[Federal Register Volume 87, Number 201 (Wednesday, October 19, 2022)]
[Notices]
[Pages 63502-63505]
[FR Doc No: 2022-22708]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2019-N-2854]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Premarket Tobacco
Product Applications and Recordkeeping Requirements

AGENCY: Food and Drug Administration, Health and Human Services (HHS).

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Submit written comments (including recommendations) on the
collection of information by November 18, 2022.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be submitted to https://www.reginfo.gov/public/do/PRAMain. Find this particular information
collection by selecting ``Currently under Review--Open for Public
Comments'' or by using the search function. The OMB control number for
this information collection is 0910-0879.

FOR FURTHER INFORMATION CONTACT: JonnaLynn Capezzuto, Office of
Operations, Food and Drug Administration, Three White Flint North, 10A-
12M, 11601 Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Premarket Tobacco Product Applications and Recordkeeping Requirements--
21 CFR 1114

OMB Control Number 0910-0879--Extension

    This information collection supports the requirements for the
content, format, submission recordkeeping, and postmarket reporting
requirements of a premarket tobacco product application (PMTA). Section
910(a) (21 U.S.C. 387j(a)) of the Federal Food, Drug, and Cosmetic Act
(FD&C Act) established requirements for premarket review of new tobacco
products and the implementing regulations are found in part 1114 (21
CFR part 1114), subchapter K.
    An applicant may submit a PMTA to demonstrate that a new tobacco
product meets the requirements to receive a marketing granted order. A
new tobacco product may not be introduced or delivered for introduction
into interstate commerce under this part until FDA has issued a
marketing granted order for the product (Sec.  1114.5). Further, Sec.
1114.7 describes the required content and format of the PMTA. The PMTA
must contain sufficient information for FDA to determine whether any of
the grounds for denial specified in section 910(c)(2) of the FD&C Act
apply. The application must contain the following sections: general
information, descriptive information, product samples, labeling, a
statement of compliance with 21 CFR part 25, a summary, product
formulation, manufacturing, health risk investigations, effect on the
population as a whole, and a certification statement.
    Submitters can visit the following web page which describes the
process for submitting a PMTA (https://www.fda.gov/tobacco-products/market-and-distribute-tobacco-product/premarket-tobacco-product-applications).
    After submission of a PMTA, FDA may request, and an applicant may
submit, an amendment to a pending PMTA. FDA generally expects that when
an applicant submits a PMTA, the submission will include all
information required by section 910(b)(1) of the FD&C Act and part 1114
to enable FDA to determine whether it should authorize the marketing of
a new tobacco product. However, FDA recognizes that additional
information

