[Federal Register Volume 85, Number 214 (Wednesday, November 4, 2020)]
[Notices]
[Pages 70143-70144]
[FR Doc No: 2020-24455]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 4451-024]

Green Mountain Power Corporation; City of Somersworth, New
Hampshire; Notice of Application Accepted for Filing and Soliciting
Motions To Intervene and Protests

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection.
    a. Type of Application: Subsequent Minor License.
    b. Project No.: 4451-024.
    c. Date filed: April 30, 2020.
    d. Applicants: Green Mountain Power, City of Somersworth, New
Hampshire.
    e. Name of Project: Lower Great Falls Hydroelectric Project.
    f. Location: On the Salmon Falls River in Strafford County, New
Hampshire, and York County, Maine. No federal lands are occupied by the
project works or located within the project boundary.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791(a)-825(r).
    h. Applicant Contact: Mr. John Greenan, Green Mountain Power
Corporation, 1252 Post Road, Rutland, VT 05701; Phone at (802) 770-
2195, or email at<EMAIL_ADDRESS>    i. FERC Contact: Amanda Gill,<PHONE_NUMBER> or
<EMAIL_ADDRESS>    j. Deadline for filing motions to intervene and protests: 60 days
from the issuance date of this notice.
    The Commission strongly encourages electronic filing. Please file
motions to intervene and protests using the Commission's eFiling system
at https://ferconline.ferc.gov/FERCOnline.aspx. For assistance, please
contact FERC Online Support at<EMAIL_ADDRESS>(866) 208-
3676 (toll free), or<PHONE_NUMBER> (TTY). In lieu of electronic
filing, you may submit a paper copy. Submissions sent via the U.S.
Postal Service must be addressed to: Kimberly D. Bose, Secretary,
Federal Energy Regulatory Commission, 888 First Street NE, Room 1A,
Washington, DC 20426. Submissions sent via any other carrier must be
addressed to: Kimberly D. Bose, Secretary, Federal Energy Regulatory
Commission, 12225 Wilkins Avenue, Rockville, Maryland 20852. The first
page of any filing should include docket number P-4451-024.
    The Commission's Rules of Practice require all intervenors filing
documents with the Commission to serve a copy of that document on each
person on the official service list for the project. Further, if an
intervenor files comments or documents with the Commission relating to
the merits of an issue that may affect the responsibilities of a
particular resource agency, they must also serve a copy of the document
on that resource agency.
    k. This application has been accepted for filing, but is not ready
for environmental analysis at this time.
    l. Project Description: The existing Lower Great Falls Project
consists of: (1) A 297-foot-long, 32-foot-high stone masonry and
concrete dam that includes the following sections: (a) A 176-foot-long
spillway section with a crest elevation of 102.37 feet National
Geodetic Vertical Datum of 1929 (NGVD) and 4-foot-high flashboards at
an elevation of 106.37 feet NGVD at the top of the flashboards; (b) a
50-foot-long left abutment section; and (c) a 71-foot-long right
abutment section; (2) an impoundment with a surface area of 32 acres
and a storage capacity of 467 acre-feet at an elevation of 106.37 feet
NGVD; (3) a 40.5-foot-wide, 20-foot-high intake structure with four 5-
foot-wide, 10.5-foot-high steel frame gates and a trashrack with 2-inch
bar spacing; (4) two steel penstocks that include: (a) An 8.5-foot-
diameter, 120-foot-long left penstock that bifurcates into a 5.3-foot-
diameter, 85-foot-long section and a 7.6-foot-diameter, 85-foot-long
section; and (b) an 8.5-foot-diameter, 140-foot-long right penstock
that bifurcates into a 7-foot-diameter, 85-foot-long section and a 7.6-
foot-diameter, 85-foot-long section; (5) a 46-foot-long, 30-foot-wide
concrete and brick powerhouse with four Francis turbine-generator units
with a total capacity of 1.28 megawatt; (6) a 55-foot-long, 30-foot-
wide tailrace; (7) a 260-foot-long underground transmission line that
delivers power to a 4.16-kilovolt distribution line; and (8)
appurtenant facilities. The project creates a 250-foot-long bypassed
reach of the Salmon Falls River between the dam and the downstream end
of the tailrace.
    The project operates as a run-of-river (ROR) facility with no
storage or flood control capacity. The project impoundment is
maintained at a flashboard crest elevation of 106.37 feet NGVD. The
current license requires the project to maintain a continuous minimum
flow of 6.05 cubic feet per second (cfs) or inflow, whichever is less,
to the bypassed reach for the purpose of protecting and enhancing
aquatic resources in the Salmon Falls River. The average annual
generation production of the project was 3,916,825 kilowatt-hours from
2005 through 2018.
    The applicant proposes to: (1) Continue operating the project in a
ROR mode; (2) provide a minimum flow of 30 cfs or inflow, whichever is
less, to the bypassed reach; (3) install an eel ramp for upstream eel
passage at the project; (4) implement targeted nighttime turbine
shutdowns to protect eels during downstream passage; and (5) install a
downstream fish passage structure for eels and other resident fish
species.
    m. A copy of the application is available for review via the
internet through the Commission's Home Page

