[Federal Register Volume 82, Number 78 (Tuesday, April 25, 2017)]
[Notices]
[Pages 19115-19117]
[FR Doc No: 2017-08284]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80486; File No. SR-NYSEArca-2016-177]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change Relating to the Listing and Trading of Shares of the USCF
Canadian Crude Oil Index Fund Under NYSE Arca Equities Rule 8.200

April 19, 2017.

I. Introduction

    On December 30, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the USCF
Canadian Crude Oil Index Fund (``Fund'') under NYSE Arca Equities Rule
8.200. The proposed rule change was published for comment in the
Federal Register on January 23, 2017.\3\ On March 8, 2017, pursuant to
Section 19(b)(2) of the Act,\4\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ The Commission has received no
comments on the proposed rule change. This order institutes proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79793 (January 13,
2017), 82 FR 7885 (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 80180, 82 FR 13702
(March 14, 2017). The Commission designated April 23, 2017 as the
date by which the Commission shall either approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Exchange's Description of the Proposal

    The Exchange proposes to list and trade Shares of the Fund under
NYSE Arca Equities Rule 8.200, Commentary .02, which governs the
listing and trading of Trust Issued Receipts.\7\ The Fund is a series
of the United States Commodity Index Funds Trust (``Trust'') \8\ and is
a commodity pool that will continuously issue common shares of
beneficial interest that may be purchased and sold on the Exchange. The
Trust and the Fund are managed and controlled by United States
Commodity Funds LLC (``USCF'' or ``Sponsor''), which is registered as a
commodity pool operator with the Commodity Futures Trading Commission
and is a member of the National Futures Association. Brown Brothers
Harriman & Co., Inc. will be the administrator and custodian for the
Fund. ALPS Distributors, Inc. will be the marketing agent (``Marketing
Agent'') for the Fund.
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    \7\ Commentary .02 to NYSE Arca Equities Rule 8.200 applies to
Trust Issued Receipts that invest in ``Financial Instruments.'' The
term ``Financial Instruments,'' as defined in Commentary .02(b)(4)
to NYSE Arca Equities Rule 8.200, means any combination of
investments, including cash; securities; options on securities and
indices; futures contracts; options on futures contracts; forward
contracts; equity caps, collars, and floors; and swap agreements.
    \8\ According to the Exchange, the Trust filed with the
Commission on June 16, 2016 a registration statement on Form S-1
under the Securities Act of 1933 relating to the Fund (File No. 333-
212089) (``Registration Statement'').
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    The Exchange has made the following representations and statements
in describing the Fund and its investment strategies, including the
Fund's portfolio holdings and investment restrictions.\9\
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    \9\ The Commission notes that additional information regarding
the Trust, the Fund, and the Shares, including investment
strategies, risks, net asset value (``NAV'') calculation, creation
and redemption procedures, fees, availability of information,
trading rules and halts, surveillance, information bulletins,
distributions, and taxes, among other information, is included in
the Notice and the Registration Statement, as applicable. See Notice
and Registration Statement, supra notes 3 and 8, respectively.

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A. Investment Objective and Principal Investments of the Fund

