariff, Second Revised Volume 1-A,
effective 11/24/08.
    Filed Date: 10/22/2008.
    Accession Number: 20081023-0111.
    Comment Date: 5 p.m. Eastern Time on Monday, November 03, 2008.

    Docket Numbers: RP09-30-000.
    Applicants: Florida Gas Transmission Company, LLC.
    Description: Florida Gas Transmission Co, LLC submits Thirteenth
Revised Sheet 7 et al. to FERC Gas Tariff, Fourth Revised Volume 1,
effective 11/1/08.
    Filed Date: 10/24/2008.
    Accession Number: 20081024-0129.
    Comment Date: 5 p.m. Eastern Time on Wednesday, November 05, 2008.
    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. 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. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://

www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St., NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also 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>.

Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. E8-25911 Filed 10-29-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19259-19260]
[FR Doc No: 2013-07301]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Attendance at PJM Interconnection, L.L.C. Meetings

    The Federal Energy Regulatory Commission (Commission) hereby gives
notice that members of the Commission and Commission staff may attend
upcoming PJM Interconnection, L.L.C. (PJM) Members Committee and
Markets and Reliability Committee meetings, as well as other PJM
committee, subcommittee or task force meetings.\1\ The Commission and
Commission staff may attend the following meetings:
---------------------------------------------------------------------------

    \1\ For example, PJM subcommittees and task forces of the
standing committees (Operating, Planning and Market Implementation)
and senior standing committees (Members and Markets and Reliability)
meet on a variety of different topics; they convene and dissolve on
an as-needed basis. Therefore, the Commission and Commission staff
may monitor the various meetings posted on the PJM Web site.
---------------------------------------------------------------------------

PJM Members Committee

     March 28, 2013 (Wilmington, DE)
     April 25, 2013 (Wilmington, DE)
     May 16, 2013 (White Sulphur Springs, West VA)
    Date To Be Determined
     June 27, 2013 (Wilmington, DE)
     August 1, 2013 (Wilmington, DE)
     September 26, 2013 (Wilmington, DE)
     October 24, 2013 (Wilmington, DE)
     December 5, 2013 (Wilmington, DE)

PJM Markets and Reliability Committee

     March 28, 2013 (Wilmington, DE)
     April 25, 2013 (Wilmington, DE)
     May 30, 2013 (Wilmington, DE)
     June 27, 2013 (Wilmington, DE)
     August 1, 2013 (Wilmington, DE)
     August 29, 2013 (Wilmington, DE)
     September 26, 2013 (Wilmington, DE)
     October 24, 2013 (Wilmington, DE)
     December 5, 2013 (Wilmington, DE)

