[Federal Register Volume 86, Number 39 (Tuesday, March 2, 2021)]
[Notices]
[Pages 12237-12244]
[FR Doc No: 2021-04217]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91199; File No. SR-OCC-2021-003]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change To Establish OCC's Persistent
Minimum Skin-in-the-Game

February 24, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on February 10, 2021, the Options Clearing
Corporation (``OCC'' or ``Corporation'') 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 OCC. 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. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change would amend OCC's Rules, Capital
Management Policy, and certain other OCC policies to establish a
persistent minimum level of OCC's own pre-funded financial resources
(commonly referred to as ``skin-in-the-game'') that OCC would
contribute to cover default

losses or liquidity shortfalls. Amendments to OCC's Rules are included
in Exhibit 5a of filing SR-OCC-2021-003. Amendments to OCC's Capital
Management Policy are included in confidential Exhibit 5b of filing SR-
OCC-2021-003. OCC would also make conforming changes to the Default
Management Policy, Clearing Fund Methodology Policy, and Recovery and
Orderly Wind-Down Plan (``RWD Plan''), which can be found in
confidential Exhibits 5c, 5d, and 5e of filing SR-OCC-2021-003,
respectively, to reflect the amended default waterfall (i.e., the
financial resources OCC would use to address default losses and
liquidity shortfalls, listed in the order OCC would utilize them).
Material proposed to be added is marked by underlining, and material
proposed to be deleted is marked with strikethrough text. All terms
with initial capitalization that are not otherwise defined herein have
the same meaning as set forth in the OCC By-Laws and Rules.\3\
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    \3\ OCC's By-Laws and Rules can be found on OCC's public
website: https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

(1) Purpose
    OCC is proposing to amend OCC's Rules, Capital Management Policy,
and certain other policies to establish a persistent minimum level of
skin-in-the-game that OCC would contribute to cover default losses or
liquidity shortfalls, which would consist of a minimum amount of OCC's
own pre-funded resources that OCC would charge prior to charging a loss
to the Clearing Fund (as defined below, the ``Minimum Corporate
Contribution'') and, as OCC's Rules currently provide, applicable funds
held in trust in respect to OCC's Executive Deferred Compensation Plan
(``EDCP'') (such funds, as defined in OCC's Rules, being the ``EDCP
Unvested Balance'') that would be charged pari passu with the Clearing
Fund deposits of non-defaulting Clearing Members. The persistent
minimum level of skin-in-the-game would establish a floor for the pre-
funded resources OCC would contribute to cover default losses and
liquidity shortfalls. In addition to this minimum, OCC would continue
to commit its liquid net assets funded by equity (``LNAFBE'') \4\
greater than 110% of its Target Capital Requirement prior to charging a
loss to the Clearing Fund.
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    \4\ International standards and the Commission's Rules
established minimum LNAFBE requirements for financial market
infrastructures and covered clearing agencies, respectively. See
CPSS-IOSCO, Principles for financial market infrastructures, at
Principle 15 (Apr. 16, 2012), available at http://www.bis.org/publ/cpss101a.pdf; 17 CFR 240.17Ad-22(e)(15). The Capital Management
Policy defines ``LNAFBE'' as the level of cash and cash equivalents,
no greater than Equity, less any approved adjustments (i.e., agency-
related liabilities such as Section 31 fees held by OCC).
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Background
    In January 2020, OCC implemented its Capital Management Policy, by
which OCC (a) determines the amount of Equity \5\ sufficient for OCC to
meet its regulatory obligations and to serve market participants and
the public interest (as defined in OCC's Rules, the ``Target Capital
Requirement''), (b) monitors Equity and LNAFBE levels to help ensure
adequate financial resources are available to meet general business
obligations; and (c) manages Equity levels, including by (i) adjusting
OCC's fee schedule (as appropriate) and (ii) establishing a plan for
accessing additional capital should OCC's Equity fall below certain
thresholds (the ``Replenishment Plan'').\6\ In addition, OCC's Rules,
the Capital Management Policy, and associated policies provide for the
use of OCC's current and retained earnings in excess of 110% of the
Target Capital Requirement (i.e., the ``Early Warning'' threshold under
OCC's Replenishment Plan) to cover losses arising from a Clearing
Member's default.\7\ While OCC's Rules previously provided for OCC to
contribute its own capital to cover default losses at the Board's
discretion, the Capital Management Policy changes made the contribution
of such excess capital obligatory.\8\
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    \5\ The Capital Management Policy defines ``Equity'' as
shareholders' equity as shown on OCC's Statement of Financial
Condition.
    \6\ See Exchange Act Release No. 88029 (Jan. 24, 2020), 85 FR
5500 (Jan. 30, 2020) (File No. SR-OCC-2019-007) (hereinafter,
``Order Approving Capital Management Policy'').
    \7\ Id. at 5502.
    \8\ Use of excess capital to cover losses arising from the
default of a bank or other clearing agency that is not otherwise
associated with a Clearing Member default remains at the Board's
discretion. See Rule 1006(e)(ii).
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    In the event of a Clearing Member default, OCC would contribute
excess capital to cover losses remaining after applying the margin
assets and Clearing Fund contribution of the defaulting Clearing Member
and before charging the Clearing Fund contributions of non-defaulting
Clearing Members. Should OCC's excess capital be insufficient to cover
the loss, OCC also has another tranche of OCC resources in addition to
the Clearing Fund; namely, the EDCP Unvested Balance.\9\ In the event
of a default loss, the EDCP Unvested Balance is contributed pari passu
with the Clearing Fund contributions of non-defaulting Clearing
Members.
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    \9\ As defined in OCC's Rules, the EDCP Unvested Balance
consists of funds (x) deposited on or after January 1, 2020 in
respect of its EDCP and (y) in excess of amounts necessary to pay
for benefits accrued and vested under the EDCP at such time.
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    The implementation of OCC's Capital Management Policy marked the
first time OCC committed OCC's own pre-funded financial resources into
OCC's approach to capital management and resiliency. In particular, OCC
believes that the inclusion of the EDCP Unvested Balance is a powerful
alignment of interest between management and Clearing Members. OCC
takes seriously the interest of the industry and international
regulators in seeing more significant skin-in-the-game commitments at
central counterparties.
    To that end, OCC has reviewed feedback received in connection with
the initial filing of the Capital Management Plan, relevant papers from
industry participants and stakeholders concerning skin-in-the-game, and
regulatory regimes in jurisdictions outside the United States. For one,
a comment submitted in connection with the Capital Management Policy's
filing urged OCC to implement a ``minimum amount of skin-in-the-game
that `scales with risk and is defined and funded upfront' and . . . `to
define a level of [skin-in-the-game] ex ante that would always be
readily available in case of a default loss.' '' \10\ OCC has also
reviewed the paper, ``A Path Forward for CCP Resilience, Recover, and
Resolution,'' originally released in October 2019 with nine signatories
and re-released in March of 2020 with ten additional signatories,
representing major buy-side and sell-side firms in the markets OCC
serves.\11\ One of the paper's significant

