[Federal Register Volume 79, Number 154 (Monday, August 11, 2014)]
[Rules and Regulations]
[Pages 46707-46709]
[FR Doc No: 2014-18810]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R10-OAR-2013-0708, FRL-9914-90-Region 10]

Approval and Promulgation of Implementation Plans; Idaho:
Infrastructure Requirements for the 2010 Nitrogen Dioxide and 2010
Sulfur Dioxide National Ambient Air Quality Standards

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving the
Idaho State Implementation Plan (SIP) as meeting the infrastructure
requirements of the Clean Air Act (CAA) for the National Ambient Air
Quality Standards (NAAQS) promulgated for nitrogen dioxide
(NO2) on January 22, 2010, and sulfur dioxide
(SO2) on June 2, 2010. Whenever a new or revised NAAQS is
promulgated, the CAA requires states to submit a plan for the
implementation, maintenance and enforcement of such NAAQS. The plan is
required to address basic program elements, including but not limited
to regulatory structure, monitoring, modeling, legal authority, and
adequate resources necessary to implement, maintain and enforce the
standards. These elements are referred to as infrastructure
requirements.

DATES: This final rule is effective on September 10, 2014.

ADDRESSES: The EPA has established a docket for this action under
Docket Identification No. EPA-R10-OAR-2013-0708. All documents in the
docket are listed on the http://www.regulations.gov Web site. Although
listed in the index, some information may not be publicly available,
i.e., Confidential Business Information or other information the
disclosure of which 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 either electronically through http://www.regulations.gov or in hard copy at EPA Region 10, Office of Air,
Waste, and Toxics, AWT-107, 1200 Sixth Avenue, Seattle, Washington
98101. The EPA requests that you contact the person listed in the FOR
FURTHER INFORMATION CONTACT section to schedule your inspection. The
Regional Office's official hours of business are Monday through Friday,
8:30 to 4:30, excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: Kristin Hall at:<PHONE_NUMBER>,
<EMAIL_ADDRESS>or the above EPA, Region 10 address.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us'' or ``our'' is used, it is intended to refer to the EPA.
Information is organized as follows:

Table of Contents

I. Background
II. Response to Comment
III. Final Action
IV. Statutory and Executive Order Reviews

I. Background

    Section 110 of the CAA specifies the general requirements for
states to submit SIPs to implement, maintain and enforce the NAAQS and
the EPA's actions regarding approval of those SIPs. On September 16,
2013, Idaho made two SIP submissions to the EPA demonstrating that the
Idaho SIP meets the infrastructure requirements of the CAA for the 2010
NO2 and 2010 SO2 NAAQS. Idaho's submissions
addressed the following CAA section 110(a)(2) elements for the 2010
NO2 and 2010 SO2 NAAQS: (A), (B), (C),
(D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L) and (M). On
April 17, 2014, we proposed approval of Idaho's September 16, 2013,
submissions (79 FR 21669). An explanation of the CAA requirements and
implementing regulations that are met by these SIP submissions, a
detailed explanation of the submissions, and the EPA's reasons for the
proposed action were provided in the notice of proposed rulemaking on
April 17, 2014, and will not be restated here (79 FR 21669). The public
comment period for our proposed action ended on May 19, 2014, and we
received one anonymous comment via the www.regulations.gov Web site.

II. Response to Comment

    Comment: ``Due to the recent Supreme Court decision in EME Homer
City v. EPA, the EPA should disapprove the State's submission with
regard to Interstate Transport. This is because, due to the decision, a
State's SIP is obligated to `contain adequate provisions . . .
prohibiting . . . any source or other type of emissions activity within
the State from emitting any air pollutant in amounts which will . . .
contribute significantly to nonattainment in, or interfere with
maintenance by, any other State with respect to any' [such primary or
secondary] NAAQS. Even though the lower court's stay of CSAPR may still
be in effect, the fact remains that a state is required to submit
something that addresses Interstate Transport. Since the State of Idaho
did not submit anything for Interstate Transport the EPA is left with
no other option than to disapprove the state's submission since it does
not address Interstate Transport. Since this decision was handed down
after this rule was published the EPA should withdraw this proposed
rule and re-propose with a disapproval of the Interstate Transport
section.''
    Response: We disagree with the commenter. In this rulemaking the
EPA is not taking any final action with respect to the provisions in
CAA section 110(a)(2)(D)(i)(I), which address emissions that
significantly contribute to nonattainment or interfere with maintenance
of the NAAQS in any other state. Idaho did not make a SIP submission to
address the requirements of CAA section 110(a)(2)(D)(i)(I) and thus
there is no such submission upon which the EPA could take action under
CAA section 110(k). The EPA did not propose to take any action with
respect to Idaho's obligations pursuant to CAA section
110(a)(2)(D)(i)(I) and is not, in this rulemaking action, taking any
such action. Further, the EPA could not, as the commenter urges, act to
disapprove a SIP that has not been submitted to the EPA.
    The EPA also disagrees with the commenters' assertion that the EPA
should disapprove Idaho's submissions because they do not address the
requirements of CAA section 110(a)(2)(D)(i)(I). Section 110(k)(3) of
the CAA authorizes the EPA to approve a plan in full, disapprove it in
full, or approve it in part and disapprove it in part, depending on the
extent to which such plan meets the requirements of the CAA. This
authority to approve the states' SIP submissions in separable parts was
included in the 1990 Amendments to the CAA to overrule a decision in
the Court of Appeals for the Ninth Circuit holding that the EPA could
not approve individual measures in a plan submission without either
approving or disapproving the plan as a whole. See S. Rep. No. 101-228,
at 22, 1990 U.S.C.C.A.N. 3385, 3408 (discussing the express overruling
of Abramowitz v. U.S. EPA, 832 F.2d 1071 (9th Cir. 1987)). The
authority provided by the 1990 Amendments to act on particular plan
revisions has been recognized by the Court of Appeals for the Ninth
Circuit. See Hall v. U.S. EPA, 273 F.3d 1146 (9th Cir. August 29,
2001).
    As such, the EPA interprets its authority under CAA section
110(k)(3) as affording the EPA the discretion to approve or
conditionally approve individual elements of Idaho's

