\* MERGEFORMAT
                 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            WASHINGTON, D.C.  20460
                                                                      OFFICE OF
                                                            CHEMICAL SAFETY AND
                                                           POLLUTION PREVENTION
MEMORANDUM

Date:  May 27, 2011

SUBJECT:	DCPA. (Chlorthal Dimethyl). Human Health Assessment Scoping Document in Support of Registration Review.

PC Code:  078701
DP Barcode: 386637
Decision No.:  444895
Registration No.:  Not Applicable
Petition No.: Not Applicable
Regulatory Action: Registration Review Scoping
Risk Assessment Type: Not Applicable
Case No.: 0270
TXR No.: Not Applicable
CAS No.: 1861-32-1
MRID No.: None
40 CFR: 180.185

FROM:	Christine L. Olinger, Risk Assessor
		Kit Farwell, D.V.M., Toxicologist
		Jeffrey L. Dawson, Chemist
		Risk Assessment Branch VII
		Health Effects Division (7509P)
		Office of Pesticide Programs

THRU:	Michael S. Metzger, Chief,
		Risk Assessment Branch VII
		Health Effects Division (7509P)
		Office of Pesticide Programs

TO:	Jill Bloom
		Risk Management and Implementation Branch III
		Pesticide Re-evaluation Division (7508P)
		Office of Pesticide Programs

Executive Summary

The Health Effects Division (HED) DCPA (dimethyl tetrachlorophthalate) Registration Review Team has evaluated the most recent human health assessments and database for the herbicide DCPA to determine the scope of work necessary to support the established tolerances and existing registrations.  The risk assessment used to support the 1998 Reregistration Eligibility Decision (RED) and a risk assessment to support new tolerances of DCPA (Dole, 2004) were the primary sources for this evaluation.  DCPA is registered for use on several vegetable crops and some ornamental plants.  Most residential uses have been cancelled and are no longer supported by the primary registrant.

Liver and thyroid effects are observed in many DCPA toxicity studies.  The acute toxicity of DCPA is low.  Toxicity in longer term studies with DCPA included thyroid toxicity as shown by decreased levels of thyroid hormone, microscopic thyroid changes, and increased thyroid weight.  Liver toxicity included increased liver weight, elevated liver enzyme activity, increased cholesterol, and liver hypertrophy.  It is believed that the liver effects are precursor events to the thyroid effects, with increased metabolism of thyroid hormone by the liver resulting in a compensatory stimulation of the thyroid.  Effects on the kidney have also been observed.  There were no mutagenicity concerns for DCPA, but thyroid follicular cell adenomas/carcinomas, hepatocellular adenomas/carcinomas, and hepatocholangiocarcinomas were found in rats; hepatic adenomas were found in mice.  DCPA is classified a Group C, possible human carcinogen with a cancer potency factor based on the three combined liver tumors in female rats.  DCPA has not been identified as a member of a common mechanism group for cumulative risk assessment.

The previous risk assessment identified a 28-day inhalation toxicity study and a comparative thyroid toxicity study as data gaps.  These studies are still required.  The test guidelines have been updated since the 2002 assessment and additional studies are now required, including immunotoxicity and acute and subchronic neurotoxicity studies.  The endpoints and the FQPA safety factor will be re-evaluated after these studies have been completed and reviewed.

The most recent dietary, residential, aggregate, and occupational risk assessments did not identify risk estimates of concern.   It is noted that DCPA and its environmental degradates are often found in groundwater monitoring studies.  Additional residue chemistry studies are needed to support the registration review of DCPA including rotational crop field trials, sample storage information from prior crop field trials, a ruminant feeding study, a poultry metabolism study, and a livestock method validation.  These studies had been previously requested in the RED and in response to new tolerances established in 2004.  A new poultry feeding study is reserved pending results of the metabolism study.  Once these studies have been received and reviewed, a new dietary assessment will be conducted to support the registration review of DCPA.  Since the residential uses are no longer supported a new residential assessment will not be needed.  However several studies have been identified in the literature that describe off-target movement of DCPA into residential settings, particularly in agricultural areas.  The Agency will evaluate these studies during registration review to determine if a quantitative assessment of risk to residents in agricultural areas is needed.  Should new points of departure for dermal and inhalation routes of exposure be identified once the new toxicity studies are received, a revised occupational assessment may be required.

There are impurities of toxicity concern in DCPA formulations.  Prior assessments have estimated risks from exposure to these contaminants, and have determined them to be negligible. During registration review the registrants should certify that the impurities in current formulations are at similar levels or below the levels previously assessed.  If not, then a new assessment may be required.

Introduction
DCPA (dimethyl tetrachlorophthalate) is also commonly referred to as dacthal, chlorthal dimethyl or chlorthal methyl.  DCPA is a chlorinated benzoic acid herbicide which inhibits cell division of root tips in target plants.  It controls many annual grasses and broadleaf weeds in a variety of agricultural crops and ornamental varieties (e.g., broccoli, onions, tomatoes, cabbage, cauliflower, dogwood, azalea).  Annual agricultural use from 1998 through 2008 averaged approximately 500,000 pounds over 100,000 acres with broccoli and onions accounting for 79 percent of that use (Ratnayake, 2011).  Information also suggests that on average 50 percent of broccoli is treated and 15 percent of onions (SLUA).  It was also reported that use for ornamental crops in nurseries is low at around 2,600 pounds in 2006.  California usage data exhibit similar trends for the years 2006-2008 (CA Usage reference).  Most uses in residential settings have been cancelled and the remaining residential uses are not supported, so will eventually be removed (personal communication, J. Bloom, 3/3/11).

Tolerances are established in 40 CFR § 180.185 for residues of DCPA, which address direct treatment of crops as well as inadvertent residues of DCPA from off-target movement and carry-over of residues to rotational crops.  The metabolites monomethyltetrachloroterephthalate (MTP) and tetrachloroterephthalic acid (TCP or TPA) are included in the tolerance expression for DCPA.  Codex has not established maximum residue limits (MRLs) but MRLs are established in Canada for several commodities.

The HED DCPA Registration Review Team evaluated the most recent human health assessments and database for DCPA to determine the scope of work necessary to support Registration Review.  In addition, HED has conducted a screening literature search for studies that could contribute to the assessment.  The Reregistration Eligibility Decision (RED) and associated chapters as well as a risk assessment to support new tolerances were the primary sources for this document.  It should also be noted that previous assessments assessed risks from trace contaminant materials in DCPA products.

Hazard Identification/Toxicology

Toxicity of DCPA:  The database for DCPA is extensive.  Previous risk assessments considered subchronic and chronic oral studies in rats, subchronic and chronic oral studies in mice, developmental studies in rats and rabbits, a 2-generation reproduction study in rats, a dermal toxicity study in rats, metabolism studies, a dermal absorption study, and a battery of mutagenicity studies with DCPA.   Since the previous risk assessment, the registrant has conducted subchronic rat and dog studies and a chronic dog study with DCPA.  These studies have been reviewed and will not result in changes to previously selected endpoints for DCPA.

The previous risk assessment identified an inhalation toxicity study and a comparative thyroid study as data gaps.  These studies are still required.  The test guidelines have been updated since the 2002 assessment and additional studies are now required, including immunotoxicity and acute and subchronic neurotoxicity studies.

The acute toxicity of DCPA is low.  DCPA is in acute toxicity category III for the oral route of exposure and is in toxicity category IV for dermal and inhalation routes of exposure.  It is a mild irritant to the eyes and skin and it is not a skin sensitizer.

Toxicity in longer term studies with DCPA included thyroid toxicity as shown by decreased levels of thyroid hormone, microscopic thyroid changes, and increased thyroid weight.  Liver toxicity included increased liver weight, elevated liver enzyme activity, increased cholesterol, and liver hypertrophy.  It is believed that the liver effects are precursor events to the thyroid effects, with increased metabolism of thyroid hormone by the liver resulting in a compensatory stimulation of the thyroid.  Other toxicity included anemia, pneumonitis, and kidney toxicity (increased kidney weight, increased incidences of chronic nephropathy, and changes in clinical pathology).  A PubMed search was conducted and no new toxicity information which would result in changes to the previous risk assessment was found.

There were no mutagenicity concerns for DCPA.  Thyroid follicular cell adenomas/carcinomas, hepatocellular adenomas/carcinomas, and hepatocholangiocarcinomas were found in rats; hepatic adenomas were found in mice.  DCPA was classified a Group C, possible human carcinogen, with a cancer potency factor based on the three combined liver tumors in female rats of 1.5 x 10[-3] (mg/kg/day)[-1].

FQPA Assessment:  There were acceptable rat and rabbit developmental toxicity studies and an acceptable 2-generation reproduction study.  No quantitative or qualitative susceptibility occurred in these studies and no neurotoxicity was noted in any of the studies.  The
FQPA safety factor for DCPA was reduced to 1X in the most recent risk assessment.  Considering current policy for FQPA database uncertainty factors, the FQPA factor would likely be retained at 10x for the lack of a comparative thyroid study.  The most recent risk assessment showed very low risk estimates, so retaining the 10x factor would not likely result in these estimates exceeding the level of concern.

