ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2009-0311; FRL-      ]

Approval and Promulgation of Air Quality Implementation Plans;

Pennsylvania; Revised Motor Vehicle Emission Budgets for

the Scranton/Wilkes-Barre 8-Hour Ozone Maintenance Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

SUMMARY: EPA is taking direct final action to approve a State
Implementation Plan (SIP) revision submitted by the Commonwealth of
Pennsylvania.  The revision amends the 8-hour ozone maintenance plan for
the Scranton/Wilkes-Barre Area 8-Hour Ozone Maintenance Area (the Area).
 This revision amends the maintenance plan’s 2009 and 2018 motor
vehicle emissions budgets (MVEBs) by unequally dividing the existing
approved MVEBs which covers the entire maintenance area into three
sub-regional MVEBs, one set of MVEBs for each county comprising the
area.  The revised plan continues to demonstrate maintenance of the
8-hour national ambient air quality standard (NAAQS) for ozone.  EPA is
approving this SIP revision to the Pennsylvania maintenance plan for the
Scranton/Wilkes-Barre Area in accordance with the requirements of the
Clean Air Act (CAA).

DATES:  This rule is effective on [Insert date 60 days after publication
in the Federal Register] without further notice, unless EPA receives
adverse written comment by [Insert date 30 days after publication in the
Federal Register].  If EPA receives such comments, it will publish a
timely withdrawal of the direct final rule in the Federal Register and
inform the public that the rule will not take effect.

ADDRESSES:  Submit your comments, identified by Docket ID Number
EPA-R03-OAR-2009-0311 by one of the following methods:

     A.    www.regulations.gov.  Follow the on-line instructions for
submitting comments.

     B.    E-mail<EMAIL_ADDRESS>
     C.    Mail:   EPA-R03-OAR-2009-0311, Carol Febbo, Chief, Energy,
Radiation and Indoor Environment Branch, Mailcode 3AP23, U.S.
Environmental Protection Agency, Region III, 1650 Arch Street,
Philadelphia, Pennsylvania 19103.

     D.   Hand Delivery: At the previously-listed EPA Region III
address.  Such deliveries are only accepted during the Docket’s normal
hours of operation, and special arrangements should be made for
deliveries of boxed information.

Instructions:  Direct your comments to Docket ID No.
EPA-R03-OAR-2009-0311.  EPA's policy is that all comments received will
be included in the public docket without change, and may be made
available online at www.regulations.gov, including any personal
information provided, unless the comment includes information claimed to
be Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute.  Do not submit information that you
consider to be CBI or otherwise protected through www.regulations.gov or
e-mail.  The www.regulations.gov website is an anonymous access system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment.  If you send an
e-mail comment directly to EPA without going through
www.regulations.gov, your e-mail address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet.  If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit.  If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment.  Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses.

Docket:  All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute.  Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form.  Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy during normal business hours at the Air Protection
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch
Street, Philadelphia, Pennsylvania 19103.  Copies of the State submittal
are available at the Pennsylvania Department of Environmental
Protection, Bureau of Air Quality, P.O. Box 8468, 400 Market Street,
Harrisburg, Pennsylvania .

FOR FURTHER INFORMATION CONTACT:  Martin Kotsch,<PHONE_NUMBER>, or by
e-mail at<EMAIL_ADDRESS>

SUPPLEMENTARY INFORMATION:  Throughout this document whenever ``we'',

``us'', or ``our'' is used, we mean EPA.

Table of Contents

I. Background

II. Summary of Pennsylvania's SIP Revision and EPA's Review

III. Final Action

IV. Statutory and Executive Order Reviews

I. Background

On November 11, 2007 (72 FR 64948) EPA redesignated the
Scranton/Wilkes-Barre area of Pennsylvania to attainment for the 8-hour
ozone NAAQS.  For this area, the redesignation included approval of an
8-hour ozone maintenance plan, which identifies on-road MVEBs for
Volatile Organic Compounds (VOCs) and Nitrous Oxides (NOX), which are
ozone precursors, which are then used for transportation planning and
conformity purposes.  There are three separate metropolitan planning
organizations (MPOs) in this maintenance area - one for Lackawana and
Luzerne Counties, one for Monroe County and one for Wyoming County, with
individual responsibility for doing transportation conformity within
their respective planning boundaries within the Area.  Pennsylvania has
unequally divided the existing MVEBs and created sub-regional MVEBs for
each MPO to better accommodate the transportation planning and
conformity processes within the Area.

II. Summary of Pennsylvania's SIP Revision and EPA's Review

On April 21, 2008, the State of Pennsylvania submitted to EPA a formal
revision to its State Implementation Plan (SIP).  The SIP revision
proposes new MVEBs to reflect the reallocation of the existing overall
MVEBS for the maintenance area.  By reallocating the MVEBs, the
Pennsylvania Department of Environmental Protection (PADEP) is ensuring
that transportation conformity can be demonstrated in the
Scranton/Wilkes-Barre area.  The April 21, 2008 submittal still ensures
maintenance of the NAAQS for ozone for the Scranton/Wilkes-Barre area.

The following table lists the previously approved MVEBs and the proposed
reallocation of the MVEBs into sub-regional budgets for the
Scranton/Wilkes-Barre area.

Scranton/Wilkes-Barre Area Reallocation of the MVEBs into Sub-regional
Budgets

Current MVEBs in the Approved Maintenance Plan – All Counties

(Tons/Day)

2004 Base Year         2009 Projection     2018 Projection

       VOC                 31.6                              25.2
               16.9

       NOx                 66.1                              48.3
               23.7

Proposed MVEBs in the Revised Maintenance Plan

(Tons/Day) 1/

                              2009 Budget           2018 Budget

  Lackawana-Luzerne Counties

VOC                              17.99                       11.8

NOx                              34.58                        16.7

Monroe County

VOC                              6.19                        4.64

NOx                             12.16                        6.36

Wyoming County

VOC                              0.99                        0.54

NOx                             1.54                        0.68

1/  Due to rounding, some of the new reallocated budgets, if combined,
are insignificantly different then the previously approved mobile
budgets for the entire area. This slight difference will still ensure
maintenance of the 8-hour ozone attainment as the combined MVEBs  are
still lower then the attainment year budgets.

EPA is approving the 2009 and 2018 MVEBs for VOCs and NOX emissions
listed above in Table 1 as the new MVEBs for transportation conformity
planning.

III. Final Action

EPA is approving Pennsylvania's April 21, 2008 SIP revision submittal
which amends the 8-hour ozone maintenance plans for the Scranton/Wilkes
Barre area.  This revision unequally divides the previously approved
2009 and 2018 MVEBs to create sub-regional MVEBs for the two counties
comprising the area.  EPA is approving this SIP revision because the
April 21, 2008 submittal continues to demonstrate maintenance of the
8-hour ozone NAAQS with the aggregated sub-regional MVEBs.  EPA is
publishing this rule without prior proposal because the Agency views
this as a noncontroversial amendment and anticipates no adverse comment,
since no significant adverse comments were received on the SIP revision
at the State level.  However, in the Proposed Rules section of today's
Federal Register, EPA is publishing a separate document that will serve
as the proposal to approve the SIP revision if adverse comments are
filed. This rule will be effective on [Insert date 60 days after
publication in the Federal Register] without further notice unless EPA
receives adverse comment by [Insert date 30 days after publication in
the Federal Register].

If EPA receives adverse comment, EPA will publish a timely withdrawal in
the Federal Register informing the public that the rule will not take
effect.  EPA will address all public comments in a subsequent final rule
based on the proposed rule. EPA will not institute a second comment
period on this action.  Any parties interested in commenting must do so
at this time

IV.   Statutory and Executive Order Reviews

A.   General Requirements

Under the Clean Air Act, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations 42 U.S.C. 7410(k); 40 CFR 52.02(a).  Thus, in
reviewing SIP submissions, EPA’s role is to approve state choices,
provided that they meet the criteria of the Clean Air Act.  Accordingly,
this action merely approves state law as meeting Federal requirements
and does not impose additional requirements beyond those imposed by
state law.  For that reason, this action:

Is not a "significant regulatory action” subject to review by the
Office of Management and Budget under Executive Order 12866 (58 FR
51735, October 4, 1993);

Does not impose an information collection burden under the provisions of
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

Is certified as not having a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.);

Does not contain any unfunded mandate or significantly or uniquely
affect small governments, as described in the Unfunded Mandates Reform
Act of 1995 (Public Law 104-4);

Does not have Federalism implications as specified in Executive Order
13132 (64 FR 43255, August 10, 1999);

Is not an economically significant regulatory action based on health or
safety risks subject to Executive Order 13045 (62 FR 19885, April 23,
1997);

Is not a significant regulatory action subject to Executive Order 13211
(66 FR 28355, May 22, 2001);

Is not subject to requirements of section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note)
because application of those requirements would be inconsistent with the
Clean Air Act; and

Does not provide EPA with the discretionary authority to address, as
appropriate, disproportionate human health or environmental effects,
using practicable and legally permissible methods, under Executive Order
12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by
Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP
is not approved to apply in Indian country located in the state, and EPA
notes that it will not impose substantial direct costs on tribal
governments or preempt tribal law.

B.   Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating the
rule must submit a rule report, which includes a copy of the rule, to
each House of the Congress and to the Comptroller General of the United
States.  EPA will submit a report containing this action and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register.  A major rule cannot
take effect until 60 days after it is published in the Federal Register.
 This action is not a “major rule” as defined by 5 U.S.C. 804(2).

