[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68803-68811]
[FR Doc No: 2023-21938]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98592; File No. SR-FICC-2023-014]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of Proposed Rule Change Relating to the GSD and MBSD
Schedules of Haircuts for Eligible Clearing Fund Securities

September 28, 2023
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 22, 2023, Fixed Income Clearing Corporation (``FICC'')
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 primarily prepared by the clearing agency. 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 consists of modifications to FICC's
Government Securities Division (``GSD'') Rulebook (``GSD Rules'') and
Mortgage-Backed Securities Division (``MBSD'') Clearing Rules (``MBSD
Rules,'' and collectively with the GSD Rules, the ``Rules'') \3\ in
order to modify the GSD and MBSD Schedules of Haircuts for Eligible
Clearing Fund Securities and remove them from the respective Rules, and
make other clarifying changes, as described in greater detail below.
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    \3\ Terms not defined herein are defined in the GSD Rules and
MBSD Rules, as applicable, available at www.dtcc.com/legal/rules-and-procedures.
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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, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

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

1. Purpose
    FICC is proposing to modify the GSD and MBSD Schedules of Haircuts
for Eligible Clearing Fund Securities, and to remove them and the
related concentration limits from the respective Rules, and make other
clarifying changes, as described in greater detail below.
Background
    FICC, through GSD and MBSD, serves as a central counterparty and
provider of clearance and settlement services for the U.S. government
securities and mortgage-backed securities markets. A key tool that FICC
uses to manage its credit exposures to its members is the daily
collection of margin from each member. The aggregated amount of all GSD
and MBSD members' margin constitutes the GSD Clearing Fund and MBSD
Clearing Fund (collectively referred to herein as the ``Clearing
Fund'').
    The objective of the Clearing Fund is to mitigate potential losses
to FICC associated with liquidating a member's portfolio in the event
FICC ceases to act for that member (hereinafter referred to as a
``default'').\4\ FICC would access the Clearing Fund should a
defaulting member's own margin be insufficient to satisfy losses to
FICC caused by the liquidation of that member's portfolio. The Clearing
Fund reduces the risk that FICC would need to mutualize any losses
among non-defaulting members during the liquidation process.
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    \4\ The GSD Rules and MBSD Rules each identify when FICC may
cease to act for a member and the types of actions FICC may take.
For example, FICC may suspend a firm's membership with FICC or
prohibit or limit a member's access to FICC's services in the event
that member defaults on a financial or other obligation to FICC. See
GSD Rule 21 (Restrictions on Access to Services) and MBSD Rule 14
(Restrictions on Access to Services), supra note 3.
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    Under GSD Rule 4 (Clearing Fund and Loss Allocation) and MBSD Rule
4 (Clearing Fund and Loss Allocation), members are required to make
deposits to the GSD and MBSD Clearing Funds, as applicable, with the
amount of each member's required deposit being determined by FICC in
accordance with GSD Rule 4 and MBSD Rule 4, as applicable (the
``Required Fund Deposit'').
    A member may satisfy its Required Fund Deposit with cash or an open
account indebtedness secured by Eligible Clearing Fund Securities.\5\
Eligible Clearing Fund Securities, comprised of certain agency,
mortgage-backed, and Treasury securities, are valued based on the prior
Business Day's closing market price, less a haircut, and may be subject
to a concentration limit.\6\ Haircuts are used to protect FICC and its
members from price fluctuations, i.e., if FICC is required to liquidate
collateral of an insolvent member and such collateral is worth less at
the time of liquidation than when it is pledged to FICC. Concentration
limits are intended to reduce FICC's risk by limiting the percentage of
certain types of Eligible Clearing Fund Securities pledged by members
to secure the Clearing Fund deposits. This is because when a member's
portfolio contains large net unsettled positions in a particular group
of securities with a similar risk profile or in a particular asset
type, such securities could present additional risk to FICC.
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    \5\ See GSD Rule 4, Section 3 (Form of Deposit) and MBSD Rule 4,
Section 3 (Form of Deposit), supra note 3.
    \6\ See GSD Rule 1 (Definitions) and MBSD Rule 1 (Definitions)
for applicable definitions, including Eligible Clearing Fund
Securities and its components, which are Eligible Clearing Fund
Agency Securities, Eligible Clearing Fund Mortgage-Backed
Securities, and Eligible Clearing Fund Treasury Securities. Supra
note 3.
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    Currently, collateral haircuts applicable to relevant security
types and remaining maturity terms are specified as fixed percentages
in the Schedule of Haircuts for Eligible Clearing Fund Securities in
the GSD Rules and MBSD Rules.\7\ The sufficiency of collateral haircuts
is evaluated through use of back-tests, stress-tests and market
observations. To ensure the sufficiency of the collateral haircuts, a
backtesting analysis of members' collateral deposits is conducted
daily, and summary reviews are completed quarterly, each by the FICC
market risk group pursuant to FICC's internal market risk management
policies and procedures. FICC performs daily backtesting of collateral
by comparing the collateral haircut for each member in simulated
liquidations with the member's actual collateral held on deposit at
FICC. Any exceptions noted are escalated to management daily to assess
the root cause and determine whether further analysis and/or review
would be appropriate. Specifically, if FICC determines that a
particular security may present inherent volatility and/or liquidity
risks that could likely result in an erosion in the value of the
security exceeding the applicable collateral haircut, ad hoc reviews
may be conducted by risk management pursuant to FICC's internal market
risk management procedures. On a quarterly basis, FICC reviews and
identifies instances where the simulated losses from available
historical stress testing scenario dates have exceeded the collateral
haircut values. In addition, each quarter, FICC reviews the composition
of the Eligible Clearing Fund Securities that members have

