[Federal Register Volume 88, Number 115 (Thursday, June 15, 2023)]
[Notices]
[Pages 39317-39322]
[FR Doc No: 2023-12761]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97691; File No. SR-NYSECHX-2023-09]

Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To Adopt New NYSE
Chicago Rule 29 To Establish Listing Standards Related to Recovery of
Erroneously Awarded Incentive-Based Executive Compensation

June 9, 2023.

I. Introduction

    On February 22, 2023, NYSE Chicago, Inc. (``NYSE Chicago'' or the
``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
proposed rule change to adopt new Rule 29 to Article 22 of the NYSE
Chicago Rules (``NYSE Chicago Rule 29'') to require issuers to adopt
and comply with a policy providing for the recovery of erroneously
awarded incentive-based compensation received by current or former
executive officers as required by Rule 10D-1 under the Act (``Rule 10D-
1''). The proposed rule change was published for comment in the Federal
Register on March 13, 2023.\3\ On April 24, 2023, the Commission
extended the time period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to approve or disapprove the proposed rule
change.\4\ On June 7, 2023, the Exchange filed Amendment No. 1 to the
proposed rule change, which replaced and superseded the proposed rule
change as originally filed.\5\ The Commission is publishing this notice
to solicit comments on the proposed rule change, as modified by
Amendment No. 1, from interested persons and is approving the proposed
rule change, as modified by Amendment No. 1, on an accelerated basis.
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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. 97052 (March 7,
2023), 88 FR 15476 (``Notice''). No comments were received in
response to this Notice.
    \4\ See Securities Exchange Act Release No. 97363, 88 FR 26374
(April 28, 2023).
    \5\ Amendment No. 1 is available on the Commission's website at
https://www.sec.gov/comments/sr-nysechx-2023-09/srnysechx202309-201319-402803.pdf. In Amendment No. 1, the Exchange (i) amends
proposed NYSE Chicago Rule 29(b) to provide that the effective date
of proposed NYSE Chicago Rule 29 would be October 2, 2023; and (ii)
amends proposed NYSE Chicago Rule 29(f) (Noncompliance with Rule 29
(Erroneously Awarded Compensation)) to provide that in the event of
any failure by a listed issuer to comply with any requirement of
proposed NYSE Chicago Rule 29, the Exchange may at its sole
discretion provide such issuer with an initial six-month cure period
and an additional six-month cure period.
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II. Background and Description of the Proposal, as Modified by
Amendment No. 1

    On October 26, 2022, the Commission adopted final Rule 10D-1 \6\ to
implement section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (``Dodd-Frank Act''), which added section 10D to
the Act. Section 10D of the Act requires the Commission to adopt rules
directing the national securities exchanges to prohibit the listing of
any security of an issuer that is not in compliance with the
requirements of section 10D of the Act. Rule 10D-1 requires national
securities exchanges that list securities to establish listing
standards that require each issuer to adopt and comply with a written
executive compensation recovery policy and to provide the disclosures
required by Rule 10D-1 and in the applicable Commission filings.\7\
Under Rule 10D-1, listed companies must recover from current and former
executive officers incentive-based compensation received during the
three completed fiscal years preceding the date on which the issuer is
required to prepare an accounting restatement.
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    \6\ 17 CFR 240.10D-1.
    \7\ See Securities Exchange Act Release No. 96159, 87 FR 73076
(November 28, 2022) (``Adopting Release''). Rule 10D-1 requires such
exchange listing rules to be effective no later than one year after
November 28, 2022. Rule 10D-1 further requires that each listed
issuer: (i) adopt the required recovery policy no later than 60 days
following the effective date of the listing standard; (ii) comply
with the recovery policy for all incentive-based compensation
received by executive officers on or after the effective date of the
applicable listing standard; and (iii) provide the required
disclosures on or after the effective date of the listing standard.
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    As required by Rule 10D-1, the Exchange proposes to adopt NYSE
Chicago Rule 29 entitled ``Erroneously Awarded Compensation.'' Proposed
NYSE Chicago Rule 29 (the ``Rule'') mirrors the text of Rule 10D-1.
Specifically, the Rule would require Exchange listed issuers to adopt a
recovery policy that complies with the requirements of the Rule
(``recovery policy''), comply with their recovery policy, and provide
the required disclosures in the applicable Commission filing.\8\
Proposed NYSE Chicago Rule 29(f) would prohibit the initial or
continued listing of any security of an issuer that is not in
compliance with the requirements of any portion of the Rule.\9\
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    \8\ See proposed NYSE Chicago Rule 29(b) and (c).
    \9\ See proposed NYSE Chicago Rule 29(f).
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    Specifically, proposed NYSE Chicago Rule 29(c)(1) would require
each issuer, for initial and continued listing, to adopt and comply
with a written recovery policy providing that the issuer will recover
reasonably promptly the amount of erroneously awarded incentive-based
compensation in the event that the issuer is required to prepare an
accounting restatement due to the material noncompliance of the issuer
with any financial reporting requirement under the securities laws,
including any required accounting restatement to correct an error in
previously issued financial statements that is material to the
previously issued financial statements, or that would result in a
material misstatement if the error were corrected in the current period
or left uncorrected in the current period.
    The issuer's recovery policy must apply to all incentive-based
compensation received by a person: (A) after beginning service as an
executive officer; (B) who served as an executive officer at any time
during the performance period for that incentive-based compensation;
(C) while the issuer has a class of securities listed on a national
securities exchange or a national securities association; and (D)
during the three completed fiscal years immediately preceding the date
that the issuer is required to prepare an accounting restatement as
described in paragraph (c)(1) of the Rule.\10\ An issuer's obligation
to recover erroneously awarded compensation is not dependent on if or
when the restated financial statements are filed.
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    \10\ See proposed NYSE Chicago Rule 29(c)(1)(i). In addition to
these last three completed fiscal years, the recovery policy must
apply to any transition period (that results from a change in the
issuer's fiscal year) within or immediately following those three
completed fiscal years. However, a transition period between the
last day of the issuer's previous fiscal year end and the first day
of its new fiscal year that comprises a period of nine to 12 months
would be deemed a completed fiscal year.
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    For purposes of determining the relevant recovery period, the date
that

