[Federal Register Volume 86, Number 99 (Tuesday, May 25, 2021)]
[Notices]
[Pages 28161-28169]
[FR Doc No: 2021-10959]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91937; File No. SR-FINRA-2021-010]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend
the Requirements for Covered Agency Transactions Under FINRA Rule 4210
(Margin Requirements) as Approved Pursuant to SR-FINRA-2015-036

May 19, 2021.
    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 7, 2021, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend the requirements for Covered Agency
Transactions under FINRA Rule 4210 (Margin Requirements) as approved by
the SEC pursuant to SR-FINRA-2015-036. The proposed rule change would
amend, under FINRA Rule 4210, paragraphs (e)(2)(H), (e)(2)(I), (f)(6),
and Supplementary Material .02 through .05, each as amended or
established pursuant to SR-FINRA-2015-036.
    The text of the proposed rule change is available on FINRA's
website at http://www.finra.org, at the principal office of FINRA and
at the Commission's Public Reference Room.

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

    In its filing with the Commission, FINRA 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. FINRA 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
    On October 6, 2015, FINRA filed with the Commission proposed rule
change SR-FINRA-2015-036, which proposed to amend FINRA Rule 4210 to
establish margin requirements for: (1) To Be Announced (``TBA'')
transactions,\3\ inclusive of adjustable rate mortgage (``ARM'')
transactions; (2) Specified Pool Transactions; \4\ and (3) transactions
in Collateralized Mortgage Obligations (``CMOs''),\5\ issued in
conformity with a

program of an agency \6\ or Government-Sponsored Enterprise
(``GSE''),\7\ with forward settlement dates, as further defined under
FINRA Rule 4210(e)(2)(H)(i)c. pursuant to the rule change
(collectively, defined under the rule change as ``Covered Agency
Transactions'').\8\
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    \3\ FINRA Rule 6710(u) defines ``TBA'' to mean a transaction in
an Agency Pass-Through Mortgage-Backed Security (``MBS'') or a Small
Business Administration (``SBA'')-Backed Asset-Backed Security
(``ABS'') where the parties agree that the seller will deliver to
the buyer a pool or pools of a specified face amount and meeting
certain other criteria but the specific pool or pools to be
delivered at settlement is not specified at the Time of Execution,
and includes TBA transactions for good delivery and TBA transactions
not for good delivery. Agency Pass-Through MBS and SBA-Backed ABS
are defined under FINRA Rule 6710(v) and FINRA Rule 6710(bb),
respectively. The term ``Time of Execution'' is defined under FINRA
Rule 6710(d).
    \4\ FINRA Rule 6710(x) defines Specified Pool Transaction to
mean a transaction in an Agency Pass-Through MBS or an SBA-Backed
ABS requiring the delivery at settlement of a pool or pools that is
identified by a unique pool identification number at the time of
execution.
    \5\ FINRA Rule 6710(dd) defines CMO to mean a type of
Securitized Product backed by Agency Pass-Through MBS, mortgage
loans, certificates backed by project loans or construction loans,
other types of MBS or assets derivative of MBS, structured in
multiple classes or tranches with each class or tranche entitled to
receive distributions of principal or interest according to the
requirements adopted for the specific class or tranche, and includes
a real estate mortgage investment conduit (``REMIC''). The term
``Securitized Product'' is defined under FINRA Rule 6710(m).
    \6\ FINRA Rule 6710(k) defines ``agency'' to mean a United
States executive agency as defined in 5 U.S.C. 105 that is
authorized to issue debt directly or through a related entity, such
as a government corporation, or to guarantee the repayment of
principal or interest of a debt security issued by another entity.
The term excludes the U.S. Department of the Treasury in the
exercise of its authority to issue U.S. Treasury Securities as
defined under FINRA Rule 6710(p). Under 5 U.S.C. 105, the term
``executive agency'' is defined to mean an ``Executive department, a
Government corporation, and an independent establishment.''
    \7\ FINRA Rule 6710(n) defines GSE to have the meaning set forth
in 2 U.S.C. 622(8). Under 2 U.S.C. 622(8), a GSE is defined, in
part, to mean a corporate entity created by a law of the United
States that has a Federal charter authorized by law, is privately
owned, is under the direction of a board of directors, a majority of
which is elected by private owners, and, among other things, is a
financial institution with power to make loans or loan guarantees
for limited purposes such as to provide credit for specific
borrowers or one sector and raise funds by borrowing (which does not
carry the full faith and credit of the Federal Government) or to
guarantee the debt of others in unlimited amounts.
    \8\ The proposed rule change would redesignate the current
definition of Covered Agency Transactions, as set forth in paragraph
(e)(2)(H)(i)c., as paragraph (e)(2)(H)(i)b., without any change. See
Exhibit 5. For purposes of this filing, all references to provisions
under Rule 4210 are to provisions as amended or established pursuant
to SR-FINRA-2015-036 (for convenience, also referred to in this
filing as the ``current rule''), except where otherwise indicated.
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    In proposing the margin requirements, FINRA pointed out that the
rulemaking was necessary to address the potential risk arising from
unsecured credit exposures that exist in the Covered Agency Transaction
market.\9\ FINRA noted that unsecured credit exposures in the Covered
Agency Transaction market could lead to financial losses by dealers.
Further, FINRA noted that permitting counterparties to participate in
the Covered Agency Transaction market without posting margin can
facilitate increased leverage by customers, thereby potentially posing
a risk to the dealer extending credit and to the marketplace as a
whole.\10\
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    \9\ See Securities Exchange Act Release No. 76148 (October 14,
2015), 80 FR 63603 (October 20, 2015) (Notice of Filing of Proposed
Rule Change; File No. SR-FINRA-2015-036) (FINRA's filing proposing
SR-FINRA-2015-036, referred to as the ``Original Proposal'').
    \10\ See Original Proposal, 80 FR at 63604. FINRA further
pointed out that the rulemaking was necessary given that FINRA's
existing requirements, prior to the rulemaking, did not address the
Covered Agency Transaction market generally, and given that existing
industry best practices guidelines, such as set forth by the
Treasury Market Practices Group (``TMPG''), are recommendations and
not rule requirements. Id.
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    The Commission approved SR-FINRA-2015-036 on June 15, 2016 (the
``Approval Date'').\11\ Pursuant to Partial Amendment No. 3 to SR-
FINRA-2015-036, FINRA announced in Regulatory Notice 16-31 that the
rule change would become effective on December 15, 2017, 18 months from
the Approval Date, except that the risk limit determination
requirements as set forth in paragraphs (e)(2)(F), (e)(2)(G) and
(e)(2)(H) of Rule 4210 and in new Supplementary Material .05, each as
respectively amended or established by SR-FINRA-2015-036 (collectively,
the ``risk limit determination requirements''), would become effective
on December 15, 2016, six months from the Approval Date.\12\
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    \11\ See Securities Exchange Act Release No. 78081 (June 15,
2016), 81 FR 40364 (June 21, 2016) (Notice of Filing of Amendment
No. 3 and Order Granting Accelerated Approval to a Proposed Rule
Change to Amend FINRA Rule 4210 (Margin Requirements) to Establish
Margin Requirements for the TBA Market, as Modified by Amendment
Nos. 1, 2, and 3; File No. SR-FINRA-2015-036) (approving SR-FINRA-
2015-036, referred to as the ``Approval Order'').
    \12\ See Partial Amendment No. 3 to SR-FINRA-2015-036 and
Regulatory Notice 16-31 (August 2016), both available at:
<www.finra.org>.
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    Industry participants requested that FINRA reconsider the potential
impact of certain requirements pursuant to SR-FINRA-2015-036 on smaller
and medium-sized firms, and that FINRA extend the implementation date
of the requirements pending such reconsideration to reduce potential
uncertainty in the Covered Agency Transaction market. In Partial
Amendment No. 3 to SR-FINRA-2015-036, FINRA stated that it would
monitor the impact of the requirements pursuant to that rulemaking and,
if the requirements prove overly onerous or otherwise are shown to
negatively impact the market, FINRA would consider revisiting such
requirements as may be necessary to mitigate the rule's impact.\13\ In
response to the concerns of industry participants, FINRA has engaged in
extensive dialogue, both with industry participants and other
regulators, including staff of the SEC and the Federal Reserve System,
for the purpose of reconsidering the requirements. Further, pending
this period of dialogue and reconsideration, FINRA has extended the
implementation date of the requirements pursuant to SR-FINRA-2015-036
(other than the risk limit determination requirements that became
effective on December 15, 2016) on several occasions, most recently to
October 26, 2021 (the ``October 26, 2021, implementation date''),\14\
and has published various guidance to assist members.\15\
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    \13\ See note 12 supra.
    \14\ See Securities Exchange Act Release No. 90852 (January 5,
2021), 86 FR 2021 (January 11, 2021) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Extend the Implementation
Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to
SR-FINRA-2015-036; File No. SR-FINRA-2020-046). As discussed further
below, FINRA plans to file a separate proposed rule change that
would further adjust the October 26, 2021, implementation date to
align with the effective date of the amendments to SR-FINRA-2015-036
as set forth in this proposed rule change.
    \15\ For example, FINRA made available a set of Frequently Asked
Questions & Guidance to clarify certain of the requirements,
available at: <www.finra.org>. Further, staff of the SEC's Division
of Trading and Markets made available a set of Frequently Asked
Questions regarding SEA Rule 15c3-1 and Rule 15c3-3 in connection
with Covered Agency Transactions under FINRA Rule 4210, also
available at: <www.finra.org>.
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    FINRA notes that, in the period since the Approval Date, there has
been opportunity to discern with greater clarity the potential impact,
on both firms and their customers, of the requirements pursuant to SR-
FINRA-2015-036. Members have told FINRA that the requirements, as
currently approved, favor larger firms over smaller firms because
larger firms would have more market power to negotiate margin
agreements \16\ with their customers. Members have pointed out that
non-FINRA member bank dealers and other entities are able to
participate in the Covered Agency Transaction market without being
subject to FINRA Rule 4210, which thereby places FINRA member broker-
dealers at a competitive disadvantage. Some smaller members told FINRA
that, among other things, having the option to take a capital charge in
lieu of collecting margin for their customers' mark to market losses
would help alleviate this competitive disadvantage, though it would not
fully resolve the disparity that results from being subject to Rule
4210 when non-FINRA member bank dealers are not.
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    \16\ For example, larger firms would have more market power to
negotiate Master Securities Forward Transaction Agreements
(``MSFTAs'') or customer account agreements.
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A. Summary of Proposed Amendments
    Taking into account FINRA's dialogue with members,\17\ and the
overall

