[Federal Register: May 24, 2010 (Volume 75, Number 99)]
[Notices]
[Page 28825-28828]
[DOCID:fr24my10-88]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62120; File No. S7-04-09]

Order Granting Temporary Conditional Exemption for Nationally
Recognized Statistical Rating Organizations From Requirements of Rule
17g-5 Under the Securities Exchange Act of 1934 and Request for Comment

May 19, 2010.

I. Introduction

    The Securities and Exchange Commission (``Commission'') is
conditionally exempting, with respect to certain credit ratings and
until December 2, 2010, nationally recognized statistical rating
organizations (``NRSROs'') from requirements in Rule 17g-5(a)(3) \1\
under the Securities Exchange Act of 1934 (``Exchange Act'') discussed
below that have a compliance date of June 2, 2010.\2\ Starting on that
date, Rule 17g-5(a)(3) will apply when an issuer, sponsor, or
underwriter (each an ``arranger'') hires an NRSRO to determine an
initial credit rating for a security or money market instrument issued
by an asset pool or as part of any asset-backed or mortgage-backed
securities transaction (a ``structured finance product'').\3\ However,
under this order, an NRSRO is not required to comply with Rule 17g-
5(a)(3) until December 2, 2010 with respect to credit ratings where:
(1) The issuer of the structured finance product is a non-U.S. person;
and (2) the NRSRO has a reasonable basis to conclude that the
structured finance product will be offered and sold upon issuance, and
that any arranger linked to the structured finance product will effect
transactions of the structured finance product after issuance, only in
transactions that occur outside the U.S. The Commission also is
soliciting comment regarding the application of Rule 17g-5(a)(3) to
transactions outside of the U.S.
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    \1\ 17 CFR 240.17g-5(a)(3).
    \2\ See Securities Exchange Act Release No. 61050 (Nov. 23,
2009), 74 FR 63832 (Dec. 4, 2009) (``Adopting Release'').
    \3\ In the Adopting Release, the Commission stated that it
intended the term ``security or money market instrument issued by an
asset pool or as part of any asset-backed or mortgage-backed
securities transaction,'' which mirrors, in part, the text of
Section 15E(i)(1)(B) of the Exchange Act (15 U.S.C. 78o-7(i)(1)(B)),
to cover the full range of structured finance products, including,
but not limited to, securities collateralized by static and actively
managed pools of loans or receivables (e.g., commercial and
residential mortgages, corporate loans, auto loans, education loans,
credit card receivables, and leases), collateralized debt
obligations, collateralized loan obligations, collateralized
mortgage obligations, structured investment vehicles, synthetic
collateralized debt obligations that reference debt securities or
indexes, and hybrid collateralized debt obligations.
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II. Background

    Rule 17g-5 identifies, in paragraphs (b) and (c) of the rule, a
series of conflicts of interest arising from the business of
determining credit ratings.\4\ Paragraph (a) of Rule 17g-5 \5\
prohibits an NRSRO from issuing or maintaining a credit rating if it is
subject to the conflicts of interest identified in paragraph (b) of
Rule 17g-5 unless the NRSRO has taken the steps prescribed in paragraph
(a)(1) (i.e., disclosed the type of conflict of interest in Exhibit 6
to Form NRSRO in accordance with Section 15E(a)(1)(B)(vi) of the
Exchange Act \6\ and Rule 17g-1) \7\ and paragraph (a)(2) (i.e.,
established and is maintaining and enforcing written policies and
procedures to address and manage conflicts of interest in accordance
with Section 15E(h) of the Exchange Act).\8\ Paragraph (c) of Rule 17g-
5 specifically prohibits outright seven types of conflicts of interest.
Consequently, an NRSRO is prohibited from issuing or maintaining a
credit rating when subject to these conflict regardless of whether it
had disclosed them and established procedures reasonably designed to
address them.
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    \4\ 17 CFR 240.17g-5(b) and (c).
    \5\ 17 CFR 240.17g-5(a).
    \6\ 15 U.S.C. 78o-7(a)(1)(B)(vi).
    \7\ 17 CFR 240.17g-1.
    \8\ 15 U.S.C. 78o-7(h).
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    In December 2009, the Commission adopted subparagraph (a)(3) of
Rule 17g-5, which added new provisions to Rule 17g-5. These provisions
require an NRSRO that is hired by an arranger to determine an initial
credit rating for a structured finance product to take certain steps
designed to allow an NRSRO that is not hired by the arranger to
nonetheless determine an initial credit rating--and subsequently
monitor that credit rating--for the structured finance product.\9\ In
particular, under Rule 17g-5(a)(3), an NRSRO is prohibited from issuing
or maintaining a credit rating when it is subject to the conflict of
interest identified in paragraph (b)(9) of Rule 17g-5 (i.e., being
hired by an arranger to determine a credit rating for a structured
finance