an issuer is required to prepare an accounting restatement as described
in paragraph (c)(1) of the Rule is the earlier to occur of: (A) the
date the issuer's board of directors, a committee of the board of
directors, or the officer or officers of the issuer authorized to take
such action if board action is not required, concludes, or reasonably
should have concluded, that the issuer is required to prepare an
accounting restatement as described in paragraph (c)(1) of the Rule; or
(B) the date a court, regulator, or other legally authorized body
directs the issuer to prepare an accounting restatement as described in
paragraph (c)(1) of the Rule.\11\
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    \11\ See proposed NYSE Chicago Rule 29(c)(1)(ii).
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    The amount of incentive-based compensation that must be subject to
the issuer's recovery policy (``erroneously awarded compensation'') is
the amount of incentive-based compensation received that exceeds the
amount of incentive-based compensation that otherwise would have been
received had it been determined based on the restated amounts, and must
be computed without regard to any taxes paid. For incentive-based
compensation based on stock price or total shareholder return, where
the amount of erroneously awarded compensation is not subject to
mathematical recalculation directly from the information in an
accounting restatement: (A) the amount must be based on a reasonable
estimate of the effect of the accounting restatement on the stock price
or total shareholder return upon which the incentive-based compensation
was received; and (B) the issuer must maintain documentation of the
determination of that reasonable estimate and provide such
documentation to the Exchange.\12\
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    \12\ See proposed NYSE Chicago Rule 29(c)(1)(iii).
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    The issuer must recover erroneously awarded compensation in
compliance with its recovery policy except to the extent that one of
the conditions set forth below is met, and the issuer's committee of
independent directors responsible for executive compensation decisions,
or in the absence of such a committee, a majority of the independent
directors serving on the board, has made a determination that recovery
would be impracticable.
     The direct expense paid to a third party to assist in
enforcing the policy would exceed the amount to be recovered. Before
concluding that it would be impracticable to recover any amount of
erroneously awarded compensation based on expense of enforcement, the
issuer must make a reasonable attempt to recover such erroneously
awarded compensation, document such reasonable attempt(s) to recover,
and provide that documentation to the Exchange.
     Recovery would violate home country law where that law was
adopted prior to November 28, 2022. Before concluding that it would be
impracticable to recover any amount of erroneously awarded compensation
based on violation of home country law, the issuer must obtain an
opinion of home country counsel, acceptable to the Exchange, that
recovery would result in such a violation, and must provide such
opinion to the Exchange.
     Recovery would likely cause an otherwise tax-qualified
retirement plan, under which benefits are broadly available to
employees of the registrant, to fail to meet the requirements of 26
U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder.\13\
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    \13\ See proposed NYSE Chicago Rule 29(c)(1)(iv).
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    The issuer is prohibited from indemnifying any executive officer or
former executive officer against the loss of erroneously awarded
compensation.\14\
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    \14\ See proposed NYSE Chicago Rule 29(c)(1)(v).
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    Proposed NYSE Chicago Rule 29(c)(2) would require that each issuer
file all disclosures with respect to such recovery policy in accordance
with the requirements of the federal securities laws, including the
disclosure required by the applicable Commission filings.
    Proposed NYSE Chicago Rule 29(d) would provide that the
requirements of the Rule do not apply to the listing of: (1) a security
futures product cleared by a clearing agency that is registered
pursuant to section 17A of the Act (15 U.S.C. 78q-1) or that is exempt
from the registration requirements of section 17A(b)(7)(A) (15 U.S.C.
78q-1(b)(7)(A)); (2) a standardized option, as defined in 17 CFR
240.9b-1(a)(4), issued by a clearing agency that is registered pursuant
to section 17A of the Act (15 U.S.C. 78q-1); (3) any security issued by
a unit investment trust, as defined in 15 U.S.C. 80a-4(2); and (4) any
security issued by a management company, as defined in 15 U.S.C. 80a-
4(3), that is registered under section 8 of the Investment Company Act
of 1940 (15 U.S.C. 80a-8), if such management company has not awarded
incentive-based compensation to any executive officer of the company in
any of the last three fiscal years, or in the case of a company that
has been listed for less than three fiscal years, since the listing of
the company.
    Proposed NYSE Chicago Rule 29(e) would provide that, unless the
context otherwise requires, the following definitions apply for
purposes of the Rule:
     Executive Officer. An executive officer is the issuer's
president, principal financial officer, principal accounting officer
(or if there is no such accounting officer, the controller), any vice-
president of the issuer in charge of a principal business unit,
division, or function (such as sales, administration, or finance), any
other officer who performs a policy-making function, or any other
person who performs similar policy-making functions for the issuer.
Executive officers of the issuer's parent(s) or subsidiaries are deemed
executive officers of the issuer if they perform such policy making
functions for the issuer. In addition, when the issuer is a limited
partnership, officers or employees of the general partner(s) who
perform policy-making functions for the limited partnership are deemed
officers of the limited partnership. When the issuer is a trust,
officers, or employees of the trustee(s) who perform policy-making
functions for the trust are deemed officers of the trust. Policy-making
function is not intended to include policy-making functions that are
not significant. Identification of an executive officer for purposes of
the Rule would include at a minimum executive officers identified
pursuant to 17 CFR 229.401(b).
     Financial reporting measures. Financial reporting measures
are measures that are determined and presented in accordance with the
accounting principles used in preparing the issuer's financial
statements, and any measures that are derived wholly or in part from
such measures. Stock price and total shareholder return are also
financial reporting measures. A financial reporting measure need not be
presented within the financial statements or included in a filing with
the Commission.
     Incentive-based compensation. Incentive-based compensation
is any compensation that is granted, earned, or vested based wholly or
in part upon the attainment of a financial reporting measure.
     Received. Incentive-based compensation is deemed received
in the issuer's fiscal period during which the financial reporting
measure specified in the incentive-based compensation award is
attained, even if the payment or grant of the incentive-based
compensation occurs after the end of that period.
    Proposed NYSE Chicago Rule 29(b) would provide that the effective
date of the Rule (``effective date'') is October 2, 2023 and that each
listed issuer must (i) adopt the recovery policy no later than

