[Federal Register Volume 77, Number 100 (Wednesday, May 23, 2012)]
[Notices]
[Pages 30581-30584]
[FR Doc No: 2012-12451]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67004; File No. SR-Phlx-2012-64]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Institute
an Excess Order Fee

May 17, 2012.
    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 May 11, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the Exchange.

The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    Phlx proposes to institute an Excess Order Fee. Phlx will implement
the proposed change on June 1, 2012. The text of the proposed rule
change is available at http://nasdaqomxphlx.cchwallstreet.com/nasdaqomxphlx/phlx/, at Phlx's principal office, and at the
Commission's Public Reference Room.

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 those statements may be examined at
the places specified in Item III below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    Phlx is concerned that the inefficient order entry practices of
certain market participants may be placing excessive burdens on Phlx's
NASDAQ OMX PSX (``PSX'') system and the member organizations that trade
on it and may negatively impact the usefulness and life cycle cost of
market data.\3\ Market participants that flood the market with orders
that are rapidly cancelled or that are priced away from the inside
market do little to support meaningful price discovery, and in fact may
create investor confusion about the extent of trading interest in a
stock. In extreme instances, inefficient order entry may constitute
``layering,'' the manipulative practice of using multiple orders at
different price levels to move the price of a stock. While Phlx has an
active program to detect and prosecute manipulative schemes, including
layering,\4\ it also believes that market quality can be improved
through the imposition of a fee on market participants that engage in
extremely inefficient order entry practices. Because Phlx believes that
inefficient order entry is a problem associated with a relatively small
number of market participants, and is therefore not a pervasive
characteristic of today's markets, the impact of the fee will be
narrow. In fact, it is Phlx's expectation that the fee will encourage
potentially affected market participants to modify their order entry
practices in order to avoid the fee, thereby improving the market for
all participants. Accordingly, Phlx does not expect to earn significant
revenues from the fee.
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    \3\ See generally Recommendations Regarding Regulatory Reponses
to the Market Events of May 6, 2010, Joint CFTC-SEC Advisory
Committee on Emerging Regulatory Issues, at 11 (February 18, 2011)
(``The SEC and CFTC should also consider addressing the
disproportionate impact that [high frequency trading] has on
Exchange message traffic and market surveillance costs. * * *. The
Committee recognizes that there are valid reasons for algorithmic
strategies to drive high cancellation rates, but we believe that
this is an area that deserves further study. At a minimum, we
believe that the participants of those strategies should properly
absorb the externalized costs of their activity.'').
    \4\ Cf. FINRA Sanctions Trillium Brokerage Services, LLC,
Director of Trading, Chief Compliance Officer, and Nine Traders
$2.26 Million for Illicit Equities Trading Strategy (September 13,
2010) (available at http://www.finra.org/Newsroom/News Releases/
2010/P121951). The fee proposed in this filing will not in any way
substitute for, or result in a diminution of, Phlx's surveillance
program for market manipulation.
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    The fee will be imposed on market participant identifiers
(``MPID'') that have characteristics indicative of inefficient order
entry practices. In general, the determination of whether to impose the
fee on a particular MPID will be made by calculating the ratio between
(i) entered orders, weighted by the distance of the order from the
national best bid or offer (``NBBO''), and (ii) orders that execute in
whole or in part. The fee is imposed on MPIDs with an ``Order Entry
Ratio'' of more than 100. The Order Entry Ratio is calculated, and the
Excess Order Fee imposed, on a monthly basis.
    For each MPID, the Order Entry Ratio is the ratio of (i) the MPID's
``Weighted Order Total'' to (ii) the greater of one (1) or the number
of displayed, non-marketable orders \5\ sent to PSX through the MPID
that execute in full or in part.\6\ The Weighted Order Total is the
number of displayed, non-marketable orders sent to PSX through the
MPID, as adjusted by a ``Weighting Factor.'' The applicable Weighting
Factor is applied to each order based on its price in comparison to the
NBBO at the time of order entry:
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    \5\ The fee focuses on displayed orders since they have the most
significant impact on investor confusion and the quality of market
data.
    \6\ Thus, in an extreme case where no orders entered through the
MPID executed, this component of the ratio would be assumed to be 1,
so as to avoid the impossibility of dividing by zero.

------------------------------------------------------------------------
                                                               Weighting
             Order's Price versus NBBO at entry                 factor
------------------------------------------------------------------------
Less than 0.20% away........................................          0x
0.20% to 0.99% away.........................................          1x
1.00% to 1.99% away.........................................          2x
2.00% or more away..........................................          3x
------------------------------------------------------------------------

    Thus, in calculating the Weighted Order Total, an order that was
more than 2.0% away from the NBBO would be equivalent to three orders
that were 0.50% away. Due to the applicable Weighting Factor of 0x,
orders entered less than 0.20% away from the NBBO would not be included
in the Weighted Order Total, but would be included in the ``executed''
orders component of the Order Entry Ratio if they execute in full or
part.\7\ MPIDs with a daily average Weighted Order Total of less than
100,000 during the month will not be subject to the Excess Order
Fee.\8\
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    \7\ An analogous fee that was recently filed by The NASDAQ Stock
Market LLC (``NASDAQ'') includes an exclusion from both components
of the ratio for orders sent by market makers in securities in which
they are registered, through the MPID applicable to the
registration. Because Phlx rules governing PSX currently do not
allow for market maker registration, Phlx is not proposing a
comparable exemption.
    \8\ Phlx believes that this exclusion is reasonable because an
MPID with an extremely low volume of entered orders has only a de
minimis impact on the market.
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    The following example illustrates the calculation of the Order
Entry Ratio:
     A member enters 15,000,000 displayed, liquidity-providing
orders:
     [cir] 10,000,000 orders are entered at the NBBO. The Weighting
Factor for these orders is 0x.
     [cir] 5,000,000 orders are entered at a price that is 1.50% away
from the NBBO. The Weighting Factor for these orders is 2x.
     Of the 15,000,000 orders, 90,000 are executed.
     The Weighted Order Total is (10,000,000 x 0) + (5,000,000
x 2) = 10,000,000. The Order Entry Ratio is 10,000,000/90,000 = 111
    If an MPID has an Order Entry Ratio of more than 100, the amount of
the Order Entry Fee will be calculated by determining the MPID's
``Excess Weighted Orders.'' Excess Weighted Orders are calculated by
subtracting (i) the Weighted Order Total that would result in the MPID
having an Order Entry Ratio of 100 from (ii) the MPID's actual Weighted
Order Total. In the example above, the Weighted Order Total that would
result in an Order Entry Ratio of 100 is 9,000,000, since 9,000,000/
90,000 = 100. Accordingly,

the Excess Weighted Orders would be 10,000,000 - 9,000,000 = 1,000,000.
    The Excess Order Fee charged to the member will then be determined
by multiplying the ``Applicable Rate'' by the number of Excess Weighted
Orders. The Applicable Rate is determined based on the MPID's Order
Entry Ratio:

------------------------------------------------------------------------
                                                              Applicable
                     Order entry ratio                           rate
------------------------------------------------------------------------
101-1,000..................................................       $0.005
More than 1,000............................................         0.01
------------------------------------------------------------------------

    In the example above, the Applicable Rate would be $0.005, based on
the MPID's Order Entry Ratio of 111. Accordingly, the monthly Excess
Order Fee would be 1,000,000 x $0.005 = $5,000.
2. Statutory Basis
    Phlx believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\9\ in general, and with Sections
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which Phlx operates or controls, is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    Phlx believes that the Order Entry Fee is reasonable because it is
designed to achieve improvements in the quality of displayed liquidity
and market data that will benefit all market participants. In addition,
although the level of the fee may theoretically be very high, the fee
is reasonable because market participants may readily avoid the fee by
making improvements in their order entry practices that reduce the
number of orders they enter, bring the prices of their orders closer to
the NBBO, and/or increase the percentage of their orders that execute.
For similar reasons, the fee is consistent with an equitable allocation
of fees, because although the fee may apply to only a small number of
market participants, the fee would be applied to them in order to
encourage better order entry practices that will benefit all market
participants. Ideally, the fee will be applied to no one, because
market participants will adjust their behavior in order to avoid the
fee. Finally, Phlx believes that the fee is not unfairly
discriminatory. Although the fee may apply to only a small number of
market participants, it will be imposed because of the negative
externalities that such market participants impose on others through
inefficient order entry practices. Accordingly, Phlx believes that it
is fair to impose the fee on these market participants in order to
incentivize them to modify their behavior and thereby benefit the
market.
    Finally, Phlx believes that the fee will help 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, because the fee is designed
to reduce the extent of non-actionable orders in the market, thereby
promoting greater order interaction, increasing the quality of market
data, and inhibiting potentially abusive trading practices.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Phlx does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Specifically, Phlx
believes that the fee will constrain market participants from pursuing
certain inefficient and potentially abusive trading strategies. To the
extent that this change may be construed as a burden on competition,
Phlx believes that it is appropriate in order to further the purposes
of Section 6(b)(5) of the Act.\11\
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    \11\ 15 U.S.C. 78f(b)(5).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\12\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(3)(a)(ii).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2012-64 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2012-64. 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 on
official business days between the hours of 10:00 a.m. and 3:00 p.m.
Copies of such filing also will be available for inspection and copying
at the principal offices 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-Phlx-2012-64, and should be submitted on
or before June 13, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-12451 Filed 5-22-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 227 (Friday, November 25, 2016)]
[Notices]
[Pages 85226-85229]
[FR Doc No: 2016-28332]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2015-D-2537]

Submission of Quality Metrics Data; Draft Guidance for Industry;
Availability; Request for Comments

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability; request for comments.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of a revised draft guidance for industry entitled
``Submission of Quality Metrics Data.'' In order to help develop
compliance and inspection policies and practices, improve the Agency's
ability to predict, and therefore possibly mitigate, future drug
shortages, and to encourage the pharmaceutical industry to implement
state-of-the-art, innovative quality management systems for
pharmaceutical manufacturing, FDA intends to initiate a quality metrics
reporting program. The revised draft guidance describes FDA's plans for
an initial, voluntary phase of this program. FDA expects that this
voluntary phase will allow the Agency to learn more about a limited set
of quality metrics and associated analytics, and to help inform future
FDA decisionmaking about its quality metrics program. This revised
draft also provides an opportunity to gain additional perspectives from
industry participants on the future use of quality metrics data.

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that the Agency considers your comment on this
draft guidance before it begins work on the final version of the
guidance, submit either electronic or written comments on the draft
guidance by January 24, 2017.

ADDRESSES: You may submit comments as follows:

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): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Division of
Dockets Management, 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-2015-D-2537 for ``Submission of Quality Metrics Data.'' Received
comments will be placed in the docket and, except for those submitted
as ``Confidential Submissions,'' publicly viewable at https://www.regulations.gov/ or at the Division of Dockets Management 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 Division of
Dockets Management. 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: http://www.fda.gov/regulatoryinformation/dockets/default.htm.
    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 Division of Dockets Management, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
    Submit written requests for single copies of the draft guidance to
the Division of Drug Information, Center for Drug Evaluation and
Research (CDER), Food and Drug Administration, 10001 New Hampshire
Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002 or
to the Office of Communication, Outreach and Development, Center for
Biologics Evaluation and Research (CBER), Food and Drug Administration,
10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-
0002. Send one self-addressed adhesive label to assist that office in
processing your requests. See the SUPPLEMENTARY INFORMATION section for
electronic access to the draft guidance document.

