[Federal Register Volume 87, Number 67 (Thursday, April 7, 2022)]
[Notices]
[Pages 20485-20488]
[FR Doc No: 2022-07341]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94587; File No. SR-OCC-2022-004]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Proposed Rule Change by The Options Clearing
Corporation Concerning Settlement Timing

April 1, 2022.
    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 March 22, 2022, The Options Clearing
Corporation (``OCC'' or ``Corporation'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
primarily 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

    This proposed rule change by OCC would revise the required
settlement time from 9:00 a.m. Central Time (``CT'') to 8:00 a.m. CT.
In order to make this change, OCC is proposing changes to the OCC By-
Laws (``By-Laws'') and Rules. The proposed changes to OCC's By-Laws and
Rules are included as Exhibits 5A-5C to file number SR-OCC-2022-004.
Material proposed to be added is underlined and material proposed to be
deleted is marked in 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 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 filing this proposed rule change to change the time frame
for collecting Margin \4\ and Clearing Fund deficits as well as
increases in the Clearing Fund cash requirement (``Settlement Funds'').
The proposed changes are generally intended to shorten the collection
period for Settlement Fund deficits and align the time for satisfying
start of day settlement to 8:00 a.m. CT (``SOD Settlement Time''). OCC
believes the proposed changes will reduce operational complexity by
creating a more uniform settlement time for Clearing Fund deficits. The
earlier SOD Settlement Time will also provide OCC with additional time
to address a default event and implement protective actions. To provide
increased transparency, the proposal also grants OCC discretion to
extend funding deadlines when warranted by the circumstances (e.g.,
operational or system difficulties).
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    \4\ Current OCC Rule 706(b) allows OCC to specify the settlement
time for cross-margin accounts with Participating CCOs. As of the
date of this filing, OCC only maintains cross-margin accounts with
one Participating CCO, the Chicago Mercantile Exchange (``CME'').
OCC's Operations Manual specifies that the settlement time for OCC/
CME cross margin debits is 7:30 a.m. CT. This filing will not change
the start-of-day settlement time for OCC/CME cross-margin debits.
For the avoidance of doubt, the settlement time for OCC's internal
cross-margin program under Article VI, Section 25 of OCC's By-Laws
will be 8:00 a.m. CT.
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    The contents of the proposed rule change are summarized as follows.
Background
    Under OCC's Rules, there are different windows for the collection
of Settlement Funds depending on the reason for the deficit, and the
settlement time for satisfying such deficits may vary. For example, OCC
Rule 1005(a) currently requires Clearing Members to satisfy any general
deficits within one hour of receiving notice from OCC; OCC Rule 1005(b)
currently requires Clearing Members to satisfy any deficits related to
a monthly or intra-month resizing of the Clearing Fund by 9:00 a.m. CT
on the second business day following notice from OCC; and whenever an
amount is paid out of the Clearing Fund, OCC Rule 1006(h) requires
Clearing Members to replenish the Clearing Fund following a charge
thereto by 9:00 a.m. CT on the first business day following notice from
OCC. In certain cases, such as the monthly Clearing Fund sizing
process, the current Rules provide a two day period for Clearing
Members to deposit any additional required Clearing Fund assets, while
simultaneously Clearing Members are eligible to withdraw any excess
contributions based upon the new requirement. To address these issues,
OCC proposes to change OCC's rules concerning the collection of
Settlement Funds. The proposed changes would, in general, allow OCC to
reduce operational complexity by creating a more uniform settlement
time for Clearing Fund deficits.
    In addition, OCC proposes to align the collection of Settlement
Funds with a consistent SOD Settlement Time. OCC's current SOD
Settlement Time is 9:00 a.m. CT; however, the Board approved changing
the SOD Settlement Time to 8:00 a.m. CT. By aligning the SOD Settlement
Time for margin and Clearing Fund deficiencies, OCC believes the
proposed change would provide a clear and consistent process for
collecting Settlement Funds. Moving to an earlier settlement time would
also provide OCC with more time to address a default event and
implement necessary protective actions, including securing funds from
its liquidity providers.
Changes to By-Laws
    Currently, two definitions in OCC's By-Laws (Article I,
Definitions; Article XV, Foreign Currency Options, Definitions) refer
to the term ``settlement time'' as 9:00 a.m. CT (10:00 a.m. Eastern
Time (``ET'')). OCC proposes moving the definition in Article I of
OCC's By-Laws to Chapter I, Rule 101 of OCC's Rules. This defined term
does not appear elsewhere in the By-Laws, but is routinely used in
OCC's Rules. OCC also proposes updating both definitions to instead
provide for ``settlement time'' to be 8:00 a.m. CT (9:00 a.m. ET).
Additionally, OCC proposes to clarify in the definition that would move
to OCC's Rules that ``settlement time'' does not include settlements
related to any cross-margin program with a Participating CCO. OCC Rule
706 allows OCC to specify the settlement time for cross-margin accounts
with Participating CCOs. This filing will not change the start-of-day
settlement time for the OCC/CME cross-margin account, which is
currently 7:30 a.m. CT, but will clarify any potential ambiguity about
the start-of-day settlement time for these accounts.
Changes to Rules
Daily Margin Report
    OCC Rule 605 currently requires Clearing Members to satisfy margin
deficits by 9:00 a.m. CT (10:00 a.m. ET).

