[Federal Register: November 29, 2006 (Volume 71, Number 229)]
[Notices]
[Page 69166-69172]
[DOCID:fr29no06-93]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54796; File No. SR-NYSEArca-2006-85]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Order Granting Accelerated Approval of Proposed Rule Change
Relating to a Six-Month Pilot Program To Adopt New Initial and
Continued Listing Standards

 November 20, 2006.
    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 November 17, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'' or
``SEC'') the proposed rule change as described in Items I and II below,
which Items have been substantially prepared by the Exchange. The
Commission is publishing this notice to solicit comment on the proposed
rule change from interested persons. For the reasons discussed below,
the Commission is granting accelerated approval of the proposed rule
change, as a six-month pilot, until May 29, 2007.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes, on a six-month pilot program basis (the
``Pilot Program''), to make significant revisions to its initial and
continued financial listing standards for operating companies.\3\ The
text of the proposed rule change is available on the Exchange's Web
site at http://www.nysearca.com, at the Exchange's Office of the Secretary and

at the Commission's Public Reference Room.
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    \3\ The Commission notes that the proposed changes are primarily
to the initial and continued listing standards of common stock and
common stock equivalent securities, preferred stock and similar
issues and secondary classes of common stock. Some changes are also
being made to the listing standards for bonds and debentures,
warrants, contingent value rights, other securities, and index-
linked exchangeable notes.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
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 III below. The self-regulatory
organization has prepared summaries, set forth in Sections A, B, and C
below, of the most significant aspects of such statements.

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

1. Purpose
    On March 7, 2006, Archipelago Holdings, Inc. and the New York Stock
Exchange, Inc. completed their merger (the ``Merger''), creating NYSE
Group, Inc. (``NYSE Group''). NYSE Group is a holding company that
operates, among other subsidiaries, two securities exchanges: New York
Stock Exchange LLC (``NYSE'') and NYSE Arca Equities, Inc. (``NYSE Arca
Equities'' or the ``Corporation'').\4\ NYSE Arca Equities conducts its
equities trading operations through its equities trading facility, NYSE
Arca, L.L.C. (also referred to as the ``NYSE Arca Marketplace'').
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    \4\ The Commission notes that NYSE Arca is actually the
registered national securities exchange and NYSE Arca Equities is a
wholly-owned subsidiary of NYSE Arca.
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    In connection with the Merger, NYSE Arca Marketplace examined all
aspects of its listings program, and as a result, determined to make
substantial modifications and enhancements to its listing standards.
Accordingly, with this filing, NYSE Arca is proposing significant
revisions to the initial and continued listing criteria applicable to
operating companies set forth in NYSE Arca Equities Rule 5, completely
replacing the current tiered structure with a single set of numerical
and financial requirements.\5\ The principal objectives of these
proposed revisions are to upgrade the financial condition, shareholder
interest, and stature of issuers listing on NYSE Arca Marketplace; more
closely align NYSE Arca Marketplace's listing standards and structure
with the NYSE; and enhance NYSE Arca Marketplace's competitive
position.\6\
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    \5\ This filing relates only to quantitative (financial)
original and continued listing standards applicable to operating
companies. It does not relate to listing standards for corporate
governance, exchange traded funds, open and closed-end funds,
commodity-based trusts, trust issued receipts, portfolio depositary
receipts, investment company units or other types of structured
products. See supra note 3.
    \6\ The Commission recently approved substantial revisions to
NYSE Arca's listing fees. See Securities Exchange Act Release No.
54007 (June 16, 2006), 71 FR 36155 (June 23, 2006) (SR-PCX-2006-16).
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    NYSE Arca Equities Rule 5.1(a) provides that the Board of the
Directors of the Exchange will make determinations as to whether to
list securities or admit securities to unlisted trading privileges on
the Exchange. Similarly, current NYSE Arca Equities Rule 5.2(a)
provides that the prescribed forms of applications to list securities
on the Exchange will be determined by the Board of Directors. This
filing proposes to amend both of the aforementioned requirements to
state that the Exchange will make such determinations. Such decisions
will be made by the chief executive officer of the Exchange or by staff
of the Exchange pursuant to authority delegated by the chief executive
officer. In addition, NYSE Arca Equities Rule 5.2(a) would be amended
to state that the Exchange may deny listing or apply additional or more
stringent criteria based on any event, condition, or circumstance that
makes the listing of the company inadvisable or unwarranted in the
opinion of the Exchange. Such determination could be made even if the
company meets the standards set forth below.

Summary of Current and Proposed Initial Listing Standards

Summary of Current Initial Listing Standards for Operating Companies

    Currently, the NYSE Arca Marketplace has a two-tier listing
structure, classifying listed securities as either Tier I or Tier II.
For their common stock to qualify for initial listing as a Tier I
security, issuers must satisfy, among other things, the numerical
criteria set forth in NYSE Arca Equities Rule 5.2(c).\7\ To qualify for
initial listing as a Tier II security, issuers must satisfy, among
other things, the numerical criteria set forth in NYSE Arca Equities
Rule 5.2(k). Both Rule 5.2(c) and Rule 5.2(k) also provide that an
issuer may qualify under either a Basic or an Alternate set of listing
criteria. To be eligible to list, an issuer need only satisfy all of
the criteria under one of these four separate sets of standards.\8\
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    \7\ In addition to the numerical criteria set forth in Rules
5.2(c) and 5.2(k), issuers must also satisfy certain qualitative
requirements, including corporate governance-related standards set
forth in NYSE Arca Equities Rule 5.3. These corporate governance
rules are not the subject of this proposal.
    \8\ NYSE Arca Equities Rule 5.2(a) provides that approval of
listing applications is a matter solely within the discretion of
NYSE Arca Equities, and the fact that an issuer may meet the
applicable listing requirements does not necessarily mean that its
application will be approved.

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    These requirements are:

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                                                    Tier I (Rule 5.2(c))              Tier II (Rule 5.2(k))
                                             -------------------------------------------------------------------
                                                   Basic          Alternate          Basic          Alternate
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Net tangible assets \9\.....................  ...............  ...............      $2,000,000   ...............
Net worth \10\..............................      $4,000,000      $12,000,000   ...............      $8,000,000
Pre-tax income \11\.........................        $750,000   ...............  ...............  ...............
Net income \12\.............................  ...............  ...............        $100,000   ...............
Public float (shares).......................         500,000        1,000,000          500,000        1,000,000
Public beneficial holders \13\..............      800 or 400              400              500              500
Market value................................      $3,000,000      $15,000,000       $1,500,000       $2,000,000
Operating history...........................  ...............         3 years          3 years   ...............
Price \14\..................................              $5               $3               $3               $1
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Proposed Initial Listing Standards for Common Stock and Common Stock
Equivalent Securities