product) \10\ unless it has taken the steps prescribed in paragraphs
(a)(1) and (2) of Rule 17g-5 (discussed above) and the steps prescribed
in new paragraph (a)(3) of Rule 17g-5.\11\ Rule 17g-5(a)(3), among
other things, requires that the NRSRO must:
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    \9\ See 17 CFR 240.17g-5(a)(3); see also Adopting Release at
63844-45.
    \10\ Paragraph (b)(9) Rule 17g-5 identifies the following
conflict of interest: Issuing or maintaining a credit rating for a
security or money market instrument issued by an asset pool or as
part of any asset-backed or mortgage-backed securities transaction
that was paid for by the issuer, sponsor, or underwriter of the
security or money market instrument. 17 CFR 240.17g-5(b)(9).
    \11\ 17 CFR 240.17g-5(a)(3).
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     Maintain on a password-protected Internet Web site a list
of each structured finance product for which it currently is in the
process of determining an initial credit rating in chronological order
and identifying the type of structured finance product, the name of the
issuer, the date the rating process was initiated, and the Internet Web
site address where the arranger represents the information provided to
the hired NRSRO can be accessed by other NRSROs;
     Provide free and unlimited access to such password-
protected Internet Web site during the applicable calendar year to any
NRSRO that provides it with a copy of the certification described in
paragraph (e) of Rule 17g-5 that covers that calendar year; \12\ and
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    \12\ Paragraph (e) of Rule 17g-5 requires that an NRSRO seeking
to access the hired NRSRO's Internet web site during the applicable
calendar year must furnish the Commission with the following
certification:
    The undersigned hereby certifies that it will access the
Internet Web sites described in 17 CFR 240.17g-5(a)(3) solely for
the purpose of determining or monitoring credit ratings. Further,
the undersigned certifies that it will keep the information it
accesses pursuant to 17 CFR 240.17g-5(a)(3) confidential and treat
it as material nonpublic information subject to its written policies
and procedures established, maintained, and enforced pursuant to
section 15E(g)(1) of the Act (15 U.S.C. 78o-7(g)(1)) and 17 CFR
240.17g-4. Further, the undersigned certifies that it will determine
and maintain credit ratings for at least 10% of the issued
securities and money market instruments for which it accesses
information pursuant to 17 CFR 240.17g-5(a)(3)(iii), if it accesses
such information for 10 or more issued securities or money market
instruments in the calendar year covered by the certification.
Further, the undersigned certifies one of the following as
applicable: (1) In the most recent calendar year during which it
accessed information pursuant to Sec.  17 CFR 240.17g-5(a)(3), the
undersigned accessed information for [Insert Number] issued
securities and money market instruments through Internet Web sites
described in 17 CFR 240.17g-5(a)(3) and determined and maintained
credit ratings for [Insert Number] of such securities and money
market instruments; or (2) The undersigned previously has not
accessed information pursuant to 17 CFR 240.17g-5(a)(3) 10 or more
times during the most recently ended calendar year.
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     Obtain from the arranger a written representation that can
reasonably be relied upon that the arranger will, among other things,
disclose on a password-protected Internet Web site the information it
provides to the hired NRSRO to determine the initial credit rating (and
monitor that credit rating) and provide access to the web site to an
NRSRO that provides it with a copy of the certification described in
paragraph (e) Rule 17g-5.\13\
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    \13\ In particular, under paragraph (a)(3)(iii) of Rule 17g-5,
the arranger must represent to the hired NRSRO that it will:
    (1) Maintain the information described in paragraphs
(a)(3)(iii)(C) and (a)(3)(iii)(D) of Rule 17g-5 available at an