FOR FURTHER INFORMATION CONTACT: Tara Gooen Bizjak, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 2109, Silver Spring, MD 20993-0002, 301-
796-3257; or Stephen Ripley, Center for Biologics Evaluation and
Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg.
71, Rm. 7301, Silver Spring, MD 20993-0002,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    FDA is announcing the availability of a revised draft guidance for
industry entitled ``Submission of Quality Metrics Data.'' More than a
decade ago, FDA launched an initiative to encourage the implementation
of a modern, risk-based pharmaceutical quality assessment system. As
part of this initiative, and in recognition of the increasing
complexity of pharmaceutical manufacturing, FDA developed a 21st
century vision for manufacturing and product quality with input from
academia and industry. FDA articulated its vision as ``a maximally
efficient, agile, flexible pharmaceutical manufacturing sector that
reliably produces high-quality drug products without extensive
regulatory oversight.''
    Significant progress toward achieving this vision has occurred in
the intervening years, as evidenced by programs and guidance from FDA
around major initiatives such as pharmaceutical development and quality
by design, quality risk management and pharmaceutical quality systems,
process validation, and process analytical technology, among others.
These programs and guidances are intended to promote effective use of
the most current pharmaceutical science and engineering principles, and
knowledge throughout a product's life cycle.
    Despite these achievements, however, we have not fully realized our
21st century vision for manufacturing and quality, and indicators of
serious product quality defects persist. The Agency has found that the
majority of drug shortages stem from quality issues--the discovery of
substandard manufacturing facilities or processes, or identification of
significant quality defects in finished products, necessitating
remediation efforts, which in turn, may interrupt production, and cause
a shortage of drugs. Taking action to reduce drug shortages remains a
top priority for FDA.
    The continued existence of product quality issues may point to
increased complexities in the supply chain, limited innovation in
manufacturing, inadequate adoption of modern manufacturing technologies
and robust quality management systems, or other factors. As described
in the revised draft guidance, FDA is proposing a voluntary phase of a
quality metrics reporting program to learn more about a limited set of
quality metrics and associated analytics. Under this program, beginning
in early 2018, FDA anticipates accepting the voluntary submission of
data from owners and operators of certain human drugs establishments,
especially manufacturers of covered drug products and active
pharmaceutical ingredients (API) used in covered drug products. A
covered drug product is: (1) Subject to an approved application under
section 505 of the Federal Food, Drug, and Cosmetic (the FD&C Act) (21
U.S.C. 355) or under section 351 of the Public Health Service Act (the
PHS Act) (42 U.S.C. 262); (2) marketed pursuant to an over-the-counter
(OTC) monograph, or (3) a marketed unapproved finished drug product.
Other types of establishments may also choose to submit quality metrics
data as explained in the revised draft guidance. FDA expects to use
information about participating establishments in our risk-based
decisionmaking, and to evaluate our planned analytics as we further
develop the quality metrics program as a subject of future rulemaking.
    Under Title VII section 706 of the Food and Drug Administration
Safety and Innovation Act (FDASIA) (Pub. L. 112-144), FDA may require
the submission of any records or other information that FDA may inspect
under section 704 of the FD&C Act (21 U.S.C. 374), in advance or in
lieu of an inspection by requesting the records or information from a
person that owns or operates an establishment that is engaged in the
manufacture, preparation, propagation, compounding, or processing of a
drug. The quality metrics data described in the revised draft guidance
is information of the type that FDA may inspect under section 704 of
the FD&C Act. However, FDA does not intend to require the submission of
information pursuant to section 704(a)(4) of the FD&C Act in
implementing the voluntary phase of the quality metrics reporting
program. FDA does not intend to take enforcement action based on errors
in a quality metrics data submission made to this voluntary phase of
the reporting program, provided the submission is made in good faith.
    Current good manufacturing practice (CGMP) for human drugs requires
manufacturers to have an ongoing program to maintain and evaluate
product and process data that relate to product quality (21 CFR
211.180(e) and 21 U.S.C. 351(a)(2)(B)). Manufacturers are expected to
use a quality program to support process validation, and manufacturers
may include the metrics described in this guidance in their quality
program. As discussed in the revised draft guidance, FDA encourages

manufacturers to routinely use additional quality metrics beyond the
metrics described in this guidance in performing product and
establishment specific evaluations.
    FDA envisions information collected from a fully implemented
quality metrics reporting program will be an important factor in
further focusing the use of FDA resources on the areas of highest risk
to public health, which may include: (1) Establishing a signal
detection program as one factor in identifying establishments and
products that may pose significant risk to consumers; (2) identifying
situations in which there may be a risk for drug supply disruption; (3)
improving the effectiveness of establishment inspections; and (4)
improving FDA's evaluation of drug manufacturing and control
operations.
    FDA has engaged with stakeholders in several ways to develop
mutually useful and objective quality metrics. On July 28, 2015, FDA
published a draft guidance entitled ``Request for Quality Metrics'' (80
FR 44973). On August 24, 2015, FDA conducted a public meeting to
discuss the draft guidance at the Agency's campus in Silver Spring, MD.
FDA has also consulted stakeholders at various trade and professional
association meetings, and published a prior request for comment in the
Federal Register on February 12, 2013 (78 FR 9928), that concerned
manufacturing quality metrics as they relate to drug shortages. These
efforts identified several categories of quality-related information
that CDER and CBER considered in developing the quality metrics
discussed in the guidance. The revised draft guidance announced in this
notice replaces the currently published draft guidance.
    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). The draft guidance, when
finalized, will represent the current thinking of FDA on the submission
of quality metrics data. It does not establish any rights for any
person and is not binding on FDA or the public. You can use an
alternative approach if it satisfies the requirements of the applicable
statutes and regulations.

II. Revisions to the 2015 Draft Guidance

    On July 28, 2015, FDA announced the availability of the draft
guidance entitled ``Request for Quality Metrics'' (80 FR 44973). The
revised draft guidance includes the following changes from the earlier
draft guidance: Adoption of a phased-in (voluntary) approach, reduction
in the number of data elements requested (i.e., reduction in reporting
burden), support for both product reports and site reports,
modifications to the quality metrics data definitions, addition of
clarifying examples for the definitions, addition of comment fields,
and clarification of special considerations for non-application and OTC
product reporting. FDA recognizes that a voluntary phase of the program
would give participants an opportunity to demonstrate transparency and
a willingness to proactively engage with the Agency in pursuit of the
goals described in the revised draft guidance. FDA also expects that it
will be able to use information submitted during a voluntary phase of
the program to inform risk-based decisionmaking, and to help evaluate
our planned analytics as we further develop the quality metrics
reporting program as a subject of future rulemaking.
    A voluntary program would also allow all types of drug
manufacturing establishments to report information. For example, active
ingredient manufacturers, including those manufacturing atypical active
ingredients, and excipient manufacturers, may participate in the
voluntary phase of the reporting program. While the program is geared
towards finished drug products and API manufacturing, all manufacturers
may report quality metrics data. FDA may not be able to accomplish the
overall goals of an FDA quality metrics reporting program, as described
in the draft guidance, from voluntary reporting alone. If FDA does not
receive a large body of data from reporting establishments, the ways in
which the Agency can use the information may be limited. For example,
the data received may not constitute a representative sample of the
industry. Further, a self-selection bias may increase the risk of
signaling an outlier where none exists. For these reasons, we expect to
use the information collected during this voluntary phase of the
program to specifically focus on: (1) Working with establishments
towards early resolution of potential quality problems and to reduce
the likelihood that the establishment's operations will be disrupted
and impact the drug supply, (2) helping to prepare for and direct our
inspections, and (3) use of the calculated metrics as an element of the
post-approval manufacturing change reporting program with an emphasis
on encouraging lifecycle manufacturing improvement.
    We intend to include the reporting of quality metrics as a factor
in our surveillance inspection risk-based model, publish a list of
reporters who provide a certain amount of information, share publicly
the measured impact on inspection frequency reduction, and provide an
opportunity for participants to submit feedback.
    In the revised draft guidance, FDA has reduced the proposed
footprint of the program from four primary metrics and three optional
metrics to three primary metric areas (i.e., lot acceptance rate,
invalidated out-of-specification rate, and product quality complaint
rate). FDA continues to recognize the importance of measuring an
establishment's pharmaceutical quality system robustness and quality
culture (e.g., senior management engagement, Corrective Action and
Preventive Action effectiveness and continual improvement, and process
capability/performance). Furthermore, these areas continue to be
covered on FDA drug establishment manufacturing inspections, and
concomitant metrics may be added as the program matures.
    FDA revised the guidance to clarify the technical definitions and
provide illustrative examples for specific scenarios (see Appendix B of
the revised draft guidance). FDA revised the draft guidance to
contemplate submission of either product reports segmented by site, or
site reports segmented by product. FDA intends to publicly recognize
both product reporting and site reporting establishments on a quality
metrics reporters list. The Agency intends to encourage product
reporting because it demonstrates a certain level of oversight and
controls over the manufacturing of drug products across the supply
chain. In addition, we believe that a product report is better suited
to identify potential drug supply disruptions. As described in the
revised draft guidance, FDA intends to publish a quality metrics
reporters list that includes product reporters that provide a list of
the establishments in their product supply chain and some or all of the
quality metrics data identifying them as ``Product Reporter Top Tier''
or ``Product Reporter Mid Tier'', respectively. The proposed quality
metrics reporter list would also identify reporters who provide only
the list of the establishments in their product supply chain.
    In the approach described in the revised draft guidance, site
reporting establishments would also be included on the quality metrics
reporters list, as there may be scenarios where product reporting
establishments do not have access to this information or may choose not
to report for covered establishments. FDA intends to provide an
opportunity