    With this filing, NYSE Arca is proposing to eliminate the Tier I
and II classifications and replace, in their entirety, the current Tier
I and Tier II numerical standards for initial listing for common stock
set forth in NYSE Arca Rules 5.2(c) and (k), respectively. Companies
whose common stock is listed with a Tier II designation will be able to
remain listed under the existing Tier II rules as long as they are in
compliance with the maintenance requirements of Arca Equities Rule
5.5(h). However, the Exchange will no longer list any new issuers or
additional classes of securities with a Tier II designation.
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    \9\ NYSE Arca Equities Rule 5.1(b)(10) defines ``net tangible
assets'' as the amount of funds remaining after deducting intangible
assets from stockholders' equity. This rule further provides that
intangible assets include, but are not limited to, goodwill,
patents, copyrights, trademarks, leaseholds, franchises, licenses,
permits, research and development costs, organization costs, and
similar types of property rights.
    \10\ NYSE Arca Equities Rule 5.1(b)(9) defines ``net worth'' as
total assets (excluding the value of goodwill) less total
liabilities.
    \11\ NYSE Arca Equities Rule 5.2(c)(4) provides that an issuer
must have pre-tax income from continuing operations of at least
$750,000 in the last fiscal year or two of the last three fiscal
years.
    \12\ NYSE Arca Equities Rule 5.2(k)(4) provides that an issuer
must have net income from continuing operations of at least $100,000
in the last fiscal year or in two of the last three fiscal years, or
total net tangible assets of $2,500,000.
    \13\ NYSE Arca Equities Rule 5.2(c)(2) provides that issuers
must have at least 800 public beneficial holders if the issuer has
at least 500,000 and less than 1,000,000 shares publicly held, or a
minimum of 400 public beneficial holders if the issuer has either:
(i) At least 1,000,000 shares publicly held; or (ii) at least
500,000 shares publicly held and average daily trading volume in
excess of 2,000 shares for the six months preceding the date of
application.
    \14\ NYSE Arca Equities Rules 5.2(c)(5) and 5.2(k)(5) provide
that the issuer must maintain the minimum price for the majority of
business days for the most recent six-month period prior to the date
of application, and the price must be at or above the minimum per
share at the time of application.
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    In place of the existing Tier I and Tier II standards, this filing
proposes to require for initial listing that, at the time of initial
listing, the listed class of common stock or common stock equivalent
securities \15\ shall have:
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    \15\ Proposed NYSE Arca Equities Rule 5.1(b)(26) defines common
stock equivalent as ``ordinary shares, ADRs, American Depository
Shares, global depository shares, depository shares, shares or
certificates of beneficial interest of trusts, and other similar
issues that have the same characteristics of common stock.''
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     At least 1.1 million publicly held shares.
     A closing price per share of $5 or more.
     A minimum of 400 round lot shareholders.
    In addition, the requirements of one of Standards One, Two or Three
below must be met:

Standard One

     The issuer of the security had annual income from
continuing operations before income taxes of at least $1 million in the
most recently completed fiscal year or in two of the last three most
recently completed fiscal years.
     The market value of publicly held shares is at least $8
million.
     The issuer of the security has stockholders' equity of at
least $15 million.

Standard Two

     The issuer of the security has stockholders' equity of at
least $30 million.
     The market value of publicly held shares is at least $18
million.
     The issuer has a two-year operating history.

Standard Three

     The market value of publicly held shares is at least $20
million.
     The issuer has:
    [cir] A market value of listed securities of $75 million (currently
traded issuers must meet this requirement and the $5 closing price
requirement for 90 consecutive trading days prior to applying for
listing); or
    [cir] Total assets and total revenue of $75 million each for the
most recently completed fiscal year or two of the last three most
recently completed fiscal years.
    In evaluating compliance with these standards, the Exchange will
consider amounts contained in a company's pro forma financial
statements provided in a filing with the Commission pursuant to
Commission rules and regulations governing Article 11 ``Pro forma
information of Regulation S-X Part 210--Form and Content of and
Requirements for Financial Statements.'' This shall include, without
limitation, adjustments relating to the proceeds of an offering. In the
case of foreign private issuers (as such term is defined in Rule 3b-4
under the Act), the Exchange will take into account global market
capitalization in evaluating compliance with the market capitalization
requirements of this rule.
    This revised rule shall apply to common stock and common stock
equivalents, including, but not limited to: Ordinary shares, American
Depository Receipts (``ADRs''), American Depository Shares, global
depository shares, depository shares, shares or certificates of
beneficial interest of trusts, and other similar issues that have the
same characteristics of common stock.

Summary of Current Initial Listing Standards for Preferred Stock and
Similar Issues

    Currently, as set forth in NYSE Arca Equities Rule 5.2(d), in the
case of preferred stock and similar issues, the following listing
requirements among others must be met:
     The issuer must meet the net worth and earnings
requirements as set forth in the Tier I Basic Listing Requirements
under Rule 5.2(c), and must meet and appear to be able to service the
dividend requirements for the preferred stock.
     If the company's common stock is traded on NYSE Arca or on
either the American Stock Exchange LLC

(``Amex'') or NYSE, the following public distribution requirements must
be met: At least 100,000 preferred shares publicly held and an
aggregate market value of at least $2,000,000, and a minimum closing
bid price of $10.
     If the related common stock is not traded on any of the
above referenced exchanges then the requirements are: At least 400,000
preferred shares publicly held and an aggregate market value of at
least $4,000,000, and a minimum closing bid price of $10. At least 800
public beneficial holders of 100 shares or more shall also be required.

Proposed Initial Listing Standards for Preferred Stock and Similar
Issues and Secondary Classes of Common Stock

    For initial listing, if the common stock or common stock equity
equivalent security of the issuer is listed on the Exchange or on the
NYSE, The Nasdaq Global Market or the Amex, the issue shall have:
     At least 200,000 publicly held shares;
     A market value of publicly held shares of at least
$4,000,000;
     A minimum closing price per share of $5;
     A minimum of 100 round lot shareholders.
    Alternatively, in the event the issuer's common stock or common
stock equivalent security is not listed on either the Exchange or on
the NYSE, The Nasdaq Global Market or the Amex, the preferred stock
and/or secondary class of common stock may be traded on the Exchange so
long as the security satisfies the initial listing criteria for common
stock.

Summary of Current and Proposed Continued Listing Standards

Current Continued Listing Standards for Common Stock

    To qualify for continued listing as a Tier I security, issuers must
satisfy, among other things, the numerical criteria set forth in NYSE
Arca Equities Rule 5.5(b). To qualify for continued listing as a Tier
II security, issuers must satisfy, among other things, the numerical
criteria set forth in NYSE Arca Equities Rule 5.5(h).
    These requirements are:
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    \16\ If the issuer has sustained losses from continuing
operations and/or net losses in two of the last three fiscal years,
then it must have a minimum of $2 million in net worth. If the
issuer has sustained losses from continuing operations and/or net
losses in three of the last four fiscal years, then it must have a
minimum of $4 million in net worth.
    \17\ Alternatively, an issuer must have at least 300 beneficial
holders of 100 shares or more.
    \18\ NYSE Arca Equities Rules 5.5(b) and (h) provide that NYSE
Arca Equities may waive the minimum bid price requirements upon
consideration of market conditions, the issuer's capitalization, the
number of outstanding and publicly held shares, and any other
factors NYSE Arca Equities deems appropriate. This proposal
eliminates this provision and replaces it with the ``cure period''
set forth in revised Rule 5.5(b).