    According to the Exchange, the investment objective of the Fund is
for the daily changes in percentage terms of its per-Share NAV to
reflect the daily changes in percentage terms of the Canadian Crude
Excess Return Index (``CCIER''),\10\ plus interest income from the
Fund's short-term fixed income holdings, less the Fund's expenses. The
CCIER targets an exposure that represents an approximately 3-month
rolling position in the following futures contracts: (i) ICE Crude
Diff--TMX WCS 1B Index Futures (``WCS Futures'') and (ii) ICE WTI Crude
Futures (``WTI Futures,'' and together with WCS Futures, collectively,
``Benchmark Component Futures Contracts'').\11\
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    \10\ The Exchange represents that the CCIER is owned and
maintained by Auspice Capital Advisors Ltd. and is designed to
measure the performance of the Canadian crude oil market. It is
calculated and tracked daily and reported each trading day via major
market data vendors.
    \11\ According to the Exchange, the WCS Futures are monthly
cash-settled futures based on the TMX WCS (Western Canadian Select)
Daily Weighted Average Price Index (``TMX WCS 1b Index'') traded on
ICE Futures Europe. The TMX WCS 1b Index is expressed as a
differential to the NYMEX WTI 1st Line Futures (Calendar Month
Average). The WTI Futures are the ICE West Texas Intermediate (WTI)
Light Sweet Crude Oil Futures Contracts traded on ICE Futures
Europe. ICE Futures Europe, NYMEX, and other futures exchanges on
which the Fund may trade listed futures contracts are referred to
collectively as ``Futures Exchanges.''
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    The Fund will seek to achieve its investment objective by first
entering into cash-settled over-the-counter (``OTC'') total return swap
and forward transactions intended to replicate the return of the CCIER
(``OTC Derivatives Contracts'') and, second, to the extent market
conditions are more favorable for futures as compared to OTC
Derivatives Contracts, investing in the Benchmark Component Futures
Contracts that comprise the CCIER. The Fund will support these
investments by holding the amounts of its margin, collateral, and other
requirements relating to these obligations in short-term obligations of
the United States of two years or less, cash, and cash equivalents.
    If constrained by regulatory requirements, or in view of market
conditions, or if one or more of the other Benchmark Component Futures
Contracts is not available, the Fund may next invest in exchange-traded
futures contracts that are economically identical or substantially
similar to the Benchmark Component Futures Contracts, e.g., futures
contracts that are based on changes in the price of WTI oil traded on
the Chicago Mercantile Exchange. When, in view of regulatory
requirements and market conditions, the Fund has invested to the
fullest extent possible in the OTC Derivatives Contracts and exchange-
traded futures contracts, the Fund may then invest in other OTC
derivative contracts and/or other contracts and instruments based on
the Benchmark Component Futures Contracts or on the price of the crude
oil underlying the Benchmark Component Futures Contracts, such as cash-
settled options, cleared swap contracts, and swap contracts other than
cleared swap contracts.\12\
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    \12\ The Exchange notes that Benchmark Component Futures
Contracts, other exchange-traded futures contracts that are
economically identical or substantially similar to the Benchmark
Component Futures Contracts, and other contracts and instruments
based on the Benchmark Component Futures Contracts, are referred to
collectively as ``Other Crude Oil-Related Investments,'' and
together with OTC Derivatives Contracts, ``Crude Oil Interests.''
The Exchange notes that market conditions that USCF currently
anticipates could cause the Fund to invest in Other Crude Oil-
Related Investments include those allowing the Fund to obtain
greater liquidity, to execute transactions with more favorable
pricing, or if the Fund or USCF exceeds position limits or
accountability levels established by an exchange.
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    The Fund will seek to achieve its investment objective by investing
so that the average daily percentage change in the Fund's NAV for any
period of 30 successive valuation days will be within plus/minus 10% of
the average daily percentage change in the CCIER over the same period.
The Sponsor believes that market arbitrage opportunities will cause
daily changes in the Fund's Share price on the Exchange on a percentage
basis to closely track the daily changes in the Fund's per Share NAV on
a percentage basis. The Sponsor also believes that the net effect of
this expected relationship and the expected relationship described
above between the Fund's per Share NAV and the CCIER will be that the
daily changes in the price of the Fund's Shares on the Exchange on a
percentage basis will closely track the daily changes in the CCIER on a
percentage basis, plus interest income from the Fund's short-term fixed
income holdings, less the Fund's expenses.

B. OTC Derivatives Contracts

    According to the Exchange, the Fund will primarily invest in OTC
Derivatives Contracts that are based on Benchmark Component Futures
Contracts and, in the opinion of the Sponsor, are traded in sufficient
volume to permit the ready taking and liquidation of positions.\13\
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    \13\ The Exchange states that the OTC Derivatives Contracts will
be entered between two parties, outside of public exchanges, in
private contracts. Unlike the exchange-traded Benchmark Component
Futures Contracts, each party to an OTC Derivatives Contract bears
credit risk with respect to the other party. To reduce such credit
risk, the Fund will generally enter into an agreement with each
counterparty based on the Master Agreement published by the
International Swaps and Derivatives Association, Inc. (``ISDA'')
that provides for the netting of overall exposure between
counterparties. In accordance with the terms and conditions of the
Fund's ISDA Master Agreement, pursuant to which the Fund's OTC
Derivatives Contracts will be entered into, the Fund will be
entitled to increase or decrease its notional exposure to the CCIER
from time to time to, among other things, manage Share purchases and
reinvestment of distributions, Fund Share redemptions and market
repurchases of Shares, and meet other liquidity needs. Reducing
notional exposure may be achieved through different methods,
including the use of offsetting forwards and partial terminations of
OTC Derivatives Contracts. Moreover, the Exchange states that, in
connection with the Master Agreements, the Sponsor will enter into
ISDA Credit Support Annexes with its counterparties to mitigate
counterparty credit exposure. According to the Exchange, the Sponsor
will assess or review, as appropriate, the creditworthiness of each
potential or existing counterparty to an OTC Derivatives Contract
pursuant to guidelines approved by the Sponsor's board. In respect
of the OTC Derivatives Contracts, the Fund will have the ability to
replace a counterparty or engage additional counterparties at any
time.
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    The Fund may enter into multiple OTC Derivatives Contracts for the
purpose of achieving its investment objective. If an OTC Derivatives
Contract is terminated, the Fund may either pursue the same or other
alternative investment strategies with an acceptable counterparty, or
make direct investments in the Benchmark Component Futures Contracts or
other investments that provide a similar return to investing in the
Benchmark Component Futures Contracts.
    The Fund may also enter into certain transactions where an OTC
component is exchanged for a corresponding futures contract (``EFRP''
transactions).\14\ The Fund may also employ spreads or straddles in its
trading to mitigate the differences in its investment portfolio and its
goal of tracking the price of the Benchmark Component Futures
Contracts.\15\
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    \14\ According to the Exchange, in the most common type of EFRP
transaction entered into by the Fund, the OTC component is the
purchase or sale of one or more baskets of the Fund's Shares.
    \15\ The Exchange states that the Fund would use a spread when
it chooses to take simultaneous long and short positions in futures
written on the same underlying asset, but with different delivery
months.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2016-177 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \16\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the

