1 February 24, 2006 MEMORANDUM Subject: Supporting Analysis for a County Level Affordability Screening Approach From: Kira Smith, TAB Jonathan Shefftz, Industrial Economics, Incorporated Thru: Dan Olson Affordability Team Leader, TAB To: Record In its February Federal Register notice, Small Drinking Water Systems Variances   Revision of Existing National Level Affordability Methodology and Methodology to Identify Variance Technologies that are Protective of Public Health, EPA requests comment on a number of questions related to the methodology the Agency uses to evaluate the affordability of its National Primary Drinking Water Rules. The three key issues are as follows:  First, EPA is requesting comment upon the size of the system the Agency should consider as representative of each the system size categories specified under SDWA. This question is critical to determining the cost each household must pay for the treatment to comply with a new regulation. Smaller systems have fewer households over which the fixed costs of treatment can be distributed and therefore experience higher household costs. EPA is specifically asking if the median ( or middle sized) or tenth percentile ( a system that serves fewer people than 90 percent of the other systems in the category) should be selected as the representative system for the category.  Second, EPA is requesting comment upon the affordability threshold ( the maximum cost that is affordable to customers served by small systems). EPA is proposing to calculate the affordability threshold by taking a percentage of the median annual household income ( MHI) among small systems which as of September 2005 was between $ 40,000 and $ 44,000. EPA is requesting comment upon three different alternative thresholds equal to: 0.25% MHI ($ 100 to $ 110 under Sept. 2005 income estimates), 0.50% MHI ($ 200 to $ 220 under Sept. 2005 income estimates), or 0.75% MHI ($ 310 to $ 330 under Sept. 2005 income estimates) 2  Third, EPA is requesting comment upon whether or not EPA should evaluate affordability strictly on a national level, or to use a two step process that includes both a national level evaluation of affordability, and a second analysis conducted at the County level. EPA would perform this second step only when the first step found a standard to be affordable at the national level. EPA would evaluate economic data to identify economically disadvantaged Counties in the U. S. that cannot afford to comply regardless of the outcome of the national determination.

This memorandum provides supporting analysis for the third question, whether EPA should evaluate affordability by using a two step process that includes both a national level evaluation of affordability, and a second analysis conducted at the County level. In developing the proposed revisions to its national affordability methodology, EPA carefully considered the recommendations of its Science Advisory Board ( SAB) and the National Drinking Water Advisory Council ( NDWAC) including the NDWAC majority report and National Rural Water Association ( NRWA) minority report. The SAB stated that " regional income measures and expenditure baselines would capture affordability relative to the resources available in a community more accurately than national values; however, a national affordability threshold is necessary to implement the fairness goal." The NDWAC recommended that EPA establish differential regional affordability criteria when sufficient supporting data are available. In particular, the NDWAC recommended that EPA separate the median household income ( MHI) into rural and urban categories to more accurately reflect actual ability and willingness to pay.

County level screening approach In determining how to both consider economically at risk areas and implement a fair national affordability methodology, EPA is requesting comment on a two part screen at the national and then county level. The county level screening approach is based on analysis presented in two papers by Scott Rubin for the NRWA, in which socioeconomic criteria ( median household income, poverty rate, and unemployment rate) are applied at the county level to measure a community's ability to afford increased water costs. 1 EPA considered MHI figures based on geographic regions and rural versus urban areas. Of the four regions in the U. S., the northeast had the highest MHIs, whereas the south had the lowest. Income in the Midwest and west did not appear to have systematic differences. Urban household income was, in general, higher than rural income. However, Scott Rubin's NRWA white papers suggested that MHI alone was not an accurate measure of the ability of a community to afford increased water costs. Mr. Rubin suggested that MHI was not necessarily related to the incidence of poverty and recommended that EPA concentrate on identifying areas that are economically at risk by looking at counties with not only low income, but also high poverty and high unemployment. EPA is requesting comment on two distinct approaches for determining affordability. Both approaches would start by determining whether the incremental household cost of treatment to meet a new regulation exceeds an increment based threshold. Under the first approach, this would be the sole criterion for determining affordability. Under the second approach, the 1 Rubin, Scott J. 2001. White Paper for National Rural Water Association, Criteria to Assess the Affordability of Water Service. Available at http:// www. nrwa. org or can be found in the docket.

Rubin, Scott J. 2002. White Paper for National Rural Water Association, Criteria to Assess Affordability Concerns in Conference Report for H. R. 2620. Available at http:// www. nrwa. org or can be found in the docket. 3 approach discussed in this memo, if EPA were to find the compliance technology affordable at the national level, EPA would then take the additional step of identifying counties that are economically at risk, and list affordable variance technologies for small systems in these counties. These systems could then apply to their primacy agency for a variance. In other words, EPA would determine that any regulation is potentially unaffordable for small systems in these economically at risk counties. Then, as with the current approach, EPA would leave it to the primacy agency to evaluate affordability individually for systems applying for a variance, as they are required to do under the SDWA for all small system variance requests if the State includes such variances in its drinking water program. The national level screen would work the same way as under the national level approach, except that because of the additional screen for at risk counties, EPA might choose a higher percentage of median system MHI for the national screen than it would under the first approach. Should the national level screen find that the compliance treatment costs are affordable for some or all small systems, the Agency would proceed to a county level screen to identify economically at risk counties, in which States could still grant variances. For any small drinking water system in counties deemed to be at risk in this second part of the affordability test, compliance technologies would be considered potentially unaffordable, regardless of EPA's national per household cost estimates, and it would be up to the primacy agency to grant variances where appropriate based on a system specific analysis of affordability. That is, States would be enabled to determine, based on the criteria in SDWA Section 1415( e), whether to grant small system variances to small systems in those at risk counties. EPA is requesting comment on three socioeconomic triggers for the county level screen: ( 1) MHI less than or equal to 65 percent of the national MHI, ( 2) poverty rate at least twice the national average, or ( 3) two year average unemployment rate at least twice the two year national average. Under this option, triggering any one of these measures would be sufficient to trigger a finding of unaffordability for small systems within the county. Therefore, this methodology allows for regional socioeconomic conditions to supplement the national level affordability determination. Exhibit 1 below displays initial estimates to convey a sense of how many counties, small systems within those counties, and populations served by those systems, would be eligible to apply for variances under the three socioeconomic triggers. 4 Exhibit 1 Results of County Level Screen Criterion Number of Counties % of All Counties Number of Small Systems % of All Small Systems Population Served % of National Population MHI <= 0.65% National MHI 356 11.3% 3,485 7.3% 4,372,677 1.5%

