[Federal Register Volume 82, Number 194 (Tuesday, October 10, 2017)]
[Rules and Regulations]
[Pages 46923-46926]
[FR Doc No: 2017-21375]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2016-0524; FRL-9968-35--Region 9]

Approval of California Air Plan Revisions, Antelope Valley Air
Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve and conditionally approve revisions to the Antelope
Valley Air Quality Management District (AVAQMD or ``District'') portion
of the California State Implementation Plan (SIP). These revisions
concern the District's demonstration regarding Reasonably Available
Control Technology (RACT) requirements for the 1997 8-hour ozone and
the 2008 8-hour ozone National Ambient Air Quality Standards (NAAQS or
``standards'') in the Antelope Valley ozone nonattainment area. The EPA
is also taking final action to approve AVAQMD negative declarations
into the SIP for the 1997 and the 2008 ozone standards.
    We are approving local SIP revisions under the Clean Air Act (CAA
or the Act).

DATES: This rule will be effective on November 9, 2017.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R09-OAR-2016-0524. All documents in the docket are
listed on the https://www.regulations.gov Web site. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available through https://www.regulations.gov, or please contact the
person identified in the FOR FURTHER INFORMATION CONTACT section for
additional availability information.

FOR FURTHER INFORMATION CONTACT: Nancy Levin, EPA Region IX, (415) 972-
3848<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Statutory and Executive Order Reviews

I. Proposed Action

    On July 28, 2017 (82 FR 35149), the EPA proposed action on the
following documents submitted into the California SIP.

------------------------------------------------------------------------
   Local agency           Document            Adopted        Submitted
------------------------------------------------------------------------
AVAQMD............  AVAQMD 8-Hour               09/19/06        01/31/07
                     Reasonably
                     Available Control
                     Technology--State
                     Implementation Plan
                     Analysis (RACT SIP
                     Analysis)--1997 8-
                     hour Ozone NAAQS
                     ``2006 RACT SIP''.
AVAQMD............  AVAQMD 8-Hour               07/21/15        10/23/15
                     Reasonably
                     Available Control
                     Technology--State
                     Implementation Plan
                     Analysis (2015 RACT
                     SIP Analysis)--2008
                     8-hour Ozone NAAQS
                     ``2015 RACT SIP''.
AVAQMD............  AVAQMD Federal              07/21/15        10/23/15
                     Negative
                     Declarations for
                     Twenty Control
                     Techniques
                     Guidelines Source
                     Categories.
AVAQMD............  AVAQMD Federal              12/20/16        06/07/17
                     Negative
                     Declarations for
                     Seven Control
                     Techniques
                     Guidelines Source
                     Categories.
------------------------------------------------------------------------

    Specifically, the EPA proposed to conditionally approve AVAQMD's
2006 and 2015 RACT SIPs with respect to Rule 462, Organic Liquid
Loading; Rule 1110.2, Emissions from Stationary, Non-road & Portable
Internal Combustion Engines; Rule 1151, Motor Vehicle and Mobile
Equipment Coating Operations; and Rule 1171, Solvent Cleaning
Operations. Simultaneously, EPA proposed to fully approve the remainder
of the 2006 and 2015 RACT SIPs, and to fully approve AVAQMD's negative
declarations submitted on October 23, 2015 and June 7, 2017. We
simultaneously withdrew our December 15, 2016 proposal to partially
approve and partially disapprove AVAQMD's 2006 and 2015 RACT SIPs
because the AVAQMD committed to address the identified deficiencies
within one year of the approval of the plan revision.
    We proposed to approve these submittals because we determined that
they complied with the relevant CAA requirements. Our proposed action
contains more information on the submittals and our evaluation.

II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period.
During this period, we received no comments.

III. EPA Action

    No comments were submitted. Therefore, as authorized in subsections
110(k)(3) and 110(k)(4) of the Act, the EPA is conditionally approving
AVAQMD's 2006 and 2015 RACT SIPs with respect to Rule 462, Organic
Liquid Loading; Rule 1110.2, Emissions from Stationary, Non-road &
Portable Internal Combustion Engines; Rule 1151, Motor Vehicle and
Mobile Equipment Coating Operations; and Rule 1171, Solvent Cleaning
Operations, and fully approving the remainder of the 2006 and 2015 RACT
SIPs and AVAQMD's negative declarations submitted on October 23, 2015
and June 7, 2017 into the California SIP.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, the EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves state law as meeting federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this action:
     Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide the EPA with the discretionary authority
to address, as appropriate, disproportionate human health or
environmental effects, using practicable and legally permissible
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian
reservation land or in any other area where the EPA or an Indian tribe
has demonstrated that a tribe has jurisdiction. In those areas of
Indian country, the rule does not have tribal implications and will not
impose substantial direct costs on tribal governments or preempt tribal
law as specified by Executive Order 13175 (65 FR 67249, November 9,
2000).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. The EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by December 11, 2017. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. This action may not be challenged later in
proceedings to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: September 15, 2017.
Deborah Jordan,
Acting Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart F--California

0
2. Section 52.220 is amended by adding paragraphs (c)(358)(ii),
(c)(493) and (494) to read as follows:

Sec.  52.220  Identification of plan--in part.

* * * * *
    (c) * * *
    (358) * * *
    (ii) Additional materials. (A) Antelope Valley Air Quality
Management District.
    (1) 8-Hour Reasonably Available Control Technology--State
Implementation Plan Analysis (RACT SIP Analysis), August 2006, adopted
on September 19, 2006.
    (2) [Reserved]
* * * * *
    (493) The following plan was submitted by on October 23, 2015 by
the Governor's designee.
    (i) [Reserved]
    (ii) Additional materials. (A) Antelope Valley Air Quality
Management District.
    (1) 8-Hour Reasonably Available Control Technology--State
Implementation Plan Analysis (RACT SIP Analysis), July 2015, adopted on
July 21, 2015.
    (2) Antelope Valley Air Quality Management District Federal
Negative Declaration (8 hr Ozone Standard) for Twenty CTG Source
Categories, signed June 15, 2015 and adopted on July 21, 2015.
    (494) The following plan revision was submitted on June 7, 2017 by
the Governor's designee.
    (i) [Reserved]
    (ii) Additional materials. (A) Antelope Valley Air Quality
Management District.
    (1) Antelope Valley Air Quality Management District Federal
Negative Declaration (8-hour Ozone Standards) for Seven Control
Techniques Guideline

Source Categories, signed October 19, 2016 and adopted on December 20,
2016.
    (2) [Reserved]

0
3. Section 52.222 is amended by adding paragraphs (a)(6)(x) and (xi) to
read as follows:

Sec.  52.222  Negative declarations.

    (a) * * *
    (6) * * *
    (x) The following negative declarations for the 2008 ozone NAAQS
were adopted by the District on July 21, 2015 and submitted to EPA on
October 23, 2015.