legal and policy issues raised by the proposed rule change. Institution
of proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved. Rather, as
described below, the Commission seeks and encourages interested persons
to provide comments on the proposed rule change.
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    \16\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\17\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade,'' and ``to protect investors and the public
interest.'' \18\
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    \17\ Id.
    \18\ 15 U.S.C. 78f(b)(5).
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    Under the proposal, the NAV for a normal trading day will be
released after 4:00 p.m. Eastern Time (``E.T.''), and an Authorized
Participant must place an order with the Marketing Agent to redeem one
or more baskets of Shares by 10:30 a.m. E.T. or the close of regular
trading on the Exchange, whichever is earlier. The Commission notes
that the proposal does not specify the creation order cut-off time, and
does not provide an explanation for the early redemption order cut-off
time. The proposal also does not explain whether an early cut-off time
would have any impact on the trading of the Shares, including any
impact on arbitrage. Accordingly, the Commission seeks commenters'
views on the 10:30 a.m. E.T. (or the close of regular trading on the
Exchange, whichever is earlier) cut-off time, and whether the
Exchange's statements relating to the creation and redemption process
support a determination that the listing and trading of the Shares
would be consistent with Section 6(b)(5) of the Act, which, among other
things, requires that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and to protect investors and the public
interest.
    In addition, under the proposal, the Fund will seek to achieve its
investment objective by holding Crude Oil Interests.\19\ The Exchange
states that the Fund's total portfolio composition will be disclosed
each business day that the Exchange is open for trading on the Fund's
Web site. The Web site disclosure will include, with respect to OTC
Derivatives Contracts and each Benchmark Component Futures Contract,
their name, percentage weighting, and value. The Commission seeks
commenters' views on the sufficiency of the information that would be
provided with respect to the Fund's Crude Oil Interests, and whether
the information will allow market participants to value these interests
intraday.
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    \19\ See supra note 12 (defining ``Crude Oil Interests'').
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IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, or
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\20\
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    \20\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal should be approved or
disapproved by May 16, 2017. Any person who wishes to file a rebuttal
to any other person's submission must file that rebuttal by May 30,
2017. The Commission asks that commenters address the sufficiency of
the Exchange's statements in support of the proposal, which are set
forth in the Notice,\21\ in addition to any other comments they may
wish to submit about the proposed rule change.
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    \21\ See supra note 3.
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    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2016-177 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2016-177. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2016-177 and should
be submitted on or before May 16, 2017. Rebuttal comments should be
submitted by May 30, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(57).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08284 Filed 4-24-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 114 (Wednesday, June 13, 2018)]
[Notices]
[Pages 27609-27614]
[FR Doc No: 2018-12634]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2018-N-2065]

Alternative or Streamlined Mechanisms for Complying With the
Current Good Manufacturing Practice Requirements for Combination
Products; Proposed List Under the 21st Century Cures Act

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: As required by the 21st Century Cures Act (Cures Act), the
Food and Drug Administration (FDA or Agency) is proposing a list of
alternative or streamlined mechanisms for complying with the current
good manufacturing practice (CGMP) requirements for combination
products. Combination products are products composed of two or more
different types of medical products (drug, device, and/or biological
product).

DATES: Submit either electronic or written comments on this notice by
September 11, 2018 to ensure that the Agency considers your comment on
this proposed list before it begins work on the final list.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before September 11, 2018. The https://www.regulations.gov electronic filing system will accept comments until
midnight Eastern Time at the end of September 11, 2018. Comments
received by mail/hand delivery/courier (for written/paper submissions)
will be considered timely if they are postmarked or the delivery
service acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and