Poverty Rate => Twice National Average 81 2.6% 532 1.1% 950,205 0.3%

2 Year Unemployment Rate => Twice National Average 80 2.5% 920 1.9% 1,391,226 0.5%

One or more of the Above 410 13.1% 4,249 8.8% 5,485,158 1.9%

Notes:

1. MHI test is based on county level and national data for 2005 MFI estimates from:

http:// www. huduser. org/ datasets/ il. html 2. Poverty test is based upon 2003 data from http:// www. census. gov/ hhes/ www/ saipe/ saipe. html 3. Unemployment test is based upon 2003 and 2004 data from http:// www. bls. gov/ lau/ home. htm Exhibits 2 and 3 show how the measures and cut off values for these socioeconomic triggers compare to those for other EPA programs and at other federal agencies. The following pages feature additional exhibits that display geographical representations of where these counties are located, as well as the number of small systems within them along with the populations they serve. Specifically, Exhibit 4 shows the location of counties that would be eligible to apply for variances under the previously presented criteria for a county level screen. Exhibit 5 provides counts for small systems located within those counties. Exhibit 6 illustrates the population levels collectively served by these small systems within each application eligible county. And finally, Exhibit 7 repeats the same graphs for Alaska. ( No separate graphs are provided for Hawaii, since no counties in that state triggered any of the criteria.) 5 Exhibit 2 Selected Examples of Socioeconomic Triggers for Other EPA Programs Office/ Guidelines Purpose/ Context Socioeconomic Indicator( s) Threshold( s)

Office of Water;

Programs Operations Facilities Requirement Division Financial Capability Guidebook ( 1984) $ Determine eligibility for grants to finance the construction of a wastewater facility.

$ If the community can demonstrate the capability to pay for the capital investment and the cost of operation and maintenance, then it will qualify. Rate of Change of Population ( many other indicators, but all focused on financial condition) Weak <  1%, Average  1% to 1%, Strong > 1%

Region 5, Water Division, NPDES Support and Technical Assistance Branch Procedures for Conducting Municipal Financial Capability Analysis in Support of Water Enforcement Actions ( December 1999) $ To determine if financial or economic constraints limit the ability to pay penalties or comply with regulations.

$ Procedures are divided into a preliminary Phase I ( with a socioeconomic focus), a follow on Phase II, plus a Phase III for litigation support.

$ As both Phase I and II are very comprehensive and detailed, only selected indicators are provided here. $ Examination of recent Census data,

making comparisons to State, County,

and/ or Standard Metropolitan Statistical Area averages $ Comparative analysis of historical and projected population and income data $ Review of employment trends at the County or Metro level and compared to State of National Averages Conclusions from the socioeconomic data should enable a classification of the community's socioeconomic condition as average, above average, or below average. 6 Exhibit 2 Selected Examples of Socioeconomic Triggers for Other EPA Programs Office/ Guidelines Purpose/ Context Socioeconomic Indicator( s) Threshold( s)

Office of Water,

Office of Water Management Combined Sewer Overflows ( CSO):

Guidance for Financial Capability Assessment and Schedule Development ( March 1997) Residential Indicator determines the financial impact of current and proposed waste water treatment and combined sewer overflow controls on residential users ( first stage screening).

If the residential indicator is above 2%,

then a second stage test is administered to assess the financial capacity of the permittee, which includes some socioeconomic measures.

A composite score is generated based on how these indicators compare to industry or national averages ( with weak assigned 1 point, mid range 2 points,

and strong 3). The total score determines the appropriate control implementation schedule ( i. e., low burden entailing normal engineering construction, medium burden an extended schedule, and high burden an even more extended schedule). Unemployment ( relative to national average)

Median Household Income ( relative to national average) Weak: > 1% above, Mid range: +/ 1%,

Strong: > 1% below Weak: > 25% below, Mid range: +/ 25%,

Strong: > 25% above 7 Exhibit 2 Selected Examples of Socioeconomic Triggers for Other EPA Programs Office/ Guidelines Purpose/ Context Socioeconomic Indicator( s) Threshold( s)

Office of Water Office of Wastewater Management To determine if the cost of compliance with WQS will prove difficult for the municipality and its households. Unemployment Weak: > 1% above National Average Mid range: National Average Strong: > 1% below National Average Economic Guidance for Water Quality Standards ( WQS) ( April 1995) If compliance costs exceed 0.8% of MHI,

then a second stage test is administered to assess the financial capacity of the municipality.

Financial capacity is examined on three levels: debt capacity, socioeconomic health, and financial management. A composite score is generated from these indicators to determine whether there is reason to downgrade the water quality standard. Median Household Income Weak: > 10% below State Median Mid range: State Median Strong: > 10% above State Median Office of Enforcement and Compliance Assurance, Office of Regulatory Enforcement Municipal Ability to Pay Model  MUNIPAY To assess the municipality's ability to pay for compliance costs and/ or penalties:

not media or office specific.

Note that thresholds act as a multiple constraint model. The following indicators are used for both the 1990 and 2000 Census, and compared both over time and to national and state values:

Population Percent Population below Age 18 Percent Population 65 and above Percent Individuals below 125% of Poverty Median Home Value and % of State Value Median Household Income and % of State No thresholds are employed, and instead the comparison is only for background information. 8 Exhibit 3 Selected Examples of Socioeconomic Triggers at Other Federal Agencies Agency/ Guidelines Purpose/ Context Indicator( s) Threshold( s)

U. S. Department of Agriculture,

Rural Utilities Service Water and Waste Loans and Grants ( Revised June 1999) $ To determine eligibility for loans and/ or grant funds for water and waste projects in an effort to ensure affordable user costs for rural residents and businesses.

$ Once eligibility is determined,

applications are ranked and funding level is based on MHI as well as a composite score based on population, health priorities,

and related criteria.