 C.  Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for judicial
review of this action must be filed in the United States Court of
Appeals for the appropriate circuit by [Insert date 60 days from date of
publication of this document in the Federal Register].  Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action.  Parties with objections to this direct final rule are
encouraged to file a comment in response to the parallel notice of
proposed rulemaking for this action published in the proposed rules
section of today's Federal Register, rather than file an immediate
petition for judicial review of this direct final rule, so that EPA can
withdraw this direct final rule and address the comment in the proposed
rulemaking.

This action to approve the Scranton/Wilkes-Barre revised maintenance
plan may not be challenged later in proceedings to enforce its
requirements.  (See, section 307(b)(2)).

List of Subjects in 40 CFR Part 52

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

__July 28, 2009___
_______\\s\\_______________

Dated:                                				William C. Early,

				Acting Regional Administrator,

                                      				Region III.

40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

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

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

Subpart NN--Pennsylvania

2.  In § 52.2020, the table in paragraph (e)(1) is amended by revising
the entry for the 8-Hour Ozone Maintenance Plan and 2002 Base Year
Emissions Inventory for the Scranton/Wilkes Barre, PA Area to read as
follows:

§ 52.2020  	Identification of plan.

*	*	*	*	*

(e) * * *

(1)* * *

Name of non-regulatory SIP revision

Applicable geographic area

State submittal date

EPA approval date

Additional explanation

*     *     *     *     *     *     *

8-Hour Ozone Maintenance Plan and 2002 Base Year Emissions Inventory
Scranton/

Wilkes-Barre Area: Lackawanna, Luzerne, Monroe and Wyoming Counties

6/12/07

11/14/07

72 FR 64948

4/21/08   	[Insert Federal Register publication date]

[Insert page number where the document begins]

*     *     *     *     *     *     *

*	*	*	*	*

 PAGE

 PAGE   11


                               October 24, 2018

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 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
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REGION 8
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1595 Wynkoop Street
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DENVER, CO   80202-1129
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Phone<PHONE_NUMBER>
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http://www.epa.gov/region08
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0
Ref: 8P-AR

MEMORANDUM

SUBJECT: 	Missoula Motor Vehicle Regional Emissions Analysis

FROM:	James Hou
		Environmental Engineer

TO: 		File

According to the Limited Maintenance Plan (LMP) Option for Moderate PM10 Nonattainment Areas (NAA) memo, in order to qualify for the LMP option, "The final criterion is related to mobile source emissions. The area should expect only limited growth in on-road motor vehicle PM10 emissions (including fugitive dust) and should have passed a motor vehicle regional emissions analysis test. It is important to consider the impact of future transportation growth in the LMP, since the level of PM-10 emissions (especially from fugitive dust) is related to the level of growth in vehicle miles traveled (VMT).

The following methodology can be found in Attachment B of the LMP Option memo, and is used to determine whether increased emissions from on-road mobile sources could, in the next 10 years, increase concentrations in the area and threaten the assumption of maintenance that underlies the LMP policy.

The equation set forth is:
                         DV + (VMTpi * DVmv) < MOS
Where:
      DV = design value in μg/m3
      VMTpi = projected increase in vehicle miles traveled (VMT) over the next 10 years
      DVmv = product of the design value and the fraction of the inventory represented by on-road mobile sources in the attainment year; and
      MOS = margin of safety for the relevant PM10 standard for a given area: 40 μg/m3 for the
      annual standard or 98 μg/m3 for the 24-hour standard.

Utilizing a DV of 81; a projected 16.93% VMT increase; and a 0.68 fraction of the inventory represented by on-road mobile sources in the attainment year the results are as follows:

                       81+ (0.1693 * (81)(0.68)) <= 98
                              OR, as calculated:
                                  90.3 <= 98

Based on the above methodology, as outlined in the LMP option memo, the projected 16.93% VMT increase does not indicate that increased emissions from on-road mobile source could, in the next 10 years, increase concentrations in the area and threaten the assumption of maintenance.


65566 Federal Register / Vol. 67, No. 207 / Friday, October 25, 2002 / Notices Long Island and New York City, New Haven, CT and Suffolk County, NY. Summary: EPA expressed environmental concerns that the FEIS lacks information to understand impacts to wetlands and waters of the US; disagreed with the conclusion that project construction and operation will result in limited adverse environmental impacts; expressed concerns about marine impacts and encouraged close coordination between FERC and the applicant with land trust/ conservation organizations along the proposed pipeline route. ERP No. F   FRC   B05192   ME, Presumpscot River Projects, Relicensing of Five Hydroelectric Projects for Construction and Operation, Dundee Project ( FERC No. 2942); Gambo Project ( FERC No. 2931); Little Falls Project ( FERC No. 2932); Mallison Falls Project ( FERC No. 2941) and Saccarappa Project ( FERC No. 2897), Cumberland County, ME. Summary: EPA expressed outstanding environmental concerns about dam removal effects on water quality and recommended that higher flows be considered at the Dundee and Mallison Falls dams. EPA also continued to urge consistency with the Casco Bay Estuary Project. ERP No. F   FRC   L03011   WA, Georgia Strait Crossing Pipeline ( LP) Project, Construction and Operation to Transport Natural Gas from the Canadian Border near Sumas, WA to US/ Canada Border at Boundary Pass in the Strait of Georgia, Docket Nos. CP01   176   000 and CP01   179   000, Whatcom and San Juan Counties, WA. Summary: EPA continues to have significant environmental objections with the proposal given the lack of evaluation of reasonable alternatives, the lack of integration with the evaluation and decision making processes being conducted in Canada for the Canadian portion of the project, and the high risks associated with seismic hazards. ERP No. F   FRC   L05220   WA, Warm Creek ( No. 10865) and Clearwater Creek ( No. 11485) Hydroelectric Project, Issuance of License for the Construction and Operation located in the Middle Fork Nooksack River ( MFNR) Basin, WA. Summary: EPA raised environmental objections regarding the proposed projects, including the potential negative impacts to aquatic and terrestrial endangered species, and adverse effects to old growth forest, water quality and cultural and spiritual resources of affected Tribes. EPA recommended that the FERC select the No Action alternative. ERP No. F   FRC   L05222   ID, Four Mid Snake River Hydroelectric Projects, Applications for New License for the Existing Projects: Shoshone Falls FERC No. 2778, Upper Salmon Falls FERC No. 2777, Lower Salmon Falls FERC No. 2061 and Bliss FERC No. 1975, Snake River, ID. Summary: EPA expressed environmental objections that the final EIS did not identify a preferred alternative. EPA continues to have objections to the No Action alternative, the Applicant Proposed Project, and the Seasonal Run of River alternative as they would result in continued negative effects to native fish, aquatic invertebrates, and riparian and wetland habitats. EPA recommended licensing and implementing the Year Round Runof River alternative. ERP No. F   IBR   J39029   SD, Angostura Unit   ( Dam, Reservoir and Irrigation Facilities) Renewal of a Long Term Water Service Contract, Cheyenne River Basin, Pine Ridge Reservation, Bismarck County, SD. Summary: No formal comment letter was sent to the preparing agency. ERP No. F   NRS   G36154   OK, Rehabilitation of Aging Flood Control Dams in Oklahoma, Authorization and Funding, OK. Summary: EPA has no objection to the proposed action since the document adequately responded to comments offered on the Draft EIS. ERP No. FA   COE   H36012   MO, St. Johns Bayou and New Madrid Floodway Project, Channel Enlargement and Improvement, Flood Control and National Economic Development ( NED), New Madrid, Mississippi and Scott Counties, MO. Summary: EPA continues to have environmental objections to the project and believes that the recommended plan ( alternative 3   1. B) raises substantive environmental issues. ERP No. FS   COE   F36163   00, Upper Des Plaines River, Flood Damage Reduction at Site 37, Construction of a Concrete Floodwall along Des Plaines River, Milwaukee Avenue, Willow Road and Palatine Road in Mt. Prospect, Cook County, IL. Summary: EPA had no objections to the proposed project and commended the Corps on their wetland mitigation proposal.

Dated: October 22, 2002. Joseph C. Montgomery, Director, NEPA Compliance Division, Office of Federal Activities. [ FR Doc. 02   27264 Filed 10   24   02; 8: 45 am]

BILLING CODE 6560   50   P ENVIRONMENTAL PROTECTION AGENCY [ OEI   2002   0010; FRL 6724   7]

Toxic Chemical Release Reporting; Community Right to Know; Request for Comment on Change of Contractor Handling Trade Secret Claims AGENCY: Environmental Protection Agency ( EPA). ACTION: Notice.

