[Federal Register: March 20, 2008 (Volume 73, Number 55)]
[Notices]
[Page 15045-15046]
[DOCID:fr20mr08-84]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

Office of Hazardous Materials Safety; Notice of Application for
Special Permits

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: List of Applications for Special Permits.

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SUMMARY: In accordance with the procedures governing the application
for, and the processing of, special permits from the Department of
Transportation's Hazardous Material Regulations (49 CFR Part 107,
Subpart B), notice is hereby given that the Office of Hazardous
Materials Safety has received the application described herein. Each
mode of transportation for which a particular special permit is
requested is indicated by a number in the ``Nature of Application''
portion of the table below as follows: 1--Motor vehicle, 2--Rail
freight, 3--Cargo vessel, 4--Cargo aircraft only, 5--Passenger-carrying
aircraft.

DATES: Comments must be received on or before April 21, 2008.

ADDRESS COMMENTS TO: Record Center, Pipeline and Hazardous Materials
Safety Administration, U.S. Department of Transportation, Washington,
DC 20590.
    Comments should refer to the application number and be submitted in
triplicate. If confirmation of receipt of comments is desired, include
a self-addressed stamped postcard showing the special permit number.

FOR FURTHER INFORMATION CONTACT: Copies of the applications are
available for inspection in the Records Center, East Building, PHH-30,
1200 New Jersey Avenue SE., Washington, DC or at http://dms.dot.gov.
    This notice of receipt of applications for special permit is
published in accordance with Part 107 of the Federal hazardous
materials transportation law (49 U.S.C. 5117(b); 49 CFR l.53(b)).

    Issued in Washington, DC, on March 11, 2008.
Delmer F. Billings,
Director, Office of Hazardous Materials, Special Permits and Approvals.

                                               New Special Permits
----------------------------------------------------------------------------------------------------------------
                                                                  Regulation(s)       Nature of special permits
   Application No.        Docket No.           Applicant            affected                  thereof
----------------------------------------------------------------------------------------------------------------
 14649-N............  .................  Olin Corporation,    49 CFR 173.62(b),    To authorize the
                                          Winchester           172.101 column       transportation in commerce
                                          Division East        (8C),                of certain Division 1.4
                                          Alton, IL.           173.60(b)(8),        ammunition in bulk packaging
                                                               172.300 and          by motor vehicle for the
                                                               172.400.             purpose of relocating a
                                                                                military packing operation.
                                                                                (mode 1)
 14650-N............  .................  Air Transport        49 CFR 172.101;      To authorize the
                                          International,       171.11;              transportation in commerce
                                          L.L.C., Little       172.204(c)(3);       of certain Division 1.1,
                                          Rock, AR.            173.27;              1.2, 1.3 and 1.4 explosives
                                                               175.30(a)(1);        which are forbidden or
                                                               175.320(b).          exceed quantities presently
                                                                                authorized. (mode 4)
 14651-N............  .................  Air Products and     49 CFR 173.40......  To authorize the
                                          Chemicals, Inc.,                          transportation in commerce
                                          Allentown, PA.                            of certain manifolded DOT
                                                                                specification 3A and FAA
                                                                                cylinders containing a
                                                                                materials toxic by
                                                                                inhalation in Hazard Zone B.
                                                                                (mode 1)
 14652-N............  .................  Magnum Mud           49 CFR 171.14(d)(4)  To authorize the
                                          Equipment Co.,                            transportation in commerce
                                          Inc., Houma, LA.                          of certain Class 3
                                                                                (flammable liquid) hazardous
                                                                                materials in IM101 portable
                                                                                tanks beyond the January 1,
                                                                                2010 date currently
                                                                                authorized. (mode 1)
 14656-N............  .................  PurePak Technology   49 CFR               To authorize the
                                          Corporation,         173.158(f)(3).       transportation in commerce
                                          Chandler, AZ.                             of nitric acid of less than
                                                                                70% concentration in an
                                                                                alternative packaging
                                                                                configuration. (modes 1, 2,
                                                                                3)
 14657-N............  .................  University of        49 CFR 1 73.416(c).  To authorize the
                                          Missouri Research                         transportation in commerce
                                          Reactor, Columbia,                        of certain radioactive
                                          MO.                                       materials in DOT 6M
                                                                                containers beyond October 1,
                                                                                2008. (mode 1)
 14658-N............  .................  Union Carbide        49 CFR 172.200,      To authorize the
                                          Corporation,         172.300, 172.400,    transportation of
                                          Midland, MI.         172.500.             combustible liquid in
                                                                                certain DOT 51 and UN31A
                                                                                containers with a capacity
                                                                                of 120 gallons not subject
                                                                                to the requirements for
                                                                                shipping papers, marking,
                                                                                labeling and placarding.
                                                                                (modes 1, 2, 3)

 14659-N............  .................  ESM Group Inc.,      49 CFR 173.242(b)    To authorize the
                                          Amherst, NY.         and (c).             transportation in commerce
                                                                                of calcium carbide (UN1402),
                                                                                Division 4.1, PG I in non-
                                                                                DOT specification bulk
                                                                                containers by motor vehicle.
                                                                                (mode 1)
 14660-N............  .................  Determan Brownie,    49 CFR 172.200;      To authorize the
                                          Inc., Minneapolis,   173.242(b);          transportation in commerce
                                          MN.                  173.243(b).          of residual amounts of Class
                                                                                3 hazardous materials and
                                                                                non-DOT specification
                                                                                packaging (meter provers).
                                                                                (mode 1)
 14661-N............  .................  FIBA Technologies,   49 CFR 180.209(a);   To authorize the ultrasonic
                                          Inc., Millbury, MA.  180.209(b).          testing of DOT-3A, DOT-3AA
                                                                                3AX, 3AA and 3T
                                                                                specification cylinders for
                                                                                use in transporting Division
                                                                                2.1, 2.2 or 2.3 material.
                                                                                (modes 1, 2, 3)
 14663-N............  .................  Department of        49 CFR 173.416(c)..  To authorize the
                                          Energy,                                   transportation in commerce
                                          Washington, DC.                           of certain radioactive
                                                                                materials in DOT 6M
                                                                                containers beyond October 1,
                                                                                2008. (mode 1)
 14664-N............  .................  Century Arms, Inc.,  49 CFR.............  To authorize the
                                          Fairfax, VT.                              transportation in commerce
                                                                                of certain Division 1.4
                                                                                explosives as Consumer
                                                                                commodity, ORM-D. (modes 1,
                                                                                2, 4, 5)
 14668-N............  .................  Lincoln Composites,  49 CFR 173.302a....  To authorize the manufacture,
                                          Lincoln, NE.                              marking, sale and use of a
                                                                                non-DOT specification fully
                                                                                wrapped fiber reinforced
                                                                                composite gas cylinders with
                                                                                a non-load sharing plastic
                                                                                liner that meets the ISO
                                                                                11119-3 standard except for
                                                                                the design water capacity
                                                                                and service pressure. (modes
                                                                                1, 2, 3, 4, 5)
----------------------------------------------------------------------------------------------------------------

 [FR Doc. E8-5473 Filed 3-19-08; 8:45 am]

BILLING CODE 4909-60-M


MEMORANDUM

To: Carbon Power Plan for Existing Power Plants; Docket id: OAR-2013-0602

From: Region 5, EPA

Subject: 8/28/14, Conference Call Regarding Proposed Carbon Plan for Existing Power Plants

Summary: A conference call was held between EPA and attendees from Michigan on August 28, 2014 to discuss the proposed Carbon Power Plan for Existing Power Plants.  The following list of questions was submitted for discussion by the Michigan Department of Environmental Quality.