may be needed to complete the review of a PMTA and, therefore FDA
allows the submission of amendments to a pending application.
    An applicant may transfer ownership of its PMTA at any time,
including when FDA has yet to act on it. Section 1114.13 describes the
steps that an applicant would be required to take when it changes
ownership of a PMTA. This section is intended to facilitate transfers
of ownership and help ensure that FDA has current information regarding
the ownership of a PMTA.
    A supplemental PMTA are an alternative format of submitting a PMTA
(Sec.  1114.15). Applicants that have received a marketing granted
order would be able to submit a supplemental PMTA to seek marketing
authorization for a new tobacco product that results from a
modification or modifications to the original tobacco product that
received the marketing granted order. FDA restricts the use of
supplemental PMTAs to only changes that require the submission of
limited information or revisions to ensure that FDA can efficiently
review the application.
    If an applicant receives a no marketing granted order, they may
submit a resubmission to respond to the deficiencies outlined (Sec.
1114.17). A resubmission may be submitted for the same tobacco product
that received a marketing denial order or for a different new tobacco
product that results from changes necessary to address the deficiencies
outlined in a marketing denial order. This application format allows an
applicant to address the deficiencies described in a marketing denial
order without having to undertake the effort of submitting a standard
PMTA. The resubmission format is not available for PMTAs that FDA
refused to accept, refused to file, cancelled, or administratively
closed, or that the applicant withdrew because FDA has not previously
completed reviews of such applications upon which it can rely, and such
applications may need significant changes to be successfully
resubmitted.
    FDA requires applicants that receive a marketing granted order to
submit postmarket reports. Postmarket reports determine or facilitate a
determination of whether there may be grounds to withdraw or
temporarily suspend a marketing granted order. Applicants are required
to submit two types of postmarket reports after receiving a marketing
granted order: periodic reports and adverse experience reports.
Periodic reports are required to be submitted within 60 calendar days
of the reporting date specified in the marketing granted order.
Applicants would also be required to report all serious and unexpected
adverse experiences associated with the tobacco product that have been
reported to the applicant or of which the applicant is aware. The
serious and unexpected adverse experience reports must be submitted to
the Center for Tobacco Products' Office of Science through the HHS
Safety Reporting Portal (https://www.safetyreporting.hhs.gov/) within
15 calendar days after receiving or becoming aware of a serious or
unexpected adverse experience. FDA's Safety Reporting Portal is
approved under OMB control number 0910-0291.
    Applicants receiving a marketing granted order are required to
maintain all records necessary to facilitate a determination of whether
there are or may be grounds to withdraw or temporarily suspend the
marketing granted order, including records related to both the
application and postmarket reports, and ensure that such records remain
readily available to the Agency upon request (Sec.  1114.45).
    The Consolidated Appropriations Act of 2022 (the Appropriations
Act), enacted on March 15, 2022, amended the definition of the term
``tobacco product'' in section 201(rr) (U.S.C. 321(rr)) of the FD&C Act
to include products that contain nicotine from any source. As a result,
non-tobacco nicotine (NTN) products that were not previously subject to
the FD&C Act (e.g., products containing synthetic nicotine) are now
subject to all of the tobacco product provisions in the FD&C Act
beginning on April 14, 2022, including the requirement of premarket
review for new tobacco products. The Appropriations Act also makes all
rules and guidances applicable to tobacco products apply to NTN
products on that same effective date, which includes the Premarket
Tobacco Product Application and Recordkeeping Requirements final rule.
Additionally, the Appropriations Act includes a transition period for
premarket review requirements, directing companies to submit PMTAs for
NTN products by May 14, 2022, to receive an additional 60-day period of
marketing without being considered in violation of premarket review
requirements. On April 14, 2022, OMB granted an emergency clearance
under this collection to include NTN products and its associated
burden. OMB granted a 6-month approval, and as such per the
requirements of the PRA, the Agency is seeking comment on these new
estimates.
    In the Federal Register of May 16, 2022 (87 FR 29749), FDA
published a 60-day notice requesting public comment on the proposed
collection of information. No comments were received.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1--Estimated Annual Reporting Burden \1\
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                                                   Number of
  21 CFR part; activity; form      Number of     responses per   Total annual    Average  burden    Total hours
             FDA #                respondents     respondent       responses      per  response
----------------------------------------------------------------------------------------------------------------
1114.5; Submission of Standard               1               1               1  1,713...........           1,713
 Bundled PMTAs \2\.
PMTA Submission; Form FDA 4057              39               1              39  0.75 (45                      29
                                                                                minutes).
PMTA Amendment and General                  39              14             546  0.16 (10                      87
 Correspondence Submission;                                                      minutes).
 Form FDA 4057a.
PMTA Grouping Submission; Form              39               1              39  0.75 (45                      29
 FDA 4057b.                                                                      minutes).
1114.41; Reporting                           4               1               4  50..............             200
 Requirements (periodic
 reports).
1114.9; Amendments............              24               2              48  188.............           9,024
1114.13; Change in Ownership..               1               1               1  1...............               1
1114.15; Supplemental                        2               1               2  428.............             856
 Applications.
1114.17; Resubmissions........               3               1               3  565.............           1,695
1114.41(a)(2); Adverse                       4               6              24  1...............              24
 Experience Reports.
1114.49(b) and (c); Waiver                   1               1               1  0.25 (15                    0.25
 from Electronic Submission.                                                     minutes).
                               ---------------------------------------------------------------------------------

    Total.....................  ..............  ..............  ..............  ................          13,658
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.
\2\ FDA anticipates that applicants will submit bundled PMTAs, which are single submissions containing PMTAs for
  a number of similar or related products. We estimate that a bundle will contain on average between 6 and 11
  distinct products.