infrastructure SIP submissions for the 2010 NO2 and 2010
SO2 NAAQS, separate and apart from any action with respect
to the requirements of CAA section 110(a)(2)(D)(i)(I) for the 2010
NO2 and 2010 SO2 NAAQS. The EPA views discrete
infrastructure SIP requirements, such as the requirements of CAA
section 110(a)(2)(D)(i)(I), as severable from the other infrastructure
elements and interprets CAA section 110(k)(3) as allowing it to act on
individual severable measures in a plan submission. In short, we
believe we have discretion under CAA section 110(k) to act upon the
various individual elements of the State's infrastructure SIP
submittals, separately or together, as appropriate.
    We note that the EPA is reviewing the recent Supreme Court case
reversing and remanding the EME Homer City decision.\1\ We are
evaluating the opinion's impact on states' CAA section
110(a)(2)(D)(i)(I) obligations. We are working with state partners,
including Idaho, to assess next steps to address interstate transport
of pollution, including interstate transport SIP requirements for the
2010 NO2 and 2010 SO2 NAAQS.
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    \1\ On August 21, 2012, the U.S. Court of Appeals for the D.C.
Circuit issued a decision vacating the Transport Rule, see EME Homer
City Generation, L.P. v. E.P.A., 696 F.3d 7 (D.C. Cir. 2012), and
ordering the EPA to continue implementing CAIR in the interim.
However, on April 29, 2014, the U.S. Supreme Court reversed and
remanded the D.C. Circuit's ruling and upheld the EPA's approach in
the Transport Rule. EPA v. EME Homer City Generation, L.P., No. 12-
1182, 572 U.S. --------slip op. (2014).
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II. Final Action

    The EPA is approving the Idaho SIP as meeting the requirements of
sections 110(a)(1) and (2) of the CAA for the 2010 NO2 and
2010 SO2 NAAQS. Specifically, we find that the Idaho SIP
meets the following CAA section 110(a)(2) infrastructure elements for
the 2010 NO2 and 2010 SO2 NAAQS: (A), (B), (C),
(D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M). This
action is being taken under section 110 of the CAA.

III. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA 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 CAA. 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 Order
12866 (58 FR 51735, October 4, 1993);
     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 this action does not involve technical standards; 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, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the State, and the EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
    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 CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by October 10, 2014. 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, Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides, and Volatile organic
compounds.

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

    Dated: July 29, 2014.
Dennis J. McLerran,
Regional Administrator, Region 10.
    40 CFR Part 52 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 N--Idaho

0
2. Section 52.670 is amended in paragraph (e) in the table entitled
``EPA-Approved Idaho Nonregulatory Provisions and Quasi-Regulatory
Measures'' by adding two entries at the end to read as follows:

Sec.  52.670  Identification of plan.

* * * * *
    (e) * * *

                    EPA-Approved Idaho Nonregulatory Provisions and Quasi-Regulatory Measures
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                                        Applicable          State
      Name of SIP provision         geographic or non-    submittal     EPA approval date         Comments
                                      attainment area        date
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                                                  * * * * * * *
Section 110(a)(2) Infrastructure   State-wide..........    9/16/2013  8/11/2014 [Insert FR  This action
 Requirements for the 2010 NO2                                         citation].            addresses the
 NAAQS.                                                                                following CAA
                                                                                elements or
                                                                                portions thereof:
                                                                                110(a)(2)(A), (B),
                                                                                (C), (D)(i)(II),
                                                                                (D)(ii), (E), (F),
                                                                                (G), (H), (J), (K),
                                                                                (L), and (M).
Section 110(a)(2) Infrastructure   State-wide..........    9/16/2013  8/11/2014 [Insert FR  This action
 Requirements for the 2010 SO2                                         citation].            addresses the
 NAAQS.                                                                                following CAA
                                                                                elements or
                                                                                portions thereof:
                                                                                110(a)(2)(A), (B),
                                                                                (C), (D)(i)(II),
                                                                                (D)(ii), (E), (F),
                                                                                (G), (H), (J), (K),
                                                                                (L), and (M).
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[FR Doc. 2014-18810 Filed 8-8-14; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 85, Number 54 (Thursday, March 19, 2020)]
[Notices]
[Pages 15830-15834]
[FR Doc No: 2020-05697]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88382; File No. SR-FICC-2020-801]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of No Objection To Advance Notice To Amend the Mortgage-Backed
Securities Division Stress Testing Methodology

March 13, 2020.
    On January 21, 2020, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'') the
advance notice SR-FICC-2020-801 (``Advance Notice'') pursuant to
Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform
and Consumer Protection Act entitled the Payment, Clearing, and
Settlement Supervision Act of 2010 (``Clearing Supervision Act'') \1\
and Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934
(``Act'').\2\ The Advance Notice describes modifications to the
Mortgage-Backed Securities Division's (``MBSD'') stress testing
methodology, which is described in the Methodology Document--MBSD
Market and Credit Risk Stress Test Models (``Stress Testing Methodology
Document'').\3\ The Advance Notice was published for public comment in
the Federal Register on February 27, 2020,\4\ and the Commission has
received no comments regarding the changes proposed in the Advance
Notice. This publication serves as notice of no objection to the
Advance Notice.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ As part of the Advance Notice, FICC filed Exhibit 3a--
Methodology Document--MBSD Market and Credit Risk Stress Models.
Pursuant to 17 CFR 240.24b-2, FICC requested confidential treatment
of Exhibit 3a.
    \4\ Securities Exchange Act Release No. 34-88266 (February 24,
2020), 85 FR 11413 (February 27, 2020) (SR-FICC-2020-801) (``Notice
of Filing'').
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I. The Advance Notice

