[Federal Register Volume 81, Number 71 (Wednesday, April 13, 2016)]
[Notices]
[Pages 21909-21914]
[FR Doc No: 2016-08444]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77558; File No. PCAOB-2007-04]

Public Company Accounting Oversight Board; Notice of Filing of
Proposed Amendments to Board Rules Relating to Inspections

April 7, 2016.
    Pursuant to Section 107(b) of the Sarbanes-Oxley Act of 2002 (the
``Act'' or the ``Sarbanes-Oxley Act''),\1\ notice is hereby given that
on March 24, 2016, the Public Company Accounting Oversight Board (the
``Board'' or the ``PCAOB'') filed with the Securities and Exchange
Commission (the ``SEC'' or ``Commission'') the proposed rule changes
described in Items I, II, and III below, which items have been prepared
by the Board. The Commission is publishing this notice to solicit
comments on the proposed rule from interested persons.
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    \1\ 15 U.S.C. 7217(b).
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I. Board's Statement of the Terms of Substance of the Proposed Rule

    On October 16, 2007, the Board adopted amendments to its rules
related to inspections. The proposed amendments included a new
paragraph (e) added to existing Rule 4003 and amendments to paragraphs
(b) and (d) of Rule 4003. On October 22, 2007, the Board filed the
amendments with the Commission and requested Commission approval (``the
original rule filing''). On February 26, 2016 the Board adopted
revisions to those proposed amendments and, on March 24, 2016 amended
the rule filing to reflect those revisions. The text of the revised
proposed amendments is set out below. Language added to the Board's
currently effective rules by these amendments is italicized. Language
deleted from the Board's currently effective rules is in brackets.
Other text in Section 4 of the Board's Rules, including notes to the
Rules, remains unchanged and is indicated by `` * * * '' in the text
below.

SECTION 4. INSPECTIONS

    * * *

Rule 4003.  Frequency of Inspections

    * * *
    (b) At least once in every three calendar years, beginning with the
three-year period following the calendar year in which its application
for registration with the Board is approved, a registered public
accounting firm that, during any of the three prior calendar years,
issued an audit report, other than by consenting to an issuer's use of
a previously issued audit report, with respect to at least one issuer,
but no more than 100[,] issuers, [or that played a substantial role in
the preparation or furnishing of an audit report with respect to at
least one issuer,] shall be subject to a regular inspection.
    * * *
    (d) Notwithstanding paragraph (b) of this Rule, with respect to any
registered public accounting firm that became registered in 2003 or
2004--
    (1) this Rule does not require the first inspection of the firm
sooner than the fourth calendar year following the first calendar year
in which the firm, while registered, issued an audit report with
respect to an issuer [or played a substantial role in the preparation
or furnishing of an audit report]; and
    (2) this Rule does not require the second inspection of the firm
sooner than the fifth calendar year following the first calendar year
in which the firm, while registered, issued an audit report with
respect to an issuer [or played a substantial role in the preparation
or furnishing of an audit report].
    (e) Notwithstanding any other provision of this Rule, if, in two
consecutive calendar years, a registered public accounting firm issues
no audit reports with respect to an issuer other than by consenting to
an issuer's use of a previously issued audit report, the Board shall
have the discretion to forego any inspection of that firm that would
otherwise be required because of any audit report that the firm had
issued with respect to an issuer prior to such calendar years.
    * * *
    (h) In each calendar year, the Board shall conduct regular
inspections of some registered public accounting firms that reported on
an annual report on Form 2 having played a substantial role in the
preparation or furnishing of an audit report with respect to an issuer
in any of the four most recent annual reporting periods through March
31 of that calendar year without having reported on an annual report on
Form 2 having issued an audit report with respect to an issuer in any
of those reporting periods. The number of such registered public
accounting firms that the Board shall inspect in any particular
calendar year shall be at least five percent of the number of
registered public accounting firms that, by June 30 of the preceding
calendar year, reported on an annual report on Form 2 for the reporting
period ending on March 31 of the preceding calendar year having played
a substantial role in the preparation or furnishing of an audit report
with respect to an issuer without having issued an audit report with
respect to an issuer in that reporting period.

II. Board's Statement of the Purpose of, and Statutory Basis for, the
Proposed Rule

    In its amended filing with the Commission, the Board included
statements concerning the purpose of, and basis for, the proposed rule.
The

text of these statements may be examined at the places specified in
Item IV below. The purpose of, and basis for, the proposed rule are
also described in sections A, B, and C below.

