[Federal Register: January 5, 2009 (Volume 74, Number 2)]
[Rules and Regulations]
[Page 205-207]
[DOCID:fr05ja09-4]

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DEPARTMENT OF TRANSPORTATION

14 CFR Part 97

[Docket No. 30643; Amdt. No. 3301]

Standard Instrument Approach Procedures, and Takeoff Minimums and
Obstacle Departure Procedures; Miscellaneous Amendments

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This rule establishes, amends, suspends, or revokes Standard
Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums
and Obstacle Departure Procedures for operations at certain airports.
These regulatory actions are needed because of the adoption of new or
revised criteria, or because of changes occurring in the National
Airspace System, such as the commissioning of new navigational
facilities, adding new obstacles, or changing air traffic requirements.
These changes are designed to provide safe and efficient use of the
navigable airspace and to promote safe flight operations under
instrument flight rules at the affected airports.

DATES: This rule is effective January 5, 2009. The compliance date for
each SIAP, associated Takeoff Minimums, and ODP is specified in the
amendatory provisions.
    The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of January 5, 2009.

ADDRESSES: Availability of matter incorporated by reference in the
amendment is as follows:
    For Examination--
    1. FAA Rules Docket, FAA Headquarters Building, 800 Independence
Avenue, SW., Washington, DC 20591;
    2. The FAA Regional Office of the region in which the affected
airport is located;
    3. The National Flight Procedures Office, 6500 South MacArthur
Blvd., Oklahoma City, OK 73169 or,
    4. The National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/federal_register/code_of_
federal_regulations/ibr_locations.html.
    Availability--All SIAPs are available online free of charge. Visit
http://nfdc.faa.gov to register. Additionally, individual SIAP and
Takeoff Minimums and ODP copies may be obtained from:
    1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building,
800 Independence Avenue, SW., Washington, DC 20591; or
    2. The FAA Regional Office of the region in which the affected
airport is located.

FOR FURTHER INFORMATION CONTACT: Harry J. Hodges, Flight Procedure
Standards Branch (AFS-420) Flight Technologies and Programs Division,
Flight Standards Service, Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma
City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125);
telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: This rule amends Title 14, Code of Federal
Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs.
The complete regulatory description of each SIAP is listed on the
appropriate FAA Form 8260, as modified by the National Flight Data
Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated
by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and
Sec.  97.20 of Title 14 of the Code of Federal Regulations.
    The large number of SIAPs, their complex nature, and the need for a
special format make their verbatim publication in the Federal Register
expensive and impractical. Further, airmen do not use the regulatory
text of the SIAPs, but refer to their graphic depiction on charts
printed by publishers of aeronautical materials. Thus, the advantages
of incorporation by reference are realized and publication of the
complete description of each SIAP contained in FAA form documents is
unnecessary. This amendment provides the affected CFR sections and
specifies the types of SIAP and the corresponding effective dates. This
amendment also identifies the airport and its location, the procedure
and the amendment number.

The Rule

    This amendment to 14 CFR part 97 is effective upon publication of
each separate SIAP as amended in the transmittal. For safety and
timeliness of change considerations, this amendment incorporates only
specific changes contained for each SIAP as modified by FDC/P-NOTAMs.
    The SIAPs, as modified by FDC P-NOTAM, and contained in this
amendment are based on the criteria contained in the U.S. Standard for
Terminal Instrument Procedures (TERPS). In developing these changes to
SIAPs, the TERPS criteria were applied only to specific conditions
existing at the affected airports. All SIAP amendments in this rule
have been previously issued by the FAA in an FDC NOTAM as an emergency
action of immediate flight safety relating directly to published
aeronautical charts. The circumstances which created the need for all
these SIAP amendments requires making them effective in less than 30
days.
    Because of the close and immediate relationship between these SIAPs
and safety in air commerce, I find that notice and public procedure
before adopting these SIAPs are impracticable and contrary to the
public interest and, where applicable, that good cause exists for
making these SIAPs effective in less than 30 days.