OCC proposes to update Rule 605 to reference the above referenced
defined term ``Settlement Time.''
    Interpretation and Policy .01 to Rule 605 currently provides that
the Daily Margin Report will not include the amount of margin required
for variance futures and requires OCC to advise Clearing Members of
margin requirements for variance futures by 9:00 a.m. CT (10:00 a.m.
ET). When OCC clears variance futures, the margin requirements for such
products would be included in the Daily Margin Report. Accordingly, OCC
proposes to delete Interpretation and Policy .01 to Rule 605.
Monthly and Intra-Month Resizing
    OCC Rule 1005(b) currently requires that Clearing Members satisfy
any deficits due to a monthly or intra-month Clearing Fund resizing by
the SOD Settlement Time on the second business day following
notification of the resizing. The two-day collection period was
intended to provide Clearing Members with sufficient notice of any
changes to their Clearing Fund contribution requirements. However, this
two-day collection period complicates the monitoring of OCC's prefunded
credit and liquidity resources.
    To address these issues, Management proposes to amend Rule 1005(b)
to require that deficits due to the standard monthly resizing of the
Clearing Fund be satisfied by the SOD Settlement Time on the first
business day of each month. The proposed change would reduce the time
to collect Clearing Fund deficits required to meet the new monthly
Clearing Fund size. This change would reduce operational complexity
related to the monitoring of OCC's prefunded credit and liquidity
resources by providing transparency and certainty to OCC around OCC's
available liquidity resources during the resizing process. Management
also proposes to shorten the collection period for intra-month resizing
to the next SOD Settlement Time following notification of the re-sizing
to align with the monthly resizing period and other Clearing Fund
deficit collection times and help ensure that OCC maintains adequate
prefunded financial resources at all times. To provide additional
transparency, Rule 1005(b) also grants OCC discretion to extend funding
deadlines when warranted by the circumstances (e.g., operational or
system difficulties).
General Deficits
    OCC Rule 1005(a) currently requires that general Clearing Fund
deficits (e.g., deficits caused by a decrease in the value of a
Clearing Member's contribution or due to an adjusted contribution
pursuant to Rule 1004 \5\) must be satisfied within one hour of being
notified of the deficit. As a practical matter, these deficits are
currently generally collected in the morning each business day but
outside of the start of day settlement cycle, which means that OCC
currently processes two separate collections from certain Clearing
Members.
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    \5\ Under Rule 1004, Clearing Fund contributions may be adjusted
due to a Clearing Member merger, consolidation, position transfer,
business expansion, membership approval or other similar event.
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    OCC proposes to revise its rules to align the collection of general
Clearing Fund deficits with the proposed SOD Settlement Time to provide
consistency in settlement times throughout OCC's rules. Under revised
Rule 1005(a), OCC would collect a general deficit arising under Rule
1005(a) at the Settlement Time, provided that it notified the Clearing
Member of such deficit at least one hour prior to the Settlement Time
on the day the notice was provided. Notice of general deficits under
Rule 1005(a) would typically be provided to Clearing Members through