Toxicity Endpoints:  The chronic dietary endpoint for DCPA was thyroid toxicity with a NOAEL of 1 mg/kg/day and a LOAEL of 10 mg/kg/day from a chronic rat study.  The endpoint for incidental oral exposure and for inhalation exposure was hepatocellular hypertrophy with a NOAEL of 50 mg/kg/day and a LOAEL of 100 mg/kg/day from a subchronic rat study.  No appropriate endpoint for acute dietary exposure was identified in any of the toxicity studies.  Quantitation of dermal exposure was not required because no systemic toxicity occurred in the dermal toxicity study at the high dose of 1000 mg/kg/day.  There were no concerns for developmental or reproductive toxicity by the dermal route of exposure because no developmental toxicity occurred in the developmental studies and parental and offspring effects in the reproduction study (decreased body weight) occurred at the same dose.  Although the thyroid was not evaluated in this study, no liver effects were noted and liver hypertrophy is believed to be a precursor event for thyroid changes.  The endpoints and the FQPA safety factor will be re-evaluated after completion of the inhalation, neurotoxicity, comparative thyroid toxicity, and immunotoxicity studies.

Toxicity of Metabolites and Degradates:  Also evaluated in previous risk assessments were subchronic oral studies, a developmental rat study, and mutagenicity studies with TPA, a degradate found in water.  The only effects occurring in these studies were irritation from the acid moiety on this compound.  Since the previous risk assessment, the registrant has conducted a mutagenicity study with MTP, which is a rat metabolite and environmental degradate.  This study has been reviewed and will not result in changes to conclusions in the previous risk assessment.

Conclusions:  Additional toxicity data are required, including a comparative thyroid toxicity study, an immunotoxicity study, and acute and subchronic neurotoxicity studies.  Once these studies have been received and reviewed the Agency will evaluate the need for modifying endpoints for risk assessment and associated safety factors.

Dietary Exposure
DCPA is registered for use on several vegetable crops; according to the use profile prepared by BEAD the predominant uses are on broccoli and onions.  The residue chemistry data was most recently reviewed in association with tolerances in/on several herbs (Hazel, 2002).  Adequate plant metabolism, analytical method, crop field trial, and processing studies are available to support the existing uses.  However, the following residue data gaps were identified in the most recent discussion of the residue database:  (i) rotational crop field trials and labeling proposals, including crops to be rotated and plant-back intervals (PBIs); (ii) sample storage temperature and duration to confirm the stability of residues in samples collected and analyzed as part of certain field trials conducted prior to 1995; (iii) a ruminant feeding study; (iv) a poultry metabolism study; and (v) livestock method validation.  Rotational crop field trials and storage stability data remain outstanding; the specific studies requiring stability data are listed in the W. Hazel memo of 2002.  The acceptability of the existing poultry feeding study will be addressed once the poultry metabolism study has been submitted and evaluated.

It is noted that the previous technical registrant attempted to address some of these deficiencies in 2002 in MRIDs 43340401, 42713501, and 43938901.  However, these studies were resubmissions of existing data and did not fully address the requirements.

There is some concern for inadvertent residues of DCPA due to off-site movement that appears to be largely due to wind-blown soil particles to which DCPA residues have adsorbed.

HED has updated the maximum reasonable dietary burden for livestock in accordance with the guidance published in 2008.  The maximum reasonable dietary burden (MRDB) for dairy cattle is 8 ppm; residues in edible livestock commodities are likely, so the requirement for the ruminant feeding study remains outstanding.  An adequate poultry metabolism study is not available, and the existing feeding study for poultry has numerous deficiencies.  Therefore, the previously required poultry metabolism study is still needed to assess potential exposure to DCPA residues in poultry commodities.  A method validation for the livestock residue analytical method remains outstanding.  An updated summary of the MRDB may be found in Table 3 of this document.

PDP data are available for residues of DCPA on numerous commodities.  Over the last several years, quantifiable residues were found in/on broccoli, cantaloupe, cauliflower, green beans, green onions, collards, kale, lettuce, onion, potatoes, summer squash, and bell peppers.  In addition, residues have been detected occasionally on commodities where no tolerances have been established.  For example, during 2007 and 2008 5% of celery samples analyzed had detectable residues of DCPA per se at an average residue of 2.5 ppb, with residues ranging from 1.2 to 12 ppb (lowest LOD is 0.7 ppb).  In addition in the years 2003, 2006, and 2008 2% of spinach samples have detectable residues of DCPA per se at average residue of 5.5 ppb, with residues ranging from 1.2 to 43 ppb (lowest LOD is 0.7 ppb).  No tolerances have been established on celery and spinach.

There are a large number of studies and data available on DCPA and degradate residues in air, surface water, drinking water, ground water, rain, and snow.  The most recent review of monitoring data was completed in May 2008 by the Office of Water (EPA, 2008), and reported in detail in the 2009 California Red-legged Frog risk assessment of DCPA.  Monitoring data indicate widespread occurrence of DCPA in surface water, ground water, drinking water, and air.  DCPA and TPA are among the most commonly found pesticides/degradates found in water samples (U.S. EPA, 2008).  DCPA is typically detected at low concentrations in remote areas where it is not used and at higher concentrations near where it is used.  DCPA's degradates, TPA and MTP are more commonly detected in ground water samples than DCPA.  TPA is typically found at higher concentrations.  TPA was the most commonly detected pesticide-derived compound in the National Survey of Pesticides in Drinking Water Wells Survey (U.S. EPA, 1998).

The estimated chronic risk from residues of DCPA in food was well below the level of concern in the most recent risk assessment, with the highest population estimated at 1% of the cPAD.  Cancer risk estimates were in the range of 10[-7].  Prior assessments did not directly include drinking water, but estimated environmental concentrations were well below the drinking water level of comparison indicating that no human health risk estimates of concern exist.

HED has also assessed dietary risks for the impurities of concern.  Further discussion may be found in the appendix to this document.

Conclusions.  The following studies remain outstanding:  (i) rotational crop field trials and labeling proposals (crops to be rotated and PBIs); (ii) sample storage temperature and duration to confirm the stability of residues in samples collected and analyzed as part of certain field trials conducted prior to 1995; (iii) a ruminant feeding study; (iv) a poultry metabolism study; and (v) livestock method validation.  The rationale for requiring these studies is attached to this document.  Once these studies have been received and reviewed a new dietary risk assessment should be conducted.  In addition, the registrants should certify that the impurity levels previously assessed in dietary risk assessment have remained the same or decreased.

Residential Exposure
Residential risks from DCPA use were considered in the previous assessments and the risk estimates that were calculated were not of concern for the uses at the time and given the policies used to define them.  A turf transferable residue study for DCPA and its impurities was used in this assessment.  Since the existing assessments were completed, most residential uses have been deleted from most DCPA labels and the remaining residential uses are not supported, so will eventually be removed (personal communication, J. Bloom, 3/3/11).

It should be noted, however, that the Agency is considering how to evaluate risks associated with exposures that can occur from the off-target movement of pesticide residues in agricultural areas.  During the screening literature search EPA identified a few studies that quantify residues of DCPA in homes in agricultural areas (Bradman, Gunier, Harnley, etc.) so any future changes in risk assessment policies regarding these exposures may require updated DCPA risk assessments.

Conclusions:  No residential data gaps were identified during the Registration Review scoping process for DCPA.  At this time residential uses of DCPA are not supported, so assessments are not needed in registration review.  However, an assessment may be needed to address changes in other risk assessment policies related to spray drift, and volatilization of pesticides.  This is especially germane since data exist that quantify some level of off-target movement from treated areas into residential settings.

Aggregate Risk Assessment
The most recent risk assessment included aggregate assessments that considered exposure from food, drinking water, and residential uses.  All risk estimates were below the level of concern.  Risk estimates from the impurities were also considered, and were below the level of concern.  A new assessment will likely be needed that considers the required new toxicity and residue data as well as changes in residential uses.  In addition, the new assessment may need to consider changes that consider off-target movement of pesticides into residential settings.

Cumulative Risk Assessment
Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to DCPA and any other substances.  For the purposes of this registration review assessment of data needs EPA has not assumed that DCPA has a common mechanism of toxicity with other substances.  For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at http://www.epa.gov/pesticides/cumulative/.