purpose of the margin amendments, FINRA is proposing revisions to the
Covered Agency Transaction requirements as approved pursuant to SR-
FINRA-2015-036. Broadly, FINRA proposes:
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    \17\ As discussed further below, this included outreach to
several members active in the Covered Agency Transaction market
regarding the volatility experienced in that market following the
outbreak of the COVID-19 pandemic in early 2020. The SEC staff has
issued a report addressing the market stress during and following
the COVID-19 shock. See SEC Division of Economic and Risk Analysis,
U.S. Credit Markets: Interconnectedness and the Effects of the
COVID-19 Economic Shock (October 2020), available at: <https://www.sec.gov/files/US-Credit-Markets_COVID-19_Report.pdf> (the ``DERA
Report'').
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     To eliminate the two percent maintenance margin
requirement that applies to non-exempt \18\ accounts pursuant to
paragraph (e)(2)(H)(ii)e. under Rule 4210. This would eliminate the
need for members to distinguish exempt account customers from other
customers (``non-exempt accounts'') for purposes of Covered Agency
Transaction margin. As such, without regard to a counterparty's exempt
or non-exempt account status, members would collect margin for each
counterparty's excess mark to market loss, as discussed in further
detail below, unless otherwise provided by the rule;
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    \18\ The term ``exempt account'' is defined under FINRA Rule
4210(a)(13). Broadly, an exempt account means a FINRA member, non-
FINRA member registered broker-dealer, account that is a
``designated account'' under FINRA Rule 4210(a)(4) (specifically, a
bank as defined under Exchange Act Section 3(a)(6), a savings
association as defined under Section 3(b) of the Federal Deposit
Insurance Act, the deposits of which are insured by the Federal
Deposit Insurance Corporation, an insurance company as defined under
Section 2(a)(17) of the Investment Company Act, an investment
company registered with the Commission under the Investment Company
Act, a state or political subdivision thereof, or a pension plan or
profit sharing plan subject to the Employee Retirement Income
Security Act or of an agency of the United States or of a state or
political subdivision thereof), and any person that has a net worth
of at least $45 million and financial assets of at least $40 million
for purposes of paragraphs (e)(2)(F), (e)(2)(G) and (e)(2)(H) of the
rule, as set forth under paragraph (a)(13)(B)(i) of Rule 4210, and
meets specified conditions as set forth under paragraph
(a)(13)(B)(ii).
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     subject to specified conditions and limitations, to permit
members to take a capital charge in lieu of collecting margin for
excess net mark to market losses on Covered Agency Transactions. These
conditions and limitations are designed to help protect the financial
stability of members that opt to take capital charges while restricting
the ability of the larger members to use their capital in lieu of
collecting margin to compete unfairly with smaller members; and
     to make revisions designed to streamline, consolidate and
clarify the Covered Agency Transaction rule language. These revisions
will preserve and clarify key exceptions to the requirements, including
for example the $250,000 de minimis transfer exception \19\ and the $10
million gross open position exception \20\ established pursuant to SR-
FINRA-2015-036.
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    \19\ Subject to specified conditions, the current rule provides
for an aggregate $250,000 de minimis transfer amount with a single
counterparty, so that if the aggregate required but uncollected
maintenance margin or mark to market loss does not exceed that
amount, the margin need not be collected or charged to net capital.
See Approval Order, 81 FR at 40367; see also paragraph
(e)(2)(H)(ii)f. of the current rule in Exhibit 5.
    \20\ The current rule provides that the margin requirements for
Covered Agency Transactions do not apply to a counterparty that has
gross open positions in Covered Agency Transactions with the member
amounting to $10 million or less if the counterparty regularly
settles its Covered Agency Transactions on a Delivery Versus Payment
(``DVP'') basis or for cash and meets other specified conditions.
See paragraph (e)(2)(H)(ii)c. of the current rule in Exhibit 5.

The proposed amendments are discussed in detail below.
B. Detailed Discussion of Proposed Amendments
1. Elimination of Maintenance Margin Requirement; Application of Mark
to Market Loss to Both Exempt and Non-Exempt Accounts
    Paragraph (e)(2)(H)(ii)e. of the rule addresses Covered Agency
Transactions with counterparties that are non-exempt accounts and
broadly provides that maintenance margin, defined under the current
rule to mean margin equal to two percent of the contract value of the
net long or net short position, by CUSIP, with the counterparty, plus
any net mark to market loss on such transactions, shall be required
margin, subject to specified exceptions under the rule.\21\ By
contrast, paragraph (e)(2)(H)(ii)d. of the rule broadly provides that
on transactions with counterparties that are exempt accounts no
maintenance margin shall be required. Such transactions must be marked
to the market daily and the member must collect any net mark to market
loss, subject to specified exceptions under the rule.\22\
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    \21\ See Approval Order, 81 FR at 40367; see also paragraph
(e)(2)(H)(ii)e. of the current rule in Exhibit 5. The rule further
sets forth specified requirements for net capital deductions and the
liquidation of positions in the event the uncollected maintenance
margin and mark to market loss (defined together under paragraph
(e)(2)(H)(i)d. of the current rule as the ``deficiency'') is not
satisfied. In short, the rule provides that if the deficiency is not
satisfied by the close of business on the next business day after
the business day on which the deficiency arises, the member shall be
required to deduct the amount of the deficiency from net capital as
provided in SEA Rule 15c3-1 until such time the deficiency is
satisfied; under the rule, if such deficiency is not satisfied
within five business days from the date the deficiency was created,
the member must promptly liquidate positions to satisfy the
deficiency, unless FINRA has specifically granted the member
additional time. As discussed in further detail below, the proposed
rule change would eliminate current paragraph (e)(2)(H)(ii)e. in its
entirety.
    \22\ See Approval Order, 81 FR at 40367; see also paragraph
(e)(2)(H)(ii)d. of the current rule in Exhibit 5. Similar to
paragraph (e)(2)(H)(ii)e., the current rule provides that if the
mark to market loss is not satisfied by the close of business on the
next business day after the business day on which the mark to market
loss arises, the member is required to deduct the amount of the mark
to market loss from net capital as provided in SEA Rule 15c3-1 until
such time the mark to market loss is satisfied; if such mark to
market loss is not satisfied within five business days from the date
the loss was created, the member must promptly liquidate positions
to satisfy the mark to market loss, unless FINRA has specifically
granted the member additional time. Again, as discussed in further
detail below, the proposed rule change would eliminate current
paragraph (e)(2)(H)(ii)d. in its entirety.
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    Members expressed concern that the two-track treatment of exempt
versus non-exempt accounts is burdensome because members are obliged
under the current rule to obtain and assess the financial information
needed to determine which counterparties must be treated as non-exempt
accounts.\23\ Further, based on feedback from members since the
Approval Date and additional observation of market conditions, FINRA
believes that the potential risk that the maintenance margin
requirement was intended to address when originally proposed \24\ is
not significant enough to warrant the burdens and competitive
disadvantage that the requirement imposes. Members pointed out that, in
practice, the maintenance margin requirement would apply to relatively
few accounts that participate in the Covered Agency Transaction market.
Yet, monitoring and collecting maintenance margin for such accounts is
operationally burdensome and out of proportion with the number and size
of the affected accounts. Further, bank dealers are not subject to the
requirement to collect maintenance margin from their customers, which
significantly would disadvantage FINRA members in competition with bank
dealers. To address these concerns, FINRA is proposing to eliminate
paragraph (e)(2)(H)(ii)d. and paragraph (e)(2)(H)(ii)e. of Rule 4210 as
established pursuant to the Approval Order, and to adopt in lieu new
paragraph (e)(2)(H)(ii)c., which provides that members shall collect
margin for each counterparty's \25\ excess net mark to