identified, as confidential, if submitted as detailed in
``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2018-N-2065 for ``Alternative or Streamlined Mechanisms for
Complying with Current Good Manufacturing Practice (CGMP) Requirements
for Combination Products.'' Received comments, those filed in a timely
manner (see ADDRESSES), will be placed in the docket and, except for
those submitted as ``Confidential Submissions,'' publicly viewable at
https://www.regulations.gov or at the Dockets Management Staff between
9 a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Melissa Burns, Office of Combination
Products, Food and Drug Administration, 10903 New Hampshire Ave., Bldg.
32, Rm. 5125, Silver Spring, MD 20993,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    In December 2016, the Cures Act (Pub. L. 114-255) was signed into
law. Section 3038(c) of the Cures Act mandated that FDA publish in the
Federal Register a list identifying types of combination products and
manufacturing processes for which ``good manufacturing processes'' may
be adopted that vary from the requirements set forth in Sec.  4.4 (21
CFR 4.4) or that FDA proposes can satisfy the requirements in Sec.  4.4
through ``alternative or streamlined mechanisms,'' and to review this
list periodically. In accordance with this statutory mandate, FDA is
publishing a proposed list in section II of this document, which
addresses processes for single-entity and co-packaged combination
products that can satisfy requirements in Sec.  4.4 through alternative
or streamlined mechanisms (hereafter ``mechanisms'').
    On January 22, 2013, FDA issued a final rule on CGMP requirements
for combination products (see 78 FR 4307 and part 4 (21 CFR part 4,
subpart A)). Prior to issuance of the final rule, although CGMP
regulations were in place to establish requirements for drugs, devices,
biological products, and human cells, tissues, or cellular or tissue-
based products (HCT/Ps), there were no regulations to clarify and
explain the application of these CGMP requirements to combination
products. The final rule clarified which CGMP requirements apply to
combination products. It also established a transparent and streamlined
regulatory framework for combination product manufacturers to use when
demonstrating compliance with applicable CGMP requirements.
    A combination product is a product composed of two or more
different types of medical products (i.e., a combination of a drug,
device, and/or biological product). The drugs, devices, and biological
products included in combination products are referred to as
``constituent parts'' of the combination product. Combination products
include ``single-entity'' combination products that are physically,
chemically, or otherwise combined or mixed and produced as a single
entity (Sec.  3.2(e)(1) (21 CFR 3.2(e)(1)) (e.g., prefilled syringes
and drug-eluting stents) and ``co-packaged'' combination products where
two or more separate products are packaged together in a single package
or as a unit and composed of drug and device products, device and
biological products, or biological and drug products (Sec.  3.2(e)(2))
(e.g., a surgical or first-aid kit).\1\ Section 4.4 outlines how
manufacturers of single-entity and co-packaged combination products
(hereafter ``CP manufacturers'') can demonstrate compliance with
applicable CGMP requirements, including through implementation of a
streamlined approach to meet the requirements of both the drug CGMP and
the device Quality System (QS) regulation by designing and implementing
a CGMP operating system that demonstrates compliance with either of the
following:
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    \1\ There are also ``cross-labeled'' combination products (Sec.
3.2(e)(3) and (4)). With respect to cross-labeled combination
products, part 4, subpart A was intended to clarify only that the
CGMP requirements applicable to the drugs, devices, or biological
products also apply to these types of articles when they are
constituent parts of such combination products. Constituent parts of
cross-labeled combination products need only comply with the
requirements otherwise applicable to that type of product (e.g., 21
CFR parts 210 and 211 for a drug constituent part or 21 CFR part 820
for a device constituent part). The ``streamlined approach'' and
related mechanisms described in this notice are generally not
relevant or applicable to cross-labeled combination products.
However, to the extent that the constituent parts of a cross-labeled
combination product are manufactured at the same facility, the
manufacturing process would be akin to when the manufacture of the
constituent parts of a co-packaged combination product occurs at the
same facility. Accordingly, as discussed in the combination product
CGMP guidance (Ref. 1), for cross-labeled combination products
manufactured at the same facility, the Agency does not intend to
object to the use of a streamlined CGMP operating system for the
manufacture of the combination product rather than distinct systems
for the manufacture of each constituent part that is occurring at
that facility.
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     The drug CGMP regulations in parts 210 and 211 (21 CFR
parts 210 and 211) and the following specified provisions from the
device QS regulation (Sec.  4.4(b)(1), ``drug CGMP-based streamlined
approach''): (1) Sec.  820.20 (21 CFR 820.20) Management
responsibility, (2) Sec.  820.30 (21 CFR 820.30) Design controls, (3)
Sec.  820.50 (21 CFR 820.50) Purchasing controls, (4) Sec.  820.100 (21
CFR 820.100) Corrective and preventive action, (5) Sec.  820.170 (21
CFR 820.170) Installation, and (6) Sec.  820.200 (21 CFR 820.200)
Servicing; or
     The device QS regulation in part 820 (21 CFR part 820) and
the following specified provisions from the drug CGMP regulations
(Sec.  4.4(b)(2), ``device QS regulation-based streamlined approach''):
(1) Sec.  211.84 (21 CFR 211.84) Testing and approval or rejection of
components, drug product containers, and closures; (2) Sec.  211.103
(21 CFR 211.103) Calculation of yield; (3) Sec.  211.132 (21 CFR
211.132) Tamper-evident packaging requirements for

over-the-counter (OTC) human drug products; (4) Sec.  211.137 (21 CFR
211.137) Expiration dating; (5) Sec.  211.165 (21 CFR 211.165) Testing
and release for distribution; (6) Sec.  211.166 (21 CFR 211.166)
Stability testing; (7) Sec.  211.167 (21 CFR 211.167) Special testing
requirements; and (8) Sec.  211.170 (21 CFR 211.170) Reserve samples.
    If the combination product includes a biological product
constituent part, the CGMP operating system must also demonstrate
compliance with applicable CGMP requirements for biological products in
parts 600 through 680 (21 CFR parts 600 through 680), and if the
combination product includes an HCT/P, the CGMP operating system must
also demonstrate compliance with the applicable current good tissue
practice requirements in part 1271 (21 CFR part 1271).
    Following publication of the final rule, FDA reviewed data and
rationales provided by manufacturers who proposed various means of
addressing CGMP considerations for combination products. FDA also
considered feedback on its draft guidance on CGMP requirements for
combination products, published in January 2015, in which stakeholders
requested further guidance on circumstances in which flexible
approaches may be available and how to engage with FDA on them. The
final ``Guidance for Industry and FDA Staff: Current Good Manufacturing
Practice Requirements for Combination Products'' includes discussion of
existing mechanisms to comply with the final rule and of circumstances
in which FDA did not intend to object to manufacturers applying
practices that vary from the requirements set forth in the rule (Ref.
1). The Agency continues to apply a risk-based approach to evaluating
methods for ensuring the quality of combination products and to welcome
proposals from manufacturers for how to enhance the efficiency of
development and manufacturing activities, while ensuring the safety and
effectiveness of the combination products produced.