Conclusion

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore--(1) Is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. For the same reason, the FAA
certifies that this amendment will not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97

    Air traffic control, Airports, Incorporation by reference, and
Navigation (air).

    Issued in Washington, DC on December 12, 2008.
John M. Allen,
Deputy Director, Flight Standards Service.

Adoption of the Amendment

0
Accordingly, pursuant to the authority delegated to me, Title 14, Code
of Federal regulations, Part 97, 14 CFR part 97, is amended by amending
Standard Instrument Approach Procedures, effective at 0901 UTC on the
dates specified, as follows:

PART 97--STANDARD INSTRUMENT APPROACH PROCEDURES

0
1. The authority citation for part 97 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120,
44502, 44514, 44701, 44719, 44721-44722.

0
2. Part 97 is amended to read as follows:

Sec. Sec.  97.23, 97.25, 97.27, 97.29, 97.31, 97.33 and
97.35  [Amended]

    By amending: Sec.  97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or
TACAN; Sec.  97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; Sec.
97.27 NDB, NDB/DME; Sec.  97.29 ILS, ILS/DME, ISMLS, MLS/DME, MLS/RNAV;
Sec.  97.31 RADAR SIAPs; Sec.  97.33 RNAV SIAPs; and Sec.  97.35 COPTER
SIAPs, Identified as follows:

* * * * *

Effective Upon Publication

----------------------------------------------------------------------------------------------------------------
      FDC date            State            City                 Airport            FDC No.          Subject
----------------------------------------------------------------------------------------------------------------
11/25/08............  NH..........  Whitefield........  Mount Washington              8/1169  LOC/NDB Rwy 10,
                                                         Regional.                             Amdt 6.
11/25/08............  KY..........  Hopkinsville......  Hopkinsville--Christian       8/1302  RNAV (GPS) Rwy 8,
                                                         County.                               Orig.
11/25/08............  GA..........  Canton............  Cherokee County........       8/1313  NDB Rwy 4, Amdt 3.
11/26/08............  ID..........  Rexburg...........  Rexburg-Madison County.       8/1387  RNAV (GPS) Rwy 35,
                                                                                Amdt 1.
11/26/08............  ID..........  Idaho Falls.......  Idaho Falls Regional...       8/1399  NDB Rwy 20, Amdt
                                                                                10B.
11/26/08............  ID..........  Idaho Falls.......  Idaho Falls Regional...       8/1400  LOC BC Rwy 2, Amdt
                                                                                6A.
11/26/08............  ID..........  Idaho Falls.......  Idaho Falls Regional...       8/1402  RNAV (GPS) Rwy 2,
                                                                                Orig.
11/26/08............  WA..........  Everett...........  Snohomish County (Paine       8/1414  ILS OR LOC/DME Rwy
                                                         Fld).                                 16R, Amdt 21.
12/1/08.............  NE..........  Omaha.............  Eppley Airfield........       8/1614  ILS OR LOC/DME Rwy
                                                                                14R, Amdt 4...ILS
                                                                                Rwy 14R (CAT II)
                                                                                Amdt 4...ILS Rwy
                                                                                14R (CAT III)
                                                                                Amdt 4.
12/1/08.............  NE..........  Omaha.............  Eppley Airfield........       8/1615  ILS OR LOC Rwy
                                                                                32R, Orig-A...ILS
                                                                                Rwy 32R (CAT II)
                                                                                Orig-A...ILS Rwy
                                                                                32R (CAT III)
                                                                                Orig-A.
12/1/08.............  NE..........  Omaha.............  Eppley Airfield........       8/1617  ILS OR LOC/DME Rwy
                                                                                14L, Amdt 1A.
12/1/08.............  MT..........  Colstrip..........  Colstrip...............       8/1682  GPS Rwy 6, Orig-A.
12/1/08.............  ND..........  Grand Forks.......  Grand Forks Intl.......       8/1686  RNAV (GPS) Rwy
                                                                                17R, Orig.
12/1/08.............  ND..........  Grand Forks.......  Grand Forks Intl.......       8/1688  VOR Rwy 17R, Amdt
                                                                                6.
12/1/08.............  WA..........  Ellensburg........  Bowers Field...........       8/1689  VOR B, Amdt 3.
12/1/08.............  NE..........  Omaha.............  Eppley Airfield........       8/1711  ILS OR LOC/DME Rwy
                                                                                18, Amdt 8.
12/1/08.............  NE..........  Omaha.............  Eppley Airfield........       8/1712  RNAV (GPS) Rwy
                                                                                32R, Orig.
12/1/08.............  OH..........  Cleveland.........  Cleveland-Hopkins Intl.       8/1768  ILS OR LOC Rwy 6R,
                                                                                Amdt 20.
12/7/08.............  CA..........  Arcata/Eureka.....  Arcata.................       8/2005  RNAV (GPS) Rwy 32,
                                                                                Orig.
12/7/08.............  CA..........  Arcata/Eureka.....  Arcata.................       8/2007  VOR/DME Rwy 1,
                                                                                Amdt 7B.
12/7/08.............  CA..........  Arcata/Eureka.....  Arcata.................       8/2011  ILS OR LOC/DME Rwy
                                                                                32, Amdt 1C.
12/7/08.............  CA..........  Arcata/Eureka.....  Arcata.................       8/2012  ILS Rwy 32, Amdt
                                                                                29B.
12/2/08.............  OR..........  Madras............  Madras Municipal.......       8/2016  TAKEOFF MINIMUMS
                                                                                AND (OBSTACLE)
                                                                                DP, Orig.
12/2/08.............  OR..........  Madras............  Madras Municipal.......       8/2020  RNAV (GPS) A,
                                                                                Orig.
12/2/08.............  NY..........  New York..........  Laguardia..............       8/2159  LDA-A, Amdt 2A.
12/2/08.............  VA..........  Norfolk...........  Chesapeake Regional....       8/2247  RNAV (GPS) Rwy 5,
                                                                                Orig.
12/3/08.............  VA..........  Manassas..........  Manassas RGNL/Harry P         8/2248  RNAV (GPS) Rwy
                                                         David Fl.                             16R, Orig-A.
12/5/08.............  CO..........  Longmont..........  Vance Brand............       8/2637  VOR/DME-A, Amdt
                                                                                1A.
12/5/08.............  CO..........  Longmont..........  Vance Brand............       8/2638  RNAV (GPS) B, Orig-
                                                                                A.