recommendations is that central counterparties should have skin-in-the-
game in a more defined manner.\12\ In contrast, OCC's current variable
approach to skin-in-the-game does not guarantee a defined amount would
be available as skin-in-the-game. Additionally, as OCC seeks
recognition in the European Union and the United Kingdom, OCC is
cognizant of the European Market Infrastructure Regulation's (``EMIR'')
expectation that skin-in-the-game be a minimum of 25% of the central
counterparty's regulatory capital requirement.\13\ Under the current
Capital Management Policy, excess capital is not dedicated solely as
skin-in-the-game and it is possible that OCC's capital in excess of
110% of its Target Capital Requirement would be less than 25% of OCC's
Target Capital Requirement.
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    \10\ Order Approving Capital Management Policy, 85 FR at 5507
(quoting comments submitted by FIA).
    \11\ See ABN AMRO Clearing Bank N.V., et al., A Path Forward for
CCP Resilience, Recovery, and Resolution (March 10, 2020), available
at https://www.jpmorgan.com/solutions/cib/markets/a-path-forward-for-ccp-resilience-recovery-and-resolution.
    \12\ While OCC agrees with the paper's authors that central
counterparties should have meaningful skin-in-the-game, OCC does not
agree with the level of skin-in-the-game recommended in the paper.
See Optimizing Incentives, Resilience and Stability in Central
Counterparty Clearing: Perspectives on CCP Issues from a Utility
Model Clearinghouse (September 22, 2020), available at https://www.theocc.com/Newsroom/Insights/2020/09-22-Optimizing-Incentives,-Resilience-and-Stabil.
    \13\ Though OCC, as a non-EU central counterparty, would not be
subject directly to the EMIR standards or the supervision of the
European Securities and Markets Authority (``ESMA''), OCC has
considered the EMIR standards as part of its bid to seek third-
country recognition in Europe and the United Kingdom. OCC is seeking
recognition to address European bank capital requirements set to go
into effect next year that would require European banks to set aside
additional capital for exposure to central counterparties that are
not ``qualified CCPs'' in Europe. In order to become a qualified
CCP, ESMA and the regulatory authority in a non-EU jurisdiction must
reach an agreement that their regulatory regimes for central
counterparties are equivalent. As of the date of this filing, the
Commodity Futures Trading Commission (``CFTC'') has reached an
agreement with ESMA on the equivalence of their regulatory regimes.
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    To address the concerns raised by these market participants,
further strengthen OCC's pre-funded financial resources, further align
the interests of OCC's management and Clearing Members, and align OCC's
skin-in-the-game with international standards, OCC is filing this
proposed rule change, which would establish a persistent minimum amount
of skin-in-the-game that would be used to cover default losses and
liquidity shortfalls. This skin-in-the-game proposal is part of a
broader set of decisions announced by OCC to lower the cost of clearing
for its members,\14\ including a fee decrease effective September 1,
2020.\15\ OCC also discussed these changes on calls with OCC's Non-
Equity Exchanges, Clearing Members, and other market participants,
including discussions with the SIFMA Options Committee and FIA and open
calls with OCC Clearing Members. Members expressed that the proposed
addition of a minimum level of skin-in-the-game would be a welcome
enhancement by OCC. One market participant expressed its appreciation
for OCC's commitment to resiliency, but renewed concerns it had raised
in connection with OCC's Capital Management Policy about increases in
OCC's capital and, if OCC were sold, a more commercial orientation
monetized with higher fees. As OCC stated with respect to the
establishment of the Capital Management Policy,\16\ OCC believes that
this view is well outside the scope of the Capital Management Policy
and this proposed rule change, but will continue to engage with
Clearing Members and other market participants to address any concerns.
While questions were raised in these conversations, no specific
suggestions were made.
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    \14\ OCC announced these decisions in a press release and letter
to Clearing Members. See Press Release, OCC To Lower Costs for Users
of U.S. Equity Derivatives Markets (Aug. 3, 2020), available at
https://www.theocc.com/Newsroom/Press-Releases/2020/08-03-OCC-To-Lower-Costs-for-Users-of-US-Equity-De; ``Letter to Clearing Member
Firms--OCC to Lower Costs for Users of U.S. Equity Derivative
Markets'' (Aug. 3, 2020), available at https://www.theocc.com/Newsroom/Views/2020/08-03-Letter-to-Clearing-Member-Firms.
    \15\ See Exchange Act Release No. 89534 (Aug. 12, 2020), 85 FR
50858 (Aug. 18, 2020) (File No. SR-OCC-2020-009).
    \16\ See Exhibit 3g to File No. SR-OCC-2019-007.
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Proposed Changes
    In order to establish a persistent minimum amount of skin-in-the-
game, OCC is proposing to: (a) Amend OCC's Rules to define the Minimum
Corporate Contribution, insert the Minimum Corporate Contribution in
OCC's default waterfall as provided in Rule 1006, provide for how OCC
would calculate any LNAFBE greater than 110% of its Target Capital
Requirement OCC would contribute in addition to the Minimum Corporate
Contribution, and provide a time by which OCC would reestablish the
Minimum Corporate Contribution if and when OCC uses it to cover default
losses; (b) amend the Capital Management Policy to exclude the Minimum
Corporate Contribution from OCC's measurement of its LNAFBE against its
Target Capital Requirement and from OCC's calculation of the Early
Warning and Trigger Event, to ensure that OCC may maintain the Minimum
Corporate Contribution exclusively for default losses while retaining
access to replenishment capital in the event OCC suffers an operational
loss that reduces its Equity below those thresholds; and (c) apply
conforming changes to the Default Management Policy, Clearing Fund
Methodology Policy, and the RWD Plan to reflect that in the event of a
default loss or liquidity shortfall, the Minimum Corporate Contribution
would be charged after contributing the margin and Clearing Fund
deposit of a default member and before the contribution of OCC's LNAFBE
in excess of 110% of OCC's Target Capital Requirement, both before OCC
charges the Clearing Fund deposits of non-default Clearing Members and
the EDCP Unvested Balance on a pro rata basis.
(a) Amendments to OCC's Rules
    To establish and maintain a persistent minimum level of skin-in-
the-game, OCC proposes to amend its Rules to (1) define the Minimum
Corporate Contribution; (2) revise OCC's default waterfall to more
clearing define the skin-in-the-game resources OCC would contribute to
a default loss; (3) provide for how OCC would calculate any LNAFBE
greater than 110% of the Target Capital Requirement it would contribute
after exhausting the Minimum Corporate Contribution; and (4) provide
for how OCC would replenish the Minimum Corporate Contribution after
each chargeable default loss.
(1) Defining the Minimum Corporate Contribution
    OCC would establish a persistent minimum level of skin-in-the-game
by first amending OCC's Rules to define the Minimum Corporate
Contribution in Chapter I of the Rules to mean the minimum level of
OCC's own funds maintained exclusively to cover credit losses or
liquidity shortfalls, the level of which OCC's Board shall determine
from time to time. As OCC's own funds, OCC would hold the Minimum
Corporate Contribution in accordance with OCC's By-Laws governing the
investment of OCC's funds \17\ and OCC's policies and procedures
governing cash and investment management. Specifically, OCC maintains
uninvested OCC cash in demand deposits and any investments of funds
maintained to satisfy the Minimum Corporate Contribution would be
limited to overnight reverse repurchase agreements involving U.S.
Government Treasury Securities, consistent with OCC's same-day
liquidity needs for such funds.
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    \17\ See OCC By-Laws Art. IX, Sec. 1.
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    While the proposed definition would give OCC's Board discretion in
setting the Minimum Corporate Contribution,

