[Federal Register: September 20, 2006 (Volume 71, Number 182)]
[Notices]
[Page 55037-55042]
[DOCID:fr20se06-92]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54437; File No. SR-CHX-2005-06]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Order Approving a Proposed Rule Change and Amendment No. 1 and Notice
of Filing and Order Granting Accelerated Approval to Amendment No. 2 to
a Proposed Rule Change Relating to Disciplinary and Delisting
Procedures

September 13, 2006.

I. Introduction

    On March 7, 2005, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposal to revise the Exchange's disciplinary and delisting
procedures. The Exchange filed Amendment No. 1 to the proposed rule
change on June 2, 2006. The proposed rule change, as amended by
Amendment No. 1, was published for comment in the Federal Register on
June 27, 2006.\3\ The Commission received no comments regarding the
proposal, as amended by Amendment No. 1. On August 10, 2006, the
Exchange filed Amendment No. 2 to the proposed rule change.\4\ This
order approves the proposal, as amended. In addition, the Commission is
publishing notice to solicit comments on, and is simultaneously
approving, on an accelerated basis, Amendment No. 2.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 54021 (June 20,
2006), 71 FR 36571 (``Notice'').
    \4\ Amendment No. 2 revises the proposal to: (1) Clarify that
the Exchange will use its emergency suspension authority under CHX
Art. VII, Rule 2(a)(1)(i) only with respect to CHX Participants, and
not with respect to associated persons of CHX Participants; (2)
confirm that the Exchange will not use its emergency suspension
authority under CHX Art. VII, Rule 2(a)(1)(i) unless the Exchange
believes that the rule violation suggests that a Participant is in
such financial or operational difficulty that the Participant cannot
be permitted to continue to do business as a Participant with safety
to investors, creditors, other Participants, or the Exchange; and
(3) clarify that only a Participant, but not an associated person of
a Participant, may hold a trading permit.
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II. Description of the Proposal

    The proposal revises a number of rules governing the CHX's
disciplinary and delisting procedures. According to the CHX, the
Exchange reviewed its rules, in part, to respond to the requirements of
the Commission's 2003 order instituting public administrative

proceedings against the Exchange,\5\ and in light of the Commission's
guidance that a self-regulatory organization (``SRO'') should ensure
that its ``regulatory function is strong, vigorous, and sufficiently
independent and insulated from improper influence from management or
any regulated entity.'' \6\
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    \5\ See Securities Exchange Act Release No. 48566 (September 30,
2003), Administrative Proceeding File No. 3-11282 (``Order''). The
Exchange noted that certain aspects of the proposed rule change are
based on the recommendations of the Independent Counsel appointed by
the terms of the Order.
    \6\ See Securities Exchange Act Release No. 48946 (December 17,
2003), 68 FR 74678 (December 24, 2003) (order approving File No. SR-
NYSE-2003-34).
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A. Authorization of Formal Disciplinary Actions and Other Proceedings

    Several CHX rules currently require the CHX's Chief Executive
Officer (``CEO'') to authorize the institution of disciplinary and
related proceedings.\7\ The proposal revises these rules to authorize
the CHX's Chief Regulatory Officer (``CRO''), rather than its CEO, to
institute these proceedings. The Exchange believes that requiring the
CRO, rather than the CEO, to authorize proceedings under these rules
will eliminate any appearance of a conflict of interest and bolster the
apparent and actual independence of the Exchange's regulatory
processes.\8\
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    \7\ See, e.g., CHX Art. VII, Rule 2, ``Emergency Suspensions''
(authorizing the CEO to suspend a Participant or associated person
under certain circumstances); CHX Art. XII, Rule 2(a), ``Minor
Infraction,'' (authorizing the CEO to censure a respondent or impose
a fine for a minor infraction); and CHX Article XII, Rule 2(d)
(renumbered by the proposal as 2(b), ``Collateral Proceedings'')
(authorizing the CEO to suspend or expel a Participant or associated
person sanctioned by another SRO). See also CHX Art. XII, Rule 1(b)
(requiring the CEO to direct the CHX's staff to prefer written
charges if it appears to the CEO that there has been a violation of
the CHX's rules).
    \8\ Although the CRO reports to the CEO, and therefore could
potentially be influenced by the CEO's views on a proposed
disciplinary matter, the Exchange noted that the CRO is required to
appear before, and report on the Exchange's regulatory programs to,
the Exchange's Regulatory Oversight Committee not less than
quarterly. The Regulatory Oversight Committee, a committee of the
CHX's Board of Directors (``Board'') composed predominately of
independent directors, is charged with oversight of the Exchange's
regulatory function. The Exchange believes that this review by the
Regulatory Oversight Committee serves as a reasonable mechanism to
prevent any conflict of interest from interfering with the
Exchange's regulatory role.
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    The proposal will allow either the CRO or the CEO to institute
proceedings under CHX Art. XI, Rule 8, ``Operational Capability,''
based upon a Participant's failure to maintain operational capability,
and to impose restrictions on Participant Firm operations under CHX
Art. XI, Rule 3(d), ``Restrictions on Operations,'' relating to net
capital and aggregate indebtedness requirements. The Exchange believes
that allowing either the CEO or the CRO to authorize proceedings under
these rules is appropriate because they may involve a mixture of
business and regulatory concerns.

B. Initial Decision by Hearing Officers

    To eliminate any appearance of a conflict of interest, the proposal
eliminates the provisions in current CHX Art. XII, Rule 5(b),
``Decision,'' that authorize the CEO to review a Hearing Officer's
proposed decision and modify its conclusions, remand the matter for
additional findings or supplemental proceedings, or conduct further
proceedings himself.\9\ The revised rule provides that the Hearing
Officer's decision will be final, although it may be appealed to a
Judiciary Committee or to the Board, as applicable, in accordance with
CHX Art. XII, Rule 6.
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    \9\ The proposal renumbers this provision as CHX Art. XII, Rule
5(f).
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C. Criteria for the Selection of Hearing Officers in Disciplinary and
Delisting Proceedings

    The proposal revises CHX Article XII, Rule 5, ``Hearing
Procedure,'' to delineate the criteria that the CEO must consider in
selecting a Hearing Officer for a disciplinary proceeding \10\ and to
create a process through which a respondent may object to a particular
Hearing Officer on the grounds of bias or conflict of interest.\11\ The
proposal adopts identical criteria and objection procedures with
respect to Hearing Officers for delisting hearings.\12\
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    \10\ See CHX Art. XII, Rule 5(e), ``Appointment of Hearing
Officer.'' Specifically, the rule states that the CEO should give
reasonable consideration to a prospective Hearing Officer's
professional competence and reputation, experience in the securities
industry, familiarity with the subject matter involved, the absence
of bias and any conflict of interest, and any other relevant
factors.
    \11\ See CHX Art. XII, Rule 5(h), ``Impartiality of Hearing
Officer.'' The rule permits a respondent to file a motion seeking
the disqualification of a Hearing Officer for bias or conflict of
interest within 15 days of the Hearing Officer's appointment.
    \12\ See CHX Art. XXVIII, Rule 4(d).
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D. Elimination of Redundant Procedures

    The proposal eliminates the summary hearing process in current CHX
Art. XII, Rule 2(b), ``Summary Hearing and Penalty,'' which the
Exchange believes is redundant of other CHX disciplinary processes and,
therefore, unnecessary. Similarly, the proposal deletes the suspension
and termination rules applicable to specialists, odd-lot dealers, and
market makers in CHX Articles XXX, XXXI, and XXXIV, respectively,
because the Exchange believes that these provisions are obsolete and
redundant of the Emergency Suspension provisions provided under CHX
Art. VII, Rule 2.