$ Special consideration is given to Rural or Native Alaskan Villages. Median Household Income ( MHI) $ Below the poverty line or 80% of the state non metropolitan median income: project receives up to 75% funding $ More than 80% of state non metropolitan median income, but less than 100%:

project receives up to 45% funding Population $ < 1,500 = 30 points $ > 1,500 to 3,000 = 20 points $ > 3,000 to 5,000 = 15 points MHI relative to statewide nonmetropolitan MHI $ < 70% = 30 points $ 70 to 80% = 20 points $ 80 to 90% = 10 points $ > 90% = 0 points Applicants are awarded additional points ( and given higher priority status) depending on the cause of decline in water quality/ quantity. Decline stems from or quality issues involve:

$ Private individually owned wells or other individual sources of water = 30 points $ Established system= s water source = 20 points U. S. Department of Agriculture,

Rural Utilities Service Emergency Community Water Assistance Grants ( July 2001) $ To determine priority status for grant money that will address a significant decline in the quantity or quality of drinking water.

$ A higher score is given higher priority ( as reflected in the assigned points listed under the threshold column) and allocated more funds Other Factors $ In case of acute shortage = 10 points $ Geographic distribution of funds, rural residents hauling water, severe contamination levels, etc. = 30 points ( at the discretion of the Administrator) 9 Exhibit 3 Selected Examples of Socioeconomic Triggers at Other Federal Agencies Agency/ Guidelines Purpose/ Context Indicator( s) Threshold( s)

If determined to be eligible, then an area is able to receive a grant. The size of the grant is determined by additional factors in a second round analysis. Population/ Location Eligible if:

$ central city of Metropolitan Statistical Area;

$ metropolitan area with a population of at least 50,000; or,

$ urban counties with a population of at least 200,000 ( excluding population of entitled cities).

" A" is an average of the following ratios, dividing the city/ county's indicator by that for all metropolitan areas:

$ population;

$ extent of poverty; and,

$ extent to which housing is overcrowded.

U. S. Department of Housing and Urban Development Eligibility for Community Development Block Grants

Entitlement Communities Eligibility for Renewal Communities, Empowerment Zones, and Enterprise Communities ( Current Guidelines) Grant Size: If found to be eligible for a grant, then the size of the grant is determined. Indian Tribes receive special consideration and 1% of total appropriated funds are reserved for such applicants ( from this pool, funds are allocated competitively among tribes). The remaining funds are divided among the eligible areas on the following basis: The percent of total funds appropriated in a year and given to a specific area is based on two averages, comprising different metrics, both of which reflect the conditions of the area. " B" is an average of the following ratios, dividing the city/ county's indicator by that for all metropolitan areas:

$ extent of growth lag;

$ extent of poverty; and,

$ age of housing. Out of the total funds appropriated, the proportion to be received by a given metropolitan city/ county is based on the greater of Average " A" or " B" for that city/ county.

U. S. Department of Health and Human Services ( HHS)

Administration for Children and Families Community Services Block Grant ( Current Guidelines) Grants are made to states, which distribute funds to entities that provide services to low income individuals and families. Eligible entities are identified based on the income level of the constituency they serve. Income level of served constituency. $ Income < Poverty line ( States can revise the income limit, but it must not exceed 125 percent of the official poverty line.) 10 Exhibit 3 Selected Examples of Socioeconomic Triggers at Other Federal Agencies Agency/ Guidelines Purpose/ Context Indicator( s) Threshold( s)

U. S. Department Commerce Economic Development Administration Grants for Public Works and Economic Development Facilities ( January 1, 2001) If at least one criterion is met, areas receive grants for projects that provide long term economic development and assist in the construction of public works and economic development facilities, in order to create or retain high skill,

high wage jobs in the private sector. $ Unemployment Rate $ Per capita income $ Special circumstances that will cause or have caused severe unemployment or economic adjustment problems $ > 1% above national average $ < 80% of national average $ Out migration, underemployment, military base closure or realignment, natural or other major disasters, extraordinary depletion of natural resources, closure or restructuring of industrial firms, and/ or destructive impacts of foreign trade.

Round I Communities:

$ Population $ Poverty, unemployment, general distress $ Poverty rate $ Capped at 30,000 $ " Pervasive"; indicators may include per capita income ( below average level, or decline), earnings per worker, per capita property tax base, average years of school completed, out migration and population decline $ At least 20% in each census track, 25% in 90% of the covered census tracks, and 35% in 50% of the covered census tracks U. S. Department of Agriculture Rural Development Rural Empowerment Zone and Enterprise Community Program Three rounds of community designations ( representing different rounds of funding, not multi phase socioeconomic screens) have entailed various levels of benefits;

some communities that applied for and received benefits under initial rounds have later applied for and received benefits under later rounds.

Note that only the more relevant socioeconomic measures are displayed here. Round II and III Communities:

$ Essentially the same as Round I, but an out migration test may be substituted for the poverty test.

Round I Communities:

$ Poverty, unemployment, general distress $ Unemployment rate $ Poverty rate $ Income levels $ " Pervasive"

$ 150% of national level $ At least 20% in each census track and 35% in 50% of the covered census tracks $ For urban areas, at least 70% of households must have incomes below 80% of the local area average U. S. Department of Housing and Urban Development Community Planning and Development Empowerment Zones, Enterprise Communities, Renewal Communities Round II and III Communities:

$ Essentially the same as Round I, but no requirement for at least 35% poverty rate in 50% of the covered census tracks 11 Exhibit 4 Locations of Counties Triggering One or More Criteria 12 Exhibit 5 Small System Counts for Application Eligible Counties 13 Exhibit 6 Populations Served by Small Systems in Application Eligible Counties 14 Exhibit 7 Application Eligible Counties, Small System Counts, and Populations Served in Alaska 15 16


[Federal Register Volume 82, Number 142 (Wednesday, July 26, 2017)]
[Notices]
[Pages 34664-34666]
[FR Doc No: 2017-15730]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2017-0006; FRL-9963-50]

Receipt of Several Pesticide Petitions Filed for Residues of
Pesticide Chemicals in or on Various Commodities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of filing of petitions and request for comment.

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SUMMARY: This document announces the Agency's receipt of several
initial filings of pesticide petitions requesting the establishment or
modification of regulations for residues of pesticide chemicals in or
on various commodities.

DATES: Comments must be received on or before August 25, 2017.