------------------------------------------------------------------------
        CTG source category                CTG reference document
------------------------------------------------------------------------
Bulk Gasoline Plants..............  Control of Volatile Organic
                                     Emissions from Bulk Gasoline Plants
                                     (EPA-450/2-77-035, 12/1977).
Coils.............................  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume II: Surface Coating
                                     of Cans, Coils, Paper, Fabrics,
                                     Automobiles, and Light-Duty Trucks
                                     (EPA-450/2-77-008, 05/1977).
Fiberglass Boat Manufacturing       Control Techniques Guidelines for
 Materials.                          Fiberglass Boat Manufacturing
                                     Materials (EPA-453/R-08-004, 09/
                                     2008).
Fixed-Roof Tanks..................  Control Volatile Organic Emissions
                                     from Storage of Petroleum Liquids
                                     in Fixed-Roof Tanks (EPA-450/2-77-
                                     036, 12/1977).
Flat Wood Paneling................  Control Techniques Guidelines for
                                     Flat Wood Paneling Coatings (EPA-
                                     453/R-06-004, 09/2006).
Floating-Roof Tanks...............  Control of Volatile Organic
                                     Emissions from Petroleum Liquid
                                     Storage in External Floating Roof
                                     Tanks (EPA-450/2-78-047, 12/1978).
Insulation of Magnet Wire.........  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume IV: Surface Coating
                                     of Insulation of Magnet Wire (EPA-
                                     450/2-77-033, 12/1977).
Large Appliance Coatings..........  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume V: Surface Coating
                                     of Large Appliances (EPA-450/2-77-
                                     034, 12/1977).
                                    Control Techniques Guidelines for
                                     Large Appliance Coatings (EPA-453/R-
                                     07-004, 09/2007).
Large Petroleum Dry Cleaners......  Control of Volatile Organic Compound
                                     Emissions from Large Petroleum Dry
                                     Cleaners (EPA-450/3-82-009, 09/
                                     1982).
Manufacture of High-Density         Control of Volatile Organic Compound
 Polyethylene, Polypropylene, and    Emissions from Manufacture of High-
 Polystyrene Resins.                 Density Polyethylene,
                                     Polypropylene, and Polystyrene
                                     Resins (EPA-450/3-83-008, 11/1983).
Metal Furniture Coating...........  Control Techniques Guidelines for
                                     Metal Furniture Coatings (EPA-453/R-
                                     07-005, 09/2007).
Natural Gas/Gasoline Processing     Control of Volatile Organic Compound
 Plants.                             Leaks from Natural Gas/Gasoline
                                     Processing Plants (EPA-450/3-83-
                                     007, 12/1983).
Petroleum Refinery Equipment......  Control of Volatile Organic Compound
                                     Leaks from Petroleum Refinery
                                     Equipment (EPA-450/2-78-036, 06/
                                     1978).
Pneumatic Rubber Tires............  Control of Volatile Organic
                                     Emissions from Manufacture of
                                     Pneumatic Rubber Tires (EPA-450/2-
                                     78-030, 12/1978).
Refinery Vacuum Producing Systems,  Control of Refinery Vacuum Producing
 Wastewater Separators, and          Systems, Wastewater Separators, and
 Process Unit Turnarounds.           Process Unit Turnarounds (EPA-450/2-
                                     77-025, 10/1977).
Shipbuilding and Ship Repair        Control Techniques Guidelines for
 Surface Coating Operations.         Shipbuilding and Ship Repair
                                     Operations (Surface Coating) (61 FR
                                     44050, 08/27/96) and EPA-453/R-94-
                                     032, 04/1994.
Synthesized Pharmaceutical          Control of Volatile Organic
 Products.                           Emissions from Manufacture of
                                     Synthesized Pharmaceutical Products
                                     (EPA-450/2-78-029, 12/1978).
Synthetic Organic Chemical          Control Volatile Organic Compound
 Manufacturing Industry.             Emissions from Air Oxidation
                                     Processes in Synthetic Organic
                                     Chemical Manufacturing Industry
                                     (EPA-450/3-84-015, 12/1984).
                                    Control of Volatile Organic Compound
                                     Emissions from Reactor Processes
                                     and Distillation Operations in
                                     Synthetic Organic Chemical
                                     Manufacturing Industry (EPA-450/4-
                                     91-031, 08/1993).
Synthetic Organic Chemical Polymer  Control of Volatile Organic Compound
 and Resin Manufacturing Equipment.  Leaks from Synthetic Organic
                                     Chemical Polymer and Resin
                                     Manufacturing Equipment (EPA-450/3-
                                     83-006, 03/1984).
Wood Furniture Manufacturing        Control of Volatile Organic Compound
 Coating Operations.                 Emissions from Wood Furniture
                                     Manufacturing Operations (EPA-453/R-
                                     96-007, 04/1996).
------------------------------------------------------------------------

    (xi) The following negative declarations were adopted by the
District on December 20, 2016 and submitted to EPA on June 7, 2017.

             Negative Declarations for the 1997 Ozone NAAQS
------------------------------------------------------------------------
        CTG source category                CTG reference document
------------------------------------------------------------------------
Can Coating.......................  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume II: Surface Coating
                                     of Cans, Coils, Paper, Fabrics,
                                     Automobiles, and Light-Duty Trucks
                                     (EPA-450/2-77-008, 05/1977).
Flat Wood Paneling Coating........  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume VII: Factory
                                     Surface Coating of Flat Wood
                                     Paneling (EPA-450/2-78-032, 06/
                                     1978).
Large Petroleum Dry Cleaning......  Control of Volatile Organic Compound
                                     Emissions from Large Petroleum Dry
                                     Cleaners (EPA-450/3-82-009, 09/
                                     1982).
------------------------------------------------------------------------

             Negative Declarations for the 2008 Ozone NAAQS
------------------------------------------------------------------------
        CTG source category                CTG reference document
------------------------------------------------------------------------
Can Coating.......................  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume II: Surface Coating
                                     of Cans, Coils, Paper, Fabrics,
                                     Automobiles, and Light-Duty Trucks
                                     (EPA-450/2-77-008, 05/1977).
Drum Coating......................  Control Techniques Guidelines for
                                     Miscellaneous Metal and Plastic
                                     Parts Coatings (EPA-453/R-08-003,
                                     09/2008).
Flat Wood Paneling Coating........  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume VII: Factory
                                     Surface Coating of Flat Wood
                                     Paneling (EPA-450/2-78-032, 06/
                                     1978).
Metal Furniture Coating...........  Control of Volatile Organic
                                     Emissions from Existing Stationary
                                     Sources--Volume III: Surface
                                     Coating of Metal Furniture (EPA-450/
                                     2-77-032, 12/1977).
Pleasure Craft Coating............  Control Techniques Guidelines for
                                     Miscellaneous Metal and Plastic
                                     Parts Coatings (EPA-453/R-08-003,
                                     09/2008).
Tank Truck Gasoline Loading         Control of Hydrocarbons from Tank
 Terminals.                          Truck Gasoline Loading Terminals
                                     (EPA-450/2-77-026, 10/1977).
------------------------------------------------------------------------

* * * * *

0
4. Revise Sec.  52.248 to read as follows:

Sec.  52.248  Identification of plan--conditional approval.

    (a) The EPA is conditionally approving a California State
Implementation Plan (SIP) revision submitted on November 13, 2015
updating the motor vehicle emissions budgets for nitrogen oxides
(NOX) and coarse particulate matter (PM10) for
the 1987 24-hour PM10 standard for the San Joaquin Valley
PM10 maintenance area. The conditional approval is based on
a commitment from the State to submit a SIP revision that demonstrates
full implementation of the contingency provisions of the 2007
PM10 Maintenance Plan and Request for Redesignation
(September 20, 2007). If the State fails to meet its commitment by June
1, 2017, the approval is treated as a disapproval.
    (b) The EPA is conditionally approving portions of the California
SIP revisions submitted on January 31, 2007 and October 23, 2015,
demonstrating control measures in the Antelope Valley portion of the
Los Angeles-San Bernardino Counties (West Mojave Desert) nonattainment
area implement RACT for the 1997 and 2008 ozone standards. The
conditional approval is based on a commitment from the state to submit
new or revised rules that will correct deficiencies in the following
rules for the Antelope Valley Air Quality Management District:
    (1) Rule 462, Organic Liquid Loading;
    (2) Rule 1110.2, Emissions from Stationary, Non-road & Portable
Internal Combustion Engines;
    (3) Rule 1151, Motor Vehicle and Mobile Equipment Coating
Operations; and
    (4) Rule 1171, Solvent Cleaning Operations. If the State fails to
meet its commitment by November 9, 2018, the conditional approval is
treated as a disapproval.