A. Background

    MBSD provides trade comparison, netting, risk management,
settlement, and central counterparty services for U.S. mortgage-backed
securities market. FICC manages its credit exposures to its members by
collecting an appropriate amount of margin from each member.\5\ The
aggregate of all MBSD members' margin amounts (together with certain
other deposits required under the MBSD Rules) constitutes MBSD's
Clearing Fund, which FICC would access should a member default with
insufficient margin to satisfy any FICC losses caused by the
liquidation of the defaulting member's portfolio.\6\
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    \5\ See Rule 4 (Clearing Fund and Loss Allocation) of the FICC
MBSD Clearing Rules (``MBSD Rules''), available at www.dtcc.com/legal/rules-and-procedures.aspx.
    \6\ See id.
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    FICC uses stress testing to test the sufficiency of its prefunded
financial resources.\7\ In contrast to FICC's margin methodologies,
which are designed to limit FICC's credit exposures under normal market
conditions,\8\ FICC's stress testing methodologies are designed to
quantify FICC's potential losses under extreme but plausible market
conditions.\9\ Therefore, stress testing is designed to help FICC
identify credit risks beyond those contemplated by FICC's margin
methodologies, including credit exposures that might result from the
realization of potential stress scenarios, such as extreme price
changes, multiple defaults, or changes in other valuation inputs and
assumptions.\10\ As a result, stress testing helps FICC identify the
amount of financial resources necessary to cover its credit exposure
under stress scenarios in extreme but plausible market conditions.\11\
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    \7\ On December 19, 2017, the Commission approved FICC's
adoption of the Clearing Agency Stress Testing Framework (Market
Risk) (``Stress Testing Framework''), which among other things, sets
forth the purpose of FICC's stress testing and describes certain
methodologies FICC uses in its stress testing. Securities Exchange
Act Release No. 82368 (December 19, 2017), 82 FR 61082 (December 26,
2017) (SR-DTC-2017-005; SR-FICC-2017-009; SR-NSCC-2017-006)
(``Stress Testing Framework Order'').
    \8\ See e.g., Securities Exchange Act Release No. 80253 (March
15, 2017), 82 FR 14581, 14582 (March 21, 2017) (SR-FICC-2017-004).
    \9\ See Stress Testing Framework Order, supra note 7, 82 FR at
61083; Notice of Filing, supra note 4 at 11413.
    \10\ See id.; 17 CFR 240.17Ad-22(a)(17).
    \11\ See Stress Testing Framework Order, supra note 7, 82 FR at
61083; Notice of Filing, supra note 4 at 11413.
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    FICC's stress testing methodologies have three key components.\12\
First, FICC analyzes the securities and risk exposures in its members'
portfolios to identify the principal market risk drivers and capture
the risk sensitivity of the portfolios under stressed market
conditions.\13\
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    \12\ See id.
    \13\ See id.
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    Second, FICC develops a comprehensive set of scenarios designed

to test whether FICC's prefunded financial resources are sufficient to
cover losses sustained by member portfolios in such scenarios.\14\
Specifically, FICC assesses the impact on member portfolios under both
historical scenarios and hypothetical scenarios.\15\ Historical
scenarios are based on stressed market conditions as they have occurred
on specific dates in the past.\16\ In order to select historical stress
scenarios, MBSD's stress testing model selects dates from the past that
represent stressed market conditions based on the largest historical
changes of the selected risk factors. Hypothetical scenarios represent
theoretical market conditions that may not actually have occurred, but
could conceivably occur.\17\ In order to select hypothetical stress
scenarios, MBSD considers potential future events and their perceived
impact to portfolio market risk factors.
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    \14\ See id.
    \15\ See id.
    \16\ See id.
    \17\ See id.
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    In developing historical scenarios for MBSD stress testing
purposes, FICC currently examines historical data to identify the
largest historical changes of two risk factors that influence the
pricing of mortgage-backed securities (``MBS''). Specifically, FICC
examines historical data to determine the sensitivity of MBS prices to
changes in interest rates and mortgage option adjusted spreads
(``OAS'').\18\ FICC currently uses its own internally-developed risk
factor historical data. FICC examines the historical data during a
rolling 10-year look-back period, with dates falling outside the 10-
year period eliminated quarterly.\19\
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    \18\ OAS is the yield spread added to a yield curve necessary to
match the discounted present value of an MBS's cash flows to its
market price. The OAS reflects a credit premium and the option-like
characteristic of an MBS in that it incorporates prepayment. See
Notice of Filing, supra note 4 at 11413-14.
    \19\ FICC retains and applies certain historical scenarios
beyond the 10-year data range because such events have had a
significant impact on the financial markets, including, for example,
May 29, 1994 (when the Federal Reserve significantly raised rates),
October 5, 1998 (when the Long-Term Capital Management crisis
occurred), and September 11, 2001. See Notice of Filing, supra note
4 at 11415.
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    Third, to measure and aggregate the applicable risks, FICC applies
the historical and hypothetical scenarios described above to MBSD
member portfolios (1) to analyze the potential losses on each portfolio
in relation to margin amounts collected, and (2) to analyze the effects
that potential losses on member portfolios during stress scenarios
might have on FICC's prefunded financial resources. Specifically, FICC
calculates the stress profits-and-losses under each stress scenario and
determines the loss amount exceeding a member's margin for each
scenario (``Member Deficiency''). FICC further combines the Member
Deficiencies of the member and the member's affiliated family (that are
also MBSD members) (``Affiliated Family Deficiency''). FICC calculates
the ratio of an Affiliated Family Deficiency over the total value of
the MBSD Clearing Fund excluding the sum value of the applicable
affiliated family's margin.\20\
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    \20\ 17 CFR 240.17Ad-22(e)(4) requires a covered clearing
agency, such as FICC, to establish, implement, maintain and enforce
written policies and procedures reasonably designed to monitor and
manage its credit exposures to participants and those arising from
its payment, clearing, and settlement processes, including by
maintaining sufficient prefunded financial resources at a minimum to
enable the clearing agency to cover the default of the member
(including relevant affiliates) that would potentially cause the
largest aggregate credit exposure for the clearing agency in extreme
but plausible conditions (``Cover 1 Requirement'').
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    Currently, in determining the potential losses to a member's
portfolio under a stress scenario, FICC applies a profit-and-loss
calculation that multiplies a set of risk factor stress movements by
the sensitivity (i.e., the percentage value change in response to the
stress movements) of the securities in the portfolio. FICC estimates
MBS risk sensitivities based on two interest rate risk factors and an
OAS risk factor by using a regression model with a two-month look-back
period.\21\
---------------------------------------------------------------------------

    \21\ Regression is a statistical approach that FICC uses to
determine the coefficient range used in the stress profit-and-loss
calculation. See Notice of Filing, supra note 4 at 11415.
---------------------------------------------------------------------------

B. Proposed Changes to MBSD's Stress Testing Methodology

1. Changes to the Scenario Selection Process
    As proposed in the Advance Notice, FICC would continue to examine
historical risk factor data on interest rates and OAS. However, FICC
proposes to add two new risk factors--interest rate volatility \22\ and
mortgage basis \23\--and to obtain all of the historical risk factor
data from a vendor.\24\ FICC states that the vendor-sourced data would
be more comprehensive than FICC's currently internally-sourced
data.\25\ As such, FICC states that the proposed change would enable
FICC to better understand market price changes of MBS cleared by FICC
and would enhance FICC's ability to identify risk exposures under
broader and more varied market conditions.\26\ FICC also states that
using the vendor-sourced data could prove beneficial for its
members.\27\ Specifically, FICC states that its use of the vendor-
sourced data would enable its members to align their stress testing
analyses with FICC's analyses, because its members use similar data and
analysis for their own internal stress testing methodologies.\28\
---------------------------------------------------------------------------