E. Appeal of Disciplinary Proceedings

    The proposal revises CHX Art. XII, Rule 6 to allow the Exchange, as
well as a respondent, to appeal decisions to a Judiciary Committee.\13\
Similarly, the proposal revises CHX Art. XXVIII, Rule 4(e) to allow the
Exchange, as well as an issuer, to appeal the decision of a Hearing
Officer in a delisting proceeding.
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    \13\ Specifically, the revised rule allows the Exchange to
appeal an order issued under CHX Art. XII, Rules 2(b), 4(b), and 5.
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    In addition, the proposal streamlines the current appellate review
process for disciplinary actions. Currently, appeals are heard first by
a Judiciary Committee, then by the Executive Committee and finally, on
a discretionary basis, by the Board.\14\ The proposal eliminates
appellate review by the Executive Committee and provides that appeals
will be heard by a Judiciary Committee and, on a discretionary basis,
by the full Board.\15\ The Exchange believes that the revised
procedures should reduce the time required to reach a final judgment,
thus contributing to the fair and effective enforcement of the
Exchange's rules.
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    \14\ See CHX Art. XII, Rule 6.
    \15\ See CHX Art. XII, Rule 6.
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F. Failure to Promptly Pay Fines

    Under CHX Art. XIV, Rule 10, ``Failure to Pay Debts,'' a
Participant who fails to pay a fine owed to the Exchange within 60 days
may be suspended, after due notice, until payment is made. The proposal
revises this rule to authorize the Exchange to initiate a disciplinary
proceeding under Art. XII against a Participant or associated person
for the failure to pay a debt owed to the Exchange. The Exchange
believes that the revised rule will provide the Exchange with the
flexibility to assess additional fines or other sanctions, either in
lieu of or in addition to a suspension, as an added inducement to avoid
late payment of a fine owed to the Exchange.

G. Procedural Changes

    The proposal revises several CHX rules to provide greater clarity
to the Exchange's disciplinary and delisting procedures. In this
regard, the proposal sets forth clear timeframes for responding to
charges, scheduling hearings, filing motions, and issuing orders.\16\
The proposal also: (i) Specifies

the information that must be included in certain notices; \17\ (ii)
creates limited rights to prehearing discovery for all parties to a
proceeding; \18\ (iii) sets timeframes for motions and appeals; \19\
(iv) confirms that the Board or the Executive Committee could direct
the CRO to initiate a disciplinary proceeding; \20\ (v) confirms that a
Hearing Officer must make specific findings as to each proffered charge
and impose an appropriate sanction for violations that are found to
have occurred; \21\ (vi) clarifies that fines assessed under the
summary procedure of CHX Art. XII, Rule 2 are not publicly reported,
except as may be required by Rule 19d-1 under the Act; \22\ and (vii)
confirms that the three-person Board panel that hears an appeal from an
emergency suspension decision will consist of at least two public
directors on the Board.\23\ The proposal also adopts provisions that
set forth the required content of settlement agreements in disciplinary
proceedings.\24\
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    \16\ For example, the proposal revises CHX Art. XII, Rule 5, to
require that: (i) A respondent file a written answer to charges
within 30 days from the date of service of the charges; (ii) the
Hearing Officer schedule a hearing within 30 days after the filing
of an answer; and (iii) the Hearing Officer ordinarily issue an
order within 90 days after the conclusion of a hearing. Similarly,
the proposal revises CHX Art. XXVIII, Rule 4(d), ``Hearing,'' to
require that a Hearing Officer in a delisting hearing to schedule a
hearing within 30 days after receipt of an issuer's demand for a
hearing, and that the Hearing Officer issue an order within 90 days
after the conclusion of a hearing.
    \17\ Specifically, the proposal revises Article XII, Rule 1(b),
``Written Charges,'' to state that a respondent must be served with
written charges identifying with specificity each Exchange rule or
provision of the federal securities laws alleged to have been
violated. The proposal revises CHX Art. XII, Rule 2(a), ``Minor
Infraction,'' to state explicitly that the person against whom a
fine is imposed shall be served with a written statement (the
``Notice of Fines''), signed by the CRO or his designee, setting
forth: (i) The rule(s) or policy(ies) alleged to have been violated;
(ii) the act or omission constituting each such violation; (iii) the
fine imposed for each such violation; (iv) the date on which such
action is taken; and (v) the date on which such determination
becomes final and such fine becomes due and payable to the Exchange,
or on which such action must be contested. The Exchange represents
that it currently provides this notice to persons against whom a
fine is imposed, and that the language added to the rule confirms
that this practice should continue.
    \18\ The parties must exchange a list of witnesses that they
plan to call to testify at least 30 days before the hearing. See CHX
Art. XII, Rule 5(c)(1). In addition, any party may request
production of some or all of the documents that an opposing party
intends to introduce as evidence. This request must be made at least
45 days prior to the hearing, and the documents must be produced at
least 30 days before the hearing. See CHX Art. XII, Rule 5(c)(2). A
party that does not identify witnesses or produce requested
documents will be barred from presenting those witnesses or
documents at the hearing, unless the party seeking to introduce the
evidence can show good cause for the failure to earlier identify the
witnesses or documents and can establish that the failure to allow
the presentation of the evidence would result in undue hardship to
that party. See CHX Art. XII, Rules 5(c)(1) and 5(c)(2).
    \19\ See, e.g., CHX Art. XII, Rule 5(h) (regarding motions to
disqualify the hearing examiner) and CHX Art. XII, Rule 6(a)
(regarding appeals to the Judiciary Committee).
    \20\ See CHX Art. XII, Rule 1(b)(2).
    \21\ See CHX Art. XII, Rule 5(f).
    \22\ See CHX Art. XII, Rule 2(a).
    \23\ See CHX Art. VII, Rule 2(b).
    \24\ See CHX Art. XII, Rule 1(d). The proposal deletes the
current provisions in CHX Art. XII, Rule 2(c) governing settlement
agreements and adopts new Rule 1(d) of CHX Art. XII. This provision
confirms that a respondent could settle a proceeding at any time by
entering into a settlement agreement with the Exchange without
admitting or denying the charges, except as to jurisdiction, which
must be admitted. The settlement agreement must contain a waiver by
the respondent of all rights to appeal and a proposed penalty to be
imposed, which must be reasonable under the circumstances and
consistent with the seriousness of the alleged violations. The CRO
will have the sole right to approve a proposed settlement agreement.
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H. Removal of Securities