A. Board's Statement of the Purpose of, and Statutory Basis for, the
Proposed Rule

(a) Purpose
    The Sarbanes-Oxley Act requires the Board to conduct a continuing
program of inspections to assess the degree of compliance with certain
requirements by registered public accounting firms and their associated
persons in connection with the performance of audits, issuance of audit
reports, and related matters involving issuers. In 2003, the Board
adopted PCAOB Rule 4003, ``Frequency of Inspections.'' Rule 4003(b)
provides that at least once every three years, any firm that, during
any of the three prior calendar years, issues an audit report with
respect to at least one issuer but no more than 100 issuers, or plays a
substantial role in the preparation or furnishing of an audit report
with respect to an issuer, shall be subject to a regular inspection.
The Board has adopted amendments relating to Rule 4003(b) that are
intended to facilitate the Board's ability to allocate its inspection
resources in ways that better serve the public interest and protect
investors.
1. Rules 4003(b) and (h)
    The Board has adopted amendments to eliminate Rule 4003(b)'s
provision for triennial inspections of firms that play a substantial
role in audits but do not issue audit reports and to provide instead
that the Board will, every year, inspect at least five percent of such
firms. The Board has also adopted an amendment to provide that no
inspection requirement arises under Rule 4003(b) solely because a firm
consents to an issuer's use of a previously issued audit report.
    The Board's experience in the inspection program has affected the
Board's view on the appropriateness of devoting Board resources to
inspecting one-third of all ``substantial role only'' firms every
year.\2\ In 2007, the Board concluded that it would be better to direct
a larger share of those resources toward addressing the policies,
practices, and procedures of the firms that are ultimately responsible
for the audit report on the issuer's financial statements, and that the
Board's rules should not require the Board to devote so large a portion
of its resources to inspections of ``substantial role only'' firms.
This was consistent with the risk-based focus that the Board generally
brings to bear in considering the most prudent allocation of its
inspection resources. Accordingly, the Board adopted, and included in
the original rule filing, an amendment to Rule 4003(b) to eliminate the
requirement for triennial inspections of ``substantial role only''
firms.
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    \2\ The Board uses the phrase ``substantial role only'' to
identify the relevant category of firms and to emphasize the
distinction between this category of firms (which play a substantial
role but do not issue audit reports with respect to issuers) and the
separate category of firms that play a substantial role in some
audits, but separately perform other audits in which they issue the
audit report for the issuer (for example, a non-U.S. firm that plays
a substantial role in the audit of a U.S. issuer by auditing a
foreign subsidiary, but that separately has a foreign private issuer
audit client for which it regularly provides audit reports). Even as
amended, Rule 4003 will continue to provide for at least triennial
inspections of all firms in the latter category by virtue of their
regularly issuing audit reports. In any such inspection, the Board
could review, among other things, the firm's work and its system of
quality control in relation to audits of issuers in which the firm
played a role, including a substantial role.
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    In annual reports on PCAOB Form 2 filed by registered firms for the
12-month reporting period ended March 31, 2015, 571 firms reported
having issued audit reports for one to 100 issuers, and 103 firms
reported having played a substantial role in at least one issuer audit
without having issued audit reports for any issuers. The Board
continues to be of the view that it is appropriate to allocate the
largest share of its inspection resources toward addressing the
policies, practices, and procedures of the firms that are ultimately
responsible for the audit report on the issuer's financial statements,
and that the Board's rules should not require triennial inspections of
``substantial role only'' firms. The Board therefore continues to
propose eliminating Rule 4003(b)'s requirement for triennial
inspections of ``substantial role only'' firms.
    In addition, however, having considered views expressed by SEC
staff and taking into account that the Board's inspection staff has
over time identified auditing deficiencies in some inspections of
``substantial role only'' firms,\3\ the Board has determined to revise
slightly the substance of its previously adopted approach to such
firms. With the revision, the amendment to Rule 4003 would still
eliminate the requirement to inspect all ``substantial role only''
firms, and it would still eliminate the requirement to inspect any such
firm with a prescribed frequency.
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    \3\ As of February 1, 2016, the Board had issued reports on
inspections of 38 ``substantial role only'' firms. In addition to
identifying concerns about aspects of some of those firms' systems
of quality control, the Board's inspection staff has, in 11 of those
inspections, identified that the inspected firm had failed to
perform sufficient procedures to fulfill the objectives of its role
in an audit. While such failures by an auditor in a substantial role
do not necessarily mean that the principal auditor's opinion on the
issuer's consolidated financial statements was insufficiently
supported, they present some risk of that result.
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    Unlike the amendment in the original rule filing, however, the
revised proposed amendment provides that the Board will, in each year,
select some ``substantial role only'' firms for inspection, with the
number of firms to be a number that is at least five percent of the
number of firms that reported being ``substantial role only'' firms in
their annual reports on PCAOB Form 2 filed with the Board in the
preceding year. Board rules require that all registered firms file an
annual report. A firm that does not issue an audit report for an issuer
during the period covered by an annual report must identify in that
annual report any audit in which it played a substantial role in that
period. Through its other processes, the Board may identify firms that
fail to comply with this reporting requirement (and may impose
sanctions for those failures), or the Board may identify that a firm
has reported playing a substantial role when its role in fact fell
below that level. But for purposes of identifying ``substantial role
only'' firms, the required annual reports on Form 2 provide the most
reasonable reference point.
    Based on the history of reporting on Form 2, the Board anticipates
that the five percent threshold will translate to four to six firms
each year, though it could fall above or below that range in a
particular year, and the number actually inspected could exceed that
threshold in any year as a result of risk-based judgments about how to
allocate inspection resources. The revised proposed amendment provides
that the firms to be inspected will be selected from among those that
have reported playing a substantial role in audits in one of the four
most recent Form 2 reporting periods without having reported issuing an
audit report for an issuer in any of those periods. With that revision,
Rule 4003's provision concerning ``substantial role only'' firms is now
designated as paragraph (h).
    In adopting the amendment included in the original rule filing
related to ``substantial role only'' firms, the Board noted that it had
not up to that time inspected a ``substantial role only'' firm but also
noted that it would retain discretion under the amended rule to inspect
``substantial role only'' firms at any time. The Board's practice,
since first inspecting ``substantial role only'' firms in 2009, has in
fact been