[FR Doc. 2017-21375 Filed 10-6-17; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 122 (Friday, June 24, 2011)]
[Notices]
[Page 37131]
[FR Doc No: 2011-15823]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0002]

Joint Meeting of the Gastrointestinal Drugs Advisory Committee
and the Drug Safety and Risk Management Advisory Committee; Notice of
Meeting

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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    This notice announces a forthcoming meeting of a public advisory
committee of the Food and Drug Administration (FDA). At least one
portion of the meeting will be closed to the public.
    Name of Committees: Gastrointestinal Drugs Advisory Committee and
the Drug Safety and Risk Management Advisory Committee.
    General Function of the Committees: To provide advice and
recommendations to the Agency on FDA's regulatory issues.
    Date and Time: The meeting will be held on July 20, 2011, from 8
a.m. to 1 p.m.
    Location: Hilton Washington DC/Silver Spring, The Ballrooms, 8727
Colesville Rd., Silver Spring, MD. The hotel telephone number is 301-
589-5200.
    Contact Person: Kristine T. Khuc, Center for Drug Evaluation and
Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg.
31, rm. 2417, Silver Spring, MD 20993-0002,<PHONE_NUMBER>, Fax: 301-847-
8533, e-mail<EMAIL_ADDRESS>or FDA Advisory Committee Information
Line, 1-800-741-8138<PHONE_NUMBER> in the Washington, DC area), and
follow the prompts to the desired center or product area. Please call
the Information Line for up-to-date information on this meeting. A
notice in the Federal Register about last minute modifications that
impact a previously announced advisory committee meeting cannot always
be published quickly enough to provide timely notice. Therefore, you
should always check the Agency's Web site and call the appropriate
advisory committee hot line/phone line to learn about possible
modifications before coming to the meeting.
    Agenda: The meeting will be open to the public from 8 a.m. to 9
a.m., unless public participation does not last that long; from 9 a.m.
to 1 p.m., the meeting will be closed to permit discussion and review
of trade secret and/or confidential commercial information.
    FDA generally makes background material available to the public no
later than 2 business days before the meeting or follows other
procedures to make such material available to the public. There is no
background material that is publicly available for this meeting.
    Procedure: On July 20, 2011, from 8 a.m. to 9 a.m., the meeting is
open to the public. Interested persons may present data, information,
or views, orally or in writing, on issues pending before the committee.
Written submissions may be made to the contact person on or before July
6, 2011. Oral presentations from the public will be scheduled between
approximately 8 a.m. to 9 a.m. Those individuals interested in making
formal oral presentations should notify the contact person and submit a
brief statement of the general nature of the evidence or arguments they
wish to present, the names and addresses of proposed participants, and
an indication of the approximate time requested to make their
presentation on or before June 27, 2011. Time allotted for each
presentation may be limited. If the number of registrants requesting to
speak is greater than can be reasonably accommodated during the
scheduled open public hearing session, FDA may conduct a lottery to
determine the speakers for the scheduled open public hearing session.
The contact person will notify interested persons regarding their
request to speak by June 28, 2011.
    Closed Committee Deliberations: On July 20, 2011, from 9 a.m. to 1
p.m., the meeting will be closed to permit discussion and review of
trade secret and/or confidential commercial information (5 U.S.C.
552b(c)(4)). During this session, the committees will discuss the drug
development program of an investigational gastroenterology drug.
    Persons attending FDA's advisory committee meetings are advised
that the agency is not responsible for providing access to electrical
outlets.
    FDA welcomes the attendance of the public at its advisory committee
meetings and will make every effort to accommodate persons with
physical disabilities or special needs. If you require special
accommodations due to a disability, please contact Kristine T. Khuc at
least 7 days in advance of the meeting.
    FDA is committed to the orderly conduct of its advisory committee
meetings. Please visit our Web site at http://www.fda.gov/AdvisoryCommittees/AboutAdvisoryCommittees/ucm111462.htm for procedures
on public conduct during advisory committee meetings.

    Dated: June 21, 2011.
Jill Hartzler Warner,
Acting Associate Commissioner for Special Medical Programs.
[FR Doc. 2011-15823 Filed 6-23-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Notices]
[Pages 863-867]
[FR Doc No: 2019-00505]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84991; File No. S7-27-11]

Order Granting a Limited Exemption From the Exchange Act
Definition of ``Penny Stock'' for Security-Based Swap Transactions
Between Eligible Contract Participants; Granting a Limited Exemption
From the Exchange Act Definition of ``Municipal Securities'' for
Security-Based Swaps; and Extending Certain Temporary Exemptions Under
the Exchange Act in Connection With the Revision of the Definition of
``Security'' To Encompass Security-Based Swaps

January 25, 2019.

I. Introduction

    The Securities and Exchange Commission (``Commission'' or ``SEC'')
is granting a limited exemption under Securities Exchange Act of 1934
(``Exchange Act'') from the definition of ``penny stock'' in Section
3a(51) and Rule 3a51-1 for transactions in security-based swaps between
eligible contract participants (``ECPs''); \1\ granting a limited
exemption from the definition of ``municipal securities'' for security-
based swaps; and extending until February 5, 2020, certain temporary
exemptive relief originally provided by the Commission in connection
with the revision of the definition of ``security'' in the Exchange Act
to encompass security-based swaps.\2\
---------------------------------------------------------------------------

    \1\ The term ``eligible contract participant'' or ``ECP'' is
defined in Section 1a(18) of the Commodity Exchange Act (``CEA'') [7
U.S.C. 1a(18)]. The definition of the term ``eligible contract
participant'' in the Exchange Act refers to the definition of
``eligible contract participant'' in the CEA. See Section 3(a)(65)
of the Exchange Act. The SEC and the Commodity Futures Trading
Commission have adopted final rules further defining the term
``eligible contract participant.'' See Further Definition of ``Swap
Dealer,'' ``Security-Based Swap Dealer,'' ``Major Swap
Participant,'' ``Major Security-Based Swap Participant'' and
``Eligible Contract Participant,'' Exchange Act Release No. 66868
(Apr. 27, 2012), 77 FR 30596 (May 23, 2012).
    \2\ See Order Granting Temporary Exemptions under the Securities
Exchange Act of 1934 in Connection with the Pending Revisions of the
Definition of ``Security'' to Encompass Security-Based Swaps,
Exchange Act Release No. 64795 (July 1, 2011), 76 FR 39927 (July 7,
2011) (``2011 Exchange Act Exemptive Order''); See also Further
Definition of ``Swap,'' ``Security-Based Swap,'' and ``Security-
Based Swap Agreement''; Mixed Swaps; Security-Based Swap Agreement
Recordkeeping, Exchange Act Release No. 67453 (July 18, 2012), 77 FR
48207 (Aug. 13, 2012) (``Product Definitions Adopting Release'')
(extending the expiration date of the Temporary Exemptions to
February 11, 2013); Order Extending Temporary Exemptions under the
Securities Exchange Act of 1934 in Connection with the Revision of
the Definition of ``Security'' to Encompass Security-Based Swaps,
and Request for Comment, Exchange Act Release No. 68864 (Feb. 7,
2013), 78 FR 10218 (Feb. 13, 2013) (extending the expiration date to
February 11, 2014); Order Extending Temporary Exemptions under the
Securities Exchange Act of 1934 in Connection with the Revision of
the Definition of ``Security'' to Encompass Security-Based Swaps,
and Request for Comment, Exchange Act Release No. 71485 (Feb. 5,
2014), 79 FR 7731 (Feb. 10, 2014) (``2014 Extension Order'')
(extending the expiration date for certain Temporary Exemptions to
February 5, 2017).; Order Extending Until February 5, 2019 Certain
Temporary Exemptions under the Securities Exchange Act of 1934 in
Connection with the Pending Revision of the Definition of
``Security'' to Encompass Security-Based Swaps and Request for
Comment, Exchange Act Release No. 82626 (Feb. 2, 2018), 83 FR 5665
(Feb. 18, 2018) (``2018 Extension Order'').
---------------------------------------------------------------------------