Occupational Exposure
DCPA controls many annual grasses and broadleaf weeds in a variety of agricultural crops and ornamental varieties (e.g., broccoli, onions, tomatoes, cabbage, cauliflower, dogwood, azalea).  DCPA formulations include flowable concentrates and wettable powders.  In agriculture, groundboom and aerial applications would be typical but DCPA can also be applied via chemigation and using handheld equipment, especially associated with the production of ornamental and nursery crops.  Application rates can be as high as 10.5 pounds DCPA per acre.  DCPA is marketed in typical containers that would allow open mixing activities (e.g., bottle).  Applications can be made prior to planting, as a pre-emergent, and as a layby treatment over existing crops.  Concurrent cultivation practices are also recommended by labels to ensure efficacy of DCPA and reduce the potential for off-site movement (e.g., soil incorporation, banding applications, and proper irrigation timing).

Occupational risk estimates from DCPA use were considered in the previous assessments.  Current labels require the use of normal work clothing for handlers with gloves and dust/mist respirators.  The current Restricted-Entry Interval is 12 hours.  Prior assessments were based on  chemical-specific dislodgeable foliar residue studies.  For all scenarios assessed, occupational risks were not of concern if these required label risk management elements were followed.

A revised occupational risk assessment will be required because updated monitoring data are being developed for pertinent occupational handler exposures and additional handler exposure scenarios also need to be addressed that were not included in previous assessments.  These include aerial application and handheld methods used for the production of nursery and ornamental crops. Additionally, a revised risk assessment may be needed to address possible exposure to workers doing activities in previously treated areas (i.e., post-application exposure).  The existing policy on farmworker activities was recently revised and  includes either updated values for quantitatively evaluating these exposures or it will provide a more definitive qualitative rationale for not conducting a quantitative assessment.

In the existing assessments a dermal noncancer endpoint was not identified for risk assessment purposes but cancer risks from dermal exposures were quantitatively assessed.  Additionally, noncancer and cancer risks were quantified for occupational handler inhalation exposures.  Finally, post-application cancer risks from dermal exposures were quantified.  Any changes in risk assessment endpoints for DCPA would necessitate appropriate revisions to the risk assessment.

It should also be noted that there are trace contaminant materials in DCPA products which were addressed in existing risk assessments, but they may require further review and analysis as part of the registration review process.

Conclusions:  No occupational data gaps were identified during the Registration Review scoping process for DCPA.  Adequate data, including studies currently in progress by various task forces, are available to assess all of the occupational exposure scenarios for the registered uses of DCPA.  It is noted that the primary registrants are members of the Agricultural Reentry Task Force (ARTF), the Agricultural Handlers Exposure Task Force (AHETF), and the Outdoor Residential Exposure Task Force (ORETF).   It should also be noted that likely upcoming policy revisions such as anticipated modifications in the Agency policies for completing occupational exposures could cause elements of the current exposure assessments to be revised (e.g., possible changes in transfer coefficients for field workers and unit exposures for handlers).  These changes could specifically occur based on the results of the ARTF, AHETF and ORETF.  Also, additional scenarios may be needed to address changes in other risk assessment policies related to spray drift, worker protection and volatilization of pesticides.

Public Health and Pesticide Epidemiology Data
HED has reviewed the OPP Incident Data System (IDS) to determine if there were significant incidents related to DCPA and human health (Winfield, 2011).  Based on the low frequency and severity of incident cases, there does not appear to be a concern at this time that would warrant further investigation of incidents involving DCPA.  The Agency will continue to monitor the incident information and if a concern is triggered, additional analysis will be included in the risk assessment.

Tolerance Assessment and International Harmonization
The US has established tolerances crops with registered uses of DCPA as well as inadvertent residue tolerances resulting from indirect exposure to crops via carry-over in the soil and transport of residues through drift.  A summary of US tolerances may be found in Table 2 attached to this document, along with a summary of Canadian Maximum Residue Limits (MRL).  Codex has not established MRLs in/on any commodity, and Mexico generally adopts US tolerances and/or Codex MRLs for export purposes.  Note that the MRL regulations for Canada do not include a separate entry for inadvertent residues.  The US and Canada are not harmonized with respect to residue definition:  the US includes two metabolites (MPA and TPA) in the residue definition, while the Canadian MRL includes only the parent.  With respect to residue levels, for almost all commodities where both US and Canadian limits have been established, the values are the same, with the exception of the Brassica vegetables.  Whereas the US has established a crop group tolerance at a level of 5 ppm, Canada has established limits for the individual commodities, ranging from 1 to 5 ppm.

Some of the entries for the section on inadvertent tolerances include crops with registered uses.  The registrants should clearly indicate in their response to the Registration Review Preliminary Work Plan (PWP) those crops where direct applications will be supported, and those tolerances that will be supported as inadvertent tolerances.  During registration review HED will re-evaluate the data supporting the tolerances, correct the entries in the tolerance regulation, and will attempt to harmonize with international MRLs to the extent possible.  In addition the residue definition should be modified in accordance with current policy on tolerance definitions (S. Knizner, 5/27/09) as describe below:

      Tolerances are established for residues of the herbicide dimethyl tetrachloroterephthalate (DCPA), including its metabolites and degradates, in or on the commodities in the table below.  Compliance with the tolerance levels specified below is to be determined by measuring only the sum of DCPA and its metabolites monomethyltetrachloroterephthalate (MTP) and tetrachloroterephthalic acid (TCP), calculated as the stoichiometric equivalent of DCPA, in or on the commodity.

Environmental Justice
Potential areas of environmental justice concerns, to the extent possible, were considered in this human health risk assessment, in accordance with U.S. Executive Order 12898, "Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations," http://www.epa.gov/environmentaljustice/resources/policy/exec_order_12898.pdf.  The Office of Pesticide Programs (OPP) typically considers the highest potential exposures from the legal use of a pesticide when conducting human health risk assessments, including, but not limited to, people who obtain drinking water from sources near agricultural areas, the variability of diets within the U.S. (including different ages, regions, and ethnicities), and people who may be exposed when harvesting crops.  Should these highest exposures indicate potential risks of concern, OPP further refines the risk assessments to ensure that the risk estimates are based on the best available information.

Human Studies
Past DCPA risk assessments relied in part on data in generic databases from studies in which adult human subjects were intentionally exposed to a pesticide to determine their dermal and inhalation exposure or similar studies from the literature.  Many such studies, involving exposure to many different pesticides including DCPA, are included in generic pesticide exposure databases such as the Pesticide Handler Exposure Database (PHED), the Agricultural Reentry Task Force (ARTF), and the Outdoor Residential Exposure Task Force (ORETF).  Also, there will be a reliance on the work of the Agricultural Handlers Exposure Task Force (AHETF) for revisions to the occupational handler risk assessments possibly needed in the future.  These studies have been determined to require a review of their ethical conduct and have received the appropriate review.

Endocrine Disruption
As required by FIFRA and FFDCA, EPA reviews numerous studies to assess potential adverse outcomes from exposure to chemicals.  Collectively, these studies include acute, subchronic and chronic toxicity, including assessments of carcinogenicity, neurotoxicity, developmental, reproductive, and general or systemic toxicity.  These studies include endpoints which may be susceptible to endocrine influence, including effects on endocrine target organ histopathology, organ weights, estrus cyclicity, sexual maturation, fertility, pregnancy rates, reproductive loss, and sex ratios in offspring.  For ecological hazard assessments, EPA evaluates acute tests and chronic studies that assess growth, developmental and reproductive effects in different taxonomic groups.  As part of its reregistration decision, EPA reviewed these data and selected the most sensitive endpoints for relevant risk assessment scenarios from the existing hazard database.  However, as required by FFDCA section 408(p), DCPA is subject to the endocrine screening part of the Endocrine Disruptor Screening Program (EDSP).

EPA has developed the EDSP to determine whether certain substances (including pesticide active and other ingredients) may have an effect in humans or wildlife similar to an effect produced by a "naturally occurring estrogen, or other such endocrine effects as the Administrator may designate".  The EDSP employs a two-tiered approach to making the statutorily required determinations.  Tier 1 consists of a battery of 11 screening assays to identify the potential of a chemical substance to interact with the estrogen, androgen, or thyroid (E, A, or T) hormonal systems.  Chemicals that go through Tier 1 screening and are found to have the potential to interact with E, A, or T hormonal systems will proceed to the next stage of the EDSP where EPA will determine which, if any, of the Tier 2 tests are necessary based on the available data.  Tier 2 testing is designed to identify any adverse endocrine-related effects caused by the substance, and establish a dose-response relationship between the dose and the E, A, or T effect.

Under FFDCA section 408(p), the Agency must screen all pesticide chemicals. Between October 2009 and February 2010, EPA issued test orders/data call-ins for the first group of 67 chemicals, which contains 58 pesticide active ingredients and 9 inert ingredients.  DCPA was included on that list and has been issued an order to conduct the Tier 1 testing.  Once all required Tier 1 and Tier 2 data have been received and reviewed, the endpoints and safety factors used for risk assessment purposes will be examined and a new risk assessment performed if necessary.  For further information on the status of the EDSP, the policies and procedures, the list of 67 chemicals, future lists, the test guidelines and the Tier 1 screening battery, please visit our website:  http://www.epa.gov/endo/.