SUMMARY: This notice announces an upcoming change in location and contractor designated to manage the Toxics Release Inventory ( TRI) data processing for all TRI submissions including TRI Trade Secret and confidential information submitted pursuant to 40 CFR part 350. In compliance with 40 CFR part 350 (`` Trade Secrecy Claims for Emergency Planning and Community Right to Know Information'') facilities submitting TRI reports may be eligible to claim Trade Secret for the specific chemical identity of a toxic chemical being reported. Pursuant to 40 CFR 350.23 (`` Disclosure to authorized representatives''), information entitled to trade secret or confidential treatment may not be disclosed by the Agency to the Agency's authorized representative until each affected submitter has been furnished notice of the contemplated disclosure by the EPA program office and has been afforded a period found reasonable by that office ( not less than five working days) to submit its comments. Pursuant to this Federal Register notice, comments are limited to the change of contractor handling trade secret and confidential information submitted under 40 CFR part 350. Once the transition to the new location has been completed, information regarding the new mailing address will be posted on the TRI Web site ( http:// www. epa. gov/ tri) and will be included in the 2002 Toxic Chemical Release Inventory Reporting Forms and Instructions. DATES: Comments, identified by the docket control number OEI   2002   0010, must be submitted on or before 5 working days after publication in the Federal Register. ADDRESSES: Comments may be submitted by mail, electronically, or in person. Please follow the detailed instructions for each method as provided in Unit III. of the SUPPLEMENTARY INFORMATION section of this notice. FOR FURTHER INFORMATION CONTACT: For general information, contact The Emergency Planning and Community VerDate 0ct< 09> 2002 15: 17 Oct 24, 2002 Jkt 200001 PO 00000 Frm 00037 Fmt 4703 Sfmt 4703 E:\ FR\ FM\ 25OCN1. SGM 25OCN1 65567 Federal Register / Vol. 67, No. 207 / Friday, October 25, 2002 / Notices Right to Know Hotline at ( 800) 424   9346 or ( 703) 412   9810, TDD ( 800) 553   7672, http:// www. epa. gov/ epaoswer/ hotline/. For technical information about this change in contractor and location for TRI data processing, contact: Wendy Timm, Toxics Release Inventory Program Division, OEI ( 2844T), Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460, Telephone: 202   566   0725; Fax: 202   566   0727; email: timm. wendy@ epa. gov. Once the transition to the new location has been completed, information regarding the new mailing address will be posted on the TRI Web site ( http:// www. epa. gov/ tri) and will be included in the 2002 Toxic Chemical Release Inventory Reporting Forms and Instructions.

SUPPLEMENTARY INFORMATION:

I. Does This Notice Apply to Me?

A. Affected Entities: Entities that will be affected by this action are those facilities that manufacture, process, or otherwise use certain toxic chemicals listed on the Toxics Release Inventory ( TRI) and which are required under section 313 of the Emergency Planning and Community Right to Know Act ( EPCRA) of 1986, to report annually to EPA their environmental releases of such chemicals. Currently, those industries with the following SIC code designations ( that meet all other threshold criteria for TRI reporting) must report toxic chemical releases and other waste management activities:   20   39, manufacturing sector   10, metal mining ( except for SIC codes 1011, 1081, and 1094)   12, coal mining ( except for SIC code 1241 and extraction activities)   4911, 4931 and 4939, electrical utilities that combust coal and/ or oil for the purpose of generating power for distribution in commerce.   4953, RCRA Subtitle C hazardous waste treatment and disposal facilities   5169, chemicals and allied products wholesale distributors   5171, petroleum bulk plants and terminals   7389, solvent recovery services, and   Federal facilities in any SIC code To determine whether you or your business is affected by this action, you should carefully examine the applicability provisions at 40 CFR part 350 and 40 CFR part 372. If you have any questions regarding the applicability of this action to a particular entity, consult the person( s) listed in the FOR FURTHER INFORMATION CONTACT section. II. How Can I Get Copies of This Document and Other Related Information?

A. Docket. EPA has established an official public docket for this action under Docket ID No. OEI   2002   0010. The public docket includes information considered by EPA in developing this action, including the documents listed below, which are physically located in the docket. In addition, interested parties should consult documents that are referenced in the documents that EPA has placed in the docket, regardless of whether these referenced documents are physically located in the docket. For assistance in locating documents that are referenced in documents that EPA has placed in the docket, but that are not physically located in the docket, please consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section. Although a part of the official docket, the public docket does not include Confidential Business Information ( CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the EPA Docket Center, ( EPA/ DC) EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is ( 202) 566   1742, and the telephone number for the Notice of Change of Contractor Handling TRI Submissions including TRI Trade Secret Claims Docket is ( 202) 566   1752. B. Electronic Access. You may access this Federal Register document electronically through the EPA Internet under the `` Federal Register'' listings at http:// www. epa. gov/ fedrgstr/. An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http:// www. epa. gov/ edocket/ to view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Unit II. A. Once in the system, select `` search,'' then key in the appropriate docket identification number. III. How Can I Respond to This Notice?

A. How and To Whom Do I Submit Comments?

You may submit comments through the mail, in person, or electronically. Be sure to identify the appropriate docket control number ( i. e., OEI   2002   0010) in your correspondence. 1. By mail. All comments should be sent in triplicate to: Office of Environmental Information ( OEI/ TRI), Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Ariel Rios Building, Washington, DC 20460. 2. In person or by courier. Comments may be delivered in person or by courier to: EPA Docket Center, ( EPA/ DC) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The DCO is open from 8 a. m. to 4 p. m., Monday through Friday, excluding legal holidays. The telephone number for the DCO is ( 202) 260   7093. 3. Electronically. Submit your comments electronically by e mail to: `` oei. docket@ epa. gov''. Please note that you should not submit any information electronically that you consider to be CBI. Electronic comments must be submitted as an ASCII file avoiding the use of special characters and any form of encryption. Comments and data will also be accepted on standard computer disks in WordPerfect 6.1/ 8.0 or ASCII file format. All comments and data in electronic form must be identified by the docket control number OEI   2002   0010. Electronic comments on this document may also be filed online at many Federal Depository Libraries.

B. How Should I Handle CBI Information That I Want To Submit to the Agency?

All comments which contain information claimed as CBI must be clearly marked as such. Three sanitized copies of any comments containing information claimed as CBI must also be submitted and will be placed in the public record for this document. Persons submitting information on any portion of which they believe is entitled to treatment as CBI by EPA must assert a business confidentiality claim in accordance with 40 CFR part 2.203( b) for each such portion. This claim must be made at the time that the information is submitted to EPA. If a submitter does not assert a confidentiality claim at the time of submission, EPA will consider this as a waiver of any confidentiality claim and the information may be made available to the public by EPA without further notice to the submitter.

VerDate 0ct< 09> 2002 15: 17 Oct 24, 2002 Jkt 200001 PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 E:\ FR\ FM\ 25OCN1. SGM 25OCN1 65568 Federal Register / Vol. 67, No. 207 / Friday, October 25, 2002 / Notices IV. What Is the General Background for This Action?

The Toxics Release Inventory ( TRI) is mandated by the Emergency Planning and Community Right to Know Act of 1986 ( EPCRA) and the Pollution Prevention Act ( PPA) of 1990. EPCRA Section 313 and PPA Section 6607 establishes requirements for Federal, State, and local governments and industry regarding reporting of toxic chemical releases and other waste management quantities. Under Section 322 of EPCRA and 40 CFR part 350, facilities submitting TRI reports may be eligible to claim Trade Secret for the specific chemical identity of the toxic chemical being reported. Pursuant to 40 CFR 350.23 (`` Disclosure to authorized representatives''), information entitled to trade secret or confidential treatment may not be disclosed by the Agency to the Agency's authorized representative until each affected submitter has been furnished notice of the contemplated disclosure by the EPA program office and has been afforded a period found reasonable by that office ( not less than five working days) to submit its comments. Such notice shall include a description of the information to be disclosed, the identity of the contractor, subcontractor, or grantee, the contract, subcontract, or grant number, if any, and the purposes to be served by the disclosure. This notice may be published in the Federal Register or may be sent to individual submitters. The Contract to manage the TRI data submissions was recompeted in 1998 and was awarded to the Computer Based Systems Incorporated, now known as Titan Systems, Inc. This contract will end January 31, 2003. The new contract will transition to Computer Sciences Corporation ( CSC) ( GSA Contract GSOOT99ALD0203) by the end of December 2002. This new facility will be located in New Carrollton, MD. All TRI submissions including trade secret and confidential information submitted pursuant to 40 CFR part 350 will be managed by CSC. In accordance with 40 CFR 350.23, EPA has determined that CSC and their subcontractors require access to trade secret and confidential information submitted under 40 CFR part 350 in order to receive, manage, process, and safely store such information. The contractor's and subcontractor's personnel will be required to sign a `` Confidentiality Agreement'' prior to being permitted access to trade secret and confidential information submitted under 40 CFR part 350. All contractor and subcontractor access to TRI trade secret and confidential information will take place at the contractor's facility in New Carrollton, MD. The contractor will have appropriate procedures and facilities in place to safeguard the TRI trade secret and confidential information to which the contractor and subcontractors have access during the term of this contract.

List of Subjects Environmental protection, Trade Secret and Confidential Information, TRI Data Processing.

Dated: October 21, 2002.