    The proposal revises CHX Art. XXVIII, Rule 4, ``Removal of
Securities,'' to provide that the Listing Unit of the CHX's Market
Regulation Department, rather than the Board, will make the initial
determination to delist a security. The proposal also eliminates the
CEO's review of a Hearing Officer's findings with respect to a
delisting. In addition, the proposal confirms that a Hearing Officer's
decision is final unless a review is specifically demanded,\25\ and
sets forth the process and standards that the Executive Committee must
follow with respect to any appeal of a Hearing Officer's decision.\26\
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    \25\ Appeals from a Hearing Officer's decision would be heard by
the Executive Committee. See CHX Art. XXVIII, Rule 4(e).
    \26\ See CHX Art. XXVIII, Rules 4(d) and (e). As noted above,
the proposal also adopts provisions setting forth the criteria that
a CEO must consider in selecting a Hearing Officer for a delisting
proceeding and provides a process for objecting to a Hearing Officer
on the grounds of bias or conflict of interest. See notes 10-12,
supra, and accompanying text.
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I. Role of Exchange Counsel

    The proposal clarifies the role of Exchange counsel in disciplinary
and delisting proceedings by providing that, in both types of
proceedings, the Exchange counsel acting as counsel to the Hearing
Officer may not be an employee of the CHX's Market Regulation
Department and may not have directly participated in any examination,
investigation, or decision associated with the initiation or conduct of
the proceeding.\27\
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    \27\ See CHX Art. XII, Rule 5(g) and CHX Art. XXVIII, Rule 4(d).
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J. Additional Changes

    The proposal also revises several terms used throughout CHX Art.
XII. For example, the proposal revises CHX Art. XII to substitute the
term ``respondent'' for ``accused'' and ``hearing'' for ``trial.''

K. Effective Date of the Rule Changes

    The Exchange states that the rule changes contained in the proposal
will apply to any formal disciplinary proceeding, suspension decision,
or delisting proceeding that the Exchange initiates on or after a date
that immediately follows the date of the Commission's approval. The
Exchange will issue a notice to Participants announcing this date.

L. Amendment No. 2

    CHX Art. VII, Rule 2(a)(1)(i), as amended, provides the Exchange
with emergency suspension authority over a Participant that has failed
to perform its contracts, is insolvent, or is in such financial or
operational condition or otherwise conducting its business in such a
manner that the Participant cannot be permitted to continue in business
with safety to its customers, creditors, or the Exchange, including a
reasonable belief that the Participant is violating and will continue
to violate any provision of the CHX's rules, the federal securities
laws or rules or regulations thereunder, or any condition or
restriction imposed pursuant to the provisions of CHX Art. XI, Rule
3(d), or CHX Art. XI, Rule 8(a). Amendment No. 2 revises the proposal
to: (1) Clarify that the Exchange will use its emergency suspension
authority under CHX Art. VII, Rule 2(a)(1)(i) only with respect to CHX
Participants, and not with respect to associated persons of CHX
Participants; (2) confirm that the Exchange will not use its emergency
suspension authority under CHX Art. VII, Rule 2(a)(1)(i) unless the
Exchange believes that the rule violation suggests that a Participant
is in such financial or operational difficulty that the Participant
cannot be permitted to continue to do business as a Participant with
safety to investors, creditors, other Participants, or the Exchange;
and (3) clarify that only a Participant, but not an associated person
of a Participant, may hold a trading permit. The proposal also revises
CHX Art. VII, Rule 2(a)(1) to allow the Exchange to use its emergency
suspension authority with respect to an associated person who has been
barred or suspended from being associated with a member of any SRO.

III. Discussion

    After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to

a national securities exchange.\28\ In particular, the Commission finds
that the proposed rule change, as amended, is consistent with Section
6(b)(1) of the Act,\29\ which requires, among other things, that a
national securities exchange have the capacity to enforce compliance by
its members and persons associated with its members with the provisions
of the Act and the rules and regulations thereunder, and with the rules
of the exchange; with Section 6(b)(5) of the Act,\30\ which requires,
among other things, that the rules of a national securities exchange be
designed to prevent fraudulent and manipulative acts and practices, 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; and with Section 6(b)(7) of the Act,\31\ which requires that
the rules of a national securities exchange provide a fair procedure
for the disciplining of members and persons associated with members. In
addition, the Commission finds that the proposal, as amended, is
consistent with Section 6(d)(1) of the Act,\32\ which requires, among
other things, that a national securities exchange, in determining
whether a member or associated person should be disciplined, bring
specific charges, notify the member or associated person of, and give
him an opportunity to defend against the charges, and keep a record.
The Commission also finds that the proposal, as amended, is consistent
with Section 6(d)(3) of the Act,\33\ which, among other things, allows
a national securities exchange to summarily suspend a member or person
associated with a member who has been and is expelled or suspended from
any SRO or barred or suspended from being associated with a member of
any SRO, and to summarily suspend a member who is in such financial or
operating difficulty that the exchange determines and so notifies the
Commission that the member cannot be permitted to continue to do
business as a member with safety to investors, creditors, other
members, or the exchange.
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    \28\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \29\ 15 U.S.C. 78f(b)(1).
    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78f(b)(7).
    \32\ 15 U.S.C. 78f(d)(1).
    \33\ 15 U.S.C. 78f(d)(3).
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    The Commission finds that the rule changes \34\ requiring the CRO,
rather than the CEO, to authorize the institution of disciplinary and
related proceedings could help to reduce the appearance of, or
potential for, a conflict of interest in the institution of such
proceedings, thereby helping the Exchange to provide a fair procedure
for disciplining members, as required by Section 6(b)(7) of the
Act,\35\ and helping to separate the CHX's business and regulatory
functions. Similarly, the Commission finds that the proposal to
eliminate the provisions in current CHX Art. XII, Rule 5(b) that allow
the CEO to review and modify a Hearing Officer's proposed decision
should help to eliminate the appearance of a conflict of interest in
the Exchange's disciplinary process. The Commission believes that the
proposal to amend CHX Art. XI, Rules 3(d) and 8(a), to allow the CRO,
as well as the CEO, to authorize proceedings under those rules is
reasonable because those rules govern matters that raise both business
and regulatory concerns.
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    \34\See note 7, supra, and accompanying text.
    \35\ Although the CRO reports to the CEO, the CRO must report
not less than quarterly to the Board's Regulatory Oversight
Committee, which is composed predominately of independent directors
and assists the Board in monitoring the design, implementation, and
effectiveness of the CHX's regulatory programs. See CHX Article IV,
Rule 4, ``Regulatory Oversight Committee.''
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    The Commission finds that the adoption of criteria that the CEO
should consider in selecting a Hearing Officer for disciplinary
proceedings, and the procedures for objecting to a Hearing Officer in a
disciplinary proceeding,\36\ are consistent with Section 6(b)(7) of the
Act because they should help the Exchange to provide a fair procedure
for disciplining members. The Commission finds that the comparable
provisions relating to the criteria for selection of Hearing Officers
for delisting proceedings \37\ are consistent with Section 6(b)(5) of
the Act because they should help the Exchange to provide a fair
procedure for delisting proceedings.
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    \36\ See notes 10-12, supra, and accompanying text.
    \37\ See CHX Art, XXVIII, Rule 4(d).
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    Similarly, the Commission believes that the rule changes
prohibiting the person acting as Exchange counsel to the Hearing
Officer in a disciplinary or delisting proceeding from being an
employee of the CHX's Market Regulation Department or from having
directly participated in any examination, investigation, or decision
associated with the initiation or conduct of the proceeding \38\ should
help the Exchange to provide fair disciplinary and delisting
proceedings by ensuring that such counsel did not participate in the
initiation or conduct of the matter before the Hearing Officer.
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    \38\ See CHX Art, XII, Rule 5(g) and CHX Art. XXVIII, Rule 4(d).
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    The Exchange believes that the procedures in current CHX Art. XII,
Rule 2(b), and in CHX Articles XXX, XXXI, and XXXIV are obsolete and
redundant of the emergency suspension provisions of CHX Art. VII, Rule
2.\39\ Accordingly, the Commission believes that the deletion of these
provisions should simplify the CHX's rules.
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    \39\ See Section II.D., supra.
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    The Commission finds that the rule changes \40\ allowing the
Exchange to appeal the decision of the Hearing Officer in disciplinary
and delisting proceedings are consistent with Section 6(b)(1) of the
Act because these provisions could enhance the Exchange's ability to
enforce its rules and the federal securities laws and the rules and
regulations thereunder. In addition, the Commission believes that the
changes to CHX Art. XII, Rule 6 that eliminate Executive Committee
review of Judiciary Committee decisions could allow disciplinary
matters to be resolved more efficiently. The Commission notes that
respondents will continue to have the ability to appeal a Hearing
Officer's decision to the Judiciary Committee, and that the Board will
continue to have the ability to review decisions of the Judiciary
Committee on a discretionary basis.\41\ Accordingly, although the
proposal eliminates Executive Committee review of decisions by the
Judiciary Committee, the Commission believes that the CHX's rules will
continue to provide a fair procedure for disciplining members,
consistent with Section 6(b)(7) of the Act.
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    \40\ See Section II.E., supra.
    \41\ See CHX Art. XII, Rule 6.
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    The Commission believes that the amendments to CHX Art. XIV, Rule
10 authorizing the Exchange to initiate a disciplinary proceeding under
CHX Art. XII for failure to pay a debt owed to the Exchange could
facilitate the Exchange's collection of fines by providing the Exchange
with an additional mechanism for sanctioning Participants, associated
persons, and other persons or entities subject to the CHX's
jurisdiction that fail to pay fines within the time prescribed in the
CHX's rules.
    As described more fully in Section II.G., supra, the proposal also
revises the CHX's rules to, among other things, set timeframes for
filing motions and appeals, scheduling hearings, and issuing orders;
provide for pre-hearing discovery, with timeframes for exchanging
witness lists and producing documents; and specify the required content
of settlement agreements in