the Board has approved an initial Minimum Corporate Contribution that
sets OCC's total persistent skin-in-the-game (i.e., the sum of the
Minimum Corporate Contribution and OCC's current EDCP Unvested Balance)
at 25% of OCC's Target Capital Requirement. In setting the initial
Minimum Corporate Contribution, OCC's Board considered factors
including, but not limited to, the regulatory requirements in each
jurisdiction in which OCC is registered or in which OCC is actively
seeking recognition, the amount similarly situated central
counterparties commit of their own resources to address participant
defaults, the EDCP Unvested Balance, OCC's LNAFBE greater than 110% of
its Target Capital Requirement, projected revenue and expenses, and
other projected capital needs.
(2) Revising OCC's Default Waterfall
    OCC would also amend OCC Rule 1006 to insert the Minimum Corporate
Contribution in OCC's default waterfall after contributing a defaulting
Clearing Member's margin and Clearing Fund deposit, and before
contributing OCC's LNAFBE greater than 110% of OCC's Target Capital
Requirement, both of which OCC would exhaust before charging a loss to
the Clearing Fund and the EDCP Unvested Balance, pari passu with the
Clearing Fund deposits of non-defaulting Clearing Members. So placed,
OCC believes that the Minimum Corporate Contribution would demonstrate
OCC's institutional commitment to its ongoing financial surveillance of
clearing members and the establishment and maintenance of a prudent and
effective margin methodology. A draw against the Minimum Corporate
Contribution and the associated requirement to replenish, as discussed
below, would provide fewer resources to meet other corporate
commitments. Accordingly, the proposal would further align OCC's and
its management's interests with those of non-defaulting Clearing
Members.
    OCC would also remove references to ``retained earnings'' or
``current or retained earnings'' in OCC Rule 1006(b), Rule 1006(e)(i),
Rule 1006(e)(ii), and the second sentence of Rule 1006(e)(iii), and
replace them with references to the contribution of the ``Minimum
Corporate Contribution'' and ``the Corporation's liquid net assets
funded by equity that are greater than 110% of its Target Capital
Requirement.'' The refences to ``retained earnings'' or ``current or
retained earnings'' are legacy terms used prior to OCC's implementation
of the Capital Management Policy.\18\ OCC is proposing to replace these
references in OCC's Rules to better identify the funds OCC's would
contribute in terms that align with OCC's Capital Management Policy.
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    \18\ OCC first established discretionary use of OCC's current or
retained earnings to cover default losses in Article VIII (Clearing
Fund) of OCC's By-Laws. See Exchange Act Release No. 15493 (Jan. 4,
1979), 44 FR 3802 (Jan. 18, 1979) (File No. SR-OCC-79-01). When OCC
moved the provisions governing the Clearing Fund from OCC's By-Laws
to the Rules in 2018, the provisions governing the usage of the
Clearing Fund became Rule 1006(e). See Exchange Act Release No.
83735 (July 27, 2018), 83 FR 37855 (Aug. 2, 2018) (File No. SR-OCC-
2018-008).
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(3) Calculating LNAFBE Available as Skin-in-the-Game
    Because OCC proposes to replace references to ``current or retained
earnings,'' OCC would also delete the first sentence of Rule
1006(e)(iii), which currently provides for how OCC determines its
``current earnings'' for purposes of the amount available to cover
losses under Rule 1006(e)(i) and Rule 1006(e)(ii). In its place, the
first sentence of Rule 1006(e)(iii) would set out how OCC would
determine its LNAFBE for purposes of contributing LNAFBE greater than
110% of the Target Capital Requirement to cover default losses and
liquidity shortfalls. Specifically, similar to how the Rules currently
provide for the calculation of ``current earnings,'' OCC would
determine its LNAFBE based on OCC's unaudited financial statements at
the close of the calendar month immediately preceding the occurrence of
the loss or deficiency under paragraphs (e)(i) or (e)(ii), less an
amount equal to the aggregate of all refunds made or authorized to be
made or deemed to have been made during the fiscal year in which such
loss or deficiency occurs if the refund is not reflected on such
unaudited financial statements. Accordingly, OCC would retain the
priority given to the payment of refunds that OCC has declared, but not
yet issued, as currently provided by OCC Rule 1106(e)(iii), when
calculating the amount of LNAFBE available to cover a default loss
after contributing the Minimum Corporate Contribution.
    OCC would further amend Rule 1006(e)(iii) to provide that in no
event shall OCC be required to contribute an amount that would cause
OCC's LNAFBE to fall below 110% of the Target Capital Requirement at
the time changed. The Capital Management Policy, in accordance with SEC
Rule 17Ad-22(e)(15)(ii)(A),\19\ currently requires that the funds OCC
maintains to satisfy its Target Capital Requirement be separate from
OCC's resources to cover participant defaults and liquidity shortfalls.
Accordingly, should a default occur in a month during which OCC suffers
an operational loss that decreases the value of its excess capital
available as skin-in-the-game below what is reflected on the unaudited
financial statement at the close of the previous month,\20\ OCC would
be able to take into account the decrease in its excess capital when
calculating its available LNAFBE above 110% of the Target Capital
Requirement. In addition, OCC would renumber as Rule 1006(e)(iv) the
last sentence of Rule 1006(e)(iii). That sentence, which concerns a
defaulting Clearing Member's continuing obligation for losses OCC
charges to OCC's own capital, is conceptually distinct from the rest of
Rule 1006(e)(iii) and, accordingly, deserves to be addressed
separately.
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    \19\ 17 CFR 240.17Ad-22(e)(15)(ii)(A).
    \20\ Under OCC's current rules, LNAFBE greater than 110% of the
Target Capital Requirement and the EDCP Unvested Balance are
committed to cover both operational losses and default losses. In
the event OCC experiences operational losses and default losses in
short succession, OCC would contribute these resources in the manner
specified by OCC's Rules to the event that occurred first.
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(4) Replenishing the Minimum Corporate Contribution
    Finally, OCC would add a new paragraph to Rule 1006(e)--Rule
1006(e)(v)--to provide for a 270 calendar-day period during which the
Minimum Corporate Contribution, once charged, would be reduced to the
remaining unused portion. OCC believes that 270 calendar days, or
approximately nine months, is sufficient time for OCC to accumulate the
funds necessary to reestablish the Minimum Corporate Contribution. In
making this determination, OCC used the same analysis employed to set
the Early Warning and Trigger Event under its Replenishment Plan, both
of which are based on the time OCC estimates it would take to
accumulate 10% of its Target Capital Requirement.\21\ Specifically, OCC
took into account its typical monthly earnings and the amount of
earnings that would be needed to replenish the Minimum Corporate
Contribution on an after-tax basis. Proposed Rule 1006(e)(v) would also
provide that OCC shall notify Clearing Members of any such reduction to
the Minimum Corporate Contribution.
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    \21\ See Order Approving Capital Management Policy, 85 FR at
5510-11. OCC has included this analysis as part of confidential
Exhibit 3 to File No. SR-OCC-2021-003.
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    Each chargeable loss would trigger a new 270-day period. As such,
proposed

Rule 1006(e)(v) is designed to allow OCC to manage multiple defaults
within a 270-day period by eliminating the risk that a successive
default would exhaust the resources needed to reestablish the Minimum
Corporate Contribution by the end of the initial 270-day period. And
while a successive default loss that does not impact excess LNAFBE \22\
available to replenish the Minimum Corporation Contribution would
nevertheless trigger another 270-day period during which the Minimum
Corporate Contribution would be reduced to the remaining unused portion
after the first two defaults, any LNAFBE greater than 110% of the
Target Capital Requirement would continue to be available to cover
successive default losses. In the very unlikely event that OCC
experiences an operational loss or a drop in revenue from clearing fees
that threatens its ability to reestablish the Minimum Corporate
Contribution at the end of the 270-day period, OCC would likely file a
rule change to extend the period rather than act to lower the Minimum
Corporate Contribution, dependent on the Board's consideration of the
same non-exclusive list of factors that the Board would consider when
determining whether to adjust the Minimum Corporate Contribution,
discussed below.
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    \22\ As described below, OCC is proposing to amend the Capital
Management Policy to exclude the Minimum Corporate Contribution from
the definition of LNAFBE. As a result, a second default loss covered
exclusively by the Minimum Corporate Contribution would not impact
OCC's level of LNAFBE.
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(b) Amendments to the Capital Management Policy
    Consistent with the proposed changes to OCC's Rules, OCC would
amend the portions of the Capital Management Policy that concern OCC's
usage of excess capital to cover default losses to more specifically
identify the resources OCC would contribute to default losses; namely,
the Minimum Corporate Contribution and LNAFBE above 110% of the Target
Capital Requirement. OCC would clarify that after exhausting the
Minimum Corporate Contribution, OCC would continue to offset default
losses with LNAFBE, rather than ``Equity,'' above 110% of the Target
Capital requirement. This change is not intended to change OCC's
current obligations. Rather, OCC intends to conform the Capital
Management Policy so that the terms are consistent with those used in
the proposed Rules, other requirements in the Capital Management
Policy, and OCC's regulatory obligations. Specifically, the Capital
Management Policy provides that the resources held to meet the Target
Capital Requirement must be liquid assets separate from OCC's resources
to cover participant defaults and liquidity shortfalls, consistent with
SEC Rule 17Ad-22(e)(15)(ii)(A).\23\ Because Equity typically exceeds
LNAFBE and because any funds OCC would contribute to cover a default
loss would need to be liquid assets, contributing liquid assets in
excess of LNAFBE greater than 110% of the Target Capital Requirement
would be inconsistent with the Capital Management Policy.
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    \23\ See 17 CFR 240.17Ad-22(e)(15)(ii)(A).
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    In addition, OCC would amend the Capital Management Policy's list
of capital management actions with a material impact on current or
future levels of Equity, replacing ``use of current and retained
earnings greater than 100% of the Target Capital Requirement'' with
``use of excess capital,'' to align with the title of the Capital
Management Policy's ``Excess Capital Usage'' section. That section
would also be updated to include a discussion of the factors that the
Board would consider in establishing and adjusting the Minimum
Corporate Contribution. Factors the Board would consider include, but
are not limited to, the regulatory requirements in each jurisdiction in
which OCC is registered or in which OCC is actively seeking
recognition, the amount similarly situated central counterparties
commit of their own resources to address participant defaults, the
current and projected level of the EDCP Unvested Balance, OCC's LNAFBE
greater than 110% of its Target Capital Requirement, projected revenue
and expenses, and other projected capital needs. While the Capital
Management Policy would provide that the Board would review Minimum
Corporate Contribution annually, the Board would retain authority to
change the Minimum Corporate at its discretion. In addition, the
Capital Management Policy would be updated to include the substance of
and references to proposed Rule 1006(e)(v), which, as discussed above,
provides for a 270-day period following a chargeable loss during which
the Minimum Corporate Contribution is reduced to its remaining unused
portion.
    OCC would also amend the definition of LNAFBE in the Capital
Management Policy to specifically exclude the Minimum Corporate
Contribution, which would be dedicated to cover default losses. The
Capital Management Policy defines LNAFBE as the level of cash and cash
equivalents, no greater than Equity, less any approved adjustments. The
definition currently specifies the exclusion of ``agency-related
liabilities, such as Section 31 fees'' as the only approved adjustment.
OCC would amend the definition to add the Minimum Corporate
Contribution as another example of an approved exemption to the
calculation of LNAFBE. As discussed in more detail in the discussion of
the statutory basis for these proposed changes below, this proposed
amendment to the definition of LNAFBE is intended to ensure that OCC
does not double count resources committed to cover default losses as
resources available to satisfy regulatory requirements concerning the
amount of LNAFBE or other financial resources OCC must maintain to
cover operational costs and potential business losses. For similar
reasons, OCC would amend the Capital Management Policy's discussion of
OCC's Replenishment Plan to add that in the event of an operational
loss, OCC shall first use Equity, ``less the Minimum Corporate
Contribution,'' above 110% of Target Capital. This amendment reflects
that the funds maintained for the Minimum Corporate Contribution are
not funds available to cover operational losses.
    With respect to OCC's Replenishment Plan, OCC would also amend the
definitions of the Early Warning and Trigger Event to exclude the
Minimum Corporate Contribution from the calculation of those thresholds
so that OCC maintains access to replenishment capital in the event
operational losses materialize while still maintaining the Minimum
Corporate Contribution exclusively to cover default losses. As
described above, the Early Warning and Trigger Event are the thresholds
for actions under OCC's Replenishment Plan. Currently, the Early
Warning and Trigger Event thresholds are defined with respect to OCC's
Equity falling below certain thresholds. OCC is proposing to amend
those definitions so that the Early Warning and Trigger Event occur
when Equity ``less the Minimum Corporate Contribution'' falls below
those same thresholds. These changes would ensure that OCC may maintain
the Minimum Corporate Contribution exclusively to address default
losses--the effect of which would be to increase Equity relative to
LNAFBE--while still maintaining access to its Replenishment Plan should
OCC's Equity, less the Minimum Corporate Contribution, fall close to or
below the Target Capital Requirement.