market loss,\26\ unless otherwise provided under proposed new paragraph
(e)(2)(H)(ii)d. of the rule, as discussed further below. As such, both
exempt and non-exempt accounts would receive the same margin treatment
for purposes of Covered Agency Transactions under paragraph
(e)(2)(H).\27\
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    \23\ Further, members expressed concern that some asset manager
counterparties face constraints with regard to custody of assets at
broker-dealers and that, because of these constraints, some members
need to enter into separate custodial agreements with third party
banks to hold the maintenance margin that they collect from these
asset managers. Members expressed concern that this imposes
operational burdens both on themselves and their client
counterparties, who may, as a consequence, choose to limit their
dealings with smaller broker-dealers.
    \24\ See Original Proposal, 80 FR at 63608.
    \25\ Current paragraph (e)(2)(H)(i)b. defines the term
``counterparty'' to mean any person that enters into a Covered
Agency Transaction with a member and includes a ``customer'' as
defined in paragraph (a)(3) under Rule 4210. The proposed rule
change would redesignate the definition of counterparty as paragraph
(e)(2)(H)(i)a. under the rule and revise the definition to provide
that the term ``counterparty'' means any person, including any
``customer'' as defined in paragraph (a)(3) of the rule, that is a
party to a Covered Agency Transaction with, or guaranteed by, a
member. FINRA believes that including transactions guaranteed by a
member is a useful clarifying change in the context of Covered
Agency Transactions. In connection with this change, FINRA proposes
to add new Supplemental Material .02, which would provide that, for
purposes of paragraph (e)(2)(H), a member is deemed to have
``guaranteed'' a transaction if the member has become liable for the
performance of either party's obligations under the transaction. See
proposed new Supplemental Material .02 in Exhibit 5. Accordingly, if
a clearing broker were to guarantee to an introduced customer an
introducing broker's obligations under a Covered Agency Transaction
between that introducing firm and customer, the introducing broker
would be considered a ``counterparty'' of the clearing broker for
purposes of paragraph (e)(2)(H).
    \26\ FINRA proposes to delete the current definition of ``mark
to market loss'' under paragraph (e)(2)(H)(i)g. as adopted pursuant
to the Approval Order and to replace it with a definition of ``net
mark to market loss'' under proposed new paragraph (e)(2)(H)(i)d.
Under the new definition, a counterparty's ``net mark to market
loss'' means (1) the sum of such counterparty's losses, if any,
resulting from marking to market the counterparty's Covered Agency
Transactions with the member, or guaranteed to a third party by the
member, reduced to the extent of the member's legally enforceable
right of offset or security by (2) the sum of such counterparty's
gains, if any, resulting from: (a) Marking to market the
counterparty's Covered Agency Transactions with the member,
guaranteed to the counterparty by the member, cleared by the member
through a registered clearing agency, or in which the member has a
first-priority perfected security interest; and (b) any ``in the
money,'' as defined in paragraph (f)(2)(E)(iii) of Rule 4210,
amounts of the counterparty's long standby transactions written by
the member, guaranteed to the counterparty by the member, cleared by
the member through a registered clearing agency, or in which the
member has a first-priority perfected security interest. Under
proposed new paragraph (e)(2)(H)(i)c., a counterparty's ``excess''
net mark to market loss is defined to mean such counterparty's net
mark to market loss to the extent it exceeds $250,000. As such, by
specifying excess net mark to market loss, FINRA notes that the
proposed rule preserves the $250,000 de minimis transfer exception
set forth under paragraph (e)(2)(H)(ii)f. as adopted pursuant to the
Approval Order. Further, FINRA notes that, in the interest of
clarity, proposed new paragraph (e)(2)(H)(ii)c. expressly provides
that members would not be required to collect margin, or take
capital charges, for counterparties' mark to market losses on
Covered Agency Transactions other than excess net mark to market
losses. Last, as discussed further below, the proposed rule change
would delete paragraph (e)(2)(H)(ii)f. in the interest of
consolidating the rule language.
    \27\ Current paragraph (e)(2)(H)(ii)d. of the rule contains
provisions designed to permit members to treat mortgage bankers, as
defined pursuant to current paragraph (e)(2)(H)(i)h. of the rule, as
exempt accounts under specified conditions. Because the proposed
rule change eliminates the distinction between exempt and non-exempt
accounts for purposes of Covered Agency Transactions, this language
is no longer needed and will be deleted.
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2. Option for Capital Charge in Lieu of Mark to Market Margin
    Proposed new paragraph (e)(2)(H)(ii)d. of the rule is designed,
subject to specified conditions and limitations, to permit members the
option to take a capital charge in lieu of collecting margin for a
counterparty's excess net mark to market loss (that is, as discussed
above, the net mark to market loss to the extent it exceeds $250,000).
Informed by FINRA's engagement with members, FINRA believes this
approach is appropriate because it would help alleviate the competitive
disadvantage of smaller firms vis-[agrave]-vis larger firms. Smaller
firms expressed concern that larger firms can leverage their greater
size and scale in obtaining margining agreements with their
counterparties, and that counterparties would prefer to transact with
larger firms with which margining agreements can more readily be
obtained, or with banks that are not subject to margin requirements
under Rule 4210. Smaller firms told FINRA that having the option to
take a capital charge, in lieu of collecting margin, would help
alleviate the competitive disadvantage of needing to obtain margining
agreements with such counterparties because there would be an
alternative to collecting margin. To this end, as noted above, the
proposed rule includes conditions and limitations that are designed to
help protect the financial stability of members that opt to take
capital charges while restricting the ability of the larger members to
use their capital to compete unfairly with smaller members.
Specifically, the proposed new paragraph provides that a member need
not collect margin for a counterparty's excess net mark to market loss
under paragraph (e)(2)(H)(ii)c. of the rule, provided that:
     The member must deduct the amount of the counterparty's
unmargined excess net mark to market loss from the member's net capital
computed as provided in SEA Rule 15c3-1, if the counterparty is a non-
margin counterparty \28\ or if the excess net mark to market loss has
not been margined or eliminated by the close of business on the next
business day after the business day on which such excess net mark to
market loss arises; \29\
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    \28\ Proposed new paragraph (e)(2)(H)(i)e. defines a
counterparty as a ``non-margin counterparty'' if the member: (1)
Does not have a right under a written agreement or otherwise to
collect margin for such counterparty's excess net mark to market
loss and to liquidate such counterparty's Covered Agency
Transactions if any such excess net mark to market loss is not
margined or eliminated within five business days from the date it
arises; or (2) does not regularly collect margin for such
counterparty's excess net mark to market loss.
    \29\ See proposed paragraph (e)(2)(H)(ii)d.1. in Exhibit 5.
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     if the member has any non-margin counterparties, the
member must establish and enforce risk management procedures reasonably
designed to ensure that the member would not exceed either of the
limits specified in paragraph (e)(2)(I)(i) of the rule, as proposed to
be revised pursuant to this rule change,\30\ and that the member's net
capital deductions under proposed paragraph (e)(2)(H)(ii)d.1. of the
rule for all accounts combined will not exceed $25 million; \31\
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    \30\ Current paragraph (e)(2)(I) sets forth specified
concentration thresholds. As discussed further below, the rule
change would make conforming revisions to the rule.
    \31\ See proposed paragraph (e)(2)(H)(ii)d.2. in Exhibit 5.
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     if the member's net capital deductions under paragraph
(e)(2)(H)(ii)d.1. of the rule for all accounts combined exceed $25
million for five consecutive business days, the member must give prompt
written notice to FINRA. If the member's net capital deductions under
paragraph (e)(2)(H)(ii)d.1. of the rule for all accounts combined
exceed the lesser of $30 million or 25% of the member's tentative net
capital, as such term is defined in SEA Rule 15c3-1, for five
consecutive business days, the member may not enter into any new
Covered Agency Transactions with any non-margin counterparty other than
risk-reducing transactions, and must also, to the extent of its rights,
promptly collect margin for each counterparty's excess net mark to
market loss and promptly liquidate the Covered Agency transactions of
any counterparty whose excess net mark to market loss is not margined
or eliminated within five business days from the date it arises, unless
FINRA has specifically granted the member additional time; \32\ and
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    \32\ See proposed paragraph (e)(2)(H)(ii)d.3. in Exhibit 5.
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     the member must submit to FINRA such information regarding
its unmargined net mark to market losses, non-margin counterparties and
related capital charges, in such form and manner, as FINRA shall
prescribe by Regulatory Notice or similar communication.\33\
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    \33\ See proposed paragraph (e)(2)(H)(ii)d.4. in Exhibit 5.