pledged to secure their Required Fund Deposits in order to assess the
sufficiency of the collateral haircuts applied and whether any haircut
changes would be needed.
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    \7\ See Schedule of Haircuts for Eligible Clearing Fund
Securities in the GSD Rules and MBSD Rules, supra note 3. The
Schedule of Haircuts for Eligible Clearing Fund Securities in the
GSD Rules and MBSD Rules was last modified in 2011 in order to
harmonize with the increased haircuts on clearing fund collaterals
at the National Securities Clearing Corporation, an affiliate of
FICC. See Securities Exchange Act Release No. 64488 (May 13, 2011),
76 FR 29018 (May 19, 2011) (SR-FICC-2011-03).
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    In addition to collateral haircuts, FICC applies concentration
limits to certain Eligible Clearing Fund Securities. Currently, the
concentration limits applicable to certain Eligible Clearing Fund
Securities are specified in GSD Rule 4, MBSD Rule 4, and the Schedule
of Haircuts for Eligible Clearing Fund Securities in the GSD Rules and
MBSD Rules. Specifically, Section 3b(b) of GSD Rule 4 and Section 3c(b)
of MBSD Rule 4 each provides that no more than 20 percent of a member's
Required Fund Deposit may be in the form of Eligible Clearing Fund
Agency Securities that are of a single issuer and no member may post as
eligible collateral Eligible Clearing Fund Agency Securities of which
it is the issuer. In addition, the Schedule of Haircuts for Eligible
Clearing Fund Securities in the GSD Rules and MBSD Rules provides (i)
any deposits of Eligible Clearing Fund Agency Securities or Eligible
Clearing Fund Mortgage-Backed Securities in excess of 25 percent of a
member's Required Fund Deposit will be subject to a haircut that is
twice the amount of the percentage noted in the haircut schedule and
(ii) a member may deposit Eligible Clearing Fund Mortgage-Backed
Securities of which it is the issuer, however such securities will be
subject to a premium haircut, with the initial haircut being 14
percent, and if a member also exceeds the 25 percent concentration
limit, the haircut shall be 21 percent.
    Changes to the collateral haircuts and concentration limits are
currently subject to FICC's internal governance process and would
remain so with respect to the haircut schedule changes made in
accordance with this proposal. If FICC determines that, based on the
analyses that it performs, there is insufficient/excessive collateral
haircut/concentration due to an identifiable cause that affected
multiple members and such cause would likely persist based on FICC's
assessment of market conditions, such outcome or result could cause
FICC to amend the haircuts/concentration limits in the haircut
schedule. If FICC determines that a change to the haircut schedule is
warranted, its market risk group would document the recommendation and
rationale for the change at the time of such determination and obtain
approval from an executive director or above with a notice to the risk
management committee, in accordance with FICC's internal market risk
management policies and procedures. Before making adjustments to the
haircut schedule, FICC measures the potential impact of such
adjustments to ensure any impact is both necessary and appropriate.
    Through its review, FICC has observed that under volatile market
conditions with elevated frequency and magnitude of securities price
movements, the collateral value of Eligible Clearing Fund Securities
may shift in a relatively short period of time and the current haircuts
may not sufficiently account for the change in value. When the erosion
in the value of the Eligible Clearing Fund Securities exceeds the
relevant haircuts, FICC is exposed to increased risk of potential
losses associated with liquidating a member's portfolio in the event of
a member default when the defaulting member's own margin is
insufficient to satisfy losses to FICC caused by the liquidation of
that member's portfolio. Similarly, when a member's portfolio contains
large net unsettled positions in a particular group of securities with
a similar risk profile or in a particular asset type, such securities
could present additional risk to FICC. The additional risk exposures
associated with liquidating a member's portfolio in the event of a
member default could lead to an increase in the likelihood that FICC
would need to mutualize losses among non-defaulting members during the
liquidation process. However, any changes to the haircuts and/or
concentration limits currently requires a proposed rule change to be
filed with the Commission. In order to provide FICC with more
flexibility in adjusting the haircuts and concentration limits so FICC
can respond to changing market conditions more promptly in order to
mitigate the additional risk exposure, FICC is proposing to remove the
GSD and MBSD Schedules of Haircuts for Eligible Clearing Fund
Securities and concentration limits from the respective Rules, and to
publish the haircuts and concentration limits in a haircut schedule on
FICC's website.
    Specifically, FICC is proposing to delete subsections (a), (b) and
(c) of Section 3b (Special Provisions Relating to Deposits of Eligible
Clearing Fund Securities) in GSD Rule 4 and Section 3c (Special
Provisions Relating to Deposits of Eligible Clearing Fund Securities)
in MBSD Rule 4, respectively.
    Currently, subsections (a) and (c) of Section 3b in GSD Rule 4 and
Section 3c in MBSD Rule 4, respectively, set out certain concentration
limits for Eligible Clearing Fund Agency Securities and Eligible
Clearing Fund Mortgage-Backed Securities. Subsection (a) provides that
any deposits of Eligible Clearing Fund Agency Securities or Eligible
Clearing Fund Mortgage-Backed Securities, respectively, in excess of 25
percent of a member's Required Fund Deposit will be subject to an
additional haircut equal to twice the percentage as specified in the
haircut schedule. Subsection (c) provides that a member may post as
eligible collateral Eligible Clearing Fund Mortgage-Backed Securities
of which it is the issuer; however, such collateral will be subject to
a premium haircut as specified in the haircut schedule. The same
language from subsections (a) and (c) is also currently in the
respective GSD and MBSD haircut schedules. Having this language in both
the Rules and the proposed haircut schedules is unnecessary and could
potentially create confusion for members. As such, FICC is proposing to
eliminate this duplication by deleting subsections (a) and (c) from
Section 3b in GSD Rule 4 and Section 3c in MBSD Rule 4, respectively,
and including this language in the proposed haircut schedule.
    Subsection (b) of Section 3b in GSD Rule 4 and Section 3c in MBSD
Rule 4, respectively, currently sets out an additional concentration
limit with respect to Eligible Clearing Fund Agency Securities.
Specifically, subsection (b) provides that no more than 20 percent of
the Required Fund Deposit may be in the form of Eligible Clearing Fund
Agency Securities that are of a single issuer and no member may post as
eligible collateral Eligible Clearing Fund Agency Securities of which
it is the issuer. FICC is proposing to delete the language in
subsection (b) and move it to the proposed haircut schedule. For
clarity, FICC is also proposing to revise the language in the proposed
haircut schedule to provide that no more than 20 percent of a member's
Required Fund Deposit may be secured by pledged Eligible Clearing Fund
Agency Securities of a single issuer, and no member may pledge Eligible
Clearing Fund Agency Securities of which it is the issuer to secure its
Required Fund Deposit.
    Furthermore, FICC is proposing to add language in Section 3b in GSD
Rule 4 and Section 3c in MBSD Rule 4, respectively, that makes it clear
that all Eligible Clearing Fund Securities pledged to secure Clearing
Fund deposits shall, for collateral valuation purposes, be subject to a
haircut and may be subject to a concentration limit. The proposed
language would provide that FICC shall determine the applicable
haircuts and any concentration limits from time to time in accordance
with its internal policy and governance process,

based on factors determined to be relevant by FICC, which may include,
for example, backtesting results and FICC's assessment of market
conditions, in order to set appropriately conservative haircuts and/or
concentration limits for the Eligible Clearing Fund Securities and
minimize backtesting deficiency occurrences. The proposed language
would also provide that the haircuts and any concentration limits
prescribed by FICC shall be set forth in a haircut schedule that is
published on FICC's website. Furthermore, the proposed language would
make it clear that it shall be the member's responsibility to retrieve
the haircut schedule, and FICC would provide members with at a minimum
one Business Day's advance notice of any change in the haircut
schedule.
    Lastly, FICC is proposing to delete a sentence from Section 3b in
GSD Rule 4 and Section 3c in MBSD Rule 4, respectively, that references
haircuts set forth in the Rules, and add a general reference to
applicable haircuts so that it is clear to members that the valuation
of Eligible Clearing Fund Securities is subject to applicable haircuts.
    FICC believes that the proposed change to move the haircuts and
concentration limits from the Rules to the website would enable FICC to
adjust the haircuts and concentration limits without undergoing a rule
filing process.\8\ By being able to make appropriate and timely
adjustments to the haircuts and concentration limits, FICC would have
the flexibility to respond to changing market conditions more promptly.
Having the flexibility to respond to changing market conditions more
promptly would in turn help better ensure that FICC collects sufficient
margin from members as well as risk manages its credit exposures to its
members. The proposed change would also align FICC with the manner in
which its affiliate, The Depository Trust Company (``DTC''), provides
haircut schedules to participants.\9\
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    \8\ Pursuant to Section 806(e)(1) of Title VIII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act and Rule 19b-
4(n)(1)(i) under the Act, if a change materially affects the nature
or level of risks presented by FICC, then FICC is required to file
an advance notice. 12 U.S.C. 5465(e)(1) and 17 CFR 240.19b-
4(n)(1)(i).
    \9\ DTC also allows its participants to pledge eligible
collateral as a portion of the participant fund; however, instead of
being in the DTC rulebook, the collateral haircut schedules are
published periodically by Important Notice to DTC participants.
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    Concurrent with moving the haircuts and concentration limits from
the Rules to the website, FICC is also proposing to reconfigure the
categories relating to Treasury securities haircuts by moving the
Treasury Inflation-Protected Securities (``TIPS'') to a separate
category and increasing the haircut levels for TIPS. The proposed
change to TIPS is reflected in Exhibit 3c to this filing. TIPS are a
type of Treasury security issued by the U.S. government that are
indexed to inflation such that the principal value of the security
rises as inflation rises.
    In connection with FICC's assessments of its collateral haircuts,
FICC employs daily backtesting to determine the adequacy of each
member's collateral haircuts. FICC compares the collateral haircuts for
each member with the simulated liquidation gains/losses using the
actual positions in the member's portfolio, and the actual historical
security returns. A backtesting deficiency occurs when a member's
collateral haircuts would not have been adequate to cover the simulated
liquidation losses.
    In connection with such assessments, FICC has determined that in
periods where the inflation rate fluctuates, the current haircut levels
for TIPS have been inadequate to address the fluctuations from time to
time. This is because TIPS are indexed to the inflation rate, and
prices on TIPS move inversely to their yields, e.g., when the inflation
rate increases, prices on TIPS decrease. When the decline in market
value of TIPS exceeds the haircut for TIPS, FICC would be exposed to
potential liquidation losses. Specifically, during the period from
September 1, 2021 to August 31, 2022, with TIPS comprising less than 10
percent of the total collateral value across the GSD and MBSD divisions
at FICC, FICC has observed 29 backtesting deficiencies at FICC,\10\ 26
at GSD and 3 at MBSD, where the collateral value that FICC attributed
to the TIPS that were posted by members as margin (inclusive of the
applicable current haircuts) was insufficient to cover the liquidation
of such securities by FICC without incurring a loss. Accordingly, FICC
is proposing to reconfigure and modify the haircut information that
would be posted on FICC's website to ensure that the haircut levels
would be commensurate with the particular risk attributes of TIPS.
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    \10\ The 29 backtesting deficiencies represent a sum total of
approximately $9.4 million across four days during the impact study
period, less than 0.1% of the total collateral value at FICC on each
of those days.
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    Specifically, FICC would list TIPS of various maturity groupings in
a separate category from Treasury bills, notes and bonds. In addition,
FICC would change the haircut level applicable for TIPS as follows:

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                                                            Maturity                 Current %      Proposed %
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TIPS..........................................  Zero to 1 year..................             2.0             2.0
                                                1 year to 2 years...............             2.0             3.0
                                                2 years to 5 years..............             3.0             5.0
                                                5 years to 10 years.............             4.0             7.0
                                                10 years to 15 years............             6.0             7.0
                                                15 years or greater.............             6.0            10.0
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    In determining the appropriate haircut levels for TIPS, FICC
conducted a review of TIPS haircuts at other registered clearing
agencies and foreign central counterparty clearing houses (``CCPs'') to
compare FICC's current TIPS haircuts with that required by registered
clearing agencies and foreign CCPs when TIPS are deposited to their
clearing funds, or the equivalent thereof. The results of the review
and comparison indicated that FICC's current haircut levels for TIPS
are generally lower than the TIPS haircuts required by other clearing
agencies and foreign CCPs, particularly with respect to maturity ranges
of 10 years or longer. While the TIPS haircut requirement at such other
entities is not dispositive as to the risk borne by FICC or the proper
TIPS haircut levels to offset such risk, it is indicative of the TIPS
haircuts being applied to users of other similarly situated entities in
order to use the services of the clearing agencies and foreign CCPs and
the impact to such users. The chart below shows the haircut that
participants of other clearing agencies and foreign CCPs are currently
subject to when using TIPS to

meet their margin requirements, as compared with the existing TIPS
haircut required at FICC.
[GRAPHIC] [TIFF OMITTED] TN04OC23.014