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                                              Tier I (Rule 5.5(b))               Tier II (Rule 5.5(h))
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Net tangible assets or Net worth........  $2,000,000 or 4,000,000      $500,000 or 2,000,000.
                                           \16\.
Public float (shares)...................  200,000....................  300,000.
Public beneficial holders...............  400 \17\...................  250.
Market value............................  $1,000,000.................  $500,000.
Bid price \18\..........................  $3.........................  $1.
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Proposed Continued Listing Standards for Common Stock and Common Stock
Equivalent Securities

    With this filing, NYSE Arca is proposing to eliminate the two
tiered structure and replace, in their entirety, the current Tier I and
Tier II numerical standards for continued listing for common stock set
forth in NYSE Arca Rules 5.5(b) and (h), respectively, except that Rule
5.5(h) will continue to be applied to common stocks listed with a Tier
II designation prior to the effectiveness of this filing. In their
place, this filing proposes in new Rule 5.5(b) to require for continued
listing that a listed common stock must meet the criteria set forth in
either Continued Listing Standard One or Continued Listing Standard Two
below to continue to remain listed on the Exchange. All of the existing
Tier I issuers and securities currently meet the requirements of the
proposed continued listing standards. As such, the Exchange does not
need to provide a phase in period for compliance with the new rules and
will be able to apply them as soon as the Commission approves the Pilot
Program.
    Under the proposed new standards, a listed common stock must meet
each of the criteria set forth in Continued Listing Standards One or
Two below to continue to remain listed on the Exchange.

Continued Listing Standard One

     750,000 publicly held shares;
     Market value of publicly held shares of $5 million;
     The issuer has stockholders' equity of at least $10
million; and
     400 shareholders of round lots.

Continued Listing Standard Two

     The issuer has:
    [cir] A market value of listed securities of $50 million or, in the
case of non-U.S. companies, a global market capitalization of $50
million; or
    [cir] total assets and total revenue of $50 million each for the
most recently completed fiscal year or two of the last three most
recently completed fiscal years.
     1,100,000 shares publicly held;
     Market value of publicly held shares of $15 million; and
     400 shareholders of round lots.
    In the case of a non-U.S. company with ADRs listed on the Exchange,
the term ``global market capitalization'' means (x) the closing sale
price per share of the common stock or common stock equivalent security
underlying the ADRs multiplied by (y) the number of shares of such
common stock or common stock equivalent security outstanding worldwide
(including any shares underlying outstanding ADRs).
    In addition, an issuer will also be considered to be below
compliance standards if the average closing price of a security is less
than $1.00 over a consecutive 30 trading-day period. Once notified, the
issuer must bring its share price and average share price back above
$1.00 by six months following receipt of the notification. The issuer
must, however, notify the Exchange, within 10 business days of receipt
of the notification, of its intent to cure this deficiency or be
subject to suspension and delisting procedures. Once a U.S. issuer is
notified that it is below compliance, it is required to issue a press
release disclosing the fact that it has fallen below the continued
listing standards of the Exchange concurrent with filing notice of such
non-compliance with the SEC as required by Form 8-K. Once a foreign
private issuer is notified that it is below compliance, the issuer has
30 days to issue a press

release disclosing the fact that it has fallen below the continued
listing standards of the Exchange. If the foreign private issuer fails
to issue this press release during the allotted 30 days, the Exchange
will issue the requisite press release. In the event that at the
expiration of the six-month cure period, both a $1.00 share price and a
$1.00 average share price over the preceding 30 trading days are not
attained, the Exchange will commence suspension and delisting
procedures.
    Notwithstanding the foregoing, if an issuer determines that, if
necessary, it will cure the price condition by taking an action that
will require approval of its shareholders, it must so inform the
Exchange in the above referenced notification, must obtain the
shareholder approval by no later than its next annual meeting, and must
implement the action promptly thereafter. The price condition will be
deemed cured if the price promptly exceeds $1.00 per share, and the
price remains above the level for at least the following 30 trading
days.
    Notwithstanding the foregoing, if the subject security is not the
primary trading common equity security of the issuer (e.g., a tracking
stock or a preferred class), as discussed in more detail below, the
Exchange may determine whether to apply this test to such security
after evaluating the financial status of the issuer.

Continued Listing Standards for Preferred Stock and Similar Issues and
Secondary Classes of Common Stock

    NYSE Arca proposes to replace its existing continued listing
standards for preferred stock and similar issues with the requirements
described below and to also apply those requirements to secondary
classes of common stock.
    For continued listing, if the common stock or common stock equity
equivalent security of the issuer is listed on the Exchange or on the
NYSE, The Nasdaq Global Market or the Amex, the issue shall have:
     At least 100,000 publicly held shares;
     A market value of publicly held shares of at least
$1,000,000;
     A minimum closing price per share of $1;
     A minimum of 100 round lot shareholders.
    If the preferred stock or similar issue is the issuer's only
security listed on the Exchange, after evaluating the financial status
of the issuer, the Exchange may choose to apply the six-month cure
period provided under the proposed common stock continued listing
standards to any failure to maintain a $1 closing price.
    Alternatively, in the event the issuer's common stock or common
stock equivalent security is not listed on either the Exchange or on
the NYSE, The Nasdaq Global Market or the Amex, the preferred stock
and/or secondary class of common stock may be listed on the Exchange so
long as the security satisfies the continued listing criteria for
common stock.

Other Securities Pre-Tax Income Requirement

    To conform to the parallel provision in Standard One of the
proposed common stock initial listing standards, the Exchange proposes
to increase the pre-tax income from continuing operations standard of
NYSE Arca Equities Rule 5.2(e) (``Bonds and Debentures''), NYSE Arca
Equities Rule 5.2(g) (``Contingent Value Rights''), NYSE Arca Equities
Rule 5.2(j)(1) (``Other Securities'') and NYSE Arca Equities Rule
5.2(j)(4) (``Index-Linked Exchangeable Notes'') from $750,000 to $1
million.\19\
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    \19\ The Commission notes that, among other things, the Exchange
proposes other clarifying changes, additional definitions, and
different net worth standards for bonds and debentures, contingent
value rights, other securities, and index-linked exchangeable notes.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act,\20\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \21\ in particular, because it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    Written comments on the proposed rule change were neither solicited
nor received.