Elaine G. Stanley,

Director, Office of Information Analysis and Access. [ FR Doc. 02   27234 Filed 10   24   02; 8: 45 am]

BILLING CODE 6560   50   P FEDERAL DEPOSIT INSURANCE CORPORATION Sunshine Act Meeting Pursuant to the provisions of the `` Government in the Sunshine Act'' ( 5 U. S. C. 552b), notice is hereby given that at 10: 03 a. m. on Tuesday, October 22, 2002, the Board of Directors of the Federal Deposit Insurance Corporation met in closed session to consider matters relating to the Corporation's corporate and resolution activities. In calling the meeting, the Board determined, on motion of Director James E. Gilleran ( Director, Office of Thrift Supervision), seconded by Mr. E. Wayne Rushton, acting in the place and stead of Director John D. Hawke, Jr. ( Comptroller of the Currency), concurred in by Director John M. Reich ( Appointive), that Corporation business required its consideration of the matters on less than seven days' notice to the public; that no earlier notice of the meeting was practicable; that the public interest did not require consideration of the matters in a meeting open to public observation; and that the matters could be considered in a closed meeting by authority of subsections ( c)( 2), ( c)( 4), ( c)( 6), ( c)( 8), ( c)( 9)( A)( ii), ( c)( 9)( B), and ( c)( 10) of the `` Government in the Sunshine Act'' ( 5 U. S. C. 552b( c)( 2), ( c)( 4), ( c)( 6), ( c)( 8), ( c)( 9)( A)( ii), ( c)( 9)( B), and ( c)( 10)). The meeting was held in the Board Room of the FDIC Building located at 550 17th Street, NW., Washington, DC.

Dated: October 22, 2002. Federal Deposit Insurance Corporation. Valerie J. Best, Assistant Executive Secretary. [ FR Doc. 02   27325 Filed 10   23   02; 10: 30 am]

BILLING CODE 6714   01   M FEDERAL HOUSING FINANCE BOARD [ No. 2002   N   12]

Federal Home Loan Bank Members Selected for Community Support Review AGENCY: Federal Housing Finance Board. ACTION: Notice.

SUMMARY: The Federal Housing Finance Board ( Finance Board) is announcing the Federal Home Loan Bank ( Bank) members it has selected for the 2002   03 third quarter review cycle under the Finance Board's community support requirement regulation. This notice also prescribes the deadline by which Bank members selected for review must submit Community Support Statements to the Finance Board. DATES: Bank members selected for the 2002   03 third quarter review cycle under the Finance Board's community support requirement regulation must submit completed Community Support Statements to the Finance Board on or before December 13, 2002. ADDRESSES: Bank members selected for the 2002   03 third quarter review cycle under the Finance Board's community support requirement regulation must submit completed Community Support Statements to the Finance Board either by regular mail at the Office of Supervision, Community Investment & Affordable Housing, Federal Housing Finance Board, 1777 F Street, NW., Washington, DC 20006, or by electronic mail at fitzgeralde@ fhfb. gov. FOR FURTHER INFORMATION CONTACT: Emma J. Fitzgerald, Program Analyst, Office of Supervision, Community Investment & Affordable Housing, by telephone at 202/ 408   2874, by electronic mail at fitzgeralde@ fhfb. gov, or by regular mail at the Federal Housing Finance Board, 1777 F Street, NW., Washington, DC 20006. A telecommunications device for deaf persons ( TDD) is available at 202/ 408   2579. SUPPLEMENTARY INFORMATION:

I. Selection for Community Support Review Section 10( g)( 1) of the Federal Home Loan Bank Act ( Bank Act) requires the Finance Board to promulgate VerDate 0ct< 09> 2002 15: 17 Oct 24, 2002 Jkt 200001 PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 E:\ FR\ FM\ 25OCN1. SGM 25OCN1


[Federal Register: September 14, 2006 (Volume 71, Number 178)]
[Notices]
[Page 54321-54323]
[DOCID:fr14se06-72]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54415; File No. SR-ISE-2004-17]

 Self-Regulatory Organizations; International Securities
Exchange, Inc.; Notice of Filing of a Proposed Rule Change and
Amendment No. 1 Thereto Relating to Market Maker Orders

September 7, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 26, 2004, the International Securities Exchange, Inc. (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange filed Amendment No. 1 to the proposed rule change on August
14, 2006.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced the original filing in its
entirety.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend ISE Rule 717(g) to eliminate the
restriction on Electronic Access Members representing ISE market maker
orders, provided that such orders are identified as orders for the
account of an ISE market maker. Under the proposal, an Electronic
Access Member will not be permitted to enter orders solicited from an
ISE market maker into the Solicited Order Mechanism and the Price
Improvement Mechanism. The text of the proposed rule change, as
amended, is set forth below. Proposed new language is in italics;
deletions are in [brackets].
* * * * *

Rule 716. Block Trades

    (a) through (e) No change.

Supplementary Material to Rule 716

    .01 through .04 No change.
    .05 Under paragraph (e) above, Members may enter contra orders that
are solicited. The Solicited Order Mechanism provides a facility for
Members that locate liquidity for their customer orders. Members may
not use the Solicited Order Mechanism to circumvent Exchange Rule
717(d) limiting principal transactions. This may include, but is not
limited to, Members entering contra orders that are solicited from (1)
affiliated broker-dealers, or (2) broker-dealers with which the Member
has an arrangement that allows the Member to realize similar economic
benefits from the solicited transaction as it would achieve by
executing the customer order in whole or in part as principal.
Additionally, any solicited contra orders entered by Members to trade
against Agency Orders may not be for the account of an ISE market maker
that is assigned to the options class.
    .06 through .08 No change.

Rule 717. Limitations on Orders

    (a) through (f) No change.
    (g) Orders for the Account of Another Member. [Absent an exemption
from an Exchange official designated by the Board,] Electronic Access
Members shall not cause the entry of orders for the account of an ISE
market maker that is exempt from the provisions of Regulation T of the
Board of Governors of the Federal Reserve System pursuant to Section
7(c)(2) of the Exchange Act unless such orders are identified as orders
for the account of an ISE market maker in the manner prescribed by the
Exchange.

Supplemental Material to Rule 717

    .01 through .02 No change.
* * * * *

Rule 723. Price Improvement Mechanism for Crossing Transactions

    (a) through (d) No change.

Supplementary Material to Rule 723

    .01 through .06 No change.
    .07 Any solicited Counter-Side Orders submitted by an Electronic
Access Member to trade against Agency Orders may not be for the account
of an ISE market maker assigned to the options class.
* * * * *

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    Currently, under ISE Rules, Electronic Access Members (``EAMs'')
are not permitted to represent orders for the account of an ISE market
maker. While it is common practice on other exchanges for brokers to
represent orders for the account of a market maker, the ISE initially
included this restriction in its rules due to a system limitation.
Specifically, allowing ISE market makers to enter orders through
another member instead of directly might have created an opportunity
for ISE market makers to avoid certain limitations on market maker
trading contained in the Exchange's Rules.\4\
---------------------------------------------------------------------------

    \4\ See, e.g., ISE Rule 805 (Market Maker Orders).
---------------------------------------------------------------------------

    The Exchange has developed the capability for EAMs to mark orders
to show that they are for the account of an ISE market maker. As such,
these orders will flow through the Exchange's surveillance system as if
they were directly entered by the market makers. Therefore, we propose
to eliminate the prohibition against EAMs entering orders for the
account of ISE market makers. However, under the proposal, an EAM will
be prohibited from entering orders solicited from an ISE market maker
assigned to the options class into the Solicited Order Mechanism and
the Price Improvement Mechanism, which are designed to expose solicited
transactions to the market.\5\
---------------------------------------------------------------------------

    \5\ This limitation on entering orders solicited from market
makers assigned to the options class was included in a rule change
by the CBOE (the ``Automated Improvement Mechanism'' or ``AIM'')
recently approved by the Commission. See Securities Exchange Act
Release No. 53222 (Feb. 3, 2006), 71 FR 7089 (Feb. 10, 2006). The
execution of solicited transactions through AIM is similar to the
execution of orders through the ISE's Solicited Order Mechanism and
Price Improvement Mechanism.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \7\ in particular, in that it
is designed to foster cooperation and coordination with persons engaged
in regulating, clearing, settling, processing information with respect
to, and facilitating transaction in securities, 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. In particular, the rule change will allow EAMs to represent
ISE market maker orders on the ISE, while prohibiting them from
entering orders solicited from market makers assigned to the options
class through mechanisms designed to expose solicited transactions to
the market.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    The Exchange has not solicited comments on this proposed rule
change. The Exchange has not received any unsolicited written comments
from members or other interested parties.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-ISE-2004-17 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2004-17. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. 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. All submissions should refer to
File Number SR-ISE-2004-17 and should be submitted on or before October
5, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-15268 Filed 9-13-06; 8:45 am]

BILLING CODE 8010-01-P


Comment Info: =================

General Comment:Conduct testing for a hazardous air pollutant (HAP) emissions from a drying oven and a periodic (Bell) kiln used to manufacture resin-bonded refractories at the the North American Refractories Company facility in Womelsdorf, Pennsylvania.


time burden of 4 hours for a senior business analyst (under board or
member delegation) to develop policies and procedures for evaluating
credit and liquidity risk (4 hours x $232 per hour = $928).
Commission staff believes that additional costs incurred by boards
or members for review of procedures would be incorporated into
BIDCOs' overall board or member costs and would not add any
particular costs. In addition, Commission staff estimates that a
BIDCO board or member is likely to delegate the credit risk
determinations, and that such determinations would take on average 1
hour of a senior business analyst's time (at $232 per hour) to
evaluate the credit quality for each of an average of 4 investment
company or private fund debt securities that a BIDCO would purchase
each year (4 hours x $232 per hour) for a total cost of $928 per
year.
---------------------------------------------------------------------------

    We anticipate that many BIDCOs that invest cash in these types of
debt securities would continue to consider credit quality
determinations prepared by outside sources, including NRSRO ratings,
that they conclude are credible and reliable for purposes of making
these determinations. Nevertheless, we recognize that some BIDCO boards
or members may choose to hire consultants to assist in developing
procedures and to make or oversee the proposed determinations.\113\
Staff estimates that the cost to hire such consultants would be, on
average, $8,000 for each BIDCO.\114\
---------------------------------------------------------------------------

    \113\ We do not expect that money market funds would incur
similar development assistance costs with respect to the proposed
amendments to rule 2a-7 because rule 2a-7 currently requires these
funds to perform credit quality determinations with respect to
portfolio securities. Similarly, we expect that funds that rely on
rule 5b-3 currently incorporate credit quality standards for
collateral securities in addition to ratings in their repurchase
agreements.
    \114\ Staff estimates that a BIDCO would need up to 16 hours of
consulting advice to assist in developing procedures and to make or
oversee the proposed determinations. Staff estimates that this
advice would cost a BIDCO $500 per hour based on an understanding of
the rates typically charged by outside consulting firms.
---------------------------------------------------------------------------

     We request comment on these cost estimates. Are the costs
estimates accurate regarding the proposed procedures for making credit
quality determinations? Do commenters foresee additional or alternative
costs if proposed rule 6a-5 were adopted?