(c) Amendments to the Default Management Policy, Clearing Fund
Methodology Policy, and RWD Plan
    To accommodate the proposed establishment of the Minimum Corporate
Contribution, OCC proposes conforming changes to other rule-filed
policies that describe OCC's default waterfall, as set forth in OCC
Rule 1006. In the Default Management Policy, OCC would delete the
passage concerning ``Current and Retained Earnings'' in the current
discussion of OCC's default waterfall and replace it with the Minimum
Corporate Contribution and LNAFBE greater than 110% of the Target
Capital Requirement, as provided in the proposed amendments to Rule
1006 above. OCC would also amend the Default Management Policy's
definition of ``financial resources'' to include the Minimum Corporate
Contribution as among those available to address Clearing Member
defaults and suspensions. In the Clearing Fund Methodology Policy, OCC
would similarly revise the discussion of the default waterfall in that
policy's section covering Clearing Fund charges and assessments to
incorporate the Minimum Corporate Contribution, consistent with the
proposed amendments to Rule 1006 above. OCC would also amend the
Clearing Fund Methodology Policy's definitions of OCC's ``Pre-Funded
Financial Resources'' for the purposes of sizing or measuring the
sufficiency of the Clearing Fund to include the Minimum Corporate
Contribution. Finally, OCC would amend the RWD Plan to replace all
references to ``current or retained earnings'' with the Minimum
Corporate Contribution and LNAFBE greater than 110% of the Target
Capital Requirement, or ``skin-in-the-game'' for short, modify certain
example scenarios concerning use of OCC's Enhanced Risk Management and
Recovery Tools to account for the proposed Minimum Corporate
Contribution, and make certain other conforming changes concerning use
of skin-in-the-game to address liquidity shortfalls and, in the case of
LNAFBE greater than 110% of the Target Capital Requirement, OCC's
authority to use skin-in-the-game to address losses resulting from bank
or securities or commodities clearing organization failures, including
custody or investment losses.
(2) Statutory Basis
    OCC believes the proposed rule changes are consistent with Section
17A of the Securities Exchange Act of 1934 (``Exchange Act'') and the
rules and regulations thereunder. In particular, OCC believes that the
proposed establishment of the Minimum Corporate Contribution and other
proposed changes are consistent with Section 17A(b)(3)(F) of the
Exchange Act \24\ and Rules 17Ad-22(e)(2)(i),\25\ 17Ad-22(e)(4), \26\
17Ad-22(e)(15)(ii)(A),\27\ 17Ad-22(e)(15)(iii),\28\ and Rule 17Ad-
22(e)(23) \29\ thereunder for the reasons described below.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78q-1(b)(3)(F).
    \25\ 17 CFR 240.17Ad-22(e)(2)(i).
    \26\ 17 CFR 240.17Ad-22(e)(4).
    \27\ 17 CFR 240.17Ad-22(e)(15)(ii).
    \28\ 17 CFR 240.17Ad-22(e)(15)(iii).
    \29\ 17 CFR 240.17Ad-22(e)(23).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Exchange Act requires, in part, that
the rules of OCC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, in general, to
protect investors and the public interest. The proposed revisions to
the Capital Management Policy's definitions of LNAFBE, Early Warning
and Trigger Event are designed to ensure that OCC may establish the
Minimum Corporate Contribution exclusively to cover default losses
while continuing to maintain sufficient LNAFBE for operational expenses
such that it could continue to promptly and accurately clear and settle
securities transactions even if it suffered significant operational
losses, including by continuing to maintain access to its Replenishment
Plan should an operational loss cause OCC's Equity, less the Minimum
Corporate Contribution, to fall close to or below OCC's Target Capital
Requirement. In other words, conforming these definitions to account
for the establishment of the Minimum Corporate Contribution, which will
not be available to cover operational losses, ensures that OCC will
continue to hold sufficient LNAFBE separate from the Minimum Corporate
Contribution and maintain access to its Replenishment Plan to absorb
operational losses and avoid a disruption that could negatively impact
OCC's prompt and accurate clearing and settlement of transactions.
Therefore, OCC believes that the proposed amendments to the definitions
of LNAFBE, Early Warning and Trigger Event under its Capital Management
Policy, which are reasonably designed to ensure that OCC has sufficient
LNAFBE to continue operations in the event of an operational loss, are
consistent with the requirements of Section 17A(b)(3)(F) of the
Exchange Act by protecting investors and the public interest.\30\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(4) under the Exchange Act provides, in part, that
OCC establish, implement, maintain and enforce written policies and
procedures reasonably designed to effectively identify, measure,
monitor and manage its credit exposures to participants and those
arising from its payment, clearing and settlement processes, including
by maintaining sufficient financial resources to cover its credit
exposure to each participant fully with a high degree of
confidence.\31\ By providing that OCC shall maintain a minimum level of
skin-in-the-game--in addition to OCC's LNAFBE greater than 110% of its
Target Capital Requirement, contributed prior to charging the Clearing
Fund, as OCC's Rules currently provide--OCC is providing for a minimum
level of pre-funded financial resources available to cover losses in
the event of a Clearing Member default, and reducing the amount OCC
would charge the Clearing Fund contributions of non-defaulting Clearing
Members. Therefore, OCC believes the amendments to its Rules, the
Capital Management Policy, and other related policies to establish the
Minimum Corporate Contribution are consistent with Rule 17Ad-22(e)(4).
---------------------------------------------------------------------------

    \31\ 17 CFR 240.17Ad-22(e)(4)(i).
---------------------------------------------------------------------------

    OCC also believes that the proposed changes to the definition of
LNAFBE in OCC's Capital Management Policy, which exclude the Minimum
Corporate Contribution from the calculation of LNAFBE, are consistent
with Rule 17Ad-22(e)(15)(ii)(A) under the Exchange Act.\32\ Rule 17Ad-
22(e)(15)(ii)(A) requires that the LNAFBE held by OCC to satisfy the
minimum LNAFBE required by Rule 17Ad-22(e)(15)(ii) \33\ shall be in
addition to resources held to cover participant defaults or other
credit or

liquidity risks.\34\ The proposed revision to OCC's definition of
LNAFBE is designed to satisfy Rule 17Ad-22(e)(15)(ii)(A) by providing
that the proposed Minimum Corporate Contribution, which would be held
exclusively to cover participant defaults and liquidity shortfalls,
would be in addition to the LNAFBE that OCC holds to meet or exceed its
regulatory capital requirements under Rule 17Ad-22(e)(15)(ii)--i.e.,
LNAFBE in an amount equal to 110% of OCC's Target Capital Requirement.
In addition, the proposed revisions to OCC Rule 1006(e)(iii) and the
Capital Management Policy--which would specify that OCC's committed
skin-in-the-game shall include the Minimum Corporate Contribution and
LNAFBE greater than 110% of the Target Capital Requirements--are
reasonably designed to ensure that OCC would not be obligated to
contribute an amount of skin-in-the-game that would cause its LNAFBE to
fall below the Early Warning threshold intended to ensure OCC maintains
sufficient LNAFBE to meet its regulatory obligations. As a result, OCC
believes the proposed amendments to the Capital Management Policy are
designed to comply with Rule 17Ad-22(e)(15)(ii)(A).
---------------------------------------------------------------------------