disciplinary proceedings. The Commission finds that these changes
should help the Exchange to provide a fair procedure for disciplining
members, as required by Section 6(b)(7) of the Act, by adding clarity
and specificity to the CHX's disciplinary rules and by establishing
timeframes for respondents and Hearing Officers that could facilitate
the timely resolution of disciplinary matters.
    The Commission finds that proposal to revise CHX Art. XII, Rule
1(b) and CHX Art. XII, Rule 2(a) \42\ to clarify in its rules that the
Exchange must provide a respondent with written charges identifying the
laws or rules allegedly violated is consistent with Section 6(d)(1) of
the Act, which, among other things, requires that a national securities
exchange, in a proceeding to determine whether to discipline a member
or associated person, bring specific charges, notify the member or
person of, and give him an opportunity to defend against, the charges,
and keep a record.\43\ Similarly, the Commission finds that the
proposed changes to CHX Art. XII, Rule 5(f) requiring, among other
things, that a Hearing Officer's order make specific findings as to
each charge brought by the Exchange and, where a violation is found,
impose an appropriate sanction,\44\ is consistent with the requirements
in Section 6(d)(1)(B) and (C) of the Act that a national securities
exchange's determination to impose a disciplinary sanction be supported
by a statement setting forth the specific law, rule, or regulation
violated and the sanction imposed and the reasons therefor.
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    \42\ See note 17, supra.
    \43\ The Exchange has represented that it currently provides
respondents with written notice of the charges and that the proposed
rule change is intended to confirm that this practice should
continue.
    \44\ See Section II.G., supra.
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    As described more fully above,\45\ the proposal revises CHX Art.
VII, Rule 2(a)(1) to clarify the manner in which the Exchange would use
its emergency suspension authority and to allow the Exchange to use its
emergency authority with respect to a Participant that it believes is
violating any condition or restriction imposed pursuant to the
provisions of CHX Art. XI, Rule 3(d), or CHX Art. XI, Rule 8(a).\46\
The Commission finds that these changes are consistent with Section
6(d)(3)(B) of the Act, which allows a national securities exchange to
summarily suspend a member who is in such financial or operating
difficulty that the exchange determines and so notifies the Commission
that the member cannot be permitted to continue to do business as a
member with safety to investors, creditors, other members, or the
exchange. Similarly, the Commission finds that the revisions to CHX
Art. VII, Rule 2(a)(1)(ii) that allow the Exchange to use its emergency
authority with respect to an associated person barred or suspended from
being associated with a member of any SRO is consistent with Section
6(d)(3)(A) of the Act, which allows a national securities exchange to
summarily suspend a member or associated person who has been and is
expelled or suspended from any SRO or barred or suspended from being
associated with a member of any SRO.
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    \45\ See Section II.L., supra.
    \46\ CHX Art. XI, Rule 3(d) allows the CEO or the CRO to impose
restrictions or conditions on a Participant that fails to maintain
necessary operational personnel or facilities or engages in an
activity that casts doubt on the Participant's continued compliance
with the CHX's net capital requirements. CHX Art. XI, Rule 8(a)
allows the CEO or the CRO to impose conditions or restrictions on a
Participant that fails to maintain adequate operational capability,
including making and keeping current books and records in accordance
with Rules 17a-3 and 17a-4 under the Act, 17 CFR 240.17a-3 and 17a-
4.
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    In addition, the proposal confirms that the three-person Board
panel that hears an appeal from an emergency suspension will include
two public members of the Board.\47\ The Commission believes that this
change could help to ensure the impartiality of the panels that hear
appeals from emergency suspensions, thereby helping the Exchange to
provide a fair procedure for disciplining members and associated
persons, as required by Section 6(b)(7) of the Act.
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    \47\ See CHX Art. VII, Rule 2(b).
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    The Commission finds that the changes to CHX Art. XXVIII, Rule 4,
relating to delisting procedures, are intended to clarify the CHX's
delisting procedures and to ensure the fairness of the CHX's delisting
proceedings and thus are consistent with the Act. In this regard, the
proposal eliminates the CEO's review of a Hearing Officer's findings
with respect to a delisting, thereby avoiding the appearance of, or
potential for, a conflict of interest. Similarly, the proposal revises
the CHX's rules to provide that the Listing Unit of the CHX's Market
Regulation Department, rather than the Board, will make the initial
determination to delist a security, thereby ensuring that the entity
that initiates a delisting will not participate in an appellate review
of the initial delisting determination. An issuer may request a hearing
of a delisting before a Hearing Officer, and the Hearing Officer's
decision will be final unless either the issuer or the Exchange
requests review of the decision by the Executive Committee of the CHX
Board.\48\ The Executive Committee must uphold the Hearing Officer's
decision if it finds that the Hearing Officer's factual conclusions are
supported by substantial evidence and his or her decision is not
arbitrary, capricious, or an abuse of discretion.\49\ The Commission
believes that adopting these processes and standards for review should
help promote fairness with respect to the CHX's appellate process.
---------------------------------------------------------------------------