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

3. Streamlining and Consolidation of Rule Language; Conforming
Revisions
    In support of the amendments discussed above, FINRA is proposing
several amendments to the current rule designed to streamline and
consolidate the rule language and otherwise make conforming revisions:
     The rule change consolidates language related to the
$250,000 de minimis transfer exception and the $10 million gross open
position exception while, as discussed above, preserving these
exceptions in substance. The $250,000 de minimis transfer exception is
preserved because paragraph (e)(2)(H)(ii)c. under the revised rule
specifies that the members shall collect margin for each counterparty's
excess net mark to margin loss, unless otherwise provided under
paragraph (e)(2)(H)(ii)d. of the rule (that is, as discussed above, the
provisions under the proposed rule that permit a member to take a
capital charge in lieu of collecting margin, subject to specified
conditions). The rule change deletes paragraph (e)(2)(H)(ii)f., which
currently addresses the de minimis exception and would be rendered
redundant. With respect to the current $10 million gross open position
exception, FINRA proposes to revise paragraph (e)(2)(H)(ii)a. of the
rule, which specifies counterparties that are excepted from the rule's
margin requirements, to include a ``small cash counterparty'' among the
enumerated entities included in the exception. Proposed new paragraph
(e)(2)(H)(i)h. would provide that a counterparty is a ``small cash
counterparty'' if:
    [cir] The absolute dollar value of all of such counterparty's open
Covered Agency Transactions with, or guaranteed by, the member is $10
million or less in the aggregate, when computed net of any settled
position of the counterparty held at the member that is deliverable
under such open Covered Agency Transactions and which the counterparty
intends to deliver; \34\
---------------------------------------------------------------------------

    \34\ See proposed paragraph (e)(2)(H)(i)h.1. in Exhibit 5.
---------------------------------------------------------------------------

    [cir] the original contractual settlement date for all such open
Covered Agency Transactions is in the month of the trade date for such
transactions or in the month succeeding the trade date for such
transactions; \35\
---------------------------------------------------------------------------

    \35\ See proposed paragraph (e)(2)(H)(i)h.2. in Exhibit 5.
---------------------------------------------------------------------------

    [cir] the counterparty regularly settles its Covered Agency
Transactions on a DVP basis or for cash; \36\ and
---------------------------------------------------------------------------

    \36\ See proposed paragraph (e)(2)(H)(i)h.3. in Exhibit 5.
---------------------------------------------------------------------------

    [cir] the counterparty does not, in connection with its Covered
Agency Transactions with, or guaranteed by, the member, engage in
dollar rolls, as defined in Rule 6710(z), or round robin trades,\37\ or
use other financing techniques.\38\
---------------------------------------------------------------------------

    \37\ The term ``round robin'' is defined under current paragraph
(e)(2)(H)(i)i. of the rule and, pursuant to the rule change, would
be redesignated as paragraph (e)(2)(H)(i)g., without any change.
    \38\ See proposed paragraph (e)(2)(H)(i)h.4. in Exhibit 5.
---------------------------------------------------------------------------

    The above elements are substantially similar to the elements that
are currently associated with the exception as set forth under current
paragraph (e)(2)(H)(ii)c.2., which would be deleted, along with the
definition of ``gross open position'' under paragraph (e)(2)(H)(i)e.,
which would be rendered redundant. The new proposed language reflects
that the scope of transactions addressed by the rule include Covered
Agency Transactions with a counterparty that are guaranteed by the
member.
     FINRA proposes to delete the definition of ``bilateral
transaction'' set forth in current paragraph (e)(2)(H)(i)a. The
definition is in connection with the provisions under the current rule
relating to margin treatment for exempt accounts under paragraph
(e)(2)(H)(ii)d. and for non-exempt accounts under paragraph
(e)(2)(H)(ii)e., both of which paragraphs, as discussed above, FINRA
proposes to delete pursuant to the rule change. Further, FINRA notes
that the term ``bilateral transaction'' is unduly narrow given that the
proposed revised definition of ``counterparty,'' as discussed above,
would have the effect of clarifying that the rule's scope includes
transactions guaranteed by the member.
     FINRA proposes to delete the definition of the term
``deficiency'' set forth in current paragraph (e)(2)(H)(i)d. Under the
current rule, the term is designed in part to reference required but
uncollected maintenance margin for Covered Agency Transactions. Because
the rule change proposes to eliminate such maintenance margin, the term
is not needed.
     Current paragraph (e)(2)(H)(ii)a. addresses the scope of
paragraph (e)(2)(H) and certain types of counterparties that are
excepted from the rule, provided the member makes and enforces written
risk limits pursuant to paragraph (e)(2)(H)(ii)b. Current paragraph
(e)(2)(H)(ii)b. contains the core language under the rule relating to
risk limits. FINRA is proposing to revise both paragraphs so as to
conform with the rule change and to consolidate the language relating
to written risk limits in these paragraphs within paragraph
(e)(2)(H)(ii)b. Paragraph (e)(2)(H)(ii)a.1. would be revised to read:
``1. a member is not required to collect margin, or to take capital
charges in lieu of collecting such margin, for a counterparty's excess
net mark to market loss if such counterparty is a small cash
counterparty, registered clearing agency, Federal banking agency, as
defined in 12 U.S.C. 1813(z), central bank, multinational central bank,
foreign sovereign, multilateral development bank, or the Bank for
International Settlements; and . . .'' \39\ Paragraph (e)(2)(H)(ii)a.2.
would be revised to read: ``2. a member is not required to include a
counterparty's Covered Agency Transactions in multifamily housing
securities or project loan program securities in the computation of
such counterparty's net mark to market loss, provided . . .'' \40\
Paragraph (e)(2)(H)(ii)a.2.A. would not be changed, other than to be
redesignated as part of part of (e)(2)(H)(ii)a.2. Paragraph
(e)(2)(H)(ii)a.2.B. would be eliminated as redundant \41\ because,
correspondingly, paragraph (e)(2)(H)(ii)b. would be revised to read:
``A member that engages in Covered Agency Transactions with any
counterparty shall make a determination in writing of a risk limit for
each such counterparty, including any counterparty specified in
paragraph (e)(2)(H)(ii)a.1. of this Rule, that the member shall
enforce. The risk limit for