ADDRESSES: Submit your comments, identified by docket identification
(ID) number and the pesticide petition number (PP) of interest as shown
in the body of this document, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments. Do not submit
electronically any information you consider to be Confidential Business
Information (CBI) or other information whose disclosure is restricted
by statute.
     Mail: OPP Docket, Environmental Protection Agency Docket
Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC
20460-0001.
     Hand Delivery: To make special arrangements for hand
delivery or delivery of boxed information, please follow the
instructions at http://www.epa.gov/dockets/contacts.html.
    Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Robert McNally, Biopesticides and
Pollution Prevention Division (BPPD) (7511P), main telephone number:
(703) 305-7090, email address<EMAIL_ADDRESS>or Michael
Goodis, Registration Division (RD) (7505P), main telephone number:
(703) 305-7090, email address<EMAIL_ADDRESS>The mailing address
for each contact person is: Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-
0001. As part of the mailing address, include the contact person's
name, division, and mail code. The division to contact is listed at the
end of each pesticide petition summary.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
The following list of North American Industrial Classification System
(NAICS) codes is not intended to be exhaustive, but rather provides a
guide to help readers determine whether this document applies to them.
Potentially affected entities may include:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    If you have any questions regarding the applicability of this
action to a particular entity, consult the person listed under FOR
FURTHER INFORMATION CONTACT for the division listed at the end of the
pesticide petition summary of interest.

B. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or email. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the

disk or CD-ROM as CBI and then identify electronically within the disk
or CD-ROM the specific information that is claimed as CBI. In addition
to one complete version of the comment that includes information
claimed as CBI, a copy of the comment that does not contain the
information claimed as CBI must be submitted for inclusion in the
public docket. Information so marked will not be disclosed except in
accordance with procedures set forth in 40 CFR part 2.
    2. Tips for preparing your comments. When preparing and submitting
your comments, see the commenting tips at http://www.epa.gov/dockets/comments.html.
    3. Environmental justice. EPA seeks to achieve environmental
justice, the fair treatment and meaningful involvement of any group,
including minority and/or low-income populations, in the development,
implementation, and enforcement of environmental laws, regulations, and
policies. To help address potential environmental justice issues, the
Agency seeks information on any groups or segments of the population
who, as a result of their location, cultural practices, or other
factors, may have atypical or disproportionately high and adverse human
health impacts or environmental effects from exposure to the pesticides
discussed in this document, compared to the general population.

II. What action is the Agency taking?

    EPA is announcing its receipt of several pesticide petitions filed
under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA),
21 U.S.C. 346a, requesting the establishment or modification of
regulations in 40 CFR part 180 for residues of pesticide chemicals in
or on various food commodities. The Agency is taking public comment on
the requests before responding to the petitioners. EPA is not proposing
any particular action at this time. EPA has determined that the
pesticide petitions described in this document contain the data or
information prescribed in FFDCA section 408(d)(2), 21 U.S.C.
346a(d)(2); however, EPA has not fully evaluated the sufficiency of the
submitted data at this time or whether the data support granting of the
pesticide petitions. After considering the public comments, EPA intends
to evaluate whether and what action may be warranted. Additional data
may be needed before EPA can make a final determination on these
pesticide petitions.
    Pursuant to 40 CFR 180.7(f), a summary of each of the petitions
that are the subject of this document, prepared by the petitioner, is
included in a docket EPA has created for each rulemaking. The docket
for each of the petitions is available at http://www.regulations.gov.
    As specified in FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA
is publishing notice of the petitions so that the public has an
opportunity to comment on these requests for the establishment or
modification of regulations for residues of pesticides in or on food
commodities. Further information on the petitions may be obtained
through the petition summaries referenced in this unit.
Amended Tolerances for Non-Inerts
    1. PP 6E8503. (EPA-HQ-OPP-2016-0600). BASF Corporation, 26 Davis
Drive, P.O. Box 13528, Research Triangle Park, NC 27709, requests to
amend the tolerance in 40 CFR 180.589 for residues of the fungicide,
boscalid, 3-pyridinecarboxamide,2-chloro-N-(4'-chloro[1,1'-biphenyl]-2-
yl) in or on Vegetable, legume, edible-podded, subgroup 6A from 1.6 ppm
to 5.0 ppm. Gas chromatography using mass spectrometry (GC/MS) is used
to measure and evaluate the chemical in dry and succulent beans and
peas. Contact: RD.
    2. PP 6E8484. (EPA-HQ-OPP-2016-0254). IR-4, Rutgers, The State
University of New Jersey, 500 College Road East, Suite 201 W.,
Princeton, NJ 08540, requests that upon establishing tolerances for
this petition under ``New Tolerances'' above, 40 CFR part 180.475 is
amended to remove existing tolerances for residues of the fungicide
difenoconazole, 1-[2-[2-chloro-4-(4- chlorophenoxy)phenyl]-4-methyl-
1,3-dioxolan-2-ylmethyl]-1H-1,2,4-triazole, including its metabolites
and degradates, to be determined by measuring only difenoconazole in or
on brassica, head and stem, subgroup 5A at 1.9 ppm, brassica, leafy
greens, subgroup 5B at 35 ppm; grape at 4.0 ppm; and turnip, greens at
35 ppm. Contact: RD.
    3. PP 6F8517. (EPA-HQ-OPP-2016-0639). Tessenderlo Kerley, Inc.,
2255 N. 44th St., Suite 300, Phoenix, AZ 85008, requests to amend the
tolerance in 40 CFR 180.415 for residues of the fungicide, aluminum
tris (O-ethylphosphonate), in or on Fruit, citrus, group 10 from 5.0
ppm to 9.0 ppm. Adequate enforcement methodology available in the
Pesticide Analytical Manual (PAM II, Method II) is used to measure and
evaluate the chemical in the above citrus group. Contact: RD.
New Tolerance Exemptions
    1. PP 6F8514. (EPA-HQ-OPP-2017-0185). FMC Corporation, FMC Tower at
Cira Centre South, 2929 Walnut St., Philadelphia, PA 19104, requests to
establish an exemption from the requirement of a tolerance in 40 CFR
part 180 for residues of the fungicide, plant regulator, and nematocide
Bacillus licheniformis strain FMCH001 in or on all food commodities.
The petitioner believes no analytical method is needed because an
analytical method for residues is not applicable. It is expected that,
when used as proposed, Bacillus licheniformis strain FMCH001 would not
result in residues that are of toxicological concern. Contact: BPPD.
    2. PP 6F8515. (EPA-HQ-OPP-2017-0186). FMC Corporation, FMC Tower at
Cira Centre South, 2929 Walnut St., Philadelphia, PA 19104, requests to
establish an exemption from the requirement of a tolerance in 40 CFR
part 180 for residues of the fungicide and plant regulator Bacillus
subtilis strain FMCH002 in or on all food commodities. The petitioner
believes no analytical method is needed because an analytical method
for residues is not applicable. It is expected that, when used as
proposed, Bacillus subtilis strain FMCH002 would not result in residues
that are of toxicological concern. Contact: BPPD.
New Tolerances for Non-Inerts
    1. PP 6E8484. (EPA-HQ-OPP-2016-0254). IR-4, Rutgers, The State
University of New Jersey, 500 College Road East, Suite 201 W.,
Princeton, NJ 08540, requests to establish tolerances in 40 CFR part
180.475 for residues of the fungicide difenoconazole, 1-[2-[2-chloro-4-
(4-chlorophenoxy)phenyl]-4- methyl-1,3-dioxolan-2-ylmethyl]-1H-1,2,4-
triazole, including its metabolites and degradates, to be determined by
measuring only difenoconazole in or on brassica, leafy greens, subgroup
4-16B at 35 ppm; cranberry at 0.6 ppm; fruit, small, vine climbing,
except fuzzy kiwifruit, subgroup 13-07F at 4.0 ppm; guava at 3.0 ppm;
kohlrabi at 2.0 ppm; papaya at 0.6 ppm; and vegetable, brassica, head
and stem, group 5-16 at 2.0 ppm. Available analytical methods for crops
include gas chromatography (GC) equipped with a nitrogen -phosphorous
detector; and LC/MS/MS; and for meat, milk, poultry or eggs, Syngenta's
method, AG544A, is used to measure and evaluate the chemical
difenoconazole. Contact: RD.
    2. PP 6F8499. (EPA-HQ-OPP-2016-0752). Syngenta Crop Protection,
LLC, P.O. Box 18300, Greensboro, NC 27419, requests to establish a
tolerance in 40