    \22\ Interest rate volatility reflects the market view of
fluctuations in interest rates. A high degree of interest rate
volatility will affect the price sensitivity of a security.
Identifying historical dates with high degrees of interest rate
volatility provides additional historical stress shocks.
    \23\ Mortgage basis captures the difference between the
prevailing mortgage rate and a blended U.S. Treasury rate, which
impacts borrowers' refinance incentives and the model prepayment
assumptions. The smaller the mortgage basis, the greater the
incentive for mortgage borrowers to refinance their loans and prepay
their existing mortgage, thus increasing prepayment speeds. Changes
in prepayment speeds affect the value of MBS securities. Identifying
historical dates of changes in the mortgage basis provides
additional historical stress shocks.
    \24\ FICC currently receives the historical risk-factor data
from the vendor for use in MBSD's value-at-risk (``VaR'') model,
which calculates the VaR Charge component of each member's margin.
See MBSD Rule 1, Definitions--VaR Charge, supra note 5. See also
Securities Exchange Act Release No. 79843 (January 19, 2017), 82 FR
8555, 8556 (January 26, 2017) (SR-FICC-2016-801); Securities
Exchange Act Release No. 79868 (January 24, 2017), 82 FR 8780, 8781
(January 30, 2017) (SR-FICC-2016-007). As proposed in the Advance
Notice, FICC would use the same data set for MBSD stress testing
purposes.
    \25\ For example, FICC's current methodology uses four tenors
for the interest rate factor and two individual factors for the OAS
factor. The vendor-supplied data would include 11 tenors for the
interest rate factor and approximately 32 individual factors for the
OAS factor, which would enable FICC's analysis to differentiate
between various agency mortgage programs, underlying collateral
maturities, and other MBS features. See Notice of Filing, supra note
4 at 11414-16.
    \26\ See Notice of Filing, supra note 4 at 11416.
    \27\ See Notice of Filing, supra note 4 at 11414-15.
    \28\ See id.
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    In addition, as proposed in the Advance Notice, FICC would change
the look-back period for identifying historical stress scenarios by
anchoring the starting date of the look-back period to May 29, 2002
\29\ and not eliminating any time period after that date.\30\ FICC
states that expanding the look-back period beyond the 10-year rolling
window would enable FICC to include a broader range of extreme but
plausible market conditions in the stress testing methodology.
---------------------------------------------------------------------------

    \29\ FICC states that it chose May 29, 2002 as the fixed
starting point of the look-back period based on FICC's assessment of
the accuracy and consistency of the vendor's historical data. See
Notice of Filing, supra note 4 at 11415.
    \30\ FICC would continue to include events prior to the May 29,
2002 date range that FICC identifies as important periods of
historical stress. See id.

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2. Changes to the Risk Measurement and Aggregation Process
    As proposed in the Advance Notice, FICC would replace the
regression-based profit-and-loss calculation with a financial profit-
and-loss calculation using vendor-sourced data. The vendor-sourced data
would expand the set of risk factors available to FICC for calculating
the potential losses generated by the liquidation of a member's
portfolio during stress scenarios. FICC believes that the vendor-
sourced data would improve the accuracy of FICC's stress testing
methodology by generating profit-and-loss calculations that are closer
to the actual MBS price changes during the large market moves that are
typical in stress testing scenarios.\31\
---------------------------------------------------------------------------

    \31\ See Notice of Filing, supra note 4 at 11416-17.
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3. Back-Up Calculation
    Finally, FICC proposes to implement a back-up calculation that it
would use in the event the vendor fails to provide FICC with the
vendor-sourced data described above. Specifically, if the vendor fails
to provide any data or a significant portion of the data in accordance
with the timeframes to which FICC and the vendor agreed, FICC would use
the most recently available data on the first day that such disruption
occurs. If FICC and the vendor expect that the vendor would resume
providing data within five business days, FICC would determine whether
to calculate the daily stress testing calculation using the most
recently available data or a back-up calculation, described below. If
FICC and the vendor expect that the data disruption would extend beyond
five days, FICC would utilize the back-up calculation.
    The proposed back-up calculation would be as follows: FICC would
(1) calculate each member's portfolio net exposures in four
securitization programs,\32\ (2) calculate the stress return for each
securitization program as the three-day price return for each
securitization program for each scenario date, and (3) calculate each
member's stress profit-and-loss as the sum of the products of the net
exposure of each category and the stress return value for each
category. The proposed back-up calculation would use publicly available
indices as the data source for the stress return calculations.
---------------------------------------------------------------------------

    \32\ The securitization programs are as follows: (1) FNMA and
Freddie Mac (``FHLMC'') conventional 30-year mortgage-backed
securities, (2) GNMA 30-year mortgage-backed securities, (3) FNMA
and FHLMC conventional 15-year mortgage-backed securities, and (4)
GNMA 15-year mortgage-backed securities.
---------------------------------------------------------------------------

II. Discussion

    Although the Clearing Supervision Act does not specify a standard
of review for an advance notice, the stated purpose of the Clearing
Supervision Act is instructive: to mitigate systemic risk in the
financial system and promote financial stability by, among other
things, promoting uniform risk management standards for SIFMUs and
strengthening the liquidity of SIFMUs.\33\
---------------------------------------------------------------------------

    \33\ See 12 U.S.C. 5461(b).
---------------------------------------------------------------------------

    Section 805(a)(2) of the Clearing Supervision Act authorizes the
Commission to prescribe regulations containing risk management
standards for the payment, clearing, and settlement activities of
designated clearing entities engaged in designated activities for which
the Commission is the supervisory agency.\34\ Section 805(b) of the
Clearing Supervision Act provides the following objectives and
principles for the Commission's risk-management standards prescribed
under Section 805(a): \35\
---------------------------------------------------------------------------

    \34\ 12 U.S.C. 5464(a)(2).
    \35\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     To promote robust risk management;
     to promote safety and soundness;
     to reduce systemic risks; and
     to support the stability of the broader financial system.
    Section 805(c) provides, in addition, that the Commission's risk
management standards may address such areas as risk management and
default policies and procedures, among others areas.\36\
---------------------------------------------------------------------------

    \36\ 12 U.S.C. 5464(c).
---------------------------------------------------------------------------

    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act and Section 17A of the
Exchange Act (the ``Clearing Agency Rules'').\37\ The Clearing Agency
Rules require, among other things, each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures that are reasonably designed to meet certain minimum
requirements for its operations and risk management practices on an
ongoing basis.\38\ As such, it is appropriate for the Commission to
review advance notices against the Clearing Agency Rules and the
objectives and principles of these risk management standards as
described in Section 805(b) of the Clearing Supervision Act. As
discussed below, the Commission believes the proposal in the Advance
Notice is consistent with the objectives and principles described in
Section 805(b) of the Clearing Supervision Act,\39\ and in the Clearing
Agency Rules, in particular Rules 17Ad-22(e)(4).\40\
---------------------------------------------------------------------------