PJM Market Implementation Committee

     April 10, 2013 (Norristown, PA)
     May 8, 2013 (Norristown, PA)
     June 5, 2013 (Norristown, PA)
     July 10, 2013 (Norristown, PA)
     August 7, 2013 (Norristown, PA)
     September 11, 2013 (Norristown, PA)
     October 9, 2013 (Norristown, PA)
     November 6, 2013 (Norristown, PA)
     December 11, 2013 (Norristown, PA)
    The discussions at each of the meetings described above may address
matters at issue in pending proceedings before the Commission,
including the following currently pending proceedings:
    Docket No. EL05-121, PJM Interconnection, L.L.C.
    Docket No. EL08-14, Black Oak Energy LLC, et al., v. FERC
    Docket No. EL10-52, Central Transmission, L.L.C. v. PJM
Interconnection, L.L.C.
    Docket No. ER09-1148, PPL Electric Utilities Corporation
    Docket No. ER09-1256, Potomac-Appalachian Transmission Highline,
L.L.C.
    Docket Nos. ER09-1589 and EL10-6, FirstEnergy Service Company
    Docket Nos. ER10-253 and EL10-14, Primary Power, L.L.C.
    Docket No. ER11-1844, Midwest Independent Transmission System
Operator, Inc
    Docket Nos. ER11-2183 and EL11-32, American Electric Power Service
Corporation
    Docket Nos. ER11-2814 and ER11-2815, PJM Interconnection, L.L.C.
and American Transmission Systems, Inc.
    Docket No. ER11-4106, PJM Interconnection, L.L.C.
    Docket No. ER11-4628, PJM Interconnection, L.L.C.
    Docket No. EL12-8, DC Energy, L.L.C. and DC Energy Mid-Atlantic,
L.L.C. vs. PJM Interconnection, L.L.C.
    Docket No. EL12-54, Viridity Energy, Inc. v. PJM Interconnection,
L.L.C.
    Docket No. EL12-69, Primary Power LLC v. PJM Interconnection,
L.L.C.
    Docket No. AD12-1 and ER11-4081, Midwest Independent Transmission
    System Operator, Inc.
    Docket No. AD12-16, Capacity Deliverability Across the Midwest
Independent
    Transmission System Operator, Inc./PJM Interconnection, L.L.C. Seam
    Docket No. EL13-10, North American Natural Resources, Inc. v. PJM
Interconnection, L.L.C. et. al.
    Docket No. ER12-91, PJM Interconnection, L.L.C.
    Docket No. ER12-92, PJM Interconnection, L.L.C., et al.
    Docket No. ER12-513, PJM Interconnection, L.L.C.
    Docket No. ER12-1173, PJM Interconnection, L.L.C., et al.
    Docket No. ER12-1178, PJM Interconnection, L.L.C.
    Docket No. ER12-1204, PJM Interconnection, L.L.C.
    Docket No. ER12-1761, PJM Interconnection, L.L.C.
    Docket No. ER12-2274, Public Service Electric and Gas Company
    Docket No. ER12-2391, PJM Interconnection, L.L.C.
    Docket No. ER12-2399, PJM Interconnection, L.L.C.
    Docket No. ER12-2708, PJM Interconnection, L.L.C.
    Docket No. EL13-47, FirstEnergy Solutions Corporation v. PJM
Interconnection, L.L.C. et al.
    Docket No. ER13-90, Public Service Electric and Gas Company and PJM
Interconnection, L.L.C.
    Docket No. ER13-195, Indicated PJM Transmission Owners
    Docket No. ER13-198, PJM Interconnection, L.L.C.
    Docket No. ER13-232, American Electric Power Service Corporation

    Docket No. ER13-233, American Electric Power Service Corporation
    Docket No. ER13-234, American Electric Power Service Corporation
    Docket No. ER13-235, American Electric Power Service Corporation
    Docket No. ER13-236, American Electric Power Service Corporation
    Docket No. ER13-237, American Electric Power Service Corporation
    Docket No. ER13-238, American Electric Power Service Corporation
    Docket No. ER13-239, American Electric Power Service Corporation
    Docket No. ER13-240, American Electric Power Service Corporation
    Docket No. ER13-347, PJM Interconnection, L.L.C.
    Docket No. ER13-397, PJM Interconnection, L.L.C.
    Docket No. ER13-486, PJM Interconnection, L.L.C.
    Docket No. ER13-535, PJM Interconnection, L.L.C.
    Docket No. ER13-539. PJM Interconnection, L.L.C., et al.
    Docket No. ER13-694, PJM Interconnection, L.L.C.
    Docket No. ER13-703, PJM Interconnection, L.L.C.
    Docket No. ER13-793, Eastern Kentucky Power Cooperative
    Docket No. ER13-887, PJM Interconnection, L.L.C.
    Docket No. ER13-1018, Brandon Shores LLC and C.P. Crane LLC
    Docket No. ER13-1023, PJM Interconnection, L.L.C.
    Docket No. ER13-1025, Calpine Energy Services LP
    Docket No. ER13-1033, Linden VFT, LLC and PJM Interconnection,
L.L.C.
    Docket No. ER13-1044, PJM Interconnection, L.L.C.
    Docket No. ER13-1051, Linden VFT, LLC.
    Docket No. ER13-1052, PJM Interconnection, L.L.C. and the Midwest
Independent Transmission System Operator, Inc.
    For additional meeting information, see: http://www.pjm.com/committees-and-groups.aspx and http://www.pjm.com/Calendar.aspx.
    The meetings are open to stakeholders. For more information,
contact Valerie Martin, Office of Energy Market Regulation, Federal
Energy Regulatory Commission at<PHONE_NUMBER> or
<EMAIL_ADDRESS>
    Dated: March 22, 2013.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-07301 Filed 3-28-13; 8:45 am]
BILLING CODE 6717-01-P