Attendees may have included: Bukowski, Breanna (DEQ); Hellwig, Vince (DEQ); Fiedler, David (DEQ); Kulesia, Steven (LARA); Evans, Nicholas (LARA); Brunner, Julie (DEQ); Newman, Erin (EPA); cain.alexis (EPA); Maupin, Mary (DEQ<EMAIL_ADDRESS>Note: The questions below includes the strike through of questions that were covered on the call.

                     QUESTIONS FOR EPA ON 111(D) PROPOSAL
   1.  Please provide the exact calculation, including all corresponding data and assumptions, of the 2012 MI carbon Intensity ratio.  It is important to understand how it is adjusted and how nuclear affects the target.
   2. Michigan's assigned natural gas rate of 810 lbs/MWh is not consistent with proposed 111(b) requirements for new plants which are typically more efficient than existing plants. Please explain the basis for the assigned rate EPA used in the proposed rule.
   3. It does not appear EPA's calculation of coal plant efficiency savings includes the degradation of efficiency at coal plants when they are cycled up and down to accommodate greater use of natural gas combined cycle generation. If not, why not? The degradation is a fact that is cited in EPA's own Technical Support Document "GHG Abatement Measures" pages 2-5. There EPA states:
   "Operating an EGU as a baseload unit is more efficient than operating an EGU as a load following unit to respond to fluctuations in customer electricity demand."
   4. How can we accommodate unanticipated load growth in a mass-based system?  Would mid-term corrections be permissible?
   5. How will EPA guarantee that heat rate improvements will not be considered subject to NSR permitting considering that the EPA and DOJ made the opposite argument in United States v. DTE Energy Co., 711 F.3d 643, 644 (6th Cir. 2013) even though actual emissions did not increase?
   6. For the state plan, do final legislation, final rules, and other enforceable measures have to be in place or can they be proposed or draft requirements?
   7. Is it accurate to describe that RE prior to 2014 will not be counted towards our CO2 reduction goal?
   8. How will MISO, which dispatches on a regional (not state-by-state) basis, be able to economically dispatch NGCC units over coal to the extent that Michigan maximizes the savings from building block II?
   9. Can EPA provide a sample conversion of a rate-based to a mass-based goal that relies on a portfolio approach?
   10. Would EPA consider an alternative to not meeting the interim goal, but meeting the final goal with reasonable further progress?

   11. How do we determine/control dispatch of any fossil-fueled EGU when this is performed by the RTO (MISO) under an economic market-based system of dispatch?
   12. Would EM&V have to be harmonized with other trading states if Michigan decides to take a multi-state approach to meet 111(d)?
   13. Please provide your rational for how heat rate improvements are going to be useful as part of the goal calculation in light of how to measure the improvements?  Utility comments to us have indicated that current methods used to estimate and report fuel heat input to EPA are not sufficiently precise to consistently detect a heat rate improvement of 6% or less.  We are also hearing that the 6% heat rate improvement is too high and expected heat rate improvements on coal-fired units are more in the neighborhood of 2  -  3%.  So potentially any heat rate improvements may not be measureable, and therefore, not helpful in achieving Michigan's goal.
   14. Would EPA have the authority to administer EE programs if Michigan failed to achieve its 2030 goal?

   15. How will EPA allow states flexibility accounting for units that are prevented from retirement due to reliability requirements?
   16. How could a rate-based approach work in a regional cap-and-trade program?

   17. What happens 8 years out when a new source is no longer considered new? (see p. 34,908 end of third column of FR version.)

   18. What if a state meets the final goal, but does not continue meeting it at some point past 2030?

   19. Will states have the option to count efficiency investments on the utility side of the meter towards meeting carbon limits?  They are as effective as customer improvements. Utility side of the meter improvements could provide additional advantages. Improvements to utility distribution could provide both carbon reduction and reliability improvements.
   20. Under a rate-based approach, if a coal plant is retired, are the numerator and denominator adjusted downward?  If a new, more efficient plant replaces it, are the numerator and denominator adjusted upward?  If so, wouldn't this encroach on 111(b)?

   21. How will measures purchased in conjunction with federal incentives (new furnaces, for example) or new appliance standards count?

   22. What are acceptable guidelines for forecasting electricity demand growth over the compliance period (2020  -  2029)?  How will new plants be accounted for?

   23. Under a mass based approach, if a coal plant is retired, are the total pounds of CO2 adjusted downward?  If a new plant replaces it, do the new CO2 emissions count?  If so, wouldn't this encroach on 111(b)?
   24. What is the EPA's rationale for rejecting hydroelectric generation from every state's renewable energy portfolio, while at the same time crediting all other renewable energy in states that have much higher renewable energy capacity factors than other states? For example, Kansas has a great deal more potential for generating energy from wind than Virginia, but Virginia has a greater potential for hydroelectric generation than Kansas. Why is Kansas allowed to use all of its wind generation to satisfy the EPA's GHG limit, but Virginia is not allowed to use any of its hydroelectric generation?


[Federal Register Volume 82, Number 19 (Tuesday, January 31, 2017)]
[Notices]
[Pages 8888-8890]
[FR Doc No: 2017-02001]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79876; File No. SR-NASDAQ-2016-131]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order
Granting Approval of Proposed Rule Change, as Modified by Amendment
Nos. 2 and 3, To Enhance the Reopening Auction Process Following a
Trading Halt Declared Pursuant to the Plan To Address Extraordinary
Market Volatility

January 25, 2017.

I. Introduction

    On October 13, 2016, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change related to the Exchange's re-opening process
following a trading halt declared pursuant to the National Market
System Plan to Address Extraordinary Market Volatility (``Plan''). The
proposed rule change was published for comment in the Federal Register
on November 1, 2016.\3\ On December 5, 2016, the Exchange filed
Amendment No. 1 to the proposed rule change. On December 14, 2016, the
Commission extended the time period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule change
to January 30, 2017.\4\ On December 21, 2016, the Exchange withdrew
Amendment No. 1 and filed Amendment No. 2 to the proposed rule change.
On January 19, 2017, the Exchange filed Amendment No. 3 to the proposed
rule change.\5\ The Commission received no comments on the proposed
rule change. This order approves the proposed rule change, as modified
by Amendment Nos. 2 and 3.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79158 (October 26,
2016), 81 FR 75879 (``Notice'').
    \4\ See Securities Exchange Act Release No. 79551, 81 FR 92885
(December 20, 2016).
    \5\ In Amendment No. 2, the Exchange proposed to use the Auction
Reference Price to determine whether a security subject to a Trading
Pause is priced at $3 or less, which would determine the method of
calculating the Auction Collars. The Exchange also made a conforming
change to Nasdaq Rule 4754(b)(6) relating to Trading Pauses that
exist at or after 3:50 p.m. In Amendment No. 3, the Exchange
proposed to implement the proposed rule change in the third quarter
of 2017, following the Commission's approval of the Twelfth
Amendment to the Plan. The Exchange also explained that this
implementation is contingent on the Securities Information
Processors successfully implementing changes to their systems to
allow for the new re-opening process, and the other Primary Listing
Exchanges gaining approval of their related filings and their
ability to implement the changes concurrent with Nasdaq. Because
Amendment Nos. 2 and 3 do not materially alter the substance of the
proposed rule change or raise unique or novel regulatory issues,
they are not subject to notice and comment. Both amendments are
available at: https://www.sec.gov/comments/sr-nasdaq-2016-131/nasdaq2016131.shtml.
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II. Description of the Proposed Rule Change, as Modified by Amendment
Nos. 2 and 3