Data Requirements

The following studies are required to support the registration review of DCPA:

Toxicity studies
   * 870.7800:  Immunotoxicity
   * 870.3700SS (Special Study):  Comparative Thyroid Study
   * 870.3465:  Subchronic Inhalation Toxicity Study  -  28 day
   * 870.6200:  Neurotoxicity Battery (Acute and Subchronic Studies)

Residue Chemistry Studies
   * 860.1300:  Nature of the Residue:  Poultry
   * 860.1340:  Residue Analytical Method:  Livestock Commodities
   * 860.1380:  Storage Stability
   * 860:1480:  Meat/Milk/Poultry/Eggs:  Ruminants
   * 860.1900:  Field Accumulation in Rotational Crops

Tables describing the rationale for requiring these studies are attached to this document.  In addition, once the rotational crop studies have been completed product labels should be modified to include appropriate plant-back intervals.  The registrants should also certify that the levels of the impurities of concern have not changed since the most recent risk assessment that considered the cancer risk to these toxic impurities.

References

Bradman A, et al. 2007. Pesticides and their metabolites in the homes and urine of farmworker children living in the Salinas Valley, CA. J Expo Sci Environ Epidemiol 17:331-349.

FR Vol. 70 No. 143 (07/27/05) pp 43408-43410, DCPA; Order to Amend to Terminate Uses.

Gray, Jr. LE, et al. Perinatal Exposure to the Phthalates DEHP, BBP, and DINP, but Not DEP, DMP, or DOTP, Alters Sexual Differentiation of the Male Rat.  Toxicol. Sci. (2000) 58(2): 350-365 doi:10.1093/toxsci/58.2.350

Gunier RB, et al. 2011. Determinants of Agricultural Pesticide Concentrations in Carpet Dust. Environ Health Perspect doi:10.1289/ehp.1002532 (accessed March 3, 2011)

Harnly ME, et al. 2009.  Pesticides in dust from homes in an agricultural area. Environ Sci Technol 43:8767-8774.

Nuckols JR, et al. 2007. Linkage of the California Pesticide Use Reporting Database with spatial land use data for exposure assessment. Environ Health Perspect 115:684-689.

Nuckols JR, Riggs PD, Gunier RB, Ward MH 2008. Geographic-based prediction of agricultural pesticides in household carpet dust in the central valley of California. Epidemiology 19:S320.

U.S. EPA. 1998b.  Reregistration Eligibility Decision (RED):  DCPA.  EPA 738-R-98-005.  November 1998.  Special Review and Reregistration Division, Office of Pesticide Programs.    Washington, D.C. U.S.A. Available at:  http://www.epa.gov/oppsrrd1/REDs/0270red.pdf (accessed January 28, 2011)

U.S. EPA.  2008a.  Health Effects Support Document for Dacthal Degradates:  Tetrachloroterephthalic Acid (TPA) and Monomethyl Tetrachloroterephthalic Acid (MTP).  EPA-822-R-08-005.  May, 2008.  Health and Ecological Criteria Division.  Office of Water.  Washington, D.C. U.S.A. Available at: http://www.epa.gov/safewater/ccl/pdfs/reg_determine2/healtheffects_ccl2-reg2_dacthaldegradates.pdf (accessed February 28, 2011)

OPP Memoranda Citations

                                    Author
                            DP Barcode/ Record No.
                                     Date
                                     Title
Winfield, S.
D386640
                                    3/1/11
DCPA: Review of Human Incidents
Ratnayake, S., et al.
N/A
                                    1/20/11
BEAD Chemical Profile for Registration Review: DCPA (07870I)
N/A
N/A
                                    8/18/10
EPA Screening Level Estimate of Agricultural Uses (SLUA) (8/18/10)
N/A
N/A
                                    8/10/10
EPA Analysis of California DPR Pesticide Usage Data (
Dole, T.
D303994
                                    6/9/04
2nd Revised Drinking Water and Aggregate Human Health Risk Assessment for Chlorthal dimethyl (DCPA) and the metabolite tetrachloroterephthalic acid (TPA)
Farwell, K.
D303156
                                    5/25/04
TPA (tetrachloroterephthalic acid) - metabolite of DCPA (Dacthal).  Evaluation of Potential for Carcinogenicity.
Farwell, K. and Abdel-Saheb, I.
TXR No. 0052585
                                    5/25/04
TPA (tetrachloroterephthalic acid) - metabolite of DCPA (Dacthal).  Report of the Metabolism Assessment Review Committee
Dole, T., et. al.
D281320
                                    7/8/02
HED Human Health Risk Assessment For DCPA to Support New Uses on California Parsley and Other Minor Crops (D281320, 7/8/02)
Hazel, W.
D280398
                                    6/14/02
PP#0E3883 and PP#2E6442.  IR-4 Petitions for Tolerances and Proposals.  Review of Analytical Chemistry and Residue Data.
Dole, T.
D283509
                                    6/10/02
Occupational and Residential Risk Assessment to Support Request for Establishment of Tolerance for Chlorthal-Dimethyl (DCPA) on Minor Crops.
Taylor, L., and Rinde, E.
TXR No. 0050123
                                    2/10/95
Carcinogenicity Peer Review of DCPA (Dimethyl tetrachloroterephthalate or Dacthal)for meetings on June 29 and Nov. 16, 1994.  Linda Taylor and Esther Rinde.

Attachments

Chemical Identity

Table 1. Chemical Identity
Common Name
DCPA
Other Names
Chlorthal dimethyl; CAS Name:  dimethyl 2,3,5,6-tetrachloro-1,4-benzenedicarboxylate;  IUPAC Name:  dimethyl tetrachloroterephthalate
PC Code
078701

1861-32-1
Case No.
0720
Chemical Structure

Metabolites/Degradates of Concern
Name
monomethyltetrachloroterephthalate (MTP)
CAS registry number
887-54-7
Chemical Structure

Name
tetrachloroterephthalic acid (TCP or TPA)
CAS registry number
2136-79-0
Chemical Structure

Table 2.  Summary of US and International Residue Limits
Commodity[1]
Tolerance (ppm) /Maximum Residue Limit (mg/kg)

                                      US
                                    Canada
                                   Mexico[2]
                                     Codex
180.185(a)
Cantaloupe
                                      1.0
                                      1.0
                                     None
                                     None
Garlic
                                      1.0
                                      1.0
                                     None
                                     None
Ginseng
                                      2.0
                                     None
                                     None
                                     None
Horseradish
                                      2.0
                                     None
                                     None
                                     None
Muskmelon
                                      1.0
                              Honeydew melon: 1.0
                                     None
                                     None
Onion, bulb
                                      1.0
                                      1.0
                                     None
                                     None
Onion, green
                                      1.0
                                     None
                                     None
                                     None
Strawberry
                                      2.0
                                      2.0
                                     None
                                     None
Tomato
                                      1.0
                                      1.0
                                     None
                                     None
Vegetable, brassica, leafy, group 5
                                      5.0
           Broccoli, Brussels Sprouts, Cabbages, Cauliflower:  1.0
                               Collards, Kale: 2
                              Mustard Greens:  5
                                     None
                                     None
Watermelon
                                      1.0
                                      1.0
                                     None
                                     None
180.185(c) (tolerances with regional registration)
Radish, roots
                                      2.0
                                     None
                                     None
                                     None
Radish, tops
                                     15.0
                                     None
                                     None
                                     None
180.185(d) (inadvertent tolerances) [3]
Basil, dried leaves
                                     20.0
                                     None
                                     None
                                     None
Basil, fresh leaves
                                      5.0
                                     None
                                     None
                                     None
Bean, dry
                                      2.0
                                     None
                                     None
                                     None
Bean, mung, seed
                                      2.0
                                     None
                                     None
                                     None
Bean, snap, succulent
                                      2.0
                                      2.0
                                     None
                                     None
Celeriac
                                      2.0
                                     None
                                     None
                                     None
Chicory, roots
                                      2.0
                                     None
                                     None
                                     None
Chicory, tops
                                      5.0
                                     None
                                     None
                                     None
Chive
                                      5.0
                                     None
                                     None
                                     None
Coriander, leaves
                                      5.0
                                     None
                                     None
                                     None
Corn, field, forage
                                      0.4
                                     None
                                     None
                                     None
Corn, field, grain
                                     0.05
                                     None
                                     None
                                     None
Corn, field, stover
                                      0.4
                                     None
                                     None
                                     None
Corn, pop, forage
                                      0.4
                                     None
                                     None
                                     None
Corn, pop, grain
                                     0.05
                                     None
                                     None
                                     None
Corn, pop, stover
                                      0.4
                                     None
                                     None
                                     None
Corn, sweet, forage
                                      0.4
                                     None
                                     None
                                     None
Corn, sweet, kernel plus cob with husks removed
                                     0.05
                                     None
                                     None
                                     None
Corn, sweet, stover
                                      0.4
                                     None
                                     None
                                     None
Cotton, undelinted seed
                                      0.2
                                     None
                                     None
                                     None
Cucumber
                                      1.0
                                      1.0
                                     None
                                     None
Dill
                                      5.0
                                     None
                                     None
                                     None
Eggplant
                                      1.0
                                      1.0
                                     None
                                     None
Lettuce
                                      2.0
                                      2.0
                                     None
                                     None
Marjoram
                                      5.0
                                     None
                                     None
                                     None
Parsley, dried leaves
                                     20.0
                                     None
                                     None
                                     None
Parsley, leaves
                                      5.0
                                     None
                                     None
                                     None
Pea, blackeyed, seed
                                      2.0
                                      2.0
                                     None
                                     None
Pepper
                                      2.0
                                      2.0
                                     None
                                     None
Pimento
                                      2.0
                                      2.0
                                     None
                                     None
Potato
                                      2.0
                                      2.0
                                     None
                                     None
Radicchio
                                      5.0
                                     None
                                     None
                                     None
Radish, oriental, roots
                                      2.0
                                     None
                                     None
                                     None
Radish, oriental, tops
                                      2.0
                                     None
                                     None
                                     None
Rutabaga
                                      2.0
                                     None
                                     None
                                     None
Soybean
                                      2.0
                                     None
                                     None
                                     None
Squash, summer
                                      1.0
                                      1.0
                                     None
                                     None
Squash, winter
                                      1.0
                                     None
                                     None
                                     None
Sweet potato
                                      2.0
                                      2.0
                                     None
                                     None
Turnip, roots
                                      2.0
                                       2
                                     None
                                     None
Turnip, tops
                                      5.0
                                       5
                                     None
                                     None
Yam, true, tuber
                                      2.0
                                       2
                                     None
                                     None
[1] Includes only commodities of interest for this action.  Tolerance values should be the HED recommendations and not those proposed by the applicant.
2 Mexico adopts US tolerances and/or Codex MRLs for its export purposes.
[3]Canada does not distinguish maximum residue limits in their maximum residue limit regulations.  Therefore the Canadian limits included in this section do not specifically refer to inadvertent residues.