Comment Info: =================

General Comment:75 days is not NEARLY enough time to receive and review all the information and comments that will likely be pouring in on the proposed regulations concerning e-cigarettes. I request that the comment period to be extended to 180 days.


[Federal Register Volume 82, Number 168 (Thursday, August 31, 2017)]
[Notices]
[Pages 41418-41420]
[FR Doc No: 2017-18469]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-D-2153]

Use of Real-World Evidence To Support Regulatory Decision-Making
for Medical Devices; Guidance for Industry and Food and Drug
Administration Staff; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability.

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

SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of the guidance entitled ``Use of Real-World Evidence
to Support Regulatory Decision-Making for Medical Devices.'' FDA is
issuing this guidance to clarify how we evaluate real-world data to
determine whether it may be sufficiently relevant and reliable to
generate the types of real-world evidence that can be used in FDA

regulatory decision-making for medical devices. The guidance describes
the circumstances when real-world evidence can be used, and the
scientific criteria that must be fulfilled in order to have confidence
in the data. Finally, the guidance describes some examples of actual
uses of real-world evidence that have already led to FDA decisions.

DATES: The announcement of the guidance is published in the Federal
Register on August 31, 2017.

ADDRESSES: You may submit either electronic or written comments on
Agency guidances at any time as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2016-D-2153 for ``Use of Real-World Evidence to Support Regulatory
Decision-Making for Medical Devices; Guidance for Industry and Food and
Drug Administration Staff.'' Received comments will be placed in the
docket and, except for those submitted as ``Confidential Submissions,''
publicly viewable at https://www.regulations.gov or at the Dockets
Management Staff office between 9 a.m. and 4 p.m., Monday through
Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.
    An electronic copy of the guidance document is available for
download from the internet. See the SUPPLEMENTARY INFORMATION section
for information on electronic access to the guidance. Submit written
requests for a single hard copy of the guidance document entitled ``Use
of Real-World Evidence to Support Regulatory Decision-Making for
Medical Devices'' to the Office of the Center Director, Guidance and
Policy Development, Center for Devices and Radiological Health, Food
and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5431,
Silver Spring, MD 20993-0002; or the Office of Communication, Outreach,
and Development, Center for Biologics Evaluation and Research, Food and
Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to
assist that office in processing your request.

FOR FURTHER INFORMATION CONTACT: Benjamin Eloff, Center for Devices and
Radiological Health, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 66, Rm. 2254, Silver Spring, MD 20993-0002,<PHONE_NUMBER>;
and Stephen Ripley, Center for Biologics Evaluation and Research, Food
and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301,
Silver Spring, MD 20993-0002,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    To protect and promote public health, FDA needs to understand and
evaluate the available evidence related to regulated products. For
medical devices, available evidence is traditionally comprised of non-
clinical and in some cases, clinical studies conducted and provided to
FDA by the device manufacturer or sponsor. However, FDA recognizes that
a wealth of data covering medical device experience exists and is
routinely collected in the course of treatment and management of
patients. Under certain circumstances, these real-world data (RWD) may
constitute real-world evidence (RWE), or clinical evidence regarding
the usage and potential benefits or risks of a medical product derived
from analysis of RWD, that may be of sufficient quality to help inform
or augment FDA's understanding of the benefit-risk profile of devices
at various points in their life cycle, and could potentially be used to
aid FDA in regulatory decision-making.
    This document describes the characteristics and sources of RWD and
characteristics of RWE that may be sufficient for use in making various
regulatory decisions. Because of its nature, the quality (i.e.,
relevance and reliability) of RWD can vary greatly across sources.
Likewise, there are many types of regulatory decisions with varying
levels of evidentiary needs. FDA's evidentiary standards for regulatory
decision-making are not changing. FDA encourages the use of RWE where
appropriate, and will evaluate whether the available RWE is