identified password-protected Internet Web site that presents the
information in a manner indicating which information currently
should be relied on to determine or monitor the credit rating;
    (2) Provide access to such password-protected Internet Web site
during the applicable calendar year to any NRSRO that provides it
with a copy of the certification described in paragraph (e) of Rule
17g-5 that covers that calendar year, provided that such
certification indicates that the nationally recognized statistical
rating organization providing the certification either: (i)
Determined and maintained credit ratings for at least 10% of the
issued securities and money market instruments for which it accessed
information pursuant to paragraph (a)(3)(iii) of Rule 17g-5 in the
calendar year prior to the year covered by the certification, if it
accessed such information for 10 or more issued securities or money
market instruments; or (ii) has not accessed information pursuant to
paragraph (a)(3) of Rule 17g-5 10 or more times during the most
recently ended calendar year.
    (3) Post on such password-protected Internet Web site all
information the arranger provides to the NRSRO, or contracts with a
third party to provide to the NRSRO, for the purpose of determining
the initial credit rating for the security or money market
instrument, including information about the characteristics of the
assets underlying or referenced by the security or money market
instrument, and the legal structure of the security or money market
instrument, at the same time such information is provided to the
NRSRO; and
    (4) Post on such password-protected Internet Web site all
information the arranger provides to the NRSRO, or contracts with a
third party to provide to the NRSRO, for the purpose of undertaking
credit rating surveillance on the security or money market
instrument, including information about the characteristics and
performance of the assets underlying or referenced by the security
or money market instrument at the same time such information is
provided to the NRSRO.
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    The Commission stated in the Adopting Release that subparagraph
Rule 17g-5(a)(3) is designed to address conflicts of interest and
improve the quality of credit ratings for structured finance products
by making it possible for more NRSROs to rate structured finance
products.\14\ For example, the Commission noted that when an NRSRO is
hired to rate a structured finance product, some of the information it
relies on to determine the rating is generally not made public.\15\ As
a result, structured finance products frequently are issued with
ratings from only the one or two NRSROs that have been hired by the
arranger, with the attendant conflict of interest that creates.\16\
Consequently, the Commission stated that subparagraph Rule 17g-5(a)(3)
was designed to increase the number of credit ratings extant for a
given structured finance product and, in particular, to promote the
issuance of credit ratings by NRSROs that are not hired by the
arranger.\17\ The Commission's goal in adopting the rule was to provide
users of credit ratings with more views on the creditworthiness of the
structured finance product.\18\ In addition, the Commission stated that
Rule 17g-5(a)(3) was designed to reduce the ability of arrangers to
obtain better than warranted ratings by exerting influence over NRSROs
hired to determine credit ratings for structured finance products.\19\
Specifically, by opening up the rating process to more NRSROs, the
Commission intended to make it easier for the hired NRSRO to resist
such pressure by increasing the likelihood that any steps taken to
inappropriately favor the arranger could be exposed to the market
through the credit ratings issued by other NRSROs.\20\
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    \14\ Adopting Release at 63844.
    \15\ Id.
    \16\ Id.
    \17\ Id.
    \18\ Id.
    \19\ Id.
    \20\ Id.
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    Rule 17g-5(a)(3) became effective on February 2, 2010, and the
compliance date for Rule 17g-5(a)(3) is June 2, 2010.