OCC's overnight reporting process but may also be issued in response to
market conditions or adjustments arising from mergers, consolidations,
position transfers, business expansions, membership approval or other
similar events. To achieve the operational efficiency contemplated by
the proposal, the proposed revisions to Rule 1005(a) would align the
collection period for general deficits to the Settlement Time in the
ordinary course, and continue to provide Clearing Members with one hour
to satisfy a deficit if notice was not provided at least one hour
before the Settlement Time on a particular day. To provide additional
transparency, Rule 1005(a) also grants OCC discretion to extend funding
deadlines when warranted by the circumstances (e.g., operational or
system difficulties).
Adjustments to Clearing Fund Contributions
    Rule 1004 provides that any deficiency arising from an adjustment
due to a Clearing Member merger, consolidation, position transfer,
business expansion, membership approval or other similar event shall be
satisfied in accordance with Rule 1005(a). Rule 1004 currently provides
an exception that allows a Clearing Member to satisfy an obligation
that would be due on the first business day of a calendar month to be
satisfied on the second business day if the deficit coincides with a
regular monthly sizing collection. The proposal would eliminate this
exception because regular monthly sizing deficits would no longer be
collected two business days after notification under the proposed
formulation of Rule 1005.
Replenishment and Assessments
    OCC Rule 1006(h) currently requires that Clearing Members make good
any charges to the Clearing Fund, whether in the form of replenishments
or assessments, by 9:00 a.m. the following business day. OCC proposes
to amend Rule 1006(h) to align the collection period for replenishments
and assessments with the proposed SOD Settlement Time. OCC believes
that using the defined term ``Settlement Time'' rather than stating a
specific time in Rule 1006(h) will help achieve the consistency
intended by this proposal. As described above, aligning the time for
satisfying settlement and Clearing Fund obligations to the new
definition of Settlement Time will reduce operational complexity by
creating a more uniform settlement time. Moving to the earlier time
(i.e., 8:00 a.m. CT) would also provide OCC with more time to address a
default event and implement necessary protective actions, including
securing funds from its liquidity providers. OCC also proposes to make
corresponding changes to Rule 1006(h)(B), which reiterates that each
Clearing Member shall have and shall at all times maintain the ability
to make good any deficiency described in Rule 1006(h) during a cooling-
off period.
    OCC also proposes to amend Rule 1006(h)(A) and Rule 1006(h)(B) to
allow the Corporation to specify a later time for which Clearing
Members must make good on any charges to the Clearing Fund. The purpose
of this change is to provide increased transparency by granting OCC
discretion to extend funding deadlines when warranted by the
circumstances (e.g., operational or system difficulties).
Deficits Due to Amendment of OCC's Rules
    Currently, under Rule 1002(e), if a Clearing Member's contribution
to the Clearing Fund increases due to an amendment of OCC's Rules, the
increase shall not become effective until the Clearing Member is given
at least two business days prior written notice of the amendment. This
notification period provides time for any Clearing Member to notify OCC
in writing that it wishes to terminate its clearing membership and
close out or transfer its open positions before the effective date of
the