    Table 1 describes the estimated annual reporting burden. FDA has
based these estimates on the full analysis of economic impacts and
experience with current PMTA submissions received under OMB control
number 0910-0768 (which covers the burden for electronic nicotine
delivery system (ENDS) products PMTA submissions). This average
represents a wide range of hours that will be required for these
applications under different circumstances, with some requiring more
hours (e.g., as many as 5,000 hours for early applications that involve
complex products and for which the company has no experience conducting
studies or preparing analysis of public health impacts, or for which
reliance on master files is not possible) as well as many requiring
fewer hours (e.g., as few as 50 hours for applications for products
that are very similar to other new products). FDA estimates that it
will take each respondent approximately 1,500 hours to prepare a PMTA
seeking an order from FDA allowing the marketing of a new tobacco
product. FDA also estimates that it would on average take an additional
213 hours to prepare an environmental assessment (EA) in accordance
with the requirements of 21 CFR 25.40, for a total of 1,713 hours per
PMTA application.
    FDA assumes that firms will submit all applications as PMTA
bundles. We also considered updated data on market consolidation that
has occurred since the Deeming Rule published for originally regulated
products that would receive marketing granted orders through the PMTA
pathway. For originally regulated products we expect to receive one
full PMTA submission for a total of 1,713 hours. We believe that
bundling PMTAs results in efficiencies for applicants when compared to
submitting standalone, full-text submissions for each product. We
expect to receive bundled PMTAs where applicants can use the same
evidence to support PMTAs for similar or related products. Bundling
PMTAs into a single submission would eliminate the administrative
burden of having to reproduce the same evidence in a standalone PMTA
for each product.
    FDA has three forms for use when submitting PMTA information to the
Agency. Form FDA 4057 for use when submitting PMTA single and bundled
submissions. FDA estimates that 39 respondents will submit PMTA bundles
using this form at 0.75 (45 minutes) per response. The number 39 is
accounting for the bundles of ENDS products and includes 15 new
expected bundles submitted for NTN products and the 1 bundle we expect
to receive yearly for originally regulated products, for a total of 29
hours.
    Form FDA 4057a for use when firms are submitting amendments and
other general correspondence. FDA estimates that 39 respondents will
submit amendments and other general correspondence using this form at
0.16 (10 minutes) per response, including 15 new expected submissions
related to applications submitted for NTN products. We estimate there
will be at least 14 amendments per application for a total of 87 hours.
With most applications being submitted toward the end of our 3-year
range, we expect fewer amendments during this period. However, FDA
expects correspondence from earlier applications to be submitted during
this period.
    Form FDA 4057b assists industry and FDA in identifying the products
that are the subject of a submission where an applicant groups multiple
PMTAs into a single submission (referred to as a bundled submission or
a grouped submission). FDA has previously stated that one approach to
submitting PMTAs could be to group applications for products that are
both from the same manufacturer or domestic importer and in the same
product category and subcategory into a single submission. The form
assists applicants in providing the unique identifying information for
each product in a grouped submission of PMTAs. A respondent would
utilize Form FDA 4057b once for each submission containing more than
one PMTA. We assume the submitter could include from 2 to 2,000
products in each Form FDA 4057b. Entering data for up to 2,000 rows can
take approximately 4 hours on average per Form FDA 4057b for manual
data entry. We reflect the average time of 45 minutes per response
based on the assumption that we expect to receive an average of nine
bundled products per submission. Assuming 45 minutes per Form FDA 4057b
for 39 applications, we estimate a total burden of 29 hours for this
activity. Included in this estimate are the 15 new expected submissions
submitted from NTN products.
    FDA estimates under Sec.  1114.41 that four respondents will submit
a periodic report. This number is based on the average number of
periodic report submissions expected between 2020-2022 and the addition
of NTN products. The Agency estimates that periodic reports will take
on average of 50 hours per response for a total of 200 hours. Firms
must also submit adverse experience reports (Sec.  1114.41(a)(2)) for
tobacco products with marketing orders. We assume the same number of
firms submitting periodic reports will submit adverse experience
reports. Currently, firms may voluntarily submit adverse experience
reports using Form FDA 3800 under OMB control number 0910-0645. We have
based our estimates on this information collection which estimates that
it takes 1 hour (for mandatory reporting) to complete this form for
tobacco products for a total of 24 hours.
    Under Sec.  1114.9 firms will prepare amendments to PMTA bundles in
response to deficiency letters. These amendments contain additional
information that we need to complete substantive review. We anticipate
2 responses back per bundle and therefore, we estimate that 24
respondents will submit 48 amendments (24 x 2). Assuming 1,500 hours as
the time to prepare and submit a full PMTA and amendments may on
average take 10 percent to 15 percent of that time (150-225). We
averaged this time out (12.5 percent of a full submission preparation
time) and arrived at 188 hours per response. FDA estimates the total
burden hours for preparing amendments is 9,024 hours.
    Section 1114.13 would allow an applicant to transfer ownership of a
PMTA to a new owner. FDA believes this will be infrequent, so we have

assigned 1 hour acknowledging the requirement.
    Section 1114.15 is an alternative format of submitting a PMTA that
meets the requirements of Sec.  1114.7 that would reduce the burden
associated with the submission and review of an application. Our
estimated number of 2 respondents is based on the number estimated for
postmarket reports, which is 4 bundles (which is approximately 34
products). Not all applicants will resubmit modifications to previously
authorized products, so we estimate 2 bundles (which is approximately
17 products). FDA estimates further that a supplemental PMTA will take
25 percent of the time it takes to do an original submission (including
EA hours) for 428 hours per response. We estimate a total of 856 burden
hours for this activity.
    Under Sec.  1114.17 an applicant may utilize the resubmission
format for the same tobacco product for which FDA issued a marketing
denial order or for a new tobacco product that results from changes
necessary to address the deficiencies described in a marketing denial
order. We are estimating that out of all bundles received in 2020,
2021, and 2022, that an average of three bundles are authorized. If we
receive 24 amendments to bundles yearly, we estimate based on
historical data, 58 percent fail at acceptance (down to 8 bundles
remaining), 17 percent fail at filing (down to 7 bundles remaining),
and 25 percent receive marketing orders (5 left). We also estimate that
50 percent of the applications that receive marketing denial orders
will try to resubmit in a year. Thus, this number of respondents is
three (rounded up). FDA estimates that a resubmission will take 33
percent of the time it takes to complete an original submission
(including EA hours) at 565 hours per response for a total of 1,695
hours.
    An applicant is required to submit a PMTA and all supporting and
related documents to FDA in electronic format that FDA can process,
review, and archive unless an applicant requests, and FDA grants, a
waiver from this requirement. FDA does not believe we will receive many
waivers, so we have assigned one respondent to acknowledge the option
to submit a waiver. Consistent with our other application estimates for
waivers, we believe it would take .25 hours (15 minutes) per waiver for
a total of .25 hours.