III. Basis for Relief

    As discussed above, Rule 17g-5(a)(3) requires the hired NRSRO to
obtain certain representations from an arranger in order to determine
an initial credit rating for a structured finance product. Staff from
the U.K. Financial Services Authority (``U.K. FSA''), the Japan
Financial Services Authority (``Japan FSA''), Ontario Securities
Commission (``OSC'') and the German Federal Financial Services
Authority (``BaFin'') (collectively, the ``Foreign Securities
Regulators''), as well as a number of market participants,\21\ have
notified the

Commission staff that arrangers of structured finance products located
outside the U.S. generally were not aware that they would be required
to make the representations prescribed in Rule 17g-5 in order to obtain
credit ratings from NRSROs. These Foreign Securities Regulators and
market participants have informed the Commission staff that many
foreign arrangers are not prepared to make and adhere to the prescribed
representations beginning on June 2, 2010 in terms of establishing the
requisite Internet Web sites, implementing other systems requirements
necessary to make the disclosures and analyzing the application of
local laws to their adherence to the disclosure requirements.
Consequently, they have expressed concern that local securitization
markets may be disrupted because the arrangers would not able to make
and adhere to the representations necessary to obtain credit ratings
from NRSROs for new issuances of structured finance products. Foreign
Securities Regulators and European issuers have also expressed concern
about the potential conflict between the requirements of Rule 17g-
5(a)(3) and European Union (``EU'') data protection and bank secrecy
law and EU rating regulation, in addition to explaining that additional
time is needed to identify other potential conflicts with EU and
national laws.\22\
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    \21\ See letter dated March 30, 2010 from Richard Watson,
Managing Director and Chief Operating Officer, Association for
Financial Markets in Europe/European Securitsation Forum (AFME/ESF);
letter dated April 30, 2010 from Christopher Killian, Vice
President, Securitization Group of the Securities Industry and
Financial Markets Association (SIFMA); letter dated April 30, 2010
from Neal Sullivan, Bingham McCutchen LLP on behalf of Rating and
Investment Information, Inc.; letter dated May 3, 2010 from Tom
Deutsch, Executive Director, American Securitization Forum; letter
dated May 5, 2010 from Richard Watson, Managing Director and Chief
Operating Officer, AFME/ESF; and letter dated May 12, 2010 from
Guido Ravoet, European Banking Federation (``EBF Letter''). These
letters, as well as other comments received by Commission staff in
connection with subparagraph (a)(3) of Rule 17g-5 are available on
the Commission's Internet Web site, located at http://www.sec.gov/
comments/s7-04-09/s70409.shtml and for Web site viewing and printing
in the Commission's Public Reference Room in its Washington, DC
headquarters.
    \22\ See, e.g., EBF Letter.
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    In the Adopting Release, the Commission noted that it was providing
a delayed compliance date--180 days after publication of certain rule
amendments, including Rule 17g-5(a)(3), in the Federal Register--to
allow NRSROs sufficient time to implement the new requirements.\23\
Despite this delayed compliance date, overseas arrangers and market
participants are not ready to comply with Rule 17g-5(a)(3), and Foreign
Securities Regulators have expressed their respective belief that,
absent relief, these arrangers and market participants will be unable
to comply with Rule 17g-5(a)(3) with the result that overseas
securitization markets may be disrupted. Section 36 of the Exchange Act
authorizes the Commission to exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions, from any provision of the Exchange Act or any rule
thereunder to the extent that such exemption is necessary or
appropriate in the public interest, and is consistent with the
protection of investors. Given the risk of serious disruptions to local
securitization markets that have been described by Foreign Securities
Regulators, the Commission believes that it is in the public interest,
and consistent with the protection of investors, to delay the
application of Rule 17g-5(a)(3) to certain overseas transactions and
entities. Accordingly, the Commission is conditionally exempting, with
respect to certain credit ratings and until December 2, 2010, NRSROs
from requirements in Rule 17g-5(a)(3) \24\ with respect to certain
overseas transactions that are more fully described below.
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    \23\ See Adopting Release at 63834.
    \24\ 17 CFR 240.17g-5(a)(3).
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IV. Description of the Conditional Temporary Exemption