    In conjunction with the Twelfth Amendment to the Plan,\6\ the
Exchange proposes to revise its re-opening process following a trading
halt declared pursuant to the Plan (``Trading Pause'') and to make
related changes.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 79845 (January 19,
2017) (File No. 4-631).
---------------------------------------------------------------------------

Auction Reference Price and Auction Collar for the Re-Opening Process
Following a Trading Pause

    The Exchange proposes to establish an ``Auction Reference Price''
and an ``Auction Collar'' for the re-opening process following a
Trading Pause. Specifically, for a Limit Down triggered pause, the
Auction Reference Price would be the Lower Band price of the LULD Band
in place at the time the Trading Pause was triggered.\7\ For a Limit Up
triggered pause, the Auction Reference Price would be the Upper Band
price of the LULD Band in place at the time the Trading Pause was
triggered.\8\ With respect to Auction Collars, for a Limit Down
triggered pause, the lower Auction Collar price would be derived by
subtracting 5% of the Auction Reference Price, rounded to the nearest
minimum price increment, or in the case of securities with an Auction
Reference Price of $3 or less, $0.15, from the Auction Reference Price,
and the upper Auction Collar price would be the Upper Band price of the
LULD Band in place at the time the Trading Pause was triggered.\9\ For
a Limit Up triggered pause, the upper Auction Collar price would be
derived by adding 5% of the Auction Reference Price, rounded to the
nearest minimum price increment, or in the case of securities with an
Auction Reference Price of $3 or less, $0.15, to the Auction Reference
Price, and the lower Auction Collar price would be the Lower Band price
of the LULD Band in place at the time the Trading Pause was
triggered.\10\
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    \7\ See proposed Nasdaq Rule 4120(c)(10)(A)(i)(a).
    \8\ See proposed Nasdaq Rule 4120(c)(10)(A)(i)(b). The proposed
definition of Auction Reference Price for a Trading Pause is
designed to be consistent across listing exchanges.
    \9\ See proposed Nasdaq Rule 4120(c)(10)(A)(ii)(a).
    \10\ See proposed Nasdaq Rule 4120(c)(10)(A)(ii)(b). The
proposed Auction Collars for a Trading Pause are designed to be
consistent across listing exchanges.
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Extension of Re-Opening Time and Expansion of Auction Collars

    As proposed, for any security listed on the Exchange, prior to
terminating a Trading Pause, there would be a 5-minute ``Initial
Display Only Period'' during which market participants may enter
quotations and orders in that security in Nasdaq systems.\11\ At the
conclusion of the Initial Display Only Period, the security would be
released for trading unless, at the end of the Initial Display Only
Period, the Exchange detects an order imbalance in the security.\12\ In
that case, the Exchange would extend the Display Only Period for an
additional 5-minute period

(``Extended Display Only Period'') and the Auction Collars would be
adjusted.\13\ Specifically, If the Display Only Period is extended
because the calculated price at which the security would be released
for trading is below the lower Auction Collar price or all sell market
orders would not be executed in the cross, then the new lower Auction
Collar price would be derived by subtracting 5% of the initial Auction
Reference Price, which was rounded to the nearest minimum price
increment, or in the case of securities with an Auction Reference Price
of $3 or less, $0.15, from the previous lower Auction Collar price, and
the upper Auction Collar price would not be changed.\14\ If the Display
Only Period is extended because the calculated price at which the
security would be released for trading is above the upper Auction
Collar price or all buy market orders would not be executed in the
cross, then the new upper Auction Collar price would be derived by
adding 5% of the initial Auction Reference Price, which was rounded to
the nearest minimum price increment, or in the case of securities with
an Auction Reference Price of $3 or less, $0.15, to the previous upper
Auction Collar price, and the lower Auction Collar price would not be
changed.\15\
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    \11\ See proposed Nasdaq Rule 4120(c)(10). The proposed rule
would also provide that the Trading Pause shall be terminated when
Nasdaq releases the security for trading. See id. The Exchange
proposes a conforming change in Nasdaq Rule 4120(c)(7)(A).
    \12\ See proposed Nasdaq Rule 4120(c)(10)(B). According to
proposed Nasdaq Rule 4120(c)(10)(E), upon completion of the cross
calculation, an order imbalance shall be established as follows: (i)
The calculated price at which the security would be released for
trading is above (below) the upper (lower) Auction Collar price
calculated under paragraphs (A), (B), or (C) of Nasdaq Rule
4120(c)(10); or (ii) all market orders would not be executed in the
cross.
    \13\ See proposed Nasdaq Rule 4120(c)(10)(B).
    \14\ See proposed Nasdaq Rule 4120(c)(10)(B)(i).
    \15\ See proposed Nasdaq Rule 4120(c)(10)(B)(ii).
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    At the conclusion of the Extended Display Only Period, the security
would be released for trading unless, at the end of the Extended
Display Only Period, the Exchange detects an order imbalance in the
security.\16\ In that case, the Exchange would further extend the
Display Only Period and continue to adjust the Auction Collar prices
every five minutes in the manner described in proposed Nasdaq Rule
4120(c)(10)(B) until the security is released for trading.\17\ With
respect to these additional extensions, the Exchange would release the
security for trading at the first point there is no order
imbalance.\18\
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    \16\ See proposed Nasdaq Rule 4120(c)(10)(C).
    \17\ See id.
    \18\ See id. The proposed extensions and widening of the Auction
Collars are designed to be consistent across listing exchanges.
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    As proposed, if a Trading Pause for a security exists at or after
3:50 p.m., the Exchange would conduct a LULD Closing Cross pursuant to
Nasdaq Rule 4754(b)(6).\19\
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    \19\ See proposed Nasdaq Rule 4120(a)(10)(D). The Exchange also
proposes conforming changes to Nasdaq Rules 4120(a)(12)(H) and
4754(b)(6). The concept of holding a closing auction instead of a
re-opening auction if a Trading Pause exists in the last ten minutes
of trading is designed to be consistent across listing exchanges and
to reflect the Twelfth Amendment to the Plan.
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Other Changes Related to the Re-Opening Process Following a Trading
Pause

    Nasdaq Rule 4753(a)(3) currently defines ``Order Imbalance
Indicator'' to mean a message disseminated by electronic means
containing information about Eligible Interest and the price at which
such interest would execute at the time of dissemination. The Exchange
proposes to add that, for purposes of a Trading Pause initiated
pursuant to Nasdaq Rule 4120(a)(12), ``Order Imbalance Indicator''
would also include Auction Reference Prices and Auction Collars, as
defined in proposed Nasdaq Rule 4120(c)(10)(A).\20\
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    \20\ See proposed Nasdaq Rule 4753(a)(3)(F).
---------------------------------------------------------------------------