    \37\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release No.
68080 (October 22, 2012), 77 FR 66220 (November 2, 2012) (S7-08-11).
See also Securities Exchange Act Release No. 78961 (September 28,
2016), 81 FR 70786 (October 13, 2016) (S7-03-14) (``Covered Clearing
Agency Standards''). FICC is a ``covered clearing agency'' as
defined in Rule 17Ad-22(a)(5).
    \38\ 17 CFR 240.17Ad-22.
    \39\ 12 U.S.C. 5464(b).
    \40\ 17 CFR 240.17Ad-22(e)(4).
---------------------------------------------------------------------------

A. Consistency With Section 805(b) of the Clearing Supervision Act

    For the reasons discussed below, the Commission believes that the
Advance Notice is consistent with the stated objectives and principles
of Section 805(b) of the Clearing Supervision Act.\41\
---------------------------------------------------------------------------

    \41\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

1. Changes to the Scenario Selection Process
    As described above in Section I.A., in developing historical
scenarios for MBSD stress testing purposes, FICC currently (1) examines
historical data to identify the largest historical changes of two risk
factors that influence MBS pricing (i.e., interest rates and OAS), (2)
relies on its own internally-developed risk factor historical data, and
(3) considers the historical data during a rolling 10-year look-back
period, with dates falling outside the 10-year period eliminated
quarterly. As proposed in the Advance Notice, FICC would replace the
internally-generated historical data with more comprehensive vendor-
sourced data designed to enhance FICC's ability to identify risk
exposures under broader and more varied market conditions.
Additionally, FICC proposes to expand the look-back period for
identifying historical stress scenarios from a rolling 10-year period
to one that starts on May 29, 2002 and continues forward without
eliminating time periods. Expanding the look-back period beyond the 10-
year rolling window would include a broader range of extreme but
plausible market conditions in FICC's stress testing methodology.
    Taken together, these changes should allow FICC to identify and
analyze risk exposures under a broader and more varied range of
stressed market conditions covering a longer time period, which should,
in turn, help FICC identify the amount of financial resources necessary
to cover its credit exposure under stress scenarios in extreme but
plausible market conditions. The Commission, therefore, believes that
the proposed methodology would be consistent with the promotion

of robust risk management as well as safety and soundness at FICC.
    Further, the proposed methodology would provide FICC with more
information to address potential deficiencies in its prefunded
financial resources than the current methodology because more
comprehensive data and the expanded look-back period would allow FICC
to identify and analyze additional risk exposures under a broader range
of stressed market conditions than under the current methodology.
Addressing potential deficiencies should help FICC ensure that it is
collecting adequate prefunded financial resources to cover its
potential losses resulting from the default of a clearing member and
its affiliated family under multiple extreme but plausible market
conditions, thereby improving FICC's ability to meet its Cover 1
Requirement and to limit its exposures in the event of such a default.
Accordingly, the Commission believes the proposed methodology would be
consistent with reducing systemic risks and supporting the stability of
the broader financial system.
2. Changes in Risk Measurement and Aggregation Process
    As described above in Section I.A., FICC's stress testing
methodology uses a regression model with a two-month look-back period
to determine the potential losses to a member's portfolio under a
stress scenario, estimating each members' MBS sensitivity to two
interest rate risk factors and an OAS risk factor. As proposed in the
Advance Notice, FICC would replace the regression-based calculation
with a financial profit-and-loss calculation using more comprehensive
vendor-sourced data. The vendor-sourced data would expand the set of
risk factors available to FICC for calculating the potential losses
generated by the liquidation of a member's portfolio during stress
scenarios.
    The proposed methodology's profit-and-loss calculation using more
comprehensive vendor-sourced data should enable FICC to perform a more
robust assessment of Member Deficiencies and Affiliated Member
Deficiencies and to identify potential additional risk exposures that
it may not have captured before. Accordingly, the Commission believes
that the proposed methodology would be consistent with promoting robust
risk management and safety and soundness. Moreover, because using the
profit-and-loss calculation based on more comprehensive vendor-sourced
data should better enable FICC to identify and address potential risks
with respect to specific members and their affiliates, it should help
FICC ensure that it is collecting adequate prefunded financial
resources to cover its potential losses resulting from the default of
clearing members and their affiliates under multiple extreme but
plausible market conditions, thereby improving FICC's ability to meet
its Cover 1 Requirement and to limit its exposures in the event of such
a default. Accordingly, the Commission believes the proposed
methodology would be consistent with reducing systemic risks and
supporting the stability of the broader financial system.
3. Back-Up Calculation
    As described above in Section I.B., FICC proposes to implement a
back-up calculation that it would utilize in the event of an
interruption in the vendor-sourced data feed. The back-up calculation
should provide FICC with a reasonable alternative method for
calculating stress profits-and-losses in the event of an interruption
in the vendor-sourced data feed. Accordingly, the Commission believes
the proposed back-up calculation would be consistent with promoting
robust risk management because it would help ensure that FICC has the
ability to execute its stress tests with a reasonable alternative in
the event of a vendor data disruption.
    Further, by providing FICC with a reasonable alternative method for
conducting stress testing, the proposed back-up calculation would help
FICC avoid gaps in assessing the sufficiency of its prefunded financial
resources with respect to meeting FICC's Cover 1 Requirement during a
vendor data disruption. Accordingly, the Commission believes the
proposed back-up calculation would be consistent with promoting safety
and soundness at FICC, which in turn is consistent with reducing
systemic risks and supporting the stability of the broader financial
system.