III. 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSEArca-2006-85 on the subject line.

Paper Comments:

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

All submissions should refer to File Number SR-NYSEArca-2006-85. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room. Copies of such
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-2006-85 and should be submitted on or before
December 20, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder

applicable to a national securities exchange.\22\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\23\ which requires that an exchange have
rules designed, among other things, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \22\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rules' impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \23\ 15 U.S.C. 78f(b)(5).
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    The Exchange proposes to make significant changes to its initial
and continued listing standards. Among other things, the Exchange would
no longer have a two-tiered listing structure. The Exchange represents
that all existing Tier I issuers would meet one of the proposed
continued listing standards set forth in proposed NYSE Arca Equities
Rule 5.5(h). Further, the proposal would include a grandfather clause
to ensure that the existing Tier II issuers would have the option to
remain listed on the Exchange for as long as they meet the continued
listing standards. The Commission believes that the proposal is
designed not to permit unfair discrimination among issuers, since the
proposal would treat all prospective issuers and existing Exchange-
listed issuers equally.
    Although the proposal significantly restructures and changes NYSE
Arca listing standards, as discussed below, the changes are
substantially similar to The Nasdaq Global Market initial and continued
listing standards. Based on this, the Commission believes it is
reasonable for the Exchange to determine that companies that meet these
new listing standards are appropriate for inclusion and continued
listing on NYSE Arca. For these reasons, as discussed in more details
below, the Commission finds that the proposal is consistent with the
requirements of the Act.

A. Initial Listing Standards

    As proposed, the Exchange's common stock or common stock equivalent
securities \24\ initial listing standards would be significantly
modified and the Exchange would no longer have Tier I or Tier II
securities. Common stock or common stock equivalent securities would
need: (1) At least 1.1 million publicly held shares; (2) a closing
price per share of $5 or more; and (3) a minimum of 400 round lot
shareholders, in addition to meeting the additional standards set forth
in one of three alternatives.\25\ Among other things, Standard 1 and
Standard 2 would replace the current net worth requirement with an
increased stockholders' equity requirement of $15,000,000 and
$30,000,000, respectively. In addition, under Standard 3, the current
net worth requirement would be eliminated and the issuer would be
required to have a market value of listed securities of $75,000,000 or
total assets and total revenue of $75,000,000 each for the most
recently completed fiscal year or two of the last three most recently
completed fiscal years. The Commission notes that the proposed initial
listing standards for common stock or common stock equivalent
securities are substantially similar to The Nasdaq Global Market
initial listing standards.\26\
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    \24\ See proposed NYSE Arca Equities Rule 5.1(b)(26).
    \25\ See proposed NYSE Arca Equities Rule 5.2(c).
    \26\ See Nasdaq Rule 4420(a)-(c).
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    The Exchange's proposed preferred stock (and similar issues) and
secondary classes of common stock initial listing standards would also
be significantly modified. The Exchange would eliminate the current net
worth and earnings requirements, and increase the current publicly held
shares requirement and market value requirement. The Exchange would
also lower the current bid price requirement. As proposed, if the
common stock or common stock equivalent security of the issuer is
listed on the Exchange, NYSE, The Nasdaq Global Market, or Amex, these
securities must have: (1) At least 200,000 publicly held shares; (2) a
market value of publicly held shares of at least $4 million; (3) a
closing price per share of $5 or more; and (4) a minimum of 100 round
lot shareholders.\27\ If the common stock or common stock equivalent
security of the issuer is not listed on the Exchange, NYSE, The Nasdaq
Global Market, or Amex, these securities must satisfy the initial
listing standards for common stock.\28\ The Commission notes that these
requirements are substantially similar to The Nasdaq Global Market
initial listing standards.\29\
---------------------------------------------------------------------------

    \27\ See proposed NYSE Arca Equities Rule 5.2(d).
    \28\ See proposed NYSE Arca Equities Rule 5.2(d).
    \29\ See Nasdaq Rule 4420(k).
---------------------------------------------------------------------------

    The Exchange also proposes to amend the initial listing standards
for bonds and debentures and contingent value rights by increasing the
net worth requirement and pre-tax income requirement consistent with
the proposed common stock initial listing standards. In addition, the
Exchange proposes to amend the initial listing standards for other
securities and index-linked exchangeable notes to add a pre-tax income
requirement, consistent with the pre-tax income requirements of the
common stock initial listing standards. The pre-tax income requirement
for these securities is being raised from $750,000 to $1,000,000.
    Based on the foregoing, the Commission believes that the proposed
amendments to the NYSE Arca Equities initial listing standards are
consistent with the requirements of the Act.

B. Continued Listing Standards

    The Commission believes that the proposed amendments to the NYSE
Arca Equities continued listing standards are consistent with the
requirements of the Act. The Exchange proposes to amend the common
stock or common stock equivalent securities continued listing standard,
by requiring that common stock must meet the standards set forth in one
of two alternatives.\30\ Both common stock continued listing standards
would increase the current publicly held shares requirement. In
addition, the current $1,000,000 market value requirement would be
increased to a $5,000,000 market value of publicly held shares
requirement under Continued Listing Standard 1 and $15,000,000 under
Continued Listing Standard 2. Continued Listing Standard 1 would
replace the current net worth requirement of $2,000,000 or $4,000,000
with a higher stockholders' equity requirement of $10,000,000.
Continued Listing Standard 2 would eliminate the current net worth
requirement, but require companies to maintain a market value of listed
securities of $50,000,000 (in the case of non-U.S. companies, a global
market capitalization of $50,000,000), or total assets and total
revenue of $50,000,000 each for the most recently completed fiscal year
or two of the last three most recently completed fiscal years. In
addition, the Exchange would require under both common stock continued
listing standards that all common stock have an average closing price
of at least $1.00 over a consecutive 30-day trading period, instead of
the current $3 bid price requirement.\31\ The Commission notes that the
proposed continued listing standards for common stock, common stock
equivalent securities and similar issues are substantially similar

to The Nasdaq Global Market continued listing standards.\32\
---------------------------------------------------------------------------

    \30\ See proposed NYSE Arca Equities Rule 5.5(b).
    \31\ As noted above, issuers would have six months to cure this
deficiency. See proposed NYSE Arca Equities Rule 5.5(b).
    \32\ See Nasdaq Rule 4450(a)-(b).
---------------------------------------------------------------------------

    The Exchange also proposes to amend the preferred stock (and
similar issues) and secondary classes of common stock continued listing
standards.\33\ The Exchange would eliminate the current net worth
requirement and continuing operations requirements. In addition, the
proposed new preferred continued listing standards would contain a new
$1 bid price requirement. The Commission notes that the proposed
continued listing standards for preferred stock and similar issues and
secondary classes of common stock are substantially similar to The
Nasdaq Global Market continued listing standards.\34\
---------------------------------------------------------------------------

    \33\ See proposed NYSE Arca Equities Rule 5.5(c).
    \34\ See Nasdaq Rule 4450(h).
---------------------------------------------------------------------------