    The Commission is conditionally exempting NRSROs from Rule 17g-
5(a)(3) until December 2, 2010 with respect to credit ratings where:
(1) The issuer of the structured finance product is a non-U.S. person;
and (2) the NRSRO has a reasonable basis to conclude that the
structured finance product will be offered and sold upon issuance, and
that any arranger linked to the structured finance product will effect
transactions in the structured finance product after issuance, only in
transactions that occur outside the U.S. These conditions are designed
to confine the exemption's application to credit ratings of structured
finance products issued in, and linked to, financial markets outside
the U.S.
    The Commission notes that this exemption only applies to
subparagraph (a)(3) of Rule 17g-5. It does not cover any other
requirements in Rule 17g-5. Consequently, if an NRSRO determines a
credit rating for a structured finance product that is exempt from Rule
17g-5(a)(3), the NRSRO remains subject to all the other prohibitions in
Rule 17g-5.

A. The Issuer Must Be a Non-U.S. Person

    The first condition of the exemption is that the issuer of the
structured finance product must be a non-U.S. person. The Commission
understands that preparations for compliance with Rule 17g-5(a)(3) are
lacking with respect to overseas issuers. This condition--that the
issuer be a non-U.S. person--is designed to provide the necessary
relief for overseas issuers while circumscribing the relief to the
scope of the problem that has been described to the Commission staff so
that Rule 17g-5(a)(3) may go into effect to the extent possible.
Further, the requirement is designed to suit the nature of the
structured finance issuers. Many structured finance product issuers are
bankruptcy remote special purpose vehicles. As such, they are primarily
legal constructions as compared with operating companies that have
employees, principal places of business, and physical locations.
Consequently, rather than impose a condition that the issuer be located
outside the U.S., the Commission is establishing a condition that the
issuer be a non-U.S. person. To this end, and for the purposes of this
order, the Commission intends a ``U.S. person'' to have the same
definition as under Regulation S under the Securities Act.\25\
Consequently, to satisfy this exemption, the NRSRO must be determining
a credit rating for a structured finance product issued by a person
that is not a U.S. person.
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    \25\ 17 CFR 230.902(k).
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B. Transactions Must Be Outside the U.S.

    The second condition of the exemption is that the NRSRO has a
reasonable basis to conclude that the structured finance product will
be offered and sold upon issuance, and that any arranger linked to the
structured finance product will effect transactions of the structured
finance product after issuance, only in transactions that occur outside
the U.S. The Commission is confining the relief to only those
transactions that occur outside the U.S. because it understands that it
is with respect to overseas transactions that compliance preparations
are lacking. Thus, circumscribing the relief to only those transactions
that occur outside the U.S. will provide the necessary relief but still
allow Rule 17g-5(a)(3) to come into effect where there are no such
problems. An example of a transaction that occurs outside the U.S.
would be a transaction that complies with the applicable safe harbor
under Rules 903 and 904 of Regulation S.\26\
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    \26\ 17 CFR. 230.903; 17 CFR 230.904.
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    The question of whether an NRSRO has a ``reasonable basis'' to
conclude that the structured finance product will be offered and sold
upon issuance, and than any arranger linked to the structured finance
product will effect transactions of the structured finance product
after issuance, in transactions that occur outside the U.S. will depend
on the facts and circumstances of a given situation. In order to have a
reasonable basis to make these conclusions, the NRSRO should discuss
with any arranger linked to the

structured finance product (i.e., the sponsor, underwriter, and issuer)
how they intend to market and sell the structured finance product and
how they intend to engage in any secondary market activities (i.e., re-
sales) of the structured finance product. An NRSRO may choose to obtain
from the arranger a representation upon which the NRSRO can reasonably
rely that sales of the structured finance product will meet this
condition. Factors relevant to the analysis of whether such reliance
would be reasonable would include, but not be limited to: (1) Ongoing
or prior failures by the arranger to adhere to its representations; or
(2) a pattern of conduct by the arranger where it fails to promptly
correct breaches of its representations.