                               Table 2--Estimated Annual Recordkeeping Burden \1\
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                                                     Number of                    Average burden
      21 CFR part; activity          Number of      records per    Total annual         per         Total hours
                                   recordkeepers   recordkeeper       records      recordkeeping
----------------------------------------------------------------------------------------------------------------
1114.45; PMTA Records...........              39               1              39               2              78
1100.204; Pre-existing Products                1               1               1               2               2
 Records........................
1107.3; Exemptions From                        1               1               1               2               2
 Substantial Equivalence (SE)
 Records........................
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............              82
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Table 2 describes the annual recordkeeping burden. FDA estimates
that 39 recordkeepers will maintain records at 2 hours per record.
Included in this estimate are the 15 expected new recordkeepers of NTN
products. Firms are also required to establish and maintain records
related to SE exemption requests and pre-existing products (Sec.
1100.200 states that subpart C of part 1100). We expect the burden
hours to be negligible for SE exemption requests. Firms would have
already established the required records when submitting the SE
exemption request. Similarly, we expect the hours of to be negligible
for any pre-existing tobacco products that have already submitted
standalone pre-existing tobacco product submissions, because firms
would have established the required records when submitting the
standalone pre-existing tobacco product submissions. We believe this
time is usual and customary for these firms. We estimate that it would
take 2 hours per record to establish the required records for a total
of 4 hours.
    Relative to the emergency approval by OMB our estimated burden for
the information collection reflects an overall increase of 72 hours and
a corresponding increase of 117 responses/records. We attribute this
adjustment to the addition of NTN product submissions.

    Dated: October 11, 2022.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2022-22708 Filed 10-18-22; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 80, Number 205 (Friday, October 23, 2015)]
[Proposed Rules]
[Page 64381]
[FR Doc No: 2015-26145]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R10-OAR-2014-0562: FRL-9935-47-Region 10]

Approval and Promulgation of Implementation Plans; Oregon: Lane
Regional Air Protection Agency Open Burning Rules and Oregon Department
of Environmental Quality Enforcement Procedures

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve into Oregon's State Implementation Plan (SIP) a submittal from
the Oregon Department of Environmental Quality (ODEQ) dated July 7,
2014, containing revisions to the Lane Regional Air Protection Agency's
(LRAPA) open burning rules adopted on March 14, 2008. The revised LRAPA
open burning rules make clarifications and provide for additional
controls of open burning activities in Lane County, would reduce
particulate emissions in Lane County, and would strengthen Oregon's
SIP. The EPA is also proposing to approve a submittal from the ODEQ
dated June 30, 2014, to update Oregon Administrative Rules (OAR) that
relate to procedures in contested cases (appeals), enforcement
procedures, and civil penalties. The EPA is proposing to approve most
of the submitted provisions because the revisions clarify and
strengthen the SIP and are consistent with the Clean Air Act (CAA). The
EPA is not proposing to approve certain provisions of the submitted
rules that do not relate to the requirements for SIPs under section 110
of the CAA. Finally, the EPA is proposing to correct the SIP pursuant
to the authority of section 110(k)(6) of the CAA to remove certain
provisions previously approved by the EPA that do not relate to the
requirements for SIPs under section 110 of the CAA.

DATES: Comments must be received on or before November 23, 2015.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R10-
OAR-2014-0562, by any of the following methods:
     Federal eRulemaking Portal http://www.regulations.gov:
Follow the on-line instructions for submitting comments.
     Email<EMAIL_ADDRESS>     Mail: Mr. Keith Rose, U.S. EPA Region 10, Office of Air,
Waste and Toxics, AWT-150, 1200 Sixth Avenue, Suite 900, Seattle, WA
98101
     Hand Delivery/Courier: U.S. EPA Region 10, 1200 Sixth
Avenue, Suite 900, Seattle, WA 98101. Attention: Keith Rose, Office of
Air, Waste and Toxics, AWT-150. Such deliveries are only accepted
during normal hours of operation, and special arrangements should be
made for deliveries of boxed information.
    Please see the direct final rule which is located in the Rules
section of this Federal Register for detailed instructions on how to
submit comments.

FOR FURTHER INFORMATION CONTACT: Keith Rose at telephone number: (206)
553-1949, email address<EMAIL_ADDRESS>or the above EPA, Region
10 address.

SUPPLEMENTARY INFORMATION: For further information, please see the
direct final action, of the same title, which is located in the Rules
section of this Federal Register. The EPA is simultaneously approving
the State's SIP revision as a direct final rule without prior proposal
because the EPA views this as a noncontroversial SIP revision and
anticipates no adverse comments. A detailed rationale for the approval
is set forth in the preamble to the direct final rule. If the EPA
receives no adverse comments, the EPA will not take further action on
this proposed rule.
    If the EPA receives adverse comments, the EPA will withdraw the
direct final rule and it will not take effect. The EPA will address all
public comments in a subsequent final rule based on this proposed rule.
The EPA will not institute a second comment period on this action. Any
parties interested in commenting on this action should do so at this
time. Please note that if we receive adverse comment on an amendment,
paragraph, or section of this rule and if that provision may be severed
from the remainder of the rule, the EPA may adopt as final those
provisions of the rule that are not the subject of an adverse comment.