a counterparty shall cover all of the counterparty's Covered Agency
Transactions with the member or guaranteed to a third party by the
member, including Covered Agency Transactions specified in paragraph
(e)(2)(H)(ii)a.2. of this Rule. The risk limit determination shall be
made by a designated credit risk officer or credit risk committee in
accordance with the member's written risk policies and procedures.''
\42\
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    \39\ The proposed new term ``small cash counterparty'' is
discussed above. The proposed language in the paragraph reflects
FINRA's proposed establishment of the option to take a net capital
charge in lieu of collecting margin. Further, FINRA notes that, for
clarity, the proposed rule change adds registered clearing agencies
to the types of counterparties that are within the exception
pursuant to paragraph (e)(2)(H)(ii)a. as revised. This preserves the
treatment of registered clearing agencies under the rule in light of
the proposed deletion of current paragraph (e)(2)(H)(ii)c. In this
regard, also in the interest of clarity, FINRA proposes to add new
paragraph (e)(2)(H)(i)f. by way of defining the term ``registered
clearing agency.''
    \40\ Under current paragraph (e)(2)(H)(ii)a.2., a member is not
required to apply the margin requirements of paragraph (e)(2)(H) to
Covered Agency Transactions with a counterparty in multifamily
housing securities or project loan program securities, provided the
securities meet the specified conditions under the rule and the
member makes and enforces the written risk limit determinations as
specified under the rule. FINRA notes that the proposed rule change
does not change the treatment of multifamily housing securities or
project loan program securities under the current rule other than to
clarify, in express terms, that a member is not required to include
a counterparty's Covered Agency Transactions in multifamily housing
securities or project loan program securities in the computation of
such counterparty's net mark to market loss.
    \41\ See proposed paragraph (e)(2)(H)(ii)a. in Exhibit 5.
    \42\ See proposed paragraph (e)(2)(H)(ii)b. in Exhibit 5.
---------------------------------------------------------------------------

     Paragraph (e)(2)(I) under Rule 4210 addresses
concentration thresholds. FINRA is proposing to make revisions to align
the paragraph with the proposed new language as to paragraph (e)(2)(H),
in particular the elimination of the maintenance margin requirement and
the introduction of the proposed new term ``small cash counterparty.''
Specifically, FINRA proposes to revise the opening sentence of the
paragraph to read: ``In the event that (i) the net capital deductions
taken by a member as a result of marked to the market losses incurred
under paragraphs (e)(2)(F), (e)(2)(G) (exclusive of the percentage
requirements established thereunder), or (e)(2)(H)(ii)d.1. of this
Rule, plus any unmargined net mark to market losses below $250,000 or
of small cash counterparties exceed . . .'' \43\ Current paragraph
(e)(2)(I)(i)c. would be redesignated as (e)(2)(I)(ii) and would read:
``(ii) such excess as calculated in paragraph (e)(2)(I)(i) of this Rule
continues to exist on the fifth business day after it was incurred . .
.'' The final clause of the paragraph would be revised to read: ``. . .
the member shall give prompt written notice to FINRA and shall not
enter into any new transaction(s) subject to the provisions of
paragraphs (e)(2)(F), (e)(2)(G) or (e)(2)(H) of this Rule that would
result in an increase in the amount of such excess.''
---------------------------------------------------------------------------

    \43\ See proposed paragraph (e)(2)(I) in Exhibit 5.
---------------------------------------------------------------------------

     Paragraph (f)(6) under Rule 4210 addresses the time within
which margin or ``mark to market'' must be obtained. FINRA proposes to
delete the phrase ``other than that required under paragraph (e)(2)(H)
of this Rule,'' so the rule, as revised, would read: ``The amount of
margin or `mark to market' required by any provision of this Rule shall
be obtained as promptly as possible and in any event within 15 business
days from the date such deficiency occurred, unless FINRA has
specifically granted the member additional time.'' FINRA believes this
is appropriate given the proposed elimination of current paragraph
(e)(2)(H)(ii)d. and paragraph (e)(2)(H)(ii)e. of the rule, both of
which set forth, among other things, specified time frames for
collection of mark to market losses or deficiencies, as appropriate,
and liquidation of positions that are specific to Covered Agency
Transactions.
     Current Supplemental Material .02 addresses the
requirement for monitoring procedures with respect to mortgage bankers,
for purposes of treating them as exempt accounts pursuant to current
paragraph (e)(2)(H)(ii)d. Current Supplemental Material .03 addresses
how the cure of mark to market loss or deficiency, as defined under the
current rule, may cure the need to liquidate positions. Current
Supplemental Material .04 addresses determining whether an account
qualifies as an exempt account. The proposed rule change would render
each of these provisions unnecessary, given that the rule change
eliminates the need to distinguish exempt versus non-exempt accounts,
including, as discussed above, the language targeted toward mortgage
bankers, and eliminates the liquidation provisions under current
paragraph (e)(2)(H)(ii)d. and paragraph (e)(2)(H)(ii)e. of the rule.
FINRA proposes to redesignate current Supplemental Material .05 as
Supplemental Material .03.\44\
---------------------------------------------------------------------------

    \44\ See the Supplemental Material provisions in Exhibit 5.
---------------------------------------------------------------------------

    If the Commission approves the proposed rule change, FINRA will
announce the effective date of the proposed rule change in a Regulatory
Notice to be published no later than 60 days following Commission
approval. The effective date will be no later than 120 days following
publication of the Regulatory Notice announcing Commission
approval.\45\ Further, FINRA plans to file a separate proposed rule
change that would adjust the October 26, 2021, implementation date for
the requirements pursuant to SR-FINRA-2015-036 (other than the risk
limit determination requirements that became effective on December 15,
2016) to align with the effective date of the amendments to SR-FINRA-
2015-036 as set forth in this proposed rule change. FINRA believes this
alignment is appropriate in the interest of regulatory clarity.
---------------------------------------------------------------------------

    \45\ FINRA notes that the proposed rule change would not impact
members that are funding portals or that have elected to be treated
as capital acquisition brokers (``CABs''), given that such members
are not subject to Rule 4210.
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\46\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. Based on extensive engagement with industry
participants, FINRA believes that the proposed rule change is
consistent with the Act because, by eliminating the maintenance margin
requirement for Covered Agency Transactions and by permitting members,
under specified conditions, to take a capital charge in lieu of
collecting margin, the proposed amendments will alleviate the negative
competitive impact that the requirements pursuant to SR-FINRA-2015-036
could have for smaller firms. Smaller firms told FINRA that the
requirements pursuant to SR-FINRA-2015-036, absent the proposed
revisions by FINRA, would have the effect of favoring larger firms that
could leverage their greater size and scale and non-member banks that
are not subject to the requirements of FINRA rules. The proposed rule
change, by alleviating this disadvantage, would help promote
competition by leveling the playing field among participants in the
Covered Agency Transaction market, thereby reducing disruption in the
Covered Agency Transaction market without the loss of investor
protection.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Economic Impact Assessment
    FINRA has undertaken an economic impact assessment, as set forth
below, to further analyze the regulatory need for the proposed rule
change, its potential economic impacts, including anticipated costs,
benefits, and distributional and competitive effects, relative to the
current baseline, and the alternatives FINRA considered in assessing
how best to meet its regulatory objective.
A. Regulatory Need
    In Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA stated that
it would monitor the impact of the requirements specified in the rule
change, inclusive of any potential intended or unintended regulatory,
economic or competitive consequences.

In response to concerns raised by industry participants regarding the
impacts of the requirements, FINRA has engaged in extensive dialogue
with industry participants, staff of the SEC and the Federal Reserve
System, to reconsider the specified requirements, and to propose any
necessary amendments to the requirements adopted pursuant to SR-FINRA-
2015-036.
B. Economic Baseline
    The economic baseline for the proposed rule change is based on (1)
the existing state of the market and firm practices, (2) Rule 4210
prior to the amendments pursuant to SR-FINRA-2015-036 (for convenience,
``pre-revision Rule 4210''), and (3) the amendments pursuant to SR-
FINRA-2015-036 that, other than the risk limit determination
requirements that became effective on December 15, 2016, would be
implemented on the October 26, 2021, implementation date.
    Through several discussions and consultations with member firms and
other relevant stakeholders since the SEC approved SR-FINRA-2015-036,
FINRA has learned about some of the unintended consequences identified
as part of the rulemaking. A particular aspect that has been identified
is with respect to competition among FINRA members firms, and between
member and non-member firms. The outbreak of the COVID-19 pandemic in
early 2020 affected the financial system, increasing volatility in
different markets, including the Covered Agency Transaction market.\47\
This exogenous shock to the market took place while FINRA was well into
the process of evaluating feedback and concerns raised regarding the
margin requirements for trading in this market. FINRA sought feedback,
and discussed with several firms, the impact on the Covered Agency
Transaction market of the increased volatility, including the impact of
the margin requirements pursuant to SR-FINRA-2015-036 and the
requirements as they would be amended pursuant to this rule filing.
Overall, firms that participated in the outreach were supportive of the
proposed rule amendments as set forth in this filing.
---------------------------------------------------------------------------