    \48\ See CHX Art. XXVIII, Rule 4(e).
    \49\ See id.
---------------------------------------------------------------------------

    The Commission finds that the technical changes to revise certain
terms used throughout the CHX's disciplinary rules are consistent with
the Act.
    The Commission finds good cause for approving Amendment No. 2 prior
to the thirtieth day after the date of publication of notice of filing
thereof in the Federal Register. As described more fully above,
Amendment No. 2 clarifies the proposal by confirming that the Exchange
will use its emergency suspension authority under CHX Art. VII, Rule
2(a)(1)(i) only with respect to Participants and only when the Exchange
believes that a rule violation suggests that a Participant is in such
financial or operational difficulty that the Participant cannot be
permitted to continue to do business as a Participant with safety to
investors, creditors, other Participants, or the Exchange. Accordingly,
the Commission finds that it is consistent with Sections 6(b)(5) and
19(b) of the Act to approve Amendment No. 2 on an accelerated basis.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 2, including whether Amendment No. 2
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-CHX-2005-06 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CHX-2005-06. 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 inspection and
copying in the Commission's Public Reference Room. 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-CHX-2005-06 and should be submitted on or before October 11, 2006.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\50\ that the proposed rule change (SR-CBOE-2005-06), as amended,
is approved.
---------------------------------------------------------------------------

    \50\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\51\
---------------------------------------------------------------------------

    \51\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-15588 Filed 9-19-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 85, Number 156 (Wednesday, August 12, 2020)]
[Notices]
[Pages 48741-48743]
[FR Doc No: 2020-17557]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89491; File No. SR-ICC-2020-010]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Proposed Rule Change Relating to the ICC Risk Management
Model Description

August 6, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ and Rule 19b-4,\2\ notice is hereby given that on July 29,
2020, ICE Clear Credit LLC (``ICC'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
primarily by ICC. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The principal purpose of the proposed rule change is to make
changes to ICC's Risk Management Model Description. These revisions do
not require any changes to the ICC Clearing Rules (the ``Rules'').\3\
---------------------------------------------------------------------------

    \3\ Capitalized terms used but not defined herein have the
meanings specified in the Rules.
---------------------------------------------------------------------------

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, ICC 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. ICC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

(a) Purpose
    ICC proposes to revise its Risk Management Model Description in
connection with its proposed launch of the clearing of credit default
index swaptions (``Index Swaptions'').\4\ ICC has previously filed with
the Commission changes to certain other policies and procedures related
to the clearing of Index Swaptions (the ``Swaption Rule Filings'').\5\
As set out in the Swaption Rule Filings, ICC intends to adopt or amend
certain related policies and procedures in preparation for the launch
of clearing of Index Swaptions and does not intend to commence clearing
of Index Swaptions until all such policies and procedures have been
approved by the Commission or otherwise become effective. Accordingly,
ICC proposes to make such changes to the Risk Management Model
Description effective following the approval of all such policies and
procedures and the completion of the ICC governance process surrounding
the Index Swaptions product expansion.
---------------------------------------------------------------------------

    \4\ Index Swaptions are also referred to herein and in the Risk
Management Model Description as ``index options'' or ``index CDS
options'', or in similar terms.
    \5\ SEC Release No. 34-87297 (Oct. 15, 2019) (approval), 84 FR
56270 (Oct. 21, 2019) (SR-ICC-2019-007); SEC Release No. 34-89142
(June 24, 2020) (approval), 85 FR 39226 (June 30, 2020) (SR-ICC-
2020-002); SEC Release No. 34-89072 (June 16, 2020) (notice), 85 FR
37483 (June 22, 2020) (SR-ICC-2020-008).
---------------------------------------------------------------------------

    As discussed in the Swaption Rule Filings, pursuant to an Index
Swaption, one party (the ``Swaption Buyer'') has the right (but not the
obligation) to cause the other party (the ``Swaption Seller'') to enter
into an index credit default swap transaction at a pre-determined
strike price on a specified expiration date on specified terms. In the
case of Index Swaptions that would be cleared by ICC, the underlying
index credit default swap would be limited to certain CDX and iTraxx
Europe index credit default swaps that are accepted for clearing by
ICC, and which would be automatically cleared by ICC upon exercise of
the Index Swaption by the Swaption Buyer in accordance with its terms.
    The proposed changes amend the Risk Management Model Description to
incorporate a stochastic implied mean absolute deviation (``MAD'')
feature in connection with the proposed launch of the clearing of Index
Swaptions and make certain other minor clarification changes. The
proposed amendments would modify Section VII of the Risk Management
Model Description to add a subsection on stochastic implied MAD
modeling. In the Swaption Rule Filings, ICC proposed to modify the
integrated spread response component of the margin model to incorporate
an options-implied credit spread distribution, which includes a scale
parameter related to the MAD implied from swaption prices (``implied
MAD'').\6\ ICC proposes enhancements to its approach to feature a
stochastic implied MAD, which presents a more advanced risk modeling
technique for option instruments in rapidly changing market conditions
and high-volatility market environments. Currently, the model assumes a
static implied MAD formulation where the implied MAD scale does not
change in response to the simulated underlying index levels.
---------------------------------------------------------------------------

    \6\ SEC Release No. 34-89142 (June 24, 2020) (approval), 85 FR
39226 (June 30, 2020) (SR-ICC-2020-002).
---------------------------------------------------------------------------