CFR part 180 for residues of the fungicide benzovindiflupyr in or on
Sugarcane, cane, at 0.3 parts per million (ppm). The GRM042.03A and
GRM042.04A for plant products are used to measure and evaluate the
chemical benzovindiflupyr. Contact: RD.
    3. PP 6F8522. (EPA-HQ-OPP-2016-0754). Nufarm Americas Inc., 4020
Aerial Center Parkway, Suite 101, Morrisville, NC 27545., requests to
establish a tolerance in 40 CFR part 180 for residues of the
bactericide/fungicide oxytetracycline in or on citrus, group 10-10, at
0.6 parts per million (ppm) and citrus, dried pulp, at 1.2 ppm. The LC/
MS/MS is used to measure and evaluate the chemical oxytetracycline,
utilizing turbo ion spray in the positive ionization mode. Contact: RD.
    4. PP 6F8542. (EPA-HQ-OPP-2017-0167). Syngenta Crop Protection,
LLC, P.O. Box 18300, Greensboro, NC 27419, requests to establish a
tolerance in 40 CFR part 180 for residues of the fungicide
benzovindiflupyr in or on grasses grown for seed, hay at 7 parts per
million (ppm); grasses grown for seed, straw at 6ppm and grasses grown
for seed, forage at .15 ppm. The GRM042.03A and GRM042.04A methods for
plant products are used to measure and evaluate the chemical
benzovindiflupyr. Contact: RD.

    Authority:  21 U.S.C. 346a.

    Dated: June 19, 2017.
Delores Barber,
Director, Information Technology and Resources Management Division,
Office of Pesticide Programs.
[FR Doc. 2017-15730 Filed 7-25-17; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 1 (Monday, January 3, 2011)]
[Notices]
[Pages 199-201]
[FR Doc No: 2010-32984]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63610; File No. SR-NYSEArca-2010-10]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change Relating to the Listing and Trading of
the ProShares VIX Short-Term Futures ETF and the ProShares VIX Mid-Term
Futures ETF

December 27, 2010.

I. Introduction

    On November 5, 2010, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to list and trade
shares (``Shares'') of the ProShares VIX Short-Term Futures ETF and the
ProShares VIX Mid-Term Futures ETF (``Funds'') of the ProShares Trust
II (``Trust'') under NYSE Arca Equities Rule 8.200, Commentary .02.