    FICC is not proposing any changes to the concentration limits at
this time.
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    \11\ See ICE Clear U.S. Acceptable Collateral and Haircuts,
available at www.theice.com/publicdocs/clear_us/ICUS_Collateral_Information.pdf.
    \12\ See LCH LTD-Margin Collateral Haircut Schedule, available
at www.lch.com/system/files/media_root/Collateral/Acceptable%20Collateral%20Haircuts%20LCH%20Ltd_0.pdf.
    \13\ See CME Group Acceptable Performance Bond Collateral for
Base Guaranty Fund Products, available at www.cmegroup.com/clearing/files/acceptable-collateral-futures-options-select-forwards.pdf.
    \14\ See OCC Collateral Haircut Schedule, available at
www.theocc.com/clearance-and-settlement/acceptable-collateral-haircuts.
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Impact Study
    FICC conducted an impact study for the period from September 1,
2021 through August 31, 2022 (``Impact Study''). The results of the
Impact Study indicate that, if the haircut changes for TIPS had been in
place, all 29 backtesting deficiencies would have been eliminated.
    If the proposed haircut adjustments had been in place during the
Impact Study period, the changes would have resulted in an aggregate
average daily increase for all members of $40.75 million (approximately
0.15%) in the Clearing Fund for GSD and an aggregate average daily
increase of $16.60 million (approximately 0.14%) in the Clearing Fund
for MBSD. The three largest daily average dollar increases to GSD
Members would be $11.1 million (approximately 0.91%), $8.3 million
(approximately 1.07%) and $4.3 million (approximately 1.26%). The three
largest daily average percentage increases for GSD Members would be
1.78%, 1.76% and 1.29%. The three largest daily average dollar
increases to MBSD would be $4.08 million (approximately 0.30%), $4.04
million (approximately 0.46%) and $3.99 million (approximately 0.51%).
The three largest daily average percentage increases for MBSD Members
would be 1.35%, 0.71% and 0.51%. During the Impact Study period, 33 of
132 GSD Members and 11 of 80 MBSD Members would have experienced an
increase in their respective Clearing Fund deposits had the proposed
changes been in place.
Implementation Timeframe
    Subject to approval by the Commission, FICC expects to implement
this proposal by no later than 60 Business Days after such approval and
would announce the effective date of the proposed changes by an
Important Notice posted to FICC's website.
2. Statutory Basis
    FICC believes this proposal is consistent with the requirements of
the Act, and the rules and regulations thereunder applicable to a
registered clearing agency. Specifically, FICC believes that the
proposed changes described above are consistent with Section
17A(b)(3)(F) of the Act,\15\ and Rules 17Ad-22(e)(4)(i), (e)(5),
(e)(6)(i), and (e)(6)(v), each promulgated under the Act,\16\ for the
reasons described below.
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    \15\ 15 U.S.C. 78q-1(b)(3)(F).
    \16\ 17 CFR 240.17Ad-22(e)(4)(i), (e)(5), (e)(6)(i), and
(e)(6)(v).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions and assure the
safeguarding of securities and funds which are in the custody or
control of the clearing agency or for which it is responsible.\17\ As
described above, FICC believes the proposed changes to move the
collateral haircuts and concentration limits from the Rules to the
website would provide FICC with more flexibility to respond to changing
market conditions because adjustments to the haircuts and concentration
limits would no longer require a rule change. By being able to make
appropriate and timely adjustments to the haircuts and concentration
limits, FICC would have the flexibility to respond to changing market
conditions more promptly. FICC believes that having this additional
flexibility to respond to changing market conditions more promptly
would help better ensure that FICC (i) collects sufficient margin from
members to cover the risk exposures that FICC may face in liquidating
members' portfolios and (ii) minimizes exposures from members with
large collateral positions in a particular group of securities with a
similar risk profile or in a particular asset type, such that, in the
event of a member default, FICC's

operations would not be disrupted, and non-defaulting members would not
be exposed to losses they cannot anticipate or control. In this way,
the proposed rule change to move the collateral haircuts and
concentration limits from the Rules to the website would assure the
safeguarding of securities and funds which are in the custody and
control of FICC or for which it is responsible, consistent with Section
17A(b)(3)(F) of the Act.\18\
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    \17\ 15 U.S.C. 78q-1(b)(3)(F).
    \18\ Id.
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    FICC also believes the proposed changes to move TIPS haircuts into
a separate category and raise the haircut levels for TIPS would help
ensure that the haircut levels for TIPS would be commensurate with the
particular risk attributes of TIPS. FICC has determined that in periods
where the inflation rate fluctuates, the current haircut levels for
TIPS have been inadequate to address the fluctuations from time to
time, and more conservative haircuts for TIPS are warranted. Having
haircut levels for TIPS that are commensurate with the particular risk
attributes of TIPS would enable FICC to collect sufficient margin from
members to cover the risk exposures that FICC may face in liquidating
members' portfolios such that, in the event of a member default, FICC's
operations would not be disrupted, and non-defaulting members would not
be exposed to losses they cannot anticipate or control. In this way,
the proposed rule change to move TIPS haircuts into a separate category
and raise the haircut levels for TIPS would assure the safeguarding of
securities and funds which are in the custody and control of FICC or
for which it is responsible, consistent with Section 17A(b)(3)(F) of
the Act.\19\
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    \19\ Id.
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    FICC believes that the proposed clarifying changes would help to
ensure that the Rules are clear to members. When members better
understand their rights and obligations regarding the Rules, members
are more likely to act in accordance with the Rules, which FICC
believes would promote the prompt and accurate clearance and settlement
of securities transactions. As such, FICC believes that the proposed
clarifying changes would be consistent with Section 17A(b)(3)(F) of the
Act.\20\
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    \20\ Id.
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    Rule 17Ad-22(e)(4)(i) under the Act \21\ requires a covered
clearing agency to 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 exposures arising from its payment, clearing, and settlement
processes by maintaining sufficient financial resources to cover its
credit exposure to each participant fully with a high degree of
confidence. As described above, FICC believes the proposed changes to
move the collateral haircuts and concentration limits from the Rules to
the website would provide FICC with more flexibility to respond to
changing market conditions because adjustments to the haircuts and
concentration limits would no longer require a rule change. By being
able to make appropriate and timely adjustments to the haircuts and
concentration limits, FICC would have the flexibility to respond to
changing market conditions more promptly. FICC believes that having
this additional flexibility to respond to changing market conditions
more promptly would help ensure that FICC (i) collects sufficient
margin from members to cover the risk exposures that FICC may face in
liquidating members' portfolios and (ii) minimizes exposures from
members with large collateral positions in a particular group of
securities with a similar risk profile or in a particular asset type,
such that, in the event of a member default, FICC's operations would
not be disrupted, and non-defaulting members would not be exposed to
losses they cannot anticipate or control. In this way, the proposed
rule change to move the collateral haircuts and concentration limits
from the Rules to the website would help ensure that FICC maintains
sufficient financial resources to cover its credit exposure to each
participant fully with a high degree of confidence, consistent with the
requirements of Rule 17Ad-22(e)(4)(i) under the Act.\22\
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    \21\ 17 CFR 240.17Ad-22(e)(4)(i).
    \22\ Id.
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    FICC also believes the proposed changes to move TIPS haircuts into
a separate category and raise the haircut levels for TIPS would help
ensure that the haircut levels for TIPS would be commensurate with the
particular risk attributes of TIPS. FICC has determined that in periods
where the inflation rate fluctuates, the current haircut levels for
TIPS have been inadequate to address the fluctuations from time to time
and more conservative haircuts for TIPS are warranted. Ensuring that
the haircut levels for TIPS are commensurate with the particular risk
attributes of TIPS would in turn help ensure that FICC requires members
to maintain sufficient margin to cover the credit exposures that FICC
may face related to its ability to liquidate members' portfolios in the
event of a member default. In this way, the proposed rule change to
move TIPS haircuts into a separate category and raise the haircut
levels for TIPS would help ensure that FICC maintains sufficient
financial resources to cover its credit exposure to each participant
fully with a high degree of confidence, consistent with the
requirements of Rule 17Ad-22(e)(4)(i) under the Act.\23\
---------------------------------------------------------------------------