(http://www.ferc.gov) using the ``eLibrary'' link. Enter the docket
number, excluding the last three digits in the docket number field, to
access the document (P-4451). At this time, the Commission has
suspended access to the Commission's Public Reference Room due to the
proclamation declaring a National Emergency concerning the Novel
Coronavirus Disease (COVID-19), issued by the President on March 13,
2020. For assistance, contact FERC Online Support.
    You may also register online at https://ferconline.ferc.gov/FERCOnline.aspx to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.
    n. Anyone may submit a protest or a motion to intervene in
accordance with the requirements of Rules of Practice and Procedure, 18
CFR 385.210, 385.211, and 385.214. In determining the appropriate
action to take, the Commission will consider all protests filed, but
only those who file a motion to intervene in accordance with the
Commission's Rules may become a party to the proceeding. Any protests
or motions to intervene must be received on or before the specified
deadline date for the particular application.
    All filings must (1) bear in all capital letters the title
``PROTEST'', or ``MOTION TO INTERVENE;'' (2) set forth in the heading
the name of the applicant and the project number of the application to
which the filing responds; (3) furnish the name, address, and telephone
number of the person protesting or intervening; and (4) otherwise
comply with the requirements of 18 CFR 385.2001 through 385.2005.
Agencies may obtain copies of the application directly from the
applicant. A copy of any protest or motion to intervene must be served
upon each representative of the applicant specified in the particular
application.
    o. Procedural schedule: The application will be processed according
to the following schedule. Revisions to the schedule will be made as
appropriate.

Issue Scoping Document 1 for comments--November 2020
Request Additional Information (if necessary)--January 2021
Issue Scoping Document 2--February 2021
Issue Notice of Ready for Environmental Analysis--February 2021
Commission issues Environmental Assessment--August 2021

    Final amendments to the application must be filed with the
Commission no later than 30 days from the issuance date of the notice
of ready for environmental analysis.

    Dated: October 28, 2020.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2020-24455 Filed 11-3-20; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 133 (Tuesday, July 12, 2016)]
[Rules and Regulations]
[Pages 45013-45015]
[FR Doc No: 2016-16334]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2016-0011]
RIN 1625- AA08

Special Local Regulation; Drag Boat Championship, Intracoastal
Waterway; Bucksport, SC

AGENCY: Coast Guard, DHS

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a special local regulation on
the Atlantic Intracoastal Waterway in Bucksport, South Carolina during
the Bucksport/Southeastern Drag Boat Summer Championship, on August 13,
2016 and August 14, 2016. This special local regulation is necessary to
ensure the safety of participants, spectators, and the general public
during the event. This regulation prohibits persons and vessels from
being in the regulated area unless authorized by the Captain of the
Port Charleston or a designated representative.

DATES: This rule is effective from August 13, 2016 through August 14,
2016.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2016-0011 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions about this rule,
call or email Lieutenant John Downing, Sector Charleston Office of
Waterways Management, Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

    CFR Code of Federal Regulations
    DHS Department of Homeland Security
    NPRM Notice of Proposed Rulemaking
    Sec.  Section
    U.S.C. United States Code

II. Background Information and Regulatory History

    On December 27, 2015, the Bucksport Marina notified the Coast Guard
that it will sponsor a series of drag boat races from noon to 7 p.m. on
August 13, 2016 and August 14, 2016. In response, on April 6, 2016, the
Coast Guard published a notice of proposed rulemaking titled Bucksport/
Southeastern Drag Boat Summer Championship, Atlantic Intracoastal
Waterway; Bucksport, SC. There we stated why we issued the NPRM, and
invited comments on our proposed regulatory action related to this
special local regulation. During the comment period that ended May 6,
2016, we received no comments.

III. Legal Authority and Need for Rule

    The legal basis for the rule is the Coast Guard's authority to
establish special local regulations: 33 U.S.C. 1233. The purpose of the
rule is to insure safety of life on navigable waters of the United
States during the two days of drag boat races.

IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received no comments on our NPRM published April
6, 2016. There are no changes in the regulatory text of this rule from
the proposed rule in the NPRM.
    On August 13, 2016 and August 14, 2016, Bucksport Marina will host
a series of drag boat races on the Atlantic Intracoastal Waterway in
Bucksport, South Carolina during the Bucksport/Southeastern Drag Boat
Summer Championship. Approximately 75 powerboats are anticipated to
participate in the races and approximately 35 spectator vessels are
expected to attend the event. This rule establishes a special local
regulation on certain waters on the Atlantic Intracoastal Waterway in
Bucksport, South Carolina. The special local regulation will be
enforced daily from noon until 7 p.m. on August 13, 2016 and August 14,
2016.
    Except for those persons and vessels participating in the drag boat
races, persons and vessels are prohibited from entering, transiting
through, anchoring in, or remaining within any of the race areas unless
specifically authorized by the Captain of the Port Charleston or a
designated representative. Persons and vessels desiring to enter,
transit through, anchor in, or remain within any of the race areas may
contact the Captain of the Port Charleston by telephone at (843)740-
7050, or a designated representative via VHF radio on channel 16, to
request authorization. If authorization to enter, transit through,
anchor in, or remain within the race areas is granted by the Captain of
the Port Charleston or a designated representative, all persons and
vessels receiving such authorization must comply with the instructions
of the Captain of the Port Charleston or a designated representative.
The Coast Guard will provide notice of the regulated areas by Local
Notice to Mariners, Broadcast Notice to Mariners, and on-scene
designated representatives.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive Orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive Orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This rule has not been designated
a ``significant regulatory action,'' under Executive Order 12866.
Accordingly, it has not been reviewed by the Office of Management and
Budget. This rule is not a significant regulatory action under section
3(f) of

Executive Order 12866, Regulatory Planning and Review, as supplemented
by Executive Order 13563, Improving Regulation and Regulatory Review,
and does not require an assessment of potential costs and benefits
under section 6(a)(3) of Executive Order 12866 or under section 1 of
Executive Order 13563. The Office of Management and Budget has not
reviewed it under those Orders.
    The economic impact of this rule is not significant for the
following reasons: (1) Non-participant persons and vessels may enter,
transit through, anchor in, or remain within the regulated area during
the enforcement periods if authorized by the Captain of the Port
Charleston or a designated representative; (2) vessels not able to
enter, transit through, anchor in, or remain within the regulated area
without authorization from the Captain of the Port Charleston or a
designated representative may operate in the surrounding areas during
the enforcement period; (3) the Coast Guard will provide advance
notification of the special local regulation to the local maritime
community by Local Notice to Mariners and Broadcast Notice to Mariners;
and (4) the safety zone will impact only a small designated area of the
Atlantic Intracoastal Waterway for the 2 days of August 13, and 14,
2016 from noon to 7 p.m., and thus is limited in time and scope.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    This rule may affect the following entities, some of which may be
small entities: the owner or operators of vessels intending to enter,
transit through, anchor in, or remain within the regulated area during
the enforcement period. For the reasons discussed in Regulatory
Planning and Review section above, this rule will not have a
significant economic impact on a substantial number of small entities.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that
this action is one of a category of actions that do not individually or
cumulatively have a significant effect on the human environment. This
rule involves a special local regulation issued in conjunction with a
regatta or marine parade. This rule is categorically excluded from
further review under paragraph 34(h) of Figure 2-1 of the Commandant
Instruction.
    An environmental analysis checklist supporting this determination
and a Categorical Exclusion Determination are available in the docket
where indicated under ADDRESSES. We seek any comments or information
that may lead to the discovery of a significant environmental impact
from this rule.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 100

    Marine Safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority:  33 U.S.C. 1233.

0
2. Add Sec.  100.35T07-0011 to read as follows:

Sec.  100.35T07-0011  Bucksport/Southeastern Drag Boat Summer
Championship Atlantic Intracoastal Waterway; Bucksport, SC.