The proposed rule change was published for comment in the Federal
Register on November 22, 2010.\3\ The Commission received no comments
on the proposal. This order grants approval of the proposed rule
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 63317 (November 16,
2010), 75 FR 71158 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to list and trade the Shares of the Funds
under NYSE Arca Equities Rule 8.200, Commentary .02.\4\ The Funds will
seek to provide investment results (before fees and expenses) that
match the performance of a benchmark that seeks to offer exposure to
market volatility through publicly traded futures markets. The
benchmark for ProShares VIX Short-Term Futures ETF is the S&P 500 VIX
Short-Term Futures Index and the benchmark for ProShares VIX Mid-Term
Futures ETF is the S&P 500 VIX Mid-Term Futures Index (each, an
``Index,'' and, collectively, ``Indexes'').\5\ The Funds will invest in
futures contracts based on the Chicago Board Options Exchange
(``CBOE'') Volatility Index (``VIX'') to pursue their respective
investment objectives. Each Fund also may invest in cash or cash
equivalents such as U.S. Treasury securities or other high credit
quality short-term fixed-income or similar securities (including shares
of money market funds, bank deposits, bank money market accounts,
certain variable-rate demand notes, and repurchase agreements
collateralized by government securities) that may serve as collateral
for the futures contracts.
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    \4\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to
Trust Issued Receipts that invest in ``Financial Instruments.'' The
term ``Financial Instruments,'' as defined in Commentary .02(b)(4)
to NYSE Arca Equities Rule 8.200, means any combination of
investments, including cash; securities; options on securities and
indices; futures contracts; options on futures contracts; forward
contracts; equity caps, collars and floors; and swap agreements.
    \5\ Standard & Poor's Financial Services LLC is the index
sponsor with respect to the Indexes.
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    ProShare Capital Management LLC, a Maryland limited liability
company, serves as the Sponsor of the Trust and is a commodity pool
operator and commodity trading advisor.\6\ Brown Brothers Harriman &
Co. serves as the administrator (``Administrator''), custodian and
transfer agent of the Funds and their respective Shares. SEI
Investments Distribution Co. serves as distributor of the Shares.
Wilmington Trust Company, a Delaware banking corporation, is the sole
trustee of the Trust.
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    \6\ The Funds have filed a Registration Statement on Form S-3
under the Securities Act of 1933, dated November 5, 2010 (File No.
333-163511) (``Registration Statement'').
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    If a Fund is successful in meeting its objective, its value (before
fees and expenses) should gain approximately as much on a percentage
basis as the level of its corresponding Index when it rises.
Conversely, its value (before fees and expenses) should lose
approximately as much on a percentage basis as the level of its
corresponding Index when it declines. Each Fund will acquire exposure
through VIX futures contracts traded on the CBOE Futures Exchange
(``CFE'') (``VIX Futures Contracts''), such that each Fund has exposure
intended to approximate the benchmark at the time of the net asset
value (``NAV'') calculation.
    Each Fund will not be actively managed by traditional methods,
which typically involve effecting changes in the composition of a
portfolio on the basis of judgments relating to economic, financial,
and market considerations with a view toward obtaining positive results
under all market conditions. Rather, the Sponsor will seek to cause the
NAV to track the performance of an Index, even during periods in which
that benchmark is flat or moving in a manner which causes the NAV of a
Fund to decline.
    The Indexes act as a measure of volatility as reflected by the
price of certain VIX Futures Contracts (``Index Components''), with the
price of each VIX Futures Contract reflecting the market's expectation
of future volatility. Each Index seeks to reflect the returns that are
potentially available from holding an unleveraged long position in
certain VIX Futures Contracts. Unlike the Indexes, the VIX, which is
not a benchmark for either Fund, is calculated based on the prices of
put and call options on the S&P 500, which are traded on the CBOE.
    The S&P 500 VIX Short-Term Futures Index employs rules for
selecting the Index Components and a formula to calculate a level for
the Index from the prices of these components. Specifically, the Index
Components represent the prices of the two near-term VIX futures
months, replicating a position that rolls the nearest month VIX Futures
Contract to the next month VIX Futures Contract on a daily basis in
equal fractional amounts. This results in a constant weighted average
maturity of one month. The roll period begins on the Tuesday prior to
the monthly CFE VIX Futures Contracts settlement date and runs through
the Tuesday prior to the subsequent month's CFE VIX Futures Contract
settlement date.
    The S&P 500 VIX Mid-Term Futures Index also employs rules for
selecting the Index Components and a formula to calculate the level of
the Index from the prices of these components. Specifically, the Index
Components represent the prices for four contract months of VIX Futures
Contracts, representing a market-based estimation of constant maturity,
five-month forward implied VIX values. The S&P 500 VIX Mid-Term Futures
Index measures the return from a rolling long position in the fourth,
fifth, sixth, and seventh month VIX Futures Contracts, and rolls
continuously throughout each month while maintaining positions in the
fifth and sixth month contracts. This results in a constant weighted
average maturity of five months.
    Additional information regarding the Funds and the Shares, the
Indexes and calculation of Index values, investment strategies, risks,
creation and redemption procedures, fees, portfolio holdings and
disclosure policies, distributions and taxes, availability of
information, trading rules and halts, and surveillance procedures,
among other things, can be found in the Registration Statement and in
the Notice, as applicable.\7\
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    \7\ See Notice and Registration Statement, supra notes 3 and 6.
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III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \8\ and the rules and regulations thereunder applicable to a
national securities exchange.\9\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\10\
which requires, among other things, that the Exchange's rules be
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. The Commission notes that the Shares must comply with
the requirements of NYSE Arca Equities Rule 8.200, Commentary .02 to be
listed and traded on the Exchange.
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    \8\ 15 U.S.C. 78f.
    \9\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \10\ 17 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\11\ which sets forth Congress' finding that it is in the