C. Other Changes

    The proposed rule change would permit the Exchange, rather than its
board of directors, to approve securities for listing and to prescribe
the form of listing applications.\35\ In particular, the Exchange may
deny listing or apply additional or more stringent criteria based on
any event, condition, or circumstance that makes the listing of the
company inadvisable or unwarranted in the opinion of the Exchange. Such
determination could be made even if the company meets the standards set
forth below. The Commission believes that it is reasonable for the
Exchange, based upon its experience, to determine whether the security
of a company would be appropriate for inclusion on NYSE Arca. The
Commission notes that this amendment is similar to NYSE's listing
standards.\36\ Further, with respect to the continued listing standards
of all securities, the Exchange proposes to require all issuers to
comply with the Exchange's corporate governance qualitative standards,
rather than only the independent directors/board committees requirement
in current NYSE Arca Equities Rule 5.3(k).\37\ The Commission believes
that these amendments are consistent with the requirements of the Act.
---------------------------------------------------------------------------

    \35\ See proposed NYSE Arca Equities Rule 5.1(a) and 5.2(a).
    \36\ See NYSE Listed Company Manual Section 101.00.
    \37\ See also NYSE Arca Equities Rule 5.5(k), which sets forth
other reasons for suspending or delisting securities on the
Exchange.
---------------------------------------------------------------------------

D. Accelerated Approval

    Pursuant to Section 19(b)(2) of the Act,\38\ the Commission may not
approve any proposed rule change prior to the 30th day after the date
of publication of notice of the filing thereof, unless the Commission
finds good cause for so doing and publishes its reasons for so finding.
The Exchange has requested the Commission find good cause for approving
the proposed rule change prior to the 30th day after the date of
publication of notice in the Federal Register.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission believes that it is reasonable to grant accelerated
approval to allow for the efficient administration of the Exchange's
initial and continued listing programs as promptly as possible. The
Commission notes that the proposed listing standards, while
significantly different than the Exchange's current listing standards,
are substantially similar to The Nasdaq Global Market, which the
Commission previously approved. In addition, the Commission notes that
the proposed listing standards would be in effect only as a pilot
program for a six-month period.\39\ Accordingly, the Commission
believes that there is good cause, pursuant to Sections 6(b)(5) of the
Act \40\ and 19(b)(2) of the Act,\41\ to grant accelerated approval to
the proposed rule change prior to the 30th day after the date of
publication of notice in the Federal Register.
---------------------------------------------------------------------------

    \39\ In any request under Section 19(b) of the Act for permanent
approval or an extension of the pilot period, the Exchange may wish
to report on the operations of the new standards during the pilot
period.
    \40\ 15 U.S.C. 78f(b)(5).
    \41\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange, and, in
particular, with Section 6(b)(5) of the Act.\42\
---------------------------------------------------------------------------

    \42\ 15 U.S.C. 78f(b)(5). The staff of the Division of Market
Regulation (``Staff'') would not recommend enforcement action to the
Commission under Rules 15g-2 through 15g-9 under the Act if broker-
dealers treat equity securities listed pursuant to the initial and
continued listing requirements set forth in amended NYSE Arca
Equities Rule 5 as meeting the exclusion from the definition of
penny stock contained in Rule 3a51-1 udner the Act pursuant to
paragraph (a)(2) thereof. In taking this position, the Staff notes
in particular that these amended listing requirements are
equivalent, in all material respects, to the listing requirments of
the The Nasdaq Global Market.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\43\ that the proposed rule change (SR-NYSEArca-2006-85), is hereby
approved on an accelerated basis, as a six-month pilot, until May 29,
2007.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\44\
---------------------------------------------------------------------------

    \44\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-20211 Filed 11-28-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 170 (Wednesday, September 2, 2015)]
[Proposed Rules]
[Pages 53024-53028]
[FR Doc No: 2015-21689]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-3657; Directorate Identifier 2012-SW-069-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Helicopters (Previously
Eurocopter France (Eurocopter) Helicopters)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to supersede airworthiness directive (AD) 2007-25-
08 for Eurocopter Model SA-365 N1, AS-365N2, AS 365 N3, SA-366G1, EC
155B, and EC155B1 helicopters. AD 2007-25-08 currently requires
checking the tail rotor gearbox (TGB) oil level, inspecting the
magnetic plug for chips and either replacing the TGB or further
inspecting for axial play in the tail rotor hub pitch change control
spider (spider), and if axial play is found in the spider, replacing
the pitch control rod assembly double bearing (bearing). Since we
issued the AD 2007-25-08, we have received reports of new occurrences
of loss of yaw control due to failure of the control rod bearing. This
proposed AD would retain some of the requirements of AD 2007-25-08,
revise the inspections for play in the double bearing to improve the
detection of play, require replacing the TGB control shaft guide
bushes, clarify the criteria concerning particle detection, and change
the inspection for play in the double bearing after the guide bushes
have been replaced. The proposed actions are intended to prevent damage
to the bearing resulting in end play, loss of tail rotor pitch control,
and subsequent loss of control of the helicopter.

DATES: We must receive comments on this proposed AD by November 2,
2015.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your
comments electronically.
     Fax:<PHONE_NUMBER>.
     Mail: Send comments to the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Deliver to the ``Mail'' address between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the Docket Operations Office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the European
Aviation Safety Agency (EASA) AD, the economic evaluation, any comments
received and other information. The street address for the Docket
Operations Office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.
    For service information identified in this proposed AD, contact
Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052;
telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax<PHONE_NUMBER>; or at
http://www.airbushelicopters.com/techpub. You may review service
information at the FAA, Office of the Regional Counsel, Southwest
Region, 10101 Hillwood Pkwy, Room 6N-321, Fort Worth, Texas 76177.

FOR FURTHER INFORMATION CONTACT: Matt Wilbanks, Aviation Safety
Engineer, Rotorcraft Certification Office, Rotorcraft Directorate, FAA,
10101 Hillwood Pkwy, Fort Worth, Texas 76177; telephone<PHONE_NUMBER>;
email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to participate in this rulemaking by submitting
written comments, data, or views. We also invite comments relating to
the economic, environmental, energy, or federalism impacts that might
result from adopting the proposals in this document. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. To
ensure the docket does not contain duplicate comments, commenters
should send only one copy of written comments, or if comments are filed
electronically, commenters should submit only one time.
    We will file in the docket all comments that we receive, as well as
a report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. Before acting on this proposal, we
will consider all comments we receive on or before the closing date for
comments. We will consider comments filed after the comment period has
closed if it is possible to do so without incurring expense or delay.
We may change this proposal in light of the comments we receive.

Discussion

    On November 27, 2007, we issued AD 2007-25-08, Amendment 39-15290
(72 FR 69604, December 10, 2007) for Eurocopter (now Airbus
Helicopters) Model SA-365 N1, AS-365 N2, AS 365 N3, SA-366G1, EC 155B,
and EC155B1 helicopters. AD 2007-25-08 requires repetitively checking
the TGB oil level to ensure it is at the maximum level. AD 2007-25-08
also requires repetitively inspecting the magnetic plug for chips, and
depending on the quantity of chips found, either replacing the TGB or
further inspecting for axial play in the spider. If axial play is found
in the spider, AD 2007-25-08 requires replacing the bearing. AD 2007-
25-08 was prompted by EASA Emergency AD No. 2006-0258R1-E, dated August
29, 2006, as well as the finding that metal chips were not detected on
the magnetic plug due to insufficient oil flow because the oil in the
TGB was being maintained at the minimum level. The actions of AD 2007-
25-08 are intended to detect metal chips on the magnetic plug and to
prevent damage to the bearing resulting in end play, loss of tail rotor
pitch control, and subsequent loss of control of the helicopter.