essentially the practice described by proposed Rule 4003(h). The Board
now sees value, however, in formally committing that at least a small
portion of its inspection resources will regularly be directed toward
``substantial role only'' firms and that the Board will maintain an
active focus on whether it would be appropriate to direct a larger
portion of its resources to those inspections. At present, the Board
believes that the five percent threshold, with selections made on a
risk basis, would involve review of ``substantial role only'' work that
is appropriate and sufficient to provide for a useful, ongoing focus on
that segment of the population of registered firms. The Board can
always inspect a larger portion of that population in a given year
without a rule. The Board has determined to commit to a minimum of five
percent through a rule.
    By using the four most recent Form 2 reporting periods as the
reference point, the Board would, for any given inspection year, be
selecting ``substantial role only'' firms from a universe that includes
firms that have reported playing a substantial role as recently as the
year in which the inspection would occur and as far back as three
previous years. This will allow the Board to select from among the most
relevant universe, without limiting that universe to firms reporting in
one specific year. In addition, by limiting that universe to firms
that, in addition to playing a substantial role, have not issued an
audit report in any of those years, the rule would exclude any
possibility of counting, toward satisfaction of the ``substantial role
only'' inspection requirement, firms that otherwise would be inspected,
or recently have been inspected, because of the firm's relatively
recent issuance of an audit report.
    The proposed rule also adds a provision to existing paragraph (b)
specifying that no inspection requirement arises solely on the basis of
the firm issuing an audit report by consenting to an issuer's use of a
previously issued audit report. Since the act of originally issuing the
audit report would have given rise to an inspection requirement, and
the related audit would have been a candidate for review in that
required inspection, it would be redundant to subject the registered
firm to a separate, later inspection relating to the same audits in
circumstances where the firm is no longer issuing audit reports other
than by consenting to issuers' use of previously issued audit reports.
    The original rule filing also included a technical amendment that
was intended to clarify an aspect of Rule 4003(b) without making any
substantive change. The Board subsequently realized that the technical
amendment could have provided the Board with flexibility that the Board
did not intend regarding inspection frequency, and the Board has
therefore revised its proposal to eliminate that technical amendment
and retain the relevant existing wording. Specifically, the Board had
revised the wording of Rule 4003(b) to provide that the Board must
conduct at least one inspection of a firm in the three calendar-year
period following any calendar year in which the firm issues an audit
report with respect to an issuer. That wording would have given the
Board flexibility that the Board did not intend. For example, if a firm
issued an audit report in years 1, 2, 4, and 5, but not in year 3, a
Board inspection of the firm in year 3 would satisfy the inspection
requirement created by the audit reports in years 1 and 2, but the next
inspection would not technically be required until year 7 (the third
calendar year after the report issued in year 4), rather than within
three years after the previous inspection, i.e., year 6.
2. Rule 4003(d)
    Existing Rule 4003(d) extends the Rule 4003(b) time period in which
the Board must conduct the first and second inspections of firms that
registered with the Board in 2003 or 2004. The Board has adopted an
amendment to conform Rule 4003(d) to the Rule 4003(b) amendment
concerning ``substantial role only'' firms. Consistent with the
amendment to Rule 4003(b), the Board is amending Rule 4003(d) to
eliminate from Rule 4003(d) the references to ``substantial role only''
firms.
    Separately, a development in the law since the original rule filing
has led the Board to make a technical revision to Rule 4003(d). Rule
4003(d) uses the term ``audit report'' in two places. When Rule 4003(d)
took effect in 2006, ``audit report'' was, by definition, limited to
reports with respect to issuers, and this was still the case at the
time of the original rule filing proposing amendments to Rule 4003(d).
That definition has since been broadened to include reports with
respect to registered brokers and dealers and, as broadened, the
unqualified use of the term ``audit report'' in Rule 4003(d) would
change the meaning of the rule from what the Board originally intended
and still intends. For that reason, the Board has added the language
``with respect to an issuer'' to qualify ``audit report'' where that
term appears in proposed Rule 4003(d).
    The original rule filing included an amendment that conformed Rule
4003(d) to the Rule 4003(b) amendment that provides that no inspection
requirement arises solely on the basis of a firm issuing an audit
report by consenting to an issuer's use of a previously issued audit
report. The operation of Rule 4003(d) is limited to firms that became
registered in 2003 or 2004. At the time of the original rule filing in
2007, it was possible for circumstances to arise that would have
triggered the application of this amendment with respect to such firms.
With the passage of time, however, those circumstances should no longer
arise, and the Board has therefore made a technical revision to
eliminate this amendment to Rule 4003(d).
3. Rule 4003(e)
    The Board's experience in the inspection program to date has
affected the Board's view on the appropriateness of devoting Board
resources to inspecting every firm that has issued an audit report,
including firms that have not recently done so. This was another
respect in which the Board observed that the existing rule sometimes
requires the Board to deploy inspection resources in ways that do not
represent the most effective use of those resources in furtherance of
the public interest and the protection of investors. In particular, it
sometimes happens that (1) a firm issues an audit report in year 1,
opining on financial statements for the preceding year; (2) consistent
with existing Rule 4003(b), the Board's long-range inspection planning
sets that firm for inspection in year 4; and (3) the firm issues no
audit reports in years 2 or 3. Under the current rule, the Board must
then inspect the firm in year 4, even though the most recent audit
report issued by the firm is three years old on financial statements
that are four years old.
    In 2007, the Board concluded that it could better fulfill its
public interest and investor protection mandates if it had the
flexibility in that circumstance to focus its year 4 inspection
resources on firms that are more regularly and recently engaged in
preparing audit reports. Accordingly, the Board adopted a new paragraph
(e) to Rule 4003 that would give the Board discretion to forego the
otherwise required inspection in the scenario described above in
determining how to deploy its inspection resources.
    The Board continues to view Rule 4003(e) as providing useful
flexibility with respect to the allocation of inspection resources. The
number of otherwise required inspections that the

Board would have discretion to forego under Rule 4003(e) would vary
from year to year, but, had Rule 4003(e) been in effect, the number of
otherwise required inspections that would have met its criteria would
have been 10 in 2015, 10 in 2014 and eight in 2013. In addition,
because of delays caused by obstacles to Board inspections of
registered firms in certain countries, the current rule's deadline for
the initial inspections of firms in those countries, on the basis of
their having issued audit reports for issuers, has long since passed,
and some of those firms have long since stopped issuing audit reports
for issuers. Nineteen such firms have not issued audit reports since
before 2012, and 13 of those firms have not issued audit reports since
before 2010.
    Under proposed Rule 4003(e), the Board would have the flexibility
to deploy its inspection resources in ways other than by inspecting
such firms. Rule 4003(e) would allow the Board to forego an otherwise
required inspection of a firm that issued an audit report if, in two
consecutive years, the firm does not issue any audit reports. The rule
would not require the Board to inspect such a firm unless and until the
firm engaged in conduct that triggered the operation of Rule 4003(b)
anew.\4\ This will give the Board useful and clearly defined
flexibility to focus its inspection resources on firms more recently
involved in issuing audit reports, rather than on relatively old audit
work performed by firms that may not be currently engaged in issuing
audit reports.
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    \4\ Rule 4003(e) also makes clear that a firm's issuance of an
audit report solely by consenting to an issuer's use of a previously
issued audit report would not preclude the operation of paragraph
(e) in circumstances where paragraph (e) would otherwise apply.
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    Rule 4003(e) would not, however, prohibit the Board from inspecting
any of those firms or in any way entitle those firms not to be
inspected. There may be circumstances in which the Board would choose
to inspect a firm even where Rule 4003(e) gave the Board the discretion
to forego the inspection.
    The Board has made a technical amendment to proposed Rule 4003(e)
since the original rule filing. Proposed Rule 4003(e) uses the term
``audit report'' in two places. At the time of the original rule
filing, ``audit report'' was, by definition, limited to reports with
respect to issuers. That definition has since been broadened to include
reports with respect to registered brokers and dealers and, as
broadened, the unqualified use of the term ``audit report'' in Rule
4003(e) would change the meaning of the rule from what the Board
originally intended and still intends. For that reason, the Board has
added the language ``with respect to an issuer'' to qualify ``audit
report'' where that term appears in proposed Rule 4003(e).

B. Board's Statement on Burden on Competition

    Not applicable. The Board's consideration of the economic impacts
of the proposed rule changes is discussed in Section D below.