    \23\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(5) under the Act \24\ requires, in part, a covered
clearing agency to establish, implement, maintain and enforce written
policies and procedures reasonably designed to set and enforce
appropriately conservative haircuts and concentration limits if the
covered clearing agency requires collateral to manage its or its
participants' credit exposure. As described above, FICC believes the
proposed changes to move the collateral haircuts and concentration
limits from the Rules to the website would provide FICC with more
flexibility to respond to changing market conditions because
adjustments to the haircuts and concentration limits would no longer
require a rule change. By being able to make appropriate and timely
adjustments to the haircuts and concentration limits, FICC would have
the flexibility to respond to changing market conditions more promptly.
FICC believes that having this additional flexibility to respond to
changing market conditions more promptly would help better ensure that
FICC (i) collects sufficient margin from members to cover the risk
exposures that FICC may face in liquidating members' portfolios and
(ii) minimizes exposures from members with large collateral positions
in a particular group of securities with a similar risk profile or in a
particular asset type, such that, in the event of a member default,
FICC's operations would not be disrupted, and non-defaulting members
would not be exposed to losses they cannot anticipate or control.
Specifically, FICC would have the ability to promptly set and enforce
conservative collateral haircuts and concentration limits that are
reflective of the current market conditions. In this way, the proposed
changes to move the collateral haircuts and concentration limits from
the Rules to the website would help FICC set and enforce appropriately
conservative collateral haircuts and concentration limits, consistent
with the requirements of Rule 17Ad-22(e)(5) under the Act.\25\
---------------------------------------------------------------------------

    \24\ 17 CFR 240.17Ad-22(e)(5).
    \25\ Id.
---------------------------------------------------------------------------

    FICC also believes the proposed changes to move TIPS haircuts into
a separate category and raise the haircut

levels for TIPS would help ensure that the haircut levels for TIPS
would be commensurate with the particular risk attributes of TIPS. FICC
has determined that in periods where the inflation rate fluctuates, the
current haircut levels for TIPS have been inadequate to address the
fluctuations from time to time and more conservative haircuts for TIPS
are warranted. Specifically, FICC would have the ability to set and
enforce conservative collateral haircuts that are commensurate with the
particular risk attributes of TIPS. In this way, the proposed changes
to move TIPS haircuts into a separate category and raise the haircut
levels for TIPS would help FICC set and enforce appropriately
conservative collateral haircuts, consistent with the requirements of
Rule 17Ad-22(e)(5) under the Act.\26\
---------------------------------------------------------------------------

    \26\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(i) under the Act \27\ requires a covered
clearing agency to establish, implement, maintain and enforce written
policies and procedures reasonably designed to cover, if the covered
clearing agency provides central counterparty services, its credit
exposures to its participants by establishing a risk-based margin
system that, at a minimum, considers, and produces margin levels
commensurate with, the risks and particular attributes of each relevant
product, portfolio, and market. FICC believes that the proposed changes
to move the collateral haircuts and concentration limits from the Rules
to the website would provide FICC with more flexibility to respond to
changing market conditions because FICC would be able to make
appropriate adjustments to the haircuts and concentration limits
without a rule change. By being able to make appropriate and timely
adjustments to the haircuts and concentration limits, FICC would have
the flexibility to respond to changing market conditions more promptly.
FICC believes that having this additional flexibility to respond to
changing market conditions more promptly would enable FICC to better
risk manage its credit exposure to its members by (i) collecting
sufficient margin from members to cover the risk exposures that FICC
may face in liquidating members' portfolios and (ii) minimizing
exposures from members with large collateral positions in a particular
group of securities with a similar risk profile or in a particular
asset type, thus allowing FICC to produce margin levels commensurate
with the risks and particular attributes of each relevant product,
portfolio, and market. Therefore, FICC believes this proposed change is
consistent with Rule 17Ad-22(e)(6)(i) under the Act.\28\
---------------------------------------------------------------------------

    \27\ 17 CFR 240.17Ad-22(e)(6)(i).
    \28\ Id.
---------------------------------------------------------------------------

    FICC also believes the proposed changes to move TIPS haircuts into
a separate category and raise the haircut levels for TIPS would help
ensure that the haircut levels for TIPS would be commensurate with the
particular risk attributes of TIPS. FICC has determined that in periods
where the inflation rate fluctuates, the current haircut levels for
TIPS have been inadequate to address the fluctuations from time to time
and more conservative haircuts for TIPS are warranted. Ensuring that
the haircut levels for TIPS are commensurate with the particular risk
attributes of TIPS would allow FICC to produce margin levels
commensurate with the risks and particular attributes of each relevant
product, portfolio, and market. Therefore, FICC believes this proposed
change is consistent with Rule 17Ad-22(e)(6)(i) under the Act.\29\
---------------------------------------------------------------------------

    \29\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(v) under the Act \30\ requires a covered
clearing agency to establish, implement, maintain and enforce written
policies and procedures reasonably designed to cover, if the covered
clearing agency provides central counterparty services, its credit
exposures to its participants by establishing a risk-based margin
system that, at a minimum, uses an appropriate method for measuring
credit exposure that accounts for relevant product risk factors and
portfolio effects across products. FICC believes that the proposed
changes to move the collateral haircuts and concentration limits from
the Rules to the website would provide FICC with more flexibility to
respond to changing market conditions more promptly because FICC would
be able to make appropriate adjustments to the haircuts and
concentration limits without a rule change. Having this additional
flexibility would enable FICC to better risk manage its credit exposure
to its members because FICC would then be able to make appropriate and
timely adjustments to the haircuts and concentration limits, as
described above. Being able to adjust the haircuts and concentration
limits appropriately and timely would allow FICC to better risk manage
its credit exposure to its members by (i) collecting sufficient margin
from members to cover the risk exposures that FICC may face in
liquidating members' portfolios and (ii) minimizing exposures from
members with large collateral positions in a particular group of
securities with a similar risk profile or in a particular asset type,
thus producing margin levels commensurate with relevant product risk
factors and portfolio effects across products. Therefore, FICC believes
this proposed change is consistent with Rule 17Ad-22(e)(6)(v) under the
Act.\31\
---------------------------------------------------------------------------

    \30\ 17 CFR 240.17Ad-22(e)(6)(v).
    \31\ Id.
---------------------------------------------------------------------------

    FICC also believes the proposed changes to move TIPS haircuts into
a separate category and raise the haircut levels for TIPS would help
ensure that the haircut levels for TIPS would be commensurate with the
particular risk attributes of TIPS. Specifically, as proposed, FICC
would have collateral haircuts that are commensurate with the
particular risk attributes of TIPS. Ensuring that the haircut levels
for TIPS are commensurate with the particular risk attributes of TIPS
would allow FICC to produce margin levels commensurate with relevant
product risk factors and portfolio effects across products. Therefore,
FICC believes this proposed change is consistent with Rule 17Ad-
22(e)(6)(v) under the Act.\32\
---------------------------------------------------------------------------

    \32\ Id.
---------------------------------------------------------------------------

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

    Section 17A(b)(3)(I) of the Act requires that the rules of FICC do
not impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.\33\ FICC does not believe the
proposed rule changes to move the haircuts and concentration limits
from the Rules to the website would impose a burden on competition.
These proposed changes are designed to enable FICC to timely respond to
increases in market volatility with haircut requirements and
concentration limits that are more reflective of the current credit
exposures to FICC. As discussed above, these proposed changes would
allow FICC to better risk manage its credit exposure to its members by
(i) collecting sufficient margin from members to cover the risk
exposures that FICC may face in liquidating members' portfolios and
(ii) minimizing exposures from members with large collateral positions
in a particular group of securities with a similar risk profile or in a
particular asset type, such that, in the event of a member default,
FICC's operations would not be disrupted, and non-defaulting members
would not be exposed to losses they cannot anticipate or control. These
proposed changes would not unfairly inhibit access to FICC's services,
or disadvantage or favor any particular member in relationship to
another member. The proposed changes would allow FICC to adjust the
haircuts

and concentration limits more promptly and would not otherwise affect
members' access to FICC's services. In addition, any changes to the
haircuts or concentration limits would be directly related to the
perceived risk related to members' collateral based on back-tests,
stress-tests and market observations, and would be applied uniformly to
all members. Accordingly, FICC believes that these proposed changes
would not impose any burden or have any impact on competition.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    Similarly, FICC does not believe the proposed rule changes to move
TIPS haircuts into a separate category would impose a burden on
competition. These proposed changes are designed to improve the clarity
and presentation of the haircut information. These proposed changes
would not unfairly inhibit access to FICC's services or disadvantage or
favor any particular member in relationship to another member, and the
changes would be applied uniformly to all members. Accordingly, FICC
believes that these proposed changes would not impose any burden or
have any impact on competition.
    FICC believes the proposed changes to raise certain TIPS haircut
levels may have an impact on competition because these changes could
result in members' Eligible Clearing Fund Securities being subject to
higher haircuts than they would have been under the current GSD and
MBSD Schedules of Haircuts for Eligible Clearing Fund Securities. FICC
believes that the proposed change could burden competition by
potentially increasing these members' operating costs by requiring
members who are using TIPS as collateral to pledge additional
collateral. Nonetheless, FICC believes any burden on competition
imposed by the proposed changes would not be significant and,
regardless of whether such burden on competition could be deemed
significant, would be necessary and appropriate, as permitted by
Section 17A(b)(3)(I) of the Act for the reasons described in this
filing and further below.\34\
---------------------------------------------------------------------------