Actions Since AD 2007-25-08 Was Issued

    Since we issued AD 2007-25-08 (72 FR 69604, December 10, 2007), we
have received reports of new occurrences of loss of yaw control due to
failure of the control rod bearing.
    EASA, which is the Technical Agent for the Member States of the
European Union, has since superseded EASA Emergency AD No. 2006-0258R1-
E with several ADs, the most recent being EASA AD No. 2012-0170R2,
dated June 20, 2014, to correct an unsafe condition for these Airbus
Model helicopters. After receiving reports of several new occurrences
of damage to the bearings and subsequent investigations of the
incidents, EASA advises of implementing additional, revised inspection
and corrective actions; reducing the interval between inspections; a
modification replacing both guide bushes and improving the tolerance
between the control shaft and the TGB wheel to limit the friction loads
on the control bearing; and requiring the play measurement of the TGB
to control rod, shaft assembly double bearing to be measured according
to the type of fenestron installed. EASA AD 2012-0170R2 also excludes
helicopters modified in accordance with modification (MOD) 07 65B63.

FAA's Determination

    These helicopters have been approved by the aviation authority of
France and are approved for operation in the United States. Pursuant to
our bilateral agreement with France, EASA, its technical
representative, has notified us of the unsafe condition described in
its AD. We are proposing this AD because we evaluated all known
relevant information and determined that an unsafe condition is likely
to exist or develop on other products of the same type design.

Related Service Information Under 1 CFR Part 51

    We reviewed ASB No. AS365-05.00.61, Revision 4, dated April 8,
2014, for FAA-certificated Model SA 365 N1, AS 365 N2, and AS 365 N3
helicopters and for non-FAA-certificated Model AS355F, F1, and F2
helicopters; ASB No. SA366-05.41, Revision 4, dated April 8, 2014, for
FAA-certificated Model SA-366G1 and non-FAA-certificated Model SA-366GA
helicopters; and ASB No. EC155-05A022, Revision 4, dated April 8, 2014,
for FAA-certificated Model EC 155B and EC155B1 helicopters. All three
ASBs describe procedures for monitoring the behavior of the bearing by
checking its axial play by dimensional measurement and by maintaining
the operating oil at the maximum level. EASA classified this service
information as mandatory and issued EASA AD No. 2012-0170R2 to ensure
the continued airworthiness of these helicopters. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section of this NPRM.

Proposed AD Requirements

    This proposed AD would require:
     Checking the TGB oil level at specified intervals. An
owner/operator (pilot) may perform this visual check and must enter
compliance into the helicopter maintenance records in accordance with
14 CFR Sec. Sec.  43.9(a)(1) through (4) and 91.417(a)(2)(v). A pilot
may perform this check because it involves only a visual check for the
oil level in the TGB and can be performed equally well by a pilot or a
mechanic. This check is an exception to our standard maintenance
regulations.
     Inspecting the magnetic plug of the TGB for chips at
specified intervals.
     Within 300 hours time-in-service (TIS), replacing each
affected part-numbered TGB guide bush with an airworthy guide bush,
inspecting the bearing of the TGB control shaft and rod assembly for
M50 type particles, and performing measurements of play in the TGB
control shaft and rod assembly.
     Within 110 hours TIS after replacing the guide bush, and
thereafter at intervals not to exceed 55 hours TIS, performing certain
measurements for play in the TGB control shaft and rod assembly.
    This proposed AD would not apply to helicopters with TGB part
number 365A33-6005-09 installed. Airbus Helicopters refers to the
installation of this part-numbered TGB as MOD 07 65B63.

 Differences Between the Proposed AD and the EASA AD

    The calendar times in the EASA AD have already passed and are not
included in this proposed AD.

Costs of Compliance

    We estimate that this proposed AD would affect 133 helicopters of
U.S. Registry. We estimate that operators may incur the following costs
in order to comply with this AD. The estimated labor cost is $85 per
work-hour. We estimate .5 work-hour to check the TGB oil level for a
cost of $43 per helicopter and $5,719 for the fleet each inspection
cycle. We estimate .5 work-hour to inspect the magnetic plug on the TGB
for chips for a cost of $43 per helicopter and $5,719 for the fleet
each inspection cycle. We estimate 3 work-hours to measure the play in
the TGB control shaft and rod assembly for a cost of $255 per
helicopter and $33,915 for the fleet each inspection cycle. Replacing
the TGB control shaft guide bushes would take 4 work-hours and required
parts would cost $565, for an estimated total of $905 per helicopter
and $120,365 for the U.S. operator fleet. Inspecting the TGB control
shaft and rod assembly for steel particles would take 6 work-hours for
a cost per helicopter of $510 and a fleet cost of $67,830. If
necessary, it would cost about $30,000 per helicopter to replace the
TGB and $24,000 for overhaul of the TGB to replace the bearing.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed, I certify this proposed regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska 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.
    We prepared an economic evaluation of the estimated costs to comply
with this proposed AD and placed it in the AD docket.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2007-25-08, Amendment 39-15290 (72 FR 69604, December 10, 2007), and
adding the following new AD:

Airbus Helicopters (Previously Eurocopter France Helicopters):
Docket No. FAA-2015-3657; Directorate Identifier 2012-SW-069-AD.

(a) Applicability

    This AD applies to Model SA-365N1, AS-365N2, AS 365 N3, SA-
366G1, EC 155B, and EC155B1 helicopters, with a tail rotor gearbox
(TGB) pitch control rod assembly double bearing (bearing) installed,
certificated in any category, except helicopters with TGB part
number (P/N) 365A33-6005-09 installed.

(b) Unsafe Condition

    This AD defines the unsafe condition as damage to the bearing,
which could result in end play, loss of tail rotor pitch control,
and subsequent loss of control of the helicopter.

(c) Affected ADs

    This AD supersedes AD 2007-25-08, Amendment 39-15290 (72 FR
69604, December 10, 2007).

(d) Comments Due Date

    We must receive comments by November 2, 2015.

(e) Compliance

    You are responsible for performing each action required by this
AD within the specified compliance time unless it has already been
accomplished prior to that time.