12/5/08.............  OR..........  Medford...........  Rogue Valley Intl/            8/2640  Takeoff Minimums
                                                         Medford.                              and (Obstacle)
                                                                                DP, Amdt 8.
12/5/08.............  TX..........  Dallas............  Dallas Executive.......       8/2716  ILS OR LOC Rwy 31,
                                                                                Amdt 8.
12/9/08.............  IL..........  Belleville........  Scott AFB/Midamerica...       8/3076  ILS OR LOC Rwy
                                                                                14R, Orig-B.
12/10/08............  NC..........  Maxton............  Laurinburg-Maxton......       8/3203  RNAV (GPS) Rwy 5,
                                                                                Orig.
12/10/08............  NC..........  Maxton............  Laurinburg-Maxton......       8/3204  ILS Rwy 5, Amdt 1.
12/10/08............  NC..........  Mooresville.......  Lake Norman Airpark....       8/3271  RNAV (GPS) Rwy 14,
                                                                                Orig.
12/11/08............  DC..........  Washington........  Washington Dulles Intl.       8/3289  RNAV (GPS) Y Rwy
                                                                                19C, Amdt 3.
12/10/08............  FL..........  Tallahassee.......  Tallahassee Regional...       8/3356  VOR Rwy 18, Amdt
                                                                                11.
12/10/08............  FL..........  Tallahassee.......  Tallahassee Regional...       8/3357  NDB Rwy 36, Amdt
                                                                                20.
12/10/08............  PA..........  Pittsburgh........  Pittsburgh Intl........       8/3421  RNAV (RNP) Z Rwy
                                                                                32, Orig.
12/10/08............  PA..........  Pittsburgh........  Pittsburgh Intl........       8/3422  RNAV (GPS) Y Rwy
                                                                                32, Amdt 4.
12/10/08............  PA..........  Pittsburgh........  Pittsburgh Intl........       8/3423  ILS OR LOC Rwy 32,
                                                                                Amdt 12.
12/9/08.............  IL..........  Belleville........  Scott AFB/Midamerica...       8/8135  This NOTAM
                                                                                Published In TL
                                                                                08-26 Is Hereby
                                                                                Rescinded In It's
                                                                                Entirety. ILS OR
                                                                                LOC Rwy 14R, Orig-
                                                                                B.
11/14/08............  LA..........  Natchitoches......  Natchitoches RGNL......       8/9331  This NOTAM
                                                                                Published In TL
                                                                                09-01 Is Hereby
                                                                                Rescinded In It's
                                                                                Entirety. LOC Rwy
                                                                                35, Amdt 3D.
----------------------------------------------------------------------------------------------------------------

 [FR Doc. E8-30640 Filed 1-2-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register: November 9, 2009 (Volume 74, Number 215)]
[Notices]
[Page 57717-57718]
[DOCID:fr09no09-90]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon written request, copies available from: U.S. Securities and
Exchange Commission, Office of Investor Education and Advocacy,
Washington, DC 20549-0213.