for both types of establishments to benefit from this incentive.
    In order to implement a phased-in approach, FDA intends to begin
collecting quality metrics data as part of a voluntary phase of the
program. The first phase of the quality metrics program outlined in the
revised draft guidance would be fully voluntary. After evaluating the
results of the voluntary phase of the quality metrics program in 2018,
FDA intends to initiate notice and comment rulemaking under existing
statutory authority to develop a mandatory quality metrics reporting
program.
    FDA carefully considered supporting flexible data collection
timeframes for the purposes of reporting. In the context of a program
that required product-based reporting, such flexibility would be
feasible. However, in the context of the voluntary phase of the
reporting program, FDA is proposing a common timeframe to facilitate
publication of the quality metrics reporters list, and given the need
to identify duplicate data if both the product reporting establishment
and site reporting establishment submit data.
    A Technical Specifications Document entitled ``Quality Metrics
Technical Conformance Guide, Version 1.0'' was published on June 27,
2016 (81 FR 41545). This guide provides technical recommendations for
the submission of quality metrics data. It is intended to serve as the
technical reference for implementation of the quality metrics program.
FDA intends to publish Version 2.0 of the Technical Conformance Guide
soon after publication of the revised draft guidance. We anticipate
that the electronic submission platform will be available to test in
2017.
    Reporting establishments will be able to submit 300 word text
comments to provide an explanation of submitted data or report plans
for improvement. FDA may refer to the comments if unusual data or
trends are identified or as preparation for an onsite inspection. The
submission of comments is optional. In the future, FDA may consider
establishing a set of codes to standardize the comments.
    FDA also revised the draft guidance to address the special
complexities for grouping non-application drug products. Defining a
``product'' for the purpose of grouping non-application drugs for the
submission of quality metrics data proved challenging without an
application number. Using one segment to group products, such as active
pharmaceutical ingredient(s), manufacturing process, minor formulation
changes, or stock-keeping unit, is an imperfect solution. For the
purpose of this revised draft guidance, FDA has defined a product
family for finished drug products as any combination of National Drug
Code (NDC) product code segments where the active pharmaceutical
ingredient and dose form is the same (i.e., a product family could be
multiple strengths or only a single strength). For APIs, the product
family is defined by the NDC product code segment. Our intent is to
define product family in a way that was likely consistent with how
products are grouped for the Periodic Product Review per 21 CFR
211.180(e) (e.g., Annual Product Review). We expect that this approach
will group similar products with similar manufacturing operations
together.
    There are also special considerations with respect to product
quality complaints for OTC products. Manufacturers of OTC products
typically receive much more frequent communications from customers than
manufacturers of prescription drug products, and the nature of these
communications are quite different. The definition of a product quality
complaint is intended to cover any possible or actual quality issue,
while excluding preferential complaints. We anticipate that our
analytics will account for this imbalance in reporting type between
prescription and OTC drug products.

III. How To Report Quality Metrics Data to FDA

    FDA expects to encourage reporting establishments to submit quality
metrics data reports where the data is segmented on a quarterly basis
throughout a single calendar year. At present, FDA intends to open the
electronic portal in January 2018 to receive voluntary submissions of
data. FDA expects to publish a Federal Register notice providing
instructions on the submission of voluntary reports and specifying the
dates that we intend to open the portal, published no fewer than 30
days before the portal is opened (e.g., before December 1, 2017). FDA
expects to begin the data analysis once the portal is closed and then
publish initial findings and the quality metric reporters list on the
FDA Web site.
    To reduce discrepancies between site and product reporting, FDA is
proposing a defined, uniform reporting period.
    In the rare instance that a reporting establishment or covered
establishment discovers an error in its submission, an amendment may be
made with an associated explanation via email to<EMAIL_ADDRESS>The amendment process is specified in the
Technical Conformance Guide.

IV. Paperwork Reduction Act of 1995

    This revised draft guidance contains information collection
provisions that 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). The collection of some of the information requested in the
revised draft guidance is covered under FDA regulations at 21 CFR parts
210 and 211 and approved under OMB control number 0910-0139. In
accordance with the PRA, FDA intends to solicit public comment and
obtain OMB approval for any information collections recommended in this
guidance that are new or that would represent material modifications to
those previously approved collections of information found in FDA
regulations or guidances. Subject to OMB approval, FDA anticipates that
it will begin collecting quality metrics data in January 2018.

V. Electronic Access

    Persons with access to the Internet may obtain the draft guidance
at either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, or
https://www.regulations.gov/.

    Dated: November 18, 2016.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2016-28332 Filed 11-23-16; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 76, Number 235 (Wednesday, December 7, 2011)]
[Rules and Regulations]
[Pages 76304-76309]
[FR Doc No: 2011-31394]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2010-1026; FRL-9325-2]

Saflufenacil; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes tolerances for residues of
saflufenacil in or on Banana; Coffee, green bean; and Mango. BASF
Corporation requested these tolerances under the Federal Food, Drug,
and Cosmetic Act (FFDCA).

DATES: This regulation is effective December 7, 2011. Objections and
requests for hearings must be received on or before February 6, 2012,
and must be filed in accordance with the instructions provided in 40
CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: EPA has established a docket for this action under docket
identification (ID) number EPA-HQ-OPP-2010-1026. All documents in the
docket are listed in the docket index available at http://www.regulations.gov. Although listed in the index, some information is
not publicly available, e.g., Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac
Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket
Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (703)
305-5805.

FOR FURTHER INFORMATION CONTACT: Kathryn Montague, Registration
Division (7505P), Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-
0001; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to those
engaged in the following activities:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).

     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather to
provide a guide for readers regarding entities likely to be affected by
this action. Other types of entities not listed in this unit could also
be affected. The North American Industrial Classification System
(NAICS) codes have been provided to assist you and others in
determining whether this action might apply to certain entities. If you
have any questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.