    Dated: September 25, 2015.
Michelle L. Pirzadeh,
 Acting Regional Administrator, Region 10.
[FR Doc. 2015-26145 Filed 10-22-15; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 82, Number 221 (Friday, November 17, 2017)]
[Notices]
[Pages 54430-54434]
[FR Doc No: 2017-24920]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82056; File No. SR-OCC-2017-806]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of Advance Notice Concerning Liquidity for Same-Day
Settlement

November 13, 2017.
    Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, entitled Payment, Clearing
and Settlement Supervision Act of 2010 (``Clearing Supervision Act'')
\1\ and Rule 19b-4(n)(1)(i) of the Securities Exchange Act of 1934
(``Act''),\2\ notice is hereby given that on October 13, 2017, The
Options Clearing Corporation (``OCC'') filed with the Securities and
Exchange Commission (``Commission'') an advance notice as described in
Items I, II and III below, which Items have been prepared by OCC. The
Commission is publishing this notice to solicit comments on the advance
notice from interested persons.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
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I. Clearing Agency's Statement of the Terms of Substance of the Advance
Notice

    This advance notice is filed in connection with a proposed change
to modify the tools available to OCC in order to provide a mechanism
for addressing the risks of liquidity shortfalls, specifically, in the
extraordinary situation where OCC faces a liquidity need to meet its
same-day settlement obligations as a result of a bank or securities or
commodities clearing organization failing to achieve daily settlement.
    The proposed changes to OCC's By-Laws were submitted as Exhibit 5
of the

filing.\3\ The proposed change is described in detail in Item 10 below.
All terms with initial capitalization not defined herein have the same
meaning as set forth in OCC's By-Laws and Rules.\4\
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    \3\ OCC has filed a proposed rule change with the Commission in
connection with the proposed change. See SR-OCC-2017-017.
    \4\ OCC's By-Laws and Rules can be found on OCC's public Web
site: http://optionsclearing.com/about/publications/bylaws.jsp.
Other terms not defined herein or in the OCC By-Laws and Rules can
be found in the Rules & Procedures of NSCC (``NSCC Rules''),
available at http://www.dtcc.com/~/media/Files/Downloads/legal/
rules/nscc_rules.pdf, as the context implies.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice

    In its filing with the Commission, OCC included statements
concerning the purpose of and basis for the advance notice and
discussed any comments it received on the advance notice. The text of
these statements may be examined at the places specified in Item IV
below. OCC has prepared summaries, set forth in sections A and B below,
of the most significant aspects of these statements.

(A) Clearing Agency's Statement on Comments on the Advance Notice
Received From Members, Participants or Others

    Written comments were not and are not intended to be solicited with
respect to the proposed change and none have been received. OCC will
notify the Commission of any written comments received by OCC.

(B) Advance Notices Filed Pursuant to Section 806(e) of the Payment,
Clearing, and Settlement Supervision Act

Description of the Proposed Change
    The purpose of the proposed change is to modify the tools available
to OCC in order to provide a mechanism for addressing the risks of
liquidity shortfalls, specifically, in the extraordinary situation
where OCC faces a liquidity need to meet its same-day settlement
obligations as a result of a bank or securities or commodities clearing
organization failing to achieve daily settlement.
Current Practice
    Presently, Article VIII, Section 5(e) of OCC's By-Laws provides OCC
with the authority to borrow against the Clearing Fund in two
circumstances. First, Article VIII, Section 5(e) of OCC's By-Laws
provides OCC the authority to borrow where OCC ``deems it necessary or
advisable to borrow or otherwise obtain funds from third parties in
order to meet obligations arising out of the default or suspension of a
Clearing Member or any action taken by the Corporation in connection
therewith pursuant to Chapter XI of the Rules or otherwise.'' Second,
Article VIII, Section 5(e) of OCC's By-Laws provides OCC the authority
to borrow against the Clearing Fund where OCC ``sustains a loss
reimbursable out of the Clearing Fund pursuant to [Article VIII,
Section 5(b) of OCC's By-Laws] but [OCC] elects to borrow or otherwise
obtain funds from third parties in lieu of immediately charging such
loss to the Clearing Fund.'' In order for a loss to be reimbursable out
of the Clearing Fund under Article VIII, Section 5(b) of OCC's By-Laws,
it must arise from a situation in which any bank or securities or
commodities clearing organization has failed ``to perform any
obligation to [OCC] when due because of its bankruptcy, insolvency,
receivership, suspension of operations, or because of any similar
event.'' \5\
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    \5\ To the extent that a loss resulting from any of the events
referred to in Article VIII, Section 5(b) is recoverable out of the
Clearing Fund pursuant to Article VIII, Section 5(a), the provisions
of Article VIII, Section 5(a) control and render the provisions of
Article VIII, Section 5(b) inapplicable.
---------------------------------------------------------------------------