60 days following the effective date; (ii) comply with its recovery
policy for all incentive-based compensation received (as such term is
defined in proposed NYSE Chicago Rule 29(e)) by executive officers on
or after the effective date; \15\ and (iii) provide the required
disclosures in the applicable Commission filings required on or after
the effective date.\16\
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    \15\ As described above, a listed issuer would have to comply
with its recovery policy for all incentive-based compensation
received by executive officers on or after the effective date of the
applicable listing standard (i.e., NYSE Chicago Rule 29). Incentive-
based compensation that is the subject of a compensation contract or
arrangement that existed prior to the effective date of Rule 10D-1
would still be subject to recovery under the Exchange's rule if such
compensation was received on or after the effective date of the
Rule, as required by Rule 10D-1. See Adopting Release, supra note 7,
and also definitions of ``incentive based compensation'' and
``received'' in proposed NYSE Chicago Rule 29(e).
    \16\ See Amendment No. 1, supra note 5, at 5-6. In support of
proposing an effective date of October 2, 2023, the Exchange states
it believes this is consistent with Section 10D ``and the goal of
implementing the proposed rule promptly while also being consistent
with the expectations of listed issuer that the proposed rules would
take effect a year after the adoption of Rule 10D-1 based on the
issuers' understanding of a statement made . . . in the Rule 10D-1
Adopting Release.'' See id.
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    The Exchange states that the proposed new requirements described
above are consistent with the protection of investors and the public
interest because they further the goal of ensuring the accuracy of the
financial disclosure of listed issuers and may improve the overall
quality and reliability of financial reporting.\17\
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    \17\ See id. at 12.
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    As described above, Rule 10D-1 requires national securities
exchanges to prohibit the initial or continued listing of any security
of an issuer not in compliance with its rules adopted to comply with
Rule 10D-1. The Exchange proposes therefore to require that a listed
issuer will be subject to delisting in the event of any failure by such
listed issuer to comply with any requirement of the Rule, including the
requirement to adopt a recovery policy that complies with the
applicable listing standard, disclose the policy in accordance with
Commission rules or comply with its recovery policy. The Exchange
states that the proposed delisting process that sets forth procedures
that would apply if an issuer failed to comply with the Rule is closely
modeled on the compliance process for listed issuers delayed in
submitting periodic reports to the Commission as set forth in Section
802.01E of the NYSE Listed Company Manual and Section 1007 of the NYSE
American Company Guide.\18\ Specifically, the Exchange proposes to
adopt proposed NYSE Chicago Rule 29(f) to provide that a listed issuer
that is out of compliance with the Rule \19\ and fails to regain
compliance within any cure period provided by the Exchange (as further
described below) would have its listed securities immediately suspended
and the Exchange would immediately commence delisting procedures with
respect to all such listed securities.\20\ Proposed NYSE Chicago Rule
29(f)(iii) would provide that the Exchange may afford a listed issuer
that fails to comply with any of the requirements of the Rule an
initial six-month period to cure the deficiency.\21\ If the issuer
fails to cure the delinquency within the initial cure period, the
Exchange may either afford the issuer up to an additional six months to
cure the deficiency or, if the Exchange determines that an additional
cure period is not appropriate,\22\ commence suspension and delisting
procedures in accordance with Article 22, Rule 4 of the NYSE Chicago
Rules.\23\ Notwithstanding the foregoing, the Exchange may in its sole
discretion decide (i) not to afford a listed issuer any initial cure
period or additional cure period, or (ii) at any time during such cure
period, to truncate the cure period and immediately commence suspension
and delisting procedures if the listed issuer is subject to delisting
pursuant to any other provision of the Exchange rules, including if the
Exchange believes, in the Exchange's sole discretion, that continued
listing and trading of a listed issuer's securities on the Exchange is
inadvisable or unwarranted.\24\ In determining whether an initial or
additional cure period is appropriate, or whether either such period
should be truncated, the Exchange will consider the likelihood that the
delinquency can be cured during such period.\25\ The Exchange may also
commence suspension and delisting procedures without affording any cure
period at all or at any time during the initial or additional cure
period if the Exchange believes, in the Exchange's sole discretion,
that it is advisable to do so on the basis of an analysis of all
relevant factors.\26\ In no event would the Exchange continue to trade
a listed issuer's securities if that listed issuer has failed to cure
its delinquency with the Rule on the date that is twelve months after
the date the Exchange notified the issuer of the delinquency.\27\
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    \18\ See id. at 10. The Exchange's original filing included
provisions establishing cure periods to be applied in the event of a
listed issuer's failure to adopt a recovery policy within the
required time period but did not establish cure periods for other
incidents of noncompliance with the Rule. Amendment No. 1 revised
these cure period provisions so that they are now applicable to all
incidents of noncompliance with Rule 29 and not just delayed
adoption of recovery policies. See id. at 4 n.4. The Exchange states
that it believes the compliance procedures, as amended, ``are
appropriately rigorous and are consistent with the public interest
and the interests of investors.'' See id. at 13.
    \19\ Proposed NYSE Chicago Rule 29(f)(ii) provides that a listed
issuer will be deemed to be below standards in the event of any
failure by such listed issuer to comply with any requirement of the
Rule. The listed issuer would be required to notify the Exchange in
writing within five days of any type of delinquency. When the
Exchange determines that a delinquency has occurred, it will
promptly send written notification to a listed issuer of the
procedures set forth in the Rule and, within five days of the date
of receipt of such notification, the listed issuer will be required
to (i) contact the Exchange to discuss the status of resolution of
the delinquency and (ii) issue a press release disclosing the
occurrence of the delinquency, the reason for the delinquency and,
if known, the anticipated date the delinquency will be cured. If the
listed issuer has not issued the required press release within five
days of the date of the delinquency notification, the Exchange will
issue a press release stating that the issuer has incurred a
delinquency and providing a description thereof. See proposed NYSE
Chicago Rule 29(f)(ii).
    \20\ See proposed NYSE Chicago Rule 29(f)(i) and (iv). Such
listed issuer would not be eligible to follow the procedures
outlined in Article 22, Rules 17A and 22 of the NYSE Chicago Rules
with respect to such a delisting determination, and any such listed
issuer would be subject to delisting procedures as set forth in
Article 22, Rule 4 of the NYSE Chicago Rules. Article 22, Rule 4
(Removal of Securities) provides that an issuer subject to a
delisting determination has a right to a hearing by a hearing
officer, provided a written request for such a review is filed with
the Secretary of the Exchange not later than 15 days following
service of notice of the proposed delisting. See Article 22, Rule
4(c) of the NYSE Chicago Rules. Thereafter, an issuer may demand a
review by the Executive Committee. See Article 22, Rule 4(e).
    \21\ During such six-month period, the Exchange would monitor
the listed issuer and the status of resolution of the delinquency
until the delinquency is cured. See proposed NYSE Chicago Rule
29(f)(iii).
    \22\ In determining whether an additional cure period is
appropriate, the Exchange will consider the likelihood that the
delinquency can be cured during the additional cure period. See
proposed NYSE Chicago Rule 29(f)(iv).
    \23\ An issuer would not be eligible to follow the procedures
outlined in Article 22, Rules 17A and 22 of the NYSE Chicago Rules.
See proposed NYSE Chicago Rule 29(f)(iii).
    \24\ See id.
    \25\ See id.
    \26\ See id.
    \27\ See proposed NYSE Chicago Rule 29(f)(iv).
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, 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 is consistent with the
requirements of section 6(b) of the Act.\29\ Specifically, the
Commission finds that the proposed rule change is consistent 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 are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. In addition, the Commission finds that the
proposed rule change is consistent with section 6(b)(7) of the Act,\31\
which requires, among other things, that the rules of a national
securities exchange provide a fair procedure for the prohibition or
limitation by the exchange of any person with respect to access to
services offered by the exchange. The proposed rule change, as modified
by Amendment No. 1, is also consistent with section 10D of the Act \32\
and Rule 10D-1 thereunder, as further described below.\33\
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    \28\ 15 U.S.C. 78f(b). In approving this proposed rule change,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \29\ 15 U.S.C. 78f(b).
    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78(b)(7).
    \32\ 15 U.S.C. 78j-4.
    \33\ 17 CFR 240.10D-1.
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    The development and enforcement of meaningful listing standards for
a national securities exchange is of substantial importance to
financial markets and the investing public. Meaningful listing
standards are especially important given investor expectations
regarding the nature of companies that have achieved an exchange
listing for their securities, and the role of an exchange in overseeing
its market and assuring compliance with its listing standards.\34\ The
corporate governance standards embodied in the listing rules of
national securities exchanges, in particular, play an important role in
assuring that companies listed for trading on the exchanges' markets
observe good governance practices, including a fair approach and
greater accountability for the recovery of erroneously awarded
compensation.\35\
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    \34\ See, e.g., Securities Exchange Release Nos. 65708 (November
8, 2011), 76 FR 70799 70802 (November 15, 2011) (SR-NASDAQ-2011-
073); 63607 (December 23, 2010), 75 FR 82420, 82422 (December 30,
2010) (SR-NASDAQ-2010-137); 57785 (May 6, 2008), 73 FR 27597, 27599
(May 13, 2008) (SR-NYSE-2008-17); and 93256 (October 4, 2021), 86 FR
56338 (October 8, 2021) (SR-NASDAQ-2021-007).
    \35\ See, e.g., Securities Exchange Release No. 68639 (January
11, 2013), 78 FR 4570, 4579 (January 22, 2013) (SR-NYSE-2012-49)
(stating, in connection with the modification of exchange rules for
compensation committees of listed issuers to comply with Rule 10C-1
of the Act, that corporate governance listing standards ``play an
important role in assuring that companies listed for trading on the
exchanges' markets observe good governance practices, including a
reasoned, fair, and impartial approach for determining the
compensation of corporate executives'' and stating that the proposal
would foster ``greater transparency, accountability and
objectivity'' in oversight of compensation practices.).
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    In enacting section 10D of the Act,\36\ Congress resolved to
require national securities exchanges to establish listing standards to
require listed issuers to develop and comply with a policy to recover
incentive-based compensation erroneously awarded on the basis of
financial information that requires an accounting restatement.\37\ In
October 2022, as required by this legislation, the Commission adopted
Rule 10D-1 under the Act, which directs the national securities
exchanges to establish listing standards that require issuers to: (i)
develop and comply with written policies for recovery of incentive-
based compensation based on financial information required to be
reported under the securities laws, applicable to the issuers'
executive officers, during the three completed fiscal years immediately
preceding the date that the issuer is required to prepare an accounting
restatement; and (ii) disclose those compensation recovery policies in
accordance with Commission rules. In response, the Exchange has filed
the proposed rule change, which includes rules intended to comply with
the requirements of Rule 10D-1.
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    \36\ Public Law 111-203, 954, 124 Stat. 1376, 1904 (2010)
(codified at 15 U.S.C. 78j-4).
    \37\ As a part of the Dodd-Frank Act legislative process, in a
2010 report, the Senate Committee on Banking, Housing and Urban
Affairs stated that it is ``unfair to shareholders for corporations
to allow executive officers to retain compensation that they were
awarded erroneously.'' See Report of the Senate Committee on
Banking, Housing, and Urban Affairs, S.3217, Report No. 111-176 at
135-36 (Apr. 30, 2010) (``Senate Report'') at 135. See also Adopting
Release, supra note 7, 87 FR at 73077 (citing to the Senate Report)
(``The language and legislative history of the Dodd-Frank Act make
clear that Section 10D is premised on the notion that an executive
officer should not retain incentive-based compensation that, had the
issuer's accounting been correct in the first instance, would not
have been received by the executive officer, regardless of any fault
of the executive officer for the accounting errors. The Senate
Report also indicates that shareholders should not `have to embark
on costly legal expenses to recoup their losses' and that
`executives must return monies that should belong to the
shareholders.' '').
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    The Exchange's proposed NYSE Chicago Rule 29 incorporates the
requirements of Rule 10D-1. The Commission believes that the Exchange's
proposal will foster greater fairness, accountability, and transparency
to shareholders of listed issuers by advancing the recovery of
incentive-based compensation that was erroneously awarded on the basis
of financial information that requires an accounting restatement,
consistent with section 10D of the Act \38\ and Rule 10D-1
thereunder,\39\ and will therefore further the protection of investors
consistent with section 6(b)(5) of the Act.\40\ In addition, as the
Commission stated in the Adopting Release, the recovery requirements
may provide executive officers with an increased incentive to take
steps to reduce the likelihood of inadvertent misreporting and will
reduce the financial benefits to executive officers who choose to
pursue impermissible accounting methods, which can further discourage
such behavior.\41\ The Commission believes that these benefits of the
Exchange's new rules on the recovery of erroneously awarded
compensation will protect investors and the public interest as required
under section 6(b)(5) of the Act.
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    \38\ 15 U.S.C. 78j-4.
    \39\ 17 CFR 240.10D-1.
    \40\ 15 U.S.C. 78f(b)(5).
    \41\ See Adopting Release, supra note 7, 87 FR at 73077. See
also Amendment No. 1, supra note 5, at 12, agreeing with the
Commission's statement on the benefits of the recovery policy.
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    Rule 10D-1 and proposed NYSE Chicago Rule 29 require that a listed
issuer recover the amount of erroneously awarded incentive-based
compensation ``reasonably promptly.'' The Adopting Release stated that
whether an issuer is acting reasonably promptly ``will depend on the
particular facts and circumstances applicable to that issuer'' and
``the final rules do not restrict exchanges from adopting more
prescriptive approaches to the timing and method of recovery under
their rules in compliance with section 19(b) of the Exchange Act . .
.'' \42\ Rule 10D-1 also does not compel the exchanges to adopt a more
prescriptive approach to the timing and method of recovery. In its
proposal, the Exchange stated that ``the issuer's obligation to recover
erroneously awarded incentive-based compensation reasonably promptly
will be assessed on a holistic basis with respect to each such
accounting restatement prepared by the issuer'' and that ``[i]n
evaluating whether an issuer is recovering erroneously awarded