(f) Required Actions

    (1) Check the TGB oil level at the following intervals:
    (i) For Model SA-365N1, AS-365N2, AS 365 N3 helicopters, at
intervals not to exceed 10 hours time-in-service (TIS).
    (ii) For Model SA366G1 helicopters, at each daily flight check.
    (iii) For Model EC 155B and EC155B1 helicopters, at intervals
not to exceed 15 hours TIS or 7 days, whichever occurs first.
    (iv) The actions required by paragraph (f)(1) of this AD may be
performed by the owner/operator (pilot) holding at least a private
pilot certificate and must be entered into the aircraft records
showing compliance with this AD in accordance with 14 CFR Sec. Sec.
43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The record must
be maintained as required by 14 CFR Sec. Sec.  91.417, 121.380, or
135.439.
    (2) If the oil level is not at maximum, before further flight, a
qualified mechanic must fill it to the maximum level.
    (3) Inspect the magnetic plug of the TGB for any chips as
follows:
    (i) At intervals not to exceed 25 hours TIS for helicopters with
a magnetic plug without a chip electrical indication in the cockpit,
or
    (ii) At intervals not to exceed 100 hours TIS and after any
illumination of the TGB ``CHIP'' warning light for helicopters with
a chip electrical indication in the cockpit.
    (4) If you find any chips during the inspection in paragraph
(f)(3) of this AD, determine whether the quantity of chips is within
the removal criteria.
    (i) If the quantity of chips on the magnetic plug is at or above
the removal criteria, before further flight, replace the TGB with an
airworthy TGB.
    (ii) If the quantity of chips on the magnetic plug is below the
removal criteria, comply with paragraph (f)(6) of this AD before
further flight.
    (5) Within 300 hours TIS, without removing the TGB:
    (i) Replace each TGB control shaft guide bush (guide bush), P/N
365A33-6189-20 and 365A33-6189-21, with guide bush, P/N 365A33-6223-
20, and replace each guide bush, P/N 365A33-6188-20, with guide
bush, P/N 365A33-6222-20.

    Note 1 to paragraph (f)(5)(i) of this AD:  Airbus Helicopters
refers to the replacement of the guide bushes as Modification
0765B58.

    (ii) Inspect the bearing of the TGB control shaft and rod
assembly for M50 type particles (particles) as shown in Figures 1
through 3 of Airbus Helicopters Alert Service Bulletin (ASB) No.
AS365-05.00.61, Revision 4, dated April 8, 2014, for Model SA 365
N1, AS 365 N2, and AS 365 N3 helicopters (AS365-05.00.61); ASB No.
SA366-05.41, Revision 4, dated April 8, 2014, for Model SA 366G1
helicopters (SA366-05.41); or ASB No. EC155-05A022, Revision 4,
dated April 8, 2014, for Model EC 155B and EC155B1 helicopters
(EC155-05A022). Inspect the bearing by separating the control shaft
(item q of Figure 3) from the control rod (item p of Figure 3),
rinse the bearing with white spirit or equivalent, collect the
product on a blotting paper, and inspect for particles inside the
control shaft, around the bearing, and on blotting paper.
    (A) If there are no particles, clean the control shaft and
control rod with white spirit or equivalent and install the control
shaft and control rod.
    (B) If there are any particles, replace the bearing with an
airworthy bearing.
    (iii) Perform measurements of play in the TGB control shaft and
rod assembly bearing as follows:
    (A) For the TGB side:
    (1) Remove the cover and inspect the positioning of the locking
of the 3 screws, as shown in the two positioning for measurement
photographs in the Accomplishment Instructions under paragraph
3.B.4.a.(1) of ASB AS365-05.00.61, SA336-05.41, or EC155-05A022.
Correctly lock the screws if the positioning is inconvenient for
measurement. Set the pedal unit to the neutral position and rig the
tail servo-control using a 6 mm diameter pin. Remove any primer and
paint from the support casing face of the servo-control using 600
grit sand paper. Apply DOW 19 or equivalent protection and a coat of
primer P05 or equivalent. Do not reapply primer and paint to the
support casing face of the servo-control.
    (2) Perform a measurement ``M1'' using a caliper gage, between
the end of the control rod (item p in the three photographs in the
Accomplishment Instructions under paragraph 3.B.4.a.(1) of ASB
AS365-05.00.61, SA336-05.41, or EC155-05A022) and the seating face
of the servo-control on the casing. Mark the position of the caliper
gage on the support casing face of the servo-control as ``R1'' using
a permanent felt tip pen. Position the caliper gage on R1 (shown in
the first of the three photographs in the Accomplishment
Instructions under paragraph 3.B.4.a.(1) of ASB AS365-05.00.61,
SA336-05.41, or EC155-05A022) and on the screw (item ac in the first
of the three photographs in the Accomplishment Instructions under
paragraph 3.B.4.a.(1) of ASB AS365-05.00.61, SA336-05.41, or EC155-
05A022) of the universal joint of the servo-control. Set the mobile
part of the caliper gage against the end of the control rod. Shift
the caliper gage against the control lever (item ab in the last
photograph in the Accomplishment Instructions under paragraph
3.B.4.a.(1) of ASB AS365-05.00.61, SA336-05.41, or EC155-05A022)
while remaining in contact with the end of the control rod.
    (3) Record measurement M1 indicated on the caliper gage on the
component history card or equivalent record.
    (B) For the TRH side:
    (1) Perform a measurement ``M2'' using a caliper gage between
the flat face of the center plate (item c in the photograph in the
Accomplishment Instructions under paragraph 3.B.4.a.(2) of ASB
AS365-05.00.61, SA336-05.41, or EC155-05A022) and the face of the
inner web (item ad in the photograph in the Accomplishment
Instructions under paragraph 3.B.4.a.(2) of ASB AS365-05.00.61,
SA336-05.41, or EC155-05A022) of the rotor hub on which the inner
bearings of the TRH blades are installed. Position the caliper gage
flat across the opening (item ae in the photograph in the
Accomplishment Instructions under paragraph 3.B.4.a.(2) of ASB
AS365-05.00.61, SA336-05.41, or EC155-05A022) of the pitch change
spider. Mark the position of the caliper gage on the flat surface of
the center plate as ``R2'' and on the opening as ``R3'' using a
permanent felt tip pen.
    (2) Record measurement M2 indicated on the caliper gage.
    (3) Calculate a measurement ``M0'' by adding measurements M1
(required in paragraph (f)(5)(iii)(A) of this AD) and M2.
    (4) Perform measurements M1 and M2 again by repeating the
requirements in paragraphs (f)(5)(iii)(A) and (f)(5)(iii)(B) of this
AD and calculate a second measurement M0.
    (5) Calculate the difference between the two M0 measurements. If
the difference is not less than 0.25 mm (0.01 inch), calculate the
two M0 measurements again.
    (6) Calculate the mean value of the two M0 measurements and
record it on the component history card or equivalent record. This
M0 measurement will be the reference measurement enabling you to
evaluate any increase in the play in the bearing of the control
shaft and rod assembly during later inspections.
    (6) Within 110 hours TIS after replacing the guide bush, and
thereafter at intervals not to exceed 55 hours TIS, perform
measurements for play in the TGB control shaft and rod assembly as
follows.
    (i) On the TGB side:
    (A) Remove the TGB fairing, set the pedal unit to the neutral
position and rig the tail servo-control using a 6 mm diameter pin.
    (B) Perform measurement ``M1'' using a caliper gage between the
end of the control rod (item p in the three photographs in the
Accomplishment Instructions under paragraph 3.B.4.b (1) of ASB
AS365-05.00.61, SA336-05.41, or EC155-05A022) and the seating face
of the servo-control on the casing. Position the caliper gage on
mark R1 and the bearing against the screw (item ac as shown in the
first of the three photographs in the Accomplishment Instructions
under paragraph 3.B.4.b.(1) of ASB AS365-05.00.61, SA336-05.41, or
EC155-05A022) of the universal joint of the servo-control. Set the
mobile part of the caliper gage against the end of the control rod.
Shift the caliper gage against the control lever (item ab as shown
in the last of the three photographs in the Accomplishment
Instructions under paragraph 3.B.4.b.(1) of ASB AS365-05.00.61,
SA336-05.41, or EC155-05A022) while remaining in contact with the
end of the control rod.