    \32\ 17 CFR 240.17Ad-22(e)(15)(ii)(A).
    \33\ Rule 17Ad-22(e)(15)(ii), in turn, requires that OCC hold
LNAFBE to the greater of (x) six months of OCC's current operating
expenses, or (y) the amount determined by the Board to be sufficient
to ensure a recovery or orderly wind-down of critical operations and
services. 17 CFR 240.17Ad-22(e)(15)(ii). OCC's Capital Management
Policy is reasonably designed to meet this requirement, and Rule
17Ad-22(e)(15) more broadly, by providing that OCC sets its Target
Capital Requirement at a level sufficient to maintain LNAFBE at
least equal to the greater of: (x) Six months of OCC's current
operating expenses, (y) the amount determined by the Board to be
sufficient to ensure a recovery or orderly winddown of critical
operations and services, and (z) the amount determined by the Board
to be sufficient for OCC to continue operations and services as a
going concern if general business losses materialize. See Order
Approving Capital Management Policy, 85 FR at 5501-02. In addition,
in setting the Target Capital Requirement, OCC's Board considers
OCC's projected rolling twelve-months' operating expenses to ensure
that OCC maintains Equity and other financial resources approved by
the CFTC, as required by CFTC Rule 39.11(a)(2). See id. at 5501 n.19
(citing 17 CFR 39.11(a)(2)).
    \34\ Id. Similarly, CFTC Rule 39.11(b)(3) provides that a
derivatives clearing organization (``DCO'') may allocate financial
resources to satisfy requirements that the DCO possess financial
resources (i) to enable the DCO to meet obligations notwithstanding
a default by the clearing member creating the largest financial
exposure for the DCO in extreme but plausible market conditions, and
(ii) to enable the DCO to cover its operational costs, but not both.
See 17 CFR 39.11(b)(3).
---------------------------------------------------------------------------

    In addition, OCC believes that the proposed amendments to OCC's
definition of the Early Warning and Trigger Event thresholds under
OCC's Replenishment Plan are consistent with Rule 17Ad-22(e)(15)(iii)
\35\ because excluding the Minimum Corporate Contribution from those
thresholds would ensure that OCC may continue to access replenishment
capital in the unlikely event that OCC experiences an operational loss
while continuing to maintain the Minimum Corporate Contribution
exclusively to cover default losses. Rule 17Ad-22(e)(15)(iii) requires,
in part, that OCC establish, implement, maintain and enforce written
policies and procedures reasonably designed to identify, monitor, and
manage OCC's general business risk, including by maintaining a viable
plan for raising additional Equity should its Equity fall close to or
below the amount required under Rule 17Ad-22(e)(15)(ii).\36\ By setting
the threshold triggers by reference to the Target Capital Requirement,
OCC's Replenishment Plan is designed to require OCC to act to raise
capital should its Equity fall close to or below the amounts required
under Rule 17Ad-22(e)(15)(ii). However, the effect of holding the
Minimum Corporate Contribution would be to increase OCC's Equity
relative to LNAFBE available to cover potential operational losses. To
help ensure that OCC holds LNAFBE above its Target Capital Requirement
and maintains access to replenishment capital, the proposed change
would exclude the Minimum Corporate Contribution when measuring OCC's
Equity against the Early Warning and Trigger Event thresholds under its
Replenishment Plan. Accordingly, OCC believes that the proposed
amendments to the definitions of the Early Warning and Trigger Event
thresholds are consistent with Rule 17Ad-22(e)(15)(iii).
---------------------------------------------------------------------------

    \35\ 17 CFR 240.17Ad-22(e)(15)(iii).
    \36\ Id. As discussed in note 33, supra, OCC's Target Capital
Requirement is reasonably designed to meet or exceed the minimum
LNAFBE required to satisfy Rule 17Ad-22(e)(15)(ii).
---------------------------------------------------------------------------

    OCC also believe that the proposed changes are consistent with Rule
17Ad-22(e)(2)(i), which requires that covered clearing agencies
maintain written policies and procedures reasonably designed to provide
for governance arrangements that are clear and transparent.\37\ The
proposed changes would align the terminology used in OCC's Rules and
other rule-filed policies with the terminology of the Capital
Management Policy, providing better clarity and consistency between
OCC's governing documents. Specifically, OCC would amend its Rules,
Capital Management Policy, Default Management Policy, Clearing Fund
Methodology Policy and RWD Plan to identify OCC's sources of skin-in-
the-game (the Minimum Corporation Contribution, LNAFBE greater than
110% of the Target Capital Requirement, and the EDCP Unvested Balance)
and their places within OCC's default waterfall. The proposed
amendments to the Capital Management Policy would also identify factors
the Board would consider in setting and adjusting the Minimum Corporate
Contribution. Accordingly, OCC believes conforming the terms in these
governance arrangements and identifying factors OCC would consider in
adjusting the Minimum Corporate Contribution is consistent with Rule
17Ad-22(e)(2)(i).
---------------------------------------------------------------------------

    \37\ 17 CFR 240.17Ad-22(e)(2)(i).
---------------------------------------------------------------------------

    Finally, OCC believe that the proposed changes are consistent with
Rule 17Ad-22(e)(23), which requires covered clearing agencies to
maintain written policies and procedures reasonably designed to, among
other things, provide for publicly disclosing all relevant rules and
material procedures, including key aspects of its default rules and
procedures.\38\ The proposed changes would amend OCC's Rules to remove
the pre-Capital Management Policy references to use of ``retained
earnings'' or ``current and retained earnings'' with respect to the
sources of OCC's skin-in-the-game, and instead identify the Minimum
Corporate Contribution and LNAFBE greater than 110% of the Target
Capital Requirement. The proposed changes would also provide greater
clarity about how OCC calculates the amount of LNAFBE greater than 110%
of the Target Capital Requirement based upon the unaudited financial
statements from the close of the prior month; provided, however, that
OCC would not be required to contribute an amount that would cause its
LNAFBE to fall below 110% of the Target Capital Requirement at the time
charged. The proposed changes to OCC Rules would, in turn, be made
available on OCC's website. Therefore, OCC believes the proposed
changes would disclose relevant default rules and procedures to the
public and to Clearing Members.
---------------------------------------------------------------------------

    \38\ 17 CFR 240.17Ad-22(e)(23).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Exchange Act \39\ requires that the
rules of a clearing agency not impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Act. OCC
does not believe that the establishment of a Minimum Corporate
Contribution and the other attendant changes discussed above have any
impact, or impose any burden, on competition. As discussed above, OCC
would charge the Minimum Corporate Contribution to cover a default loss
or liquidity shortfall after charging the margin and Clearing Fund
deposit of a default Clearing Member, and before charging OCC's LNAFBE
above 110% of the Target Capital Requirement, both of which would be
exhausted before OCC charged a default loss to the Clearing Fund
deposits of non-defaulting members and the EDCP Unvested Balance on a
pro rata basis. Accordingly, all Clearing Members would benefit by the
establishment of the Minimum Corporate Contribution,

which would provide a persistent minimum level of skin-in-the-game to
absorb default losses or liquidity shortfalls prior to charging such
losses to non-defaulting Clearing Members.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others

    Written comments on the proposed rule change were not and are not
intended to be solicited with respect to the proposed rule change and
none have been 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 up to 90 days (i) as the
Commission may designate 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 the 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-OCC-2021-003 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-OCC-2021-003. 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 such filing also will be available for inspection
and copying at the principal office of OCC and on OCC's website at
https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
    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-OCC-2021-003 and
should be submitted on or before March 23, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
---------------------------------------------------------------------------

    \40\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04217 Filed 3-1-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 7 (Wednesday, January 11, 2023)]
[Notices]
[Pages 1573-1575]
[FR Doc No: 2023-00366]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following Complaints
and Compliance filings in EL Dockets:

    Docket Numbers: EL23-21-000.
    Applicants: CORE Electric Cooperative, Grand Valley Rural Power
Lines, Inc., Holy Cross Electric Association, Inc., and Yampa Valley
Electric Association, Inc. v. Public Service Company of Colorado.
    Description: Complaint of CORE Electric Cooperative, et al. v.
Public Service Company of Colorado.
    Filed Date: 12/30/22.
    Accession Number: 20230104-5111.
    Comment Date: 5 p.m. ET 1/30/23.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-1618-018; ER10-1631-020; ER10-1854-020; ER10-
1892-023; ER10-2678-021; ER10-2729-015; ER10-2739-036; ER10-2744-021;
ER11-3320-020; ER11-3321-013; ER13-2316-018; ER14-19-019; ER14-1219-
015; ER14-2548-011; ER16-1652-023; ER16-1732-014; ER16-2405-014; ER16-
2406-015; ER17-989-013; ER17-990-013; ER17-992-013; ER17-993-013; ER17-
1946-013; ER17-1947-007; ER17-1948-007; ER18-95-010; ER20-660-010;
ER20-1440-006; ER21-202-002; ER21-1133-003; ER22-425-003; ER22-1241-
002.
    Applicants: REV Energy Marketing, LLC, Enerwise Global
Technologies, LLC, Hummel Station, LLC, Centrica Business Solutions
Optimize, LLC, Yards Creek Energy, LLC, Bolt Energy Marketing, LLC,
Buchanan Energy Services Company, LLC, Helix Ravenswood, LLC, Helix
Maine Wind Development, LLC, Helix Ironwood, LLC, Bath County Energy,
LLC, Springdale Energy, LLC, Gans Energy, LLC, Chambersburg Energy,
LLC, Rockford Power, LLC, Rockford Power II, LLC, Aurora Generation,
LLC, LifeEnergy LLC, Ocean State Power, Armstrong Power, LLC, West
Deptford Energy, LLC, Seneca Generation, LLC, Wallingford Energy LLC,
LSP University Park, LLC, Riverside Generating Company, L.L.C., LS
Power Marketing, LLC, Buchanan Generation, LLC, Troy Energy, LLC,
Columbia Energy LLC, Doswell Limited Partnership, Rolling Hills
Generating, L.L.C.
    Description: Updated Market Power Analysis for Northeast Region of
LS Power Marketing, LLC, et al.
    Filed Date: 12/30/22.
    Accession Number: 20221230-5411.
    Comment Date: 5 p.m. ET 2/28/23.

    Docket Numbers: ER10-1776-005; ER10-2822-022; ER10-2824-005; ER10-
2825-006; ER10-2831-004; ER10-2957-006; ER10-2995-006; ER10-2996-005;
ER10-2999-005; ER10-3000-005; ER10-3009-007; ER10-3013-006; ER10-3014-
003; ER10-3029-005; ER11-2196-011; ER16-1250-015; ER17-1243-003; ER17-
1769-004; ER19-2360-004; ER21-2272-003; ER21-2748-003; ER21-2847-003;
ER22-2173-002; ER22-2174-002.
    Applicants: Daybreak Solar, LLC, Bakeoven Solar, LLC, Montague
Solar, LLC, Lund Hill Solar, LLC, Bracewell LLP, Golden Hills Wind
Farm, LLC, Montague Wind Power Facility, LLC, Solar Star Oregon II,
LLC, Twin Buttes Wind II LLC, Avangrid Renewables, LLC, San Luis Solar
LLC, Klondike Wind Power III LLC, Twin Buttes Wind LLC, Star Point Wind
Project LLC, Pebble Springs Wind LLC, Klondike Wind Power II LLC,
Klondike Wind Power LLC, Klamath Energy LLC, Juniper Canyon Wind Power
LLC, Hay Canyon Wind LLC, Colorado Green Holdings LLC, Big Horn II Wind
Project LLC, Big Horn Wind Project LLC, Atlantic Renewable Projects II
LLC, Leaning Juniper Wind Power II LLC.
    Description: Updated Market Power Analysis for Northwest Region of
Atlantic Renewable Projects II LLC, et al.
    Filed Date: 12/30/22.
    Accession Number: 20221230-5412.
    Comment Date: 5 p.m. ET 2/28/23.

    Docket Numbers: ER10-2042-042; ER10-1942-034; ER17-696-022; ER10-
1938-037; ER10-1934-036; ER10-1893-036; ER10-3051-041; ER10-2985-040;
ER10-3049-041; ER10-1877-010; ER11-4369-021; ER16-2218-022; ER10-1862-
036.
    Applicants: Power Contract Financing, L.L.C., North American Power
Business, LLC, North American Power and Gas, LLC, Hermiston Power, LLC,
Champion Energy Services, LLC, Champion Energy Marketing LLC, Champion
Energy, LLC, CES Marketing X, LLC, CES Marketing IX, LLC, Calpine Power
America--CA, LLC, Calpine Energy Solutions, LLC, Calpine Construction
Finance Co., L.P., Calpine Energy Services, L.P.

    Description: Updated Market Power Analysis for Northwest Region of
Calpine Energy Services, L.P, et al.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5523.
    Comment Date: 5 p.m. ET 3/6/23.

    Docket Numbers: ER10-2822-023; ER16-1250-016; ER11-2112-011; ER10-
2828-007; ER10-2285-008; ER17-1241-002; ER16-2285-005; ER10-2423-011;
ER10-2404-011; ER10-2812-018; ER10-1291-025; ER10-2843-017; ER12-2649-
006; ER10-1725-006; ER10-3001-007; ER10-3002-007; ER10-3004-008; ER12-
422-008; ER10-2301-006; ER19-2361-002; ER20-2830-001; ER10-3010-007;
ER10-2306-006; ER12-96-010; ER10-3031-007; ER10-3160-005; ER16-1637-
004.
    Applicants: UIL Distributed Resources, LLC, The United Illuminating
Company, Streator-Cayuga Ridge Wind Power LLC, South Chestnut LLC,
Rochester Gas and Electric Corporation, Providence Heights Wind,
LLC,PPM Roaring Brook, LLC, Otter Creek Wind Farm LLC, New York State
Electric & Gas Corporation, New England Wind, LLC, Locust Ridge Wind
Farm II, LLC, Locust Ridge Wind Farm, LLC, Lempster Wind, LLC,
Hardscrabble Wind Power LLC, Groton Wind, LLC, GenConn Middletown LLC,
GenConn Energy LLC, GenConn Devon LLC, Flat Rock Windpower II LLC, Flat
Rock Windpower LLC, Desert Wind Farm LLC, Deerfield Wind, LLC, Central
Maine Power Company, Casselman Windpower LLC, Blue Creek Wind Farm LLC,
Avangrid Renewables, LLC, Atlantic Renewable Projects II LLC.
    Description: Triennial Market Power Analysis for Northeast Region
of Atlantic Renewable Projects II LLC, et al.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5522.
    Comment Date: 5 pm ET 3/6/23.

    Docket Numbers: ER11-2639-015.
    Applicants: Ridge Crest Wind Partners, LLC.
    Description: Updated Market Power Analysis for Northwest Region of
Ridge Crest Wind Partners, LLC.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5519.
    Comment Date: 5 p.m. ET 3/6/23.

    Docket Numbers: ER16-915-006; ER10-2861-011; ER12-1308-014; ER13-
1504-012; ER15-1952-012; ER16-612-001.
    Applicants: Greeley Energy Facility, LLC, Pavant Solar LLC, SWG
Arapahoe, LLC, Palouse Wind, LLC, Fountain Valley Power, L.L.C.,
Comanche Solar PV, LLC.
    Description: Updated Market Power Analysis for Northwest Region of
Comanche Solar PV, LLC, et al.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5521.
    Comment Date: 5 pm ET 3/6/23.

    Docket Numbers: ER19-1044-006.
    Applicants: Telocaset Wind Power Partners, LLC.
    Description: Updated Market Power Analysis for Northwest Region and
Notice of Change in Status of Telocaset Wind Power Partners, LLC.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5513.
    Comment Date: 5 p.m. ET 3/6/23.

    Docket Numbers: ER19-2439-001
    Applicants: Tampa Electric Company.
    Description: Notice of Change in Status of Tampa Electric Company.
    Filed Date: 1/4/23.
    Accession Number: 20230104-5201.
    Comment Date: 5 p.m. ET 1/25/23.

    Docket Numbers: ER21-1044-001.
    Applicants: Tri-State Generation and Transmission Association, Inc.
    Description: Updated Market Power Analysis for Northwest Region of
Hartree Partners, LP.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5518.
    Comment Date: 5 p.m. ET 3/6/23.