incentive-based compensation reasonably promptly, the Exchange will
consider whether the issuer is pursuing an appropriate balance of cost
and speed in determining the appropriate means to seek recovery, and
whether the issuer is securing recovery through means that are
appropriate based on the particular facts and circumstances of each
executive officer that owes a recoverable amount.'' \43\ The Commission
believes this guidance provided by the Exchange is consistent with the
Commission's statements regarding when an issuer is acting ``reasonably
promptly'' as expressed in the Adopting Release, with Rule 10D-1 and
with the Act.\44\
---------------------------------------------------------------------------

    \42\ See Adopting Release, supra note 7, 87 FR at 73104. For
example, the Commission stated that after the exchanges have
observed issuer performance they can use any resulting data to
assess the need for further guidelines to ensure prompt and
effective recovery. See id.
    \43\ See Amendment No. 1, supra note 5, at 5.
    \44\ See Adopting Release, supra note 7, 87 FR 73104.
---------------------------------------------------------------------------

    Rule 10D-1 requires issuers subject to the listing standards to
adopt a recovery policy no later than 60 days following the date on
which the applicable listing standards become effective and to comply
with their recovery policy, and provide the required disclosures, on or
after the effective date. The Exchange, in Amendment No. 1, is
proposing that the effective date of the Rule be October 2, 2023.\45\
The Exchange believes that setting this date as the effective date will
ensure that issuers have more than a year from the date Rule 10D-1 was
published in the Federal Register to adopt recovery policies.\46\ This
is consistent with language in Rule 10D-1 and the Adopting Release,
while also ensuring prompt implementation of this proposed rule.
---------------------------------------------------------------------------

    \45\ See Amendment No. 1, supra note 5, amending proposed NYSE
Chicago Rule 29(b).
    \46\ Listed issuers will need to have their recovery policy in
place no later than 60 days following the effective date of October
2, 2023, which would be more than a year after publication of Rule
10D-1 in the Federal Register. Listed issuers will also have to
comply with their recovery policy for all incentive-based
compensation received by executive officers on or after the
effective date of October 2, 2023, and provide the required
disclosures in the applicable Commission filings on or after the
effective date of October 2, 2023. See Adopting Release, supra note
7, and also definitions of ``incentive based compensation'' and
``received'' in proposed Section 303A.14(e). See also supra notes
15-16 and accompanying text.
---------------------------------------------------------------------------