    \34\ Id.
---------------------------------------------------------------------------

    FICC believes any burden on competition presented by the proposed
changes to the TIPS haircut levels would not be significant. As
discussed above, if the proposed changes to the TIPS haircut levels had
been in place during the Impact Study period, the three largest daily
average dollar increases to GSD Members would have been $11.1 million
(approximately 0.91%), $8.3 million (approximately 1.07%), and $4.3
million (approximately 1.26%); and the three largest daily average
dollar increases to MBSD Members would have been $4.08 million
(approximately 0.30%), $4.04 million (approximately 0.46%), and $3.99
million (approximately 0.51%). In addition, FICC believes that the
proposed changes to the TIPS haircut levels are comparable with what is
being required of users of other similar registered clearing agencies
and foreign CCPs when posting TIPS as collateral.
    FICC believes any burden on competition that may be imposed by the
proposed changes to the TIPS haircut levels would be necessary because,
as described above, the proposed changes would help ensure that the
collateral values attributed to TIPS would be commensurate with the
particular risk attributes of TIPS. Making sure proper collateral
values are attributed to TIPS that are used as margin would thus help
better ensure that FICC collects sufficient margin from members and
thereby assure the safeguarding of securities and funds which are in
the custody and control of FICC or for which it is responsible,
consistent with Section 17A(b)(3)(F) of the Act.\35\
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    In addition, FICC believes the proposed changes to the TIPS haircut
levels are necessary to support FICC's compliance with Rules 17Ad-
22(e)(4)(i), (e)(5), (e)(6)(i), and (e)(6)(v) under the Act.
Specifically, as described above, FICC believes these proposed changes
would ensure that the haircut levels for TIPS are commensurate with the
particular risk attributes of TIPS. Having haircut levels for TIPS that
are commensurate with the particular risk attributes of TIPS would
ensure proper collateral valuation for TIPS used as margin. Ensuring
proper collateral valuation for TIPS used as margin would help FICC
better measure, monitor, and manage its credit exposures to
participants and those exposures arising from its payment, clearing,
and settlement processes, consistent with the requirements of Rule
17Ad-22(e)(4)(i) under the Act.\36\ Ensuring proper collateral
valuation for TIPS used as margin would also allow FICC to set and
enforce appropriately conservative collateral haircuts, consistent with
the requirements of Rule 17Ad-22(e)(5) under the Act.\37\ It would also
help FICC cover its credit exposures to its participants, consistent
with the requirements of Rules 17Ad-22(e)(6)(i) and (e)(6)(v) under the
Act.\38\
---------------------------------------------------------------------------

    \36\ 17 CFR 240.17Ad-22(e)(4)(i).
    \37\ 17 CFR 240.17Ad-22(e)(5).
    \38\ 17 CFR 240.17Ad-22(e)(6)(i) and (e)(6)(v).
---------------------------------------------------------------------------

    FICC also believes that any burden on competition that may be
imposed by the proposed changes to the TIPS haircut levels would be
appropriate in furtherance of the Act because these proposed changes
have been specifically designed to assure the safeguarding of
securities and funds which are in the custody and control of FICC or
for which it is responsible, as required by Section 17A(b)(3)(F) of the
Act.\39\ As described above, FICC believes these proposed changes would
help better ensure that FICC collects sufficient margin from members,
thus enabling FICC to produce margin levels more commensurate with the
risks it faces as a central counterparty. Accordingly, FICC believes
these proposed changes are appropriately designed to meet its risk
management goals and regulatory obligations.
---------------------------------------------------------------------------

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

    FICC does not believe the proposed clarifying changes to the Rules
would impact competition. These changes would help to ensure that the
Rules remain clear. In addition, the changes would facilitate members'
understanding of the Rules and their obligations thereunder. These
changes would not affect FICC's operations or the rights and
obligations of the membership. As such, FICC believes the proposed
clarifying changes would not have any impact on competition.

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

    FICC has not received or solicited any written comments relating to
this proposal. If any additional written comments are received, they
will be publicly filed as an Exhibit 2 to this filing, as required by
Form 19b-4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
    All prospective commenters should follow the Commission's
instructions on how to submit comments, available at https://www.sec.gov/regulatory-actions/how-to-submit-comments. General
questions regarding the rule filing process or logistical questions
regarding this filing should be directed to the Main Office of the
SEC's Division of Trading and Markets at

[email protected] or<PHONE_NUMBER>.
    FICC reserves the right to not respond to any comments 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.

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-FICC-2023-014 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FICC-2023-014. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of FICC and on DTCC's website
(dtcc.com/legal/sec-rule-filings). Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to File Number
SR-FICC-2023-014 and should be submitted on or before October 25, 2023.

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

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

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21938 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P


Solvent Cleaning SISNOSE Screening Analysis

1. Summary

The Environmental Protection Agency (EPA) Office of Air and Radiation
has analyzed the potential economic impacts of options for regulation of
n-propyl bromide (nPB) under the Significant New Alternatives Policy
(SNAP) program for the adhesives and aerosols manufacturing categories.
Two alternative regulatory actions have been evaluated:

continued use of nPB is “acceptable” (with appropriate equipment)

continued use of nPB is “unacceptable.”

A screening analysis was conducted to determine whether regulatory
options under consideration could result in a “significant impact on a
substantial number of small entities” (SISNOSE). This screening
analysis of small business impacts is conducted in conformance with EPA
guidance for compliance with the Regulatory Flexibility Act (RFA) and
the Small Business Regulatory Enforcement Fairness Act (SBREFA).

Under the guidance, regulatory impacts are classified as category 1, 2,
or 3. Category 1 means that the rule is presumed not to have a SISNOSE.
Category 3 means that a SISNOSE is presumed to exist. Category 2 means
that no presumption applies and consultation with the Small Business
Advocacy Chair is needed to make a determination. Conclusions are
summarized in Table 1 for each of the affected manufacturing categories
as identified by their North American Industrial Classification System
(NAICS) codes.

As shown in Table 1, results for the Engineering Services and Other
Scientific and Technical Services NAICS codes are the only ones that
exhibit category 2 status under current assumptions.

Table 1. Conclusions of RFA/SBREFA screening analysis

	NPB acceptable with 12 ppm AEL	NPB unacceptable

NAICS 331 -- Primary Metal Manufacturing	Category 1	Category 1

NAICS 332 – Fabricated Metal Product Manufacturing	Category 1	Category
1

NAICS 333 – Machinery Manufacturing	Category 1	Category 1

NAICS 334 – Computer & Electronic Product Manufacturing	Category 1
Category 1

NAICS 335 – Electrical Equip, Appliance & Component Manufacturing
Category 1	Category 1

NAICS 336 – Transportation Equipment Manufacturing	Category 1	Category
1

NAICS 337 – Furniture & Related Product Manufacturing	Category 1
Category 1

NAICS 339 – Miscellaneous Manufacturing	Category 1	Category 1

NAICS 541330 – Engineering Services	Category 2	Category 2

NAICS 541690 – Other Scientific & Technical Consulting Services
Category 2	Category 2

The classification criteria prescribed in the EPA guidance for making
the above categorizations are as follows:

Category 1

The number of small companies that have compliance costs greater than 1%
of sales is less than 1,000 and less than 20% of the total number of
small companies.

The number of small companies that have compliance costs greater than 3%
of sales is less than 100.

Category 2

The number of small companies that have compliance costs greater than 1%
of sales is more than 1,000 or more than 20% of the total number of
small companies.

The number of small companies that have compliance costs greater than 3%
of sales is between 100 and 999, and less than 20% of the total number
of small companies.

Category 3

The number of small companies that have compliance costs greater than 3%
of sales is more than 1,000 or more than 20% of the total number of
small companies.

The level of aggregation at which these classification criteria are
applied is left open to interpretation in the EPA guidance. They can be
applied at the level of an overall rulemaking, by manufacturing category
(i.e., NAICS code), or at any level that is relevant to understanding
impacts on small businesses. In this case, results are summarized at the
at the level of individual NAICS codes and at the level of company size
categories. Small manufacturing businesses are defined as firms
employing fewer than 500 people; small service firms are defined as
those with receipts of less than $5 million/yr.

2. Impacts of Regulatory Alternatives

2.1 nPB Acceptable

It is assumed that the existing use of nPB is in a vapor degreaser in
all NAICS codes.  The effect of a 12 parts-per-million (ppm) acceptable
exposure limit (AEL) is assumed to require an upgrade in the performance
of the vapor degreaser equipment for about 30 percent of companies.
Although some businesses may opt to purchase a new degreaser, the impact
of the regulatory option is limited to the incremental cost of the
required upgrade.  Upgrade capital costs are estimated to be $15,000 for
a 13 sq ft vapor degreaser (ICF, 2004).  Using the relationships between
surface area and nPB usage documented in the analysis supporting the
proposed rulemaking (EPA, 2003), this $15,000/13 sq ft capital cost
estimate is scaled to create an upgrade cost function that indicates an
incremental cost of $2.67 per pound of nPB use for degreasers using up
to 6,000 pounds per year and $1.90 per pound of nPB use for degreasers
using more than 6,000 pounds per year.  These incremental cost factors
are applied to the nPB usage projected to occur in each NAICS code and
company size category to produce impact estimates.