C. Board's Statement on Comments on the Proposed Rule Received From
Members, Participants or Others

    The Board solicited public comment before adopting the amendments
to Rule 4003 that were included in the original rule filing. The Board
received three comment letters, all of which were supportive of those
amendments and, more generally, supportive of the Board's effort to
increase its discretion to bring risk-based judgments to bear in
allocating its inspection resources.\5\
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    \5\ See Letter from Deloitte Touche Tohmatsu (July 20, 2007)
(``DTT letter''), Letter from PricewaterhouseCoopers LLP (July 23,
2007) (``PwC letter''), and Letter from the New York State Society
of Certified Public Accountants (July 24, 2007) (``NYSSCPA
letter''), available at www.pcaobus.org/Rules/Docket_024.
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    The revised proposed amendments reflect certain technical
corrections or updates described above, including undoing a non-
substantive amendment that was discovered to have an unintended
substantive effect, qualifying the term ``audit report'' to remain
consistent with the original meaning following intervening legislation
that expanded the definition, and eliminating references to the effect
of consenting to the use of a previously issued audit report where the
passage of time had negated the potential applicability of those
references. The Board made these revisions without seeking public
comment.
    In addition, since the original rule filing, which included the
amendment eliminating any periodic inspection requirement for all
``substantial role only'' firms, the Board has determined to commit to
a practice of conducting some inspections of such firms and to
establish by rule a lower limit on the number of such inspections it
will conduct each year. Such a practice is consistent with the Board's
authority even in the absence of a rule, is consistent with the Board's
description of its possible exercise of that authority in soliciting
public comment on the amendments,\6\ and is consistent with the
discretion and authority that the commenters recognized the Board
retained.\7\ From the perspective of rights and obligations of
registered firms and associated persons, there is no meaningful
difference between the rule originally proposed for comment and the
Board's current practice. The Board has committed itself by rule to
that practice without seeking public comment specific to doing so.
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    \6\ See Proposed Amendments to Limit Board Rule 4003's Fixed
Periodic Inspection Requirement to Firms that Regularly Issue Audit
Reports, PCAOB Release No. 2007-007 (May 24, 2007), at 4 (noting
that information that comes to the Board in various ways ``could
lead the Board to exercise its discretion to inspect a particular
`substantial role only' firm''), available at www.pcaobus.org/Rules/Docket_024.
    \7\ See DTT letter at 1, PwC letter at 1, NYSSCPA letter at 3.
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D. Economic Considerations and Application to Audits of Emerging Growth
Companies

    In the Board's view, the proposed amendments to Rule 4003 are
consistent with the purposes of the Act, the public interest, and the
protection of investors.\8\ In reaching that conclusion, the Board has
taken economic considerations into account.\9\
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    \8\ Section 104(b)(2) of the Act provides that the Board may, by
rule, adjust the inspection schedules set by section 104(b)(1) if
the Board finds that different inspection schedules are consistent
with the purposes of the Act, the public interest, and the
protection of investors. To the extent the Commission views any of
the proposed amendments as constituting a change to an inspection
schedule set by section 104(b)(1), the statement in the text
reflects the Board's finding for purposes of section 104(b)(2).
    \9\ Section A, above, describes the need for the proposed
amendments and the Board's key decisions in selecting this course of
action. This section does not repeat the earlier discussion, but
focuses on the costs and benefits, relative to an appropriate
baseline, of the Board's proposal.
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1. Rules 4003(b) and 4003(h)
    It is anticipated that the proposed amendments to Rule 4003(b) and
the addition of Rule 4003(h) will impose no new costs on the universe
of registered firms relative to current practice.\10\ Those proposed
amendments do not require registered public accounting firms to take
any particular actions as part of their audits or otherwise. Rather,
they merely conform the Board's rules to current practice.\11\
Accordingly, the

proposed amendments to Rule 4003(b) and the addition of Rule 4003(h) do
not increase the costs imposed on the group of those registered firms
that are subject to inspection because of playing a substantial role in
an audit.
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    \10\ To assist the Commission's consideration of this proposal,
this section discusses costs and benefits relative to current
practice. It does not discuss costs and benefits relative to
existing Rule 4003(b), under which, absent the proposed amendments
discussed here, the PCAOB would in each year inspect approximately
33 percent of ``substantial role only'' firms. The resulting
analysis of costs and benefits here, however, should not be
understood to suggest that a rule change conforming a rule to
existing practice would in every case necessarily involve no costs
or benefits.
    \11\ The Board's practice, since first inspecting ``substantial
role only'' firms in 2009, has been to inspect each year
approximately five percent of those firms and to reflect that
allocation of inspection resources in its budget materials.
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    The Board has considered whether the proposed amendments might
decrease audit quality in the work of the ``substantial role only''
firms by appearing to those firms to reduce the likelihood of their
being inspected. On that question, the Board has considered that the
proposed rules would not change those firms' perception of the fact
that they might be inspected. The Board has also considered whether the
proposed rules would be likely to change, in any meaningful way, those
firms' current perception of the likelihood of being inspected. There
is no direct evidence concerning what those firms' current perceptions
are on that point, but it is reasonable to assume that firms in the
``substantial role only'' category currently perceive the likelihood of
their being inspected as something that is less than the existing
rule.\12\ Because it appears most likely that the typical such firm's
perception of the chance of inspection would be less than the current
rule, and because the proposed rule would not change those firms'
perception of the fact that they might be inspected, the Board does not
anticipate that the proposed amendments would cause any significant
change in the extent to which the potential for inspection currently
provides an incentive for registered firms to perform audit work in
compliance with PCAOB standards. Nor do the proposed amendments provide
any incremental benefit relative to the current practice.
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    \12\ The Board inspected no ``substantial role only'' firms
before 2009 and, as noted above, from 2009 on has inspected in each
year approximately five percent of those firms. In addition, since
2010 the Board's Web site has provided an overview of the Board's
inspection practices that, among other things, contrasts the Board's
practice of conducting triennial inspections of firms that issue
audit reports for one to 100 issuers with the practice of
inspecting, in each year, ``some'' firms that are not in that
category but that play a role in issuer audits. See http://pcaobus.org/Inspections/Pages/InspectedFirms.aspx.
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2. Rule 4003(e)
    Proposed Rule 4003(e) will potentially reduce costs imposed on the
universe of registered firms relative to current practice.\13\ Proposed
Rule 4003(e) poses the possibility of fewer firms incurring inspection
related costs because it provides the Board with discretion to forgo an
otherwise required inspection of a firm if, after issuing an audit
report in one year, the firm does not issue audit reports in the two
succeeding years. To the extent that proposed Rule 4003(e) results in
the Board forgoing any inspections, the firms that would otherwise have
been inspected would not incur the inspection related costs.\14\
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    \13\ Current practice is consistent with existing Rule 4003's
inspection frequency requirements for firms that issue audit
reports. Of the 28 otherwise required inspections in 2013, 2014, and
2015 that would have met the criteria of proposed Rule 4003(e), 16
were in the U.S. or in non-U.S. jurisdictions where the Board was
not blocked from conducting inspections, and the Board conducted all
of those inspections within the period prescribed by current Rule
4003.
    \14\ The number of otherwise required inspections that the Board
would have discretion to forego under Rule 4003(e) would vary from
year to year, but, as noted above, had Rule 4003(e) been in effect,
the number of otherwise required inspections that would have met its
criteria would have been 10 in 2015, 10 in 2014, and eight in 2013.
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    The Board has considered whether the benefit of potentially
avoiding imposing regulatory burdens on those firms that might, under
proposed Rule 4003(e), be less likely to be inspected than would be the
case under current practice could reduce audit quality in the work of
those firms. On that question, the Board has considered that firms that
the Board could choose to forgo inspecting under proposed Rule 4003(e)
typically would not be expected to realize, at the time they perform an
audit, that future developments will make Rule 4003(e) applicable.
Moreover, Rule 4003(e) would not, even if applicable, provide the firm
with any assurance that it would not be inspected. For those reasons,
the Board does not anticipate that proposed Rule 4003(e) would cause
any significant change in the extent to which the potential for
inspection provides an incentive for registered firms to perform audit
work in compliance with PCAOB standards.
3. Emerging Growth Companies
    Before rules adopted by the Board can take effect, they must be
approved by the Commission. Under Section 103(a)(3)(C) of the Act,\15\
any rules adopted by the Board after April 5, 2012, shall not apply
``to an audit of'' any emerging growth company (``EGC'') (as defined in
section 3(a)(80) of the Securities Exchange Act of 1934 \16\ (the
``Exchange Act'')) unless the Commission ``determines that the
application of such additional requirements is necessary or appropriate
in the public interest, after considering the protection of investors
and whether the action will promote efficiency, competition, and
capital formation.''
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 7213(a)(3)(C).
    \16\ 15 U.S.C. 78c(a)(80).
---------------------------------------------------------------------------