    \47\ See the DERA Report, note 17 supra. See also Federal
Reserve Bank of New York Staff Reports, It's What You Say and What
You Buy: A Holistic Evaluation of the Corporate Credit Facilities
(July 2020), available at: <https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr935.pdf>.
---------------------------------------------------------------------------

    Market participants indicated that the order and timing of official
sector activities, including the Federal Reserve Board's federal funds
rate cut and its quantitative easing measures, including purchases of
U.S. Treasury securities (``UST'') and mortgage-based securities
(``MBS''), and the mortgage loan forbearance relief provided under the
Coronavirus Aid, Relief, and Economic Security Act (the ``CARES
Act''),\48\ as amended, were coincident with short-term significant
increases in volatility in UST and MBS pricing, resulting in increased
margin calls, lower counterparty liquidity, and an adverse effect on
related hedges. Most of the firms that participated in FINRA's outreach
efforts had signed with their counterparties margining agreements
(MSFTAs or customer account agreements), giving the firms the ability
to collect margin when necessary. These firms reported that in most
cases, clients met their margin calls, with uncollected margin amounts
being charged against the firm's capital, in accordance with pre-
revision Rule 4210 and, in some cases, the requirements pursuant to SR-
FINRA-2015-036 and the SEC staff's related guidance regarding SEA Rule
15c3-1 and Rule 15c3-3.\49\ Thus, FINRA learned that firms have in
principle already adjusted to the requirements of SR-FINRA-2015-036,
which as such is an appropriate baseline for the proposed rule change.
---------------------------------------------------------------------------

    \48\ Public Law 116-136, 134 Stat. 281 (2020).
    \49\ See the SEC staff Frequently Asked Question set as
referenced in note 15 supra.
---------------------------------------------------------------------------

    The economic baseline considers the impact of the proposed rule
change against the obligations, costs, and benefits associated with the
requirements of SR-FINRA-2015-036. FINRA recognizes that some firms
might continue to operate under the requirements of pre-revision Rule
4210, versus the requirements of SR-FINRA-2015-036. In establishing the
rule change pursuant to SR-FINRA-2015-036, FINRA provided an analysis
of the economic baseline that existed pre-2015 (the year that FINRA
filed SR-FINRA-2015-036 with the SEC), and the potential economic
impacts of the proposed changes pursuant to SR-FINRA-2015-036.\50\
FINRA understands that the individual impacts experienced as a result
of the proposed rule change as set forth is this filing will depend
upon the extent to which member firms wholly adopted, partially adopted
or are waiting to implement the requirements of SR-FINRA-2015-036.
---------------------------------------------------------------------------

    \50\ See the Original Proposal as referenced in note 9 supra.
---------------------------------------------------------------------------

C. Economic Impacts
    FINRA has analyzed the potential costs and benefits of the proposed
rule change, and the different parties that are expected to be
affected. FINRA has identified member firms that engage in Covered
Agency Transactions and their customers as the parties to be mainly
affected by the proposed rule change. The proposed rule change is
expected to provide relief to member firms, while promoting competition
without diminishing investor protections.
Anticipated Benefits
    FINRA believes that the proposed rule change would provide several
direct benefits to member firms. First, the removal of the two percent
maintenance margin requirement on non-exempt accounts would benefit
member firms by reducing costs arising from two main channels. First,
firms would no longer incur costs associated with distinguishing
between exempt and non-exempt accounts. Second, the proposed rule
change would provide operational relief with respect to obtaining
custody and related agreements in connection with the need to collect
maintenance margin. FINRA understands that the requirement to collect
maintenance margin has led firms to enter into separate custodial
agreements with third party banks to hold the maintenance margin where
counterparties are constrained from custodying assets direct with
broker-dealers. This resulted in an operational burden to both the
member firms and their counterparties. Anecdotally, mid-size and
smaller member firms have claimed an additional indirect cost to the
current rule, specifically, that this operational burden has resulted
in counterparties reducing the number of member firms with which they
transact.
    Second, the proposed rule change would permit member firms the
option to take a capital charge in lieu of collecting margin for a
counterparty's excess net mark to market loss. The proposal would allow
member firms to do so subject to specified conditions and limitations
as discussed above, and would preserve the substance of the exceptions
permitted under the current rule.\51\ These conditions and limitations
are designed to help protect the financial stability of members that
opt to take capital charges. The proposed limit on the capital charges
taken by the firm in lieu of collecting margin provides guardrails to
ensure that large member firms do not use this provision to corner the
market in these securities.
---------------------------------------------------------------------------

    \51\ See, for example, note 19 and note 20 supra.
---------------------------------------------------------------------------

    FINRA has learned that allowing firms to take a capital charge in
lieu of collecting margin would further benefit them by decreasing
operational burdens. These burdens arise from the costs

associated with obtaining the required margin agreements from
counterparties, and from the competitive advantage large dealers have,
stemming from their ability to enter into MSFTAs with trading
counterparties. Finally, FINRA believes that this provision would
result in a transfer of the risk from the customer to the member firm.
This would benefit the firm's customers and trading counterparties by
reducing their costs and decreasing their risk exposure. As such, this
could serve as an additional incentive to establishing trading
relationships.
    FINRA believes that, in addition to the main benefits discussed
above, member firms would benefit from the streamlining of the rule
text and clarifications provided throughout, including the provisions
and exceptions as discussed above and set forth by the rule. One such
example is the proposed change to the definition of counterparty in the
rule. The proposed definition is expected to reduce costs associated
with determining liability and responsibilities when establishing the
contractual relationship between the member firm and its counterparty.
A second example is the proposed amendment that defines the required
margin by reference to the proposed new defined term ``excess net mark
to market loss.'' The proposed language streamlines and clarifies the
language pursuant to SR-FINRA-2015-036 with regard to the $250,000 de
minimis transfer amount, thereby making it easier to determine the
applicable margin.\52\ This is expected to reduce the costs associated
with determining the margin requirements when establishing trading
relationships.
---------------------------------------------------------------------------

    \52\ See note 26 supra.
---------------------------------------------------------------------------

Anticipated Costs
    FINRA notes that while the choice by member firms to commit capital
in lieu of margin has anticipated benefits, as discussed above, such
choice can also potentially result in some costs. The magnitude of
these costs depends on the firm's trading activity, its access to
capital, and the capital reserves necessary to fulfill the firm's
margin obligations. As firms are not required to commit capital in lieu
of margin, FINRA expects that firms will only do so when they believe
it appropriately balances benefits and risks.
    Moreover, the member firm's decision to take a capital charge in
lieu of capital has additional associated costs. Taking a capital
charge reduces the amount of excess net capital a firm has available
for other uses and exposes the firm to financial and business risk if
its counterparties fails to deliver. Additional related costs could
stem from the necessary compliance systems needed to make sure the
permitted limits on taking such capital charges are met, and the costs
related to when the firm needs to keep to these limits for an extended
period, as set forth in the proposed rule text.
Anticipated Competitive Effects
    Collectively, the proposed rule change is expected to potentially
level the playing field both between regional and primary broker-dealer
members and between member firms and non-FINRA member regional banks.
While FINRA has no direct measure of trading activity by non-member
firms, it is expected that the main provisions of the proposed rule
change would reduce incentives to limit trading relationships with
FINRA member firms on account of the regulatory-imposed costs.
Decreasing the costs associated with the collection of maintenance
margin, and the ability to take a capital charge in lieu of collecting
margin, would lower the overall costs associated with engaging in
Covered Agency Transactions. FINRA believes that this would ultimately
lower the barriers to entry into the Covered Agency Transaction market
and increase competition. The magnitude of the competitive impact
depends on the extent to which the requirements pursuant to SR-FINRA-
2015-036 have already impacted market participant behavior. Finally,
the collective impacts described above are expected to benefit the
investor community, by providing investors more options for trading in
this market.
D. Alternatives Considered
    FINRA considered various alternatives to the proposed rule
amendments. For example, with regard to the provisions under proposed
paragraph (e)(2)(H)(ii)d.3. that specify the $30 million or 25% of
tentative net capital thresholds,\53\ FINRA considered imposing the
specified consequences as set forth under the proposal as soon as a
member exceeds a limit of $25 million in capital charges in lieu of
collecting margin. Industry participants expressed concern that the
abrupt imposition of such consequences in cases of market stress,
without allowing time for the member to collect margin, would be
burdensome to firms. FINRA believes this concern is valid and as such
is proposing that incurring capital charges in excess of $25 million
for five consecutive business days will require notice to FINRA, while
incurring capital charges in excess of $30 million or 25% of a firm's
tentative net capital for five consecutive business days will also
require firms to take the specified steps to manage their risk.
---------------------------------------------------------------------------

    \53\ See proposed Rule 4210(e)(2)(H)(ii)d.3. in Exhibit 5.
---------------------------------------------------------------------------

    FINRA believes that the proposal strikes an appropriate balance
between regulatory burdens and the ability of member firms to compete
in these markets, as well as member firms' financial responsibility and
operational risk considerations and compliance.