B. Consistency With Rule 17Ad-22(e)(4)(iii) and (vi)

    Rule 17Ad-22(e)(4)(iii) requires, in part, each covered clearing
agency to establish, implement, maintain and enforce written policies
and procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, by
maintaining additional financial resources at the minimum to enable it
to cover a wide range of foreseeable stress scenarios that include, but
are not limited to, the default of the participant family that would
potentially cause the largest aggregate credit exposure for the covered
clearing agency in extreme but plausible market conditions.\42\ Rule
17Ad-22(e)(4)(vi) requires, in part, each covered clearing agency to
effectively identify, measure, monitor, and manage its credit exposures
to participants and those arising from its payment, clearing, and
settlement processes, by testing the sufficiency of its total financial
resources available by conducting stress testing of its total financial
resources once each day using standard predetermined parameters and
assumptions.\43\
---------------------------------------------------------------------------

    \42\ 17 CFR 240.17Ad-22(e)(4)(iii).
    \43\ 17 CFR 240.17Ad-22(e)(4)(vi).
---------------------------------------------------------------------------

    As described above in Section I.B., FICC proposes to change its
stress testing methodology to: (1) Enhance the scenario selection
process by replacing its internally-generated historical data with more
comprehensive vendor-sourced data and expanding the look-back period
for identifying historical stress scenarios from a rolling 10-year
period to one that starts on May 29, 2002 and continues forward without
eliminating time periods; (2) replace the regression-based calculation
with a financial profit-and-loss calculation using more comprehensive
vendor-sourced data; and (3) implement a back-up calculation that it
would utilize in the event of an interruption in the vendor-sourced
data feed. Taken together, these changes should allow FICC to identify
and analyze risk exposures under a broader range of stressed market
conditions covering a longer time period, which should, in turn, help
FICC identify the amount of financial resources necessary to cover its
credit exposure under stress scenarios in extreme but plausible market
conditions.
    Accordingly, the Commission believes that FICC's proposed stress
testing methodology is consistent with Rule 17Ad-22(e)(4)(iii) because
it should better enable FICC to assess its ability to maintain
sufficient financial resources to cover a wide range of foreseeable
stress scenarios that include the default of the member (including
relevant affiliates) that would potentially cause FICC's largest
aggregate credit exposure in extreme but plausible conditions.\44\
Additionally, the Commission believes FICC's proposed stress testing
methodology is consistent with Rule 17Ad-22(e)(4)(vi) because it should
enable FICC to test the sufficiency of its minimum financial resources
by conducting stress testing using standard

predetermined parameters and assumptions.\45\
---------------------------------------------------------------------------

    \44\ See 17 CFR 240.17Ad-22(e)(4)(iii).
    \45\ See 17 CFR 240.17Ad-22(e)(4)(vi).
---------------------------------------------------------------------------

III. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act, that the Commission does not object to this
advance notice proposal (SR-FICC-2020-801) and that FICC is authorized
to implement the proposal as of the date of this notice.

    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-05697 Filed 3-18-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 203 (Friday, October 21, 2022)]
[Rules and Regulations]
[Pages 63933-63935]
[FR Doc No: 2022-22331]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 87, No. 203 / Friday, October 21, 2022 /
Rules and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0393; Project Identifier MCAI-2021-01249-T;
Amendment 39-22131; AD 2022-16-02]
RIN 2120-AA64

Airworthiness Directives; Airbus Canada Limited Partnership (Type
Certificate Previously Held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain Airbus Canada Limited Partnership Model BD-500-1A10 and BD-500-
1A11 airplanes. This AD was prompted by the discovery that overwing
emergency exit door (OWEED) handle covers were difficult to open on
some airplanes. This AD requires replacing the existing OWEED handle
cover brackets with newly designed OWEED handle cover brackets and
installing placards regarding this replacement, as specified in a
Transport Canada Civil Aviation (TCCA) AD, which is incorporated by
reference. The FAA is issuing this AD to address the unsafe condition
on these products.

DATES: This AD is effective November 25, 2022.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of November 25,
2022.

ADDRESSES: For material incorporated by reference (IBR) in this AD,
contact TCCA, Transport Canada National Aircraft Certification, 159
Cleopatra Drive, Nepean, Ontario K1A 0N5, Canada; telephone 888-663-
3639; email [email protected]; internet https://tc.canada.ca/en/aviation.
You may view this material at the FAA, Airworthiness Products Section,
Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call 206-
231-3195. It is also available in the AD docket at https://www.regulations.gov by searching for and locating Docket No. FAA-2022-
0393.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0393; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, the
mandatory continuing airworthiness information (MCAI), any comments
received, and other information. The address for Docket Operations is
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Gabriel Kim, Aerospace Engineer,
Mechanical Systems and Administrative Services Section, FAA, New York
ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590;
telephone<PHONE_NUMBER>; email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    TCCA, which is the aviation authority for Canada, has issued TCCA
AD CF-2021-39, dated November 10, 2021 (TCCA AD CF-2021-39) (also
referred to as the MCAI), to correct an unsafe condition for certain
Airbus Canada Limited Partnership Models BD-500-1A10 and BD-500-1A11
airplanes.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to certain Airbus Canada
Limited Partnership Model BD-500-1A10 and BD-500-1A11 airplanes. The
NPRM published in the Federal Register on April 6, 2022 (87 FR 19815).
The NPRM was prompted by the discovery that OWEED handle covers were
difficult to open on some airplanes. An investigation revealed that
brackets of certain OWEED handle covers are prone to flexure, thus
increasing the force necessary to remove the OWEED handle cover beyond
design requirements. As a result, the OWEED handle covers must be
removed in order to access the emergency exit, which could delay
passenger evacuation. The NPRM proposed to require replacing the
existing OWEED handle cover brackets with newly designed OWEED handle
cover brackets and installing a placard regarding this replacement, as
specified in TCCA AD CF-2021-39.
    The FAA is issuing this AD to address the increased force necessary
to remove the OWEED handle cover to access the emergency exit, which
could hinder passenger evacuation in emergency. See the MCAI for
additional background information.

Discussion of Final Airworthiness Directive

Comments

    The FAA received a comment from an individual who supported the
NPRM without change.
    The FAA also received a comment from Delta Airlines (DAL). The
following presents that comment received on the NPRM and the FAA's
response.

Request To Clarify Part Numbers for the SB Incorporation Placard

    DAL found that the SB Incorporation Placard is identified as two
different part numbers, CDPL604-5 and CDPL604-5-F493000-25-01, in
Safran Service Bulletin F493000-25-01, Revision 1, dated September 17,
2020, which is referenced in TCCA AD CF-2021-39. The Safran component
maintenance manual (CMM) states ``true part number is CDPL604-5-
F493000-25-01, added by service bulletin F493000-25-01'' in the
nomenclature for part number ``CDPL604-5F49300'' described as
``placard, service bulletin incorporation (bonded).'' The Safran CMM
has another part number that begins with ``CDPL604-5,'' but with a
different suffix. The service bulletin does not state the full true
part number CDPL604-5-F493000-25-01. DAL requested that paragraph (h)
of the proposed AD be revised to add an Exception that clarifies the
part numbers.
    The FAA partially agrees with the request. The FAA agrees that two
part numbers, CDPL604-5 and CDPL604-5-F493000-25-01, were identified
for the SB Incorporation Placard, and that both

part numbers are correct and represent the same part. However, the FAA
disagrees with the need to revise paragraph (h) of this AD to provide
further clarification of the part numbers. The replacement kit includes
the correct placard for installation. This AD has not been changed with
regard to this request.