of sufficient relevance and reliability to address the specific
regulatory decision being considered.
    This guidance does not affect any Federal, State or local laws or
regulations or foreign laws or regulations that may otherwise be
applicable to the use or collection of RWE and that provide protections
for human subjects or patient privacy. This guidance should be used to
complement, but not supersede, other device-specific and good clinical
practice guidance documents. FDA considered comments received on the
draft guidance that published in the Federal Register of July 27, 2016
(81 FR 49228). FDA revised the guidance as appropriate in response to
the comments.

II. Significance of Guidance

    This guidance is being issued consistent with FDA's good guidance
practices regulation (21 CFR 10.115). The guidance represents the
current thinking of FDA on use of real-world evidence to support
regulatory decision-making for medical devices. It does not establish
any rights for any person and is not binding on FDA or the public. You
can use an alternative approach if it satisfies the requirements of the
applicable statutes and regulations. This guidance is not subject to
Executive Order 12866.

III. Electronic Access

    Persons interested in obtaining a copy of the guidance may do so by
downloading an electronic copy from the internet. A search capability
for all Center for Devices and Radiological Health guidance documents
is available at https://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/default.htm. Guidance
documents are also available at https://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/default.htm or https://www.regulations.gov. Persons unable to download
an electronic copy of ``Use of Real-World Evidence to Support
Regulatory Decision-Making for Medical Devices'' may send an email
request to<EMAIL_ADDRESS>to receive an electronic copy of
the document. Please use the document number 1500012 to identify the
guidance you are requesting.

IV. Paperwork Reduction Act of 1995

    This guidance refers to previously approved collections of
information found in FDA regulations and guidance. These collections of
information are subject to review by the Office of Management and
Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). The collections of information in 21 CFR part 807, subpart E,
have been approved under OMB control number 0910-0120; the collections
of information in 21 CFR part 814, subparts A through E (premarket
approval), have been approved under OMB control number 0910-0231; the
collections of information in 21 CFR part 814, subpart H (humanitarian
device exemption), have been approved under OMB control number 0910-
0332; the collections of information in 21 CFR part 812
(investigational device exemption) have been approved under OMB control
number 0910-0078; the collections of information in 21 CFR part 822
(postmarket surveillance) have been approved under OMB control number
0910-0449; the collections of information in 21 CFR 50.23 (exception
from general requirements for informed consent) have been approved
under OMB control number 0910-0586; the collections of information in
21 CFR part 54 (financial disclosure by clinical investigators) have
been approved under OMB control number 0910-0396; the collections of
information in 21 CFR 56.115 (institutional review boards records) have
been approved under OMB control number 0910-0130; and the collections
of information in 21 CFR parts 50 subpart B (informed consent of human
subjects) and 56 (institutional review boards) have been approved under
OMB control number 0910-0755. The collections of information in the
guidance ``Requests for Feedback on Medical Device Submissions: The
Pre-Submission Program and Meetings with Food and Drug Administration
Staff'' have been approved under OMB control number 0910-0756.

    Dated: August 25, 2017.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2017-18469 Filed 8-30-17; 8:45 am]
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[Federal Register Volume 80, Number 48 (Thursday, March 12, 2015)]
[Notices]
[Pages 13069-13070]
[FR Doc No: 2015-05645]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

Driver Qualifications; Regulatory Guidance Concerning the Use of
Computerized Employer Notification Systems for the Annual Inquiry and
Review of Driving Records

AGENCY: Federal Motor Carrier Safety Administration.