    Under either of the two aforementioned circumstances, OCC is
authorized to borrow against the Clearing Fund for a period not to
exceed 30 days, and during such period, the borrowing shall not affect
the amount or timing of any charges otherwise required to be made
against the Clearing Fund pursuant to Article VIII, Section 5. However,
if any part of the borrowing remains outstanding after 30 days, then at
the close of business on the 30th day (or the first Business Day
thereafter) such amount must be considered an actual loss to the
Clearing Fund, and OCC must immediately allocate such loss in
accordance with Article VIII, Section 5.
Proposed Change
    While Article VIII, Section 5(e) of OCC's By-Laws currently
provides for borrowing authority in the more extreme scenarios
involving a bank's or securities or commodities clearing organization's
bankruptcy, insolvency, receivership, suspension of operations or
similar event, such authority does not extend to the similar, but less
extreme scenarios in which a bank or securities or commodities clearing
organization might be temporarily unable to timely make daily
settlement with OCC for reasons other than its bankruptcy, insolvency,
receivership or suspension of operations or similar events. An example
of such a related scenario would be a disruption of the ordinary
operations of a settlement bank that temporarily prohibits the bank
from timely effecting settlement payments in accordance with OCC's
daily settlement cycle.
    The proposed change would expand upon the existing borrowing
authority in Article VIII, Section 5(e) of OCC's By-Laws. As expanded,
OCC would be authorized to borrow (or otherwise obtain funds through
any means determined to be reasonable by the Executive Chairman, COO or
CAO) against the Clearing Fund in the extraordinary event that OCC
faces a liquidity need in order to complete same-day settlement. As
specified in the proposed rule text, the funds obtained from any such
transaction can be used only for their stated purpose, namely, to
satisfy a need for liquidity for same-day settlement. Consistent with
the existing borrowing authority in Article VIII, Section 5(e) of OCC's
By-Laws, OCC would be authorized to borrow against the Clearing Fund
for a period not to exceed 30 days, and during such period, the funds
obtained would not be deemed to be charges against the Clearing Fund,
irrespective of how such funds are applied, and the borrowing shall not
affect the amount or timing of any charges otherwise required to be
made against the Clearing Fund pursuant to Article VIII, Section 5.
However, in the unlikely event that any part of the borrowing were to
remain outstanding after 30 days, then at the close of business on the
30th day (or the first Business Day thereafter), such amount would be
considered an actual loss to the Clearing Fund, and OCC must
immediately allocate such loss in accordance with Article VIII, Section
5.
    Like the existing borrowing authority in Article VIII, Section 5(e)
of OCC's By-Laws, OCC envisions that the proposed expanded authority
only would be relevant in extraordinary circumstances and, even then,
only would be used where OCC, exercising its discretion, believes the
employment of this particular authority would be appropriate to address
OCC's immediate liquidity need.
    OCC proposes to amend Sections 1(a), 5(b) and 5(e) of Article VIII
of its By-Laws in order to give effect to the expanded borrowing
authority discussed herein. Section 5(e) of Article VIII of OCC's By-
Laws would be amended to permit OCC to borrow against the Clearing Fund
if it reasonably believes such borrowing is necessary to meet its
liquidity needs for same-day settlement as a result of the failure of
any bank or securities or commodities clearing organization to achieve
daily settlement.