Conclusion

    The FAA reviewed the relevant data, considered the comments
received, and determined that air safety requires adopting this AD as
proposed. Except for minor editorial changes, and any other changes
described previously, this AD is adopted as proposed in the NPRM. None
of the changes will increase the economic burden on any operator.
Accordingly, the FAA is issuing this AD to address the unsafe condition
on these products.

Related Service Information Under 1 CFR Part 51

    TCCA AD CF-2021-39 specifies procedures for replacing the existing
OWEED handle cover brackets with newly designed OWEED handle cover
brackets and installing placards regarding this replacement.
    This material is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

Costs of Compliance

    The FAA estimates that this AD affects 21 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
3 work-hours x $85 per hour = $255...........................             $40             $295           $6,195
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some or all of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected individuals. The FAA does not control warranty coverage for
affected individuals. As a result, the FAA has included all known costs
in the cost estimate.

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.
    The FAA is 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) Will not affect intrastate aviation in Alaska, and
    (3) 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.

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 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 adding the following new airworthiness
directive:

2022-16-02 Airbus Canada Limited Partnership (Type Certificate
Previously Held by C Series Aircraft Limited Partnership (CSALP);
Bombardier, Inc.): Amendment 39-22131; Docket No. FAA-2022-0393;
Project Identifier MCAI-2021-01249-T.

(a) Effective Date

    This airworthiness directive (AD) is effective November 25,
2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus Canada Limited Partnership (Type
Certificate Previously Held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Model BD-500-1A10 and BD-500-1A11
airplanes, certificated in any category, as identified in Transport
Canada Civil Aviation (TCCA) AD CF-2021-39, dated November 10, 2021
(TCCA AD CF-2021-39).

(d) Subject

    Air Transport Association (ATA) of America Code 52, Doors.

(e) Unsafe Condition

    This AD was prompted by discovery that overwing emergency exit
door (OWEED) handle covers were difficult to open on some airplanes.
An investigation revealed that brackets of certain OWEED handle
covers are prone to flexure, thus increasing the force necessary to
remove the OWEED handle cover beyond design requirements. The FAA is
proposing this AD to address the increased force necessary to remove
the OWEED handle cover to access the emergency exit, which could
hinder passenger evacuation in an emergency.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, TCCA AD CF-2021-39.

(h) Exception to TCCA AD CF-2021-39

    Where TCCA AD CF-2021-39 refers to its effective date, this AD
requires using the effective date of this AD.

(i) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, New
York ACO Branch, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. In
accordance with 14 CFR 39.19, send your request to your principal
inspector or responsible Flight Standards Office, as appropriate. If
sending information directly to the manager of the certification
office, send it to the attention of the person identified in
paragraph (j) of this AD. Information may be emailed to: ATTN:
Program Manager, Continuing Operational Safety, FAA, New York ACO
Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590;
telephone<PHONE_NUMBER>. Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, New York ACO
Branch, FAA; or TCCA; or Airbus Canada Limited Partnership's TCCA
Design Approval Organization (DAO). If approved by the DAO, the
approval must include the DAO-authorized signature.

(j) Related Information

    For more information about this AD, contact Gabriel Kim,
Aerospace Engineer, Mechanical Systems and Administrative Services
Section, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone<PHONE_NUMBER>; email [email protected].

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Transport Canada Civil Aviation (TCCA) AD CF-2021-39, dated
November 10, 2021.
    (ii) [Reserved]
    (3) For TCCA AD CF-2021-39, contact Transport Canada National
Aircraft Certification, 159 Cleopatra Drive, Nepean, Ontario K1A
0N5, Canada; telephone<PHONE_NUMBER>; email [email protected]; internet
https://tc.canada.ca/en/aviation.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on July 22, 2022.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2022-22331 Filed 10-20-22; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 85 (Tuesday, May 3, 2016)]
[Rules and Regulations]
[Pages 26468-26470]
[FR Doc No: 2016-10305]

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

Coast Guard

33 CFR Part 165

[Docket Number USCG-2016-0109]
RIN 1625-AA00

Safety Zone; Hudson River, Jersey City, NJ, Manhattan, NY

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a temporary safety zone on the
navigable waters of the Hudson River in the vicinity of Manhattan, NY,
and Jersey City, NJ for the Louis Vuitton America's Cup World Series
New York 2016 regatta. This temporary safety zone is necessary to
protect all participating and spectator vessels from the hazards
associated with regattas in high traffic areas. This rule is intended
to restrict all vessels from a portion of the Hudson River during the
event.

DATES: This rule is effective from 11:30 a.m. on Friday, May 6, 2016
through 5:00 p.m. on Sunday, May 8, 2016. This rule will be enforced
between 11:30 a.m. to 5:00 p.m. from Friday, May 6, 2016 through
Sunday, May 8, 2016.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2016-0109 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
proposed rulemaking, call or email LTJG Christopher Dunn, Sector New
York Waterways Management Division, U.S. Coast Guard; telephone 718-
354-4012, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary rule without prior notice
and opportunity to comment pursuant to authority under section 4(a) of
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a Notice of Proposed Rulemaking (NPRM)
with respect to this rule because doing so would be impracticable and
contrary to the public interest. The event sponsor was late in
submitting the marine event application. This late submission did not
give the Coast Guard enough time to publish an NPRM and solicit
comments from the public before establishing a safety zone. The nature
of the Louis Vuitton America's Cup World Series New York 2016 requires
the immediate establishment of a safety zone. Publishing an NPRM and
delaying the effective date of this rule to await public comment
inhibits the Coast Guard's ability to fulfill its statutory mission to
protect ports, waterways, and the maritime public. We are issuing this
rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good
cause exists for making it effective less than 30 days after
publication in the Federal Register. The rule must become effective on
the date specified in order to provide for the safety of spectators and
vessels operating in the area near this event. Delaying the effective
date of this rule would be contrary to the public interest and would
expose spectators and vessels to the hazards associated with the
regattas. The sponsor advised that any change to the date of the event
would cause economic hardship on the event sponsor, negatively
impacting other activities being held in conjunction with the event.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under the authority in 33
U.S.C. 1231. The Louis Vuitton America's Cup World Series 2016, is
planned to take place over a 3 day period between the dates of May 6-8,
2016, on the Hudson River in the vicinity of Manhattan, NY. The Series
is composed of daily racing of high-speed, high-performance sailing
vessels. The racing of these vessels on the Hudson River along
Manhattan, NY is expected to generate national and international media
coverage, and attract spectators on a number of recreational vessels
and excursion vessels.
    The Coast Guard is proposing establishing this safety zone, in
conjunction with the Louis Vuitton America's Cup World Series 2016, to
ensure the protection of the maritime public and event participants
from the hazards associated with large-scale

marine events. The Coast Guard anticipates some concern with the
proposed safety zone by mariners, especially commercial vessel
operators, as vessel transits on the Hudson River along Manhattan may
be restricted for a portion of each day for three consecutive days. The
Hudson River is the site of many marine events each year and
recreational and commercial vessel traffic is frequently heavy. The
Coast Guard Sector New York Vessel Traffic Service routinely works with
the local marine pilot organization and shipping agents to coordinate
vessel transits during marine events on the Hudson River, and will
continue to do so for the Louis Vuitton America's Cup World Series 2016
to avoid major interruptions to shipping schedules.