B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's
tolerance regulations at 40 CFR part 180 through the Government
Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2010-1026 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing, and must be received by the Hearing Clerk on or before
February 6, 2012. Addresses for mail and hand delivery of objections
and hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing that does not contain any CBI for inclusion in the public
docket. Information not marked confidential pursuant to 40 CFR part 2
may be disclosed publicly by EPA without prior notice. Submit a copy of
your non-CBI objection or hearing request, identified by docket ID
number EPA-HQ-OPP-2010-1026, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only
accepted during the Docket Facility's normal hours of operation (8:30
a.m. to 4 p.m., Monday through Friday, excluding legal holidays).
Special arrangements should be made for deliveries of boxed
information. The Docket Facility telephone number is<PHONE_NUMBER>.

II. Summary of Petitioned-For Tolerance

    In the Federal Register of February 4, 2011 (76 FR 6465) (FRL-8858-
7), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
0E7806) by BASF Corporation, 26 Davis Drive, P.O. Box 13528, Research
Triangle Park, NC 27709-3528. The petition requested that 40 CFR
180.649 be amended by establishing tolerances for residues of the
herbicide saflufenacil, including its metabolites and degradates, in or
on Banana, whole fruit; Coffee, green bean; and Mango, fruit at 0.03
parts per million (ppm). Compliance with the tolerance levels is to be
determined by measuring only the sum of saflufenacil, 2-chloro-5-[3,6-
dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-
fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide, and its
metabolites N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-
1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide and N-[4-
chloro-2-fluoro-5-
({[(isopropylamino)sulfonyl]amino{time} carbonyl)phenyl]urea,
calculated as the stoichiometric equivalent of saflufenacil, in or on
the commodities. That notice referenced a summary of the petition
prepared by BASF Corporation, the registrant, which is available in the
docket, http://www.regulations.gov. Comments were received on the
notice of filing. EPA's response to these comments is discussed in Unit
IV.C.
    Based upon review of the data supporting the petition, EPA has
modified the commodity terms for Banana and Mango. The reason for this
change is explained in Unit IV.D.

III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a
tolerance (the legal limit for a pesticide chemical residue in or on a
food) only if EPA determines that the tolerance is ``safe.'' Section
408(b)(2)(A)(ii) of FFDCA defines ``safe'' to mean that ``there is a
reasonable certainty that no harm will result from aggregate exposure
to the pesticide chemical residue, including all anticipated dietary
exposures and all other exposures for which there is reliable
information.'' This includes exposure through drinking water and in
residential settings, but does not include occupational exposure.
Section 408(b)(2)(C) of FFDCA requires EPA to give special
consideration to exposure of infants and children to the pesticide
chemical residue in establishing a tolerance and to ``ensure that there
is a reasonable certainty that no harm will result to infants and
children from aggregate exposure to the pesticide chemical residue. * *
*
    Consistent with section 408(b)(2)(D) of FFDCA, and the factors
specified in section 408(b)(2)(D) of FFDCA, EPA has reviewed the
available scientific data and other relevant information in support of
this action. EPA has sufficient data to assess the hazards of and to
make a determination on aggregate exposure for saflufenacil including
exposure resulting from the tolerances established by this action.
EPA's assessment of exposures and risks associated with saflufenacil
follows.

A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its
validity, completeness, and reliability as well as the relationship of
the results of the studies to human risk. EPA has also considered
available information concerning the variability of the sensitivities
of major identifiable subgroups of consumers, including infants and
children.
    Saflufenacil has low acute toxicity via the oral, dermal, and
inhalation routes of exposure. It is slightly irritating to the eye but
is neither a dermal irritant nor sensitizer.
    Short-term, subchronic, and chronic toxicity studies in rats, mice,
and dogs identified the hematopoietic system as the target organ of
saflufenacil. Protoporphyrinogen oxidase inhibition in the mammalian
species may result in disruption of heme synthesis which in turn causes
anemia. In these studies, decreased hematological parameters (red blood
cells (RBC), hematocrit (Ht), mean corpuscular volume (MCV), mean
corpuscular hemoglobin (MCH), and mean corpuscular hemoglobin
concentration (MCHC)) were seen at about the same dose level across
species, except in the case of the dog, where the effects were seen at
a slightly higher dose. These effects occurred around the same dose
level from the

short- through long-term exposures without increasing in severity.
Effects were also seen in the liver (increased weight, centrilobular
fatty change, and lymphoid infiltrate) in mice, the spleen (increased
spleen weight and extramedullary hematopoiesis) in rats, and in both
these organs (increased iron storage in the liver and extramedullary
hematopoiesis in the spleen) in dogs. No dermal toxicity was seen at
the limit dose in a 28-day dermal toxicity study in rats.
    Carcinogenicity studies in rats and mice showed no evidence of
increased incidence of tumors at the tested doses. Saflufenacil is
weakly clastogenic in the in vitro chromosomal aberration assay in V79
cells in the presence of S9 activation; however, the response was not
evident in the absence of S9 activation. It is neither mutagenic in
bacterial cells nor clastogenic in rodents in vivo. Saflufenacil is
classified as ``not likely to be carcinogenic to humans.''
    Increased fetal and offspring susceptibility to saflufenacil were
observed in the developmental toxicity studies in the rat and rabbit
and in the 2-generation reproduction study in the rat. Developmental
effects such as decreased fetal body weights and increased skeletal
variations occurred at doses that were not maternally toxic in the
developmental study in rats, indicating increased quantitative
susceptibility. In rabbits, developmental effects such as increased
liver porphyrins were observed at doses that were not maternally toxic,
indicating increased quantitative susceptibility. In the 2-generation
reproduction study in rats, offspring effects such as increased number
of stillborn pups, decreased viability and lactation indices, decreased
pre-weaning body weight and/or body-weight gain, and changes in
hematological parameters were observed at a dose resulting in less
severe maternal toxicity (decreased food intake, body weight/weight
gain and changes in hematological parameters and organ weights
indicative of anemia), indicating increased qualitative susceptibility.
    There was no evidence of neurotoxicity or neuropathology in the
toxicity database for saflufenacil. In the acute neurotoxicity study, a
decrease in motor activity was observed on the first day of dosing at
the limit dose in males only. The finding was not accompanied by any
other neuropathological changes and was considered a reflection of a
mild and transient general systemic toxicity and not a substance-
specific neurotoxic effect. In the subchronic neurotoxicity study,
systemic toxicity (anemia), but no evidence of neurotoxicity, was seen
in males and females.
    There is no evidence of immunotoxity in the saflufenacil database.
The increase in spleen weight seen only in rats in the 90-day oral
toxicity study is attributable to an increased clearance of defective
RBCs (i.e., defective hemoglobin synthesis) and is thus an indication
of toxicity to the hematopoietic system rather than to the immune
system. In a 28-day immunotoxicity study in rats, saflufenacil failed
to induce toxicity specific to the immune system at the highest dose
tested, indicating that saflufenacil does not directly target the
immune system at the dose levels being used for risk assessment.
    Specific information on the studies received and the nature of the
adverse effects caused by saflufenacil as well as the no-observed-
adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-
level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document Saflufenacil. Human-Health Risk
Assessment for Proposed Tolerances for Residues in/on Imported Coffee,
Banana, and Mango at page 19 in docket ID number EPA-HQ-OPP-2010-1026.