    The Exchange also proposes to amend Nasdaq Rule 11890 to provide
that executions as a result of a Halt Auction under Nasdaq Rule
4120(c)(10) would not be eligible for a request to review as clearly
erroneous under Nasdaq Rule 11890.\21\
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    \21\ The proposal to exclude re-opening auction trades from the
clearly erroneous execution rule is designed to be consistent across
listing exchanges.
---------------------------------------------------------------------------

Other Changes Relating to Trading Pauses

    The Exchange proposes to amend Nasdaq Rule 4120(a)(12)(G) to state
that if the Exchange is unable to re-open trading due to a systems or
technology issue, it shall notify the Processor immediately.\22\ The
Exchange also proposes to amend Nasdaq Rule 4120(a)(12)(H) to state
that if a Trading Pause was initiated by another exchange, the Exchange
may resume trading only upon receipt of Price Bands from the
Processor.\23\
---------------------------------------------------------------------------

    \22\ See proposed Nasdaq Rule 4120(a)(12)(G). This change is
designed to be consistent across listing exchanges and to reflect
the Twelfth Amendment to the Plan. The Exchange also proposes to
delete rule text in Nasdaq Rule 4120(a)(12)(G) concerning phased
implementation of the Plan, because the Plan has been fully
implemented.
    \23\ See proposed Nasdaq Rule 4120(a)(12)(H). This change is
designed to be consistent across listing exchanges and to reflect
the Twelfth Amendment to the Plan.
---------------------------------------------------------------------------

    The Exchange proposes to implement this proposed rule change in the
third quarter of 2017.\24\ The Exchange represents that it will
announce the implementation date of this proposed rule change via a
notice to be issued after this proposed rule change is approved by the
Commission.\25\
---------------------------------------------------------------------------

    \24\ The Exchange explains that implementation of the proposed
changes is contingent on the Securities Information Processors
successfully implementing changes to their systems to allow for the
new re-opening process, and the other Primary Listing Exchanges
gaining approval of their related filings and their ability to
implement the changes concurrent with Nasdaq. See Amendment No. 3,
supra note 5.
    \25\ See id. For a more detailed description of the proposed
rule change, see Notice, supra note 3.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment Nos. 2 and 3, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\26\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\27\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in 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. As noted above, the Commission
received no comment letters regarding the proposed rule change.
---------------------------------------------------------------------------

    \26\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission notes that the proposed rule change is designed,
together with the Twelfth Amendment to the Plan,\28\ to address the
issues experienced on August 24, 2015 by reducing the number of repeat
Trading Pauses in a single NMS Stock.\29\ The Commission notes that the
proposed rule change is also designed to further the goal of
establishing a standardized approach for how Primary Listing Exchanges
would conduct certain aspects of an automated re-opening following a
Trading Pause, which should provide certainty for market participants
regarding how a security would re-open following a Trading Pause,
regardless of the listing exchange.\30\
---------------------------------------------------------------------------

    \28\ See supra note 6.
    \29\ See Notice, supra note 3, at 75882.
    \30\ See id.
---------------------------------------------------------------------------

    With respect to the proposed Auction Reference Price and Auction
Collars, the Commission finds reasonable the Exchange's belief that the
price of the limit state that preceded the Trading Pause (i.e., either
the Lower or Upper Price Band price) would better reflect the most
recent price of the security, and therefore should be used as the

Auction Reference Price.\31\ Moreover, the Commission believes that the
proposed method for calculating the initial Auction Collars (i.e., the
Auction Collar on the opposite side of the trading pressure would be
the Price Band in place before the Trading Pause was triggered) would
address the concept of mean reversion, as well as avoid a security from
trading outside of a price that it would have been permitted to trade
before the Trading Pause.\32\
---------------------------------------------------------------------------

    \31\ See Notice, supra note 3, at 75882-83.
    \32\ See Notice, supra note 3, at 75883.
---------------------------------------------------------------------------

    The Commission believes that extending the Trading Pause and
widening the Auction Collar on the side of the order imbalance would be
a measured approach to provide additional time to attract offsetting
interest, to help to address an imbalance that may not be resolved
within the prior Auction Collars, and to reduce the potential for
triggering another Trading Pause.\33\ Also, as the Exchange noted,
widening the Auction Collar only in the direction of the order
imbalance would address issues relating to the concept of mean
reversion.\34\ Moreover, the Commission notes that the proposal to
conduct a LULD Closing Cross pursuant to Nasdaq Rule 4754(b)(6) should
a Trading Pause exist at or after 3:50 p.m. would be consistent with
the Twelfth Amendment to the Plan.
---------------------------------------------------------------------------

    \33\ See Notice, supra note 3, at 75882.
    \34\ See Notice, supra note 3, at 75883.
---------------------------------------------------------------------------

    The Commission believes that it is appropriate to preclude requests
to review executions as a result of a Halt Auction under Nasdaq Rule
4120(c)(10) as clearly erroneous. The Commission notes that the
proposed re-opening procedures would allow for widened collars, which
may result in a re-opening price that would be away from prior trading
prices, but the re-opening price would be the result of a measured and
transparent process that reduces the potential that such a trade would
be considered erroneous.\35\
---------------------------------------------------------------------------

    \35\ See id.
---------------------------------------------------------------------------

    The Commission believes that the proposed enhancements to the Order
Imbalance Indicator would further promote transparency around the re-
opening process following a Trading Pause.
    Finally, the Commission notes that the proposed amendments to
Nasdaq Rule 4210(a)(12)(G) and (H) would remove obsolete rule text and
conform the remaining rule text to the Twelfth Amendment to the Plan.
    Based on the Exchange's representations mentioned above and in the
Notice, and for the foregoing reasons, the Commission finds that the
proposed rule change, as modified by Amendment Nos. 2 and 3, is
consistent with Section 6(b)(5) of the Act \36\ and the rules and
regulations thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\37\ that the proposed rule change (SR-NASDAQ-2016-131), as
modified by Amendment Nos. 2 and 3, be, and hereby is, approved.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
---------------------------------------------------------------------------

    \38\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02001 Filed 1-30-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: February 24, 2010 (Volume 75, Number 36)]
[Notices]
[Page 8321]
[DOCID:fr24fe10-51]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Project No. 13619-000

Coastal Hydropower LLC; Notice of Preliminary Permit Application
Accepted for Filing and Soliciting Comments, Motions to Intervene, and
Competing Applications