public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities. Quotation and last-sale
information regarding the Shares will be disseminated through the
facilities of the Consolidated Tape Association. The level of each
Index will be published at least every 15 seconds both in real-time
from 9:30 a.m. to 4:15 p.m. Eastern Time and at the close of trading on
each Business Day \12\ by Bloomberg L.P. and Reuters.\13\ The closing
prices and settlement prices of the Index Components are available from
the Web sites of the CFE, automated quotation systems, published or
other public sources, and on-line information services such as
Bloomberg or Reuters. The specific contract specifications for the
component futures underlying the Indexes are also available on those
Web sites, as well as on other financial informational sources. The CFE
also provides delayed futures information on current and past trading
sessions and market news free of charge on its Web site. In addition,
the Funds will provide Web site disclosure of portfolio holdings daily
and will include, as applicable, the notional value (in U.S. dollars)
of VIX Futures Contracts and characteristics of such instruments and
cash equivalents, and amount of cash held in the portfolio of the
Funds. Further, NYSE Arca will calculate and disseminate every 15
seconds throughout the trading day an updated Indicative Optimized
Portfolio Value (``IOPV''), which is an indicator of the value of the
VIX Futures Contracts and cash and/or cash equivalents less liabilities
of a Fund.\14\ The NAV for the Funds' Shares will be calculated by the
Administrator once a day,\15\ and the Exchange will make available on
its Web site daily trading volume of the Shares, closing prices of the
Shares, and number of Shares outstanding.
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    \11\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \12\ A ``Business Day'' means any day other than a day when any
of the NYSE, the NYSE Arca, the CBOE, or the CFE or other exchange
material to the valuation or operation of the Funds, or the
calculation of the VIX, options contracts underlying the VIX, VIX
Futures Contracts or the Indexes is closed for regular trading.
    \13\ Complete real-time data for component futures underlying
the Indexes is available by subscription from Reuters and Bloomberg.
In addition, the Funds' Web site at http://www.proshares.com will
display the end of day closing Index levels and NAV.
    \14\ The IOPV is published on NYSE Arca's Web site and is
available through on-line information services such as Bloomberg and
Reuters.
    \15\ Each Fund's NAV will be calculated at 4:15 p.m. Eastern
Time.
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    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Web site disclosure of the
portfolio composition of the Funds will occur at the same time as the
disclosure by the Funds of the portfolio composition to Authorized
Participants so that all market participants are provided portfolio
composition information at the same time. In addition, if the Exchange
becomes aware that the NAV with respect to the Shares is not
disseminated to all market participants at the same time, the Exchange
will halt trading in the Shares until such time as the NAV is available
to all market participants. Further, the Exchange may halt trading
during the day in which an interruption to the dissemination to the
IOPV, the value of the Index, the VIX, or the value of the underlying
VIX Futures Contracts occurs. If such interruption persists past the
trading day in which it occurred, the Exchange will halt trading no
later than the beginning of the trading day following the
interruption.\16\ Trading in the Shares will be subject to NYSE Arca
Equities Rule 8.200, Commentary .02(e), which sets forth certain
restrictions on ETP Holders acting as registered Market Makers in Trust
Issued Receipts to facilitate surveillance. The Exchange represents
that Standard & Poor's Financial Services LLC, the index sponsor with
respect to the Indexes, has implemented procedures designed to prevent
the use and dissemination of material, non-public information regarding
the Indexes.
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    \16\ Trading may also be halted because of market conditions or
for reasons that, in the view of the Exchange, make trading in the
Shares inadvisable. These may include: (1) The extent to which
trading is not occurring in the underlying futures contracts; or (2)
whether other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present.
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    The Exchange has represented that the Shares are deemed to be
equity securities subject to the Exchange's existing rules governing
the trading of equity securities. In support of this proposal, the
Exchange has made representations, including:
    (1) The Funds will meet the initial and continued listing
requirements applicable to Trust Issued Receipts in NYSE Arca Equities
Rule 8.200 and Commentary .02 thereto.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) The Exchange's surveillance procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable Federal
securities laws.
    (4) Prior to the commencement of trading, the Exchange will inform
its ETP Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Information Bulletin will discuss the following: (a)
The risks involved in trading the Shares during the Opening and Late
Trading Sessions when an updated IOPV will not be calculated or
publicly disseminated; (b) the procedures for purchases and redemptions
of Shares in Creation Baskets and Redemption Baskets (and that Shares
are not individually redeemable); (c) NYSE Arca Equities Rule 9.2(a),
which imposes a duty of due diligence on its ETP Holders to learn the
essential facts relating to every customer prior to trading the Shares;
(d) the requirement that ETP Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (e) trading information.
    (5) The Shares must be in compliance with NYSE Arca Equities Rule
5.3 and Rule 10A-3 under the Act.\17\
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    \17\ 17 CFR 240.10A-3.
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    (6) A minimum of 100,000 Shares of each of the Funds will be
outstanding as of the start of trading on the Exchange.

This approval order is based on the Exchange's representations.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \18\ and the
rules and regulations thereunder applicable to a national securities
exchange.
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    \18\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\19\ that the proposed rule change (SR-NYSEArca-2010-101), be, and
it hereby is, approved.
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    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32984 Filed 12-30-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 153 (Friday, August 8, 2014)]
[Notices]
[Pages 46477-46479]
[FR Doc No: 2014-18750]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72754; File No. SR-ICEEU-2014-11]

Self-Regulatory Organizations; ICE Clear Europe Limited; Order
Granting Accelerated Approval of Proposed Rule Change Relating to EMIR
Requirements

August 4, 2014.

I. Introduction

    On July 7, 2014, ICE Clear Europe Limited (``ICE Clear Europe'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-ICEEU-2014-11 pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change was published for comment in
the Federal Register on July 15, 2014.\3\ The Commission did not
receive comments on the proposed rule change. For the reasons discussed
below, the Commission is granting approval of the proposed rule change
on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-72582 (July 10,
2014), 79 FR 41320 (July 15, 2014) (SR-ICEEU-2014-11) (This rule
filing is hereinafter referred to as the ``Procedures Submission'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICE Clear Europe has stated that the principal purpose of the
proposed rule change is to amend certain ICE Clear Europe procedural
rules (``Procedures'') in order to comply with requirements under the
European Market Infrastructure Regulation (including regulations and
implementing technical standards thereunder, ``EMIR'') \4\ that will
apply to ICE Clear Europe as an authorized central counterparty and to
further implement proposed changes to its Clearing Rules (the
``Clearing Rules'') relating to EMIR implementation and certain other
matters as proposed in rule filing SR-ICEEU-2014-09 (the ``Rule
Submission'').\5\
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    \4\ Regulation (EU) No 648/2012 of the European Parliament and
of the Council of 4 July 2012 on OTC derivatives, central
counterparties and trade repositories, as well as various
implementing regulations and technical standards.
    \5\ Securities Exchange Act Release No. 34-72540 (July 3, 2014),
79 FR 39429 (July 10, 2014) (SR-ICEEU-2014-09).

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

    As described in more detail in the Rule Submission, in order to
comply with EMIR, ICE Clear Europe is proposing changes to the
structure of customer accounts for cleared transactions. The amendments
to the Clearing Rules would establish two new types of individually
segregated accounts, Individually Segregated Margin-flow Co-mingled
Accounts and Individually Segregated Sponsored Accounts. The proposed
changes to the Clearing Rules would also establish multiple new types
of omnibus accounts, Segregated Customer Omnibus Accounts (separately
for each product: FX, F&O and CDS) and Segregated TTFCA Customer
Omnibus Accounts (separately for each product: FX, F&O and CDS) as well
as Omnibus Margin-flow Co-mingled Accounts. The amendments to the
Procedures described herein are intended to further implement these
changes to the Clearing Rules, as well as make various other
consolidating, conforming and clarifying changes and drafting
improvements to the existing Procedures.
    ICE Clear Europe proposes to make amendments to the following
Procedures: The Clearing Procedures, Finance Procedures, Membership
Procedures, Business Continuity Procedures, Complaint Resolution
Procedures, General Contract Terms, CDS Procedures, FX Procedures, OTC
FX Product Guide and Published Terms for FX Contracts, Auction Terms
for FX Default Auctions, Auction Terms for F&O Default Auctions and
Delivery Procedures. The CDS Operational Procedures are being
eliminated as they are no longer applicable. The proposed Procedure
amendments are described as follows.\6\
---------------------------------------------------------------------------