Extension:
    Rule 17i-5, SEC File No. 270-531, OMB Control No. 3235-0590.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 \1\ the Securities and Exchange Commission (``Commission'')
intends to submit to the Office of Management and Budget a request for
extension of the previously approved collections of information
discussed below. The Code of Federal Regulations citation to this
collection of information is the following: 17 CFR 240.17i-5.
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    \1\ 44 U.S.C. 3501 et seq.
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    Section 231 of the Gramm-Leach-Bliley Act of 1999 \2\ (the
``GLBA'') amended Section 17 of the Securities Exchange Act of 1934 (15
U.S.C. 78q) to create a regulatory framework under which a holding
company of a broker-dealer (``investment bank holding company'' or
``IBHC'') may voluntarily be supervised by the Commission as a
supervised investment bank holding company (or ``SIBHC'').\3\ In 2004,
the Commission promulgated rules, including Rule 17i-5, to create a
framework for the Commission to supervise SIBHCs.\4\ This framework
includes qualification criteria for SIBHCs, as well as recordkeeping
and reporting requirements. Among other things, this regulatory
framework for SIBHCs is intended to provide a basis for non-U.S.
financial regulators to treat the Commission as the principal U.S.
consolidated home-country supervisor for SIBHCs and their affiliated
broker-dealers.\5\
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    \2\ Public Law 106-102, 113 Stat. 1338 (1999).
    \3\ See 15 U.S.C. 78q(i).
    \4\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR
34472 (Jun. 21, 2004).
    \5\ See H.R. Conf. Rep. No. 106-434, 165 (1999). See also
Exchange Act Release No. 49831, at 6 (Jun. 8, 2004), 69 FR 34472, at
34473 (Jun. 21, 2004).
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    Pursuant to Section 17(i)(3)(A) of the Exchange Act, an SIBHC would
be required to make and keep records, furnish copies thereof, and make
such reports as the Commission may require by rule.\6\ Rule 17i-5 would
require that an SIBHC make and keep current certain records relating to
its business. In addition, it would require that an SIBHC preserve
those and other records for certain prescribed time periods.
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    \6\ 15 U.S.C. 78q(i)(3)(A).
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    The collections of information required pursuant to Rule 17i-5 are
necessary so that the Commission can adequately supervise the
activities of these SIBHCs. In addition, these collections of
information are needed to allow the Commission to effectively determine
whether supervision of an IBHC as an SIBHC is necessary or appropriate
in furtherance of the purposes of section 17 of the Act. Rule 17i-5
also enhances the Commission's supervision of the SIBHCs' subsidiary
broker-dealers through collection of additional information and
inspections of affiliates of those broker-dealers. Without this
information and documentation, the Commission would be unable to
adequately supervise an SIBHC, nor would it be able to determine
whether continued supervision of an IBHC as an SIBHC were necessary and
appropriate in furtherance of the purposes of section 17 of the Act.
    In addition to the one firm currently supervised by the Commission
as an SIBHC, we estimate that 2 IBHCs will file Notices of Intention
with the Commission to be supervised by the Commission as SIBHCs; for a
total of three firms. An SIBHC will generally require about 40 hours to
create and document a contingency plan regarding funding and liquidity
of the affiliate group at a cost of $9,200 per SIBHC.\7\ An SIBHC will
require, on average, approximately 64 hours each quarter to create a
record regarding stress tests, or approximately 256 hours each year and
a cost of $49,920.\8\ Further, an SIBHC will establish approximately 20
new counterparty arrangements each year, and will take, on average,
about 30 minutes to create a record regarding the basis for credit risk
weights for each such counterparty for a cost of $84,000.\9\ Finally,
an SIBHC will generally require about 24 hours per year to maintain the
specified records for a cost of $4,632.\10\
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    \7\ We believe that an SIBHC would have a Senior Treasury
Manager create this record. According to the Securities Industry and
Financial Markets Association (``SIFMA''), the hourly cost of a
Senior Treasury Manager is $230, as reflected in the SIFMA's Report
on Management and Professional Earnings for 2008 (``SIFMA's Report
on Professional Earnings''), and modified to account for an 1,800-
hour work-year and multiplied by 5.35 to account for bonuses, firm
size, employee benefits and overhead. ($230 x 40 hours) = $9,200.
    \8\ We believe that an SIBHC would have a Floor Supervisor, or
equivalent, create this record with an hourly cost of $195, as
reflected in SIFMA's Report on Professional Earnings''). ($195 x
256) = $49,920.
    \9\ On average, each firm presently maintains relationships with
approximately 1,000 counterparties. Further, firms generally already
maintain documentation regarding their credit decisions, including
their determination of credit risk weights, for those
counterparties. We believe that an SIBHC would have an Intermediate
Accountant create this record, which according to SIFMA's Report on
Professional Earnings receives an hourly rate of $141. ($141 x (30
minutes x 20 counterparties)) = $84,000.
    \10\ We believe that an SIBHC would have a Program Analyst
perform this task and according to SIFMA's Report on Professional
Earnings, a Programmer Analyst receives an hourly rate of $193.
($193 x 24) = $4,632.
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    We believe that an IBHC likely will upgrade its information
technology (``IT'') systems in order to more efficiently comply with
certain of the SIBHC framework rules (including Rules 17i-4, 17i-5,
17i-6 and 17i-7), and that this would be a one-time cost. Depending on
the state of development of the IBHC's IT systems, it would cost an
IBHC between $1 million and $10 million to upgrade its IT systems to
comply with the SIBHC framework of rules. Thus, on average, it would
cost each of the three IBHCs about $5.5 million to upgrade their IT
systems, or approximately $16.5 million in total. It is impossible to
determine what percentage of the IT systems costs would be attributable
to each Rule, so we allocated the total estimated upgrade costs equally
(at 25% for each of the above-mentioned Rules), with $4,125,000
attributable to Rule 17i-5.
    Written comments are invited on: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the agency, including