    (a) Regulated Area. All waters of the Atlantic Intracoastal
Waterway encompassed by a line connecting the following points: Point 1
in position 33[deg]39'13'' N., 079[deg]05'36'' W.; thence west to point
2 in position 33[deg]39'17'' N., 079[deg]05'46'' W.; thence south to
point 3 in position 33[deg]38'53'' N., 079[deg]05'39'' W.; thence east
to point 4 in position 33[deg]38'54'' N., 079[deg]05'31'' W.; thence
north back to point 1. All coordinates are North American Datum 1983.
    (b) Definition. As used in this section, ``designated
representative'' means Coast Guard Patrol Commanders, including Coast
Guard coxswains, petty officers, and other officers operating Coast
Guard vessels, and Federal, state, and local officers designated by or
assisting the Captain of the Port Charleston in the enforcement of the
regulated areas.
    (c) Regulations. (1) All persons and vessels are prohibited from
entering, transiting through, anchoring in, or remaining within the
regulated area, except persons and vessels participating in Bucksport/
Southeastern Drag Boat Summer championship or serving as safety
vessels. Persons and vessels desiring to enter, transit through, anchor
in, or remain within the regulated area may contact the Captain of the
Port Charleston by telephone at<PHONE_NUMBER>, or a designated
representative via VHF radio on channel 16, to request authorization.
If authorization to enter, transit through, anchor in, or remain within
the regulated area is granted by the Captain of the Port Charleston or
a designated representative, all persons and vessels receiving such
authorization must comply with the instructions of the Captain of the
Port Charleston or a designated representative.
    (2) The Coast Guard will provide notice of the regulated area by
Marine Safety Information Bulletins, Local Notice to Mariners,
Broadcast Notice to Mariners, and on-scene designated representatives.
    (d) Enforcement period. This rule will be enforced daily from noon
until 7 p.m. on August 13, and August 14, 2016.

    Dated: June 27, 2016.
G.L. Tomasulo,
Captain, U.S. Coast Guard, Captain of the Port Charleston.
[FR Doc. 2016-16334 Filed 7-11-16; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 87, Number 234 (Wednesday, December 7, 2022)]
[Notices]
[Pages 75105-75113]
[FR Doc No: 2022-26535]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96426; File No. SR-NSCC-2022-005]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Partial Amendment No. 2 and Amendment
No. 3 and of Designation of Longer Period for Commission Action on
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change To Revise the Excess Capital Premium Charge Order

December 1, 2022.
    On May 20, 2022, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') proposed rule change SR-NSCC-2022-005 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 June 8, 2022,\3\ and the
Commission has received comments regarding the changes proposed in the
proposed rule change.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 95026 (June 2, 2022), 87
FR 34913 (June 8, 2022) (File No. SR-NSCC-2022-005). The Notice
referred to an incorrect filing date of May 30, 2022; however, the
proposal was filed on May 20, 2022, as indicated here. Moreover, the
Notice reflected the filing of Amendment No. 1, which made a
correction to Exhibit 5 of the filing, specifically, to insert an
additional cross-reference into a proposed definition that had been
omitted.
    \4\ Comments are available at https://www.sec.gov/comments/sr-nscc-2022-005/srnscc2022005.htm.
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    On July 11, 2022, pursuant to Section 19(b)(2) of the Act,\5\ the
Commission designated a longer period within which to approve,
disapprove, or institute proceedings to determine whether to approve or
disapprove the Proposed Rule Change.\6\ On September 1, 2022, the
Commission instituted proceedings, pursuant to Section 19(b)(2)(B) of
the Act,\7\ to determine whether to approve or disapprove the Proposed
Rule Change.\8\
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    \5\ 15 U.S.C. 78s(b)(2).
    \6\ Securities Exchange Act Release No. 95245 (July 11, 2022),
87 FR 42523 (July 15, 2022) (SR-NSCC-2022-005).
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ Securities Exchange Act Release No. 95656 (Sept. 1, 2022),
87 FR 55058 (Sept. 8, 2022) (File No. SR-NSCC-2022-005).
---------------------------------------------------------------------------

    On July 6, 2022, NSCC filed a partial amendment (``Amendment No.
2'') to modify the proposed rule change.\9\ On November 28, 2022, NSCC
filed another amendment (``Amendment No. 3'') to modify the proposed
rule change as described in Items I, II and III below, which Items have
been prepared primarily by the clearing agency.\10\
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    \9\ Amendment No. 2 partially amended the proposed rule change
to update the description of the impact of the proposal. The
contents of that Amendment are reflected in Section II(A)(1)(vii)
below. In Amendment No. 2, NSCC also provided a revised version of
the confidential impact study that it included as Exhibit 3a to the
proposed rule change.
    \10\ Amendment No. 3 amends and replaces the proposed rule
change in its entirety. Specifically, it would clarify the
particular circumstances in which NSCC would retain the ability to
waive the ECP charge, rather than remove NSCC's discretion to waive
or reduce the charge as was initially proposed in the proposed rule
change. As described in greater detail below in Section II.(iv),
this Amendment describes why NSCC believes it is appropriate for
NSCC to retain discretion to waive an ECP charge in certain defined
circumstances, defines the circumstances in which NSCC may waive the
ECP charge, and discloses both the information that NSCC would
review in deciding whether to waive the ECP charge as well as the
governance around the application of such waiver. In order to
implement these proposed changes, NSCC would amend Section I(B)(2)
of Procedure XV of the Rules to include a new subsection (c) to
describe NSCC's discretion to waive the ECP charge.