Table 3.  Summary of Revised Maximum Reasonable Dietary Burden for DCPA
                                Feed Commodity
                                Feedstuff Type
                                 % Dry Matter
                                Percent in Diet
                                Tolerance Level
                               Max Contribution
Beef Cattle (R=15%; CC=80%; PC=5%)
Corn Forage
                                       R
                                      40
                                      15
                                      0.4
                                     0.15
Corn Grain
                                      CC
                                      88
                                      50
                                     0.05
                                     0.028
Processed Potato Waste
                                      CC
                                      15
                                      30
                                       2
                                       4
Soybean Seed
                                      PC
                                      89
                                       5
                                       2
                                     0.11
Total
                                      NA
                                      NA
                                      100
                                      NA
                                     4.29
Dairy Cattle (R=45%; CC=45%; PC10%)
Corn Forage
                                       R
                                      40
                                      15
                                      0.4
                                     0.15
Turnip Tops
                                       R
                                      30
                                      30
                                       5
                                       5
Turnip Roots
                                      CC
                                      15
                                      10
                                       2
                                     1.33
Processed Potato Waste
                                      CC
                                      15
                                      10
                                       2
                                     1.33
Corn Grain
                                      CC
                                      88
                                      25
                                     0.05
                                     0.014
Soybean Seed
                                      PC
                                      89
                                      10
                                       2
                                     0.22
Total
                                      NA
                                      NA
                                      100
                                      NA
                                     8.06
Poultry (CC=75-80%; PC=20-25%)
Corn Grain
                                      CC
                                     NA 0
                                      80
                                     0.05
                                     0.04
Soybean Seed
                                      PC

                                      20
                                       2
                                      0.4
Total

                                     0.44
Hogs (CC=80-85%; PC=15-20%)
Corn Grain
                                      CC
                                       0
                                      80
                                     0.05
                                     0.04
Soybean Seed
                                      PC

                                      20
                                       2
                                      0.4
Total
                                      NA
                                      NA
                                      100
                                      NA
                                     0.44

Rationale for Requiring a Poultry Nature of the Residue Study

Guideline Number: 860.1300
Study Title:  Nature of the Residue, Livestock (Poultry)
                       Rationale for Requiring the Data

This study provides essential information on the potential transfer and bioconcentration of residues in poultry meat and eggs for pesticides applied to feed items.  Many pesticides undergo change during or after livestock consume treated feed. The composition of the terminal residue must be determined before complete residue detection methodology and residue quantification data can be developed.  The study may help to validate the poultry magnitude of residue data previously submitted if no new residues of concern are identified. The requested poultry nature of the residue study will need supporting storage stability data for all DCPA residues of concern, unless the samples from the feeding study are analyzed within six months of collection.

                         Practical Utility of the Data

How did the Agency make its re-registration decision without these data?
In order to make its reregistration decision, the Agency assumed poultry would have similar types of residues as cattle and goats.

How will the data be used?
The data will be used to provide a full characterization of the DCPA residue profile.  The submission will provide the necessary data to set tolerances for livestock commodities. These data may also result in a change in how dietary risks are quantified.

Rationale for Requiring an Independent Laboratory Validation for a Livestock Residue Analytical Method

Guideline Number: 860.1340
Study Title: Residue Analytical Methods (enforcement analytical method for livestock)
                       Rationale for Requiring the Data
One of the analytical methods submitted by the registrant must be suitable for use by various Federal and State enforcement agencies.  The Food and Drug Administration (FDA) collects these methods and then publishes them to be used for tolerance enforcement purposes.  The registrant has submitted a method for determining residues of DCPA and its metabolites that may be suitable but must be tested by an independent laboratory to ensure that it is useful.
                         Practical Utility of the Data
How will the data be used?
EPA would review the independent laboratory validation of the submitted method and determine its suitability as an enforcement method.  If suitable, EPA would forward the method to FDA.  The enforcement analytical methods are published by FDA and are available to all regulatory laboratories for use in monitoring the specific pesticide concentrations in foods and feeds.  They are a necessary tool for tolerance enforcement and residue monitoring and, as such are essential in the efforts to ensure a safe food supply for the consumer.

Rationale for Requiring Cattle Magnitude of Residue Study

Guideline Number: 860.1480
Study Title: Magnitude of the Residue (Cattle Feeding Study)
                       Rationale for Requiring the Data
A new ruminant feeding study is required to determine whether tolerances are needed (and if so the appropriate tolerance levels) for milk and meat. The requested ruminant feeding study will need supporting storage stability data for all DCPA residues of concern, unless the samples from the feeding study are analyzed within 30 days of collection.
                         Practical Utility of the Data
How did the Agency make its re-registration decision without these data?
The Agency has made conservative assumptions within the dietary assessment to account for the lack of magnitude of the residue (MOR) data from the cattle feeding studies. Residue estimates based on the metabolism studies were included to account for potential exposure to DCPA and it metabolites in meat and milk from ruminants. However, these data are needed to ensure that the correct assumptions were made.

How will the data be used?
The data will be used to provide a full characterization of the DCPA residue profile. The submission of livestock MOR data would provide the necessary data to determine if tolerances are needed for livestock commodities and if necessary, to set the appropriate tolerance levels.

How could the data impact the Agency's future decision-making?
The submission of MOR data would provide the necessary data to set tolerances for livestock commodities. These data may also result in a change in how dietary risks are quantified.

Rationale for Requiring Field Accumulation in Rotational Crops Study

Guideline Number: 860.1900
Study Title:  Field Accumulation in Rotational Crops
                       Rationale for Requiring the Data

A rotational crop use is any field-vegetable crop use or any other site use on which it is reasonably foreseeable that any food or feed crop may be planted after harvest of a treated crop.  The purpose of field accumulation in rotational crop studies is to determine the amount of pesticide residue uptake into rotational crops.  The study uses a typical end-use product applied to a field plot.  Results of these studies are used to determine whether residues occur in rotational crops grown under actual field conditions.  Based on these data, appropriate crop rotation restrictions (time from application to planting of rotational crop) may be established and the need for tolerances on the rotated crops determined.

Carrot roots and tops, corn fodder and silage, oat forage, and turnip tops from plants sowed at a 1-year plantback interval in soil treated at half the maximum application rate bore quantifiable residues in one or more samples.  These data indicate that tolerances are needed for residues of DCPA and metabolites in some crops if they are rotated to fields that have been treated at even half the maximum seasonal label rate.  The petitioner/registrant has not proposed any restrictions that obviate the need for rotational crop tolerances.