    Under the proposed changes, the risk methodology for clearing Index
Swaptions would consider the risk arising from the joint fluctuations
of the underlying index levels and the options implied MAD scales in
proposed Subsection VII.3. ICC would identify and describe the
distribution that the changes of the implied MAD scales associated with
each option expiry follow. ICC would also discuss and provide the
rationale for its selected parameter estimation approach. Specifically,
ICC would set out how the distribution parameters are estimated for a
set of implied MAD changes. The proposed changes further explain how
ICC models the joint fluctuations of the underlying index levels and
the options implied MAD scales. Proposed Figure 12 illustrates the
simulation approach and is thus intended to replace Figure 11 in
Subsection VII.2.2 that ICC proposes to remove. Relatedly, in
Subsection VII.5.1.1 with respect to instrument profit/loss (``P/L'')
estimations for Index Swaptions, ICC proposes to add reference to
notations related to the stochastic implied MAD from proposed
Subsection VII.3.
    ICC also proposes other minor clarification changes to the Risk
Management Model Description. ICC propose to reference the
clearinghouse in Subsection III.6 when describing where certain data is
obtained and to abbreviate a term in Subsection VI.2. Given the
addition of Subsection VII.3, ICC proposes to renumber the subsections
in Section VII accordingly. ICC further proposes clarifications to a
formula and its notes in Subsection VII.5.1.2 regarding risk factor P/L
estimations, including with respect to the description of an
alternative option position P/L computation, subsequent risk
estimations and the addition of certain payments to portfolio
requirements.
(b) Statutory Basis
    ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \7\ and the regulations
thereunder applicable to it, including the applicable

standards under Rule 17Ad-22.\8\ In particular, Section 17A(b)(3)(F) of
the Act \9\ requires that the rule change be consistent with the prompt
and accurate clearance and settlement of securities transactions and
derivative agreements, contracts and transactions cleared by ICC, the
safeguarding of securities and funds in the custody or control of ICC
or for which it is responsible, and the protection of investors and the
public interest. The proposed rule change would enable a stochastic
implied MAD feature in the Risk Management Model Description in
connection with the proposed launch of the clearing of Index Swaptions.
In contrast to the static implied MAD formulation where the implied MAD
scale does not change in response to the simulated underlying index
levels, the stochastic implied MAD approach considers the joint
fluctuations of the underlying index levels and the options implied MAD
scales in proposed Subsection VII.3. Such feature presents a more
advanced risk modeling technique for option instruments in rapidly
changing market conditions and high-volatility market environments. The
proposed clarification changes would further ensure readability and
transparency with respect to ICC's risk methodology and practices in
the Risk Management Model Description to ensure that it remains up-to-
date, clear, and transparent to support the effectiveness of ICC's risk
management system. ICC's view, these changes will enhance its risk
model and thus enhance its ability to manage the participant default
risk, including with respect to Index Swaptions. The proposed rule
change is therefore consistent with the prompt and accurate clearing
and settlement of the contracts cleared by ICC, including Index
Swaptions, the safeguarding of securities and funds in the custody or
control of ICC or for which it is responsible, and the protection of
investors and the public interest, within the meaning of Section
17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
    \8\ 17 CFR 240.17Ad-22.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
    \10\ Id.
---------------------------------------------------------------------------

    The amendments would also satisfy relevant requirements of Rule
17Ad-22.\11\ Rule 17Ad-22(e)(2)(i), (iii), and (v) \12\ requires each
covered clearing agency to establish, implement, maintain, and enforce
written policies and procedures reasonably designed to provide for
governance arrangements that are clear and transparent; support the
public interest requirements of Section 17A of the Act \13\ applicable
to clearing agencies, and the objectives of owners and participants;
and specify clear and direct lines of responsibility. ICC's Risk
Management Model Description clearly assigns and documents
responsibility and accountability for risk decisions and requires
consultation or approval from relevant parties. ICC determined to
incorporate a stochastic implied MAD feature in the Risk Management
Model Description in accordance with its governance process, which
included review and/or approval by the ICC Risk Committee and Board of
the determination to enable the stochastic implied MAD feature of the
model and the corresponding changes to the Risk Management Model
Description. In ICC's view, the proposed rule change continues to
ensure that ICC maintains policies and procedures that are reasonably
designed to provide for clear and transparent governance arrangements
that support the public interest requirements of Section 17A of the Act
\14\ applicable to clearing agencies, and the objectives of owners and
participants, and specify clear and direct lines of responsibility,
consistent with Rule 17Ad-22(e)(2)(i), (iii), and (v).\15\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.17Ad-22.
    \12\ 17 CFR 240.17Ad-22(e)(2)(i), (iii), and (v).
    \13\ 15 U.S.C. 78q-1.
    \14\ Id.
    \15\ 17 CFR 240.17Ad-22(e)(2)(i), (iii), and (v).
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(4)(ii) \16\ requires each covered clearing agency
to establish, implement, maintain, and enforce written policies and
procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by maintaining additional financial resources at the minimum to enable
it to cover a wide range of foreseeable stress scenarios that include,
but are not limited to, the default of the two participant families
that would potentially cause the largest aggregate credit exposure for
the covered clearing agency in extreme but plausible market conditions.
As discussed above, ICC proposes to modify the Risk Management Model
Description to add a subsection on stochastic implied MAD modeling.
Under the proposed changes, the risk methodology for clearing Index
Swaptions would consider the risk arising from the joint fluctuations
of the underlying index levels and the options implied MAD scales. ICC
believes that the proposed changes support and enhance its ability to
manage its financial resources as such feature presents a more advanced
risk modeling technique for option instruments in rapidly changing
market conditions and high-volatility market environments.
Additionally, the proposed clarification changes provide further
clarity and transparency regarding ICC's risk management practices to
strengthen the documentation surrounding ICC's risk methodology,
including the incorporation of a reference to the clearinghouse in
Subsection III.6 when describing where certain data is obtained and the
clarifications to a formula and its notes in Subsection VII.5.1.2. As
such, the proposed amendments would strengthen ICC's ability to
maintain its financial resources and withstand the pressures of
defaults, consistent with the requirements of Rule 17Ad-
22(e)(4)(ii).\17\
---------------------------------------------------------------------------

    \16\ 17 CFR 240.17Ad-22(e)(4)(ii).
    \17\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(i) \18\ requires each covered clearing agency 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, at a
minimum, considers, and produces margin levels commensurate with, the
risks and particular attributes of each relevant product, portfolio,
and market. ICC proposes to modify the Initial Margin Methodology
section of the Risk Management Model Description to enable a stochastic
implied MAD feature of the model in connection with the clearing of
Index Swaptions. As described above, this feature considers the
relationship between the underlying index levels and the implied MAD
scales and presents a more advanced risk modeling technique for option
instruments in rapidly changing market conditions and high-volatility
market environments. ICC believes that such feature enhances its margin
methodology, which considers and produces margin levels commensurate
with the risks and particular attributes of each relevant product,
portfolio, and market, consistent with the requirements of Rule 17Ad-
22(e)(6)(i).\19\
---------------------------------------------------------------------------