    The proposed amendments do not change or add to the requirements
that apply ``to an audit of'' an EGC or to any other audits. They do
not affect requirements governing how a firm conducts or reports on
audits under PCAOB standards, including audits of EGCs. In addition to
not imposing any requirements that apply to an audit, the proposed
amendments do not appear likely to significantly affect EGCs in other
ways. Specifically, the Board does not anticipate that the proposed
amendments will affect an auditor's perception, during the audit of an
EGC, of the possibility of that audit eventually being reviewed in any
inspection or the nature of any such review. Many factors affect the
selection of audits that the Board reviews in the inspection of any
particular firm, and the proposed rules would not affect the likelihood
that any particular audit of an EGC will be reviewed in an inspection
of the EGC's auditor. In addition, as noted above, firms that the Board
could choose to forgo inspecting under proposed Rule 4003(e) typically
would not be expected to realize, at the time they perform an audit,
that future developments will make Rule 4003(e) applicable, and in any
event they would have no assurance that the Board would forgo the
inspection. Moreover, to the extent audits of EGCs are selected for
review in an inspection, the proposed rules would have no effect on how
that review is conducted, and they provide no reason for an auditor, at
the time of the audit, to anticipate any different treatment of that
audit in an inspection.
    It does not appear that the proposed amendments would have an
effect on efficiency, competition, and capital formation with respect
to EGCs. The Board defers to the Commission on the applicability of
Section 103(a)(3)(C) to the proposed amendments. If the Commission
determines that Section 103(a)(3)(C) applies to these amendments, the
Board requests that the Commission determine that it is necessary or
appropriate in the public interest, after considering the protection of
investors and whether the action will promote efficiency, competition,
and capital formation, to apply the amendments to audits of EGCs. The
Board stands ready to assist the Commission with any additional
analysis that may become necessary.

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

    Pursuant to Section 19(b)(2)(A)(ii) of the Exchange Act,\17\ and
based on its determination that an extension of the period set forth in
Section 19(b)(2)(A)(i) of the Exchange Act \18\ is appropriate in light
of the Commission's consideration of Section 103(a)(3)(C) of the
Sarbanes-Oxley Act with respect to applicability of the proposed rules
to audits of emerging growth companies, as defined in Section 3(a)(80)
of the Exchange Act, the Commission has determined to extend to July
12, 2016 the date by which the Commission should take action on the
proposed rules.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(2)(A)(ii).
    \18\ 15 U.S.C. 78s(b)(2)(A)(i).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed
rules are consistent with the requirements of Title I of the Sarbanes-
Oxley 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/pcaob.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number PCAOB-2007-04 on the subject line.

Paper Comments

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

All submissions should refer to File Number PCAOB-2007-04. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/pcaob.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rules that are filed
with the Commission, and all written communications relating to the
proposed rules 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 Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549-1090, on official business days between the hours of 10:00
a.m. and 3:00 p.m. Copies of such filing will also be available for
inspection and copying at the principal office of the PCAOB. All
comments received will be posted without change; we do 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 No. PCAOB-2007-04 and should be
submitted on or before May 4, 2016.

    For the Commission, by the Office of the Chief Accountant, by
delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-11(b)(2).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-08444 Filed 4-12-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 188 (Wednesday, September 28, 2011)]
[Notices]
[Page 60015]
[FR Doc No: 2011-24956]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EF11-13-000]

Southeastern Power Administration; Notice of Filing

    Take notice that on September 14, 2011, the Southeastern Power
Administration submitted its Rate Order No. SEPA-55 concerning rate and
repayment data for the Cumberland System, for confirmation and approval
on a final basis, effective October 1, 2011, and ending September 30,
2013.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on October 14, 2011.

    Dated: September 21, 2011.
Kimberly D. Bose,
Secretary.
[FR Doc. 2011-24956 Filed 9-27-11; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Rules and Regulations]
[Pages 30881-30883]
[FR Doc No: 2012-12612]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2011-1341; Directorate Identifier 2011-NE-41-AD;
Amendment 39-17062; AD 2012-10-13]
RIN 2120-AA64

Airworthiness Directives; Continental Motors, Inc. (CMI)
Reciprocating Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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

SUMMARY: We are superseding an existing airworthiness directive (AD)
for certain Continental Motors, Inc. (CMI) models TSIO-520, TSIO-550-K,
TSIOF-550K, and IO-550-N series reciprocating engines with new or
rebuilt CMI starter adapters installed between January 1, 2011 and
November 20, 2011. That AD currently requires replacing affected CMI
starter adapters with starter adapters eligible for installation. This
AD requires the same actions, but to an expanded population of
reciprocating engines. This AD was prompted by two additional reports
received of fractures in starter adapter gear shafts in certain
additional part number (P/N) CMI starter adapters since we issued the
existing AD. We are issuing this AD to prevent starter adapter gear
shaft failure which could cause oil scavenge pump failure and engine
in-flight shutdown.