    \6\ The proposed rule change is described in further detail in
the Procedures Submission. See supra note 3.
---------------------------------------------------------------------------

    ICE Clear Europe proposes to make certain common changes to all
relevant sections of the Procedures. In each such section of the
Procedures, ICE Clear Europe would add provisions addressing governing
law, arbitration and submission to jurisdiction that are substantially
the same as those set forth in the Clearing Rules (specifically, Rules
117 and 1608). In addition, various references to Sponsored Principals
would be added throughout, as well as conforming changes to reflect
changes in defined terms in the Clearing Rules, such as the use of
``Buying Counterparty'' and ``Selling Counterparty''.
    ICE Clear Europe proposes revisions to its Clearing Procedures to
incorporate the additional categories of customer accounts and relevant
defined terms and other clarifications for margin for the relevant
product categories (F&O, CDS and FX). The proposed revisions also
include conforming changes, implementing changes and drafting
improvements related to the transfer and close out of customer
positions. In addition, the revisions would addresses certain matters
with respect to Customer-CM Collateral provided to Non-FCM/BD Clearing
Members, establish certain recordkeeping requirements for Clearing
Members with respect to Customers (including as to the identity and
default portability preferences thereof), and adopt certain additional
defined terms and procedures relating to position transfers made under
Rule 408(a)(i) and Part 12 of the Clearing Rules, as well as paragraph
6 of the Clearing Procedures.
    ICE Clear Europe proposes to revise the Finance Procedures to
incorporate the new account categories (and in particular Sponsored
Principals), accommodate the use of pledged collateral arrangements as
well as title transfer collateral, make certain revisions concerning
margin requirements for F&O and FX contracts, and make other conforming
and clarifying changes. The Finance Procedures would also be revised to
incorporate certain parameters for the FX guaranty fund and to allow
the Clearing House to allow different currencies to be used for the
guaranty fund contributions for any product category. In addition,
Revised Paragraph 15 of the Finance Procedures would specify additional
parameters for the Clearing House contributions to the three guaranty
funds, as described in further detail in the Procedures Submission.
    The Membership Procedures, which set out various aspects of the
clearing membership application process, would be modified to also
cover Sponsors and Sponsored Principals, in substantially the same
manner as for Clearing Members. Other proposed revisions include
various updates to defined terms and drafting clarifications as further
described in the Procedures Submission.
    ICE Clear Europe proposes to revise the CDS Procedures to implement
the Sponsored Principal model and make various updates to defined terms
(and conforming references to terms) and make drafting improvements for
clarity and conformity, as discussed in more detail in the Procedures
Submission. As noted in the Rule Submission, various membership
requirements in Paragraph 2 have been moved to Part 2 of the Clearing
Rules, and Paragraph 6, which addresses the Clearing House's
contributions to the CDS guaranty fund, has been removed and moved to
the Finance Procedures. Paragraph 13, which addresses certain aspects
of customer transactions, including transfer of customer positions, has
been moved to paragraph 6 of the Clearing Procedures (and generalized
to apply all product categories, not just CDS).
    Finally, ICE Clear Europe proposes to make clarifying, conforming
and implementing changes to a number of other Procedures. Specifically,
the FX Procedures would be revised to update various definitions,
conform to new defined terms and other provisions of the updated
Clearing Rules, incorporate the Sponsored Principal model, and make
various other conforming and clarifying revisions as discussed in more
detail in the Procedures Submission. The Auction Terms for F&O Default
Auctions would be revised to incorporate participation by Sponsored
Principals as well as a number of other conforming and clarifying
revisions to the auction and bidding process as further described in
the Procedures Submission. In addition, ICE Clear Europe proposes
various amendments to the Delivery Procedures. In many cases these
revisions do not strictly relate to EMIR implementation but reflect
other general updates and conforming changes. ICE Clear Europe also
proposes to make various non-substantive conforming changes and
drafting clarifications to the Business Continuity Procedures and
Complaint Resolution Procedures.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \7\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if the
Commission finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such self-regulatory organization. Section 17A(b)(3)(F)
of the Act \8\ requires, among other things, that the rules of a
clearing agency are designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, to
assure the safeguarding of securities

and funds which are in the custody or control of the clearing agency or
for which it is responsible and, in general, to protect investors and
the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2)(C).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that the proposed amendments to the Procedures
are consistent with the requirements of Section 17A of the Act \9\ and
the rules and regulations thereunder applicable to ICE Clear Europe. In
particular, the Commission believes that the proposed amendments to the
ICE Clear Europe Procedures, which are principally designed to further
implement proposed changes to its Clearing Rules as contained in the
Rule Submission, are designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, and to
assure the safeguarding of securities and funds which are in the
custody or control of the clearing agency or for which it is
responsible, consistent with Section 17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78q-1.
    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Section 19(b)(2)(C)(iii) of the Act \11\ allows the Commission to
approve a proposed rule change earlier than 30 days after the date of
publication of the notice of the proposed rule change in the Federal
Register where the Commission finds good cause for so doing and
publishes the reason for the finding. In its filing, ICE Clear Europe
requested that the Commission approve the proposed rule change on an
accelerated basis for good cause shown. ICE Clear Europe has
represented that the proposed Procedures changes are necessary to
further implement the rule changes contained in the Rule Submission in
order to comply with requirements under EMIR in connection with its
authorization as a central counterparty under EMIR. ICE Clear Europe
further notes that failure to have the amendments in effect, and to be
in compliance with the EMIR requirements, may adversely affect the
approval of its authorization application and therefore its ability to
do business as a recognised central counterparty. Accordingly, the
Commission finds that good cause exists to approve the proposed rule
change on an accelerated basis pursuant to Section 19(b)(2)(C)(iii) of
the Act.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2)(C)(iii).
    \12\ 15 U.S.C. 78s(b)(2)(C)(iii).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \13\ and the
rules and regulations thereunder.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-ICEEU-2014-11) be, and
hereby is, approved on an accelerated basis.\15\
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Kevin M. O'Neill,
Deputy Secretary.
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    \16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2014-18750 Filed 8-7-14; 8:45 am]
BILLING CODE 8011-01-P