    \18\ 17 CFR 240.17Ad-22(e)(6)(i).
    \19\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    ICC does not believe the proposed rule change would have any
impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purpose of the Act. The proposed rule
change would amend the Risk Management Model Description to add

a subsection on stochastic implied MAD modeling in connection with the
proposed launch of the clearing of Index Swaptions and make certain
other minor clarification changes. The proposed rule change will apply
uniformly across all market participants. ICC does not believe
acceptance of Index Swaptions for clearing would adversely affect the
trading markets for such contracts, and in fact acceptance of such
contracts by ICC would provide market participants with the additional
flexibility to have their Index Swaptions cleared. Acceptance of Index
Swaptions for clearing will not, in ICC's view, adversely affect
clearing of any other currently cleared product. ICC does not believe
the amendments would adversely affect the ability of Participants,
their customers or other market participants to continue to clear
contracts, including CDS Contracts. ICC also does not believe the
enhancements would adversely affect the cost of clearing or otherwise
limit market participants' choices for selecting clearing services in
Index Swaptions, credit default swaps or other products. Accordingly,
ICC does not believe the amendments would impose any burden on
competition not necessary or appropriate in furtherance of the purpose
of the Act.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others

    Written comments relating to the proposed rule change have not been
solicited or received. ICC will notify the Commission of any written
comments received by ICC.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ICC-2020-010 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-ICC-2020-010. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filings will also be available for inspection
and copying at the principal office of ICE Clear Credit and on ICE
Clear Credit's website at https://www.theice.com/clear-credit/regulation.
    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-ICC-2020-010 and should be
submitted on or before September 2, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17557 Filed 8-11-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 31, 2010 (Volume 75, Number 61)]
[Notices]
[Page 16097]
[DOCID:fr31mr10-59]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 516-459]

South Carolina Electric and Gas Company, South Carolina; Notice
of Availability of Environmental Assessment

March 24, 2010.
    In accordance with the National Environmental Policy Act of 1969
and the Federal Energy Regulatory Commission's (Commission or FERC's)
regulations, 18 Code of Federal Regulations (CFR) Part 380 (Order No.
486, 52 FR 47897), the Office of Energy Projects has reviewed South
Carolina Electric and Gas Company's application for license for the
Saluda Hydroelectric Project (FERC Project No. 516), located on Saluda
River in Richland, Lexington, Saluda, and Newberry counties, near
Columbia, South Carolina. The project does not occupy any Federal
lands.
    Staff prepared a draft environmental assessment (EA), which
analyzes the potential environmental effects of relicensing the
project, and concludes that licensing the project, with appropriate
environmental protective measures, would not constitute a major federal
action that would significantly affect the quality of the human
environment.
    A copy of the EA 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 at
<EMAIL_ADDRESS>toll-free at 1-866-208-3676, or for TTY,
202-502-8659.
    You may also register online at http://www.ferc.gov/docs-filing/
esubscription.asp to be notified via e-mail of new filings and
issuances related to this or other pending projects. For assistance,
contact FERC Online Support.
    Any comments should be filed within 45 days from the date of this
notice and be addressed to: Kimberly D. Bose, Secretary, Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
Please affix Project No. 516 to all comments. Comments may be filed
electronically via the Internet in lieu of paper. The Commission
strongly encourages electronic filings. See 18 CFR 385.2001(a)(1)(iii)
and the instructions on the Commission's Web site (http://www.ferc.gov)
under the ``e-Filing'' link.
    For further information, contact Lee Emery by telephone at (202)
502-8379, or by e-mail at<EMAIL_ADDRESS>
Kimberly D. Bose,
Secretary.
[FR Doc. 2010-7148 Filed 3-30-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 150 (Monday, August 7, 2017)]
[Rules and Regulations]
[Pages 36688-36689]
[FR Doc No: 2017-16493]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 60

[EPA-HQ-OAR-2014-0292; FRL-9965-63-OAR]

Revisions to Test Methods, Performance Specifications, and
Testing Regulations for Air Emission Sources; Technical Correction

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule; technical correction.

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

SUMMARY: The Environmental Protection Agency (EPA) is taking action to
correct an omission in revisions requested to Performance Specification
2 in the ``revisions'' rule published August 30, 2016.

DATES: Effective: August 7, 2017.

FOR FURTHER INFORMATION CONTACT: Mrs. Lula H. Melton, Air Quality
Assessment Division, Office of Air Quality Planning and Standards
(E143-02), Environmental Protection Agency, Research Triangle Park, NC
27711;

telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: This action removes subparagraphs <IP_ADDRESS>,
<IP_ADDRESS>, <IP_ADDRESS>, and <IP_ADDRESS> in Performance Specification 2. These
four subparagraphs are no longer necessary due to revisions that were
made to paragraph 6.1.1 in the final ``revisions'' rule dated August
30, 2016 (81 FR 59800).
    Section 553 of the Administrative Procedure Act (APA), 5 U.S.C.
553(b)(3)(B), provides that, when an agency for good cause finds that
notice and public procedure are impracticable, unnecessary, or contrary
to the public interest, the agency may issue a rule without providing
notice and an opportunity for public comment. We have determined that
there is good cause for making this technical amendment final without
prior proposal and opportunity for public amendment because only simple
publication errors are being corrected that do not substantially change
the agency actions taken in the final rule. Thus, notice and public
procedure are unnecessary. (See also the final sentence of section
307(d)(1) of the Clean Air Act (CAA), 42 U.S.C. 307(d)(1), indicating
that the good cause provisions in subsection 553(b) of the APA continue
to apply to this type of rulemaking under section 307(d) of the CAA.)

List of Subjects in 40 CFR Part 60

    Environmental protection, Administrative practice and procedure,
Air pollution control.

    Dated: July 25, 2017.
Sarah Dunham,
Acting Assistant Administrator.

    For the reasons stated in the preamble, the Environmental
Protection Agency corrects title 40, chapter I of the Code of Federal
Regulations as follows:

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
1. The authority citation for part 60 continues to read as follows:

    Authority: 42 U.S.C. 7401 et. seq.

Appendix B to Part 60 [Corrected]

0
2. In appendix B to part 60, in ``Performance Specification 2-
Specifications and Test Procedures for SO2 and
NOX Continuous Emission Monitoring Systems in Stationary
Sources'' remove sections <IP_ADDRESS>, <IP_ADDRESS>, <IP_ADDRESS>, and <IP_ADDRESS>.

[FR Doc. 2017-16493 Filed 8-4-17; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 158 (Wednesday, August 15, 2018)]
[Notices]
[Pages 40520-40522]
[FR Doc No: 2018-17526]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0915]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Guidance for Industry on Postmarketing Adverse Event
Reporting for Nonprescription Human Drug Products Marketed Without an
Approved Application

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA, Agency, or we) is
announcing an opportunity for public comment on the proposed collection
of certain information by the Agency. Under the Paperwork Reduction Act
of 1995 (PRA), Federal Agencies are required to publish notice in the
Federal Register concerning each proposed collection of information,
including each proposed extension of an existing collection of
information, and to allow 60 days for public comment in response to the
notice. This notice solicits comments on the collection of information
entitled ``Guidance for Industry on Postmarketing Adverse Event
Reporting for Nonprescription Human Drug Products Marketed Without an
Approved Application.''