ACTION: Notice of regulatory guidance.

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SUMMARY: FMCSA provides regulatory guidance concerning the use of
State-operated employer notification systems (ENS) for the annual
inquiry and review of driving records required by 49 CFR 391.25. The
guidance explains the use of State-operated ENS that provide motor
carriers with a department of motor vehicle report for every State in
which the driver held either an operator's license, a commercial
driver's license (CDL), or permit when a driver is enrolled in the
system. Many State driver licensing agencies (SDLAs) provide ENS that
either automatically update requestors (push-system) on license status,
crashes and convictions of laws or regulations governing the operation
of motor vehicles or allow the requestor to regularly query the record
(pull-system) for this information. The use of these systems to check
the driving record, at least annually, satisfies the requirement for an
annual review of each driver's record. This includes when a third-party
is used to accumulate the records for a motor carrier. This revises the
Agency guidance issued in 2003 that referenced to a specific third-
party vendor.

DATES: This guidance is effective March 12, 2015.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas L. Yager, Chief, Driver and
Carrier Operations Division, Office of Bus and Truck Standards and
Operations, 1200 New Jersey Ave. SE., Washington, DC 20590, Telephone
202-366-4325, Email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Legal Basis

    The Secretary of Transportation has statutory authority to set
minimum standards for commercial motor vehicle safety. These minimum
standards must ensure that: (1) CMVs are maintained, equipped, loaded,
and operated safely; (2) the responsibilities imposed on operators of
CMVs do not impair their ability to operate the vehicles safely; (3)
the physical condition of CMV operators is adequate to enable them to
operate the vehicles safely; (4) the operation of CMVs does not have a
deleterious effect on the physical condition of the operators; and (5)
an operator of a commercial motor vehicle is not coerced by a motor
carrier, shipper, receiver, or transportation intermediary to operate a
commercial motor vehicle in violation of a regulation (49 U.S.C.
31136(a)(1)-(5), as amended). The Secretary also has broad power in
carrying out motor carrier safety statutes and regulations to
``prescribe recordkeeping and reporting requirements'' and to ``perform
other acts the Secretary considers appropriate'' (49 U.S.C. 31133(a)(8)
and (10)).
    The Administrator of FMCSA has been delegated authority under 49
CFR 1.87(f) to carry out the functions vested in the Secretary of
Transportation by 49 U.S.C. chapter 311, subchapters I, III and IV,
relating to commercial motor vehicle programs and safety regulation.

Background

    On January 13, 2003, FMCSA issued a letter to a company providing
regulatory guidance concerning the use of computerized employer
notification systems for the annual inquiry and review of driving
records required by 49 CFR 391.25. The guidance explained that the use
of a specific third-party computerized ENS that provides motor carriers
with a department of motor vehicle report for every State in which the
driver held either an operator's license, a CDL, or permit when a
driver is enrolled in the system, and provides an update anytime the
State licensing agency enters new information about license status,
crashes and convictions of laws or regulations governing the operation
of motor vehicles satisfies the requirement for an annual review of
each driver's record. However, the guidance referenced a specific
vendor providing such services to the motor carrier industry.
    The regulatory guidance issued to the specific company was
subsequently posted to FMCSA's Web site as question #4 to 49 CFR 391.25
(See http://www.fmcsa.dot.gov/regulations/title49/section/391.25?guidance). The 2003 guidance reads as follows:
    Question 4: Does the use of a third-party computerized system that
provides motor carriers with a complete department of motor vehicle
report for every State in which the driver held a commercial motor
vehicle operator's license or permit when a driver is enrolled in the
system, and then automatically provides an update anytime the State
licensing agency enters new information on the driving record, satisfy
the requirements of Sec.  391.25?
    Guidance: Yes. Since motor carriers would be provided with a
complete department of motor vehicle report for every State in which
the driver held a commercial motor vehicle operator's license or permit
when a driver is enrolled in the system, and then provided with an
update any time the State licensing agency enters new information on
the driving record, the requirements of Sec.  391.25(a) would be
satisfied. When the motor carrier manager reviews the information on
the driving record, and the License Monitor system records the identity
of the manager who conducted the review, the requirements of Sec.
391.25(b) and (c) would be satisfied.
    With regard to the requirement that the response from each State
agency, and a note identifying the person who performed the review, may
be maintained in the driver's qualification files, motor carriers may
satisfy the record keeping requirement by using computerized records in
accordance with 49 CFR 390.31. Section [390.31] allows all records that
do not require signatures to be maintained through the use of computer
technology provided the motor carrier can produce, upon demand, a
computer printout of the required data. Therefore, motor carriers using
an automated computer system would not be required to maintain paper
copies of the driving records, or a note identifying the person who
performed the review, in each individual driver qualification file
provided a computer printout can be produced upon demand of a Federal
or State enforcement official.