whether the information will have practical utility; (b) the accuracy
of the agency's estimate of the burden of the collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information collected; and (d) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques or other forms of information
technology. Consideration will be given to comments and suggestions
submitted in writing within 60 days of this publication.
    Comments should be directed to Charles Boucher, Director/Chief
Information Officer, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria, Virginia 22312 or send
an e-mail to<EMAIL_ADDRESS>
    Dated: November 2, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-26884 Filed 11-6-09; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Notices]
[Pages 63267-63268]
[FR Doc No: 2013-24843]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70709; File No. SR-OCC-2013-803]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of No Objection to Advance Notice Filing To Reflect Enhancements
in OCC's System for Theoretical Analysis and Numerical Simulations as
Applied to Longer-Tenor Options

October 17, 2013.
    On June 4, 2013, The Options Clearing Corporation (``OCC'') filed
with the Securities and Exchange Commission (``Commission'') advance
notice SR-OCC-2013-803 (``Advance Notice'') pursuant to Section
806(e)(1) of the Payment, Clearing, and Settlement Supervision Act of
2010 (``Clearing Supervision Act'' or ``Title VIII'') \1\ and Rule 19b-
4(n)(1)(i) under the Securities Exchange Act of 1934 (``Exchange
Act'').\2\ The Advance Notice was published for comment in the Federal
Register on July 9, 2013.\3\ The Commission did not receive any
comments on the Advance Notice publication. This publication serves as
a notice of no objection to the Advance Notice.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i). OCC is a designated financial
market utility and is required to file advance notices with the
Commission. See 12 U.S.C. 5465(e). OCC also filed the proposal in
this Advance Notice as a proposed rule change under Section 19(b)(1)
of the Exchange Act and Rule 19b-4 thereunder, which was published
for comment in the Federal Register on June 14, 2013. 15 U.S.C.
78s(b)(1); 17 CFR 240.19b-4. See Release No. 69723 (June 10, 2013),
78 FR 36002 (June 14, 2013) (SR-OCC-2013-08). OCC withdrew the
proposed rule change on August 27, 2013. Prior to the date of
withdrawal, the Commission did not receive any comments on the
proposed rule change. On October 10, 2013, OCC re-filed the proposal
in this Advance Notice as a proposed rule change under Section
19(b)(1) of the Exchange Act and Rule 19b-4 thereunder.
    \3\ Release No. 69925 (July 3, 2013), 78 FR 41161 (July 9, 2013)
(SR-OCC-2013-803) (``Notice'').
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I. Description of the Advance Notice

    On December 14, 2012, the Commission issued an order approving a
proposed rule change and a notice of no objection to an advance notice,
collectively (``December 14, 2012 Action''), through which OCC proposed
to establish a legal and operational framework for OCC to clear certain
OTC index options on the S&P 500 Index (``OTC S&P 500 Index
Options'').\4\ OCC is prohibited from clearing OTC S&P 500 Index
Options until the Commission approves and OCC implements certain
enhancements to OCC's System for Theoretical Analysis and Numerical
Simulations (``STANS'') as applied to all options,\5\ including over-
the-counter (``OTC'') options that OCC is otherwise permitted to clear,
with at least three years of residual tenor (``Risk Management
Proposal'').\6\ This Advance Notice is the Risk Management Proposal. By
this Advance Notice, OCC is enhancing STANS by: (i) Including daily OTC
indicative quotations; (ii) introducing variations in implied
volatility; and (iii) introducing a valuation adjustment.
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    \4\ Release No. 68434 (December 14, 2012), 77 FR 75243 (December
19, 2012) (SR-OCC-2012-14, AN-OCC-2012-01).
    \5\ OCC represents that its Risk Management Proposal is part of
OCC's ongoing efforts to test and improve its risk management
operations with respect to all longer-tenor options that OCC
currently clears. See December 14, 2012 Action, supra note 4, 77 FR
at 75243. OCC states it intends to use its STANS margin system to
calculate margin requirements on the same basis as for exchange-
listed options cleared by OCC. See Notice, supra note 3, 78 FR at
41161.
    \6\ Release No. 68434 (December 14, 2012), 77 FR 75243 (December
19, 2012) (SR-OCC-2012-14, AN-OCC-2012-01).
---------------------------------------------------------------------------