amendment. Clearing Members that do not notify OCC of such termination
must satisfy the increased contribution by 9:00 a.m. CT on the second
business day following notification of the amendment.
    OCC proposes to allow a five-business day notification period to
allow Clearing Members additional time to determine whether to
terminate clearing membership as a result of any such rule change and
close out or transfer all open positions before the effective date of
the amendment. The purpose of this change is to update Rule 1002(e) to
better reflect OCC's current practice pursuant to which Clearing
Members are generally afforded more than five-business days' notice of
any change in Clearing Fund requirements that result from an amendment
of OCC's Rules through the regulatory filing process. As this change
codifies an existing practice, OCC does not believe it will modify
Clearing Member behavior or otherwise have an adverse impact on OCC.
    OCC also proposes to revise Rule 1002(e) to align with the proposed
SOD Settlement Time. As described above, this change is intended to
reduce operational complexity by creating a more uniform settlement
time for Clearing Fund deficits, including those described in Rule
1002(e), that aligns with the current collection period for other
obligations to OCC.
Temporary Increase in Clearing Fund Cash Requirement
    Interpretation and Policy .03 to Rule 1002 requires Clearing
Members to satisfy any increase in their required cash contribution
resulting from an increase in overall Clearing Fund Cash Requirement no
later than the second business day following notification of the
increase. OCC proposes to revise Rule 1002 to require that Clearing
Members satisfy an increase in required cash contributions by the first
SOD Settlement Time following notification of the increase. The purpose
of this change is to reduce operational complexity by creating a more
uniform settlement time that aligns with the current collection period
for other obligations to OCC.
Conforming Changes to Policies and Agreements
    In connection with the proposed changes described above, OCC will
need to make conforming changes to the Clearing Fund Methodology
Policy. These changes include updating the policy to reflect the timing
for satisfying an increase to the Clearing Fund Cash Requirements and
eliminating the policy language describing the exception set forth in
Rule 1004 as described more fully above. These changes are intended to
update the Clearing Fund Methodology Policy to conform with the
proposed changes to OCC's rules described above and support the reduced
operational complexity that OCC expects to achieve by creating a more
uniform SOD Settlement Time.
(2) Statutory Basis
    OCC believes the proposed rule change is consistent with Section
17A of the Act \6\ and the rules thereunder applicable to OCC. Section
17A(b)(3)(A) of the Act \7\ requires, among other things, that a
clearing agency be so organized and have the capacity to be able to
facilitate the prompt and accurate clearance and settlement of
securities transactions and derivatives agreements, contracts, and
transactions for which it is responsible. OCC believes the proposed
rule change is consistent with this requirement because the change
would improve OCC's capacity to facilitate clearance and settlement by
allowing OCC to collect financial resources consistent with its
calculated requirements as soon as reasonably possible. OCC believes
this change will facilitate the prompt and accurate settlement of the
transactions for which it is responsible by harmonizing various
settlement deadlines thereby reducing operational complexity. The
change would also facilitate the prompt and accurate settlement of
transactions by providing OCC assurance about available funds earlier
on each business day.
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    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78q-1(b)(3)(A).
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    OCC also believes that the proposed rule change is consistent with
the requirement in Rule 17Ad-22(e)(3)(i) \8\ to establish, implement,
maintain and enforce written policies and procedures reasonably
designed to maintain a sound risk management framework for managing
legal, credit, liquidity, operational, general business, investment,
custody and other risks that arise in or are borne by OCC. OCC believes
the proposed SOD Settlement Time changes will contribute to OCC's sound
risk management framework for managing the risks borne by OCC. For
example, OCC believes the proposed changes will reduce its liquidity
risk by assuring start of day settlement requirements are met earlier
on each business day. Additionally, OCC believes adding consistency to
its start of day settlement time requirements will reduce operational
risk by simplifying the requirements around settlement for both
Clearing Members and OCC. While cross-margin deficits will still be
required to be met by 7:30 a.m. CT, all other Settlement Funds will be
required by 8:00 a.m. CT. OCC believes this reduction in complexity
around required settlement timing will reduce risk and contribute to
OCC's sound risk management framework. The proposal would also improve
OCC's process for addressing delays arising from operational issues or
system difficulties by granting OCC discretion to extend certain
funding deadlines when warranted by the circumstances.
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    \8\ 17 CFR 240.17Ad-22(e)(3)(i).
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    The proposal is also consistent with the requirement in Rule 17Ad-
22(e)(8) to establish, implement, maintain, and enforce policies and
procedures reasonably designed to define the point at which settlement
is final to be no later than the end of the day on which the payment or
obligation is due. Under the proposal, settlement finality for
transactions cleared by OCC occurs when a settlement bank either
accepts or confirms the settlement instruction. Moving to the earlier
time would promote settlement finality by allowing OCC to more quickly
identify issues that could potentially impact its ability to settle
transactions (e.g., a Clearing Member default) and providing OCC with
additional time to take protective actions, including securing funds
from its liquidity providers.
    The proposed rule change is not inconsistent with the existing
rules of OCC, including any other rules proposed to be amended.