Large-scale rotational crop field trials are required to determine the appropriate tolerance levels for rotated crop commodities.  The scope of the required tests is dependent upon the petitioner's/registrant's intent with respect to the crops to be allowed in rotation and the desired plantback interval(s) for these crops.  Any crop without a registered use, for which the petitioner/registrant wishes to allow rotation, requires field trial data to determine a suitable tolerance level.  A crop group approach, requiring data on representative commodities, may be appropriate if several crops within a group are to be rotated.  For individual crops, the standard number of trials needed to support direct crop treatment tolerances are required, e.g., 20 trials for wheat.
                        Practical Utility of the Data

How did the Agency make its re-registration decision without these data?
Since the data were lacking, the Agency was not able to evaluate risks for rotational crops.

How will the data be used?
The data will be used to provide a full characterization of the DCPA residue profile.  The submission of these data would provide the necessary information to determine if tolerances are needed for rotated crops and if so, to set the appropriate tolerance levels. These data may also result in a change in how dietary risks are quantified.

How could the data impact the Agency's future decision-making?
The submission of these data would allow the Agency determine if tolerances are necessary for rotational crops and if so, to set the appropriate tolerances.  The previously submitted confined and limited field rotational crop studies have shown potential residue uptake into rotated crops.  If residues are detected in crops without established tolerances, these crops may be seized by the Food and Drug Administration (FDA).  Accurate rotational crop tolerances protect farmers from inappropriate crop seizures.

Rationale for Requiring a 28-day Subchronic Toxicity Study

Guideline Number: 870.3465
Study Title:  Subchronic Inhalation Toxicity Study
                       Rationale for Requiring the Data
This data requirement is conditionally required under 40 CFR Part 158 as a part of the data requirements for registration of a pesticide (food and non-food uses).  This study is required for DCPA because workers can potentially be exposed to DCPA via the inhalation route of exposure.  DCPA is in toxicity category IV for inhalation exposure and is a mild irritant to the eyes and skin and is not a skin sensitizer.

                         Practical Utility of the Data
How will the data be used?

This study can be used to select endpoints and doses for use in exposure assessment for workers by the inhalation route of exposure.

How could the data impact the Agency's future decision-making?

This study will be used in a worker occupational exposure assessment.  This study was requested in the previous risk assessment.

Rationale for Requiring a Comparative Thyroid Study

Guideline Number: 870.3700SS (Special Study)
Study Title:  Comparative Thyroid Study
                       Rationale for Requiring the Data
Thyroid toxicity with treatment with DCPA has been observed in studies with adult animals, but no such data exist for developmental effects of DCPA on the thyroid and thyroid hormones of young animals.

                         Practical Utility of the Data
How will the data be used?

The thyroid and thyroid hormones are adversely affected by treatment with DCPA, but data are lacking with which to estimate developmental risks associated with this toxicity.  The data may provide a dose and endpoint for use in the assessment of risks for children and will play a role in the registration review decision.

How could the data impact the Agency's future decision-making?

If the study indicates there is a special vulnerability to children from DCPA, a new toxicity endpoint will be incorporated into the risk assessment for children.

Rationale for Requiring The Neurotoxicity Battery

Guideline Number: 870.6200
Study Title:  Neurotoxicity Battery (Acute and Subchronic Studies)
                       Rationale for Requiring the Data

The Neurotoxicity Screening Battery (OPPTS 870.6200) is designed to evaluate the potential adverse effects on the nervous system from exposure to pesticide chemicals.  The Agency believes that the guideline studies are inadequate in their assessment of behavioral effects and do not use optimal methods to evaluate the potential toxicity to the nervous tissue structure and function. To detect and characterize these potential effects more fully, a battery of more sensitive testing is required. The objective of this neurotoxicity battery testing is to evaluate the incidence and severity of the functional and/or behavioral effects, the level of motor activity, and the histopathology of the nervous system. The acute neurotoxicity study is required to detect possible effects resulting from a single exposure. The subchronic neurotoxicity study is intended to detect possible effects resulting from repeated or long-term exposures.

Neurotoxicity was not detected in the toxicity studies with DCPA.

                         Practical Utility of the Data
How will the data be used?

The acute and subchronic neurotoxicity studies provide critical scientific information needed to characterize potential hazard to the human population on the nervous system from pesticide exposure. These studies can provide data on a wide range of functional tests for evaluating neurotoxicity including sensory effects, neuromuscular effects, learning and memory and histopathology of the nervous system and can be used to select endpoints and doses for use in risk assessment of all exposure scenarios and are considered a primary data source for reliable reference dose calculation.

How could the data impact the Agency's future decision-making?

If the acute or subchronic neurotoxicity studies show that DCPA poses either a greater or a diminished risk than that given in the previous risk assessment, the risk assessment may need to be revised to reflect the magnitude of potential risk derived from the new data.

If the Agency does not have these data, a 10X database uncertainty factor may be applied when conducting a risk assessment using the currently available studies.

Rationale for Requiring an Immunotoxicity Study

Guideline Number: 870.7800
Study Title:  Immunotoxicity
                       Rationale for Requiring the Data
This is a new data requirement under 40 CFR Part 158 as a part of the data requirements for registration of a pesticide (food and non-food uses).

The Immunotoxicity Test Guideline (OPPTS 870.7800) prescribes functional immunotoxicity testing and is designed to evaluate the potential of a repeated chemical exposure to produce adverse effects (i.e., suppression) on the immune system. Immunosuppression is a deficit in the ability of the immune system to respond to a challenge of bacterial or viral infections such as tuberculosis (TB), Severe Acquired Respiratory Syndrome (SARS), or neoplasia.  Because the immune system is highly complex, studies assessing functional immunotoxic endpoints are helpful in fully characterizing a pesticide's potential immunotoxicity.  These data will be used in combination with data from hematology, lymphoid organ weights, and histopathology in routine chronic or subchronic toxicity studies to characterize potential immunotoxic effects.

                         Practical Utility of the Data
How will the data be used?

These animal studies can be used to select endpoints and doses for use in risk assessment of all exposure scenarios and are considered a primary data source for reliable reference dose calculation. For example, animal studies have demonstrated that immunotoxicity in rodents is one of the more sensitive manifestations of TCDD (2,3,7,8-tetrachlorodibenzo-p-dioxin) among developmental, reproductive, and endocrinologic toxicities.  Additionally, the EPA has established an oral reference dose (RfD) for tributyltin oxide (TBTO) based on observed immunotoxicity in animal studies (IRIS, 1997).

How could the data impact the Agency's future decision-making?

If the immunotoxicity study shows that the test material poses either a greater or a diminished risk than that given in the interim decision's conclusion, the risk assessments for the test material may need to be revised to reflect the magnitude of potential risk derived from the new data.

If the Agency does not have these data, a 10X database uncertainty factor may be applied for conducting a risk assessment from the available studies.

Discussion on Toxic Impurities

The manufacturing process of DCPA produces several contaminants known to be of significant toxicological concern, including hexachlorobenzene (HCB) and congeners (structurally related chemicals) of polyhalogenated dibenzo-p-dioxins/dibenzofurans (dioxins/furans).  Carcinogenic risk was assessed for dietary exposure to HCB and dioxin/furans using cancer potency factors of 1.02 (mg/kg/day)[-1] and 1 x 10[5], respectively.  Estimated dietary risks were negligible and below the level of concern.  In addition, cancer risk from these contaminants was assessed for occupational exposure and was below the level of concern.


[Federal Register: October 26, 2005 (Volume 70, Number 206)]
[Notices]
[Page 61861-61864]
[DOCID:fr26oc05-139]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52637; File No. SR-NASD-2004-026]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Amendments No. 3 and 4 to Proposed
Rule Change To Amend NASD Rule 2320(a) Governing Best Execution

October 19, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 22 and September 22, 2005, the National Association of
Securities Dealers, Inc. (``NASD'') filed with the Securities and
Exchange Commission (``Commission'' or ``SEC'') Amendments No. 3 and 4
to the proposed rule change as described in Items I, II, and III below
which Items have substantially been prepared by the NASD. The proposed
rule change, incorporating Amendments No. 1 and 2, was published for
comment in the Federal Register on February 25, 2005.\3\ The Commission
is publishing this notice to solicit comments on the proposed rule
change, as amended by Amendments No. 3 and 4 from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 51229 (Feb. 18,
2005), 70 FR 9416.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    In response to comments on the original proposal, NASD is proposing
additional amendments to Rule 2320(a) (``Best Execution Rule''). Below
is the text of the proposed rule change marked to show changes from the
text that was published previously.\4\ Proposed deletions are in
brackets. The discussion section of this notice focuses on the changes
made in Amendments No. 3 and 4. For an explanation of the original
filing, see the release cited in footnote 3.
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