    STANS is a margin system that OCC uses to calculate clearing-level
margin.\7\ Through this Risk Management Proposal, OCC is enhancing
STANS in the following ways:
---------------------------------------------------------------------------

    \7\ According to OCC, STANS calculates margin by determining the
minimum expected liquidating value of each account using a large
number of projected price scenarios created by large-scale Monte
Carlo simulations. See Notice, supra note 3, 78 FR at 41161.
---------------------------------------------------------------------------

    (i) Daily OTC Indicative Quotations. According to OCC, STANS uses a
daily dataset of market prices to value each portfolio.\8\ OCC is
enhancing this daily dataset of market prices by including daily OTC
indicative quotations.\9\ OCC will obtain daily OTC indicative
quotations from a third-party service provider who obtains it through a
daily poll of OTC derivatives dealers.\10\
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    \8\ See Notice, supra note 3, 78 FR at 41161.
    \9\ Id.
    \10\ OCC selected a third-party service provider rather than
having the OTC derivatives dealers provide the information directly
to OCC to avoid unnecessarily duplicating reporting that is already
being done in the OTC markets. See Notice, supra note 3, 78 FR at
41161-62.
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    (ii) Variations in Implied Volatility. According to OCC, STANS
currently uses a two-day risk horizon which assumes that implied
volatilities of option contracts do not change during that period.\11\
OCC will introduce variations in implied volatility in the modeling of
all longer-tenor options under STANS.\12\ OCC plans to achieve this by
``incorporating, into the set of risk factors whose behavior is
included in the econometric models underlying STANS, time series of
proportional changes in implied volatilities for a range of tenors and
in-the-money and out-of-the-money amounts representative of the dataset
provided by OCC's third-party service provider.'' \13\
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    \11\ See Notice, supra note 3, 78 FR at 41162.
    \12\ Id.
    \13\ Id.
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    (iii) Valuation Adjustment. OCC intends to enhance the portfolio
net asset value that STANS uses, by introducing a valuation
adjustment.\14\ According to OCC, the valuation adjustment will be
``based upon the aggregate sensitivity of any longer-tenor options in a
portfolio to the overall level of implied volatilities at three years
and five years and to the relationship between implied volatility and
exercise prices at both the three- and five-year tenors in order to
allow for the anticipated market impact of unwinding a portfolio of
longer-tenor options, as well as for any differences in the quality of
data in OCC's third party service provider's dataset, given that month-
end data may be subjected to more extensive validation by the service
provider than daily data.'' \15\
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    \14\ Id.
    \15\ Id.
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II. Discussion and Commission Findings

    Although Title VIII does not specify a standard of review for an
advance notice, the Commission believes that the stated purpose of
Title VIII is instructive.\16\ The stated purpose of Title VIII is to
mitigate systemic risk in the financial system and promote financial
stability by, among other things, promoting uniform risk management
standards for systemically-important financial market utilities
(``FMUs'') and strengthening the liquidity of systemically important
FMUs.\17\
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    \16\ See 12 U.S.C. 5461(b).
    \17\ Id.
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    Section 805(a)(2) of the Clearing Supervision Act \18\ authorizes
the Commission to prescribe risk management standards for the payment,
clearing, and settlement activities of designated clearing entities and
financial institutions engaged in designated activities for which it is
the supervisory agency or the appropriate