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

    Section 17A(b)(3)(I) of the Exchange Act 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.\9\ OCC does not
believe that the proposed rule change would impact or impose any burden
on competition. In connection with these changes, OCC will continue to
provide daily reporting to Clearing Members with projected requirements
to provide notice and transparency. While the proposed rule changes
would reduce the time that Clearing Members have to respond to start of
day settlement requirements, OCC does not believe the proposed change
would present an undue burden on OCC's Clearing Members.
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    \9\ 15 U.S.C. 78q-1(b)(3)(I).
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    Additionally, the proposed rule changes would apply to all Clearing
Members consistently and would not

provide any Clearing Member with a competitive advantage over any other
Clearing Member. Further, the proposed rule change would not affect
Clearing Member's access to OCC's services or impose any direct burdens
on Clearing Members. Accordingly, the proposed rule change would not
unfairly inhibit access to OCC's services or disadvantage or favor any
particular user in relationship to another user.
    For the foregoing reasons, OCC believes that the proposed rule
change is in the public interest, would be consistent with the
requirements of the Act applicable to clearing agencies, and would not
impact or impose a burden on competition.

(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 such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.
    OCC shall post notice on its website of proposed changes that are
implemented. The proposal shall not take effect until all regulatory
actions required with respect to the proposal are completed.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-OCC-2022-004 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2022-004. 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-2022-004 and
should be submitted on or before April 28, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-07341 Filed 4-6-22; 8:45 am]
BILLING CODE 8011-01-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY                NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY
			2565 PLYMOUTH ROAD
                        ANN ARBOR, MICHIGAN 48105-2498

                                                                   OFFICE OF
                                                           AIR AND RADIATION
Dear Vehicle Owner:
	The Environmental Protection Agency is conducting an important, voluntary program to help control air pollution which involves analyzing vehicle emissions of privately owned cars and trucks to determine the effectiveness of emissions control systems.  You may be able to contribute significantly toward this program and be compensated for allowing us to test your vehicle.  If your vehicle qualifies, we will offer you the following incentives to participate. Participation is necessary to receive these incentives:

 The use of a fully insured loaner car with a full tank of fuel, and $20.00 per day.

 If you do not wish to use a loaner vehicle, you will receive $50.00 per day.

 If you do not wish to provide your social security number, you have the option to cap your total incentive at $599.

 Your vehicle will be returned to you after testing with a full tank of fuel.

	Testing will be conducted in EPA's National Vehicle and Fuel Emissions Laboratory in Ann Arbor.  Your vehicle will probably accumulate less than 300 miles under simulated driving conditions.  No unusual operations will be performed on your vehicle and it will be fully insured for the entire test period which will take approximately one to four weeks.  EPA will want to continue testing your vehicle until all tests are complete.

	Jacobs, a contractor to the EPA, is working with EPA to procure vehicles for this program.  Please complete and return the enclosed reply form in the prepaid envelope to Jacobs as soon as possible even if you choose not to participate.  If you are willing to participate, a representative of Jacobs may be in touch with you to ask questions about your vehicle. The information that you provide to EPA in the reply form and your answers to our questions will indicate your willingness to participate and whether your vehicle is eligible to participate. The amount of time to answer the questions, which includes reviewing instructions, locating records, and reviewing the information, is estimated to be up to 60 minutes with an average of about 30 minutes per response. (Questions about the time estimate may be sent to Chief, Information Policy Branch, PM-223, USEPA, 401 M St. SW, Washington, DC 20460. This information is collected under Information Collection Request OMB# 2060-0086.)

	The EPA will keep the personal information that you provide (name, contact information and, if collected, social security number) confidential.  However, EPA must submit your social security number to the IRS if your incentive is $600 or more.  Your vehicle's VIN will be shared with the vehicle manufacturer because the vehicle manufacturer needs the VIN in order to provide information to EPA that is necessary for testing your vehicle's emissions systems.
On rare occasions the manufacturer may ask for your contact information so that they may contact you with questions about your vehicle or to test your vehicle as well.  We ask for your permission to share your contact information with the manufacturer.