February 18, 2010.
    On November 5, 2009, Coastal Hydropower LLC filed an application
for a preliminary permit, pursuant to section 4(f) of the Federal Power
Act, proposing to study the feasibility of the Green River Lock and Dam
No. 4 Hydroelectric Project, located on the Green River in Woodbury,
Kentucky. The sole purpose of a preliminary permit, if issued, is to
grant the permit holder priority to file a license application during
the permit term. A preliminary permit does not authorize the permit
holder to perform any land disturbing activities or otherwise enter
upon lands or waters owned by others without the owners' express
permission.
    The proposed project would consist of the following:
    (1) 8 VLH 4000 low head units; (2) a switchyard; (3) a \1/2\-mile-
long transmission line; and (4) appurtenant facilities. The proposed
Green River Lock and Dam No. 4 Hydroelectric Project would have an
average annual generation of 17.5 gigawatt-hours.
    Applicant Contact: James Borg, Mead & Hunt, Inc., 6501 Watts Road,
Madison, WI 53719.
    FERC Contact: Allyson Conner,<PHONE_NUMBER>.
    Deadline for filing comments, motions to intervene, competing
applications (without notices of intent), or notices of intent to file
competing applications: 60 days from the issuance of this notice.
Comments, motions to intervene, notices of intent, and competing
applications may be filed electronically via the Internet. See 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission's Web site
(http://www.ferc.gov/docs-filing/ferconline.asp) under the ``eFiling''
link. For a simpler method of submitting text only comments, click on
``Quick Comment.'' For assistance, please contact FERC Online Support
at<EMAIL_ADDRESS>call toll-free at<PHONE_NUMBER>; or,
for TTY, contact<PHONE_NUMBER>. Although the Commission strongly
encourages electronic filing, documents may also be paper-filed. To
paper-file, mail an original and eight copies to: Kimberly D. Bose,
Secretary, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.
    More information about this project, including a copy of the
application, can be viewed or printed on the ``eLibrary'' link of
Commission's Web site at http: //www.ferc.gov/docs-filing/elibrary.asp.
Enter the docket number (P-13619) in the docket number field to access
the document. For assistance, contact FERC Online Support.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-3634 Filed 2-23-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: April 11, 2008 (Volume 73, Number 71)]
[Notices]
[Page 19928-19929]
[DOCID:fr11ap08-128]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket Nos. FMCSA-99-5748, FMCSA-00-8398, FMCSA-03-15893, FMCSA-03-
16241, FMCSA-03-16564, FMCSA-05-22194, FMCSA-05-22727]

Qualification of Drivers; Exemption Renewals; Vision

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of final disposition.

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

SUMMARY: FMCSA previously announced its decision to renew the
exemptions from the vision requirement in the Federal Motor Carrier
Safety Regulations for 20 individuals. FMCSA has statutory authority to
exempt individuals from the vision requirement if the exemptions
granted will not compromise safety. The Agency has reviewed the
comments submitted in response to the previous announcement and
concluded that granting these exemptions will provide a level of safety
that will be equivalent to, or greater than, the level of safety
maintained without the exemptions for these commercial motor vehicle
(CMV) drivers.

FOR FURTHER INFORMATION CONTACT: Dr. Mary D. Gunnels, Director, Medical
Programs,<PHONE_NUMBER><EMAIL_ADDRESS>FMCSA, Department of
Transportation, 1200 New Jersey Avenue, SE., Room W64-224, Washington,
DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m. Monday through
Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    You may see all the comments online through the Federal Document
Management System (FDMS) at http://www.regulations.gov

Background

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
for a 2-year period if it finds ``such exemption would likely achieve a
level of safety that is equivalent to, or greater than, the level that
would be achieved absent such exemption.'' The statute also allows the
Agency to renew exemptions at the end of the 2-year period. The comment
period ended on March 14, 2008.

Discussion of Comments

    FMCSA received one comment in this proceeding. The comment was
considered and discussed below.
    Advocates for Highway and Auto Safety (Advocates) expressed
opposition to FMCSA's policy to grant exemptions from the FMCSR,
including the driver qualification standards. Specifically, Advocates:
(1) Objects to the manner in which FMCSA presents driver information to
the public and makes safety determinations; (2) objects to the Agency's
reliance on conclusions drawn from the vision waiver program; (3)
claims the Agency has misinterpreted statutory language on the granting
of exemptions (49 U.S.C. 31136(e) and 31315); and finally (4) suggests
that a 1999 Supreme Court decision affects the legal validity of vision
exemptions.
    The issues raised by Advocates were addressed at length in 64 FR
51568 (September 23, 1999), 64 FR 66962 (November 30, 1999), 64 FR
69586 (December 13, 1999), 65 FR 159 (January 3, 2000), 65 FR 57230
(September 21, 2000), and 66 FR 13825 (March 7, 2001). We will not
address these points again here, but refer interested parties to those
earlier discussions.

Conclusion

    The Agency has not received any adverse evidence on any of these
drivers that indicates that safety is being compromised. Based upon its
evaluation of the 20 renewal applications, FMCSA renews the Federal
vision exemptions for Eric D.

Bennett, Lee A. Burke, Barton C. Caldara, Charlie F. Cook, Allan
Darley, John K. DeGolier, Robin S. England, Richard Hailey, Jr., Robert
V. Hodges, George R. Knavel, John R. Knott, III, John K. Love, Roger D.
Mollak, Edward D. Pickle, Ezequiel M. Ramirez, Kent S. Reining, James
L. Schmitt, Earl W. Sheets, Thomas E. Voyles, Jr., and James T.
Wortham, Jr.
    In accordance with 49 U.S.C. 31136(e) and 31315, each renewal
exemption will be valid for 2 years unless revoked earlier by FMCSA.
The exemption will be revoked if: (1) The person fails to comply with
the terms and conditions of the exemption; (2) the exemption has
resulted in a lower level of safety than was maintained before it was
granted; or (3) continuation of the exemption would not be consistent
with the goals and objectives of 49 U.S.C. 31136 and 31315.

    Issued on: April 4, 2008.
Larry W. Minor,
Associate Administrator for Policy and Program Development.
 [FR Doc. E8-7666 Filed 4-10-08; 8:45 am]

BILLING CODE 4910-EX-P


[Federal Register Volume 79, Number 140 (Tuesday, July 22, 2014)]
[Notices]
[Pages 42562-42563]
[FR Doc No: 2014-17180]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-148, OMB Control No. 3235-0133]

Proposed Collection; Comment Request

Securities and Exchange Commission, Office of FOIA Services, 100 F
Street NE., Washington, DC 20549-2736.

Extension:
    Rule 17a-19 and Form X-17A-19

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and
Exchange Commission (``Commission'') is soliciting comments on the
existing collection of information provided for in Rule 17a-19 (17 CFR
240.17a-19) and Form X-17A-19 under the Securities Exchange Act of 1934
(15 U.S.C. 78a et seq.). The Commission plans to submit this existing
collection of information to the Office of Management and Budget
(``OMB'') for extension and approval.
    Rule 17a-19 requires every national securities exchange and
registered national securities association to file a Form X-17A-19 with
the Commission and the Securities Investor Protection Corporation
(``SIPC'') within 5 business days of the initiation, suspension, or
termination of any member and, when terminating the membership interest
of any member, to notify that member of its obligation to file
financial reports as required by Exchange Act Rule 17a-5(b).\1\
---------------------------------------------------------------------------

    \1\ 17 CFR 240.17a-5(b).
---------------------------------------------------------------------------

    Commission staff anticipates that the national securities exchanges
and registered national securities associations collectively will make
800 total filings annually pursuant to Rule 17a-19 and that each filing
will take approximately 15 minutes. The total reporting burden is
estimated to be approximately 200 total annual hours.
    Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimates of the burden of the proposed collection of information; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on respondents, including through the use of automated
collection techniques or other forms of information technology.
Consideration will be given to comments and suggestions submitted in
writing within 60 days of this publication.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    Please direct your written comments to: Thomas Bayer, Director/
Chief Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email
to<EMAIL_ADDRESS>

    Dated: July 16, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-17180 Filed 7-21-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 93 (Thursday, May 14, 2015)]
[Notices]
[Pages 27798-27801]
[FR Doc No: 2015-11595]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74917; File No. SR-ICC-2015-004]

Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to Physical Settlement of CDS
Contracts

May 8, 2015.