B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA
identifies toxicological points of departure (POD) and levels of
concern to use in evaluating the risk posed by human exposure to the
pesticide. For hazards that have a threshold below which there is no
appreciable risk, the toxicological POD is used as the basis for
derivation of reference values for risk assessment. PODs are developed
based on a careful analysis of the doses in each toxicological study to
determine the dose at which no adverse effects are observed (the NOAEL)
and the lowest dose at which adverse effects of concern are identified
(the LOAEL). Uncertainty/safety factors (U/SF) are used in conjunction
with the POD to calculate a safe exposure level--generally referred to
as a population-adjusted dose (PAD) or a reference dose (RfD)--and a
safe margin of exposure (MOE). For non-threshold risks, the Agency
assumes that any amount of exposure will lead to some degree of risk.
Thus, the Agency estimates risk in terms of the probability of an
occurrence of the adverse effect expected in a lifetime. For more
information on the general principles EPA uses in risk characterization
and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.
    A summary of the toxicological endpoints for saflufenacil used for
human risk assessment is discussed in Unit III.B. of the final rule
published in the Federal Register of May 11, 2011 (76 FR 27256) (FRL-
8872-7).

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary
exposure to saflufenacil, EPA considered exposure under the petitioned-
for tolerances as well as all existing saflufenacil tolerances in 40
CFR 180.649. EPA assessed dietary exposures from saflufenacil in food
as follows:
    i. Acute exposure. Quantitative acute dietary exposure and risk
assessments are performed for a food-use pesticide, if a toxicological
study has indicated the possibility of an effect of concern occurring
as a result of a 1-day or single exposure.
    Such effects were identified for saflufenacil. In estimating acute
dietary exposure, EPA used food consumption information from the United
States Department of Agriculture (USDA) 1994-1996 and 1998 Nationwide
Continuing Surveys of Food Intake by Individuals (CSFII). The unrefined
assessment assumed 100% crop treated (CT), Dietary Exposure Evaluation
Model (DEEM)TM 7.81 default concentration factors, and
tolerance-level residues for all commodities, except cottonseed;
sunflower subgroup 20B; soybean, seed; vegetable, legume, subgroup 6C,
pea and bean (except soybean); and rapeseed subgroup 20A, for which the
tolerance levels were multiplied by a correction factor to account for
a metabolite of concern which is not included in the tolerance
expression.
    ii. Chronic exposure. In conducting the chronic dietary exposure
assessment EPA used the food consumption data from the USDA 1994-1996
and 1998 CSFII. Chronic dietary exposure was assessed using the same
food residue assumptions as in the acute dietary exposure assessment
discussed in unit III.C.1.i.
    iii. Cancer. Based on the data summarized in Unit III.A., EPA has
concluded that saflufenacil does not pose a cancer risk to humans.
Therefore, a dietary exposure assessment for the purpose of assessing
cancer risk is unnecessary.
    2. Dietary exposure from drinking water. The Agency used screening
level water exposure models in the dietary exposure analysis and risk
assessment for saflufenacil in drinking water. These

simulation models take into account data on the physical, chemical, and
fate/transport characteristics of saflufenacil. Further information
regarding EPA drinking water models used in pesticide exposure
assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.
    Based on the First Index Reservoir Screening Tool (FIRST) and
Pesticide Root Zone Model/Ground Water (PRZM/GW) models, the estimated
drinking water concentrations (EDWCs) of saflufenacil for acute
exposures are estimated to be 37.3 parts per billion (ppb) for surface
water and 180 ppb for ground water. EDWCs for chronic exposures for
non-cancer assessments are estimated to be 23.8 ppb for surface water
and 173 ppb for ground water.
    Modeled estimates of drinking water concentrations were directly
entered into the dietary exposure model. For acute dietary risk
assessment, the water concentration value of 180 ppb was used to assess
the contribution to drinking water. For chronic dietary risk
assessment, the water concentration of value 173 ppb was used to assess
the contribution to drinking water.
    3. From non-dietary exposure. The term ``residential exposure'' is
used in this document to refer to non-occupational, non-dietary
exposure (e.g., for lawn and garden pest control, indoor pest control,
termiticides, and flea and tick control on pets). Saflufenacil is not
registered for any specific use patterns that would result in
residential exposure.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when
considering whether to establish, modify, or revoke a tolerance, the
Agency consider ``available information'' concerning the cumulative
effects of a particular pesticide's residues and ``other substances
that have a common mechanism of toxicity.''
    EPA has not found saflufenacil to share a common mechanism of
toxicity with any other substances, and saflufenacil does not appear to
produce a toxic metabolite produced by other substances. For the
purposes of this tolerance action, therefore, EPA has assumed that
saflufenacil does not have a common mechanism of toxicity with other
substances. For information regarding EPA's efforts to determine which
chemicals have a common mechanism of toxicity and to evaluate the
cumulative effects of such chemicals, see EPA's Web site at  http://www.epa.gov/pesticides/cumulative.

D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA
shall apply an additional tenfold (10x) margin of safety for infants
and children in the case of threshold effects to account for prenatal
and postnatal toxicity and the completeness of the database on toxicity
and exposure unless EPA determines based on reliable data that a
different margin of safety will be safe for infants and children. This
additional margin of safety is commonly referred to as the Food Quality
Protection Act Safety Factor (FQPA SF). In applying this provision, EPA
either retains the default value of 10x, or uses a different additional
SF when reliable data available to EPA support the choice of a
different factor.
    2. Prenatal and postnatal sensitivity. The pre- and postnatal
toxicity database for saflufenacil includes rat and rabbit
developmental toxicity studies, a 2-generation reproduction toxicity
study in rats, acute and subchronic neurotoxicity studies in rats, and
a 28-day immunotoxicity study in rats. As discussed in Unit III.A.
there was evidence of quantitative susceptibility of fetuses to
saflufenacil exposure in the developmental toxicity studies in rats and
rabbits and evidence of qualitative susceptibility of offspring in the
rat reproduction study.
    An analysis was performed to determine the degree of concern for
the effects observed in the developmental and reproduction toxicity
studies when considered in the context of all available toxicity data,
and to identify any residual uncertainties after establishing toxicity
endpoints and traditional uncertainty factors (UFs) to be used in the
risk assessment of saflufenacil. The degree of concern is low and there
are no residual uncertainties for the increased susceptibility since:
    i. Clear NOAELs/LOAELs were established for the developmental
effects seen in rats and rabbits as well as for the offspring effects
seen in the 2-generation reproduction study;
    ii. Dose-response relationships for the effects of concern are well
characterized;
    iii. None of the effects in the developmental or reproduction
studies were attributable to a single exposure and, therefore, are not
of concern for acute risk assessment; and
    iv. The dose used to evaluate chronic dietary risks is lower than
the NOAELS for fetal/offspring effects in the developmental and
reproduction studies and is, therefore, protective of the developmental
and offspring effects observed in these studies.
    3. Conclusion. EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
FQPA SF were reduced to 1x. That decision is based on the following
findings:
    i. The toxicity database for saflufenacil is complete.
    ii. There is no indication that saflufenacil is a neurotoxic
chemical and there is no need for a developmental neurotoxicity study
or additional UFs to account for neurotoxicity.
    iii. Although there is evidence of increased quantitative and
qualitative susceptibility of offspring in the developmental and
reproduction studies for saflufenacil, the degree of concern is low and
the Agency did not identify any residual uncertainties after
establishing toxicity endpoints and traditional UFs to be used in the
risk assessment of saflufenacil.
    iv. There are no residual uncertainties identified in the exposure
databases. The dietary food exposure assessments were performed based
on 100% CT and tolerance-level residues. EPA made conservative
(protective) assumptions in the ground water and surface water modeling
used to assess exposure to saflufenacil in drinking water. These
assessments will not underestimate the exposure and risks posed by
saflufenacil.