II. Proposed List of Mechanisms for Complying With Sec.  4.4 CGMP
Requirements for Combination Products

A. Introduction

    The following is a proposed list of mechanisms for demonstrating
compliance with relevant combination product CGMP requirements, as
described below. Where applicable, reference is made to sections of the
``Guidance for Industry and FDA Staff: Current Good Manufacturing
Practice Requirements for Combination Products'' for additional
information (Ref. 1). FDA will continue to evaluate this list in light
of Agency experience and stakeholder input. Manufacturers are welcome
to propose other approaches not described, and FDA continues to
encourage dialogue with the Agency on various means of demonstrating
CGMP compliance for combination products.
    For each mechanism described below, CP manufacturers should
consider what documentation would be sufficient to support that the
mechanism, including the specific approach for implementing it, assures
appropriate control of the manufacture of the combination product to
ensure safety and effectiveness of the product. Appropriate evidence
and an explanation of the rationale to support the approach should be
accessible at the manufacturing facility for review during facility
inspections. For additional discussion on how to interact with FDA
regarding the mechanisms described below, see section III.

B. Mechanisms for Complying With Drug CGMP Requirements (Part 211)
Specified in Sec.  4.4 2
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    \2\ Several drug CGMP mechanisms included in this proposed list
depend upon use of a more broadly defined batch. FDA notes that
approaches that depend upon broadly defined batches may increase the
number of distributed products implicated when corrective actions
are necessary to address postmarket issues.
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    FDA interprets the mechanisms identified in the sections below as a
means to demonstrate compliance with the specified part 211
requirements identified in Sec.  4.4:
1. Section 211.165 Testing and Release for Distribution
    Use of product samples that are not finished combination products
(but that are representative of the finished combination product with
respect to the characteristics and attributes being tested) when
performing testing required by Sec.  211.165 to determine whether the
drug constituent part meets final specifications. To meet the
requirements of Sec.  211.165, the CP manufacturer would need to
establish, including where appropriate through bridging studies and
other quantitative means, that any differences in the manufacturing
process for the representative samples as compared to the finished
combination product do not affect the drug constituent part. For
example, as part of product release testing, drug-eluting lead
manufacturers could perform release testing for identity, potency, or
other quality attributes on a representative lead tip assembly that
contains the drug constituent part, but does not contain the full
electronic and mechanical assembly, so long as they can establish that
the differences in the manufacturing process do not impact the drug
constituent part and the sample is representative of the finished
combination product with respect to the quality attributes being
tested.
    (See also Section IV.B.5 of Reference 1 for additional information
on testing and release for combination products.)
2. Section 211.166 Stability Testing
    Use of bracketing and matrixing approaches to stability studies for
combination products. Principles for bracketing and matrixing
approaches to meet the requirements of Sec.  211.166 have already been
addressed by the Agency with regard to drug products (Ref. 2), and such
principles can also be applied to combination products. For example,
when assessing stability for a prefilled syringe that is marketed in
various fill volumes, one of the approaches that a CP manufacturer
could utilize, if appropriate, is bracketing based on the smallest and
the largest fill volume of product configurations. In determining the
extremes for a bracketing approach and/or when justifying the use of a
matrix design for single-entity combination products, it is important
that the drug-device interactions and variations in the manufacturing
processes are considered. For co-packaged combination products, such
approaches can be applied to the drug constituent part of the product.
    Leveraging stability data for an already marketed combination
product. Such mechanisms can be considered when the new combination
product is a modification of an already marketed product and the
modification does not impact the stability of the drug constituent
part. For example, when developing new lengths of a drug-coated
catheter product for which the catheter materials, drug coating,
manufacturing process, and packaging configurations are largely
unchanged from existing marketed sizes, the CP manufacturer would
generally be able to leverage existing stability data to establish
initial product shelf life or to support reduced stability data
requirements, so long as characteristics of the product that could
impact stability (materials, packaging configuration, etc.) remain the
same. However, if the device constituent part of a drug-coated catheter
includes a new material that is in contact with the drug coating, for
example, new stability studies would generally be needed under Sec.
211.166.