DATES: This AD is effective June 8, 2012.
    We must receive any comments on this AD by July 9, 2012.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this AD, contact Continental
Motors, Inc., PO Box 90, Mobile, AL 36601; phone:<PHONE_NUMBER>, or go
to: http://tcmlink.com/servicebulletins.cfm.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Office (phone:<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Anthony Holton, Aerospace Engineer,
Atlanta Certification Office, FAA, Small Airplane Directorate, 1701
Columbia Avenue, Atlanta, GA 30337; phone:<PHONE_NUMBER>; fax: 404-474-
5606; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    On December 5, 2011, we issued AD 2011-25-51, Amendment 39-16891
(76 FR 77382, December 13, 2011). That AD applied to certain CMI models
TSIO-520, TSIO-550-K, TSIOF-550K, and IO-550-N series reciprocating
engines manufactured between January 1, 2011 and November 20, 2011 with
certain starter adapters installed. That AD also applied to those same
engine models where a replacement new or rebuilt starter adapter from
CMI was installed between January 1, 2011 and November 20, 2011. That
AD requires replacing affected CMI starter adapters with starter
adapters eligible for installation. That AD resulted from five reports
of fractures in starter adapter gear shafts in certain P/N CMI starter
adapters. We issued that AD to prevent starter adapter gear shaft
failure which could cause oil scavenge pump failure and engine in-
flight shutdown.

Actions Since AD 2011-25-51 Was Issued

    Since we issued AD 2011-25-51 (76 FR 77382, December 13, 2011), we
received 2 additional reports of fractures in starter adapter shaft
gears in CMI starter adapters not listed in that AD. This AD
supersedure expands the population of affected starter adapters by
adding five P/Ns, P/Ns 642085A18; 642085A22; R-642085A18; R-642085A19;
and R-642085A22, to the applicability. This AD supersedure also expands
the applicability from new or rebuilt CMI starter adapters installed
between January 1, 2011 and November 20, 2011, to, new or rebuilt CMI
starter adapters installed before November 20, 2011.

FAA's Determination

    We are issuing this AD because we evaluated all the relevant
information

and determined the unsafe condition described previously is likely to
exist or develop in other products of the same type design.

AD Requirements

    This AD requires replacing affected CMI starter adapters on
affected engines with starter adapters eligible for installation.

FAA's Justification and Determination of the Effective Date

    An unsafe condition exists that requires the immediate adoption of
this AD. The FAA has found that the risk to the flying public justifies
waiving notice and comment prior to adoption of this rule because of
the short compliance time required to remove the affected parts from
service. Therefore, we find that notice and opportunity for prior
public comment are impracticable and that good cause exists for making
this amendment effective in less than 30 days.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and we did not provide you with notice and an opportunity to
provide your comments before it becomes effective. However, we invite
you to send any written data, views, or arguments about this AD. Send
your comments to an address listed under the ADDRESSES section. Include
the docket number FAA-2011-1341 and directorate identifier FAA-2011-NE-
41-AD at the beginning of your comments. We specifically invite
comments on the overall regulatory, economic, environmental, and energy
aspects of this AD. We will consider all comments received by the
closing date and may amend this AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this AD.

Costs of Compliance

    We estimate that this AD will affect 225 engines installed on
airplanes of U.S. registry. We also estimate that it will take about 4
work-hours per engine to perform the actions required by this AD, and
that the average labor rate is $85 per work-hour. Required parts will
cost about $500 per engine. Based on these figures, we estimate the
total cost of the AD to U.S. operators to be $189,000.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, Section 106, describes the
authority of the FAA Administrator. Subtitle VII, Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701, ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends part 39 of the Federal Aviation
Regulations (14 CFR part 39) as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing airworthiness directive (AD)
2011-25-51, Amendment 39-16891, (76 FR 77382, December 13, 2011) and
adding the following new AD:

2012-10-13 Continental Motors, Inc. (formerly Teledyne Continental
Motors, formerly Continental): Amendment 39-17062; Docket No. FAA-
2011-1341; Directorate Identifier 2011-NE-41-AD.

(a) Effective Date

    This AD is effective June 8, 2012.

(b) Affected ADs

    This AD supersedes AD 2011-25-51, Amendment 39-16891 (76 FR
77382, December 13, 2011).

(c) Applicability

    This AD applies to Continental Motors, Inc. (CMI) TSIO-520-B,
BB, D, DB, E, EB, J, JB, K, KB, N, NB, UB, VB; TSIO-550-K; TSIOF-
550-K; IO-550-N (Turbo-normalized only; STC SE10589SC); with a
starter adapter part number (P/N) 642085A17; 642085A18; 642085A19;
642085A20; 642085A22; 642085-1A1, R-642085A17; R-642085A18; R-
642085A19; or R-642085A22 installed, where the engine was
manufactured before November 20, 2011, or, where a new or rebuilt
starter adapter was installed before November 20, 2011.

(d) Unsafe Condition

    This AD was prompted by two additional reports received of
fractures in starter adapter gear shafts in certain additional P/N
CMI starter adapters since we issued AD 2011-25-51 (76 FR 77382,
December 13, 2011). We are issuing this AD to prevent starter
adapter gear shaft failure which could cause oil scavenge pump
failure and engine in-flight shutdown.

(e) Compliance

    Comply with this AD within the compliance times specified,
unless already done.
    (1) For starter adapters with less than 75 hours of total time-
in-service (TIS) on the effective date of this AD, before further
flight, replace the starter adapter with a starter adapter eligible
for installation.
    (2) For starter adapters with between 75 and 100 hours of total
TIS, inclusive on the effective date of this AD, within the next 10
hours of engine operation, or before exceeding 100 hours TIS,
whichever occurs first, replace the starter adapter with a starter
adapter eligible for installation.
    (3) For starter adapters with more than 100 hours of total TIS
on the effective date of this AD, no further action is required.

(f) Definition

    For the purpose of this AD, a starter adapter eligible for
installation is:
    (1) A starter adapter with one of the P/Ns listed in this AD
that has a vibro-peened manufacturer code below the ink stamped P/N
on the starter adapter, or
    (2) A starter adapter with one of the P/Ns listed in this AD
that has more than 100 hours total TIS.

(g) Alternative Methods of Compliance (AMOCs)

    The Manager, Atlanta Certification Office, may approve AMOCs for
this AD. Use the procedures found in 14 CFR 39.19 to make your
request.

(h) Related Information

    (1) For further information about this AD, contact: Anthony
Holton, Aerospace Engineer, Atlanta Certification Office, FAA, Small
Airplane Directorate, 1701 Columbia Avenue, Atlanta, GA 30337;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) CMI Mandatory Service Bulletin No. MSB11-4B, dated April 4,
2012, pertains to this AD.
    (3) For copies of the service information referenced in this AD,
contact: Continental Motors, Inc., PO Box 90, Mobile, AL 36601;
phone:<PHONE_NUMBER>, or go to: http://tcmlink.com/servicebulletins.cfm. You may review copies of the referenced
service information at the FAA, Engine & Propeller Directorate, 12
New England Executive Park, Burlington, MA. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

    Issued in Burlington, Massachusetts, on May 16, 2012.
Peter A. White,
Manager, Engine & Propeller Directorate, Aircraft Certification
Service.
[FR Doc. 2012-12612 Filed 5-23-12; 8:45 a.m.]
BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 93 (Thursday, May 14, 2015)]
[Rules and Regulations]
[Pages 27565-27567]
[FR Doc No: 2015-11018]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2014-0492]
RIN 1625-AA00

Safety Zone; Portland Dragon Boat Races, Portland, OR

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is establishing a safety zone in Portland, OR.
This safety zone is necessary to help ensure the safety of the maritime
public during the annual marine event and will do so by prohibiting
unauthorized persons and vessels from entering the regulated area
unless authorized by the Sector Columbia River Captain of the Port or
his designated representatives.