I. Introduction

    On March 11, 2015, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change SR-ICC-2015-004 pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The
proposed rule change was published for comment in the Federal Register
on March 27, 2015.\3\ The Commission received one comment.\4\ For the
reasons discussed below, the Commission is approving the proposed rule
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-74563 (Mar. 23,
2015), 80 FR 16471 (Mar. 27, 2015) (File No. SR-ICC-2015-004).
    \4\ See Comment from Kermit Kubitz, dated April 17, 2015,
available at https://www.sec.gov/comments/sr-icc-2015-004/icc2015004-1.htm.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    ICC proposes to amend its rules to modify the terms and conditions
for physical settlement of cleared CDS Contracts, and to adopt certain
new delivery procedures relating to physical settlement.
    Under the current terms of the ICC Clearing Rules (``ICC Rules''),
upon the occurrence of a credit event under a cleared CDS Contract, the
contract is typically settled in cash in accordance with the terms of
the ICC Rules, which incorporate the applicable ISDA Credit Derivatives
Definitions (the ``ISDA Definitions'') and the market-standard credit
default swap auction methodology for determining the cash settlement
price. However, in certain circumstances, such as where the Credit
Derivatives Determinations Committee decides not to hold a cash
settlement auction for a particular credit event, or such an auction is
cancelled under the terms of the auction methodology (including because
of a failure to determine the auction settlement price), the CDS
Contracts provide for a fallback settlement method of physical
settlement. Under physical settlement of a CDS contract generally, the
protection buyer will be entitled to deliver one or more qualifying
deliverable obligations to the protection seller, in which case the
protection seller will be required to pay the protection buyer a
defined physical settlement amount. Under the current ICC Rules, if
physical settlement applies,\5\ ICC will match clearing participants
(``Participants'') that are protection buyers with Participants that
are protection sellers in the relevant contract, and the two
Participants will be responsible for effecting physical settlement
between them. ICC does not itself perform or guarantee performance of
physical settlement between the matched Participants. Once matching
occurs, the contract is purely a bilateral contract between the matched
Participants, and ICC has no further rights or obligations with respect
to the contract. ICC does, however, collect and hold physical
settlement margin as collateral agent on behalf of the protection buyer
to secure the protection seller's obligations to the protection buyer
under physical settlement.
---------------------------------------------------------------------------

    \5\ ICC notes that to date, physical settlement has not been
necessary for any of the CDS Contracts cleared by ICC.
---------------------------------------------------------------------------

    ICC proposes to amend the ICC Rules relating to physical settlement
such that ICC will be responsible for financial performance of physical
settlement. ICC notes that under the amended approach, it would still
require payments and deliveries in the ordinary course under physical
settlement to be made directly between the matched buying Participant
and selling Participant, with ICC only being obligated to make direct
payments in the case of certain defined settlement failure scenarios.
ICC believes that this proposed rule change will further the general
policy goals of central clearing for CDS transactions, and is
consistent with ICC's financial resources, risk management procedures
and operational capabilities.\6\
---------------------------------------------------------------------------

    \6\ ICC notes that a substantially similar approach to physical
settlement is used in the ICE Clear Europe Limited CDS clearing
service.
---------------------------------------------------------------------------

    ICC proposes to make certain amendments to Chapters 1, 4, 5, 21 and
22 of the ICC Rules. ICC also proposes