V. Request for Comment

    The Commission notes that it intends to monitor the use of this
temporary exemption to evaluate whether it is being used for
transactions that meet the above-described conditions. If the
Commission discovers that this temporary exemption is being used
otherwise, it will consider whether further action is appropriate,
including whether to revise or revoke the exemption. In this
connection, the Commission requests comment on the following:
     With respect to foreign regulators, regulations, and laws,
what specific conflicts, if any, will arise from the application of
Rule 17g-5(a)(3)?
     Do any NRSROs, or credit rating agencies considering
applying for registration as an NRSRO, intend to use information
required to be provided on password-protected Internet Web sites by
Rule 17g-5(a)(3) to determine and monitor credit ratings with respect
to credit ratings that are being exempted from the requirements of Rule
17g-5(a)(3)? NRSROs or credit rating agencies that intend to use such
information to determine and monitor credit ratings with respect to
credit ratings that are being exempted are asked to provide specific
details on when they expect to be ready to determine and monitor such
credit ratings.
     What are the different types of structured finance and
similar products used outside the U.S.? What factors should determine
whether an instrument sold entirely or primarily outside of the U.S. is
a structured finance product?
     What actions are NRSROs taking to prepare to comply with
Rule 17g-5(a)(3)'s application to credit ratings that are being
exempted by this order? What specific costs--compliance, operational,
and any others--will be associated with that compliance, including
costs to arrangers?
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/exorders.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number S7-04-09 on the subject line; or
     Use the Federal eRulemaking Portal (http://
www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

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

All submissions should refer to File Number S7-04-09. This file number
should be included on the subject line if e-mail is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/exorders.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F St., NE., Washington, DC
20549 on official business days between the hours of 10 a.m. and 3 p.m.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly.

VI. Conclusion

    For the foregoing reasons, the Commission believes it would be
necessary or appropriate in the public interest and consistent with the
protection of investors to grant a temporary exemption from the
requirements in Rule 17g-5(a)(3) with respect to certain credit
ratings.
    Accordingly, it is hereby ordered, pursuant to Section 36 of the
Exchange Act, that a nationally recognized statistical rating
organization is exempt until December 2, 2010 from the requirements in
Rule 17g-5(a)(3) (17 CFR 240.17g-5(a)(3)) for credit ratings where:
    (1) The issuer of the security or money market instrument is not a
U.S. person (as defined under Securities Act Rule 902(k)); and
    (2) The nationally recognized statistical rating organization has a
reasonable basis to conclude that the structured finance product will
be offered and sold upon issuance, and that any arranger linked to the
structured finance product will effect transactions of the structured
finance product after issuance, only in transactions that occur outside
the U.S.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-12373 Filed 5-21-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Notices]
[Pages 29194-29195]
[FR Doc No: 2019-13238]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. IC19-19-000]

Commission Information Collection Activities (FERC-542); Comment
Request

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of information collection and request for comments.

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SUMMARY: In compliance with the requirements of the Paperwork Reduction
Act of 1995, the Federal Energy Regulatory Commission (Commission or
FERC) is submitting its information collection FERC-542 (Pipeline
Rates: Rate Tracking) to the Office of Management and Budget (OMB) for
review of the information collection requirements. Any interested
person may file comments directly with OMB and should address a copy of
those comments to the Commission as explained below. The Commission
previously published a Notice in the Federal Register (4/10/2019)
requesting public comments. The Commission received no public comments
and is making this notation in its submittal to OMB.

DATES: Comments on the collection of information are due July 22, 2019.