DATES: Submit either electronic or written comments on the collection
of information by October 15, 2018.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before October 15, 2018. The https://www.regulations.gov electronic filing system will accept comments until
midnight Eastern Time at the end of October 15, 2018. Comments received
by mail/hand delivery/courier (for written/paper submissions) will be
considered timely if they are postmarked or the delivery service
acceptance receipt is on or before that date.

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-2011-N-0915 for ``Guidance for Industry on Postmarketing Adverse
Event Reporting for Nonprescription Human Drug Products Marketed
Without an Approved Application.'' Received comments, those filed in a
timely manner (see ADDRESSES), 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
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.

FOR FURTHER INFORMATION CONTACT: Domini Bean, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A-12M, 11601
Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
Agencies must obtain approval from the Office of Management and Budget
(OMB) for each collection of information they conduct or sponsor.
``Collection of information'' is defined in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and includes Agency requests or requirements that members of
the public submit reports, keep records, or provide information to a
third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A))
requires Federal Agencies to provide a 60-day notice in the Federal
Register concerning each proposed collection of information, including
each proposed extension of an existing collection of information,
before submitting the collection to OMB for approval. To comply with
this requirement, FDA is publishing notice of the proposed collection
of information set forth in this document.
    With respect to the following collection of information, FDA
invites comments on these topics: (1) Whether the proposed collection
of information is necessary for the proper performance of FDA's
functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.

Guidance for Industry on Postmarketing Adverse Event Reporting for
Nonprescription Human Drug Products Marketed Without an Approved
Application; OMB Control Number 0910-0636--Extension

    This information collection supports Agency guidance directed to
manufacturers, packers, and/or distributors whose names appear on the
label of a nonprescription drug marketed in the United States under
section 502(b)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C
Act) (21 U.S.C. 352(b)(1)). FDA is requesting public comment on
estimates of annual submissions from these respondents, as required by
the Dietary Supplement and Nonprescription Drug Consumer Protection Act
(Pub. L. 109-462) and described in the guidance. The guidance document
discusses what should be included in a serious adverse drug event
report submitted under section 760(b)(1)

of the FD&C Act (21 U.S.C. 379aa(b)(1)), including followup reports
under 760(c)(2) of the FD&C Act (21 U.S.C. 379aa(c)(2)), and how to
submit these reports. The estimates for the annual reporting and
recordkeeping burdens are based on FDA data on the number of adverse
drug experience reports submitted for nonprescription drug products
marketed without an approved application and on prior input from
comments received from prior Federal Register publications.
    Based on FDA records, we received 194,449 total annual responses
from approximately 283 respondents for nonprescription drugs marketed
without an approved application. We estimate that each submission will
take approximately 6 hours to prepare and submit.

                                                     Table 1--Estimated Annual Reporting Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of
                              Activity                                  Number of      responses per     Total annual    Average burden    Total hours
                                                                       respondents       respondent       responses       per response
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reports of serious adverse drug events (21 U.S.C. 379aa((b) and                 283          687.099          194,449                6        1,166,694
 (c))..............................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    Section 760(e) of the FD&C Act (21 U.S.C. 379aa(e)) also requires
that responsible persons maintain records of nonprescription adverse
event reports, whether or not the event is serious, for a period of 6
years. The guidance recommends that respondents maintain records of
efforts to obtain the minimum data elements for a report of a serious
adverse drug event and any followup reports. We estimate that there are
approximately 265,700 records per year maintained by approximately 300
respondents, and that it takes approximately 8 hours to maintain each
record.

                                                   Table 2--Estimated Annual Recordkeeping Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of                       Average burden
                              Activity                                  Number of       records per      Total annual         per          Total hours
                                                                      recordkeepers     recordkeeper       records       recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recordkeeping (21 U.S.C. 379aa(e)(1))..............................<PHONE_NUMBER>          265,700                8        2,125,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    Our estimated burden for the information collection reflects an
overall increase. We attribute this adjustment to an increase in the
number of submissions we received in the last few years.

    Dated: August 9, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-17526 Filed 8-14-18; 8:45 am]
 BILLING CODE 4164-01-P


 [Federal Register Volume 82, Number 159 (Friday, August 18, 2017)] [Notices] [Pages 39421-39422] [FR Doc No: 2017-17474]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #2

    Take notice that the Commission received the following electric

rate filings:

    Docket Numbers: ER17-1840-000.

    Applicants: Canton Mountain Wind, LLC.

    Description: Supplement to June 15, 2017 Canton Mountain Wind, LLC

tariff filing.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5094.

    Comments Due: 5 p.m. ET 8/21/17.

    Docket Numbers: ER17-1879-001.

    Applicants: New York Independent System Operator, Inc.

    Description: Tariff Amendment: Amendment to June 21, 2017 Ramapo

PAR 205 (FID 1299) to be effective 7/1/2017.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5098.

    Comments Due: 5 p.m. ET 9/1/17.

    Docket Numbers: ER17-2286-000.

    Applicants: New York Independent System Operator, Inc.

    Description: Sec.  205(d) Rate Filing: 205 filing re: Testing of

automated fuel swap capability to be effective 11/1/2017.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5060.

    Comments Due: 5 p.m. ET 9/1/17.

    Docket Numbers: ER17-2287-000.

    Applicants: NorthWestern Corporation.

    Description: Sec.  205(d) Rate Filing: SA 827--Agreement for

Remediation with GFDA and GFAP (Agritech Park Addition) to be effective

8/12/2017.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5061.

    Comments Due: 5 p.m. ET 9/1/17.

    Docket Numbers: ER17-2288-000.

    Applicants: Oklahoma Gas and Electric Company.

    Description: Sec.  205(d) Rate Filing: Update Depreciation Rates in

Transmission Formula Rate to be effective 6/1/2017.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5070.

    Comments Due: 5 p.m. ET 9/1/17.

    Docket Numbers: ER17-2289-000.

    Applicants: ISO New England Inc.

    Description: ISO New England Inc. submits Second Quarter 2017

Capital Budget Report.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5120.

    Comments Due: 5 p.m. ET 9/1/17.

    Docket Numbers: ER17-2290-000.

    Applicants: Old Dominion Electric Cooperative.

    Description: Initial rate filing: Reactive Supply and Voltage

Control from Generation Service--Wildcat Point to be effective 10/10/

2017.

    Filed Date: 8/11/17.

    Accession Number: 20170811-5127.

    Comments Due: 5 p.m. ET 9/1/17.

    The filings are accessible in the Commission's eLibrary system by

clicking on the links or querying the docket number.

    Any person desiring to intervene or protest in any of the above

proceedings must file in accordance with Rules 211 and 214 of the

Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00

p.m. Eastern time on the specified comment date. Protests may be

considered, but intervention is necessary to become a party to the

proceeding.

    eFiling is encouraged. More detailed information relating to filing

requirements, interventions, protests, service, and qualifying

facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>

(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: August 11, 2017.

Nathaniel J. Davis, Sr.,

Deputy Secretary.

[FR Doc. 2017-17474 Filed 8-17-17; 8:45 am]

BILLING CODE 6717-01-P