D. Forms N-1A, N-2 and N-3

    The proposed amendments to Forms N-1A, N-2 and N-3 would eliminate
the required use of NRSRO credit ratings by funds that choose to use
credit quality categorizations in the required table, chart, or graph
of portfolio holdings. If a fund chooses to use NRSRO credit ratings to
depict credit quality of portfolio holdings, the proposed amendments,
like the current forms, generally would require the fund to use the
credit ratings of a single NRSRO. The proposed amendments would clarify
that, if credit ratings of the NRSRO selected by a fund are not
available for certain holdings, the fund must briefly discuss the
methodology for determining credit quality for those holdings,
including, if applicable, the use of credit ratings assigned by another
NRSRO.
1. Benefits
    Under the proposed amendments, funds will have greater flexibility
to depict credit quality in the most meaningful manner, which may lead
to better information for investors. This largely results from the
congressionally mandated removal of the required use of credit ratings
under section 939A of the Dodd-Frank Act.
2. Costs
    The Commission believes that because the proposed amendments only
eliminate the required use of NRSRO credit ratings by funds that choose
to use credit quality categorizations, any cost imposed on funds would
not be material. Funds might incur costs to the extent that they choose
to develop new methodologies for depicting credit quality. If a fund
chooses to use NRSRO credit ratings to depict credit quality of
portfolio holdings, the proposed amendments would clarify that, if
credit ratings of the NRSRO selected by a fund are not available for
certain holdings, the fund must briefly discuss the methodology for
determining credit quality for those holdings. The Commission believes
that the proposed clarification would not impose any additional cost
because funds typically provide this disclosure in their shareholder
reports today.\115\
---------------------------------------------------------------------------

    \115\ This assessment is based on a staff review of a sample of
fund shareholder reports filed with the Commission.
---------------------------------------------------------------------------

E. Request for Comment

    The Commission requests comments on all aspects of the cost-benefit
analysis, including the accuracy of the potential costs and benefits
identified and assessed in this Release, as well as any other costs or
benefits that may result from the proposals. We encourage commenters to
identify, discuss, analyze, and supply relevant data regarding these or
additional costs and benefits. For purposes of the Small Business
Regulatory Enforcement Fairness Act of 1996,\116\ the Commission also
requests information regarding the potential annual effect of the
proposals on the U.S. economy. Commenters are requested to provide
empirical data to support their views.
---------------------------------------------------------------------------

    \116\ Public Law 104-121, Title II, 110 Stat. 857 (1996)
(codified in various sections of 5 U.S.C., 15 U.S.C. and as a note
to 5 U.S.C. 601).
---------------------------------------------------------------------------

VI. Consideration of Promotion of Efficiency, Competition and Capital
Formation

    Section 2(c) of the Investment Company Act and section 2(b) of the
Securities Act each requires the Commission, when engaging in
rulemaking under the respective Act that requires it to consider or
determine whether an action is consistent with or necessary or
appropriate in the public interest, to consider, in addition to the
protection of investors, whether the

action will promote efficiency, competition, and capital
formation.\117\
---------------------------------------------------------------------------

    \117\ 15 U.S.C. 80a-2(c); 15 U.S.C. 77b(b).
---------------------------------------------------------------------------

    Our proposed amendments to rules 2a-7 and 5b-3 and Forms N-MFP, N-
1A, N-2 and N-3 implement provisions of the Dodd-Frank Act that call
for the Commission to remove credit rating references in its
regulations and to substitute other appropriate standards of credit-
worthiness in place of the credit ratings. Thus, effects on efficiency,
competition, and capital formation that arise from the removal of
credit ratings are attributable to the congressionally mandated removal
of the required use of credit ratings under section 939A of the Dodd-
Frank Act. The Commission has discretion, however, to adopt rule and
rule amendments that set forth the alternative standards of credit-
worthiness, and we undertake below to discuss the effects on
efficiency, competition and capital formation of the specific standards
that we are proposing.
    We do not believe that the proposed amendments to rules 2a-7 and
5b-3 and Forms N-MFP, N-1A, N-2 and N-3 would significantly affect
competition or have an adverse effect on efficiency or capital
formation.
    Rule 2a-7. With respect to rule 2a-7, as we have discussed above,
money market funds have procedures for making credit quality and credit
risk determinations under current rule 2a-7. In addition, we have
designed the proposed standard to retain a degree of risk limitation
similar to that reflected by the credit ratings in the current rule.
Because we do not anticipate that the proposed amendments are likely to
change the types of investments that are made by money market funds, we
do not believe that the proposed amendments would have a significant
effect on competition or capital formation. As we have noted above, we
believe that money market funds could change their policies and
procedures to reflect changes in the proposed amendments or continue to
rely on their current policies and procedures to comply with the
proposed amendments. We expect that money market funds are likely to
make changes only if the benefits of such changes would justify the
costs, which would not be likely to have an adverse effect on
efficiency.
    Form N-MFP. The proposed amendments would conform the disclosures
in Form N-MFP to the proposed amendments to rule 2a-7. We do not
believe that our proposal to remove certain disclosures from the form
would change the types of securities money market funds invest in and,
therefore, would have no effect on competition or capital formation. To
the extent that the proposed amendments reduce the time funds spend
making the disclosures required in Form N-MFP, the proposed amendments
may slightly increase efficiency.
    Rule 5b-3. The proposed standard for determining the credit quality
of collateral securities in rule 5b-3 is designed to achieve the same
purpose as the credit rating reference in the existing rule, i.e., to
limit collateral securities to those that are likely to retain a stable
market value and that, under ordinary circumstances, the fund could
liquidate quickly in the event of a counterparty default. Because we do
not anticipate that the proposed amendments would change the types of
collateral securities that funds relying on 5b-3 would use, we do not
believe that the proposed amendments would have a significant effect on
competition or capital formation. Furthermore, funds typically
establish credit quality standards for collateral securities that
include credit ratings in repurchase agreements they enter into with
counterparties. Funds could change their policies and procedures to
reflect changes in the proposed amendments, but the rule would not
prohibit funds from relying on the standards in current repurchase
agreements and policies and procedures that address compliance with
rule 5b-3. We anticipate that the consideration of outside sources in
making credit quality determinations with respect to collateral
securities may help funds arrive at consistent credit quality
determinations. For these reasons, we do not believe that the proposed
amendments to rule 5b-3 would have a significant effect on efficiency.
    Forms N-1A, N-2 and N-3. The proposed amendments to Forms N-1A, N-2
and N-3 would eliminate the required use of NRSRO ratings by funds that
choose to use credit quality categorizations in the required table,
chart, or graph of portfolio holdings. If a fund chooses to use NRSRO
credit ratings to depict credit quality of portfolio holdings, the
proposed amendments would clarify that, if credit ratings of the NRSRO
selected by a fund are not available for certain holdings, the fund
must briefly discuss the methodology for determining credit quality for
those holdings, including, if applicable, the use of credit ratings
assigned by another NRSRO. We do not believe that the proposed
clarification would affect efficiency, competition or capital formation
because funds typically provide this disclosure in their shareholder
reports today.\118\ The effect, if any, on efficiency, competition and
capital formation that would arise from the proposed amendments to
Forms N-1A, N-2 and N-3 results from the congressionally mandated
removal of the required use of credit ratings under section 939A of the
Dodd-Frank Act.
---------------------------------------------------------------------------

    \118\ This assessment is based on a staff review of fund
shareholder reports filed with the Commission.
---------------------------------------------------------------------------

    Request for comment. We request comment whether the proposed rule
and rule and form amendments would, if adopted, promote efficiency,
competition, and capital formation. Commenters are requested to provide
empirical data to support their views.