    With respect to a listed issuer that fails to comply with the Rule,
the Exchange has proposed delisting procedures that are closely modeled
on the compliance process for listed issuers delayed in submitting
periodic reports to the Commission as set forth in Section 802.01E of
the NYSE Listed Company Manual and Section 1007 of the NYSE American
Company Guide.\47\ The Commission believes that these procedures, as
modified by Amendment No. 1, for listed issuers out of compliance with
the Rule, which are consistent with the procedures for filing
delinquencies as set forth in the NYSE Listed Company Manual and the
NYSE American Company Guide, adequately meet the mandate of Rule 10D-1
and are consistent with investor protection and the public interest,
since they give a listed issuer a reasonable time period to cure non-
compliance with these important requirements before they will be
delisted while helping to ensure that listed issuers that are non-
compliant will not remain listed for an inappropriate amount of
time.\48\ Additionally, the proposed delisting process, including the
cure period and the right to a review of a delisting determination by a
committee of the Board of Directors of the Exchange, is consistent with
section 6(b)(7) of the Act in that it provides a fair procedure for the
review of delisting determinations based on violations of the
Exchange's rules for recovering erroneous compensation.
---------------------------------------------------------------------------

    \47\ See supra notes 18-26 and accompanying text.
    \48\ The Exchange originally proposed that if an issuer was non-
compliant with any of the provisions of the Rule (except for a
delayed adoption of a recovery policy), the Exchange would
immediately suspend and commence delisting procedures with respect
to such issuer's listed securities. See Notice, supra note 3, 88 FR
at 15478-79. As discussed above, Amendment No. 1 amended the
Exchange's proposed delisting provisions to provide to that in the
event of any failure by a listed issuer to comply with any
requirement of the Rule, the Exchange may provide such issuer with
an initial six-month cure period and an additional six-month cure
period. See Amendment No. 1, supra note 5.
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether the proposed rule change, as modified by
Amendment No. 1, is consistent with the Exchange Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-NYSECHX-2023-09 on the subject line.

Paper Comments

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

    All submissions should refer to file number SR-NYSECHX-2023-09.
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 (https://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 a.m. and 3 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. Do
not include personal identifiable information in submissions; you
should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-NYSECHX-2023-09, and
should be submitted on or before July 6, 2023.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. In Amendment No. 1, the Exchange amended the
proposal to (i) propose that the effective date of the Rule would be
October 2, 2023; and (ii) allow the Exchange, in its sole discretion,
to provide a listed issuer that fails to comply with any requirement of
the Rule, an initial six-month cure period and an additional six-month
cure period.\49\ The changes in Amendment No. 1 provide greater clarity
to the proposal. The change to the effective date of the listing
standards is consistent with Rule 10D-1 and language in the Adopting
Release. The change to the delisting procedures and the cure periods
for non-compliance being proposed by the Exchange are similar to those
that exist under the rules of other national securities

exchanges for the late filing of annual and quarterly reports that the
Commission has previously approved as consistent with the Act.\50\ The
amended proposal also provides for a cure period for any violations of
the Rule similar to the approach taken by Nasdaq in its proposal to
adopt rules to comply with Rule 10D-1.\51\ Nasdaq's proposal has also
been approved by the Commission as consistent the Act.\52\ Accordingly,
the Commission finds good cause, pursuant to section 19(b)(2) of the
Exchange Act,\53\ to approve the proposed rule change, as modified by
Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \49\ See Amendment No. 1, supra note 5.
    \50\ See Section 802.01E of the NYSE Listed Company Manual and
Section 1007 of the NYSE American Company Guide.
    \51\ See Securities Exchange Act Release No. 97060 (March 7,
2023), 88 FR 15500 (March 13, 2023) (SR-Nasdaq-2023-005).
    \52\ See Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change to Establish Listing
Standards Related to Recovery of Erroneously Awarded Executive
Compensation (June 9, 2023) (SR-Nasdaq-2023-005).
    \53\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\54\ that the proposed rule change (SR-NYSECHX-2023-09), as
modified by Amendment No. 1, be, and hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\55\
---------------------------------------------------------------------------

    \55\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-12761 Filed 6-14-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 35 (Wednesday, February 24, 2021)]
[Notices]
[Pages 11284-11285]
[FR Doc No: 2021-03810]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP21-496-000.
    Applicants: Midcontinent Express Pipeline LLC.
    Description: Sec.  4(d) Rate Filing: MEP Cashout Filing to be
effective 4/1/2021.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5009.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-497-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Sec.  4(d) Rate Filing: REX 2021-02-17 Non-Conforming
Negotiated Rate Amendment to be effective 2/18/2021.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5015.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-498-000.
    Applicants: Viking Gas Transmission Company.
    Description: Sec.  4(d) Rate Filing: Negotiated Rate PAL
Agreement--World Fuel VR1052 to be effective 2/17/2021.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5051.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-499-000.
    Applicants: Vector Pipeline L.P.
    Description: Annual Report of Operational Purchases and Sales of
Vector Pipeline L.P. under RP21-499.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5103.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-500-000.
    Applicants: Northern Natural Gas Company.
    Description: Sec.  4(d) Rate Filing: 20210217 Negotiated Rate to be
effective 2/18/2021.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5106.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-501-000.
    Applicants: Guardian Pipeline, L.L.C.
    Description: Sec.  4(d) Rate Filing: Negotiated Rate PAL
Agreement--Koch GN0790 Extension to be effective 2/17/2021.
    Filed Date: 2/17/21.
    Accession Number: 20210217-5107.
    Comments Due: 5 p.m. ET 3/1/21.

    Docket Numbers: RP21-502-000.
    Applicants: EQT Energy, LLC, Chevron USA Inc.
    Description: Joint Petition For Limited Waiver, et al. of EQT
Energy, LLC, et al. under RP21-502.

    Filed Date: 2/17/21.
    Accession Number: 20210217-5138.
    Comments Due: 5 p.m. ET 2/24/21.

    The filings are accessible in the Commission's eLibrary system
(https://elibrary.ferc.gov/idmws/search/fercgensearch.asp) by 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: February 18, 2021.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2021-03810 Filed 2-23-21; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 140 (Friday, July 20, 2018)]
[Notices]
[Pages 34608-34609]
[FR Doc No: 2018-15598]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4368-DR; Docket ID FEMA-2018-0001]

New Jersey; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of New Jersey (FEMA-4368-DR), dated June 8,
2018, and related determinations.