    Section 1(a) of Article VIII of OCC's By-Laws would be amended to
include conforming changes that would reflect that the purpose of the
Clearing Fund includes borrowing against the Clearing Fund as permitted
under Section 5(e) of Article VIII of the By-Laws.
    Section 5(b) of Article VIII of the By-Laws would be amended to
include conforming changes that would declare that any borrowing
remaining outstanding for less than 30 days may be considered, in OCC's
discretion, an actual loss and the amount of any such loss then shall
be charged proportionately against all Clearing Members' computed
contributions to the Clearing Fund as fixed at the time, and any
borrowing remaining outstanding on the 30th day shall be considered an
actual loss to the Clearing Fund and the amount of any such loss shall
be charged proportionately against all Clearing Members' computed
contributions to the Clearing Fund as fixed at the time. OCC proposes
to include discretionary authority to declare any borrowing outstanding
for less than 30 days as an actual loss chargeable against the Clearing
Fund because the proposed borrowing authority is intended only to
address same-day liquidity needs, and intended to be promptly repaid
upon the bank's or securities or commodities clearing organization's
resolution of the temporary disruption. In the unlikely circumstance
that a disruption of a bank or securities or commodities clearing
organization is not timely resolved, OCC may need to exercise its
discretion to declare an actual loss, depending on the size of the
borrowing, to ensure that OCC replenishes its ``Cover 1'' financial
resources.\6\ The requirement to recognize any borrowing outstanding
after 30 days as an actual loss chargeable against the Clearing Fund
would be consistent with the requirements of the borrowing authority
currently permitted by Section 5(e) of Article VIII of the By-Laws.
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    \6\ ``Cover 1'' financial resources refers to the requirement
that a CCA maintains financial resources sufficient to enable it to
cover the ``default of the participant family that would potentially
cause the largest aggregate credit exposure for the [CCA] in extreme
but plausible market conditions.'' 17 CFR 240.17Ad-22(e)(7)(viii).
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Expected Effect on and Management of Risk
    OCC believes the proposed change would enable it to better manage
the risks associated with the failure of a settlement bank or
securities or commodities clearing organization's to achieve timely
settlement. As noted above, OCC's By-Laws currently provide for
borrowing authority in the more extreme scenarios involving a bank's or
securities or commodities clearing organization's bankruptcy,
insolvency, receivership, suspension of operations or similar event,
such authority does not extend to the similar, but less extreme
scenarios in which a bank or securities or commodities clearing
organization might be temporarily unable to timely make daily
settlement with OCC for reasons other than its bankruptcy, insolvency,
receivership or suspension of operations or similar events. The
proposed change would expand upon this existing borrowing authority to
allow OCC to borrow (or otherwise obtain funds through any means
determined to be reasonable by the Executive Chairman, COO or CAO)
against the Clearing Fund in the extraordinary event that OCC faces a
liquidity need in order to complete same-day settlement. As a result,
the proposed change would enhance OCC's ability to manage its liquidity
risks and ensure that it is able to continue making timely settlements
in the event of such a disruption.
    As stated above, it is conceivable, though extremely unlikely, that
a bank or securities or commodities clearing organization may fail to
make timely settlement with OCC as a result of a temporary disruption
to its ordinary operations. The proposed change would not alter this
risk, but would provide OCC with a mechanism for addressing it, should
such risk ever be realized. The proposed mechanism for addressing this
risk--discretionary authority to borrow from the Clearing Fund--would
require OCC's senior and executive management to exercise discretion
and judiciousness and could, if ever deployed, present an arguably new,
though very limited, risk to Clearing Members.
    Modifying OCC's existing authority to borrow against the Clearing
Fund introduces a new, and potentially competing, demand on OCC's
Clearing Fund resources in that any amount of Clearing Fund resources
borrowed to address the failure of a bank or securities or commodities
clearing organization to make timely settlement would subtract from the
available resources to address other losses that could be charged
against the Clearing Fund (most common among those, losses related to
Clearing Member defaults). To manage the potential for competing
demands on Clearing Fund resources, OCC would exercise discretion and
judiciousness in selecting when this new borrowing authority could be
prudently deployed, in light of then-existing facts and circumstances.
In the alternative, OCC's could elect to deploy an alternative tool,
such as OCC's ability to extend the settlement window under Rule 505,
if such tool would be more appropriate given anticipated demands on
Clearing Fund resources in light of then-existing facts and
circumstances. Because of the low probability that a bank or securities
or commodities clearing organization would suffer a temporary
disruption to its ordinary operations that could threaten its ability
to make timely settlement, and the extremely low probability that such
a disruption would result in the bank or securities or commodities
clearing organization actually failing to make timely settlement, OCC
believes that the potential for competing demands on Clearing Fund
resources can be managed sufficiently through the tools available in
its default management rules, policies and procedures.\7\
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    \7\ In addition, the bank or securities or commodities clearing
organization would need to be in deficit for the settlement cycle in
question in order for OCC to face an immediate liquidity need.
Further, OCC must reasonably anticipate an imminent or near imminent
failure by one or more Clearing Members for there to be a potential
competing demand on Clearing Fund resources. OCC believes that the
alignment of all of these occurrences represents an extraordinarily
low probability occurrence.
---------------------------------------------------------------------------

    The proposed change could arguably present a new, though very
limited, risk to Clearing Members in that OCC's authority to borrow
against the Clearing Fund would be expanded, albeit slightly, to permit
borrowing in a new scenario where a bank or securities or commodities
clearing organization fails to make timely settlement (but otherwise is
not in bankruptcy, insolvency, receivership, suspension of operations
or a similar state). In order for Clearing Members to be impacted by
this risk, a borrowing under the proposed authority would need to be
declared an actual loss by OCC prior to 30 days lapsing or remain
outstanding for 30 days, at which point, such amount would be
considered an actual loss to the Clearing Fund, and OCC would be
required to immediately allocate such loss in accordance with Article
VIII, Section 5. However, given that the proposed borrowing authority
is intended to be deployed to address immediate liquidity needs arising
from temporary disruptions of the ordinary operation of a bank or
securities or commodities clearing organization, OCC believes that it
is extremely unlikely that any amount of any such borrowing ultimately
would need to be declared as an actual loss in advance of 30 days or
remain outstanding for a period of 30

days. If, however, any amount of any such borrowing in fact did remain
outstanding for longer than expected, OCC believes there would be a
high probability that the bank or securities or commodities clearing
organization in question has actually failed, and therefore entered
bankruptcy, insolvency, receivership, suspension of operations or a
similar state--which events would have independently triggered the
already-existing borrowing authority in Article VIII, Section 5(e).
Consistency With the Clearing Supervision Act
    The stated purpose of the Clearing Supervision Act is to mitigate
systemic risk in the financial system and promote financial stability
by, among other things, promoting uniform risk management standards for
systemically important financial market utilities and strengthening the
liquidity of systemically important financial market utilities.\8\
Section 805(a)(2) of the Clearing Supervision Act \9\ also authorizes
the Commission to prescribe risk management standards for the payment,
clearing and settlement activities of designated clearing entities,
like OCC, for which the Commission is the supervisory agency. Section
805(b) of the Clearing Supervision Act \10\ states that the objectives
and principles for risk management standards prescribed under Section
805(a) shall be to:
---------------------------------------------------------------------------