DATES: This rule is effective June 15, 2015.

ADDRESSES: Documents mentioned in this preamble are part of Docket
Number [USCG-2014-0492]. To view documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
type the docket number in the ``SEARCH'' box and click ``SEARCH.''
Click on ``Open Docket Folder'' on the line associated with this
rulemaking. You may also visit the Docket Management Facility in Room
W12-140 on the ground floor of the Department of Transportation West
Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    You may submit comments identified by docket number USCG-2014-0492
using any one of the following methods:
    (1) Federal e-Rulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail or Delivery: Docket Management Facility (M-30), U.S.
Department of Transportation, West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590-0001. Deliveries
accepted between 9 a.m. and 5 p.m., Monday through Friday, except
federal holidays. The telephone number is<PHONE_NUMBER>. See the
``Public Participation and Request for Comments'' portion of the
SUPPLEMENTARY INFORMATION section below for further instructions on
submitting comments. To avoid duplication, please use only one of these
three methods.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Kenneth Lawrenson, Waterways Management Division, Marine
Safety Unit Portland, Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing or submitting
material to the docket, call Cheryl Collins, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    An interim rule was used for the establishment of the 2014 Portland
Dragon Boat Races and was published as USCG-2014-0492 in the Federal
Register on October 21, 2014 with a comment period that ended on
November 20, 2014. Three comments were received and no requests for a
public meeting were received by the Coast Guard. All three comments
received were generally supportive of the event. The comments received
and the answers to comments are covered in the ``Discussion of
Comments, Changes and the Final Rule'' section, below.

B. Basis and Purpose

    Coast Guard Captains of the Port are granted authority to establish
safety zones in 33 CFR 1.05-1(f) for safety and environmental purposes
as described in 33 CFR part 165.
    Regattas create the potential for complex navigation situations
because of the large number of vessels that congregate near the event.
In addition, the dragon boats involved in this regatta are not power
driven vessels and consequently are limited in their ability to
maneuver. This safety zone is necessary in order to ensure the safety
of the maritime public in the proximity of marine event sites and
reduce the risk of collision with the non-power driven vessels involved
in the race.

C. Discussion of Comments, Changes and the Final Rule

    As discussed above, in the ``Regulatory History and Information''
section, there were three comments received on the Temporary Interim
Rule, published as USCG-2014-0492, for the 2014 Portland Dragon Boat
Races. The first commenter was a cat and stated that they agreed that
the safety of people is important. The Coast Guard agrees. The second
commenter asked, ``What is a dragon boat and where can I find one?'' A
dragon boat is a vessel propelled with paddles by a large crew and used
for racing. Sources for these vessels are beyond the scope of this
rulemaking. The third commenter recommended that the safety zone cover
a larger area, based on the event's recent rise in popularity in the
Portland area. The Coast Guard agrees that the Portland Dragon Boat
Festival has seen recent increases in attendance and participation;
however the racing route has remained unchanged. Given that race
managers limit the number of participants on the water at any specific
time, the Coast Guard has determined that the current safety zone is
adequate to protect the interests of safe navigation.

D. Discussion of the Final Rule

    The Final Rule finalizes the interim Safety Zone in the Thirteenth
Coast Guard District without changes.

    This regulated area is located along the western side of the
Willamette River extending from Tom McCall Waterfront Park between the
Hawthorne and Marquam Bridges, Portland, OR. The center span of the
Hawthorne and Marquam bridges will be left open to allow commercial
traffic through during the event. This event will take place from 8:00
a.m. to 6:00 p.m. on the first or second Saturday and Sunday of
September. The zone is short in duration and will allow waterway users
to enter or transit through the zone when deemed safe by the Captain of
the Port or his designated representative.

E. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. The Coast Guard has made
this determination based on the fact that the regulated area created by
this rule will not significantly affect the maritime public because
vessels may still coordinate their transit with the Coast Guard in the
vicinity of the safety zone. Additionally, the Safety Zone which will
be enforced is minimal in duration.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    The Coast Guard did not receive comments from the Small Business
Administration on this rule.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities.
    This rule may affect the following entities, some of which may be
small entities: The owners and operators of vessels intending to
operate in the area covered by the safety zone.
    The rule will not have a significant economic impact on a
substantial number of small entities for the following reasons: (i) The
regulated area is limited in size; (ii) the official on-scene patrol
may authorize access to the regulated area; (iii) the regulated area
will affect a limited geographical location for a limited time; (iv)
the Coast Guard will make notifications via maritime advisories so
mariners can adjust their plans accordingly; and (v) vessel traffic
will be able to pass the safety zone with permission from the COTP
representative.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children From Environmental Health Risks

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian

tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a
preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. This rule involves the creation of one
safety zone around a marine event to protect the maritime public. This
rule is categorically excluded from further review under paragraph
34(g) of Figure 2-1 of the Commandant Instruction. A preliminary
environmental analysis checklist supporting this determination and a
Categorical Exclusion Determination are available in the docket where
indicated under ADDRESSES. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
For the reasons discussed in the preamble, the interim rule amending 33
CFR part 165 which was published at 79 FR 62829 on October 21, 2014 is
adopted as a final rule without change.

    Dated: April 17, 2015.
D.J. Travers,
Captain, U.S. Coast Guard, Captain of the Port, Sector Columbia River.
[FR Doc. 2015-11018 Filed 5-13-15; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 83, Number 226 (Friday, November 23, 2018)]
[Notices]
[Pages 59429-59431]
[FR Doc No: 2018-25469]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84612; File No. SR-BOX-2018-35]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Permit Up to Ten
Expiration Months for Long-Term Options on the SPDR[supreg] S&P[supreg]
500 Exchange-Traded Fund Shares (``SPY'')

November 16, 2018.
    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 November 16, 2018, BOX Exchange LLC (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule from
interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend BOX Rule 5070 (Long-term Options
Contracts) to permit up to ten (10) expiration months for long-term
options on SPY. The text of the proposed rule change is available from
the principal office of the Exchange, at the Commission's Public
Reference Room and also on the Exchange's internet website at http://boxoptions.com.