financial regulator. Section 805(b) of the Clearing Supervision Act
\19\ states that the objectives and principles for the risk management
standards prescribed under Section 805(a) shall be to:
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    \18\ 12 U.S.C. 5464(a)(2).
    \19\ 12 U.S.C. 5464(b).
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     Promote robust risk management;
     Promote safety and soundness;
     Reduce systemic risks; and
     Support the stability of the broader financial system.
    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act \20\ (``Clearing Agency
Standards'').\21\ The Clearing Agency Standards became effective on
January 2, 2013 and require registered clearing agencies that perform
central counterparty (``CCP'') services to establish, implement,
maintain, and enforce written policies and procedures that are
reasonably designed to meet certain minimum requirements for their
operations and risk management practices on an ongoing basis.\22\ As
such, it is appropriate for the Commission to review advance notices
against these risk management standards that the Commission promulgated
under Section 805(a) of the Clearing Supervision Act \23\ and the
objectives and principles of these risk management standards as
described in Section 805(b) of the Clearing Supervision Act.\24\
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    \20\ 12 U.S.C. 5464(a)(2).
    \21\ Exchange Act Release No. 68080 (October 22, 2012), 77 FR
66220 (November 2, 2012) (S7-08-11).
    \22\ The Clearing Agency Standards are substantially similar to
the risk management standards established by the Board of Governors
of the Federal Reserve System (``Federal Reserve'') governing the
operations of designated DFMUs that are not clearing entities and
financial institutions engaged in designated activities for which
the Commission or the Commodity Futures Trading Commission is the
Supervisory Agency. See Financial Market Utilities, 77 FR 45907
(August 2, 2012).
    \23\ 12 U.S.C. 5464(a).
    \24\ 12 U.S.C. 5464(b).
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    OCC's Risk Management Proposal, as described above, is designed to
enhance OCC's margin calculation requirements for longer-tenor options.
Consistent with Section 805(b) of the Clearing Supervision Act,\25\ the
Division believes that OCC's Risk Management Proposal should help
promote robust risk management and mitigate systemic risk by
introducing variations in implied volatility in the modeling of all
Longer-Tenor Options, and introducing a valuation adjustment in STANS
to address OCC's increased exposure to Longer-Tenor Options that may
possess characteristics that are more illiquid than other options that
are cleared by OCC. The Risk Management proposal may also improve
liquidity in the market for Longer-Tenor Options, which may improve
price discovery in this market.
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    \25\ See 12 U.S.C. 5464(b).
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    Commission Rule 17Ad-22(b)(2),\26\ adopted as part of the Clearing
Agency Standards,\27\ requires that a registered clearing agency
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to ``use margin requirements to limit
its credit exposures to participants under normal market conditions;''
and ``use risk-based models and parameters to set margin
requirements.'' Furthermore, Commission Rule 17Ad-22(b)(3),\28\ also
adopted as part of the Clearing Agency Standards,\29\ requires, in
relevant part, a central counterparty to establish, implement,
maintain, and enforce written policies and procedures reasonably
designed to maintain sufficient financial resources to withstand, at a
minimum, a default by the participant family to which it has the
largest exposure in extreme but plausible market conditions. The
proposed enhancements to STANS, as described in the Risk Management
Proposal, should help OCC to more accurately set margin requirements
for Longer-Tenor Options, which OCC will use to limit its credit
exposures to participants under both normal and stressed market
conditions and should help OCC maintain sufficient financial resources
to withstand a default by the participant family to which it has the
largest exposure in extreme but plausible market conditions.
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    \26\ 17 CFR 240.17Ad-22(b)(2).
    \27\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (November
2, 2012).
    \28\ 17 CFR 240.17Ad-22(b)(3).
    \29\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (November
2, 2012).
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III. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act,\30\ that the Commission DOES NOT OBJECT to
advance notice proposal (SR-OCC-2013-803) and that OCC is AUTHORIZED to
implement the proposal as of the date of this notice or the date of an
order by the Commission approving a proposed rule change that reflects
rule changes that are consistent with this advance notice proposal (SR-
OCC-2013-803), whichever is later.
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    \30\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24843 Filed 10-22-13; 8:45 am]
BILLING CODE 8011-01-P