    Docket Numbers: ER23-397-001.
    Applicants: PJM Interconnection, L.L.C.
    Description: Tariff Amendment: Request to Defer Action-Amendment to
ISA & ICSA, SA# 5564 & 5565; Queue AA2-161 to be effective 12/31/9998.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5077.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-580-001.
    Applicants: PJM Interconnection, L.L.C.
    Description: Tariff Amendment: Request to Defer Action on Amendment
to WMPA, SA No. 5591; Queue No. AE2-054 to be effective 12/31/9998.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5075.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-771-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) Rate Filing: 2023-01-05_SA 3392 Entergy
Arkansas-New Madrid Solar 1st Rev GIA (J944) to be effective 12/20/
2022.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5023.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-772-000.
    Applicants: Arizona Public Service Company.
    Description: Sec.  205(d) Rate Filing: Service Agreement No. 407,
Ditat Deus Solar LGIA to be effective 12/8/2022.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5036.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-773-000.
    Applicants: Pacific Gas and Electric Company.
    Description: Sec.  205(d) Rate Filing: CCSF missed WPAs filing (WDT
SA 275) to be effective 3/7/2023.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5047.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-774-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) Rate Filing: 2023-01-05_SA 2672
Termination of METC-Lansing Brd of Water IFA to be effective 1/6/2023.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5054.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-775-000.
    Applicants: PJM Interconnection, L.L.C.
    Description: Sec.  205(d) Rate Filing: PJM submits Amended NJ SAA
Agreement as Rate Sch. No. 49 to be effective 4/15/2022.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5067.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-776-000.
    Applicants: PJM Interconnection, L.L.C.
    Description: Sec.  205(d) Rate Filing: Original ISA, Service
Agreement No. 6747; Queue No. AF1-290 to be effective 12/7/2022.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5068.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-777-000.
    Applicants: New York Independent System Operator, Inc., Niagara
Mohawk Power Corporation.
    Description: Sec.  205(d) Rate Filing: New York Independent System
Operator, Inc. submits tariff filing per 35.13(a)(2)(iii: NYISO-
National Grid Joint 205: Amended SGIA NYISO NatGrid Pattersonville
SA2544 to be effective 12/20/2022.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5071.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-778-000.
    Applicants: Avista Corporation.
    Description: Petition for Limited Waiver of Avista Corporation.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5101.
    Comment Date: 5 p.m. ET 1/26/23.

    Docket Numbers: ER23-779-000.
    Applicants: PJM Interconnection, L.L.C.
    Description: Sec.  205(d) Rate Filing: Revisions to Sch. 12--Appx A
and C--

Dec. 2022 RTEP, 30-Day Comment Period to be effective 4/5/2023.
    Filed Date: 1/5/23.
    Accession Number: 20230105-5117.
    Comment Date: 5 p.m. ET 1/26/23.

    Take notice that the Commission received the following electric
securities filings:

    Docket Numbers: ES23-24-000.
    Applicants: Citizens S-Line Transmission LLC.
    Description: Application Under Section 204 of the Federal Power Act
for Authorization to Issue Securities of Citizens S-Line Transmission
LLC.
    Filed Date: 1/3/23.
    Accession Number: 20230103-5524.
    Comment Date: 5 p.m. ET 1/24/23.

    The filings are accessible in the Commission's eLibrary system
(https://elibrary.ferc.gov/idmws/search/fercgensearch.asp) by 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: January 5, 2023.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2023-00366 Filed 1-10-23; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: May 11, 2010 (Volume 75, Number 90)]
[Notices]
[Page 26209-26210]
[DOCID:fr11my10-59]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

May 3, 2010.
    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG10-37-000.
    Applicants: TX Solar I LLC.
    Description: Notice of Self-Certification of Exempt Wholesale
Generator Status of TX Solar I LLC.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5151.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER01-1699-010.
    Applicants: Pilot Power Group, Inc.
    Description: Pilot Power Group, Inc submits a request for Category
1 Seller Status Classification Pursuant to Order No. 697 etc.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0238.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-720-002.
    Applicants: Northeastern Power Company.
    Description: Northeastern Power Company's Refund Report.
    Filed Date: 05/03/2010.
    Accession Number: 20100503-5074.
    Comment Date: 5 p.m. Eastern Time on Monday, May 24, 2010.

    Docket Numbers: ER10-1127-001.
    Applicants: Florida Power Corporation.
    Description: Florida Power Corp submits correction to Amendment to
the Cost-Based Sales Agreement with City of Mount Dora, FL.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0237.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1139-000.
    Applicants: Ameren Energy Marketing Company.
    Description: Ameren Energy Marketing Company submits tariff filing
per 35.12: Ameren Energy Marketing Company Market Based Rate Schedule
to be effective 4/30/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5071.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1141-000.
    Applicants: Ameren Energy Generating Company.
    Description: Ameren Energy Generating Company submits tariff filing
per 35.12: Ameren Energy Generating Company General Tariff to be
effective 5/3/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5099.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1142-000.
    Applicants: FirstEnergy Generation Corp.
    Description: FirstEnergy Generation Corp. submits tariff filing per
35.12: Market-Based Power Sales tariff to be effective 4/1/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5109.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1143-000.
    Applicants: PECO Energy Company.
    Description: PECO Energy Company submits tariff filing per 35.12:
PECO Energy Company MBR to be effective 4/30/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5110.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1144-000.
    Applicants: Exelon Generation Company, LLC.
    Description: Exelon Generation Company, LLC submits tariff filing
per 35.12: Exelon Generation, LLC Vol 1 to be effective 4/30/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5111.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1145-000.
    Applicants: Exelon Generation Company, LLC.
    Description: Exelon Generation Company, LLC submits tariff filing
per 35.12: Exelon Generation, LLC Vol 2 to be effective 4/30/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5113.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1146-000.
    Applicants: New England Power Pool.
    Description: New England Power Pool Participants Committee submits
transmittal letter along with counterpart signature pages of the NEPOOL
Agreement, dated as of 9/1/71.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0254.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1147-000.
    Applicants: PJM Interconnection, LLC.
    Description: PJM Interconnection, LLC submits an executed
interconnection service agreement entered into among PJM et al.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0255.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1149-000.
    Applicants: Florida Power & Light Company.
    Description: Florida Power and Light Company submits revised tariff
sheets for their Open Access Transmission Tariff.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0224.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1151-000.
    Applicants: AmerenEnergy Resources Generating Company.
    Description: AmerenEnergy Resources Generating Company submits
tariff filing per 35.12: AmerenEnergy Resources Generating Company
General Tariff to be effective 5/3/2010.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5277.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1152-000.
    Applicants: PJM Interconnection, LLC.
    Description: Allegheny Power submits FERC Electric Tariff, Sixth
Revised Volume No. 1.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0239.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1153-000.
    Applicants: Consolidated Edison Company of New York.
    Description: Consolidated Edison Co of New York, Inc submits an
amendment to the Delivery Service Rate Schedule No. 96.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0244.

    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1154-000.
    Applicants: Buy Energy Direct, LLC.
    Description: Buy Energy Direct, LLC submits a Petition for
Acceptance of Initial Rate Schedule, Waivers and Blanket Authority.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0243.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1155-000.
    Applicants: PacifiCorp.
    Description: PacifiCorp submits updated Exhibit 1 to First Revised
Rate Schedule No. 302 etc.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0242.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1156-000.
    Applicants: Conectiv Delmarva Generation, Inc.
    Description: Conectiv Delmarva Generation, Inc submits the proposed
FERC Electric Tariff, Original Volume No. 2.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0241.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1157-000.
    Applicants: Duke Energy Carolinas, LLC.
    Description: Duke Energy Carolinas, LLC submits Network Integration
Transmission Service Agreements.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0240.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1158-000.
    Applicants: PacifiCorp.
    Description: PacifiCorp submits Interim Interconnection Agreement
etc.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-0245.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Docket Numbers: ER10-1159-000.
    Applicants: San Diego Gas & Electric Company.
    Description: San Diego Gas & Electric Company submits tariff filing
per 35.12: San Diego Gas & Electric Company Transmission Owner Tariff
Volume No. 11 to be effective 5/3/2010.
    Filed Date: 05/03/2010.
    Accession Number: 20100503-5005.
    Comment Date: 5 p.m. Eastern Time on Monday, May 24, 2010.

    Docket Numbers: ER10-1168-000.
    Applicants: San Diego Gas & Electric Company.
    Description: San Diego Gas & Electric Company submits tariff filing
per 35.12: San Diego Gas & Electric Company Market Based Rate Tariff,
Volume No. 10 to be effective 5/3/2010.
    Filed Date: 05/03/2010.
    Accession Number: 20100503-5006.
    Comment Date: 5 p.m. Eastern Time on Monday, May 24, 2010.