VII. Regulatory Flexibility Act Certification

    Pursuant to section 5(b) of the Regulatory Flexibility Act,\119\
the Commission hereby certifies that the proposed amendments to rule
2a-7 and Form N-MFP under the Investment Company Act would not, if
adopted, have a significant economic impact on a substantial number of
small entities. For purposes of the RFA, an investment company is a
small entity if it, together with other investment companies in the
same group of related investment companies, has net assets of $50
million or less as of the end of its most recent fiscal year.\120\
Based on information in filings submitted to the Commission, we believe
that there are no money market funds that are small entities. For this
reason, the Commission believes that the amendments to rule 2a-7 and
Form N-MFP under the Investment Company Act would not, if adopted, have
a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------

    \119\ 5 U.S.C. 605(b).
    \120\ 17 CFR 270.0-10(a).
---------------------------------------------------------------------------

    The Commission requests written comments regarding this
certification. The Commission requests that commenters describe the
nature of any impact on small businesses and provide empirical data to
support the extent of the impact.

VIII. Initial Regulatory Flexibility Analysis

    The Commission has prepared the following Initial Regulatory
Flexibility Analysis (``IRFA'') in accordance with section 3(a) of the
Regulatory Flexibility Act.\121\ It relates to the Commission's
proposed amendments to rule 5b-3 under the Investment Company Act and
Forms N-1A, N-2 and N-3 under the Investment Company Act and Securities

Act and proposed rule 6a-5 under the Investment Company Act.
---------------------------------------------------------------------------

    \121\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

A. Objectives and Legal Basis

    As described more fully in Sections I and II of this Release, to
implement section 939A of the Dodd-Frank Act, the Commission is
proposing to amend (i) rule 5b-3 to eliminate references to the credit
rating and replace it with an alternative standard of credit-worthiness
that is designed to appropriately achieve the same purpose as the use
of the credit rating and (ii) Forms N-1A, N-2 and N-3 to eliminate the
required use of NRSRO credit ratings by funds that choose to use credit
quality categorizations in the required table, chart, or graph of
portfolio holdings in their shareholder reports. The Commission is also
proposing new rule 6a-5 to set forth a standard of credit-worthiness
for purposes of section 6(a)(5)(A)(iv) of the Act, as anticipated by
the Dodd Frank Act, which eliminates the investment grade standard from
section 6(a)(5) of the Investment Company Act.
    The Commission is proposing amendments to rule 5b-3 pursuant to our
authority set forth in sections 6(c) and 38(a) of the Investment
Company Act [15 U.S.C. 80a-6(c), 80a-37(a)] and section 939A of the
Dodd-Frank Act. The Commission is proposing rule 6a-5 pursuant to our
authority set forth in section 38(a) of the Investment Company Act [15
U.S.C. 80a-37(a)] and section 939 of the Dodd-Frank Act, codified at
section 6(a)(5)(A)(iv)(I) of the Investment Company Act [15 U.S.C. 80a-
6(a)(5)(A)(iv)(I)]. The Commission is proposing amendments to Forms N-
1A, N-2 and N-3 pursuant to the authority set forth in sections 5, 6,
7, 10 and 19(a) of the Securities Act and sections 8, 24(a), 30 and 38
of the Investment Company Act.

B. Small Entities Subject to the Rule

    The proposed amendments to rule 5b-3 and proposed rule 6a-5 under
the Investment Company Act would affect funds and BIDCOs, respectively,
including entities that are considered to be a small business or small
organization (collectively, ``small entity'') for purposes of the
Regulatory Flexibility Act.
    Investment Companies. For purposes of the Regulatory Flexibility
Act, an investment company is a small entity if it, together with other
investment companies in the same group of related investment companies,
has net assets of $50 million or less as of the end of its most recent
fiscal year.\122\ Based on a review of filings submitted to the
Commission, we estimate that 181 investment companies may be considered
small entities and that all of these investment companies may
potentially rely on rule 5b-3.\123\ We estimate that approximately 150
investment companies that meet the definition of small entity would be
subject to the proposed amendments to Forms N-1A, N-2 and N-3.
---------------------------------------------------------------------------

    \122\ 17 CFR 270.0-10(a).
    \123\ The 181 investment companies that meet the definition of
small entity include business development companies, which are
subject to sections 5 and 12 of the Investment Company Act. 15
U.S.C. 80a-58; 15 U.S.C. 80a-59.
---------------------------------------------------------------------------

    BIDCOs. Under the standards adopted by the Small Business
Administration, small entities in the financial investment industry
include entities with $7 million or less in annual receipts.\124\ We do
not have any data and are not aware of any databases that compile
information regarding how many BIDCOs would be small entities under
this definition. We request comment on how many BIDCOs are small
entities under this definition.
---------------------------------------------------------------------------

    \124\ 13 CFR 121.201.
---------------------------------------------------------------------------

C. Reporting, Recordkeeping, and Other Compliance Requirements

    Rule 5b-3. We propose to amend rule 5b-3 to allow a fund to treat
the acquisition of a repurchase agreement as an acquisition of
securities collateralizing the repurchase agreement for purposes of
sections 5(b)(1) and 12(d)(3) of the Act if the collateral other than
cash or government securities consists of securities that the fund's
board of directors (or its delegate) determines at the time the
repurchase agreement is entered into are: (i) Issued by an issuer that
has the highest capacity to meet its financial obligations; and (ii)
sufficiently liquid that they can be sold at approximately their
carrying value in the ordinary course of business within seven days. A
fund that acquires repurchase agreements and intends the acquisition to
be treated as an acquisition of the collateral securities must adopt
and implement written policies and procedures reasonably designed to
comply with the conditions of rule 5b-3, including any credit quality
or liquidity requirements that we adopt.\125\
---------------------------------------------------------------------------

    \125\ 17 CFR 270.38a-1(a).
---------------------------------------------------------------------------

    We have estimated the costs of these amendments previously in the
cost-benefit analysis in Section V above.\126\
---------------------------------------------------------------------------

    \126\ See supra Section V.B.2.
---------------------------------------------------------------------------

    Proposed rule 6a-5. Proposed rule 6a-5 would impose no reporting,
recordkeeping or other compliance requirements.
    Forms N-1A, N-2 and N-3. The proposed amendments to Forms N-1A, N-2
and N-3 would apply to open-end management investment companies,
closed-end management investment companies and separate accounts
organized as management investment companies that offer variable
annuity contracts, including those that are small entities. We are
proposing to amend the forms to eliminate the required use of NRSRO
credit ratings by funds that choose to use credit quality
categorizations in the required table, chart, or graph of portfolio
holdings in their shareholder reports. If a fund chooses to use NRSRO
credit ratings to depict credit quality of portfolio holdings, the
proposed amendments, like the current forms, generally would require
the fund to use the credit ratings of a single NRSRO. The proposed
amendments would clarify that, if credit ratings of the NRSRO selected
by a fund are not available for certain holdings, the fund must briefly
discuss the methodology for determining credit quality for those
holdings, including, if applicable, the use of credit ratings assigned
by another NRSRO. For purposes of the cost-benefit analysis, we have
estimated that any cost imposed on funds would not be material.

D. Duplicating, Overlapping, or Conflicting Federal Rules

    Rule 31a-1 under the Act requires the retention of ledger accounts
for each portfolio security and each person through which a portfolio
transaction is effected, including certain records of collateral for
monies borrowed and loaned.\127\ Although some of the procedures under
the proposed amendments to rule 5b-3 may overlap with information in
the ledgers, we believe any overlap would be minimal and the rule 5b-3
procedures would contain additional information specifically related to
the concerns underlying these rules. The Commission believes that there
are no other rules that duplicate, overlap, or conflict with the
proposed amendments to Forms N-1A, N-2 and N-3 and proposed new rule
6a-5.
---------------------------------------------------------------------------

    \127\ See rule 31a-1(b)(2)(i)(d).
---------------------------------------------------------------------------

E. Significant Alternatives

    The Regulatory Flexibility Act directs us to consider significant
alternatives that would accomplish our stated objectives, while
minimizing any significant adverse impact on small issuers. In
connection with the proposed rule and rule and form amendments, the
Commission considered the following alternatives: (i)

Establishing different compliance standards or timetables that take
into account the resources available to small entities; (ii)
clarifying, consolidating, or simplifying compliance and reporting
requirements under the rule for small entities; (iii) use of
performance rather than design standards; and (iv) exempting small
entities from all or part of the requirements.
    The Commission believes that, at the present time, special
compliance or reporting requirements for small entities, or an
exemption from coverage for small entities, would not be appropriate or
consistent with investor protection. The proposed rule and amendments
to rules and forms are intended to implement sections 939 and 939A of
the Dodd-Frank Act. We believe that, with respect to rule 5b-3,
different credit quality standards, special compliance requirements or
timetables for small entities, or an exemption from coverage for small
entities, may create a risk that those entities could acquire
repurchase agreements with collateral that is less likely to retain its
market value or liquidity in the event of a counterparty default.
Similarly, with respect to proposed rule 6a-5, we believe that special
compliance requirements or timetables for small entities, or an
exemption from coverage for small entities, may create a risk that
those BIDCOs could acquire debt securities that are not of sufficiently
high credit quality that they would be likely to maintain a fairly
stable market value or be liquidated easily, as we believe may have
been intended for the BIDCO to support its long-term commitments.
Further consolidation or simplification of the proposals for funds that
are small entities would be inconsistent with the Commission's goals of
fostering investor protection.
    The proposed form amendments, if adopted, would apply to all
investment companies that use Forms N-1A, N-2 and N-3 to register under
the Investment Company Act and to offer their securities under the
Securities Act. If the Commission excluded small entities from the
proposed form amendments, small entities would be required to use NRSRO
credit ratings if they choose to depict credit quality, while other
entities would not be subject to that requirement. We believe this
outcome is inconsistent with section 939A of the Dodd-Frank Act. We
believe that special compliance or reporting requirements, or an
exemption, for small entities would not be appropriate because the
proposed requirement--that if a fund chooses to use NRSRO credit
ratings to depict credit quality of portfolio holdings, generally it
must use the ratings of a single NRSRO--is intended to eliminate the
possibility that a fund of any size could choose to use NRSRO credit
ratings and then select the most favorable ratings among credit ratings
assigned by multiple NRSROs.
    We have endeavored through the proposed form amendments to minimize
regulatory burden on investment companies, including small entities,
while meeting our regulatory objectives. We have endeavored to clarify,
consolidate, and simplify the requirements applicable to investment
companies, including those that are small entities. Finally, the
proposal would use performance rather than design standards for
determining the credit quality of specific securities.
    For these reasons, we have not proposed alternatives to the
proposed rule and rule and form amendments.