II. Discussion

A. Background

    Title VII of the Dodd-Frank Wall Street Reform and Consumer
Protection Act \3\ amended the definition of ``security'' under the
Exchange Act to expressly encompass security-based swaps.\4\ The
expansion of the definition of the term ``security'' to include
security-based swaps had the effect of changing the scope of the
Exchange Act regulatory provisions that apply to security-based swaps
and, in doing so, raised certain complex questions that required
further consideration.
---------------------------------------------------------------------------

    \3\ The Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, 124 Stat. 1376 (2010) (``Dodd-Frank Act'').
    \4\ See Section 761(a)(2) of the Dodd-Frank Act (amending
Section 3(a)(10) of the Exchange Act (15 U.S.C. 78c(a)(10)). The
provisions of Title VII generally became effective on July 16, 2011
(360 days after the enactment of the Dodd-Frank Act) (the
``Effective Date''), unless a provision required a rulemaking, in
which case the provision would go into effect ``not less than'' 60
days after publication of the related final rules in the Federal
Register or on July 16, 2011, whichever is later. See Section 774 of
the Dodd-Frank Act (15 U.S.C. 77b).
---------------------------------------------------------------------------

    In July 2011, the Commission issued an order (the ``2011 Exchange
Act Exemptive Order''), which granted temporary exemptive relief from
compliance with certain provisions of the Exchange Act in connection
with security-based swap activity by: (i) Any person who meets the
definition of ``eligible contract participant'' set forth in Section
1a(12) of the Commodity Exchange Act as of July 20, 2010 (i.e., the day
prior to the date the Dodd-Frank Act was signed into law) and (ii) a
broker or dealer registered under Section 15(b) of the Exchange Act.\5\
---------------------------------------------------------------------------

    \5\ See 2011 Exchange Act Exemptive Order, 76 FR at 39938-39.
The 2011 Exchange Act Exemptive Order did not provide exemptive
relief for any provisions or rules prohibiting fraud, manipulation,
or insider trading (other than the prophylactic reporting or
recordkeeping requirements such as the confirmation requirements of
Exchange Act Rule 10b-10). In addition, the 2011 Exchange Act
Exemptive Order did not affect the Commission's investigative,
enforcement, and procedural authority related to those provisions
and rules. See 2011 Exchange Act Exemptive Order at 39931, n. 34.
The 2011 Exchange Act Exemptive Order also did not address Sections
12, 13, 14, 15(d), 16, and 17A of the Exchange Act and the rules
thereunder.
---------------------------------------------------------------------------

    The overall approach of the 2011 Exchange Act Exemptive Order was
directed toward maintaining the status quo during the implementation
process for the Dodd-Frank Act.\6\ In the 2011 Exchange Act Exemptive
Order, the Commission stated that it would accomplish this ``by
preserving the application of particular Exchange Act requirements that
already are applicable in connection with instruments that will be
`security-based swaps' following the Effective Date [of the Dodd-Frank
Act], but deferring the applicability of additional Exchange Act
requirements in connection with those instruments explicitly being
defined as `securities' as of the Effective Date.'' \7\
---------------------------------------------------------------------------

    \6\ See id., at 39929.
    \7\ Id. Under the 2011 Exchange Act Exemptive Order, instruments
that (before the Effective Date) were security-based swap agreements
and (after the Effective Date) constituted security-based swaps were
still subject to the application of those Exchange Act provisions.
See 2011 Exchange Act Exemptive Order, 76 FR at 39930, nn. 24-25.
---------------------------------------------------------------------------

    In 2014, the Commission extended the expiration dates for the
temporary exemptions in the 2011 Exchange Act Exemptive Order.\8\ In
the 2014 Extension Order, the Commission distinguished between: (i) The
temporary exemptions related to pending security-based swap rulemakings
(``Linked Temporary Exemptions''); and (ii) the temporary exemptions
that generally were not directly related to a specific security-based
swap rulemaking (``Unlinked Temporary Exemptions'').\9\ The expiration
dates for the Linked Temporary Exemptions established by the 2014
Extension Order were the compliance dates for the specific rulemakings
to which they were ``linked,'' and the expiration date for the Unlinked
Temporary Exemptions was three years following the effective date of
the 2014 Extension Order (i.e., February 5, 2017), or such time that
the Commission issues an order or rule determining whether continuing
exemptive relief is appropriate for security-based swaps with respect
to any such Unlinked Temporary Exemptions. This approach was designed
to provide the Commission with flexibility while its Dodd-Frank Act
rulemaking is still in progress to determine whether continuing relief
should be provided for any of the Unlinked Temporary Exemptions.\10\
---------------------------------------------------------------------------

    \8\ See 2014 Extension Order.
    \9\ See id., at 7732.
    \10\ See id., at 7731. The 2014 Extension Order referred to the
temporary exemptions provided for in the 2011 Exchange Act Exemptive
Order as the ``Expiring Temporary Exemptions'' and noted that the
2011 Exchange Act Exemptive Order generally provided for the
following exemptions from the Exchange Act: ``(a) temporary
exemptions in connection with security-based swap activity by
certain `eligible contract participants'; and (b) temporary
exemptions specific to security-based swap activities by registered
brokers and dealers.''
    The 2014 Extension Order identified the Linked Temporary
Exemptions as those Expiring Temporary Exemptions related to: (1)
Capital and margin requirements applicable to a broker or dealer
(Sections 7 and 15(c)(3), Regulation T, and Exchange Act Rules 15c3-
1, 15c3-3, and 15c3-4); (2) recordkeeping requirements applicable to
a broker or dealer (Sections 17(a) and 17(b) and Exchange Act Rules
17a-3, 17a-4, 17a-5, 17a-11, and 17a-13); (3) registration
requirements under Section 15(a)(1), and the other requirements of
the Exchange Act and the rules and regulations thereunder that apply
to a ``broker'' or ``dealer'' that is not registered with the
Commission; (4) Exchange Act Rule 10b-10; and (5) Regulation ATS.
The remaining Expiring Temporary Exemptions are the Unlinked
Temporary Exemptions.
    As applicable, the Commission extended the Linked Temporary
Exemptions until the compliance date for pending rulemakings
concerning: Capital, margin, and segregation requirements for
security-based swap dealers and major security-based swap
participants; recordkeeping and reporting requirements for broker-
dealers, security-based swap dealers, and major security-based swap
participants; security-based swap trade acknowledgements; and
registration requirements for security-based swap execution
facilities. The Linked Temporary Exemptions are not addressed in
this order and have been, or will be, separately considered in
connection with the related security-based swap rulemakings. See,
e.g., Trade Acknowledgement and Verification of Security-Based Swap
Transactions, Exchange Act Release No. 78011 (June 8, 2016), 81 FR
39807, 39824-25, n. 189 (June 17, 2016).