    (See also Section IV.B.6 of Reference 1 for additional information
on stability requirements for combination products.)
3. Section 211.167 Special Testing Requirements
    Defining ``batch'' based on the drug constituent part rather than
the finished combination product for purposes of special testing
requirements for pyrogens and endotoxins. For example, a manufacturer
of a combination product that has a sub-assembly coated with a drug,
which is then incorporated into several ``batches'' or ``lots'' of the
overall combination product, may be able to define a batch for purposes
of pyrogen and endotoxin testing as a batch of that sub-assembly for
purposes of meeting the requirements of Sec.  211.167. As with the
other mechanisms described in this list, this mechanism would only
potentially be available if there would be no impact on the drug
constituent part from subsequent manufacturing processes, including
when the constituent parts are combined to produce the final
combination product. CP manufacturers should consider whether such
risks may be introduced later in the production process (after the
batch has been defined). This approach will most frequently apply for
co-packaged combination products or single-entity combination products
for which only a component or sub-assembly of the overall product is in
contact with the drug constituent part.
    (See also Section IV.B.7 of Reference 1 for additional information
on special testing requirements for combination products.)
4. Section 211.170 Reserve Samples
    Keeping reserve samples that are representative of the finished
combination product. CP manufacturers may use validated surrogates as
representative samples to meet the requirements of Sec.  211.170,
provided the surrogate is appropriate, both in terms of the
manufacturing process and the characteristics of the container closure.
For example, maintaining only a sub-assembly of a coated single-entity
combination product or only the drug constituent part of a co-packaged
combination product as a reserve sample would generally be permissible
under the regulation when: (1) All manufacturing process steps after
the coating step or the fill for the drug constituent part are shown
not to affect the drug constituent part, (2) the immediate container
closure has essentially the same characteristics as that for the drug
constituent part as packaged in the combination product for
distribution, and (3) the representative samples are suitable for all
required testing of the drug constituent part for which the reserve
samples are being kept.
    Using samples from representative lots of a larger batch for
retention of reserve samples. To meet the requirements of Sec.
211.170, CP manufacturers may be able to use bracketing and matrixing
approaches to retain reserve samples from certain lots to adequately
represent the broadly defined batch of the combination product. For
example, CP manufacturers might be able to retain reserve samples of
appropriately varied sizes of a drug-coated combination product from
within a broadly defined batch that includes multiple lots of different
sizes.
    (See also Section IV.B.8 of Reference 1 for additional information
on reserve sample requirements for combination products.)

C. Mechanisms for Complying With Device Quality System Requirements
(Part 820) Specified in Sec.  4.4

    FDA interprets the mechanisms identified in the sections below as a
means to demonstrate compliance with the specified part 820
requirements identified in Sec.  4.4:
1. Section 820.30 Design Controls
    Using existing pharmaceutical development practices and
documentation that align with the design control principles and
requirements of Sec.  820.30. Robust pharmaceutical development
practices would address many design control requirements to assure
compliance with Sec.  820.30, where applicable. CP manufacturers need
to demonstrate how development processes and terminology align with
design control principles and requirements in Sec.  820.30, when
required, including, where necessary, developing additional design
control elements. When evaluating the adequacy of existing
pharmaceutical development processes, particular attention should be
given to postmarket management of design changes to the combination
product and the alignment of change control practices with the
principles and requirements of Sec.  820.30, as applicable.
2. Exemption of Combination Products From Device QS Regulation
    Exemption of the combination product from all or certain provisions
of the device QS regulation (part 820) if the device constituent part
of the combination product is itself exempt from such requirements and
use of the device constituent part falls within the scope of the
relevant exemption, including with respect to the device constituent
part's intended use. Some devices are exempt from all or certain
provisions of the device QS regulation (see, for example, liquid
medication dispensers such as cups and droppers that fall within the
scope of Sec.  880.6430 (21 CFR 880.6430), provided the use of the
device is not a new intended use or does not otherwise raise different
safety and effectiveness questions (see, for example, limitations to
the exemption under 21 CFR 880.9). Consistent with this, for the
combination product to be exempt from the associated provisions of the
device QS regulation, we interpret this exemption to mean that the use
of the device in the combination product must not be a new intended use
or otherwise raise different safety and effectiveness questions for the
device. This circumstance will most frequently apply to co-packaged
combination products. For example, an oral dosing syringe (a liquid
medication dispenser under Sec.  880.6430) that is co-packaged with a
drug may be exempt from certain provisions of the device QS regulation
(and hence the combination product may also be exempt from such
provisions); however, incorporation of such a dispenser into a primary
container closure system or co-packaging of such a dispenser with an
emergency-use product, for example, may constitute a new intended use
for the dispenser or raise different safety and effectiveness questions
for the dispenser, such that the relevant exemption would not apply.
    (See also Section III.C.3 of Reference 1 for additional information
on the exemption from provisions of the device QS regulation for
combination products.)