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

    The Commission is publishing this notice to solicit comments on
Amendment Nos. 2 and 3 from interested persons and to designate a
longer period for Commission action pursuant to Section 19(b)(2)(B) of
the Act \11\ to determine whether to approve or disapprove the proposed
rule change, as modified by Amendment Nos. 2 and 3 (hereinafter,
``proposed rule change'').
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of modifications to Procedure XV
(Clearing Fund Formula and Other Matters) of NSCC's Rules & Procedures
(``Rules'') \12\ to revise the Excess Capital Premium (``ECP'') charge
by enhancing the methodology for calculating the charge to (1) compare
a Member's applicable capital amounts with the amount it contributes to
the Clearing Fund that represents its volatility charge, (2) for
Members that are broker-dealers, use net capital amounts rather than
excess net capital amounts in the calculation of the ECP charge; and
for all other Members, use equity capital in the calculation of the ECP
charge, and (3) establish a cap of 2.0 for the Excess Capital Ratio (as
defined below) that is used in calculating a Member's ECP charge.
---------------------------------------------------------------------------

    \12\ Capitalized terms not defined herein are defined in the
Rules, available at http://dtcc.com/~/media/Files/Downloads/legal/
rules/nscc_rules.pdf.
---------------------------------------------------------------------------

    The proposed changes would also improve the transparency of the
Rules regarding the ECP charge by (1) clarifying the capital amounts
that are used in the calculation of the charge by introducing new
defined terms, (2) clarifying the particular circumstances in which
NSCC retains the ability to waive the charge, and (3) providing that
NSCC may calculate the charge based on updated capital information, as
described in greater detail below.

II. Clearing Agency's Amended Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item III below. The clearing agency has prepared
summaries, set forth in sections A, B, and C below, of the most
significant aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

1. Purpose
Description of Amendment No. 3
    This filing constitutes Amendment No. 3 to proposed rule change SR-
NSCC-2022-005, which was filed with the Commission on May 20, 2022, and
previously amended on June 1, 2022 and July 6, 2022. This Amendment
amends and replaces the Filing, as previously amended, in its entirety.
NSCC submits this Amendment in order to clarify the particular
circumstances in which NSCC would retain the ability to waive the ECP
charge, rather than remove NSCC's discretion to waive or reduce the
charge as was proposed in the Filing.
    In particular, and as described in greater detail below, this
Amendment describes why NSCC believes it is appropriate for NSCC to
retain discretion to waive an ECP charge in certain defined
circumstances, defines the circumstances in which NSCC may waive the
ECP charge, and discloses both the information that NSCC would review
in deciding whether to waive the ECP charge as well as the governance
around the application of such waiver. In order to implement these
proposed changes, NSCC would amend Section I(B)(2) of Procedure XV of
the Rules to include a new subsection (c) to describe NSCC's discretion
to waive the ECP charge, as shown in Exhibits 4 and 5 to this
Amendment.
Proposed Rule Change
    NSCC is proposing to modify the ECP charge, which is a component of
its Clearing Fund that NSCC may impose on a Member when a portion of
that Member's Required Fund Deposit (defined in the Rules as the
``Calculated Amount'') exceeds its applicable capital amounts by 1.0
(defined in the Rules as the ``Excess Capital Ratio''), as described in
greater detail below.\13\ The proposed changes would revise the ECP
charge by enhancing the methodology for calculating the charge to (1)
compare a Member's applicable capital amounts with the amount it
contributes to the Clearing Fund that represents its volatility charge,
(2) for Members that are broker-dealers, use net capital amounts rather
than excess net capital amounts in the calculation of the ECP charge;
and for all other Members, use equity capital in the calculation of the
ECP charge, and (3) establish a cap of 2.0 for the Excess Capital Ratio
that is used in calculating a Member's ECP charge.
---------------------------------------------------------------------------

    \13\ See Section I(B)(2) of Procedure XV, id.
---------------------------------------------------------------------------

    The proposed changes would also improve the transparency of the
Rules regarding the ECP charge by (1) clarifying the capital amounts
that are used in the calculation of the charge by introducing new
defined terms, (2) clarifying the particular circumstances in which
NSCC retains the ability to waive the charge, and (3) providing that
NSCC may calculate the charge based on updated capital information, as
described in greater detail below.
(i) Overview of the Required Fund Deposit and NSCC's Clearing Fund
    As part of its market risk management strategy, NSCC manages its
credit exposure to Members by determining the appropriate Required Fund
Deposits to the Clearing Fund and monitoring its sufficiency, as
provided for in the Rules.\14\ The Required Fund Deposit serves as each
Member's margin.
---------------------------------------------------------------------------