E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide
exposures are safe by comparing aggregate exposure estimates to the
acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA
calculates the lifetime probability of acquiring cancer given the
estimated aggregate exposure. Short-, intermediate-, and chronic-term
risks are evaluated by comparing the estimated aggregate food, water,
and residential exposure to the appropriate PODs to ensure that an
adequate MOE exists.
    1. Acute risk. Using the exposure assumptions discussed in this
unit for acute exposure, the acute dietary exposure from food and water
to saflufenacil will occupy <1% of the aPAD for the general U.S.
population and all population subgroups including infants and children.
    2. Chronic risk. Using the exposure assumptions described in this
unit for chronic exposure, EPA has concluded that chronic exposure to
saflufenacil from food and water will utilize 31% of the cPAD for
infants less than 1 year

old, the population group receiving the greatest exposure. There are no
residential uses for saflufenacil.
    3. Short-term risk. Short-term aggregate exposure takes into
account short-term residential exposure plus chronic exposure to food
and water (considered to be a background exposure level).
    A short-term adverse effect was identified; however, saflufenacil
is not registered for any use patterns that would result in short-term
residential exposure. Short-term risk is assessed based on short-term
residential exposure plus chronic dietary exposure. Because there is no
short-term residential exposure and chronic dietary exposure has
already been assessed under the appropriately protective cPAD (which is
at least as protective as the POD used to assess short-term risk), no
further assessment of short-term risk is necessary, and EPA relies on
the chronic dietary risk assessment for evaluating short-term risk for
saflufenacil.
    4. Intermediate-term risk. Intermediate-term aggregate exposure
takes into account intermediate-term residential exposure plus chronic
exposure to food and water (considered to be a background exposure
level).
    An intermediate-term adverse effect was identified; however,
saflufenacil is not registered for any use patterns that would result
in intermediate-term residential exposure. Intermediate-term risk is
assessed based on intermediate-term residential exposure plus chronic
dietary exposure. Because there is no intermediate-term residential
exposure and chronic dietary exposure has already been assessed under
the appropriately protective cPAD (which is at least as protective as
the POD used to assess intermediate-term risk), no further assessment
of intermediate-term risk is necessary, and EPA relies on the chronic
dietary risk assessment for evaluating intermediate-term risk for
saflufenacil.
    5. Aggregate cancer risk for U.S. population. Based on the lack of
evidence of carcinogenicity in two adequate rodent carcinogenicity
studies, saflufenacil is not expected to pose a cancer risk to humans.
    6. Determination of safety. Based on these risk assessments, EPA
concludes that there is a reasonable certainty that no harm will result
to the general population, or to infants and children from aggregate
exposure to saflufenacil residues.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology (liquid chromatography/mass
spectroscopy/mass spectroscopy (LC-MS/MS)) is available to enforce the
tolerance expression. The method may be requested from: Chief,
Analytical Chemistry Branch, Environmental Science Center, 701 Mapes
Rd., Ft. Meade, MD 20755-5350; telephone number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint U.N. Food and
Agriculture Organization/World Health Organization food standards
program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    The Codex has not established a MRL for saflufenacil.

C. Response to Comments

    An anonymous citizen objected to the presence of any pesticide
residues on food. The Agency understands the commenter's concerns and
recognizes that some individuals believe that pesticides should be
banned completely. However, the existing legal framework provided by
section 408 of FFDCA contemplates that tolerances greater than zero may
be set when persons seeking such tolerances or exemptions have
demonstrated that the pesticide meets the safety standard imposed by
that statute. This citizen's comment appears to be directed at the
underlying statute and not EPA's implementation of it; the citizen has
made no contention that EPA has acted in violation of the statutory
framework.

D. Revisions to Petitioned-For Tolerances

    EPA has revised the proposed commodity terms as follows to agree
with the Agency's Food and Feed Commodity Vocabulary: ``Banana, whole
fruit'' was changed to ``Banana;'' ``Mango, fruit'' was changed to
``Mango''.

V. Conclusion

    Therefore, tolerances are established for residues of saflufenacil,
including its metabolites and degradates, as set forth in the
regulatory text.

VI. Statutory and Executive Order Reviews

    This final rule establishes tolerances under section 408(d) of
FFDCA in response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled Regulatory Planning and
Review (58 FR 51735, October 4, 1993). Because this final rule has been
exempted from review under Executive Order 12866, this final rule is
not subject to Executive Order 13211, entitled Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
Protection of Children from Environmental Health Risks and Safety Risks
(62 FR 19885, April 23, 1997). This final rule does not contain any
information collections subject to OMB approval under the Paperwork
Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any
special considerations under Executive Order 12898, entitled Federal
Actions to Address Environmental Justice in Minority Populations and
Low-Income Populations (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under section 408(d) of FFDCA, such as the tolerance in
this final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) do not apply.
    This final rule directly regulates growers, food processors, food
handlers, and food retailers, not States or tribes, nor does this
action alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of section 408(n)(4) of FFDCA. As such, the Agency has determined that
this action will not have a substantial direct effect on States or
tribal governments, on the relationship between the national government
and the States or tribal governments, or on the distribution of power
and responsibilities among the various levels of government or between
the Federal Government and Indian tribes. Thus, the Agency has
determined that Executive Order 13132, entitled Federalism (64 FR
43255, August 10,

1999) and Executive Order 13175, entitled Consultation and Coordination
with Indian Tribal Governments (65 FR 67249, November 9, 2000) do not
apply to this final rule. In addition, this final rule does not impose
any enforceable duty or contain any unfunded mandate as described under
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L.
104-4).
    This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note).