The only other capital cost item involved in continuing to use nPB in an
upgraded degreaser is training cost.  This is estimated at a constant
$1018 per firm.  This assumption is imported from prior SISNOSE analyses
of impacts on adhesive and aerosol users of nPB.

The major effect of the degreaser upgrade on operating costs is expected
to be a reduction in solvent usage and consequent cost savings.  Among
degreasers that do not currently meet a 12 ppm AEL, the average exposure
is estimated to be about 41 ppm.  The difference between 41 ppm and 12
ppm implies a 71% reduction in solvent use will result from the upgrade.
 This equates to a dollar savings of $2.82 per pound of nPB used.  The
total savings are substantial and confirm the suspicion that the
degreaser upgrade will pay for itself fairly quickly in most instances.

The only other operating cost considered is the cost of personal
protection equipment.  The costs assumed for this are imported from the
SISNOSE analysis of adhesives and aerosols users of nPB that were
derived originally from the OSHA impact analysis of methylene chloride
regulations.  These costs are quite significant and are the primary
reason that a category 2 impact designation is indicated in NAICS codes
541330 and 541690 for the “nPB acceptable” regulatory alternative.
It is important to note however that there are estimated to be only 50
to 60 companies using nPB in these NAICS codes, representing much less
than one percent of the total number of firms in each.

2.2 nPB Unacceptable

The projected choices of alternatives to nPB are based in large part on
analysis of recent market trends.  Flammables, such as isopropyl
alcohol, and aqueous cleaning approaches are ruled out.  In the case of
flammables, the cost of explosion proofing and fire suppression is
believed to heavily outweigh any advantage gained by using a less
expensive solvent.  In the case of aqueous cleaning, experience has
shown that as much as a third of the market has already adopted it where
it has been proven effective and cost-effective.  As a result, it is
thought that there is little further potential that has not already been
vigorously explored.  It might be possible to see another 5% shift to
aqueous, but the analysis assumes zero to be more conservative.

The remaining alternatives include chlorinated solvents that are
presumed to be the choice by metals cleaning businesses (NAICS codes
331, 332, 333, and 337) and HCFC 225 and Trans-DCE that are preferred
choices in the electronics and precision cleaning businesses (NAICS
codes 334, 335, 336, 339, 541330, and 541690).

It is assumed that the use of chlorinated solvents will require the same
vapor degreaser upgrade as required for nPB due to air pollution
requirements.  The same capital costs are therefore assumed and the same
degree of reduction in solvent usage is assumed.  The major difference
in the cost of this substitution is the lack of a requirement for
personal protective equipment due to the higher exposure limits.

It is assumed that the use of HCFC 225 and Trans-DCE can be accommodated
without the need to modify vapor degreasers, eliminating an important
capital cost.  However, these solvents are considerably more expensive
at $13.50/lb for HCFC 225 and $16.50/lb for Trans DCE.  This results in
an impact that exceeds 1% of sales in the smallest company size category
in NAICS Codes 334, 335, and 336.  However, there are fewer than 100
firms affected which leaves the result well within the category 1
SISNOSE designation.  In NAICS Codes 541330 and 541690, however, the
impact of these more expensive solvents produces impacts in the 1%-to-2%
of sales range that do obtain a category 2 SISNOSE designation.  It is
again important to note that there are estimated to be only 50 to 60
companies using nPB in these NAICS codes, representing much less than
one percent of the total number of firms in each.

References

EPA 2003, Economic Impacts: Options for SNAP Decision on n-Propyl
Bromide, U.S. Environmental Protection Agency, March 20, 2003.

ICF 2004, The U.S. Solvent Cleaning Industry and the Transition to
Non-Ozone Depleting Substances, ICF Consulting, prepared for the U.S.
Environmental Protection Agency, August 2004.

 PAGE

 PAGE   1


[Federal Register: June 11, 2007 (Volume 72, Number 111)]
[Notices]
[Page 32148]
[DOCID:fr11jn07-85]

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

SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request; Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549

Extension: Form S-8, OMB Control No. 3235-0066, SEC File No. 270-66

    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'') has submitted to the Office of Management
and Budget this request for extension of the previously approved
collection of information discussed below.
    Form S-8 (17 CFR 239.16b) under the Securities Act of 1933 (15
U.S.C. 77a et seq.) is the primary registration statement used by
qualified registrants to register securities issuers in connection with
employee benefit plans. Form S-8 provides verification of compliance
with securities law requirements and assures the public availability
and dissemination of such information. The likely respondents will be
companies. The information must be filed with the Commission on
occasion. Form S-8 is a public document. All information provided is
mandatory. We estimate that 50% of the 24 hours per response (12 hours
per response) is prepared by the filer for a total annual reporting
burden of 46,164 hours (12 hours per response x 3,847 responses).
    An agency may conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid control number.
    Written comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503 or send an e-mail to
<EMAIL_ADDRESS>and (ii) R. Corey Booth, Director/Chief

Information Officer, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria, VA 22312; or send an e-
mail to<EMAIL_ADDRESS>Comments must be submitted to OMB within
30 days of this notice.

    Dated: June 4, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-11160 Filed 6-8-07; 8:45 am]

BILLING CODE 8010-01-P


                                   Overview

   This fact sheet clarifies the eligibility of personal assistance services in congregate and transitional shelters under the Category B, Emergency Protective Measures provision of the Federal Emergency Management Agency's (FEMA) Public Assistance Program.  FEMA will reimburse eligible applicants' reasonable costs associated with the provision of personal assistance services for persons with disabilities in congregate and transitional shelters.

   The Public Assistance Program and Applicants for Public Assistance grants must abide by all applicable authorities, including: Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101, et seq.; 28 C.F.R. Part 35 (Title II, Department of Justice); the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121, et seq.; and 44 C.F.R. Part 206.  Applicants should also consult the FEMA Public Assistance Guide (FEMA 322), dated June 2007; FEMA Disaster Assistance Policy DAP9523.15, Eligible Costs Related to Evacuations and Sheltering, dated April 6, 2007; FEMA Disaster Assistance Policy DAP9521.3, Private Nonprofit (PNP) Facilities Eligibility, dated July 18, 2007; and FEMA Recovery Policy RP9525.7, Labor Costs-Emergency Work dated November 16, 2006 to determine eligibility requirements.
   Personal Assistance Services are formal and informal services usually provided by paid personnel, friends, family members and volunteers that enable children and adults to maintain their independence outside of an institutional setting.  In a congregate or transitional shelter, when the person that normally provides assistance is not available, personal assistance services will still be required in order to maintain the usual level of independence. These services may include:  care for oneself such as grooming, eating, bathing, toileting, dressing and undressing, walking, transferring (movement between cot and wheel chair); maintaining health and safety; and assistance taking medications, communicating, or accessing programs and services.

   Personal Assistance Services do not include the provision of:  wheel chairs, prescription eyeglasses, hearing aids, or readers for personal use or study.

                         Public Assistance Eligibility

   Eligible Applicants:  State, local, and tribal governments which provide personal assistance services in general population shelters (44 CFR §206.221 Definitions and §206.222 Applicant Eligibility).  State, local, and tribal governments may provide personal assistance services directly, or may contract (including through mutual aid agreements and memoranda of understanding) with other personal assistance service providers for such services.

                              Emergency Shelters

   If a State, local, or tribal government provides personal assistance services to individuals with disabilities in a congregate or transitional shelter, the cost to provide personal assistance services is considered part of the sheltering operation and the cost for both the facility and its operation are eligible.  Reimbursement for the costs of providing personal assistance services will terminate when Section 403 emergency sheltering operations end.
                           Eligible Sheltering Costs

   If the regular employees of an eligible applicant perform duties in direct support of personal assistance services, any overtime pay related to such duties is eligible for reimbursement.  However, the straight-time pay of these employees is not eligible.  Regular-time and overtime for contract labor, including mutual aid agreements, specifically hired to provide additional support required as a result of the disaster or emergency are eligible for reimbursement.  (See 44 CFR 206.228(a)(2) and FEMA Recovery Policy RP9525.7, Labor Costs-Emergency Work, for information related to eligible labor costs while performing emergency work).

   					  ___________________________	_________
                                  Deborah Ingram			Date
                                                                     Assistant Administrator
                                                                     Recovery Directorate


[Federal Register Volume 79, Number 170 (Wednesday, September 3, 2014)]
[Rules and Regulations]
[Pages 52172-52174]
[FR Doc No: 2014-20453]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2013-0766; Directorate Identifier 2013-NE-26-AD;
Amendment 39-17961; AD 2014-17-08]
RIN 2120-AA64

Airworthiness Directives; Pratt & Whitney Canada Corp. Turboprop
Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all
Pratt & Whitney Canada Corp. (P&WC) PT6A-114 and PT6A-114A turboprop
engines. This AD requires initial and repetitive borescope inspection
(BSI) of compressor turbine (CT) blades, and the removal from service
of blades that fail inspection. This AD was prompted by several
incidents of CT blade failure, causing power loss, and engine failure.
We are issuing this AD to prevent failure of CT blades, which could
result in damage to the engine and damage to the airplane.