    \8\ 12 U.S.C. 5461(b).
    \9\ 12 U.S.C. 5464(a)(2).
    \10\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     Promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act and the Act in furtherance of
these objectives and principles, including those standards adopted
pursuant to the Commission rules cited below.\11\ For the reasons set
forth below, OCC believes that the proposed change is consistent with
the risk management standards promulgated under Section 805(a) of the
Clearing Supervision Act.\12\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release
Nos. 68080 (October 22, 2012), 77 FR 66220 (November 2, 2012) (S7-
08-11) (``Clearing Agency Standards''); 78961 (September 28, 2016),
81 FR 70786 (October 13, 2016) (S7-03-14) (``Standards for Covered
Clearing Agencies''). The Standards for Covered Clearing Agencies
became effective on December 12, 2016. OCC is a ``covered clearing
agency'' as defined in Rule 17Ad-22(a)(5) and therefore is subject
to section (e) of Rule 17Ad-22.
    \12\ 12 U.S.C. 5464(b)(1) and (4).
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(7)(viii) requires that a covered clearing agency
(``CCA'') address foreseeable liquidity shortfalls that would not be
covered by the CCA's liquid resources and seek to avoid unwinding,
revoking, or delaying the same-day settlement of payment
obligations.\13\ As stated above, OCC believes that it could be
foreseeable, though extremely unlikely, that a bank or securities or
commodities clearing organization may fail to make timely settlement
with OCC as the result of an event that does not result in a loss to
OCC from the bankruptcy, insolvency, resolution, suspension of
operations or similar event of such bank or securities or commodities
clearing organization. The proposed change would improve OCC's ability
to address such situations by expanding OCC's borrowing authority to
enable OCC to borrow against the Clearing Fund in order to avoid
disrupting its ordinary settlement cycle (and thusly, to avoid imposing
the same disruption on Clearing Members).
---------------------------------------------------------------------------

    \13\ 17 CFR 240.17Ad-22(e)(7)(viii).
---------------------------------------------------------------------------

III. Date of Effectiveness of the Advance Notice and Timing for
Commission Action

    The proposed change may be implemented if the Commission does not
object to the proposed change within 60 days of the later of (i) the
date the proposed change was filed with the Commission or (ii) the date
any additional information requested by the Commission is received. OCC
shall not implement the proposed change if the Commission has any
objection to the proposed change.
    The Commission may extend the period for review by an additional 60
days if the proposed change raises novel or complex issues, subject to
the Commission providing the clearing agency with prompt written notice
of the extension. A proposed change may be implemented in less than 60
days from the date the advance notice is filed, or the date further
information requested by the Commission is received, if the Commission
notifies the clearing agency in writing that it does not object to the
proposed change and authorizes the clearing agency to implement the
proposed change on an earlier date, subject to any conditions imposed
by the Commission.
    OCC shall post notice on its Web site of proposed changes that are
implemented.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-OCC-2017-806 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2017-806. 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 advance notice that are filed
with the Commission, and all written communications relating to the
advance notice between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of OCC and on OCC's Web site at
http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_17_806.pdf.
    All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2017-806 and
should be submitted on or before December 8, 2017.

    By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24920 Filed 11-16-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 95 (Thursday, May 16, 2019)]
[Notices]
[Pages 22173-22174]
[FR Doc No: 2019-10124]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85826; File No. SR-NYSE-2019-09]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Designation of a Longer Period for Commission Action on a
Proposed Rule Change To Amend Exchange Rules 104 and 36 To Require
Designated Market Makers To Communicate With a Designed Senior
Representative of the Issuers of the DMM's Assigned Securities

May 10, 2019.
    On March 8, 2019, New York Stock Exchange LLC (``NYSE'' 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 to amend NYSE Rules 104 and 36 to require
Designated Market Makers (``DMMs'') to communicate with a designated
senior representatives of the issuers of the DMM's assigned securities.
The proposed rule change was published in the Federal Register on March
26, 2019.\3\ The Commission has received no comments on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 85367 (Mar. 20,
2019), 84 FR 11382 (Mar. 26, 2019) (``Notice'').
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    Section 19(b)(2) of the Act \4\ provides that within 45 days of the
publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve, disapprove, or institute
proceedings to determine whether the proposed rule change should be
disapproved. The 45th day after publication of the notice for this
proposed rule change is May 10, 2019. The Commission is extending this
45-day time period.
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    \4\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds that it is appropriate to designate a longer
period within which to take action on the proposed rule change so that
it has sufficient time to consider the proposal. Accordingly, the
Commission, pursuant to Section 19(b)(2) of the Act,\5\ designates June
24, 2019, as the date by which the Commission shall either approve or
disapprove, or institute

proceedings to determine whether to approve or disapprove, the proposed
rule change (File No. SR-NYSE-2019-09).
---------------------------------------------------------------------------

    \5\ Id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(31).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10124 Filed 5-15-19; 8:45 am]
 BILLING CODE 8011-01-P