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

    Written comments were neither solicited nor received.

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

    Within 45 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 or disapprove 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 is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2021-010 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2021-010. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will

post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office of FINRA. All comments received will be posted without
change. Persons submitting comments are cautioned that we do not redact
or edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-FINRA-2021-010
and should be submitted on or before June 15, 2021.
---------------------------------------------------------------------------

    \54\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10959 Filed 5-24-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 42 (Monday, March 6, 2017)]
[Notices]
[Page 12589]
[FR Doc No: 2017-04168]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2014-0471; FRL-9959-70-OAR]
RIN 2060-AS26

Granting Petitions To Add n-Propyl Bromide to the List of
Hazardous Air Pollutants

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice, extension of comment period.

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SUMMARY: On January 9, 2017, the Environmental Protection Agency (EPA)
published a draft notice of the rationale for granting petitions to add
n-propyl bromide (nPB), also known as 1-bromopropane (1-BP) (Chemical
Abstract Service No. 106-94-5), to the list of hazardous air pollutants
contained in section 112(b)(1) of the Clean Air Act. The EPA is
extending the comment period on the draft notice that was scheduled to
close on March 10, 2017, by 90 days until June 8, 2017. The EPA is
making this interim extension as an initial response to allow adequate
consideration of a request to extend the comment period by more than 6
months.

DATES: The public comment period for the proposed rule published in the
Federal Register on January 9, 2017 (82 FR 2354), is being extended.
Written comments must be received on or before June 8, 2017.

ADDRESSES: Comments. Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2014-0471, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed
action, contact Ms. Elineth Torres, Sector Policies and Programs
Division (D205-02), Office of Air Quality Planning and Standards,
Environmental Protection Agency, Research Triangle Park, North Carolina
27711; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: To allow for adequate consideration of the
request for extension of time, the EPA has decided to extend the public
comment period until June 8, 2017.

    Dated: February 17, 2017.
Stephen Page,
Director, Office of Air Quality Planning and Standards.
[FR Doc. 2017-04168 Filed 3-3-17; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 87, Number 239 (Wednesday, December 14, 2022)]
[Notices]
[Pages 76530-76532]
[FR Doc No: 2022-27053]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96466; File No. SR-CboeEDGX-2022-052]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule

December 8, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 1, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
proposes to amend its Fee Schedule. The text of the proposed rule
change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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
    The Exchange proposes to amend its Fee Schedule to eliminate two
Market Maker Volume Tiers, effective December 1, 2022.
    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 18% of the market share and
currently the Exchange represents only approximately 6% of the market
share.\3\ Thus, in such a low-concentrated and

highly competitive market, no single options exchange, including the
Exchange, possesses significant pricing power in the execution of
option order flow. The Exchange believes that the ever-shifting market
share among the exchanges from month to month demonstrates that market
participants can shift order flow or discontinue to reduce use of
certain categories of products, in response to fee changes.
Accordingly, competitive forces constrain the Exchange's transaction
fees, and market participants can readily trade on competing venues if
they deem pricing levels at those other venues to be more favorable.
---------------------------------------------------------------------------

    \3\ See Cboe Global Markets U.S. Options Market Monthly Volume
Summary (November 30, 2022),available at https://markets.cboe.com/us/options/market_statistics/.
---------------------------------------------------------------------------

    The Exchange's Fees Schedule sets forth standard rebates and rates
applied per contract. For example, the Exchange assesses a standard fee
of $0.20 per contract for Market Maker orders that add liquidity in
both Penny and Non-Penny Securities. The Fee Codes and Associated Fees
section of the Fees Schedule also provides for certain fee codes
associated with certain order types and market participants that
provide for various other fees or rebates. Additionally, the Fee
Schedule offers tiered pricing which provides Members \4\ opportunities
to qualify for higher rebates or reduced fees where certain volume
criteria and thresholds are met. Additionally, in response to the
competitive environment, the Exchange also offers tiered pricing, which
provides Members with opportunities to qualify for higher rebates or
reduced fees where certain volume criteria and thresholds are met.
Tiered pricing provides an incremental incentive for Members to strive
for higher tier levels, which provides increasingly higher benefits or
discounts for satisfying increasingly more stringent criteria.
---------------------------------------------------------------------------

    \4\ See Exchange Rule 1.5(n).
---------------------------------------------------------------------------

    For example, pursuant to Footnote 2 of the Fees Schedule, the
Exchange currently offers eight Market Maker Volume Tiers which provide
reduced fees between $0.01 and $0.17 per contract for qualifying Market
Makers orders that yield fee code PM or NM where a Member meets the
respective tiers' volume thresholds.\5\ In particular, Market Maker
Volume Tier 7 provides a reduced fee of $0.04 per contract for a
Member's qualifying orders (i.e., yielding fee code PM or NM) if a
Member: (1) has an ADV in Customer orders greater than or equal to
0.70% of average OCV; (2) has an ADV in Customer or Market Maker orders
greater than or equal to 0.50% of average OCV; (3) has an ADV in AIM
Agency Orders greater than or equal to 0.30% of average OCV; and (4)
has an ADV in complex Customer orders (yielding fee codes ZA, ZB, ZC,
or ZD) greater than or equal to 0.10% of average OCV. Market Maker
Volume Tier 8 provides a reduced fee of $0.03 per contract for a
Member's qualifying orders (i.e., yielding fee code PM or NM) if a
Member: (1) has an ADV in Customer orders greater than or equal to
1.00% of average OCV; (2) has an ADV in Customer or Market Maker orders
greater than or equal to 1.10% of average OCV; (3) has an ADV in AIM
Agency Orders greater than or equal to 0.75% of average OCV; and (4)
has an ADV in complex Customer orders (yielding fee codes ZA, ZB, ZC,
or ZD) greater than or equal to 0.20% of average OCV. The Exchange
notes that no Member has reached either Tier 7 or 8 in several months
and the Exchange therefore proposes to eliminate these Tiers from the
Fees Schedule.\6\
---------------------------------------------------------------------------

    \5\ See Cboe EDGX U.S. Options Exchange Fees Schedule, Footnote
2, Market Maker Volume Tiers.
    \6\ In connection with the proposed elimination of Tier 7, the
Exchange also proposes to eliminate references to the listed fee of
``$0.04'' for fee codes PM and NM in the Standard Rates table as
such reduced fee will no longer be an option for Market-Maker orders
that add liquidity. The Exchange notes that it is not proposing to
eliminate the reference to ``$0.03'' notwithstanding the proposed
elimination of Tier 8 as another Market Maker Volume Tier (i.e.,
Tier 5) currently also offers a reduced fee of $0.03.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions 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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
---------------------------------------------------------------------------

    As described above, the Exchange operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient.
    The Exchange believes that eliminating Market Maker Volume Tiers 7
and 8 under Footnote 2 is reasonable because the Exchange is not
required to maintain these tiers or provide reduced fees. The Exchange
also believes the proposed change is reasonable because no Members have
reached these tiers in several months. Further, Members still have
other opportunities to obtain reduced fees, such as via Market Maker
Volume Tiers 1 through 6.\10\ The Exchange believes that eliminating
Market Maker Volume Tiers 7 and 8 is equitable and not unfairly
discriminatory because it applies uniformly to all Members. The
Exchange also notes that the proposed changes will not adversely impact
any Member's ability to otherwise qualify for reduced fees or enhanced
rebates offered under other tiers.
---------------------------------------------------------------------------