							(over)

      The enclosed information sheet answers some questions people often ask about this program.  If you want to participate in this program or have any additional questions, please feel free to call Jacobs toll free at<PHONE_NUMBER>.  Someone is available between 8 AM and 4 PM or you may leave a message for a return call.  You may also call me at<PHONE_NUMBER>.  I will be happy to answer any questions you may have related to this program.  We look forward to receiving your reply form or a telephone call very soon.
Sincerely,

Lynn Sohacki
Environmental Engineer
Compliance Division
Environmental Protection Agency
2565 Plymouth Road
Ann Arbor, MI  48105


[Federal Register Volume 88, Number 42 (Friday, March 3, 2023)]
[Rules and Regulations]
[Pages 13306-13308]
[FR Doc No: 2023-04253]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-0166; Project Identifier MCAI-2022-00576-T;
Amendment 39-22341; AD 2023-03-16]
RIN 2120-AA64

Airworthiness Directives; Embraer S.A. (Type Certificate
Previously Held by Yabor[atilde] Ind[uacute]stria Aeron[aacute]utica
S.A.; Embraer S.A.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain Embraer S.A. Model ERJ 190-300 airplanes. This AD was prompted
by failed lockwires on the attachment of the left-hand main landing
gear (MLG) trunnion bearing to spar 2. This AD requires inspecting for
damage of the left- and right-hand MLG trunnion bearing attaching
parts, replacing damaged parts, and modifying the MLG trunnion bearing
attaching parts, as specified in an Ag[ecirc]ncia Nacional de
Avia[ccedil][atilde]o Civil (ANAC) AD, which is incorporated by
reference. The FAA is issuing this AD to address the unsafe condition
on these products.

DATES: This AD becomes effective March 20, 2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of March 20,
2023.
    The FAA must receive comments on this AD by April 17, 2023.

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 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.
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2023-0166; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this AD, the mandatory continuing airworthiness
information (MCAI), any comments received, and other information. The
street address for Docket Operations is listed above.
    Material Incorporated by Reference:
     For ANAC material incorporated by reference (IBR) in this
AD, contact National Civil Aviation Agency (ANAC), Aeronautical
Products Certification Branch (GGCP), Rua Dr. Orlando Feirabend Filho,
230--Centro Empresarial Aquarius--Torre B--Andares 14 a 18, Parque
Residencial Aquarius, CEP 12.246-190--S[atilde]o Jos[eacute] dos
Campos--SP, Brazil; telephone 55 (12) 3203-6600; email anac.gov.br">[email protected]anac.gov.br;
website anac.gov.br/en/. You may find this material on the ANAC website
at sistemas.anac.gov.br/certificacao/DA/DAE.asp.
     You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Hassan Ibrahim, Aerospace Engineer,
Large Aircraft Section, FAA, International Validation Branch, 2200
South 216th St., Des Moines, WA 98198; telephone<PHONE_NUMBER>; email
[email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written data, views, or arguments
about this final rule. Send your comments to an address listed under
ADDRESSES. Include ``Docket No. FAA-2023-0166; Project Identifier MCAI-
2022-00576-T'' at the beginning of your comments. The most helpful
comments reference a specific portion of the final rule, explain the
reason for any recommended change, and include supporting data.

The FAA will consider all comments received by the closing date and may
amend this final rule because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
regulations.gov, including any personal information you provide. The
agency will also post a report summarizing each substantive verbal
contact received about this final rule.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this AD contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this AD, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this AD. Submissions containing CBI should be sent to Hassan
Ibrahim, Aerospace Engineer, Large Aircraft Section, FAA, International
Validation Branch, 2200 South 216th St., Des Moines, WA 98198;
telephone<PHONE_NUMBER>; email [email protected] Any commentary
that the FAA receives that is not specifically designated as CBI will
be placed in the public docket for this rulemaking.

Background

    ANAC, which is the aviation authority for Brazil, has issued ANAC
AD 2022-04-02, effective May 3, 2022 (ANAC AD 2022-04-02) (also
referred to as the MCAI), to correct an unsafe condition for certain
Embraer S.A. Model ERJ 190-300 airplanes. The MCAI states that there
was an occurrence of failed lockwires, having part number (P/N) MS
20995C32, on the attachment of the left-hand MLG trunnion bearing to
spar 2 on a flight test airplane. These lockwires are designed to
safety one shear pin to the other, keeping the integrity of the
assembly through the torque applied to the shear pins. The structure
vibration could cause the rotation of the shear pins causing the
lockwire failure and the shear pin migration, which can collapse the
MLG structure during takeoff and landing operations. You may examine
the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-
0166.