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

2018 Extension Order
    In the 2018 Extension Order, the Commission extended the expiration
date of the Unlinked Temporary Exemptions until February 5, 2019.\11\
In the 2018 Extension Order, the Commission also requested comment on
whether continuing exemptive relief is necessary beyond February 5,
2019.\12\ The Commission received four letters from two different
commenters in response.\13\
---------------------------------------------------------------------------

    \11\ See 2018 Extension Order. See also Order Extending Certain
Temporary Exemptions under the Securities Exchange Act of 1934 in
Connection with the Revision of the Definition of ``Security'' to
Encompass Security-Based Swaps and Request for Comment, Exchange Act
Release No. 79833 (Jan. 18, 2017), 82 FR 8467 (Jan. 25, 2017)
(``2017 Extension Order''). The 2017 Extension Order, which had
extended the expiration date of the Unlinked Temporary Exemptions
until February 5, 2018, received two comments, both of which had
expressed support for extending the exemptive relief, with one
reiterating its prior request that the Commission provide permanent
exemptive and other relief to security-based swap market
participants from the Exchange Act and the Securities Act. See
comment from Layla Spencer, dated Jan. 30, 2017; and letters from
Kyle Brandon, Managing Director, SIFMA, dated Feb. 2, 2017 (``SIFMA
Letter I'') and Jan. 11, 2018 (``SIFMA Letter II'') (requesting that
the Commission further extend the exemptive relief for the Unlinked
Temporary Exemptions). For details regarding SIFMA's earlier request
for permanent exemptive and other relief, see Draft SIFMA SBS
Exemptive Relief Request (Oct. 20, 2011), which is available at
https://www.sec.gov/comments/s7-27-11/s72711-7.pdf, and SIFMA SBS
Exemptive Relief Request (Dec. 5, 2011), which is available at
https://www.sec.gov/comments/s7-27-11/s72711-10.pdf.
    \12\ Comments received are available at https://www.sec.gov/comments/s7-27-11/s72711.shtml. The Commission did not receive any
comments in response to the request for comment in the 2014
Extension Order. However, in 2012, the Commission received a request
from market participants to extend certain of the Temporary
Exemptions, citing concerns that key issues and questions regarding
the application of the federal securities laws remained unresolved
and continuing concerns about the potential for unnecessary
disruption to the security-based swap market. See SIFMA Request for
Extension of the Expiration Date of the SEC's Exchange Act Exemptive
Order and SBS Interim final Rules (Dec. 20, 2012), which is
available at http://www.sec.gov/comments/s7-27-11/s72711-12.pdf.
    \13\ See letter from Kyle Brandon, Managing Director, SIFMA,
dated Nov. 8, 2018 (``SIFMA Letter III'') (requesting that the
Commission further extend the exemptive relief for the Unlinked
Temporary Exemptions, which are currently set to expire on Feb. 5,
2019, and also requesting certain permanent exemptive and other
relief). See also supplemental letter from Kyle Brandon, Managing
Director, SIFMA, dated Dec. 20, 2018 (``SIFMA Letter IV'')
(supplementing November 2018 submission with additional detail and
recommending a transition period before expiration of any Unlinked
Temporary Exemptions). See also letters from Walt L. Lukken,
President and Chief Executive Officer, Futures Industry Association,
dated Nov. 18 and Nov. 29, 2018 (the ``FIA Letters'') (each
expressing support for codifying the exemptions for SBS from
inapplicable securities rules).
---------------------------------------------------------------------------

B. Temporary Exemptions

    The Commission has proposed substantially all of the rules
governing security-based swap market participants and transactions
required by Title VII of the Dodd-Frank Act and has finalized a
majority of these rulemakings.\14\ However, the Commission is still in
the process of finalizing some remaining rules under Title VII of the
Dodd-Frank Act.\15\
---------------------------------------------------------------------------

    \14\ See, e.g., Regulation SBSR--Reporting and Dissemination of
Security-Based Swap Information, Exchange Act Release No. 74244
(Feb. 11, 2015), 80 FR 14563 (Mar. 19, 2015); Security-Based Swap
Data Repository Registration, Duties, and Core Principles, Exchange
Act Release No. 74246 (Feb. 11, 2015), 80 FR 14437 (Mar. 19, 2015);
Registration Process for Security-Based Swap Dealers and Major
Security-Based Swap Participants, Exchange Act Release No. 75611
(Aug. 5, 2015), 80 FR 48963 (Aug. 14, 2015); Regulation SBSR--
Reporting and Dissemination of Security-Based Swap Information,
Exchange Act Release No. 78321 (July 14, 2016), 81 FR 53545 (Aug.
12, 2016); Applications by Security-Based Swap Dealers or Major
Security-Based Swap Participants for Statutorily Disqualified
Associated Person To Effect or Be Involved in Effecting Security-
Based Swaps, Exchange Act Release No. 84858 (Dec. 19, 2018).
    \15\ See, e.g., Registration and Regulation of Security-Based
Swap Execution Facilities, Exchange Act Release No. 63825 (Feb. 2,
2011), 76 FR 10948 (Feb. 28, 2011); Capital, Margin, and Segregation
Requirements for Security-Based Swap Dealers and Major Security-
Based Swap Participants and Capital Requirements for Broker-Dealers,
Exchange Act Release No. 68071 (Oct. 18, 2012), 77 FR 70213 (Nov.
23, 2012); Recordkeeping and Reporting Requirements for Security-
Based Swap Dealers, Major Security-Based Swap Participants, and
Broker-Dealers; Capital Rule for Certain Security-Based Swap
Dealers; Proposed Rules, Exchange Act Release No. 71958 (Apr. 17,
2014), 79 FR 25194 (May 2, 2014); Risk Mitigation Techniques for
Uncleared Security-Based Swaps, Exchange Act Release No. 84861 (Dec.
19, 2018).
---------------------------------------------------------------------------

    As described above, since initially granting temporary exemptive
relief for the Unlinked Temporary Exemptions, the Commission has
extended the temporary exemptive relief four times. Each time, the
Commission requested comment on why continuing the exemptive relief was
necessary. In 2018, the Commission requested that ``any request should
be detailed as to the circumstances in which the Exchange Act provision
or rule applies to security-based swaps or security-based swap market
participants, and why relief [would be] necessary.'' \16\ Detailed
comments could provide the Commission with information useful to
evaluate whether an exemption is necessary or appropriate in the public
interest, and consistent with the protection of investors, as required
by Section 36.\17\
---------------------------------------------------------------------------

    \16\ See 2018 Extension Order, at 8469.
    \17\ See Exchange Act Section 36 [15 U.S.C. 78mm]. Section 36 of
the Exchange Act authorizes the Commission to conditionally or
unconditionally exempt, by rule, regulation, or order any person,
security, or transaction (or any class or classes of persons,
securities, or transactions) from any provision of the Exchange Act
or any rule or regulation.
---------------------------------------------------------------------------

    Following its issuance of the 2018 Extension Order, the Commission
received four letters from two different commenters that were
responsive to the request for comment in the 2018 Extension Order. Two
of the letters from one commenter identified specific provisions for
which permanent relief was sought.\18\ In particular, in SIFMA Letter
III and SIFMA Letter IV, SIFMA requests (1) that two of the exemptions
it describes as implicated by the Unlinked Temporary Exemptions
(exemptions from the definition of ``penny stock'' and from Section 31
fees for security-based swaps) be extended on a permanent basis; and
(2) guidance regarding municipal and government securities. In SIFMA
Letter III, SIFMA also requests that the Commission provide an
additional extension period before the expiration of the remaining
Unlinked Temporary Exemptions in order to allow for an orderly
transition. In SIFMA Letter IV, SIFMA clarifies that request for an
additional extension period and requests that the Commission extend the
Unlinked Temporary Exemptions for an additional twelve months. The FIA

Letters express support for SIFMA Letter III and for extending the
temporary exemptive relief for the Unlinked Temporary Exemptions beyond
February 5, 2019.\19\
---------------------------------------------------------------------------

    \18\ See SIFMA Letters III and IV, supra note 13.
    \19\ See FIA Letters, supra note 13.
---------------------------------------------------------------------------

    In SIFMA Letter III and SIFMA Letter IV, SIFMA requests additional
relief not discussed in this Order.\20\ In particular, SIFMA requests
relief in relation to the (i) regulation of security-based swap
execution facilities, (ii) broker-dealer registration, (iii) Exchange
Act Rule 10b-10, (iv) margin, (v) hypothecation, (vi) disclosure
requirements relating to extensions of credit, (vii) requirements
relating to personnel of SBS Entities, (viii) research requirements,
(ix) municipal advisor regulation, (x) securities activities of OTC
Derivatives Dealers, (xi) Exchange Member SRO Membership, and (xii)
Audit Committees and Compensation Committees.\21\ Some of these
requests relate to Linked Temporary Exemptions rather than Unlinked
Temporary Exemptions, and, as noted above, the Commission has
considered or will consider those requests in connection with the
related security-based swap rulemakings. In addition, the Commission
believes that all of the additional requests would benefit from further
consideration. The Commission invites market participants or other
interested parties to provide any information that may be relevant to
the Commission's consideration of these requests for relief, or to the
scope of the order more generally.
---------------------------------------------------------------------------