VII. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report to each House of the Congress and to
the Comptroller General of the United States. EPA will submit a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States prior to publication of this final rule in the Federal
Register. This final rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure,
Agricultural commodities, Pesticides and pests, Reporting and
recordkeeping requirements.

    Dated: November 21, 2011.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

0
1. The authority citation for part 180 continues to read as follows:

    Authority:  21 U.S.C. 321(q), 346a and 371.

0
2. Section 180.649 is amended by alphabetically adding the following
commodities to the table in paragraph (a)(1) to read as follows:

Sec.  180.649  Saflufenacil; tolerances for residues.

    (a) General. (1) * * *

------------------------------------------------------------------------
                                                              Parts per
                         Commodity                             million
------------------------------------------------------------------------

                                * * * * *
Banana \1\.................................................         0.03
Coffee, green bean \1\.....................................         0.03

                                * * * * *
Mango \1\..................................................         0.03

                                * * * * *
------------------------------------------------------------------------
\1\ No U.S. registration as of December 7, 2011.

* * * * *
[FR Doc. 2011-31394 Filed 12-6-11; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: June 8, 2010 (Volume 75, Number 109)]
[Notices]
[Page 32528-32529]
[DOCID:fr08jn10-159]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62206; File No. SR-ISE-2010-56]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval to a
Proposed Rule Change Relating to the Amounts That Direct Edge ECN, in
Its Capacity as an Introducing Broker for Non-ISE Members, Passes
Through to Such Non-ISE Members

June 2, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 28, 2010, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons,
and is approving the proposal on an accelerated basis.
---------------------------------------------------------------------------

    \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 to modify the amounts that Direct Edge ECN
(``DECN''), in its capacity as an introducing broker for non-ISE
Members, passes through to such non-ISE Members.
    The text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.ise.com, on the Commission's Internet
Web site at http://www.sec.gov, at ISE, and at the Commission's Public
Reference Room.

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
    DECN, a facility of ISE, operates two trading platforms, EDGX and
EDGA.\3\ On May xx, [sic] 2010, the ISE filed for immediate
effectiveness a proposed rule change to amend Direct Edge ECN's
(``DECN'') fee schedule for ISE Members \4\ to pass through charges
from other market centers.\5\ The changes made pursuant to SR-ISE-2010-
55 became operative on June 1, 2010.
---------------------------------------------------------------------------

    \3\ This fee filing relates to the trading facility operated by
ISE and not EDGA Exchange, Inc. and EDGX Exchange, Inc. Direct Edge
ECN LLC (EDGA and EDGX) will cease to operate in its capacity as an
electronic communications network following the commencement of
operations of EDGA Exchange, Inc. and EDGX Exchange, Inc. as
national securities exchanges.
    \4\ References to ISE Members in this filing refer to DECN
Subscribers who are ISE Members.
    \5\ On June 1, 2010, in SR-ISE-2010-55, the Exchange increased
the ``Q'' flag from $0.0018 to $0.0020 per share to more closely
reflect the costs of removing liquidity from the NYSE. By way of
background, on May 1, 2010, in SR-ISE-2010-37, the Exchange amended
the fees for orders that either route or re-route to the NYSE in
response to an increase in NYSE's fee for removing liquidity to
$0.0021 per share (from $0.0018 per share). As part of that
amendment, the ``Q'' flag, which denotes an order type (ROUC) that
routes to the NYSE, was increased from $0.0015 per share to $0.0018
per share on EDGA and EDGX to reflect the increase. See Securities
Exchange Act Release No. 62050 (May 6, 2010), 75 FR 27029 (May 13,
2010) (SR-ISE-2010-37).
---------------------------------------------------------------------------

    In its capacity as a member of ISE, DECN currently serves as an
introducing broker for the non-ISE Member subscribers of DECN to access
EDGX and EDGA. DECN, as an ISE Member and introducing broker, receives
rebates and is assessed charges from DECN for transactions it executes
on EDGX or EDGA in its capacity as introducing broker for non-ISE
Members. Since the amounts of charges were changed pursuant to SR-ISE-
2010-55, DECN wishes to make corresponding changes to the amounts it
passes through to non-ISE Member subscribers of DECN for which it acts
as introducing broker. As a result, the per share amounts that non-ISE
Member subscribers receive and are charged will be the same as the
amounts that ISE Members receive and are charged.
    ISE is seeking accelerated approval of this proposed rule change,
as well an effective date of June 1, 2010. ISE represents that this
proposal will ensure that both ISE Members and non-ISE Members (by
virtue of the pass-through described above) will in effect be charged
equivalent amounts and that the imposition of such amounts will begin
on the same June 1, 2010, start date.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(4),\7\ in particular, in that
it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its members and other persons using
its facilities. In particular, this proposal will ensure that dues,
fees and other charges imposed on ISE Members are equitably allocated
to both ISE Members and non-ISE Members (by virtue of the pass-through
described above).
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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-ISE-2010-56 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2010-56. 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 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the ISE. 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-ISE-2010-56 and should be
submitted on or before June 29, 2010.

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.\8\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) \9\ of the Act, which requires that the
rules of a national securities exchange provide for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using its facilities.
---------------------------------------------------------------------------

    \8\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C 78c(f).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    As described more fully above, ISE recently amended DECN's fee
schedule for ISE Members pursuant to SR-ISE-2010-55 (the ``Member Fee
Filing''). The fee change made pursuant to the Member Fee Filing became
operative on June 1, 2010. DECN receives rebates and is charged fees
for transactions it executes on EGDX or EDGA in its capacity as an
introducing broker for its non-ISE member subscribers. The current
proposal, which will apply beginning on June 1, 2010, will allow DECN
to pass through the revised fee to the non-ISE member subscribers for
which it acts an introducing broker. The Commission finds that the
proposal is consistent with the Act because it will charge fees to non-
ISE member subscribers that are equivalent to those established for ISE
member subscribers in the Member Fee Filing.
    ISE has requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after publication
of notice of filing thereof in the Federal Register. As discussed
above, the proposal will allow DECN to pass through to non-ISE member
subscribers the revised fee established for ISE member subscribers in
the Member Fee Filing, resulting in equivalent fees for ISE member and
non-member subscribers. In addition, because the proposal will apply
the revised fee beginning on June 1, 2010, the revised fees will have
the same effective date, thereby promoting consistency in the DECN's
fee schedule. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act, for approving the proposed rule change
prior to the thirtieth day after the date of publication of notice of
filing thereof in the Federal Register.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-ISE-2010-56) is approved on
an accelerated basis.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-13767 Filed 6-7-10; 8:45 am]
BILLING CODE 8011-01-P