Related Service Information Under 1 CFR Part 51

    ANAC AD 2022-04-02 specifies procedures for inspecting for damage
of the left- and right-hand MLG trunnion bearing attaching parts,
replacing any damaged parts and torquing shear pins, having P/N 196-
32185-007 or P/N 196-32216-007, and modifying the MLG trunnion bearing
attaching parts to spars 2 and 3. This material 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

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI
described above. The FAA is issuing this AD after determining that the
unsafe condition described previously is likely to exist or develop on
other products of the same type design.

Requirements of This AD

    This AD requires accomplishing the actions specified in ANAC AD
2022-04-02 described previously, except for any differences identified
as exceptions in the regulatory text of this AD.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA developed a process to use some civil aviation
authority (CAA) ADs as the primary source of information for compliance
with requirements for corresponding FAA ADs. The FAA has been
coordinating this process with manufacturers and CAAs. As a result,
ANAC AD 2022-04-02 is incorporated by reference in this AD. This AD
requires compliance with ANAC AD 2022-04-02 in its entirety through
that incorporation, except for any differences identified as exceptions
in the regulatory text of this AD. Service information required by ANAC
AD 2022-04-02 for compliance will be available at regulations.gov under
Docket No. FAA-2023-0166 after this AD is published.

FAA's Justification and Determination of the Effective Date

    Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5
U.S.C. 551 et seq.) authorizes agencies to dispense with notice and
comment procedures for rules when the agency, for ``good cause,'' finds
that those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' Under this section, an agency, upon finding good
cause, may issue a final rule without providing notice and seeking
comment prior to issuance. Further, section 553(d) of the APA
authorizes agencies to make rules effective in less than thirty days,
upon a finding of good cause.
    There are currently no domestic operators of these products.
Accordingly, notice and opportunity for prior public comment are
unnecessary, pursuant to 5 U.S.C. 553(b)(3)(B). In addition, for the
forgoing reason(s), the FAA finds that good cause exists pursuant to 5
U.S.C. 553(d) for making this amendment effective in less than 30 days.

Regulatory Flexibility Act (RFA)

    The requirements of the RFA do not apply when an agency finds good
cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and
comment. Because the FAA has determined that it has good cause to adopt
this rule without notice and comment, RFA analysis is not required.

Costs of Compliance

    Currently, there are no affected U.S.-registered airplanes. If an
affected airplane is imported and placed on the U.S. Register in the
future, the FAA provides the following cost estimates to comply with
this AD:

                  Estimated Costs for Required Actions
------------------------------------------------------------------------
           Labor cost                 Parts cost       Cost per product
------------------------------------------------------------------------
69 work-hours x $85 per hour =    $7,333 per kit....  Up to $20,531.
 $5,865.
------------------------------------------------------------------------

    According to the manufacturer, some or all of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected individuals. The FAA does not control warranty coverage for
affected individuals. As a result, the FAA has included all known costs
in the cost estimate.

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.
    The FAA is 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

    This AD will not have federalism implications under Executive Order
13132. This AD will 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 that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866, and
    (2) Will not affect intrastate aviation in Alaska.

List of Subjects in 14 CFR Part 39

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

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 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:

2023-03-16 Embraer S.A. (Type Certificate Previously Held by
Yabor[atilde] Ind[uacute]stria Aeron[aacute]utica S.A.; Embraer
S.A.): Amendment 39-22341; Docket No. FAA-2023-0166; Project
Identifier MCAI-2022-00576-T.

(a) Effective Date

    This airworthiness directive (AD) is effective March 20, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Embraer S.A. Model ERJ 190-300 airplanes,
certificated in any category, serial numbers 19020009 through
19020011 inclusive.

(d) Subject

    Air Transport Association (ATA) of America Code 32, Landing
gear.

(e) Unsafe Condition

    This AD was prompted by failed lockwires on the attachment of
the left-hand main landing gear (MLG) trunnion bearing to spar 2 on
a flight test airplane. These lockwires are designed to safety one
shear pin to the other, keeping the integrity of the assembly
through the torque applied to the shear pins. The FAA is issuing
this AD to address this condition, which could result in structure
vibration and possible rotation of the shear pins causing lockwire
failure and shear pin migration, which could collapse the MLG
structure during takeoff and landing operations.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, ANAC AD 2022-04-02.