III. Interacting With FDA on Mechanisms for Complying With CGMP for
Combination Products

1. Process for Interacting With FDA

    In some cases, CP manufacturers may interact with FDA to gain
approval or otherwise notify FDA of a manufacturing change. In other
cases, although a submission or notification is not required, CP
manufacturers may want to discuss potential use of CGMP mechanisms with
FDA. CP manufacturers are encouraged to interact early with FDA on
contemplated CGMP mechanisms.
     Pre-Submissions and Meeting Requests. CP manufacturers who
want to obtain FDA feedback prior to submitting a premarket application
or a postmarket supplement or who otherwise want to obtain feedback on

their approach may interact with FDA via the existing established
process applicable to the lead Center \3\ for the combination product.
For combination products reviewed under a new drug application (NDA) or
a biologics license application (BLA), such interactions will generally
be through Type C meetings (Ref. 3).\4\ For combination products
reviewed under an abbreviated new drug application (ANDA), these
interactions will generally be through pre-ANDA meetings (Ref. 4).\5\
For combination products reviewed under a device premarket submission
(e.g., a premarket approval application (PMA), de novo classification,
or premarket notification (510(k)), these interactions will generally
be via the pre-submission process (Ref. 5).
---------------------------------------------------------------------------

    \3\ A combination product is assigned to an Agency center
(Center for Biologics Evaluation and Research, Center for Drug
Evaluation and Research, or Center for Devices and Radiological
Health) that will have primary jurisdiction (i.e., the ``lead
Center'') for that combination product's review and regulation.
Assignment of a combination product to a lead Center is based on a
determination of which constituent part provides the primary mode of
action of the combination product (21 U.S.C. 353(g)).
    \4\ When final, this guidance will represent the FDA's current
thinking on this topic.
    \5\ When final, this guidance will represent the FDA's current
thinking on this topic.
---------------------------------------------------------------------------

    Regardless of the type of submission, such interactions should be
focused on a general discussion of the mechanism and CGMP approach the
CP manufacturer wishes to pursue and associated justification to
support the approach. Only representative data is typically appropriate
in these interactions; complete data should be included in the
subsequent premarket submission or postmarket supplement, if required,
and/or be maintained at the manufacturing facility, as appropriate.\6\
---------------------------------------------------------------------------

    \6\ Note that when discussing a mechanism for complying with
CGMP requirements for which the CP manufacturer is leveraging
information in master file(s), the master file holder must submit a
letter of authorization to permit FDA to review such information
(see 21 CFR 314.420(d) and 21 CFR 814.20(c)). The specific
information within the master file that is being leveraged should be
clearly identified to FDA.
---------------------------------------------------------------------------

     Premarket Review. CP manufacturers should include in their
original submission for NDAs, BLAs, ANDAs, and PMAs information on any
mechanisms for complying with CGMP requirements. For PMAs, this
information should be included in the manufacturing section of the PMA.
For information regarding where to place information in NDAs, BLAs, or
ANDAs, refer to ``eCTD Technical Conformance Guide'' (Ref. 6).
     Postmarket Supplements or Notifications to FDA. Postmarket
changes to implement a combination product CGMP mechanism for NDAs,
ANDAs, BLAs, and PMAs, may require submission of a supplement or
notification to FDA.\7\ CP manufacturers should consult related
guidances relevant to the type of constituent part of the combination
product (Refs. 7 to 9).\8\ If a CP manufacturer has questions on the
appropriate submission type or the need for a submission, they can
contact the lead Center for assistance.
---------------------------------------------------------------------------

    \7\ Requirements for postmarket supplements are contained, for
example, in 21 CFR 314.70 (NDAs), 21 CFR 601.12 (BLAs), and 21 CFR
814.39 (PMAs). Any questions on whether FDA review is required for a
postmarket CGMP mechanism should be directed to the lead Center.
    \8\ With reference to Ref. 8, when final, this guidance will
represent the FDA's current thinking on this topic.
---------------------------------------------------------------------------

2. Content Suggestions
    When submitting information on a CGMP mechanism, along with any
submission requirements applicable to the submission type, the
following content should be included:
     Applicable CGMP regulation. Identify the CGMP regulation
applicable to the described mechanism. For example, if a submission
includes a mechanism related to stability testing, indicate that Sec.
211.166 is the applicable CGMP requirement.
     Applicable Products. If the mechanism is to be applied to
multiple products and/or product configurations, list all related
sizes, strengths, etc., as well as all related application numbers.
     Related Interactions with FDA. If the CP manufacturer has
had previous interactions with FDA relevant to the proposed mechanism,
either for the product addressed in the submission or for related
products, the CP manufacturer should provide reference to those
interactions. Where applicable, the CP manufacturer may cross-reference
previously submitted information.
     Justification and Scientific Data. Include a rationale to
support that the proposed mechanism assures adequate manufacturing
control to ensure product safety and effectiveness. When describing a
CGMP mechanism in a premarket or postmarket submission, the description
should be accompanied by data necessary to support the approach. When
proposing a change from a CGMP approach that was reviewed previously by
FDA, such justification should include analysis of how the proposed
approach compares to the previously reviewed approach as an effective
manufacturing control, including representative data, as appropriate,
to substantiate the analysis.
3. FDA Engagement
    CP manufacturers are encouraged to discuss combination product CGMP
mechanisms with FDA. Any questions on how to engage FDA in such
discussions should be directed to the lead Center for the product or
the Office of Combination Products, as needed.
4. FDA Review
    FDA may review information from a CP manufacturer related to a
mechanism for complying with CGMP requirements for combination products
in premarket applications, postmarket supplements or notifications,
pre-submissions and meetings, and during facility inspections. FDA may
determine that the data and rationale presented by a CP manufacturer
for a particular mechanism are insufficient to demonstrate that the
mechanism, as proposed or implemented, meets the applicable CGMP
requirement. FDA generally will notify the CP manufacturer and/or
applicant in writing of any such determination.