IV. Discussion of the Rule

    The Louis Vuitton America's Cup World Series 2016 regatta is
scheduled to occur on the navigable waters of a Hudson River in the
vicinity of Manhattan, NY and Jersey City, NJ from May 6-8, 2016. This
event will involve high-speed, high-performance sailing vessels that
will compete in a series of daily races. This event is expected to
generate national and international media coverage, and attract
thousands of spectators on hundreds of commercial and recreational
vessels.
    The COTP proposes the establishment of a temporary safety zone on
the navigable waters of the Hudson River to ensure the protection of
the maritime public and event participants from the hazards associated
with this event. This temporary safety zone will begin in the vicinity
of the Battery and extend north to approximately North Cove, Manhattan,
NY. The Coast Guard anticipates some concern by mariners, especially
commercial vessel operators, that vessel transits on the Hudson River
along Manhattan may be restricted for a portion of each day for three
consecutive days. To ensure the safe and efficient movement of vessels
in this area, a portion of the navigable waterway will remain available
for use along the western side of the navigable channel. In addition,
the Coast Guard Sector New York Vessel Traffic Service will continue to
communicate and coordinate vessel movements that occur in the vicinity
of this area for the entirety of this marine event.
    Safety zone enforcement will be effective each day over a three
consecutive day period starting May 6-8, 2016. Safety zone enforcement
will begin each day at approximately 11:30 a.m. and continue until the
Americas Cup races are completed for the day, but no later than 5:00
p.m.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive order related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This rule has not been designated
a ``significant regulatory action,'' under Executive Order 12866.
Accordingly, it has not been reviewed by the Office of Management and
Budget.
    The potential impact on the public will be minimized for the
following reasons: Vessels will only be restricted from the designated
safety zone for a maximum of 6 hours per day for a maximum of 3 days;
marine traffic will be permitted to transit the Hudson river along the
New Jersey side of the river for the duration of this event and will be
minimally impacted by the establishment of a temporary safety zone;
vessels including those that require access to pier berths along the
Manhattan side of the river will be permitted to enter or pass through
the affected waterway with the permission of the COTP or the COTP's
representative.
    Notifications of this event and its associated safety zone will be
made to mariners through advisory notice, Local Notice to Mariners,
event sponsors, and local media. Notifications will be made well in
advance of the event's commencement and last throughout the event.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 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 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.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator. 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 section.
    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.

C. 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).

D. Federalism and Indian Tribal Governments

    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 have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, 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. If
you

believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.

E. 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 an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. 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 (42 U.S.C. 4321-4370f), and have determined 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 establishment of a safety zone lasting approximately
6 hours for 3 days and is designed to minimize the impact to vessel
traffic on the navigable waters, vessels will be able to transit around
the zone in a safe manner. It is categorically excluded from further
review under paragraph 34(g) of Figure 2-1 of the Commandant
Instruction. An environmental analysis checklist supporting this
determination and a Categorical Exclusion Determination will be
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.

G. 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.

List of Subjects in 33 CFR Part 165

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

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1,
6.04-6, and 160.5 and Department of Homeland Security Delegation No.
0170.1

0
2. Add Sec.  165.T01-0109 to read as follows:

Sec.  165.T01-0109  Safety Zone; Hudson River, Manhattan, NY.

    (a) Regulated Area. The following area is a temporary safety zone:
All navigable waters of the Hudson River bound by the following
coordinates: Beginning at 40[deg]43.441' N., 74[deg]01.538' W.; thence
to 40[deg]43.390' N., 74[deg]01.015' W.; thence to 40[deg]42.846' N.,
74[deg]01.143' W.; thence to 40[deg]41.992' N., 74[deg]01.230' W.;
thence to 40[deg]41.995' N., 74[deg]01.916' W.; thence back to the
starting point.
    (b) Effective Period. This rule will be effective from May 6-8,
2016. This rule will be enforced daily from approximately 11:30 a.m.
until the America's Cup races are completed for the day, but no later
than 5:00 p.m.
    (c) Definitions. The following definitions apply to this section:
    (1) Designated Representative. ``Designated representative'' means
any Coast Guard commissioned, warrant, or petty officer of the U.S.
Coast Guard who has been designated by the COTP New York, to act on his
or her behalf. The designated representative may be on an official
patrol vessel or may be on shore and will communicate with vessels via
VHF-FM radio or loudhailer. In addition, members of the Coast Guard
Auxiliary may be present to inform vessel operators of this regulation.
    (2) Official Patrol Vessels. ``Official patrol vessel'' means any
Coast Guard, Coast Guard Auxiliary, state, or local law enforcement
vessels assigned or approved by the COTP.
    (d) Regulations. (1) The general regulations contained in 33 CFR
165.23, as well as the following regulations, apply.
    (2) No vessels, except for those participating in the regatta, will
be allowed to transit the safety zone without the permission of the
COTP or designated representative.
    (3) All persons and vessels shall comply with the instructions of
the COTP or the designated representative. Upon being hailed by a U.S.
Coast Guard vessel by siren, radio, flashing light or other means, the
operator of a vessel shall proceed as directed.
    (4) Spectators or other vessels shall not anchor, block, loiter, or
impede the movement of event participants or official patrol vessels in
the safety zones.
    (5) Vessel operators desiring to enter or operate within the safety
zone shall contact the COTP or the designated representative via VHF
channel 16, the Vessel Traffic Service via VHF channel 14 or the Sector
New York Command Center via<PHONE_NUMBER> to obtain permission to do so.

    Dated: April 12, 2016.
M.H. Day,
Captain, U.S. Coast Guard, Captain of the Port New York.
[FR Doc. 2016-10305 Filed 5-2-16; 8:45 am]
BILLING CODE 9110-04-P