to adopt a related set of Delivery Procedures and Physical Settlement
and Notices Terms. Furthermore, ICC also proposes to make certain
related and conforming changes to its Risk Management Framework. All
capitalized terms not defined herein are defined in the ICC Rules.
    In Chapter 1 of the ICC Rules, ICC proposes to amend the definition
of ``Client-Related Initial Margin'' so that it now includes Physical
Settlement Margin collected with respect to Client-Related Positions.
As discussed below, according to ICC, such Physical Settlement Margin
is intended to secure the obligations of a Participant to ICC in
connection with physical settlement. Similarly, in Rule 403, ICC
proposes to amend the definition of ``Physical Settlement Margin'' to
refer to such obligations to ICC (as opposed to the obligations to the
matched Participant under the current ICC Rules). In Rule 502(b), a
conforming reference to Physical Settlement Margin will be updated. A
conforming change is also made in Rule 2101-02(a)(iv).
    ICC proposes changes to Chapter 22 (which covers physical
settlement) by adding a new Rule 2200 with definitions relating to the
revised physical settlement provisions, including ``Matched Delivery
Buyer'' and ``Matched Delivery Seller,'' and the related terms
``Matched Delivery Contract,'' ``Matched Delivery Buyer Contract,''
``Matched Delivery Seller Contract'' and ``MP Delivery Amount.'' As
discussed below, these terms are used in connection with the matching
of buying Participants and selling Participants in the revised
settlement procedures. A new definition of ``Asset Package Delivery
Notice'' has also been added to address notices in connection with
Asset Package delivery under the 2014 ISDA Credit Derivatives
Definitions (the ``2014 ISDA Definitions'').
    According to ICC, Rule 2201(a), which provides for matching of
buying Participants and selling Participants into a Matched Delivery
Pair in the case of physical settlement, will be revised to address
scenarios where a Participant's CDS contracts must be split and matched
with multiple other Participants for purposes of physical settlement.
Conforming changes to use applicable defined terms (such as Relevant
Restructuring Credit Event) will also be made. Rule 2201(b), which
addresses delivery of certain notices between a Matched Delivery Pair,
will be revised to include references to Asset Package Delivery
Notices. Rule 2201(c) will be deleted at the request of Participants as
being inconsistent with the terms of uncleared CDS and unnecessary in
light of the provisions of the ISDA Definitions and Rule 2202.
    ICC also proposes changes to Rule 2202, which addresses resolution
of disputes related to permissible deliverable obligations, in order to
incorporate the concept of Asset Package Delivery under the 2014 ISDA
Definitions, as well as related concepts of Prior Deliverable
Obligations, Package Observable Bonds and Asset Package Delivery
Notices. Rules 2202(b) and (c) will also be revised to address the
consequences of a selling Participant's refusal to accept delivery of a
particular obligation, including for the offsetting transaction between
ICC and the buying Participant.
    Rule 2203 will be replaced with new provisions addressing ICC's
role in physical settlement. When a Matched Delivery Pair is
established, the CDS Contract between the Matched Delivery Buyer and
ICC will be referred to as the Matched Delivery Buyer Contract, and the
corresponding CDS Contract between ICC and the Matched Delivery Seller
will be referred to as the Matched Delivery Seller Contract. Under the
revised physical settlement approach, ICC intends to remain party to
each such contract, but will require certain notices, payments and
deliveries to take place directly between the Matched Delivery Buyer
and Matched Delivery Seller. Accordingly, under Rule 2203(a), for each
Matched Delivery Buyer Contract, ICC will designate the Matched
Delivery Seller to receive on ICC's behalf notices and deliveries from
the Matched Delivery Buyer and to make payments on ICC's behalf to the
Matched Delivery Buyer. Similarly, under Rule 2203(b), for each Matched
Delivery Seller Contract, ICC will designate the Matched Delivery Buyer
to deliver on ICC's behalf notices and deliveries to the Matched
Delivery Seller, and to receive on ICC's behalf payments from the
Matched Delivery Seller. The result is that notices, payments and
deliveries will be made directly between the Matched Delivery Buyer and
Matched Delivery Seller, in satisfaction of the parties and ICC's
respective obligations under both the Matched Delivery Buyer Contract
and Matched Delivery Seller Contract. Rule 2203(c) further clarifies
that the exercise of rights by Matched Delivery Buyer against ICC will
be deemed the exercise by ICC of the corresponding rights against
Matched Delivery Seller, and vice versa. Rules 2203(d) and (e) will
provide for copies of relevant notices to be provided to ICC, as well
as notice of the completion of settlement between the Matched Delivery
Buyer and Matched Delivery Seller. Rule 2203(f) will clarify the
obligations of the respective parties to a Matched Delivery Contract,
and address a scenario where an Asset Package being delivered is deemed
to have a value of zero under the 2014 ISDA Definitions. Rule 2203(g)
will allocate costs and expenses that may be incurred by ICC in
connection with physical settlement.
    Rule 2204, as revised, will address physical settlement of certain
deliverable obligations that do not settle in the ordinary course on a
delivery-versus-payment basis (``Non-DVP Obligations''). The rule
establishes a procedure under which the Matched Delivery Seller will
pay the physical settlement amount owed to ICC, which in turn will not
pay such amount to the Matched Delivery Buyer until ICC receives notice
that the obligation has been received by the Matched Delivery Seller
from the Matched Delivery Buyer. If the obligation is not delivered,
the physical settlement amount will be returned to the Matched Delivery
Seller.
    ICC states that Rule 2205 will address settlement failures by the
Matched Delivery Seller or Matched Delivery Buyer. Under subsection
(a), if the Matched Delivery Seller fails to pay the physical
settlement amount when due, the Matched Delivery Buyer Contract will be
cash settled as between the Matched Delivery Buyer and ICC. ICC thus
will not be obligated to take delivery of the relevant deliverable
obligations (and dispose of them in a situation where the Matched
Delivery Seller has failed to perform), but will compensate the Matched
Delivery Buyer for the value of the Matched Delivery Buyer Contract
through the cash settlement process. Pursuant to subsection (b), ICC
may, in addition to its other default remedies, terminate the Matched
Delivery Seller Contract, in which case the Matched Delivery Seller
will owe ICC an amount equal to the cash settlement amount ICC paid the
Matched Delivery Buyer, together with other losses and expenses
incurred by ICC as a result of the failure. Rule 2205(c) provides that,
consistent with the terms of the ISDA Definitions applicable to a
protection buyer generally, any failure by ICC to deliver any
deliverable obligations to the Matched Delivery Seller (including as a
result of a failure by the Matched Delivery Buyer to make a delivery)
will not constitute a default by ICC, and the Matched Delivery Seller's
sole remedy will be as set forth in the Matched Delivery Seller
Contract (which may include, for example, buy-in remedies of the
Matched Delivery Seller). ICC will not have any obligation to purchase
or

acquire deliverable obligations (other than in settlement of the
Matched Delivery Buyer Contract) in order to settle the Matched
Delivery Seller Contract. In the event of a delivery failure by a
Matched Delivery Buyer, such party will be liable to ICC for any costs
incurred by ICC in settling the corresponding Matched Delivery Seller
Contract (in addition to ICC's other remedies for a default).
    According to ICC, the changes to Rule 2206 are to cover certain
other, non-default scenarios in which physical settlement fails to
occur. Under Rules 2206(a) and (b), if physical settlement of the
Matched Buyer Delivery Contract does not occur because the deliverable
obligation is in less than the relevant minimum denomination or the
Matched Delivery Seller is not a permitted transferee of the
obligation, the failure will be treated as an illegality or
impossibility outside of the parties' control, which will result in
cash settlement \7\ under the ISDA Definitions. In this and other
scenarios where a cash settlement fallback applies, the same cash
settlement amount will apply to both the Matched Delivery Buyer
Contract and Matched Delivery Seller Contract under Rule 2206(c).
Similarly, in the case of a buy-in, the same buy-in price will apply to
both contracts. Rule 2206(d) will provide for cash settlement of both
the Matched Delivery Buyer Contract and Matched Delivery Seller
Contract in certain cases where delivery does not occur between the
Matched Delivery Buyer and the customer for which it is acting. Rule
2206(e) specifies the date of any cash settlement and provides for
notice of the relevant amount owed.
---------------------------------------------------------------------------

    \7\ Cash settlement in this context is different from the
auction cash settlement that normally applies to CDS contracts under
the ISDA Definitions, and is based on price quotations obtained by
the relevant party to the contract for the obligation or obligations
that cannot be delivered.
---------------------------------------------------------------------------

    According to ICC, Rule 2207(a) will provide for certain standard
representations and related provisions for physical settlement in the
ISDA Definitions to apply as between the Matched Delivery Buyer and
Matched Delivery Seller, and will clarify ICC's authority to designate
a Participant to make or receive physical settlement on its behalf as
provided in Rules 2203 and 2204 for purposes of Section 9.2(c)(iv) of
the 2003 ISDA Credit Derivatives Definitions or Section 11.2(c)(iv) of
the 2014 ISDA Definitions, even though the Participant is not its
Affiliate. Rule 2207(b) will clarify certain procedures for obtaining
price quotations for the relevant deliverable obligations in the event
that a cash settlement fallback applies.
    Rule 2208 will allow the Matched Delivery Buyer and Matched
Delivery Seller to settle their rights and obligations as to physical
settlement through an alternative arrangement agreed between them
(referred to as a ``CADP''), in lieu of settlement pursuant to Chapter
22 of the ICC Rules. If they so agree, ICC will have no obligation in
respect of such alternative arrangement.
    Rules 2209(a) and (c) will provide that margin (including physical
settlement margin) will continue to be called and held through
settlement. Rule 2209(b) will provide that ICC will apply physical
settlement margin to satisfy the Matched Delivery Seller's obligation
to pay the physical settlement amount, and call such seller for any
shortfall.
    ICC also proposes to adopt Delivery Procedures that will further
specify certain operational and other details for the physical
settlement process. According to ICC, Paragraph 1 will provide certain
definitions used in the Delivery Procedures. Paragraph 3.2 will set out
certain requirements for providing notices in connection with physical
settlement. Paragraphs 3.3(a)-(e) will establish the procedures and
timetable for ICC to allocate Matched Delivery Pairs and notify
Participants accordingly. Paragraph 3.3(g) will address additional
procedures concerning delivery of notices by Participants in connection
with physical settlement, including as to relevant notice deadlines,
requirements for providing copies of notices to ICC, treatment of late
notices and procedures for disputes involving notices. Paragraph 4 of
the Delivery Procedures will specify certain deadlines in connection
with the physical settlement of Non-DVP Obligations under Rule 2204.
Finally, Paragraph 5 will specify the deadline for notices that parties
have elected a CADP.
    ICC also proposes to adopt a set of Physical Settlement and Notices
Terms (``Notices Terms'') with respect to physical settlement. The
Notices Terms are intended to set forth a uniform set of communications
between a Participant and its customer in connection with physical
settlement, including delivery of physical settlement notices and
delivery and receipt of deliverable obligations as between the
Participant and its customer. The Notices Terms will also address the
operation of certain cash settlement and other fallbacks as between the
Participant and its customer. The Notices Terms do not bind ICC and do
not form part of the ICC Rules or ICC Procedures. The Notices Terms are
published for the convenience and use of Participants and their
customers, and are designed to be incorporated by reference in customer
clearing documentation. However, a Participant and its customer may
agree to vary the Notices Terms.
    ICC also proposes to make certain changes to its Risk Management
Framework to accommodate the changes relating to physical settlement
that are being made to the ICC Rules and procedures as set forth
herein. As revised, the Risk Management Framework reflects ICC's
obligations in respect of physical settlement as provided in the
amended ICC Rules and procedures. It will set out the steps in the
physical settlement process to be taken by ICC if physical settlement
applies, including the matching of Participants into Matched Delivery
Pairs, consistent with the ICC Rules and procedures. The revisions also
address the calculation, collection and use of margin (including
physical settlement margin) where physical settlement applies.