IV. Other Issues for Consideration

    We have developed this proposed list of mechanisms based on
information submitted to FDA by CP manufacturers as well as FDA
experience with manufacturing processes and CGMP compliance approaches
that have been shown through appropriate data and rationales to support
the manufacture of safe and effective products. FDA requests comment
from stakeholders who believe there are additional types of combination
products and/or manufacturing processes where different approaches may
be appropriate. When providing such feedback, the suggested approach
should be:
     Applicable to a type or range of combination products
(e.g., not just a single CP manufacturer's product). Commenters should
indicate to which types of combination products or manufacturing
processes they believe the suggested approach should apply.
     Supported by adequate data and rationales to demonstrate
that such an approach would continue to support manufacturing of safe
and effective combination products. Commenters should summarize the
data and rationale that support the suggested approach.

Any confidential information submitted to FDA via the docket should be
appropriately identified (see Instructions above, in ADDRESSES).

V. Paperwork Reduction Act

    This notice refers to previously approved collections of
information

found in FDA regulations. These collections of information are subject
to review by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). We note that the
information collected under the underlying CGMP regulations for drugs,
devices, and biological products, including current good tissue
practices for HCT/Ps, found in parts 211, 820, 600 through 680, and
1271, have already been approved and are in effect. The provisions of
part 211 are approved under the OMB control number 0910-0139. The
provisions of part 820 are approved under OMB control number 0910-0073.
The provisions of parts 606 and 640 are approved under OMB control
number 0910-0116. The provisions of part 610 are approved under OMB
control number 0910-0116 and OMB control number 0910-0338 (also for
part 680). The provisions of part 1271, subparts C and D, are approved
under OMB control number 0910-0543.
    We note that the information collected under the related submission
types have already been approved and are in effect. The collections of
information regarding formal meetings with sponsors and applicants have
been approved under OMB control number 0910-0429. The collections of
information regarding new drug approvals (NDA) and abbreviated new drug
applications (ANDA) have been approved under OMB control number 0910-
0001. The collections of information regarding pre-ANDAs have been
approved under OMB control number 0910-0797. The collections of
information regarding pre-submissions have been approved under OMB
control number 0910-0756. The collections of information regarding PMAs
have been approved under OMB control number 0910-0231. The collections
of information for premarket notification (510(k)) have been approved
under OMB control number 0910-0120. The collections of information for
the de novo classification process have been approved under OMB control
number 0910-0844. The collections of information regarding biologics
license applications have been approved under OMB control number 0910-
0338.

VI. References

    The following references are on display in the Dockets Management
Staff (see ADDRESSES) and are available for viewing by interested
persons between 9 a.m. and 4 p.m., Monday through Friday; they are also
available electronically at https://www.regulations.gov. FDA has
verified the website addresses, as of the date this document publishes
in the Federal Register, but websites are subject to change over time.

1. ``Guidance for Industry and FDA Staff: Current Good Manufacturing
Practice Requirements for Combination Products,'' January 2017.
https://www.fda.gov/RegulatoryInformation/Guidances/ucm126198.htm.
2. ``Guidance for Industry: Q1D Bracketing and Matrixing Designs for
Stability Testing of New Drug Substances and Products,'' January
2003. https://www.fda.gov/downloads/Drugs/Guidances/ucm073379.pdf.
3. ``Draft Guidance for Industry: Formal Meetings Between the FDA
and Sponsors or Applicants of PDUFA Products,'' December 2017.
https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM590547.pdf.
4. ``Draft Guidance for Industry: Formal Meetings Between FDA and
ANDA Applicants of Complex Products Under GDUFA,'' October 2017.
https://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm578366.pdf.
5. ``Guidance for Industry and Food and Drug Administration Staff:
Requests for Feedback on Medical Device Submissions: The Pre-
Submission Program and Meetings with Food and Drug Administration
Staff,'' September 2017. https://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm311176.pdf.
6. ``eCTD Technical Conformance Guide,'' November 2017. https://www.fda.gov/downloads/Drugs/UCM465411.pdf.
7. ``Guidance for Industry: Changes to an Approved NDA or ANDA,''
April 2004. https://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm077097.pdf.
8. ``Draft Guidance for Industry: Chemistry, Manufacturing, and
Controls Changes to an Approved Application: Certain Biological
Products,'' December 2017. https://www.fda.gov/downloads/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/General/UCM590118.pdf.
9. ``Guidance for Industry and FDA Staff: 30-Day Notices, 135-Day
Premarket Approval (PMA) Supplements and 75-Day Humanitarian Device
Exemption (HDE) Supplements for Manufacturing Method or Process
Changes,'' April 2011. https://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM080194.pdf.

    Dated: June 7, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-12634 Filed 6-12-18; 8:45 am]
 BILLING CODE 4164-01-P