    \20\ See SIFMA Letter III and SIFMA Letter IV, supra note 13.
    \21\ See SIFMA Letter III, supra note 13.
---------------------------------------------------------------------------

C. Penny Stocks

    In SIFMA Letter III, SIFMA requests an exemption from the
definition of ``penny stock'' in Exchange Act Section 3(a)(51) and
Exchange Act Rule 3a51-1 for security-based swap transactions between
ECPs. SIFMA notes that it may not always be clear that a security-based
swap is not a ``penny stock'' because the price of the security-based
swap in dollar terms may not always be clear, and requests that the
Commission provide certainty with respect to transactions between
ECPs.\22\ In SIFMA Letter IV, SIFMA also adds that it is not clear
which security-based swaps constitute equity securities or whether, in
classifying security-based swaps as penny stocks, market participants
should evaluate the security-based swap itself or its underlier.\23\
SIFMA also argues that the requirements applicable to penny stocks
under Rules 15g-1 through 15g-9 are designed to apply to cash market
securities transactions, not over-the-counter security-based swaps.\24\
Moreover, according to SIFMA, security-based swaps will be subject to
enhanced security-based swap specific disclosure and sales practice
requirements as part of the Commission's business conduct standards for
security-based dealers and major security-based swap participants,
making the penny stock regulation duplicative.\25\
---------------------------------------------------------------------------

    \22\ See SIFMA Letter III, supra note 13.
    \23\ See SIFMA Letter IV, supra note 13.
    \24\ Id.
    \25\ Id.
---------------------------------------------------------------------------

    The definition of ``penny stock'' and the associated rules were
part of a comprehensive effort by Congress and the Commission to reduce
fraud and manipulation in the penny stock market and to address, among
other things, a lack of investor information and education.\26\ In the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990,
Congress directed the Commission to adopt a series of rules requiring
broker-dealers to provide customers with certain trade and market
information prior to effecting a transaction in a penny stock for their
customers.\27\ Rules 15g-1 through 15g-9 under the Exchange Act
(collectively known as the ``penny stock rules'') implement the
Congressional directive to increase the level of disclosure to
investors concerning penny stocks generally as well as the specific
penny stock involved in a transaction.\28\ The scope of the penny stock
rules is delineated by the definition of penny stock in Exchange Act
Section 3(a)(51) \29\ and Rule 3a51-1 \30\ thereunder.
---------------------------------------------------------------------------

    \26\ Public Law 101-429, 104 Stat. 931 (1990); See Penny Stock
Disclosure Rules, Exchange Act Release No. 30608 (Apr. 20, 1992), 57
FR 18004 (Apr. 28, 1992).
    \27\ Id.
    \28\ Exchange Act Section 15(h) [15 U.S.C. 78o(h)].
    \29\ Exchange Act Section 3(a)(51) [15 U.S.C. 78c(a)(51)].
    \30\ Exchange Act Rule 3a51-1 [17 CFR 240.3a51-1].
---------------------------------------------------------------------------

    The Dodd-Frank Act established a comprehensive framework for
regulating the over-the-counter security-based swap market.\31\ As part
of that framework, Dodd-Frank directed the Commission to establish
business conduct standards for security-based swap dealers and major-
security-based swap participants.\32\ In light of that framework, the
Commission agrees with SIFMA's statement that transactions in security-
based swaps will be subject to security-based swap specific disclosures
and sales practices.\33\ Although those Dodd-Frank disclosures and
sales practices may not be precisely the same as those required under
the penny stock rules, the Commission believes that the additional
protections of the penny stock rules are unnecessary for transactions
in security-based swaps with ECPs,\34\ who, with respect to security-
based swaps, are generally the type of market participants who
understand the risks of security-based swaps without needing the added
protections provided for by the penny stock rules.\35\
---------------------------------------------------------------------------

    \31\ Dodd-Frank Act.
    \32\ See Dodd-Frank Act Section 764(h). Business Conduct
Standards for Security-Based Swap Dealers and Major Security-Based
Swap Participants, Release 34-77617 (Apr. 14, 2016), 81 FR 29960
(May 13, 2016) (``Business Conduct Standards Adopting Release'').
This includes standards for when those entities act as advisors to
``special entities'' or engaging in security-based swap transactions
with counterparties, including those that are special entities.
    \33\ See Exchange Act Rules 15Fh-1 through 15Fh-6 and Rule 15Fk-
1.
    \34\ Many transactions in security-based swaps with ECPs will
already be exempt from the penny stock rules, given the exemption
provided for transactions that meet the requirements of Regulation D
or transactions with an issuer not in connection with a public
offering pursuant to Section 4(a)(2) of the Securities Act of 1933.
See Exchange Act Rule 15g-1(c).
    \35\ The 2011 Exchange Act Exemptive Order did not provide
relief for transactions with non-ECPs.
---------------------------------------------------------------------------

    Accordingly, the Commission finds it is appropriate and in the
public interest and consistent with the protection of investors to
provide a new exemption from the definition of ``penny stock'' in
Section 3(a)(51) and Rule 3a51-1 for security-based swap transactions
between ECPs.

D. Municipal Securities

    In its letters, SIFMA asked for guidance that, for purposes of the
Exchange Act, including Section 15B and rules thereunder applicable to
municipal securities, a security-based swap with a counterparty that is
a municipal entity should not be considered a municipal security solely
due to the identity of the counterparty. Exchange Act Section 3(a)(29)
defines the term ``municipal securities'' to include ``securities which
are direct obligations of, or obligations guaranteed as to principal or
interest by, a State or any political subdivision thereof, or any
agency or instrumentality of a State or any political subdivision
thereof, or any municipal corporate instrumentality of one or more
States.'' \36\ The Commission understands that there is some
uncertainty among market participants regarding whether Exchange Act
regulatory provisions that apply to

municipal securities brokers \37\ and municipal securities dealers \38\
apply to security-based swap dealers and major security-based swap
participants that enter into security-based swaps with a counterparty
that is a State or any political subdivision thereof, or any agency or
instrumentality of a State or any political subdivision thereof, or any
municipal corporate instrumentality of one or more States (a
``municipal counterparty''). As noted above with respect to the penny
stock rules, security-based swap dealers and major security-based swap
participants are already subject to a comprehensive regulatory regime.
Moreover, that regulatory regime includes specific protections for when
a security-based swap dealer or major security-based swap participant
is acting as counterparty to a ``special entity,'' including a State,
State agency, city, county, municipality, or other political
subdivision of a State.\39\ Given the comprehensive scope of this
regulatory regime and for the avoidance of doubt, the Commission finds
that it is appropriate and in the public interest to provide an
exemption from the definition of ``municipal securities'' in Section
3(a)(29) for security-based swap transactions with a municipal
counterparty. In the Commission's view, the exemption will avoid the
application of duplicative and potentially conflicting requirements to
security-based swap dealers and major security-based swap participants.
---------------------------------------------------------------------------