2300. TRANSACTIONS WITH CUSTOMERS

2320. Best Execution and Interpositioning

    (a) In any transaction for or with a customer or a customer of
another broker-dealer, a member and persons associated with a member
shall use reasonable diligence to ascertain the best market [center]
for the subject security and buy or sell in such market [center] so
that the resultant price to the customer is as favorable as possible
under prevailing market conditions. Among the factors that will be
considered in determining whether a member has used ``reasonable
diligence'' are:
    (1) The character of the market for the security, e.g., price,
volatility, relative liquidity, and pressure on available
communications;
    (2) The size and type of transaction;
    (3) The number of markets checked;
    (4) Accessibility of the quotation; and
    (5) The terms and conditions of the order which result in the
transaction, as communicated to the member and persons associated with
the member.
    (b) through (g) No change.
* * * * *

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

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

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

1. Purpose

Background

    The Best Execution Rule currently requires a member, in any
transaction for or with a customer, to use reasonable diligence to
ascertain the best inter-dealer market for a security and to buy or
sell in such a market so that the price to the customer is as favorable
as possible under the prevailing market conditions. NASD has received a
number of questions regarding the application of the term ``customer,''
in the context of best execution. NASD Rule 0120(g) defines
``customer'' to exclude a broker or dealer, unless the context
otherwise requires. For example, if a firm that receives an order from
a customer (``originating broker-dealer'') routes the order to a member
firm (``recipient member'') and the recipient member executes the order
in a manner inconsistent with the Best Execution Rule, the recipient
member could argue that it has not violated the Best Execution Rule
because the transaction was not ``for or with a customer,'' but rather
for or with a broker-dealer.
    NASD believes that not applying the Best Execution Rule to
recipient members is contrary to both the interests of the investing
public and the general intent of the Best Execution Rule.

Proposal

    NASD filed Amendments No. 3 and 4 in response to the commenters'
concerns about how the proposed rule change would apply to the debt
markets

and in instances where another broker-dealer is simply executing a
customer order against a member's quote. Amendment No. 3 deletes
proposed references to market centers and instead uses the term
``market.'' NASD is making this change in response to comments that
suggest that the term ``market center'' would: (1) Create an unfair
competitive disparity in the equity market; and (2) create confusion
and problems of interpretation, application, and enforcement in the
debt market. While the term ``market'' has been in the text of NASD
Rule 2320 since its adoption, it is an undefined term. Accordingly,
NASD is providing interpretive guidance that states that, for purposes
of NASD Rule 2320, the term ``market'' or ``markets'' should be
interpreted broadly to include a variety of different venues,
including, but not limited to, market centers that are trading a
particular security. Such an expansive interpretation is for the
purposes of both informing broker-dealers as to the scope of venues
that must be considered in the furtherance of their best execution
obligations and promoting fair competition among broker-dealers,
exchange markets, and markets other than exchange markets, as well as
any other venue that may emerge, by not mandating that certain trading
venues have less relevance than others in the course of best execution.
    In Amendment No. 3, NASD also is providing interpretive guidance
concerning how the Best Execution Rule should be applied in the debt
market with respect to one of the factors used to determine if a member
has used reasonable diligence: Accessibility of the quotation. When
quotations are available, such as for certain liquid debt securities,
NASD will consider the ``accessibility of such quotations'' when
examining whether a member has used reasonable diligence. For purposes
of debt, the term ``quotation'' refers to either dollar (or other
currency) pricing or yield pricing.\5\
---------------------------------------------------------------------------

    \5\ NASD notes, however, that accessibility is only one of the
non-exhaustive reasonable diligence factors set out in NASD Rule
2320. In the absence of accessibility, members are not relieved from
taking reasonable steps and employing their market expertise in
achieving the best execution of customer orders.
---------------------------------------------------------------------------

    Amendment No. 4 clarified that a member's duty to provide best
execution in any transaction ``for or with a customer of another
broker-dealer'' does not apply in instances when another broker-dealer
is simply executing a customer order against the member's quote. Stated
in another manner, the duty to provide best execution to customer
orders received from other broker-dealers arises only when an order is
routed from the broker-dealer to the member for the purpose of order
handling and execution. This clarification is intended to draw a
distinction between those situations in which the member is acting
solely as the buyer or seller in connection with orders presented by a
broker-dealer against the member's quote, as opposed to those
circumstances in which the member is accepting order flow from another
broker-dealer for the purpose of facilitating the handling and
execution of such orders.

2. Statutory Basis

    NASD believes that the proposed rule change is consistent with the
provisions of Section 15A of the Act,\6\ in general, and with Section
15A(b)(6) of the Act,\7\ in particular, which requires that NASD rules
be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. The obligation of a member
firm to provide best execution to its customers has long been an
important investor protection rule, characteristic of fair and orderly
markets and a central focus of NASD's examination, customer complaint,
and automated surveillance programs. NASD believes that the proposed
rule change will expand customer protection under the Best Execution
Rule, provide better clarity to members, and enhance NASD's ability to
pursue actions for failure to provide best execution.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.

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

    On February 25, 2005, the SEC published SR-NASD-2004-026 for
comment in the Federal Register.\8\ The SEC received three comment
letters in response to the publication of the rule proposal in the
Federal Register.\9\ On June 22, 2005, the NASD responded to the
comments.\10\ BMA responded to the NASD's response.\11\
---------------------------------------------------------------------------

    \8\ See footnote 3, supra.
    \9\ See letters from Amal Aly, Vice President and Associate
General Counsel, and Ann Vlcek, Vice President and Associate General
Counsel, Securities Industry Association (``SIA'') dated March 18,
2005 (``SIA Letter''); Paul A. Merolla, Executive Vice President and
General Counsel, Instinet Group, Inc. (``Instinet'') dated March 22,
2005 (``Instinet Letter''); Michele C. David, Vice President and
Assistant General Counsel, The Bond Market Association (``BMA'')
dated April 5, 2005 (``BMA Letter''); all of which were addressed to
Jonathan G. Katz, Secretary, Commission.
    \10\ See Amendment No. 3.
    \11\ See letter from Marjorie Gross, Senior Vice President and
Regulatory Counsel, BMA to Jonathan G. Katz, Secretary Commission,
dated September 6, 2005 (``BMA Letter 2'').
---------------------------------------------------------------------------

    The BMA submitted a comment letter stating, among other things, its
belief that NASD only considered equities trading when drafting the
proposed rule change.\12\ Specifically, BMA states that NASD's proposed
change of terminology in an attempt to clarify and modernize the Best
Execution Rule exemplifies how the rule change was drafted to address
equities trading only and states further that changing ``inter-dealer''
markets to ``market centers'' has no meaning in the context of the bond
market. BMA believes the proposal is inappropriate for fixed income
securities and, if adopted, would exacerbate existing difficulties with
regard to bond trading. In addition, BMA believes applying the Best
Execution Rule, as amended, is impractical, unfair, anti-competitive,
unworkable in the case of the bond market, and inconsistent with a
customer's reasonable expectations of how its orders will be handled.
---------------------------------------------------------------------------

    \12\ NASD did not intend to only consider equity trading when
drafting this proposal. In this rule proposal, NASD is again
clarifying that the Best Execution Rule is applicable to the debt
market, and is providing additional interpretive guidance.
Specifically, NASD is providing interpretive guidance with respect
to the ``accessibility of the quotations'' reasonable diligence
factor and the application of this factor in the debt market. When
quotations are available, such as for certain liquid debt
securities, NASD will consider the ``accessibility of such
quotations'' when examining whether a member has used due diligence.
In such instances, the term ``quotation'' refers to either dollar
(or other currency) pricing or yield pricing.
---------------------------------------------------------------------------

    NASD appreciates the comments of BMA but does not find them to be
persuasive. Essentially, BMA is advocating, for a number of reasons,
that the Best Execution Rule is not applicable to the debt market.
However, the terms of NASD Rule 2320 have never been limited to equity
securities and the consistency of this observation is expressed in NASD
Rule 0116 in which the Best Execution Rule, among others, is made
applicable to transactions and business activities relating to exempted
securities (other than municipal securities) conducted by members and
associated persons.\13\
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 44631 (July 31,
2001), 66 FR 41283 (August 7, 2001) (Approval of SR-NASD-2000-38).