    \10\ See Cboe EDGX Options Fees Schedule, Footnote 2.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In particular, the Exchange
believes the proposed rule change does not impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act. Particularly, the proposal to
eliminate Market Maker Volume Tiers 7 and 8 applies to all Members, in
that, such Tiers will not be available for any Member. The Exchange
does not believe the proposed changes burden competition as all Members
will continue to have an opportunity receive enhanced rebates or
reduced fees offered under various tiers, including Market Maker Volume
Tiers 1 through 6, which tiers are generally designed to increase the
competitiveness of EDGX and attract order flow and incentivize
participants to increase their participation on the Exchange, providing
for additional execution opportunities for market participants and
improved price transparency. Greater overall order flow, trading
opportunities, and pricing transparency benefit all market participants
on the Exchange by enhancing market quality

and continuing to encourage Members to send orders, thereby
contributing towards a robust and well-balanced market ecosystem.
    The Exchange also believes the proposed rule change does not impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues they may participate on and
direct their order flow, including 15 other options exchanges.
Additionally, the Exchange represents a small percentage of the overall
market. Based on publicly available information, no single options
exchange has more than 18% of the market share. Therefore, no exchange
possesses significant pricing power in the execution of order flow.
Indeed, participants can readily choose to send their orders to other
exchanges if they deem fee levels at those other venues to be more
favorable. Moreover, the Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. Specifically,
in Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' The fact that
this market is competitive has also long been recognized by the courts.
In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit
stated as follows: ``[n]o one disputes that competition for order flow
is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .''. Accordingly, the Exchange
does not believe its proposed fee change imposes 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 neither solicited nor received comments on the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2022-052 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CboeEDGX-2022-052. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-CboeEDGX-2022-052, and
should be submitted on or before January 4, 2023.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27053 Filed 12-13-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Notices]
[Page 43198]
[FR Doc No: 2016-15709]

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ENVIRONMENTAL PROTECTION AGENCY

[ER-FRL-9027-8]

Environmental Impact Statements; Notice of Availability

    Responsible Agency: Office of Federal Activities, General
Information<PHONE_NUMBER> or http://www.epa.gov/nepa.

Weekly receipt of Environmental Impact Statements (EISs)
Filed 06/20/2016 Through 06/24/2016,
Pursuant to 40 CFR 1506.9.

Notice

    Section 309(a) of the Clean Air Act requires that EPA make public
its comments on EISs issued by other Federal agencies. EPA's comment
letters on EISs are available at: http://www.epa.gov/compliance/nepa/eisdata.html.

EIS No. 20160143, Final, NMFS, FL, Regulatory Amendment 16 to the
Fishery Management Plan for the Snapper-Grouper Fishery of the South
Atlantic Region, Review Period Ends: 08/01/2016, Contact: Rick
DeVictor.<PHONE_NUMBER>
EIS No. 20160144, Final, BLM, CO, Dominguez-Escalante National
Conservation Area Proposed Resource Management Plan, Review Period
Ends: 08/01/2016, Contact: Collin Ewing<PHONE_NUMBER>.
EIS No. 20160145, Final Supplement, BLM, CO, Roan Plateau Planning Area
Proposed Resource Management Plan Amendment, Review Period Ends: 08/01/
2016, Contact: Greg Larson<PHONE_NUMBER>.
EIS No. 20160146, Final, USFS, AK, Tongass Land and Resource Management
Plan Amendment, Review Period Ends: 08/01/2016, Contact: Susan Howle
907-225-3101.
EIS No. 20160147, Final, USFS, AK, Kake to Petersburg Transmission Line
Intertie Project, Review Period Ends: 08/01/2016, Contact: Tom Parker
907-772-5974.

    Dated: June 28, 2016.
Dawn Roberts,
Management Analyst, NEPA Compliance Division, Office of Federal
Activities.
[FR Doc. 2016-15709 Filed 6-30-16; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Notices]
[Pages 30951-30952]
[FR Doc No: 2020-10969]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following electric
rate filings:
    Docket Numbers: ER16-262-002.
    Applicants: Uniper Global Commodities North America, LLC.
    Description: Notice of Non-Material Change in Status of Uniper
Global Commodities North America LLC.
    Filed Date: 4/27/20.
    Accession Number: 20200427-5290.
    Comments Due: 5 p.m. ET 5/18/20.

    Docket Numbers: ER18-1646-000.
    Applicants: Electric Energy, Inc.
    Description: Electric Energy, Inc. submits tariff filing per
35.19a(b): Refund Report_[ER18-1646 and EL18-96] to be effective N/A.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5179.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-741-000.

    Applicants: Midcontinent Independent System Operator, Inc., Ameren
Illinois Company.
    Description: Report Filing: 2020-05-08_SA 3224 Ameren Illinois-
Bishop Hill FSA Refund Report Supplement to be effective N/A.
    Filed Date: 5/8/20.
    Accession Number: 20200508-5095.
    Comments Due: 5 p.m. ET 5/29/20.

    Docket Numbers: ER20-1823-000.
    Applicants: Vermont Transco LLC.
    Description: Petition for Limited Waiver, et al. of Vermont Transco
LLC.
    Filed Date: 5/14/20.
    Accession Number: 20200514-5127.
    Comments Due: 5 p.m. ET 5/19/20.

    Docket Numbers: ER20-1825-000.
    Applicants: Southern California Edison Company.
    Description: Petition for Limited Waiver, et al. of Southern
California Edison Company.
    Filed Date: 5/14/20.
    Accession Number: 20200514-5163.
    Comments Due: 5 p.m. ET 5/21/20.

    Docket Numbers: ER20-1826-000.
    Applicants: Puget Sound Energy, Inc.
    Description: Sec.  205(d) Rate Filing: Administrative Filing to
Update eTariff Database to be effective 4/1/2020.
    Filed Date: 5/14/20.
    Accession Number: 20200514-5169.
    Comments Due: 5 p.m. ET 6/4/20.

    Docket Numbers: ER20-1827-000.
    Applicants: Puget Sound Energy, Inc.
    Description: Tariff Cancellation: Administrative Filing to Cancel
Duplicate Tariff Record to be effective 5/15/2020.
    Filed Date: 5/14/20.
    Accession Number: 20200514-5166.
    Comments Due: 5 p.m. ET 6/4/20.

    Docket Numbers: ER20-1828-000.
    Applicants: PacifiCorp.
    Description: Compliance filing: OATT Order 864 Compliance Filing to
be effective 6/1/2020.
    Filed Date: 5/14/20.
    Accession Number: 20200514-5180.
    Comments Due: 5 p.m. ET 6/4/20.

    Docket Numbers: ER20-1829-000.
    Applicants: Trans-Allegheny Interstate Line Company, PJM
Interconnection, L.L.C.
    Description: Compliance filing: TrAILCo submits revisions to OATT
Att. H-18A re: Order 864 to be effective 1/27/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5017.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-1830-000.
    Applicants: Duquesne Light Company, PJM Interconnection, L.L.C.
    Description: Compliance filing: Duquesne submits revisions to OATT
Att H-17A re: Order 864 to be effective 1/27/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5030.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-1831-000.
    Applicants: UGI Utilities, Inc., PJM Interconnection, L.L.C.
    Description: Compliance filing: UGI submits revisions to OATT
Attachment H-8C re: Order 864 to be effective 1/27/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5057.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-1832-000.
    Applicants: Duke Energy Ohio, Inc., Duke Energy Kentucky, Inc., PJM
Interconnection, L.L.C.
    Description: Compliance filing: DEOK submits revisions to OATT,
Att. H-22A re: Order 864 to be effective 1/27/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5123.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-1833-000.
    Applicants: GenOn Mid-Atlantic, LLC.
    Description: Sec.  205(d) Rate Filing: Reactive Service Rate
Schedule Filing for Deactivation of Dickerson Units to be effective 7/
17/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5124.
    Comments Due: 5 p.m. ET 6/5/20.
    Docket Numbers: ER20-1834-000.

    Applicants: Pacific Gas and Electric Company.
    Description: Sec.  205(d) Rate Filing: 2nd Amendment to Lassen
Municipal Utility District IA (RS 225) to be effective 7/1/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5126.
    Comments Due: 5 p.m. ET 6/5/20.

    Docket Numbers: ER20-1835-000.
    Applicants: Puget Sound Energy, Inc.
    Description: Sec.  205(d) Rate Filing: BPA-Lewis PUD Agreements to
be effective 6/1/2020.
    Filed Date: 5/15/20.
    Accession Number: 20200515-5153.
    Comments Due: 5 p.m. ET 6/5/20

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: May 15, 2020.
 Nathaniel J. Davis, Sr.,
 Deputy Secretary.
[FR Doc. 2020-10969 Filed 5-20-20; 8:45 am]
 BILLING CODE 6717-01-P