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

    In its filing with the Commission, the self-regulatory organization
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. The self-regulatory organization
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
    The Exchange proposes to amend BOX Rule 5070 (Long-term Options
Contracts) to permit up to ten (10) long-term options (``LEAPS'')
expiration months for options on SPY.\3\ BOX Rule 5070 currently
provides that the Exchange may list LEAPS that expire from twelve (12)
to one hundred eighty (180) months from the time they are listed; and
there may be up to six (6) expiration months.\4\ The Exchange believes
the proposal will add liquidity to the SPY options market by allowing
market participants to hedge risks relating to SPY positions over a
longer time period with a known and limited cost. This is a filing that
is based on a proposal recently submitted by Nasdaq PHLX LLC
(``Phlx'').\5\
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    \3\ In contrast to Rule 5070, Exchange Rule 6090(b)(1)(i), which
applies to index options, permits the Exchange to list LEAPS on any
class of index options, adding up to ten expiration months. The
Exchange seeks to list ten expiration months of LEAPS on SPY, just
as it now may list ten LEAPS expiration months on index options, in
order to provide investors with a wider choice of investments.
    \4\ Strike price interval, bid/ask differential and continuity
rules shall not apply to such options series until the time to
expiration is less than nine (9) months. See BOX Rule 5070(a).
    \5\ See Securities Exchange Act Release No. 34-84449 (October
18, 2018), 83 FR 53699 (SR-Phlx-2018-64).
---------------------------------------------------------------------------

    The SPY options market today is characterized by its tremendous
daily and annual liquidity. As a consequence, the Exchange believes
that the listing of additional SPY LEAPS expiration months would be
well received by investors. This proposal to expand the number of
permitted SPY long-term expiration months would not apply to LEAPS on
any other class of stock or Exchange-Traded Fund Shares.\6\
---------------------------------------------------------------------------

    \6\ Historically, SPY is the largest and most actively traded
ETF in the United States as measured by its assets under management
and the value of shares traded.
---------------------------------------------------------------------------

    Finally, BOX Rule 5070(a) currently states that there may be ``up
to six (6) additional expiration months.'' Because the rule does not
specify which expiration months the six months are in addition to, and
thus is ambiguous, the Exchange proposes to delete the word
``additional.'' As amended, the rule would clearly and simply provide
that the Exchange may list six expiration months having from twelve
(12) to one

hundred eighty (180) months from the time they are listed until
expiration.\7\
---------------------------------------------------------------------------

    \7\ The Exchange notes other exchanges have amended their
rulebook to also clarify this language. See Securities Exchange Act
Release No. 34-80769 (May 25, 2017), 82 FR 25472 (SR-Phlx-2017-41).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\8\ in general, and Section 6(b)(5) of the Act,\9\ in
particular, in that it is designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in general
to protect investors and the public interest by offering market
participants additional LEAPS on SPY options for their investment and
risk management purposes. The proposal is intended simply to provide
additional trading opportunities, thereby facilitating transactions in
options and contributing to the protection of investors and the
maintenance of fair and orderly markets.\10\ The proposed rule change
seeks to fulfill the needs of market participants, particularly
portfolio managers and other institutional customers, by providing
protection from long-term market moves and by offering an alternative
to hedging portfolios with futures positions or off-exchange customized
derivatives instruments.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ As previously mentioned, the Exchange notes that this
filing is based on a proposal recently submitted by Phlx, in which
Phlx states the reason for filing is, in part, customer demand.
---------------------------------------------------------------------------

    The Exchange believes that additional expiration months for SPY
LEAPS does not represent a proliferation of expiration months, but is
instead a very modest expansion of LEAPS options. Significantly, the
proposal would feature new LEAPS expiration months in only a single
class of options that are very liquid and heavily traded, as discussed
above. Additionally, the Exchange notes by way of precedent that ten
expiration months are already permitted for index LEAPS options.
Further, the Exchange has the necessary systems capacity to support the
new SPY expiration months.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposal merely provides
investors additional investment and risk management opportunities by
providing flexibility to the Exchange to list additional long term
options expiration series, expanding the number of SPY LEAPS offered on
the Exchange from six expiration months to ten expiration months. As
indicated above, the Exchange notes that this filing is based on a
proposal recently submitted by Phlx.\11\
---------------------------------------------------------------------------

    \11\ See supra, note 5.
---------------------------------------------------------------------------

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing, to coincide with the effective date
of Phlx's proposed rule change on which the proposal is partially
based.\16\ The Exchange's proposal would clarify ambiguous rule text
and would conform the Exchange's rules relating to the permitted number
of SPY LEAPS expiration months to those of Phlx. Accordingly, the
Commission believes that the proposal raises no new or novel regulatory
issues, and waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. The Commission
therefore waives the 30-day operative delay and designates the proposal
operative upon filing.\17\
---------------------------------------------------------------------------

    \14\ Id.
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ See supra, note 5.
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-BOX-2018-35 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BOX-2018-35. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official

business days between the hours of 10 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-BOX-
2018-35 and should be submitted on or before December 14, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25469 Filed 11-21-18; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 248 (Thursday, December 28, 2023)]
[Notices]
[Page 89680]
[FR Doc No: 2023-28700]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. NJ24-5-000]

City of Azusa, California; Notice of Filing

    Take notice that on December 20, 2023, City of Azusa, California
submits tariff filing: City of Azusa 2024 Transmission Revenue
Balancing Account Adjustment and Existing Transmission Contract Update
to be effective 1/1/2024.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://www.ferc.gov) using
the ``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. At this time,
the Commission has suspended access to the Commission's Public
Reference Room, due to the proclamation declaring a National Emergency
concerning the Novel Coronavirus Disease (COVID-19), issued by the
President on March 13, 2020. For assistance, contact the Federal Energy
Regulatory Commission at [email protected] or call toll-free,
(886) 208-3676 or TYY,<PHONE_NUMBER>.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the ``eFiling'' link
at http://www.ferc.gov. Persons unable to file electronically may mail
similar pleadings to the Federal Energy Regulatory Commission, 888
First Street NE, Washington, DC 20426. Hand delivered submissions in
docketed proceedings should be delivered to Health and Human Services,
12225 Wilkins Avenue, Rockville, Maryland 20852.
    The Commission's Office of Public Participation (OPP) supports
meaningful public engagement and participation in Commission
proceedings. OPP can help members of the public, including landowners,
environmental justice communities, Tribal members and others, access
publicly available information and navigate Commission processes. For
public inquiries and assistance with making filings such as
interventions, comments, or requests for rehearing, the public is
encouraged to contact OPP at<PHONE_NUMBER> or [email protected].
    Comment Date: 5 p.m. eastern time on January 10, 2024.

    Dated: December 21, 2023.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2023-28700 Filed 12-27-23; 8:45 am]
BILLING CODE 6717-01-P