ADDRESSES: Comments filed with OMB, identified by the OMB Control No.
1902-0070 (FERC-542), should be sent via email to the Office of
Information and Regulatory Affairs<EMAIL_ADDRESS>Attention:
Federal Energy Regulatory Commission Desk Officer.
    A copy of the comments should also be sent to the Commission, in
Docket No. IC19-19-000, by either of the following methods:
     eFiling at Commission's website: http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery/Courier: Federal Energy Regulatory
Commission,

Secretary of the Commission, 888 First Street NE, Washington, DC 20426.
    Instructions: All submissions must be formatted and filed in
accordance with submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance contact FERC Online Support
by email at<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER>
(toll-free), or<PHONE_NUMBER> for TTY.
    Docket: Users interested in receiving automatic notification of
activity in this docket or in viewing/downloading comments and
issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

FOR FURTHER INFORMATION CONTACT: Ellen Brown may be reached by email at
<EMAIL_ADDRESS>telephone at<PHONE_NUMBER>, and fax at (202)
273-0873.

SUPPLEMENTARY INFORMATION:
    Title: FERC-542, Gas Pipelines Rates: Rate Tracking.
    OMB Control No.: 1902-0070.
    Type of Request: Three-year extension of the FERC-542 information
collection requirements with no changes to the current reporting
requirements.
    Abstract: The information collected by FERC-542 is used by the
Commission to implement the statutory provisions of Title IV of the
Natural Gas Policy Act (NGPA), 15 U.S.C. 3301-3432, and sections 4, 5,
and 16 of the Natural Gas Act (NGA) (Pub. L.75-688) (15 U.S.C. 717-
717w). These statutes allow the Commission to collect natural gas
transmission cost information from interstate natural gas pipelines for
the purpose of verifying that these costs, which are passed on to
customers, are just and reasonable.
    Natural gas pipelines are required by the Commission to track their
transportation costs to allow for the Commission's review and, where
appropriate, approve the pass-through of these costs to pipeline
customers. FERC-542 accounts for costs involving: (1) Research,
development, and deployment expenditures; (2) annual charge
adjustments; and (3) periodic rate adjustments.
    FERC-542 filings may be submitted at any time or on a regularly
scheduled basis in accordance with the pipeline company's tariff.
Filings may be either: (1) Accepted; (2) suspended and set for hearing;
(3) minimal suspension; or (4) suspended for further review, such as
technical conference or some other type of Commission action.
    The Commission implements these filing requirements in the Code of
Federal Regulations (CFR) under 18 CFR part 154, 154.107, 154.4, 154.7,
154.201, and 154.401-154.403.
    Type of Respondents: Jurisdictional Natural Gas Pipelines.
    Estimate of Annual Burden: \1\ The Commission estimates the total
burden and cost \2\ for this information collection as follows:
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    \1\ ``Burden'' is the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. For further
explanation of what is included in the information collection
burden, refer to Title 5 Code of Federal Regulations 1320.3.
    \2\ FERC staff estimates that industry costs for salary plus
benefits are similar to Commission costs. The cost figure is the
FY2018 FERC average annual salary plus benefits ($164,820/year or
$79/hour).

                                                      FERC-542 (Gas Pipeline Rates: Rate Tracking)
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                                                 Annual  number
                                    Number of     of  responses   Total number     Average burden  hours &    Total annual burden  hours   Cost ($) per
      FERC data collection         respondents         per        of responses        cost  per response       & total annual  cost ($)     respondent
                                                   respondent                                                          (rounded)             (rounded)
                                            (1)             (2)     (1) * (2) =  (4)........................  (3) * (4) = (5)...........       (5) / (1)
                                                                            (3)
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FERC-542.......................              90               2             180  2 hrs; $158................  360 hrs; $28,440..........            $316
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    Total......................  ..............  ..............  ..............  ...........................  360 hrs; $28,440..........  ..............
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    Comments: Comments are invited on: (1) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden and
cost of the collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility and clarity of the information collection; and (4) ways to
minimize the burden of the collection of information on those who are
to respond, including the use of automated collection techniques or
other forms of information technology.

    Dated: June 13, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2019-13238 Filed 6-20-19; 8:45 am]
BILLING CODE 6717-01-P