DATES: This AD becomes effective October 8, 2014.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of October 8,
2014.

ADDRESSES: For service information identified in this AD, contact Pratt
& Whitney Canada Corp., 1000 Marie-Victorin, Longueuil, Quebec, Canada,
J4G 1A1; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; Internet: www.pwc.ca.
You may view this service information at the FAA, Engine & Propeller
Directorate, 12 New England Executive Park, Burlington, MA. For
information on the availability of this material at the FAA, call 781-
238-7125.

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-2013-
0766; 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 AD, the mandatory continuing airworthiness information
(MCAI), the regulatory evaluation, any comments received, and other
information. The address for the Docket Office (phone:<PHONE_NUMBER>) is
Document Management Facility, U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Robert Morlath, Aerospace Engineer,
Engine Certification Office, FAA, Engine & Propeller Directorate, 12
New England Executive Park, Burlington, MA 01803; phone:<PHONE_NUMBER>;
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a supplemental notice of proposed rulemaking (SNPRM) to
amend 14 CFR part 39 by adding an AD that would apply to the specified
products. The SNPRM was published in the Federal Register on May 12,
2014 (79 FR 26901). The SNPRM proposed to correct an unsafe condition
for the specified products. The MCAI states:

    There have been a number of reported incidents where Compressor
Turbine (CT) blade failures have caused power loss on PT6A-114 &
PT6A-114A engines, resulting in in-flight shutdown (IFSD).
Investigation by engine manufacturer Pratt & Whitney Canada (P&WC)
has determined that when operated at high power and high temperature
settings, the subject CT blades are prone to crack/fracture as a
result of creep and/or sulfidation.
    P&WC issued Service Bulletin (SB) 1669 that introduces a newly
designed CT blade which has proven to be far less affected by the
blade ``Creep'' phenomenon. Additionally, to help prevent IFSD by
identifying pending creep induced blade failure of the pre-SB 1669
configuration blades, P&WC has revised SB 1669 to include specific
inspection/maintenance requirements for engines with pre-SB 1669
configuration CT blade installation.
    An engine power loss or IFSD on a single engine powered
aeroplane such as Cessna 208 could result in an unsafe condition. AD
CF-2013-21 was issued on 1 August 2013 to mandate compliance with SB
1669R9 requirements to inspect and replace the existing CT blades on
PT6A-114 & PT6A-114A engines with a new type of post SB 1669
configuration CT blades. P&WC, through SB 1727, has now introduced a
new version of the post SB 1669 configuration CT blade that features
a tighter tolerance on the platform width. This enhances the ability
of the maintainer to achieve the required inter-platform gap.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comments received.

Request To Remove Mandatory Upgrade

    One commenter requested that we remove the mandatory terminating
action requirement to install P&WC single crystal CT blades, part
numbers (P/Ns) 3072791-01 and 3072791-02. The commenter states that
mandating the installation of an unproven replacement CT blade is not
prudent and could be costly. The post-SB blade has a questionable
operating history including failure. This blade has been identified for
removal in the PT6A-34 and -36 engines, so it should not be made
mandatory for installation in the PT6A-114 engine.
    We do not agree. P&WC single crystal CT blades, P/Ns 3072791-01 and
3072791-02, are proven replacement CT blades for the PT6A-114 and PT6A-
114A engines. These single crystal CT blades have successfully
performed over 2 million flight hours in service and have displayed a
lower rate of failure than older CT blade designs. An ongoing
investigation into blade failures on other PT6A series engines has
shown that the root cause of those failures does not impact the PT6A-
114 and PT6A-114A fleets. Therefore, P&WC single crystal CT blades, P/
Ns 3072791-01 and 3072791-02, have not been identified for removal from
the PT6A-114 and PT6A-114A series engines. We did not change this AD.

Request To Change Mandatory Terminating Action

    One commenter suggested that the 36-month compliance time for the
mandatory terminating action is not appropriate. The commenter states
that mandating replacement of the complete set of single crystal CT
blades with P/N 3072791-02 blades within 36 months is an undue cost
burden for certain operators and that the availability of CT blade, P/N
3072791-02, is unreliable. The operator will not reach the next
scheduled hot section interval prior to 36 months, thereby causing the
performance of the next hot section inspection (HSI) sooner than
necessary.
    We do not agree. The 36-month compliance time for installing single
crystal CT blades, P/Ns 3072791-01 and 3072791-02, adequately addresses
the unsafe condition without imposing undue burden on operators. P&WC
single crystal CT blades, P/Ns 3072791-01 and 3072791-02 are currently
available from P&WC both as replacement parts and installed in new
production engines. We did not change this AD.

Request To Change Mandatory Terminating Action

    Hawkins Aero Engineering, Inc. (Hawkins Aero) requested that the
mandatory terminating action be changed to allow for installation of CT

blade P/Ns approved by the FAA in the future. The reason for this
request is that P&WC and various parts manufacturer approval companies
may develop new blade designs. Adding language that would allow for
installation of newly approved blades in the future would avoid having
to revise this AD.
    We do not agree. We cannot approve P/Ns that do not exist. We did
not change this AD.

Request To Change Referenced SB and P/N

    One commenter requested that we remove P&WC SB No. PT6A-72-1669 and
CT blade, P/N 3072791-01, from this AD. The commenter states that this
SB introduces CT blade, P/N 3072791-01, which is no longer available.
The commenter suggests that in this AD, to avoid confusion when an
operator reviews engine repair records to determine SB compliance, we
should mention only P&WC SB No. PT6A-72-1727, which introduces single
crystal CT blade, P/N 3072791-02.
    We partially agree. We agree that referencing P&WC SB No. PT6A-72-
1669 in this AD may introduce some confusion as to what P/Ns are
mandated for installation.
    We disagree with removing all references to P&WC SB No. PT6A-72-
1669 from this AD because this SB contains instructions on performing
the optional metallurgical examination cited in paragraph
(e)(1)(iii)(B) of this AD.
    We disagree with removing all references to single crystal CT
blade, P/N 3072791-01, because it is still acceptable for installation
even though it is no longer in production.
    We made the following change to the Credit for Previous Actions
paragraph of this AD: ``If you performed a metallurgical examination of
single crystal CT blades in accordance with P&WC SB No. PT6A-72-1669,
Revision 9, dated June 28, 2013, or earlier versions, you met the
initial inspection requirements of paragraph (e)(1)(i) of this AD.
However, you must still comply with the repetitive BSI requirement of
paragraph (e)(1)(ii) of this AD.''

Request To Change the Number of Stated Fatalities

    Hawkins Aero requested that we re-evaluate the stated number of
fatalities that have been associated with CT blade failures. Hawkins
Aero then provided a brief synopsis of recent fatal incidents involving
CT blade failures and associated forced landings that provide a
different number than what was published in the SNPRM (79 FR 26901, May
12, 2014).
    We partially agree. We agree that we should be accurate in what we
report. We disagree that we must identify fatalities to demonstrate the
need for the AD. We changed the justification statement in the Summary
and Unsafe Condition paragraphs to state that ``This AD was prompted by
several incidents of CT blade failure, causing power loss, and engine
failure.''

Request To Change the Costs of Compliance

    One commenter requested that we re-evaluate the costs of
compliance. The commenter states that the cost of performing the HSI,
other than the cost of the blades, was not considered. The commenter
also indicated that the hidden cost of installing the post-SB blades
has not been revealed. The replacement single crystal CT blades have a
hard time life limit of 10,000 hours, whereas the CT blades that are
being replaced do not. The post-SB blades have a lower stretch
inspection interval of 4,000 hours compared to 5,000 for pre-SB blades.
    We do not agree. The cost of compliance calculation includes the
initial work and parts costs associated with removing the unsafe
condition. It does not include costs associated with normal scheduled
maintenance. We did not change this AD.

Request To Approve Alternate Methods of Compliance (AMOCs)

    Hawkins Aero requested that we approve AMOCs to this AD.
    We do not agree. This AD sets forth our required method of
compliance to correct the specified unsafe condition. Operators may
request AMOCs to this AD using the procedures below. We did not change
this AD.

Request To Change Nomenclature

    Hawkins Aero requested that each time we reference the single
crystal CT blades in this AD we use the nomenclature ``P&WC single
crystal CT blade P/N's 3072791-01 and 3072791-02.'' The commenter
states that ``In several locations within the SNPRM the FAA has
referred to: `single crystal CT blades P/Ns 3072791-01 or 3072791-02,'
`CT blades, part numbers P/Ns 3072791-01 or 3072791-02,' and `P&WC
single crystal CT blades P/Ns 3072791-01 or 3072791-02'.''
    We agree. We changed this AD by replacing all references to the
single crystal CT blades with the nomenclature ``P&WC single crystal CT
blades, P/Ns 3072791-01 and 3072791-02.''