    \14\ See Rule 4 and Procedure XV, supra note 12. NSCC's market
risk management strategy is designed to comply with Rule 17Ad-
22(e)(4) under the Act, where these risks are referred to as
``credit risks.'' 17 CFR 240.17Ad-22(e)(4).
---------------------------------------------------------------------------

    The objective of a Member's Required Fund Deposit is to mitigate
potential losses to NSCC associated with liquidating a Member's
portfolio in the event NSCC ceases to act for that Member (hereinafter
referred to as a ``default'').\15\ The aggregate of all Members'
Required Fund Deposits constitutes the Clearing Fund of NSCC. NSCC
would access its Clearing Fund should a defaulting Member's own
Required Fund Deposit be insufficient to satisfy losses to NSCC caused
by the liquidation of that Member's portfolio. Pursuant to the Rules,
each Member's Required Fund Deposit consists of a number of applicable
components, each of which is calculated to address specific risks faced
by NSCC, as identified within Procedure XV of the Rules.\16\
---------------------------------------------------------------------------

    \15\ The Rules identify when NSCC may cease to act for a Member
and the types of actions NSCC may take. For example, NSCC may
suspend a firm's membership with NSCC or prohibit or limit a
Member's access to NSCC's services in the event that Member defaults
on a financial or other obligation to NSCC. See Rule 46, supra note
12.
    \16\ Supra note 12.
---------------------------------------------------------------------------

    While many components of the Clearing Fund are designed to measure
risks presented by the net unsettled positions a Member submits to NSCC
to be cleared and settled, some components measure and mitigate other
risks that NSCC may face, such as credit

risks. For example, a Member may be required to make an additional
deposit to the Clearing Fund pursuant to Section I(B)(1) of Procedure
XV of the Rules if it is placed on the Watch List, which is defined in
Rule 1 (Definitions and Descriptions) of the Rules as a list of Members
who NSCC deems to pose heightened risk to it and its other Members
based on consideration of relevant factors.\17\
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    \17\ See Section 4 of Rule 2B, which describes NSCC's ongoing
monitoring and review of Members and the factors NSCC considers in
assigning Members a credit rating that could result in a Member
being placed on the Watch List, supra note 12.
---------------------------------------------------------------------------

    Similarly, the ECP charge is a component of the Clearing Fund that
is designed to mitigate the heightened default risk a Member could pose
to NSCC if it operates with lower capital levels relative to its margin
requirements. Each Business Day, NSCC determines if a Member may be
subject to the ECP charge by first determining its Calculated Amount.
The Calculated Amount is a portion of a Member's Required Fund Deposit
designed to represent its margin requirements to NSCC. A Member's
Calculated Amount is calculated as its Required Fund Deposit excluding
any applicable special charge, margin requirement differential charge,
coverage component charge or margin liquidity adjustment charge,\18\
plus any additional amounts the Member is required to deposit to the
Clearing Fund either due to being placed on the Watch List \19\ or
pursuant to Rule 15 (Assurances of Financial Responsibility and
Operational Capability) of the Rules.\20\
---------------------------------------------------------------------------

    \18\ The special charge is described in Section I(A)(1)(c) and
(2)(c) of Procedure XV, the MRD charge is described in Section
I(A)(1)(e) and (2)(d) of Procedure XV, the coverage component charge
is described in Section I(A)(1)(f) and (2)(e) of Procedure XV, and
the MLA charge is described in Section I(A)(1)(g) and (2)(f) of
Procedure XV, supra note 12.
    \19\ Supra note 17.
    \20\ Pursuant to Section 2(b)(iv) of Rule 15, NSCC may require a
Member to provide NSCC with adequate assurances of that Member's
financial responsibility in the form of increased Clearing Fund
deposits. Supra note 12.
---------------------------------------------------------------------------

    NSCC then divides the Member's Calculated Amount by its current
capital amount, which is the amount reported to NSCC pursuant to its
ongoing membership standards, as set out in Rule 2B (Ongoing Membership
Requirements and Monitoring) and Addendum B (Qualifications and
Standards of Financial Responsibility, Operational Capability and
Business History) of the Rules.\21\ Pursuant to the current membership
standards in Addendum B of the Rules, Members that are broker-dealers
are required to maintain a certain level of excess net capital, and
Members that are banks are required to maintain a certain level of
equity capital as a requirement for continued membership with NSCC.\22\
Pursuant to Section 2 of Rule 2B of the Rules, Members are required to
provide NSCC with financial information, including information
regarding Members' current capital amounts, on a regular basis and NSCC
uses these reported capital amounts in the calculation of the ECP
charge.\23\
---------------------------------------------------------------------------