III. Comments

    The Commission received one comment concerning the proposed rule
change. In this comment, the commenter expresses concern that ICC's
proposed rule change to guarantee the financial performance of physical
settlement, in addition to its existing guarantee of cash settlement,
would add additional complexity to ICC's clearing business,
particularly during times of financial stress. The commenter addresses
three issues with the proposal. First, the commenter suggests that the
``process, financial assets and liabilities, and legal obligations of
all parties must be well understood,'' \8\ both by ICC and the
Commission. Second, ``the SEC should have some periodic report on
[ICC's] financial assets, potential obligations or value at risk, and
ability to perform under normal or adverse circumstances.'' \9\
Finally, the commenter seeks assurance that the SEC would assess the
impact ICC's guarantee of ``physical clearing on market participants''
in reducing those participants' ``financial commitment'' or
leverage.\10\ The commenter did not opine on any particular aspects of
the proposed rule change beyond these general statements.
---------------------------------------------------------------------------

    \8\ Comment from Kermit Kubitz, dated April 17, 2015, available
at https://www.sec.gov/comments/sr-icc-2015-004/icc2015004-1.htm.
    \9\ Id.
    \10\ Id.

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IV. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \11\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if the
Commission finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such self-regulatory organization. Section 17A(b)(3)(F)
of the Act \12\ requires, among other things, that the rules of a
clearing agency are designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, to
assure the safeguarding of securities and funds which are in the
custody or control of the clearing agency or for which it is
responsible and, in general, to protect investors and the public
interest.
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    \11\ 15 U.S.C. 78s(b)(2)(C).
    \12\ 15 U.S.C. 78q-1(b)(3)(F).
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    Rules 17Ad-22(b)(2-3) \13\ require each registered clearing agency
that performs central counterparty services to establish, implement,
maintain and enforce written policies and procedures reasonably
designed to use margin requirements to limit its credit exposures to
participants under normal market conditions and use risk-based models
and parameters to set margin requirements and review such margin
requirements and the related risk-based models and parameters at least
monthly, and maintain sufficient financial resources to withstand, at a
minimum, a default by the two participant families to which it has the
largest exposures in extreme but plausible market conditions, in its
capacity as a central counterparty for security based swaps.
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    \13\ 17 CFR 240.17Ad-22(b)(2-3).
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    Rule 17Ad-22(d)(15) \14\ requires each registered clearing agency
to establish, implement, maintain and enforce written policies and
procedures reasonably designed to state to its participants the
clearing agency's obligations with respect to physical deliveries and
identify and manage the risks from these obligations.
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    \14\ 17 CFR 240.17Ad-22(d)(15).
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    The Commission finds that the modification of the terms and
conditions for physical settlement of cleared CDS Contracts and the
adoption of certain new delivery procedures relating to physical
settlement is consistent with the requirements of Section 17A of the
Act \15\ and the regulations thereunder applicable to ICC.
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    \15\ 15 U.S.C. 78q-1.
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    The proposed rule change will provide greater certainty and
timeliness with respect to the clearance and settlement of CDS
transactions in circumstances where physical settlement applies.
Although physical settlement applies only rarely, and as a fallback to
the normal procedure for cash settlement, the proposed rule change will
prevent Participants from being exposed to the credit risk of other
Participants with respect to the financial performance of physical
settlement by guaranteeing timely payment of settlement amounts that
are due to a non-defaulting party. As a result, the Commission believes
the proposed rule change will promote the prompt and accurate clearing
and settlement of CDS contracts, and, in general, protect investors and
the public interest consistent with the requirements of Section
17A(b)(3)(F) of the Act.\16\
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
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    Moreover, the proposed rule change will require ICC to collect
Physical Settlement Margin \17\ (in addition to initial and variation
margin) to cover the specific obligations of each Matched Delivery
Seller to the clearinghouse with respect to physical settlement.
Therefore, the Commission believes ICC will be able to maintain
financial resources sufficient to support its clearing operations,
including operations under the amended physical settlement procedures,
in a manner consistent with the requirements of Rule 17Ad-22(b)(2-
3).\18\ Furthermore, ICC proposes to amend text of ICC Rules 2203(a)--
(g), to address the legal obligations that arise between Participants
when settling a CDS Contract that is to be physically settled, with
corresponding changes to its Delivery Procedures. The Commission
believes that ICC's Rules, as amended, establish ICC's and
Participants' obligations for performance (including financial
performance) of physically settled contracts, the procedures for
settlement and the mechanism for ICC to effect settlement in cash
without having to acquire or dispose of the underlying deliverable
obligations, consistent with the requirements of Rule 17Ad-
22(d)(15).\19\
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    \17\ The Physical Settlement Margin is calculated as the
notional value minus the estimated value of the deliverable
obligation and collected from the Matched Delivery Seller and held
by ICC until such time the Matched Delivery Buyer and the Matched
Delivery Seller as a pair confirm that settlement has been occurred.
Physical Settlement Margin is not collected from the Matched
Delivery Buyer. The estimated value of the deliverable obligation
will be determined by ICC using a ``haircut'' approach. ICC will use
the price of the cheapest-to-deliver bond as the basis for the
``haircut'' estimation. However, if reliable pricing is not
available, ICC reserves the right to determine a price of zero and
therefore charge the full notional amount as the Physical Settlement
Margin to the seller.
    \18\ 17 CFR 240.17Ad-22(b)(2-3).
    \19\ 17 CFR 240.17Ad-22(d)(15).
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V. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \20\ and the
rules and regulations thereunder.
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    \20\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\21\ that the proposed rule change (SR-ICC-2015-004) be, and hereby
is, approved.\22\
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    \21\ 15 U.S.C. 78s(b)(2).
    \22\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-11595 Filed 5-13-15; 8:45 am]
BILLING CODE 8011-01-P