    \36\ See Exchange Act Section 3(a)(29) [15 U.S.C. 78c(a)(29)].
    \37\ Section 3(a)(31) of the Exchange Act defines the term
``municipal securities broker'' to mean ``a broker engaged in the
business of effecting transactions in municipal securities for the
account of others.'' See Exchange Act Section 3(a)(31) [15 U.S.C.
78c(a)(31)].
    \38\ Exchange Act Section 3(a)(30) defines the term ``municipal
securities dealer'' to mean ``any person (including a separately
identifiable department or division of a bank) engaged in the
business of buying and selling municipal securities for his own
account, through a broker or otherwise, but does not include--(A)
any person insofar as he buys or sells such securities for his own
account, either individually or in some fiduciary capacity, but not
as a part of a regular business; or (B) a bank, unless the bank is
engaged in the business of buying and selling municipal securities
for its own account other than in a fiduciary capacity, through a
broker or otherwise; Provided, however, that if the bank is engaged
in such business through a separately identifiable department or
division (as defined by the Municipal Securities Rulemaking Board in
accordance with section 15B(b)(2)(H) of the Exchange Act), the
department or division and not the bank itself shall be deemed to be
the municipal securities dealer.'' See Exchange Act Section 3(a)(30)
[15 U.S.C. 78c(a)(30)].
    \39\ See Exchange Act Section 15(h)(4)-(5). [15 U.S.C. 78o-
10(h)(4)-(5)].
---------------------------------------------------------------------------

E. Government Securities

    In SIFMA Letter III and SIFMA Letter IV, SIFMA asked for guidance
that, for purposes of the Exchange Act, including Section 15C and rules
thereunder applicable to government securities, a security-based swap
with a counterparty that is a ``U.S. government-related entity'' should
not be considered a government security solely due to the identity of
the counterparty. The Unlinked Temporary Exemptions did not provide
such relief and, thus, the treatment of government securities will not
be impacted by the expiration of the Unlinked Temporary Exemptions. For
that reason, the Commission is not addressing the subject of government
securities as part of this Order. The Commission may consider SIFMA's
request with respect to government securities, as well as the other
requests included in SIFMA Letter III and SIFMA Letter IV, at a later
date.\40\
---------------------------------------------------------------------------

    \40\ Exchange Act Section 36(b) provides that ``the Commission
may not, under this section, exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions from Section 15C or the rules or regulations issued
thereunder or (for purposes of section 15C and the rules and
regulations issued thereunder) from any definition in paragraph
(42), (43), (44), or (45) of section 3(a).'' [15 U.S.C. 78mm].
---------------------------------------------------------------------------

F. Section 31 Fees

    In SIFMA Letter III, SIFMA requested guidance that security-based
swap transactions are not subject to Section 31 fees merely because
they are subject to transaction reporting under Regulation SBSR. The
Commission is not providing relief from Section 31 at this time. A sale
of a security is subject to Section 31 fees only if (1) the sale occurs
on a national securities exchange,\41\ or (2) the sale is transacted by
or through a member of a national securities association otherwise than
on a national securities exchange and the security is registered on a
national securities exchange or subject to prompt last-sale reporting
pursuant to the rules of the Commission or a registered national
securities association.\42\ Although security-based swaps are
securities, they do not meet any of the conditions noted above. Thus,
security-based swaps are currently not subject to Section 31 fees and
would not become subject to Section 31 fees due to the expiration of
the Unlinked Temporary Exemptions or the full implementation of
Regulation SBSR as it currently exists.
---------------------------------------------------------------------------

    \41\ See Exchange Act Section 31(b) [15 U.S.C. 78ee(b)].
    \42\ See Exchange Act Section 31(c) [15 U.S.C. 78ee(c)].
---------------------------------------------------------------------------

    The Dodd-Frank Act created a new Section 13(m) of the Exchange Act
that requires ``real-time public reporting'' of security-based swap
transactions. Once real-time public reporting is fully-implemented,
security-based swaps will be subject to prompt last-sale reporting
pursuant to the rules of the Commission, which will subject them to
Section 31 fees. Thus, when the Commission proposes to implement prompt
last-sale reporting for security-based swap transactions, it may also
revisit the appropriateness of exempting security-based swaps from
Section 31 fees at such time.

G. Transition Period

    In SIFMA Letter III, SIFMA requested that the Unlinked Temporary
Exemptions for which permanent relief is not granted be extended until
the date when security-based swap dealers and major-security-based swap
participants are required to register with the Commission. In SIFMA
Letter IV, SIFMA requested a twelve month transition period. SIFMA
stated that the expiration of the Unlinked Temporary Exemptions will
result in the application or potential application of over 150
different Exchange Act provisions.\43\ SIFMA stated that market
participants could design and implement appropriate compliance measures
and controls during that transition period.\44\ The Commission agrees
that a transition period is appropriate. The Commission agrees that a
twelve month transition period should allow market participants
adequate time to design and implement appropriate compliance measure
and controls. With this Order, the Commission is providing notice that
the majority of the Unlinked Temporary Exemptions will expire on
February 5, 2020, in order to provide sufficient additional time for
market participants to prepare.
---------------------------------------------------------------------------

    \43\ See SIFMA Letter IV, supra note 13.
    \44\ Id.
---------------------------------------------------------------------------

III. Commission Findings

    The Commission believes it is necessary or appropriate in the
public interest, and consistent with the protection of investors to
extend for a period twelve months, the Unlinked Temporary Exemptions,
until February 5, 2020, to allow market participants to prepare for the
application of certain Exchange Act provisions and rules to security-
based swap activities. The additional extension period will apply to
all of the Unlinked Temporary Exemptions otherwise set to expire on
February 5, 2019. Once this twelve-month extension period ends, all of
the Unlinked Temporary Exemptions will expire, with the exception of
the exemptions being provided with respect to the regulation of penny
stocks

involving only ECPs and with respect to the definition of municipal
securities, as described above. As noted above, the Commission invites
market participants or other interested parties to provide comments
regarding the scope of the permanent relief the Commission is granting
in this order, including whether the Commission should provide further
relief in response to specific requests made by prior commenters that
the Commission is not addressing at this time.
    Accordingly, pursuant to its authority under Section 36 of the
Exchange Act,\45\ the Commission believes it is necessary or
appropriate in the public interest, and consistent with the protection
of investors to extend the expiration of all Unlinked Temporary
Exemptions for a period of twelve months (i.e., until February 5,
2020).
---------------------------------------------------------------------------

    \45\ Exchange Act Section 36 [15 U.S.C. 78mm]. Section 36 of the
Exchange Act authorizes the Commission to conditionally or
unconditionally exempt, by rule, regulation, or order any person,
security, or transaction (or any class or classes of persons,
securities, or transactions) from any provision of the Exchange Act
or any rule or regulation thereunder, to the extent such exemption
is necessary or appropriate in the public interest, and is
consistent with the protection of investors.
---------------------------------------------------------------------------

    Pursuant to Sections 36, the Commission finds that it is necessary
and appropriate and in the public interest, and consistent with the
protection of investors to provide an exemption or security-based swap
transactions between ECPs from the definition of ``penny stock'' in
Exchange Act Section 3a(51) and Exchange Act Rule 3a51-1.
    Pursuant to Section 36, the Commission finds that it is necessary
and appropriate and in the public interest, and consistent with the
protection of investors to provide for an exemption for security-based
swap transactions with a municipal counterparty from the definition of
``municipal securities'' in Exchange Act Section 3(a)(29).
* * * * *

IV. Conclusion

    It is hereby ordered, pursuant to Section 36 of the Exchange Act,
that except as provided below, the Unlinked Temporary Exemptions
contained in the 2011 Exchange Act Exemptive Order, and extended in the
2018 Extension Order, in connection with the revision of the Exchange
Act definition of ``security'' to encompass security-based swaps, are
extended until February 5, 2020.
    It is further ordered, pursuant to Section 36 of the Exchange Act,
that security-based swap transactions between ECPs shall be exempt from
the definition of ``penny stock'' set forth in Exchange Act Section
3(a)(51) and Rule 3a51-1.
    It is further ordered, pursuant to Section 36 of the Exchange Act,
that security-based swaps shall be exempt from the definition of
``municipal securities'' in Exchange Act Section 3(a)(29).

    By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-00505 Filed 1-30-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 5 (Tuesday, January 8, 2019)]
[Notices]
[Pages 81-82]
[FR Doc No: 2018-28480]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG19-38-000.
    Applicants: Viridity Energy Solutions Inc.