DATES: The declaration was issued June 8, 2018.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated June 8, 2018, the President issued a major disaster declaration
under the authority of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''), as follows:

    I have determined that the damage in certain areas of the State
of New Jersey resulting from a severe winter storm and snowstorm
during the period of March 6-7, 2018, is of sufficient severity and
magnitude to warrant a major disaster declaration under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C.
5121 et seq. (the ``Stafford Act''). Therefore, I declare that such
a major disaster exists in the State of New Jersey.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State. You are
further authorized to provide snow assistance under the Public
Assistance program for a limited period of time during or proximate
to the incident period. Consistent with the requirement that Federal
assistance be supplemental, any Federal funds provided under the
Stafford Act for Hazard Mitigation will be limited to 75 percent of
the total eligible costs. Federal funds provided under the Stafford
Act for Public Assistance also will be limited to 75 percent of the
total eligible costs, with the exception of projects that meet the
eligibility criteria for a higher Federal cost-sharing percentage
under the Public Assistance Alternative Procedures Pilot Program for
Debris Removal implemented pursuant to section 428 of the Stafford
Act.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Lai Sun Yee, of FEMA is appointed to
act as the Federal Coordinating Officer for this major disaster.
    The following areas of the State of New Jersey have been designated
as adversely affected by this major disaster:

    Bergen, Essex, Morris, Passaic, and Somerset Counties for Public
Assistance.
    Bergen and Morris Counties for snow assistance under the Public
Assistance program for any continuous 48-hour period during or
proximate to the incident period.
    All areas within the State of New Jersey are eligible for
assistance under the Hazard Mitigation Grant Program.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034,

Disaster Unemployment Assistance (DUA); 97.046, Fire Management
Assistance Grant; 97.048, Disaster Housing Assistance to Individuals
and Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Brock Long,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2018-15598 Filed 7-19-18; 8:45 am]
 BILLING CODE 9111-23-P


[Federal Register: October 18, 2010 (Volume 75, Number 200)]
[Rules and Regulations]
[Page 63713-63714]
[DOCID:fr18oc10-8]

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

Coast Guard

33 CFR Part 117

[Docket No. USCG-2010-0892]

Drawbridge Operation Regulation; Back Bay of Biloxi, Harrison
County, MS

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from regulations.

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SUMMARY: The Commander, Eighth Coast Guard District, has issued a
temporary deviation from the regulation governing the operation of the
I-110 (HWY 15) bridge across the Back Bay of Biloxi, mile 3.0, between
Biloxi and D'Iberville, Harrison County, Mississippi. This deviation is
necessary to allow timely bridge rehabilitation to extend the bridge
life, optimize traffic and boat operations, and improve overall
traffic, boat and pedestrian safety. This deviation allows the bridge
to remain closed with limited exception.

DATES: This deviation is effective from 12:01 a.m. on January 4, 2011,
through 11:59 p.m. on May 30, 2011.

ADDRESSES: Documents mentioned in this preamble as being available in
the docket are part of docket USCG-2010-0892 and are available online
by going to http://www.regulations.gov, inserting USCG-2010-0892 in the
``Keyword'' box and then clicking ``Search''. They are also available
for inspection or copying at the Docket Management Facility (M-30),
U.S. Department of Transportation, West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or e-mail Mr. Jim Wetherington, Bridge Management Specialist,
District 8 Bridge Branch, U.S. Coast Guard; telephone<PHONE_NUMBER> e-
mail<EMAIL_ADDRESS>If you have questions on viewing
the docket, call Renee V. Wright, Program Manager, Docket Operations,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The I-110 (HWY 15) bridge across the Back
Bay of Biloxi, mile 3.0, between Biloxi and D'Iberville, Harrison
County, Mississippi, has a vertical clearance of 60 feet above mean
high water in the closed position. Presently, the draw opens on signal
if at least six hours notice is given as required by 33 CFR 117.675(a).
    The Mississippi Department of Transportation requests a deviation
to allow the bridge to remain closed to marine traffic except for
Mondays and Thursdays at 6 a.m. but only with a 72 hour advanced
request to open. The request should be made by telephone to 877-486-
8044. This deviation will allow the rehabilitation of the bridge to be
completed in a timely fashion. This rehab is necessary to extend the
bridge life, optimize traffic and boat operations, and improve overall
traffic, boat and pedestrian safety. Any vessel that does not require
an opening of the drawspan may pass at any time.
    In accordance with 33 CFR 117.261(a), Public vessels of the United
States and tugs with tow must be passed through the drawspan at any
time.
    In accordance with 33 CFR 117.31(b)(2), the drawspan shall be
opened for vessels in distress where a delay would endanger life or
property.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period.
    This deviation from the operating regulations is authorized under
33 CFR 117.35. This deviation may be terminated/cancelled at anytime
via Broadcast Notice to Mariners.

    Dated: October 5, 2010.
David M. Frank,
Bridge Administrator.
[FR Doc. 2010-26098 Filed 10-15-10; 8:45 am]
BILLING CODE 9110-04-P


1 MEMORANDUM  DRAFT DATE: May 26, 2004 SUBJECT: Review of Verified Control Technologies for Stationary Internal Combustion Engines FROM: Bradley Nelson Alpha Gamma Technologies, Inc.

TO: Sims Roy, EPA/ Emission Standards Division/ Combustion Group This memorandum summarizes the review of verified control technologies that could apply to particulate matter ( PM), nitrogen oxide ( NO X), carbon monoxide ( CO), and hydrocarbon ( HC) emission reductions from stationary internal combustion engines. The three main sources of verified engine technologies are the Cal/ EPA Air Resources Board Diesel Emission Control Strategies Verification1,2, the EPA Voluntary Diesel Retrofit Program3, and the EPA Environmental Technology Verification Program4. The State of California Air Resources Board and EPA Office of Transportation and Air Quality reached an agreement for coordination and reciprocity in diesel retrofit device verification. The objective of this joint effort is to encourage the verification of innovative emission control technologies and promote their use in retrofitting diesel vehicles and engines. Many of the verified technologies from these programs focused on emission reductions from diesel on road and off road engines. For purposes of this memorandum,

control technologies applicable to stationary engines and control technologies used in on road and off road applications will be presented in separate sections. Each of the control technology vendors were contacted to discuss the applicability of using the control technology on stationary internal combustion engines, the costs of applying the technology, and what emission reductions could be achieved. 2 STATIONARY ENGINE CONTROL TECHNOLOGY CleanAIR PERMITTM Filter The CleanAIR PERMITTM Filter uses a ceramic honeycomb structure that is comprised of hundreds of parallel channels which filter out particulate from the exhaust stream. The honeycomb structure also has a thin coating of precious metals used as a catalyst to oxidize CO and total HC into carbon dioxide and water. This technology was verified by the CARB Diesel Emission Control Strategies Verification program on June 6, 2003. The technology was approved for use on stationary emergency generators using diesel fuel. At various loads the PERMITTM Filter was able to reduce emissions of PM by 85 percent (< 0.1 g/ bhp hr), CO by 95 percent, and THC by 90 percent. The vendor5 noted that the PERMITTM Filter can be used on any type of stationary engine, including spark ignited and compression ignited engines. The vendor recommends the use of ultra low sulfur fuel ( 15 ppm sulfur) to prevent fouling of the catalyst, and cleaning the filter media after 5000 hours of operation. The capital and installation cost for a typical system is approximately $ 65,000, and depends on the size of the engine. For larger engines greater than 500 hp, two filter systems in parallel may have to be installed. Costs are slightly higher for 2 stroke engines in comparison to 4 stroke engines. A disadvantage of the PERMITTM technology is that there is a slight increase in NO X emissions, approximately 10 20 percent.