Request To Clarify Compliance Language

    One commenter requested that we clarify the language in paragraph
(e)(1)(iii)(A) of this AD with a specific P/N.
    We do not agree. Operators may install any P/N single crystal CT
blade eligible for installation. We did not change this AD.

Request To Clarify Assumptions

    One commenter requested that we re-evaluate the 1,800 hour
assumption for a typical hot section interval. The commenter states,
``Assuming that 1,800 hours is the normal interval for all operators is
incorrect; some operators have extended intervals up to and including
On Condition; therefore, stating to perform the AD at next HSI could be
much longer than the expected 1,800 hours.''
    We do not agree. We did not assume 1,800 hours as a typical HSI
interval. This AD requires blade examination or replacement at next
HSI, and not at specific flight-hour or cycles-in-operation intervals,
precisely due to the wide variety of approved inspection intervals that
exist for these engines. We did not change this AD.

Conclusion

    We reviewed the available data, including the comments received,
and determined that air safety and the public interest require adopting
this AD with the changes described previously. We determined that these
changes will not increase the economic burden on any operator or
increase the scope of this AD.

Costs of Compliance

    We estimate that this AD affects 300 engines installed on airplanes
of U.S. registry. We also estimate that it will take about 4 hours per
engine to perform the required inspection and 8 hours to replace the
blades. The average labor rate is $85 per hour. Required parts cost
about $59,334 per engine. Based on these figures, we estimate the cost
of this AD on U.S. operators to be $18,106,200, if all blades are
replaced.

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 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 this AD:
    (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 to the extent
that it justifies making a regulatory distinction, 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.

Adoption of 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 (AD):

2014-17-08 Pratt & Whitney Canada Corp.: Amendment 39-17961; Docket
No. FAA-2013-0766; Directorate Identifier 2013-NE-26-AD.

(a) Effective Date

    This AD becomes effective October 8, 2014.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Pratt & Whitney Canada Corp. (P&WC) PT6A-
114 and PT6A-114A turboprop engines.

(d) Unsafe Condition

    This AD was prompted by several incidents of compressor turbine
(CT) blade failure, causing power loss, and engine failure. We are
issuing this AD to prevent failure of CT blades, which could lead to
damage to the engine and damage to the airplane.

(e) Compliance

    Comply with this AD within the compliance times specified,
unless already done.
    (1) For engines that have CT blades installed other than P&WC
single crystal CT blades, part numbers (P/Ns) 3072791-01 or 3072791-
02, perform the following actions:
    (i) Within 150 operating hours after the effective date of this
AD, perform a borescope inspection (BSI) of CT blades for engines
with 500 or more hours time-since-new that have not been previously
inspected or time-since-last-inspection (TSLI).
    (ii) Thereafter, repeat the inspection in paragraph (e)(1)(i) of
this AD within 500 flight hours TSLI.
    (iii) During the next hot section inspection (HSI) after the
effective date of this AD, and each HSI thereafter, replace the
complete set of CT blades with any of the following:
    (A) New CT blades;
    (B) CT blades that have passed a two-blade metallurgical
examination in accordance with paragraph 3.B., Accomplishment
Instructions, of P&WC Service Bulletin (SB) No. PT6A-72-1669,
Revision 9, dated June 28, 2013; or
    (C) P&WC single crystal CT blades, P/Ns 3072791-01 or 3072791-
02.
    (2) Reserved.

(f) Mandatory Terminating Action

    Within 36 months after the effective date of this AD, replace
the complete set of CT blades with P&WC single crystal CT blades, P/
Ns 3072791-01 or 3072791-02.

(g) Credit for Previous Action

    If you performed a metallurgical examination of single crystal
CT blades before the effective date of this AD in accordance with
P&WC SB No. PT6A-72-1669, Revision 8, dated January 17, 2013, or
earlier versions, all of which are not incorporated by reference,
you have met the initial inspection requirements of paragraph
(e)(1)(i) of this AD. However, you must still comply with the
repetitive BSI requirement of paragraph (e)(1)(ii) of this AD.

(h) Alternative Methods of Compliance (AMOCs)

    The Manager, Engine Certification Office, FAA, may approve AMOCs
to this AD. Use the procedures found in 14 CFR 39.19 to make your
request.

(i) Related Information

    (1) For more information about this AD, contact Robert Morlath,
Aerospace Engineer, Engine Certification Office, FAA, Engine &
Propeller Directorate, 12 New England Executive Park, Burlington, MA
01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) Refer to Transport Canada Civil Aviation AD CF-2013-21R1,
dated November 13, 2013, for more information. You may examine the
MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-0766-0008.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) 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 the AD specifies otherwise.
    (i) Pratt & Whitney Canada Service Bulletin No. PT6A-72-1669,
Revision 9, dated June 28, 2013.
    (ii) Reserved.
    (3) For P&WC service information identified in this AD, contact
Pratt & Whitney Canada Corp., 1000 Marie-Victorin, Longueuil,
Quebec, Canada, J4G 1A1; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
Internet: www.pwc.ca.
    (4) You may view this service information at FAA, Engine &
Propeller Directorate, 12 New England Executive Park, Burlington,
MA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.
    (5) You may view this service information at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, call<PHONE_NUMBER>, or go to:
http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Burlington, Massachusetts, on August18, 2014.
Richard P. Warren,
Acting Assistant Directorate Manager, Engine & Propeller Directorate,
Aircraft Certification Service.
[FR Doc. 2014-20453 Filed 9-2-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 89 (Tuesday, May 8, 2012)]
[Notices]
[Pages 27102-27103]
[FR Doc No: 2012-11003]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Rule 30e-2, SEC File No. 270-437, OMB Control No. 3235-0494.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), the
Securities and Exchange Commission (the ``Commission'') is soliciting
comments on the collection of information summarized below. The
Commission plans to submit this existing collection of information to
the Office of Management and Budget (``OMB'') for extension and
approval.
    Rule 30e-2 (17 CFR 270.30e-2) under the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) (``Investment Company Act'') requires
registered unit investment trusts (``UITs'') that invest substantially
all of their assets in shares of a management investment company
(``fund'') to send their unitholders annual and semiannual reports
containing financial information on the underlying company.
Specifically, rule 30e-2 requires that the report contain all the
applicable information and financial statements or their equivalent,
required by rule 30e-1 under the Investment Company Act (17 CFR
270.30e-1) to be included in reports of the underlying fund for the
same fiscal period. Rule 30e-1 requires that the underlying fund's
report contain, among other things, the information that is required to
be included in such reports by the fund's registration statement form
under the Investment Company Act. The purpose of this requirement is to
apprise current shareholders of the

operational and financial condition of the UIT. Absent the requirement
to disclose all material information in reports, investors would be
unable to obtain accurate information upon which to base investment
decisions and consumer confidence in the securities industry might be
adversely affected. Requiring the submission of these reports to the
Commission permits us to verify compliance with securities law
requirements.
    Rule 30e-2, however, permits, under certain conditions, delivery of
a single shareholder report to investors who share an address
(``householding''). Specifically, rule 30e-2 permits householding of
annual and semi-annual reports by UITs to satisfy the delivery
requirements of rule 30e-2 if, in addition to the other conditions set
forth in the rule, the UIT has obtained from each applicable investor
written or implied consent to the householding of shareholder reports
at such address. The rule requires UITs that wish to household
shareholder reports with implied consent to send a notice to each
applicable investor stating that the investors in the household will
receive one report in the future unless the investors provide contrary
instructions. In addition, at least once a year, UITs relying on the
rule for householding must explain to investors who have provided
written or implied consent how they can revoke their consent. The
purpose of the notice and annual explanation requirements associated
with the householding provisions of the rule is to ensure that
investors who wish to receive individual copies of shareholder reports
are able to do so.
    The Commission estimates that the annual burden associated with
rule 30e-2 is 121 hours per respondent, including an estimated 20 hours
associated with the notice requirement for householding and an
estimated 1 hour associated with the explanation of the right to revoke
consent to householding. The Commission estimates that there are
currently approximately 760 UITs. Therefore, the Commission estimates
that the total hour burden is approximately 91,960 hours. In addition
to the burden hours, the Commission estimates that the annual cost of
contracting for outside services associated with rule 30e-2 is $20,000
per respondent, for a total annual cost of approximately $15,200,000.
    Estimates of average burden hours are made solely for the purposes
of the Paperwork Reduction Act and are not derived from a comprehensive
or even representative survey or study of the costs of Commission rules
and forms. The collection of information under rule 30e-2 is mandatory.
The information provided under rule 30e-2 will not be kept
confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number.
    Written comments are invited on: (a) Whether the proposed
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 of 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 Thomas Bayer, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
email to<EMAIL_ADDRESS>
    Dated: May 2, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-11003 Filed 5-7-12; 8:45 am]
BILLING CODE 8011-01-P