    Because the guidance made reference to one vendor, License Monitor,
it was not considered helpful by some in the industry for motor
carriers using systems other than the one operated by License Monitor.
The American Trucking Associations raised the issue with FMCSA and the
Agency agrees that the guidance should be revised to provide generic
guidance rather than vendor-specific guidance. In addition, since 2003,
several SDLAs have implemented ENS systems that provide the driver
record information to employers.

FMCSA's Decision

    In consideration of the above, FMCSA has determined that the
current regulatory guidance should be revised to make clear that any
State-operated ENS may be used to satisfy the requirements of 49 CFR
391.25, even if the information is accumulated by a third party. The
FMCSA revises Question 4 to 49 CFR 391.25 to read as follows:

Qualification of Drivers, Annual Inquiry and Review of Driving Record;
Regulatory Guidance for 49 CFR 391.25

    Question 4: Does the use of an employer notification system that
provides motor carriers with a department of motor vehicle report for
every State in which the driver held either an operator's license, a
commercial driver's license (CDL), or permit when a driver is enrolled
in the system and provides information about license status, crashes
and convictions of laws or regulations governing the operation of motor
vehicles on the driving record satisfy the requirement for an annual
review of each driver's record?
    Guidance: Yes. Since motor carriers would be provided with a
department of motor vehicle report for every State in which the driver
held a commercial motor vehicle operator's license or permit when a
driver is enrolled in the system and the State licensing agency
includes information about crashes and convictions of laws or
regulations governing the operation of motor vehicles on the driving
record, the requirements of Sec.  391.25(a) would be satisfied.
Generally, the requirements of Sec.  391.25(b) and (c) would be
satisfied if the employer notification system records the identity of
the motor carrier's representative who conducted the review when the
carrier's representative reviews the information on the driving record.
    The use of an employer notification system would meet the
requirements if either the motor carrier automatically receives updates
from the State (push-system) or can regularly access the system to
check for updates (pull-system), as long as the check occurs at least
once per year. In addition, receipt of these reports meets the
requirement for the annual check even if it is provided to the motor
carrier by a third-party.
    With regard to the requirement that the response from each State
agency, and a note identifying the person who performed the review, may
be maintained in the driver's qualification files, motor carriers may
satisfy the recordkeeping requirement by using computerized records in
accordance with FMCSA's Regulatory Guidance Concerning Electronic
Documents and Signatures, 75 FR 411, January 4, 2011. Therefore, motor
carriers using an automated employer notification computer system would
not be required to maintain paper copies of the driving records, or a
note identifying the person who performed the review, in each
individual driver qualification file provided documentation consistent
with FMCSA's January 4, 2011, guidance can be produced upon demand of a
Federal or State enforcement official.

    Issued on: March 2, 2015.
T.F. Scott Darling, III,
Acting Administrator.
[FR Doc. 2015-05645 Filed 3-11-15; 8:45 am]
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