Cleaire LongviewTM The Cleaire LongviewTM integrates a NO X reducing catalyst and a catalyzed diesel particulate filter to provide simultaneous control of NO X, PM, HC, and CO emissions. This technology was verified by the CARB Diesel Emission Control Strategies Verification program on April 16, 2004.

The technology was approved for on road applications using ultra low sulfur diesel fuel. The LongviewTM system reduced NO X emissions by 25 percent, PM emissions by 85 percent, CO emissions by 90 percent and HC emissions by 65 percent. The vendor6 stated that the LongviewTM system can be used in compression ignition stationary internal combustion 4 stroke 3 engines in prime power and limited use applications. They currently have installed the control system in a number of stationary engines less than 400 horsepower and the emission reductions were comparable to reductions from the on road applications. Cost and installation of the LongviewTM system is approximately $ 19,000.

MIRATECH GECOTM 3001 Air/ Fuel Ratio Controller The MIRATECH GECOTM controller is designed to optimize and stabilize the air/ fuel ratio, and improve the performance of stationary natural gas fired, four cycle, lean burn engines. The technology was verified by the EPA Environmental Technology Verification Program on September 2001. The controller was installed on a natural gas fired compressor engine used at a natural gas transmission station. Emission reductions for NO X at full and reduced loads averaged 30 percent, CO reductions averaged 4 percent. Emissions of THC increased approximately 10 percent over the operating range tests. Capital and installation cost for the controller was $ 11,652.

Lubrizol Engine Control Systems Purifilter The Lubrizol Purifilter has been verified by CARB for 1994 through 2003 model year diesel engines used for on road applications operating on ultra low sulfur diesel fuel ( 15 ppm sulfur).

The engines are four stroke medium and heavy duty diesel engines, including turbo charged or naturally aspirated, mechanically or electronically injected, and not equipped with exhaust gas recirculation. The vendor7 states that the Purifilter system can also be used on stationary engine applications where the exhaust temperature reaches above 280oC ( 536oF). The high temperature allows the particulate collected to be burned off. Periodic cleaning of the filter substrate will allow the system to be used for the life of the engine. The Purifilter has a PM reduction of 85 percent, and CO and HC reductions of 90 percent. Emission reductions are expected to be similar in stationary use applications. Because the Purifilter has a platinum based catalyst, NO X emissions are increased by 5 to 10 percent. Installed cost of the system ranges from $ 2000 to $ 8000,

depending on the amount of exhaust gas to be treated. 4 Engelhard DPX Catalyzed Diesel Particulate Filter The DPX Catalyzed Diesel Particulate Filter was verified under the NESCAUM Voluntary Mobile Emissions Reduction Retrofit Program. This technology was also verified by CARB,

however the manufacturer has not met the additional warranty requirements which became effective in June 2003 and is no longer considered verified by CARB as of January 1, 2004. The technology consists of filters that trap particulates and then uses a catalytic technology to continuously burn them at normal diesel operating exhaust temperatures. The technology is applicable to all 1994 through 2002 model year, two and four cycle engines that are turbocharged or naturally aspirated engines. The exhaust temperature must be at least 250oC ( 482oF) to allow the catalyst to regenerate. Also the sulfur content of the fuel must be less than 30 ppm. The vendor8 stated that this technology was verified use in on road heavy duty applications, it can be used in stationary engine applications using diesel or natural gas. Emission reductions of PM,

CO, and HC were verified to be 60 percent for each pollutant with an approximate 1 to 3 percent fuel economy penalty.

Selective Catalytic Reduction/ Non Selective Catalytic Reduction None of the verification programs listed any vendors demonstrating the use of selective catalytic reduction ( SCR) or non selective catalytic reduction ( NSCR) as a verified control technology,

however both SCR and NSCR have been proven to reduce emissions of NO X from stationary engines. Selective catalytic reduction can effectively reduce emissions of NO X from stationary lean burn engines by greater than 90 percent, but has not been widely used for engines due to the high cost. Non selective catalytic reduction reduces emissions of NO X from stationary rich burn engines by at least 90 percent. Non selective catalytic reduction is the most widely used control method for rich burn engines and has been commercially available for stationary engines for more than 15 years.

Future Emission Control Technologies In addition to the commercially available control technologies listed in this memorandum, there are a number of technologies that have demonstrated effectiveness in reducing emissions but are 5 not commercially available. From the EPA Voluntary Diesel Retrofit Program, these technologies include: NO X adsorber, Compact Selective Catalytic Reduction, and Cooled Exhaust Gas Recirculation. These technologies can reduce emissions of NO X, PM, CO, and HC by as much as 50 percent.

MOBILE ENGINE CONTROL TECHNOLOGY Donaldson DPM The Donaldson DPM diesel particulate filter muffler system was verified by CARB on February 27, 2004. The DPM with Series 6300 catalyst formulation is used for 1994 through 2002 model year engines used for on road applications operating on ultra low sulfur diesel fuel. The verified engines are four stroke medium and heavy duty diesel engines, including turbo charged,

mechanically or electronically injected, and not equipped with exhaust gas recirculation. The DPM system achieves 85 percent reduction of diesel particulate matter. CARB found that the Donaldson Company was unable to demonstrate the DPM DPF muffler system was in compliance with the 20 percent nitrogen dioxide limit which took effect January 1, 2004. Therefore the system will be in noncompliance with the NO X limit. The vendor9 stated that this system was designed for use in on road and non road applications.

Donaldson Series 6000 Diesel Oxidation Catalyst Muffler and Spiracle Closed Crankcase Filtration System The Donaldson control system was verified on a heavy duty diesel engine by EPA in September 2003. The system is packaged for use on diesel engines from 150 to 600 brake horsepower. The control system consists of an oxidation catalyst contained in a muffler sized can and a blow by filter in a closed loop configuration. Emissions of PM were reduced by 24 percent when using low sulfur diesel fuel in comparison to uncontrolled PM emissions using low sulfur diesel fuel.

Emissions of CO and HC were also reduced by 14 percent and 52 percent respectively. When using ultra low sulfur diesel fuel, emissions reductions for PM, CO and HC were 34 percent, 19 6 percent and 0 percent respectively. The vendor9 stated that this system was designed for use in on road and non road applications.

Donaldson Series 6100 Diesel Oxidation Catalyst Muffler The Donaldson control system was verified on a heavy duty diesel engine by EPA in September 2003. The system is packaged for use on diesel engines from 150 to 600 brake horsepower and is designed to be used with ultra low sulfur fuel. The control system consists of an oxidation catalyst contained in a muffler sized can. Emissions of PM was reduced by 28 percent when using ultra low sulfur diesel fuel in comparison to uncontrolled PM emissions using low sulfur diesel fuel. Emissions of CO and HC were also reduced by 38 percent and 49 percent respectively. The vendor9 stated that this system was designed for use in on road and non road applications.