    Description: Notice of Self-Certification of Exempt Wholesale
Generator of Viridity Energy Solutions Inc.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5298.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: EG19-39-000.
    Applicants: Viridity Energy Solutions Inc.
    Description: Viridity Energy Solutions Inc. Self-Certification of
EWG.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5407.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: EG19-40-000.
    Applicants: Pinetree Power LLC.
    Description: Notice of Self-Certification of Exempt Wholesale
Generator Status of Pinetree Power LLC.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5412.
    Comments Due: 5 p.m. ET 1/11/19.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-2302-007.
    Applicants: Public Service Company of New Mexico.
    Description: Triennial Market Power Analysis for the Southwest
Region of Public Service Company of New Mexico.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5440.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER10-2564-009; ER10-2600 009; ER10-2289 009.
    Applicants: Tucson Electric Power Company, UNS Electric, Inc.,
UniSource Energy Development Company.
    Description: Triennial Market Power Update for the Southwest Region
of Change in Status of Tucson Electric Power Company, et al.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5461.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER15-1041-010; ER15-2205 010.
    Applicants: Prairie Breeze Wind Energy II LLC, Prairie Breeze Wind
Energy III LLC.
    Description: Triennial Report of Prairie Breeze Wind Energy II LLC,
et al.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5458.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER15-1873-010.
    Applicants: Buckeye Wind Energy LLC.
    Description: Triennial Report of Buckeye Wind Energy LLC.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5314.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER16-1720-008.
    Applicants: Invenergy Energy Management LLC.
    Description: Triennial Report of Invenergy Energy Management LLC.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5319.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER18-471-004; ER18-472 004.
    Applicants: States Edge Wind I LLC, States Edge Wind I Holdings
LLC.
    Description: Triennial Report of States Edge Wind I LLC, et al.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5457.
    Comments Due: 5 p.m. ET 2/19/19.

    Docket Numbers: ER19-80-001.
    Applicants: PJM Interconnection, L.L.C.
    Description: Tariff Amendment: Response to the Commission's 11/27/
2018 Deficiency Letter re: Market Efficiency to be effective 12/10/
2018.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5292.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-390-001.
    Applicants: Southwestern Public Service Company.
    Description: Tariff Amendment: Amendment to ER19-390 to be
effective 11/22/2018.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5295.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-676-000.
    Applicants: GenOn Energy Management, LLC.
    Description: Sec.  205(d) Rate Filing: Market-Based Rate Tariff
Revisions to be effective 12/22/2018.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5288.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-677-000.
    Applicants: RRI Energy Services, LLC.
    Description: Sec.  205(d) Rate Filing: Market-Based Rate Tariff
Revisions to be effective 12/22/2018.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5289.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-678-000.
    Applicants: Consolidated Edison Company of New York, Inc.
    Description: Sec.  205(d) Rate Filing: PASNY Tariff RY 3 2019 to be
effective 1/1/2019.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5290.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-679-000.
    Applicants: Consolidated Edison Company of New York, Inc.
    Description: Sec.  205(d) Rate Filing: WDS Tariff Jan. 1, 2019 to
be effective 1/1/2019.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5291.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-680-000.
    Applicants: CS Berlin Ops, Inc.
    Description: Baseline eTariff Filing: MBR Application to be
effective 1/31/2019.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5293.
    Comments Due: 5 p.m. ET 1/11/19.

    Docket Numbers: ER19-681-000.
    Applicants: Sempra Gas & Power Marketing, LLC.
    Description: Sec.  205(d) Rate Filing: Sempra Gas & Power
Marketing, LLC Revised Market Based Rate Tariff to be effective 12/22/
2018.
    Filed Date: 12/21/18.
    Accession Number: 20181221-5296.
    Comments Due: 5 p.m. ET 1/11/19.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: December 26, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-28480 Filed 1-7-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 50 (Wednesday, March 14, 2018)]
[Notices]
[Pages 11197-11198]
[FR Doc No: 2018-05100]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 1773-000]

Yellowstone Hydroelectric Project; Notice of Existing Licensee's
Notice of Intent To Not File a Subsequent License Application, and
Soliciting Pre-Application Documents and Notices of Intent To File a
License Application

    At least five years before the expiration of a license for a minor
water power project not subject to sections 14 and 15 of the Federal
Power Act (i.e., a project having an installed capacity of 1.5
megawatts or less), the licensee must file with the Commission a letter
that contains an unequivocal statement of the licensee's intent to file
or not to file an application for a subsequent license.\1\
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    \1\ 18 CFR 16.19(b) (2017) (citing 18 CFR 16.6(b)). Section
16.19(b) applies to licenses not subject to Parts 14 and 15 of the
Federal Power Act.
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    If such a licensee informs the Commission that it does not intend
to file an application for a subsequent license, nonpower license, or
exemption for the project, the licensee may not file an application for
a subsequent license, nonpower license, or exemption for the project,
either individually or in conjunction with an entity or entities that
are not currently licensees of the project.\2\
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    \2\ 18 CFR 16.24(b)(1) (2017).
---------------------------------------------------------------------------

    On September 26, 2017, Moon Lake Electric Association, the existing
licensee for the Yellowstone Hydroelectric Project No. 1773, filed
notice of its intent to not file an application for a subsequent
license. Therefore, pursuant to section 16.24(b)(1) of the Commission's
regulations, Moon Lake may not file an application for a subsequent
license for the project, either individually or in conjunction with an
entity or entities that are not currently licensees of the project.
    The 900-kilowatt (kW) Yellowstone Hydroelectric Project is located
on the Yellowstone River, in Duchesne County, Utah. The diversion dam,
and portions of the penstock, are located within the Ashley National
Forest. The existing minor license for the project expires on October
15, 2022.
    The principal project works consist of: (1) A 15-foot-high, 313-
foot-long rock filled, timber-crib dam that impounds a small reservoir
covering approximately 3.8 acres; (2) a concrete intake structure with
a gate valve; (3) a 14,126-foot-long, 44-inch-diameter and 42-inch-
diameter steel penstock; (4) a powerhouse with three turbine-generators
rated at 300 kW each; (5) a substation; (6) a 14.27-mile-long, 7.2-
kilovolt overhead transmission line and underlain telephone line; and
(7) and appurtenant facilities.
    Any party interested in filing a license application (i.e.,
potential applicant) for the Yellowstone Hydroelectric Project No. 1773
must file a Notice of Intent (NOI) \3\ and pre-application document
(PAD).\4\ Additionally, while the integrated licensing process (ILP) is
the default process for preparing an application for a subsequent
license, a potential applicant may request to use alternative licensing
procedures when it files its NOI.\5\
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    \3\ 18 CFR 5.5 (2017).
    \4\ 18 CFR 5.6 (2017).
    \5\ 18 CFR 5.3(b) (2017).
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    The deadline for potential applicants, other than the existing
licensee, to file NOIs, PADs, and requests to use an alternative
licensing process is 120 days from the issuance date of this notice.
    Applications for a subsequent license from potential applicants,
other than the existing licensee, must be filed with the Commission at
least 24 months prior to the expiration of the existing license.\6\
Because the existing license expires on October 15, 2022, applications
for

license for this project must be filed by October 15, 2020.\7\
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    \6\ 18 CFR 16.20 (2017).
    \7\ To the extent an interested applicant files an NOI and PAD
and elects or is required to use the Commission's ILP, a process
plan will be issued within 180 days of this notice, which
accelerates the steps of the ILP to allow for filing a subsequent
license application by the October 15, 2020, deadline.
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    Questions concerning this notice should be directed to Evan
Williams<PHONE_NUMBER> or [email protected].

    Dated: March 8, 2018.
Kimberly D. Bose,
 Secretary.
[FR Doc. 2018-05100 Filed 3-13-18; 8:45 am]
BILLING CODE 6717-01-P