    \21\ Supra note 12.
    \22\ See Section 1. B.1. of Addendum B, supra note 12. NSCC has
proposed changes to the membership standards set forth in Addendum B
that would modify the capital requirements for Members. See
Securities Exchange Act Release No. 94068 (January 26, 2022), 21 FR
5544 (February 1, 2022) (SR-NSCC-2021-016).
    \23\ See Section 2(A) of Rule 2B, supra note 12.
---------------------------------------------------------------------------

    Pursuant to Section I(B)(2) of Procedure XV, if a Member's
Calculated Amount, when divided by its applicable capital amount, is
greater than the Excess Capital Ratio of 1.0, NSCC may require that
Member to deposit an ECP charge.\24\ The applicable ECP charge may be
equal to the product of (1) the amount by which a Member's Calculated
Amount exceeds its applicable capital amount, multiplied by (2) the
Member's Excess Capital Ratio. Members are able to access and view
reports regarding their Clearing Fund and, through these reports,
Members may be alerted when their Calculated Amount divided by the
applicable capital amount is greater than 0.5, as an early warning
regarding their capital levels.
---------------------------------------------------------------------------

    \24\ Supra note 12.
---------------------------------------------------------------------------

    Under Section I(B)(2) of Procedure XV, NSCC may collect a lower ECP
charge than the amount calculated pursuant to the Rules, may determine
not to collect the ECP charge from a Member at all, and may return all
or a portion of a collected ECP charge if it believes the imposition or
maintenance of the ECP charge is not necessary or appropriate.\25\
Section I(B)(2) of Procedure XV describes some circumstances when NSCC
may determine not to collect an ECP charge from a Member, which
includes, for example, when an ECP charge results from trading activity
for which the Member submits later offsetting activity that lowers its
Required Fund Deposit.\26\ The discretion to adjust, waive or return an
ECP charge was designed to provide NSCC with the ability to determine
when a calculated ECP charge may not be necessary or appropriate to
mitigate the risks it was designed to address.\27\
---------------------------------------------------------------------------

    \25\ When NSCC determines to collect a lower amount than that
amount calculated pursuant to the Rules, as provided for under
Procedure XV, NSCC may, for example, calculate that lower amount by
reducing the Excess Capital Ratio used in the calculation to 2.0.
Supra note 12.
    \26\ See footnote 7 of Procedure XV, supra note 12.
    \27\ See Securities Exchange Act Release No. 54457 (September
15, 2006), 71 FR 55239 (September 21, 2006) (SR-FICC-2006-03 and SR-
NSCC-2006-03).
---------------------------------------------------------------------------

    Since the ECP charge was adopted, NSCC has calculated and assessed
the ECP charge consistent with the Rules, and NSCC has exercised its
discretion to both reduce and waive the ECP charge when NSCC has deemed
it necessary or appropriate. NSCC recently reviewed the effectiveness
of the ECP charge to identify ways NSCC could enhance both the
calculation of the charge and the disclosures regarding the charge in
the Rules. In connection with this review, NSCC discussed the ECP
charge and its proposed enhancements with Members, NSCC management, and
NSCC's supervisors at the Commission. As a result of this review, NSCC
is proposing to make several enhancements to the ECP charge, as
described in greater detail below.
    These enhancements are designed to improve NSCC's ability to
measure the increased default risks that are presented by Members who
operate with lower capital. The proposed changes would simplify the
calculation of the charge and the description of the charge in the
Rules, making it more predictable to Members. The proposed changes are
designed to improve the transparency of the ECP charge to Members by
clarifying the particular circumstances in which NSCC retains the
ability to waive the charge and providing that NSCC may calculate the
charge based on updated capital information. The proposed improvements
to the transparency of the ECP charge also include clarifying the
descriptions of the capital amounts that would be used in the
calculation of the charge through new defined terms. Collectively, the
proposal would make the ECP charge more consistent, transparent, and
predictable to Members, while maintaining the effectiveness of NSCC's
risk-based margining methodology as it relates to the ECP charge.
(ii) Use Members' Volatility Component as the Calculated Amount
    NSCC is proposing to replace the Calculated Amount with the amount
collected as that Member's volatility component as determined pursuant
to Sections I(A)(1)(a)(i)-(iii) and (2)(a)(i)-(iii) of Procedure XV of
the Rules.\28\
---------------------------------------------------------------------------