Donaldson Series 6100 Diesel Oxidation Catalyst Muffler and Spiracle Closed Crankcase Filtration System The Donaldson control system was verified on a heavy duty diesel engine by EPA in September 2003. The system is packaged for use on diesel engines from 150 to 600 brake horsepower and is designed to be used with ultra low sulfur fuel. The control system consists of an oxidation catalyst contained in a muffler sized can and a blow by filter in a closed loop configuration.

Emissions of PM were reduced by 34 percent when using ultra low sulfur diesel fuel in comparison to uncontrolled PM emissions using low sulfur diesel fuel. Emissions of CO were reduced by 31 percent. Emissions of HC remained unchanged from the baseline emissions.

Emissions of PM were reduced by 29 percent when using ultra low sulfur diesel fuel in comparison to uncontrolled PM emissions using ultra low sulfur diesel fuel. Emissions of CO and HC were also reduced by 35 percent and 42 percent respectively when compared to uncontrolled ultra low sulfur diesel emissions. The vendor9 stated that this system was designed for use in onroad and non road applications.

Clean Air Partners Diesel Particulate Filter The Clean Air Partners diesel particulate filter has been verified by CARB for use on natural 7 gas/ diesel bi fuel engines. The filter achieves a particulate reduction of 85 percent from the exhaust gas. The vendor10 stated that this technology was designed for use in bi fuel engines used in on road and non road applications. They do however sell a catalyzed particulate filter silencer for stationary diesel engines that achieves a 70 to 90 percent reduction in particulate, but it has not been verified by any of the governmental agencies.

Cleaire Flash and Catch The Cleaire Flash and Catch system is verified for use on 1994 through 1998 model year Cummins M11 for steady state, on road applications ( i. e. long haul trucks), operating on low sulfur fuel. The system contains a recalibrated fuel injection map and diesel particulate filter to reduce PM emissions by 85 percent, CO and HC emissions by 90 percent, and NO X emissions by 25 percent. The vendor6 stated that this technology was intended for mobile engine used in onroad and non road applications.

Clean Diesel Technologies Fuel Borne Catalyst with CleanAir Systems Diesel Oxidation Catalyst The Fuel Borne Catalyst and Diesel Oxidation Catalyst were verified by EPA in February 2004 for on road heavy duty diesel engines using ultra low sulfur diesel fuel. Emissions of PM were captured by the Fuel Borne Catalyst and were reduced by 50 percent in comparison to baseline emissions using no control and low sulfur diesel fuel. Emissions of CO and HC were reduced by the Diesel Oxidation Catalyst by 64 and 59 percent respectively. Emissions of NO X were reduced by 7 percent by the control technology system.

Johnson Matthey Corporation Continuously Regenerating Technology ( CRT)

The Continuously Regenerating Technology was verified under the NESCAUM Voluntary Mobile Emissions Reduction Retrofit Program. This technology was also verified by CARB,

however the manufacturer has not met the additional warranty requirements which became effective in June 2003 and is no longer considered verified by CARB as of January 1, 2004. The technology is applicable to all 1994 through 2002 model year, two and four cycle engines that are 8 turbocharged or naturally aspirated engines. As with other technologies of this type, the exhaust temperature must be at least 275oC ( 527oF) to allow the catalyst to regenerate. Also the sulfur content of the fuel must be less than 30 ppm. The vendor11 stated that this technology was intended for on road heavy duty diesel engines and has not been used in a stationary application.

However they offer similar technologies for use in stationary applications. Emission reductions of PM, CO, and HC were verified to be 60 percent with an approximate 1 to 3 percent fuel economy penalty.

Clean Diesel Technologies Platinum Plus Purifier System The Platinum Plus Purifier System was verified in October 2003 by EPA's Environmental Technology Verification program. The technology comprises of a Diesel Oxidation Catalyst muffler in combination with the Platinum Plus Fuel Borne Catalyst. The technology was verified for model year 1988 through 1993, four stroke medium heavy duty engines, including turbocharged or naturally aspirated, mechanically, or electronically injected diesel engines. For fuel with a sulfur content less than 15 ppm the reductions of PM, CO, HC, and NO X are 50 percent, 50 percent, 47 percent, and 5 percent respectively. For fuel with a sulfur content of less than 500 ppm the PM, CO, and HC reductions are 41 percent, 16 percent, and 25 percent respectively. Information from the companies website states that this technology is intended for on road applications, however they do make a formulation of the fuel borne catalyst for use in stationary engine applications. The Platinum Plus DFX Power Gen. Formulation improves fuel economy and oxidation catalyst performance on stationary, marine and locomotive engines and achieves a 15 to 30 percent particulate reduction ( 80 to 90 percent particulate reduction when used with a filter).

Caterpillar Catalyzed Converter/ Muffler ( CCM)

The Catalyzed Converter/ Muffler was verified in February 2004 by the EPA Voluntary Diesel Retrofit Program. The CCM system consists of a diesel oxidation catalyst contained within a muffler assembly. The technology was verified for model years 1998 through 2003, four cycle heavy duty engines without exhaust gas recirculation, including turbocharged or naturally 9 aspirated diesel engines. For fuel with a sulfur content less than 500 ppm, the percent reduction for PM and CO were 20 percent, and 40 percent for HC. Information from the companies website states that this technology is used only for on road and non road applications. 10 REFERENCES 1. California Air Resources Board. Diesel Emission Control Strategies Verification Level 3 Verified Technologies. May 4, 2004.

Http:// www. arb. ca. gov/ diesel/ verdev/ level3. htm 2. California Air Resources Board. Diesel Emission Control Strategies Verification Level 1 Verified Technologies. May 19, 2004.

Http:// www. arb. ca. gov/ diesel/ verdev/ level1. htm 3. U. S. Environmental Protection Agency, Office of Transportation and Air Quality.

Voluntary Diesel Retrofit Program, Verified Products. February 24, 2004.

Http:// www. epa. gov/ otaq/ retrofit/ retroverifiedlist. htm 4. U. S. Environmental Protection Agency, Environmental Technology Verification Program.

Verifications By Center. May 20, 2004.

http:// www. epa. gov/ etv/ verifications/ verification index. html 5. B. Nelson, AGTI, to D. Serrano, CleanAIR Systems. Telecon. Compatibility of the PermitTM Filter system with Stationary Engines. May 18, 2004.

6. B. Nelson, AGTI, to J. Egan, Cleaire. Telecon. Information Regarding the use of their Advanced Emission Controls for Stationary Engines. May 18, 2004.

7. B. Nelson, AGTI, to J. Jantzis, Lubrizol. Telecon. Questions Regarding the Compatibility of the Purifilter system for Stationary Engines. May 17, 2004.

8. B. Nelson, AGTI, to Y. Bulent, Engelhard Telecon. Information Regarding the use of the DPX Catalyzed Diesel Particulate Filter. May 20, 2004.

9. B. Nelson, AGTI, to R. Sheffer, Donaldson. Telecon. Request for Informations Regarding their Diesel Control Technology. May 17, 2004.

10. B. Nelson, AGTI, to C. Reyes, Clean Air Partners. Telecon. Diesel Particulate Filter Information Request. May 21, 2004.

11. B. Nelson, AGTI, to K. Bynum, Johnson Matthey Corporation. Telecon. Continuously Regenerating Technology Information Request. May 21, 2004.