F. Request for Comments

    We encourage the submission of comments with respect to any aspect
of the IRFA. In particular, the Commission seeks comment on the number
of small entities that would be subject to the proposed rule and rule
and form amendments and whether the effect of the proposed rule on
small entities subject to it would be economically significant.
Commenters are asked to describe the nature of any impact and provide
empirical data supporting its extent. These comments will be considered
in connection with any adoption of the proposed rule and rule and form
amendments, and reflected in a Final Regulatory Flexibility Analysis.
    Comments should be submitted in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090. Comments may also be submitted
electronically to the following e-mail address<EMAIL_ADDRESS>
All comment letters should refer to File No. S7-7-11, and this file
number should be included on the subject line if e-mail is used.\128\
Comment letters will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street, NE., Washington,
DC 20549-1520, on official business days between the hours of 10 a.m.
and 3 p.m. Electronically submitted comment letters also will be posted
on the Commission's Internet Web site (http://www.sec.gov).
---------------------------------------------------------------------------

    \128\ Comments on the IRFA will be placed in the same public
file that contains comments on the proposed rule and rule and form
amendments.
---------------------------------------------------------------------------

Statutory Authority

    The Commission is proposing amendments to rules 2a-7 and 5b-3 under
the authority set forth in sections 6(c) and 38(a) of the Investment
Company Act [15 U.S.C. 80a-6(c), 80a-37(a)] and section 939A of the
Dodd-Frank Act. The Commission is proposing new rule 6a-5 under the
authority set forth in section 38(a) of the Investment Company Act [15
U.S.C. 80a-37(a)] and section 939 of the Dodd-Frank Act, to be codified
at section 6(a)(5)(A)(iv)(I) of the Investment Company Act [15 U.S.C.
80a-6(a)(5)(A)(iv)(I)]. The Commission is proposing amendments to Form
N-1A, Form N-2 and Form N-3 under the authority set forth in sections
5, 6, 7, 10 and 19(a) of the Securities Act [15 U.S.C. 77e, 77f, 77g,
77j, and 77s(a)] and sections 8, 24(a), 30 and 38 of the Investment
Company Act [15 U.S.C. 80a-8, 80a-24(a), 80a-29 and 80a-37]. The
Commission is proposing amendments to Form N-MFP under the authority
set forth in sections 8(b), 30(b), 31(a) and 38(a) of the Investment
Company Act [15 U.S.C. 80a-8(b), 80a-29(b), 80a-30(a) and 80a-37(a)]
and section 939A of the Dodd-Frank Act.

List of Subjects

17 CFR Part 239

    Reporting and recordkeeping requirements, Securities.

17 CFR Parts 270 and 274

    Investment companies, Reporting and recordkeeping requirements,
Securities.

Text of Proposed Rule and Form Amendments

    For reasons set out in the preamble, Title 17, Chapter II of the
Code of Federal Regulations is proposed to be amended as follows:

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

    1. The authority citation for Part 239 continues to read in part as
follow:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 78mm, 80a-
2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29,
80a-30, and 80a-37, unless otherwise noted.
* * * * *

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

    2. The authority citation for part 270 is revised to read in part
as follows:

    Authority:  15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, and 80a-
39, unless otherwise noted.
* * * * *
    Section 270.6a-5 is also issued under 15 U.S.C. 80a-
6(a)(5)(A)(iv)(I).
* * * * *
    3. Section 270.2a-7 is amended by:
    a. In paragraph (a)(5), removing the words ``and (D)'';
    b. Removing paragraph (a)(11);
    c. Redesignating paragraphs (a)(12) through (a)(20) as (a)(11)
through (a)(19);
    d. Revising newly designated paragraph (a)(11);
    e. Revising newly designated paragraph (a)(13);
    f. Removing paragraph (a)(21);
    g. Redesignating paragraph (a)(22) as paragraph (a)(20);
    h. Removing paragraph (a)(23);
    i. Redesignating paragraphs (a)(24) through (a)(29) as paragraphs
(a)(21) through (a)(26);
    j. Removing paragraph (a)(30);
    k. Redesignating paragraphs (a)(31) and (a)(32) as paragraphs
(a)(27) and (a)(28);
    l. Revising paragraphs (c)(3)(i), (c)(3)(iii), and (c)(3)(iv)(C);
    m. Adding paragraph (c)(3)(iv)(D);
    n. In paragraph (c)(7):
    i. Revising the paragraph heading;
    ii. Revising paragraph (c)(7)(i);
    iii. In the introductory text of paragraph (c)(7)(ii), removing the
phrase ``paragraphs (c)(7)(ii)(A) through (D)'' and adding in its place
``paragraphs (c)(7)(ii)(A) through (C)'';
    iv. Adding ``or'' at the end of paragraph (c)(7)(ii)(B);
    v. Removing paragraph (c)(7)(ii)(C) and redesignating paragraph
(c)(7)(ii)(D) as paragraph (c)(7)(ii)(C);
    o. Revising paragraph (c)(10)(v)(A);
    p. Revising paragraph (c)(11)(iii);
    q. In paragraph (e):
    i. Removing the words ``(a)(11)(i) (designation of NRSROs);'' from
the introductory text of paragraph (e); and
    ii. Revising paragraph (e)(1).
    These additions and revisions read as follows:

Sec.  270.2a-7  Money market funds.

    (a) * * *
    (11) Eligible Security means a security with a remaining maturity
of 397 calendar days or less that the fund's board of directors
determines presents minimal credit risks (which determination must be
based on factors pertaining to credit quality and the issuer's ability
to meet its short-term financial obligations).
* * * * *
    (13) First Tier Security means any Eligible Security:
    (i) The issuer of which the fund's board of directors has
determined has the highest capacity to meet its short-term financial
obligations;
    (ii) That is a security issued by a registered investment company
that is a money market fund; or
    (iii) That is a Government Security.
* * * * *
    (c) * * *
    (3) * * *
    (i) General. The money market fund shall limit its portfolio
investments to those United States Dollar-Denominated securities that
are at the time of Acquisition Eligible Securities.
* * * * *
    (iii) Securities Subject to Guarantees. A security that is subject
to a Guarantee may be determined to be an Eligible Security or a First
Tier Security based solely on whether the Guarantee is an Eligible
Security or First Tier Security, as the case may be, provided however,
that the issuer of the Guarantee, or another institution, has
undertaken to promptly notify the holder of the security in the event
the Guarantee is substituted with another Guarantee (if such
substitution is permissible under the terms of the Guarantee).
    (iv) * * *
    (C) The fund's board of directors determines that the Underlying
Security or any Guarantee of such security is of high quality and
subject to very low credit risk; and
    (D) The issuer of the Conditional Demand Feature, or another
institution, has undertaken to promptly notify the holder of the
security in the event the Conditional Demand Feature is substituted
with another Conditional Demand Feature (if such substitution is
permissible under the terms of the Conditional Demand Feature).
* * * * *
    (7) Monitoring, Defaults and Other Events.
    (i)(A) Monitoring. In the event the money market fund's investment
adviser (or any person to whom the fund's board of directors has
delegated portfolio management responsibilities) becomes aware of any
credible information about a portfolio security or an issuer of a
portfolio security that may suggest that the security is no longer a
First Tier Security or a Second Tier Security, as the case may be, the
board of directors shall reassess promptly whether such security
continues to present minimal credit risks and shall cause the fund to
take such action as the board of directors determines is in the best
interests of the money market fund and its shareholders. This
reassessment shall not be required if the fund disposes of the security
(or it matures) within five Business Days after the date the money
market fund's adviser (or any person to whom the fund's board of
directors has delegated portfolio management responsibilities) becomes
aware of the relevant information, and the board is subsequently
notified of the adviser's actions.
    (B) Special Rule for Certain Securities Subject to Demand Features.
If, as a result of a portfolio security that ceases to be a First Tier
Security, more than 2.5 percent of the fund's Total Assets are invested
in securities issued by or subject to Demand Features from a single
institution that are Second Tier Securities, the fund shall reduce its
investment in securities issued by or subject to Demand Features from
that institution to no more than 2.5 percent of its Total Assets by
exercising the Demand Features at the next succeeding exercise date(s),
absent a finding by the board of directors that disposal of the
portfolio security would not be in the best interests of the money
market fund.
* * * * *
    (10) * * *
    (v) * * *
    (A) The periodic testing, at such intervals as the board of
directors determines appropriate and reasonable in light of current
market conditions, of the money market fund's ability to maintain a
stable net asset value per share based upon specified hypothetical
events that include, but are not limited to, a change in short-term
interest rates, an increase in shareholder redemptions, an adverse
change in the ability of the issuer of a portfolio security to meet its
short-term financial obligations or a default on portfolio securities,
and the widening or narrowing of spreads between yields on an
appropriate benchmark the fund has selected for overnight interest
rates and commercial paper and other types of securities held by the
fund.
* * * * *
    (11) * * *
    (iii) Credit Risk Analysis. For a period of not less than three
years from the date that the credit risks of a portfolio security were
most recently reviewed, a written record of the determination that a
portfolio security presents minimal credit risks used to determine the
status of the security as an Eligible Security shall be maintained and
preserved in an easily accessible place.
* * * * *
    (e) * * *
    (1) Written Guidelines. The Board shall establish and periodically
review written guidelines (including guidelines for determining whether
securities present minimal credit risks as required in paragraph (c)(3)
of this section (by