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

    Further, BMA asserts that the term ``market center'' is an equity
term and cannot be applied in the context of debt. The NASD
acknowledges that the term ``market center'' has traditionally been
used in connection with certain equity securities. For example, Rule
600(b)(38) under the Act,\14\ which is applicable to national market
system securities, defined ``market center'' as any exchange market
maker, over-the-counter (OTC) market maker, alternative trading system,
national securities exchange, or national securities association. In
seeking to modernize the Best Execution Rule, NASD sought a recognized
term that was aimed broadly at capturing order execution venues.
However, in response to comments, including BMA's concerns that use of
this term may introduce confusion in the debt market; NASD has
determined to amend the Best Execution Rule to instead use the term
``market.'' It should be noted, as discussed above, that the term
``market'' or ``markets'' for purposes of NASD Rule 2320, should be
interpreted broadly to include a variety of different venues, including
but not limited to market centers that are trading a particular
security. Such an expansive interpretation is for the purposes of both
informing broker-dealers as to the scope of venues that must be
considered in the furtherance of their best execution obligations and
promoting fair competition among broker-dealers, exchange markets, and
markets other than exchange markets, as well as any other venue that
may emerge; it is not NASD's intention to mandate that certain trading
venues have less relevance than others in the course of best execution.
---------------------------------------------------------------------------

    \14\ 17 CFR 242.600(b)(38).
---------------------------------------------------------------------------

    BMA also believes imposing a best execution obligation on a
``downstream'' chain of dealers is impractical, unfair, anti-
competitive, and unworkable in the case of the bond market. BMA argues
that such an obligation should not be imposed on recipient broker-
dealers because there is no pre-trade quote transparency, no mandatory
firm quote obligation, and no uniform, regulated inter-market and
inter-dealer linkage.\15\ BMA fails to recognize that the Best
Execution Rule has been in place since 1968. It was adopted at a time
when the market structure of the OTC market was quite different. There
was significantly less market transparency. Trading decisions and
pricing information were based upon telephone and wire quotations as
well as quotations in the National Quotation Bureau sheet. At that
time, in response to a recommendation made in Chapter VII of the Report
of Special Study of Securities Markets of the Securities and Exchange
Commission,\16\ NASD had recently adopted a policy with respect to
firmness of quotations. Furthermore, no uniform, regulated inter-
market, inter-dealer linkage existed. The fact is that the Best
Execution Rule has been in force since the time when the OTC equity
market more closely resembled the current fixed income market.
---------------------------------------------------------------------------

    \15\ BMA notes in its comment letter that the fixed income
market is, in fact, not a single market, but in effect, several
different markets ranging from the U.S. Treasury market, where
dealer quotations may be very representative of market prices and
quotations on trading systems may be executable, to the corporate
bond market, where large and active issuers may be actively quoted
and where screens may provide good transparency for certain
securities of active issuers (but not for other securities or
issuers), to the market for distressed and emerging market paper and
derivative instruments, such as structured notes, where there may be
limited trading, quoting or transparency. Notwithstanding these
observations, they do not obviate the application of the Best
Execution Rule in wholesale fashion. As discussed subsequently in
the text, NASD's Best Execution Rule looks at a number of factors,
including the character of the market for the security, to determine
whether a member or associated person(s) has used reasonable
diligence. Accordingly, it can be applied in a variety of different
markets that can possess divergent characteristics, including the
U.S. debt market.
    \16\ See Report of Special Study of Securities Markets of the
Securities and Exchange Commission, H.R. Doc. No. 95, 88th Cong.,
1st Sess., pt. II, 674 (1963).
---------------------------------------------------------------------------

    The principles embodied in the Best Execution Rule have evolved
over time with changes in technology and the structure of the financial
markets.\17\ This evolution arises because the standard in the Best
Execution Rule is one of ``reasonable diligence'' that is assessed by
examining specific factors including ``the character of the market for
the security.'' Accordingly, the determination as to whether a member
has satisfied its best execution obligations necessarily involves a
``facts and circumstances'' analysis. In sum, in its refutation of the
best execution obligation in the context of the debt markets, BMA is
incorrect as a matter of law and regulation. Moreover, BMA's policy
attack on this important investor protection safeguard is fatally
undermined by the elasticity of NASD Rule 2320 in its recognition that
the character of the market will be among the reasonable diligence
factors in the execution of the obligation.
---------------------------------------------------------------------------

    \17\ The SEC has expressly recognized the evolving nature of the
best execution obligations of broker-dealers. See, e.g., Final
Rules, 61 FR at 48322-23 (``The scope of this duty of best execution
must evolve as changes occur in the market that give rise to
improved executions for customer orders, including opportunities to
trade more advantageous prices. As these changes occur, broker-
dealers' procedures for seeking to obtain best execution for
customer orders also must be modified to consider price
opportunities that become `reasonably available.' ''). Accordingly,
the principles embodied in the text of the Best Execution Rule are
applicable to a variety of different market structures and evolve as
the market structure for a particular type of security evolves.
---------------------------------------------------------------------------

    BMA posits that extending best execution obligations to customers
of another broker-dealer is inconsistent with a customer's reasonable
expectations of how its orders will be handled because the customer
would not have the same expectations of the chain of ``unknown''
intermediary firms involved in its transactions. NASD strongly
disagrees with BMA.\18\ BMA's assertion that customers' expectations
would somehow be different when an ``unknown'' intermediary is involved
is inconsistent with the generally recognized principle that customers
generally seek their own economic gain and that broker-dealers have a
corresponding duty to use reasonable efforts to maximize the economic
benefits for their customers.\19\ There is nothing in the case law that
suggests that a broker-dealer's determination to use an unrelated
intermediary should relieve its duties in this regard. NASD strongly
believes that customers are entitled to receive equivalent best
execution protections without regard to whether their order is executed
by the originating broker-dealer or routed to or through another
broker-dealer for execution.
---------------------------------------------------------------------------

    \18\ It has been NASD's consistent position since at least 1963
that ``the integrity of the industry can be maintained only if the
fundamental principle that a customer should at all times get the
best available price which can reasonably be obtained for him is
followed.'' See, Report of Special Study of Securities Markets of
the Securities and Exchange Commission, H.R. Doc. No. 95, 88th
Cong., 1st Sess., pt. II, 624 (1963).
    \19\ See, e.g., Newton v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 135 F.3d 266, 270 (3d Cir. 1998) (en banc) (citation omitted),
cert. denied sub nom., Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Kravitz, 525 U.S. 811 (1998). The Court, in the context of an agency
relationship, recognized that customers seek their own economic
gain. Specifically, the Court stated that ``* * * the client-
principal seeks his own economic gain and the purpose of the agency
is to help the client-principal achieve that objective, the broker-
dealer, absent instructions to the contrary, is expected to use
reasonable efforts to maximize the economic benefit to the client in
each transaction.''
---------------------------------------------------------------------------

    The SIA and Instinet submitted comment letters that, taken
together, promote the view that a recipient broker-dealer's compliance
with the terms and conditions of the order, as communicated by the
originating broker-dealer, solely, should constitute satisfaction of
its best execution obligation with regard to such routed orders. SIA
and Instinet assert that this is appropriate because the recipient
broker-dealer is not in the same position as the routing firm to weigh
the relative

importance of various factors related to each customer, as it usually
has no knowledge of the actual customer.
    NASD disagrees with the arguments of SIA and Instinet. The
recipient member is certainly entitled to rely on the routing member to
understand the terms of the order absent any other direct contact with
the customer; with that allowance noted, the recipient member is not at
any further disadvantage in complying with the terms of Rule NASD 2320,
and, consequently, investor protection requires that recipient members
must be subject to all of the relevant reasonable diligence factors in
determining whether best execution has occurred as a matter of fact and
circumstance.
    Instinet also asserted that the proposal would create an unfair
competitive disparity between otherwise similarly situated market
centers that execute orders on an electronic agency basis because the
proposed rule would not apply to market centers operated by NASD and
other self-regulatory organizations (``SROs''). Instinet requests that
NASD revise the proposal to exclude member-operated Electronic
Communication Networks and Alternative Trading Systems that interact
with orders on a fully automated basis, or else apply the same
obligations under the proposal to the market centers operated by NASD
and other SROs.\20\ As noted above, NASD has responded to this comment,
as well as BMA's, by deleting proposed references to market centers and
simply using the term ``market.'' For purposes of NASD Rule 2320, this
term should be interpreted broadly to include a variety of different
venues, including, but not limited to, market centers that are trading
a particular security. Finally, in response to the commenters'
concerns, in Amendment No. 4, NASD clarified that a member's duty to
provide best execution to customer orders received from other broker-
dealers ``arises only when an order is routed from the broker-dealer to
the member for the purpose of order handling and execution'' and does
not arise when another broker-dealer is simply executing against a
member's quote.
---------------------------------------------------------------------------

    \20\ Instinet also claims that, in light of Regulation NMS'
effects on interaction among market centers and the potential
conflicts and interpretive issues, NASD's proposal could be
interpreted to require a market center (the recipient broker-dealer)
to consider routing an order to another market center displaying a
better price even though the originating broker-dealer already has
indicated that it has attempted to access such interest. NASD's Best
Execution Rule contains a number of factors that are examined to
determine whether a member or associated person has used reasonable
diligence, including ``accessibility of the quotation.''
Accordingly, the facts and circumstances surrounding the
``accessibility of the quotations'' would be considered to the
extent they are appropriate.
---------------------------------------------------------------------------

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NASD-2004-026 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2004-026. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of the
filing also will be available for inspection and copying at the
principal office of NASD. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-NASD-2004-026 and should be submitted on or before November 16,
2005.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
 [FR Doc. E5-5922 Filed 10-25-05; 8:45 am]

BILLING CODE 8010-01-P