    (C) Record measurement M1 indicated on the caliper gage on the
component history card or equivalent record.
    (ii) On the tail rotor hub (TRH) side:
    (A) Remove the fairing and perform a measurement ``M2'' using a
caliper gage between the flat face of the center plate (item c in
the photograph in the Accomplishment Instructions under paragraph
3.B.4.b.(2) of ASB AS365-05.00.61, SA336-05.41, or EC155-05A022) and
the face of the inner web (item ad in the photograph in the
Accomplishment Instructions under paragraph 3.B.4.b.(2) of ASB
AS365-05.00.61, SA336-05.41, or EC155-05A022) of the rotor hub on
which the inner bearings of the TRH blades are installed. Position
the caliper gage flat across the opening of the pitch change spider
on R2 and R3 as shown in the right photograph in the Accomplishment
Instructions under paragraph 3.B.4.b.(2) of ASB AS365-05.00.61,
SA336-05.41, or EC155-05A022.
    (B) Record measurement M2 indicated on the caliper gage on the
component history card or equivalent record.
    (C) Calculate a measurement ``M3'' by adding measurements M1 and
M2.
    (D) Calculate the difference between measurement ``M0''
indicated on the TGB component history card or equivalent record and
M3.
    (1) If the difference between measurement M0 and M3 is less than
0.5 mm (0.02 inch), perform an additional inspection for play in the
bearing of the TGB control shaft and rod assembly by following the
Accomplishment Instructions, paragraph 3.B.6., of ASB AS365-
05.00.61, SA366-05.41, or EC155-05A022. If there is no axial play at
the TRH pitch change spider, record value M3 on the component
history card or equivalent record. If there is axial play at the TRH
pitch change spider, replace the bearing with an airworthy bearing
and perform a new reference measurement by following the
requirements of paragraph (f)(6) of this AD.
    (2) If the difference between the measurements is equal to or
greater than 0.5 mm (0.02 inch), replace the bearing with an
airworthy bearing and perform a new reference measurement by
following the requirements of paragraph (f)(6) of this AD.

(g) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Group, FAA, may approve AMOCs
for this AD. Send your proposal to: Matt Wilbanks, Aviation Safety
Engineer, Rotorcraft Certification Office, Rotorcraft Directorate,
FAA, 10101 Hillwood Pkwy, Fort Worth, Texas 76177; telephone (817)
222-5110; email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, we suggest that you
notify your principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office or
certificate holding district office before operating any aircraft
complying with this AD through an AMOC.

(h) Additional Information

    The subject of this AD is addressed in European Aviation Safety
Agency (EASA) AD No. 2012-0170R2, dated June 20, 2014. You may view
the EASA AD on the internet at http://www.regulations.gov in Docket
No. FAA-2015-3657.

(i) Subject

    Joint Aircraft Service Component (JASC) Code: 6520 Tail Rotor
Gearbox.

    Issued in Fort Worth, Texas, on August 21, 2015.
Lance T. Gant,
Acting Directorate Manager, Rotorcraft Directorate, Aircraft
Certification Service.
[FR Doc. 2015-21689 Filed 9-1-15; 8:45 am]
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[Federal Register: September 5, 2008 (Volume 73, Number 173)]
[Notices]
[Page 51831-51832]
[DOCID:fr05se08-62]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

Collection of Overpayments

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This document provides notice that the Federal Emergency
Management Agency (FEMA) has terminated the current procedures for the
recoupment of overpayments of disaster assistance made pursuant to
Section 408 of the Stafford Act, in connection with Hurricanes Katrina
and Rita. Recoupment notices previously

sent to individual disaster applicants in connection with Hurricanes
Katrina and Rita are hereby withdrawn. FEMA will institute new
recoupment proceedings where warranted on an individual basis pursuant
to the procedures established by regulation for the administrative
collection of debts.

FOR FURTHER INFORMATION CONTACT: John Quintanilla, Federal Emergency
Management Agency, Department of Homeland Security, Virginia National
Processing Services Center, P.O. Box 2297, Winchester, VA 22604,
telephone<PHONE_NUMBER> (this is not a toll-free number). Individuals
with speech or hearing impairments may access this number through TTY
by calling the toll-free Federal Information Relay Service at 800-877-
8339.
    Notice: FEMA provided financial disaster assistance to individuals
in connection with Hurricanes Katrina and Rita pursuant to Section 408
of the Stafford Act, 42 U.S.C. 5174. Some individual disaster
applicants received assistance for which they were not eligible, or
received amounts of assistance greater than that for which they were
eligible. In many of those instances, FEMA instituted recoupment
proceedings to recover those overpayments.
    FEMA hereby provides notice that the recoupment of overpayments of
such disaster assistance conducted pursuant to the former procedures
governing recoupment, including those set forth at 44 CFR part 11, are
permanently terminated. Pursuant to this determination, all recoupment
notices previously sent to individual disaster applicants in connection
with Hurricanes Katrina and Rita, as well as any subsequent
correspondence regarding recoupment, are hereby withdrawn. This notice
does not cancel valid debts of disaster applicants from Hurricanes
Katrina and Rita; it terminates the former procedures under which FEMA
recouped such debts.
    FEMA will reexamine de novo the files of individual disaster
applicants for evidence of overpayment. In instances where FEMA
determines that recoupment is still warranted based on such review,
FEMA will institute new recoupment proceedings pursuant to the
procedures set forth at 6 CFR part 11 (adopting general procedures for
administrative collection of debts set forth at 31 CFR parts 900-904),
and will transmit new recoupment notices explaining the rights and
obligations of persons who are determined to have received
overpayments.
    Individuals otherwise covered by this Notice who have previously
entered into negotiated or voluntary payment plans with FEMA may
continue to make payments under such plans, or may elect to stop making
payments. In either event, consistent with its generally applicable
policy, FEMA will reexamine de novo such individuals' files and, where
appropriate, institute new recoupment proceedings as to any remaining
debt balances pursuant to the procedures set forth at 6 CFR part 11.

Authority

    Legal authority for recoupment is the Debt Collection Act of 1982
and the Debt Collection Improvement Act of 1996, 31 U.S.C. 3701 et seq.

    Dated: August 29, 2008..
R. David Paulison,
Administrator, Federal Emergency Management Agency.
[FR Doc. E8-20587 Filed 9-4-08; 8:45 am]

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