    Docket Numbers: ER10-1169-000.
    Applicants: San Diego Gas & Electric Company.
    Description: San Diego Gas & Electric Company submits tariff filing
per 35.12: San Diego Gas & Electric Company Wholesale Distribution
Access Tariff, Volume 6 to be effective 5/3/2010.
    Filed Date: 05/03/2010.
    Accession Number: 20100503-5007.
    Comment Date: 5 p.m. Eastern Time on Monday, May 24, 2010.

    Take notice that the Commission received the following electric
securities filings:

    Docket Numbers: ES10-39-000.
    Applicants: PHI Service Company.
    Description: Application of PHI Service Company.
    Filed Date: 04/30/2010.
    Accession Number: 20100430-5339.
    Comment Date: 5 p.m. Eastern Time on Friday, May 21, 2010.

    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. Protests will be considered by the Commission in
determining the appropriate action to be taken, but will not serve to
make protestants parties to the proceeding. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://
www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St. NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive e-mail notification
when a document is added to a subscribed dockets(s). For assistance
with any FERC Online service, please e-mail<EMAIL_ADDRESS>
or call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010-11090 Filed 5-10-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 111 (Monday, June 12, 2017)]
[Proposed Rules]
[Pages 26867-26869]
[FR Doc No: 2017-12057]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-0532; Directorate Identifier 2016-NM-203-AD]
RIN 2120-AA64

Airworthiness Directives; Dassault Aviation Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Dassault Aviation Model FALCON 7X airplanes. This proposed AD
was prompted by a review showing that inadequate clearance may exist
between certain electrical wiring and nearby structures. This proposed
AD would require an inspection of certain electrical wiring bundles and
feeders, modifications, and corrective actions if necessary. We are
proposing this AD to address the unsafe condition on these products.

DATES: We must receive comments on this proposed AD by July 27, 2017.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Dassault
Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000, South
Hackensack, NJ 07606; telephone<PHONE_NUMBER>; Internet http://www.dassaultfalcon.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-
0532; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2017-0532;
Directorate Identifier 2016-NM-203-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2016-0230, dated November 21, 2016 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for certain Dassault
Aviation Model FALCON 7X airplanes. The MCAI states:

    A review of the wiring and tubing lay-out showed that there may
be low clearance between electrical wiring and nearby structure.
Although no in-service incident has been reported, the minimum
clearances could deteriorate over time.
    This condition, if not detected and corrected, could lead to
interference or contact with structure, provoking an electrical
short circuit or fluid leakage, possibly resulting in loss of
several functions essential for safe flight.
    To initially address this potential unsafe condition, [Dassault
Aviation] DA developed some interim modifications (mod) addressing
the risk of short circuit and fluid leakage, and EASA issued AD
2010-0029 (later revised) [which corresponds to FAA AD 2011-14-04,
Amendment 39-16739 (76 FR 39256, July 6, 2011) (``AD 2011-14-04'')]
to require embodiment of those modifications in-service.
    Since EASA AD 2010-0029R1 was issued, DA developed another set
of modifications, available for in-service application through
Service Bulletin (SB) F7X-056, which are considered the final
solutions for this unsafe condition.
    For the reasons described above, this [EASA] AD requires a one-
time [general visual] inspection [for worn or damaged wiring or
connectors due to inadequate clearance between wiring and nearby
structures] of the affected electrical wiring and, depending on
findings, corrective action(s) and modification of the aeroplane.

    Corrective actions include modifying the clamping and routing;
adding new brackets, clamps, and cable protections; replacing damaged
parts; and improving connections using lock wires. You may examine the
MCAI in the AD docket on the Internet at http://www.regulations.gov by
searching for and locating Docket No. FAA-2017-0532.

Related Rulemaking

    AD 2011-14-04 requires inspections for damage to wiring bundles and
feeders; and, if necessary, repairs, modifications, and installation of
a hydraulic pipe. These actions were considered interim actions to
ensure that the minimum required clearance and adequate protection
existed among the hydraulic pipe, electrical wiring, and the airplane
structure. This proposed AD would require additional inspections and
modifications that differ from those in AD 2011-14-04.
    This proposed AD would not terminate any action in AD 2011-14-04;
rather, both AD actions are necessary to adequately address the unsafe
condition.

Related Service Information Under 1 CFR Part 51

    We reviewed Dassault Service Bulletin 7X-056, Revision 1, dated
July 20, 2016. This service information describes a one-time inspection
of certain wiring bundles and feeders, and corrective actions. This
service information is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Costs of Compliance

    We estimate that this proposed AD affects 51 airplanes of U.S.
registry.
    We estimate the following costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
               Action                         Labor cost            Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Inspection and modifications.......  31 work-hours x $85 per              $7,660         $10,295        $525,045
                                      hour = $2,635.
----------------------------------------------------------------------------------------------------------------

    We have received no definitive data that would enable us to provide
cost estimates for the on-condition actions specified in this proposed
AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.

    For the reasons discussed above, I certify this proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

Dassault Aviation: Docket No. FAA-2017-0532; Directorate Identifier
2016-NM-203-AD.

(a) Comments Due Date

    We must receive comments by July 27, 2017.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Dassault Aviation Model FALCON 7X airplanes,
certificated in any category, serial numbers (S/N) 2 through 215
inclusive.

(d) Subject

    Air Transport Association (ATA) of America Code 20, Standard
Practices Airframe--Electrical Wiring.

(e) Reason

    This AD was prompted by a review that showed that low clearance
may exist between certain electrical wiring and nearby structures.
We are issuing this AD to detect and correct inadequate clearances
between electrical wiring and nearby structures, which could lead to
interference or contact with a structure and cause an electrical
short circuit or fluid leakage. This could result in the loss of
several functions essential for safe flight.

(f) Compliance

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

(g) Inspection, Modification, and Corrective Actions

    Within 99 months or 4,100 flight cycles, whichever occurs first,
since the date of issuance of the original airworthiness certificate
or date of issuance of the original export certificate of
airworthiness; or within 60 days after the effective date of this
AD; whichever occurs later; do a general visual inspection of the
affected electrical wirings of the airplane for worn or damaged
wiring or connectors due to inadequate clearance between wiring and
nearby structures, accomplish all applicable corrective actions, and
modify the airplane, in accordance with the Accomplishment
Instructions of Dassault Service Bulletin 7X-056, Revision 1, dated
July 20, 2016, as specified in table 1 to paragraph (g) of this AD.
Do all applicable corrective actions before further flight. The
``Dassault Service Bulletin 7X-056 Section'' identified in table 1
to paragraph (g) of this AD is not required for airplanes on which a
corresponding Dassault modification has been embodied in production,
as identified in the ``Excluded'' column in table 1 to paragraph (g)
of this AD.

  Table 1 to Paragraph (g) of This AD--Applicable Sections of Dassault
        Service Bulletin 7X-056, Revision 1, Dated July 20, 2016
------------------------------------------------------------------------
  Dassault service bulletin 7X-056
              section                              Excluded
------------------------------------------------------------------------
7X-056-1...........................  Post-mod M876.
7X-056-2...........................  Post-mod M897.
7X-056-3...........................  Post-mod M900.
7X-056-4...........................  S/N 132 to 215 inclusive.
7X-056-5...........................  Post-mod M954.
7X-056-6...........................  Post-mod M980.
7X-056-7...........................  Post-mod M1021.
7X-056-8...........................  None.
------------------------------------------------------------------------

(h) Credit for Previous Actions

    This paragraph provides credit for actions required by paragraph
(g) of this AD, if those actions were performed before the effective
date of this AD using Dassault Service Bulletin 7X-056, issued
October 30, 2014.

(i) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. In accordance with 14 CFR
39.19, send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the International Branch, send it to the
attention of the person identified in paragraph (j)(2) of this AD.
Information may be emailed to<EMAIL_ADDRESS>
Before using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
local flight standards district office/certificate holding district
office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the
European Aviation Safety Agency (EASA); or Dassault Aviation's EASA
Design Organization Approval (DOA). If approved by the DOA, the
approval must include the DOA-authorized signature.

(j) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2016-0230, dated November 21,
2016, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2017-0532.
    (2) For more information about this AD, contact Tom Rodriguez,
Aerospace Engineer, International Branch, ANM-116, Transport
Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-
3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
    (3) For service information identified in this AD, contact
Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000,
South Hackensack, NJ 07606; telephone<PHONE_NUMBER>; Internet http://www.dassaultfalcon.com. You may view this service information at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton,
WA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.

    Issued in Renton, Washington, on June 2, 2017.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2017-12057 Filed 6-9-17; 8:45 am]
 BILLING CODE 4910-13-P