reference to paragraph (a)(11)) and procedures under which the delegate
makes such determinations.
* * * * *
    4. Section 270.5b-3 is amended by:
    a. Adding ``or'' at the end of paragraph (c)(1)(iv)(B);
    b. Revising paragraph (c)(1)(iv)(C);
    c. Removing paragraph (c)(1)(iv)(D);
    d. Removing paragraphs (c)(5), (c)(6), and (c)(8);
    e. Redesignating paragraph (c)(4) as (c)(5);
    f. Adding new paragraph (c)(4); and
    g. Redesignating paragraph (c)(7) as paragraph (c)(6).
    The revisions read as follows:

Sec.  270.5b-3  Acquisition of repurchase agreement or refunded
security treated as acquisition of underlying securities.

* * * * *
    (c) * * *
    (1) * * *
    (iv) * * *
    (C) Securities that the investment company's board of directors, or
its delegate, determines at the time the repurchase agreement is
entered into:
    (1) Each issuer of which has the highest capacity to meet its
financial obligations; and
    (2) Are sufficiently liquid that they can be sold at approximately
their carrying value in the ordinary course of business within seven
calendar days; and
* * * * *
    (4) Issuer, as used in paragraph (c)(1)(iv)(C) of this section,
means the issuer of a collateral security or the issuer of an
unconditional obligation of a person other than the issuer of the
collateral security to undertake to pay, upon presentment by the holder
of the obligation (if required), the principal amount of the underlying
collateral security plus accrued interest when due or upon default.
* * * * *
    5. Section 270.6a-5 is added to read as follows:

Sec.  270.6a-5  Purchase of certain debt securities by companies
relying on section 6(a)(5) of the Act.

    For purposes of reliance on the exemption for certain companies
under section 6(a)(5)(A) of the Act (15 U.S.C. 80a-6(a)(5)(A)), a
company shall be deemed to have met the requirement for credit-
worthiness of certain debt securities under section 6(a)(5)(A)(iv)(I)
of the Investment Company Act (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) if, at
the time of purchase, the board of directors (or its delegate)
determines or members of the company (or their delegate) determine that
the debt security is:
    (a) Subject to no greater than moderate credit risk; and
    (b) Sufficiently liquid that it can be sold at or near its carrying
value within a reasonably short period of time.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

    6. The authority citation for part 274 continues to read in part as
follows:

    Authority:  15 U.S.C. 77f, 77g, 77h, 77j, 77s, 78c(b), 78l, 78m,
78n, 78o(d), 80a-8, 80a-24, 80a-26, and 80a-29, unless otherwise
noted.
* * * * *
    7. Form N-1A (referenced in Sec. Sec.  239.15A and 274.11A) is
amended by revising Item 27(d)(2) to read as follows:

    Note: The text of Form N-1A does not, and these amendments will
not, appear in the Code of Federal Regulations.

Form N-1A

* * * * *

Item 27. Financial Statements

* * * * *
    (d) Annual and Semi-Annual Reports. * * *
    (2) Graphical Representation of Holdings. One or more tables,
charts, or graphs depicting the portfolio holdings of the Fund by
reasonably identifiable categories (e.g., type of security, industry
sector, geographic region, credit quality, or maturity) showing the
percentage of net asset value or total investments attributable to
each. The categories and the basis of presentation (e.g., net asset
value or total investments) should be selected, and the presentation
should be formatted, in a manner reasonably designed to depict clearly
the types of investments made by the Fund, given its investment
objectives. If the Fund uses the credit ratings, as defined in section
3(a)(60) of the Securities Exchange Act [15 U.S.C. 78(c)(a)(60)],
assigned by a nationally recognized statistical rating organization
(``NRSRO''), as defined in section 3(a)(62) of the Securities Exchange
Act [15 U.S.C. 78(c)(a)(62)], to categorize the credit quality of
portfolio holdings, it should use the credit ratings of only one NRSRO
except in the case of portfolio holdings that are not rated by that
NRSRO. If credit ratings of that NRSRO are not available for certain
holdings, the Fund must briefly discuss the methodology for determining
credit quality for such holdings, including, if applicable, the use of
credit ratings assigned by another NRSRO.
* * * * *
    8. Form N-2 (referenced in Sec. Sec.  239.14 and 274.11a-1) is
amended by revising Instruction 6(a) to Item 24 to read as follows:

    Note: The text of Form N-2 does not, and these amendments will
not, appear in the Code of Federal Regulations.

Form N-2

* * * * *

Item 24. Financial Statements

* * * * *
Instructions:
* * * * *
    6. * * *
    a. One or more tables, charts, or graphs depicting the portfolio
holdings of the Registrant by reasonably identifiable categories (e.g.,
type of security, industry sector, geographic region, credit quality,
or maturity) showing the percentage of net asset value or total
investments attributable to each. The categories and the basis of
presentation (e.g., net asset value or total investments) should be
selected, and the presentation should be formatted, in a manner
reasonably designed to depict clearly the types of investments made by
the Registrant, given its investment objectives. If the Registrant uses
the credit ratings, as defined in Section 3(a)(60) of the Exchange Act
[15 U.S.C. 78(c)(a)(60)], assigned by a nationally recognized
statistical rating organization (``NRSRO''), as defined in Section
3(a)(62) of the Exchange Act [15 U.S.C. 78(c)(a)(62)], to categorize
the credit quality of portfolio holdings, it should use the credit
ratings of only one NRSRO except in the case of portfolio holdings that
are not rated by that NRSRO. If credit ratings of that NRSRO are not
available for certain holdings, the Registrant must briefly discuss the
methodology for determining credit quality for such holdings,
including, if applicable, the use of credit ratings assigned by another
NRSRO.
* * * * *
    9. Form N-3 (referenced in Sec. Sec.  239.17a and 274.11b) is
amended by revising Instruction 6(i) to Item 28(a) to read as follows:

    Note:  The text of Form N-3 does not, and these amendments will
not, appear in the Code of Federal Regulations.

Form N-3

* * * * *

Item 28. Financial Statements

    (a) * * *

Instructions:
* * * * *
    6. * * *
    (i) One or more tables, charts, or graphs depicting the portfolio
holdings of the Registrant by reasonably identifiable categories (e.g.,
type of security, industry sector, geographic region, credit quality,
or maturity) showing the percentage of net asset value or total
investments attributable to each. If the Registrant has sub-accounts,
provide the information separately for each sub-account. The categories
and the basis of presentation (e.g., net asset value or total
investments) should be selected, and the presentation should be
formatted, in a manner reasonably designed to depict clearly the types
of investments made by the Registrant, given its investment objectives.
If the Registrant uses the credit ratings, as defined in Section
3(a)(60) [15 U.S.C. 78c(a)(60)] of the Exchange Act, assigned by a
nationally recognized statistical rating organization (``NRSRO''), as
defined in Section 3(a)(62) of the Exchange Act [15 U.S.C. 78c(a)(62)],
to categorize the credit quality of portfolio holdings, it should use
the credit ratings of only one NRSRO except in the case of portfolio
holdings that are not rated by that NRSRO. If credit ratings of that
NRSRO are not available for certain holdings, the Registrant must
briefly discuss the methodology for determining credit quality for such
holdings, including, if applicable, the use of credit ratings assigned
by another NRSRO.
* * * * *

PART 274--FORMS PRESCRIBED UNDER THE INVESTMENT COMPANY ACT OF 1940

    10. Form N-MFP (referenced in Sec.  274.201) is amended by:
    a. Revising Item 33;
    b. Removing Item 34;
    c. Revising Item 37.b;
    d. Removing Item 37.c;
    e. Removing Items 38.b and 38.c;
    f. Removing Items 39.c and 39.d;
    g. Redesignating Items 35 through 46 as Items 34 through 45; and
    h. In redesignated Item 38, replacing ``Items 37 and 38'' with
``Items 36 and 37''.
    The revisions read as follows:

    Note: The text of Form N-MFP does not, and this amendment will
not, appear in the Code of Federal Regulations.

Form N-MFP

* * * * *

Item 33

    Indicate whether the security is a First Tier Security, a Second
Tier Security or no longer an Eligible Security.
* * * * *

Item 37

* * * * *
    b. The period remaining until the principal amount of the security
may be recovered through the Demand Feature.

    Dated: March 3, 2011.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-5184 Filed 3-8-11; 8:45 am]
BILLING CODE 8011-01-P