(h) Exceptions to ANAC AD 2022-04-02

    (1) Where ANAC AD 2022-04-02 refers to its effective date, this
AD requires using the effective date of this AD.
    (2) The ``Alternative method of compliance (AMOC)'' section of
ANAC AD 2022-04-02 does not apply to this AD.

(i) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Validation Branch, 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 responsible Flight Standards Office, as
appropriate. If sending information directly to the International
Validation Branch, send it to the attention of the person identified
in paragraph (j) of this AD. Information may be emailed to: [email protected]. Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, International
Validation Branch, FAA; or ANAC; or ANAC's authorized Designee. If
approved by the ANAC Designee, the approval must include the
Designee's authorized signature.

(j) Additional Information

    For more information about this AD, contact Hassan Ibrahim,
Aerospace Engineer, Large Aircraft Section, FAA, International
Validation Branch, 2200 South 216th St., Des Moines, WA 98198;
telephone<PHONE_NUMBER>; email [email protected]

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Ag[ecirc]ncia Nacional de Avia[ccedil][atilde]o Civil (ANAC)
AD 2022-04-02, effective May 3, 2022.
    (ii) [Reserved]
    (3) For ANAC AD 2022-04-02, contact National Civil Aviation
Agency (ANAC), Aeronautical Products Certification Branch (GGCP),
Rua Dr. Orlando Feirabend Filho, 230--Centro Empresarial Aquarius--
Torre B--Andares 14 a 18, Parque Residencial Aquarius, CEP 12.246-
190--S[atilde]o Jos[eacute] dos Campos--SP, Brazil; telephone 55
(12) 3203-6600; email: anac.gov.br">[email protected]anac.gov.br; internet anac.gov.br/en/.
You may find this IBR material on the ANAC website at
sistemas.anac.gov.br/certificacao/DA/DAE.asp.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on February 10, 2023.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-04253 Filed 3-2-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 23 (Friday, February 2, 2018)]
[Notices]
[Page 4936]
[FR Doc No: 2018-02116]

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

SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon Written Request Copies Available From: U.S. Securities and
Exchange Commission, Office of FOIA Services, 100 F Street NE,
Washington, DC 20549-2736

Extension:
    Supplier Diversity Business Management System, SEC File No. 270-
663, OMB Control No. 3235-0724

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the existing
collection of information summarized below. The Commission plans to
submit this existing collection of information to the Office of
Management and Budget (``OMB'') for approval.
    The Commission is required under Section 342 of the Dodd Frank Wall
Street and Reform Act to develop standards and processes for ensuring
the fair inclusion of women-owned and minority-owned businesses in all
of the Commission's business activities. To help implement this
requirement, the Office of Minority and Women Inclusion (OMWI)
developed and maintains an electronic Supplier Diversity Business
Management System (the System) to collect up-to-date business
information and capabilities statements from diverse suppliers
interested in doing business with the Commission. This information
allows the Commission to update and more effectively manage its current
internal repository. It also allows the Commission to measure the
effectiveness of its technical assistance and outreach efforts, and
target areas where additional program efforts are necessary.
    The Commission invites comment on the System. Information is
collected in the System via web-based, e-filed, dynamic form-based
technology. The company point of contact completes a profile consisting
of basic contact data and information on the capabilities of the
business. The profile includes a series of questions, some of which are
based on the data that the individual enters. Drop-down lists are
included where appropriate to increase ease of use.
    The information collection is voluntary. There are no costs
associated with this collection. The public interface to the System is
available via a web-link provided by the agency.
    Estimated number of annual responses = 300.
    Estimated annual reporting burden = 150 hours (30 minutes per
submission).
    Since the last approval of this information collection, we have
adjusted the estimated number of respondents from 500 to 300
respondents per year, based on the actual response rate for the past
two years and anticipated increase in that response rate with the
posting of a link to the System on our web page to allow self-
registration. This reduction in the number of respondents has resulted
in a 100-hour reduction in the total burden estimate.
    Written comments are invited on: (a) Whether this collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden
imposed by the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information collected; and (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted in writing within 60
days of this publication. Please direct your written comments to Pamela
Dyson, Director/Chief Information Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon, 100 F Street NE, Washington, DC
20549 or send an email to: [email protected].

    January 30, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02116 Filed 2-1-18; 8:45 am]
 BILLING CODE 8011-01-P