    \28\ The volatility component is designed to capture the market
price risk associated with each Member's portfolio at a 99th
percentile level of confidence. NSCC has two methodologies for
calculating the volatility component--a model-based volatility-at-
risk, or VaR, charge and a haircut-based calculation, for certain
positions that are excluded from the VaR charge calculation. The
charge that is applied to a Member's Required Fund Deposit with
respect to the volatility component is referred to as the volatility
charge and is the sum of the applicable VaR charge and the haircut-
based calculation. Amounts calculated pursuant to Sections
I(A)(1)(a)(iv) and (2)(a)(iv) of Procedure XV with respect to long
positions in Net Unsettled Positions in Family-Issued Securities are
designed to address wrong-way risk presented by these positions, not
volatility risks, and, as such, are not a part of a Member's
volatility charge. See Sections I(A)(1)(a) and (2)(a) of Procedure
XV, supra note 12.

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

    In both determining if an ECP charge is applicable and in
calculating an ECP charge, NSCC currently compares a Member's
Calculated Amount to its reported capital levels. As described above,
the Calculated Amount is defined in Section I(B)(2) of Procedure XV as
a Member's Required Fund Deposit, excluding certain components and
including other additional deposits to the Clearing Fund.\29\ Because a
goal of the ECP charge is to identify and mitigate risks presented when
a Member's capital levels may not be adequate to meet its margin
requirements to NSCC, the Calculated Amount is designed to represent a
material portion of those margin requirements.
---------------------------------------------------------------------------

    \29\ See supra note 18.
---------------------------------------------------------------------------

    As described above, because each component of the Clearing Fund is
calculated to address specific risks faced by NSCC, some components are
applied only to certain positions in a Member's portfolio. For example,
the CNS fails charge, which is included in the Calculated Amount, is
based on the market value of only a Member's CNS Fails Positions (as
defined in the Rules) of the Member.\30\ The volatility component of
the Clearing Fund measures the market price volatility of all of a
Member's Net Unsettled Positions and Net Balance Order Unsettled
Positions (as defined in the Rules). Therefore, the volatility
component is often considered a comprehensive measurement of the risks
presented by a Member's clearing activity and usually comprises the
largest portion of a Member's Required Fund Deposit.\31\ NSCC believes
that replacing the Calculated Amount with a Member's volatility charge
would provide an appropriate measure for purposes of the ECP charge.
---------------------------------------------------------------------------

    \30\ See definition of ``CNS Fails Position'' in Rule 1, and see
also Section I(A)(1)(e) of Procedure XV, supra note 12.
    \31\ See definitions of ``Net Unsettled Position'' and ``Net
Unsettled Balance Order Position'' in Rule 1, supra note 12.
---------------------------------------------------------------------------

    Currently, determining a Member's Calculated Amount requires a more
complicated calculation, as it uses a Member's Required Fund Deposit,
excludes certain components, and includes other deposits. The proposal
would simplify this calculation significantly by using only the
volatility component. One of the tools NSCC provides to its Members is
a calculator that allows them to determine their potential volatility
charge based on trading activity. Therefore, this proposed change would
make the calculation of the ECP charge both clearer and more
predictable for Members.
    NSCC does not expect that any impact of this proposed change on the
number of ECP charges or the size of the calculated ECP charges would
materially impact NSCC's ability to manage the risks the ECP charge is
designed to address. NSCC believes the benefits of using a simpler,
clearer, and more predictable calculation that is based on the most
comprehensive component of the Clearing Fund outweigh any risk related
to the reduction in the ECP charges NSCC would collect.
(iii) Use Net Capital for Broker-Dealer Members and Equity Capital for
All Other Members in the Calculation of the ECP Charge
    In the calculation of the ECP charge, NSCC is proposing to use net
capital rather than excess net capital for Members that are broker-
dealers, and equity capital for all other Members. As described in
greater detail below, in connection with these proposed changes, NSCC
would also improve the transparency of the Rules by adopting
definitions of ``Net Capital'' and ``Equity Capital.''
    As described above, NSCC's ongoing membership requirements, set
forth in Rule 2B of the Rules, require Members to provide NSCC with
regular information regarding their financial positions, including
capital levels.\32\ This information is provided, in part, to confirm
that Members continue to maintain the minimum financial requirements of
membership set forth in Addendum B of the Rules.\33\ Currently, NSCC
also uses these reported capital amounts in the calculation of the ECP
charge.
---------------------------------------------------------------------------

    \32\ See Section 2.A of Rule 2B, which requires Members to
provide NSCC with a copy of their Form X-17-A-5 (Financial and
Operational Combined Uniform Single (``FOCUS'') Report),
Consolidated Report of Condition and Income (``Call Report''), or an
equivalent, supra note 12.
    \33\ Supra note 12.
---------------------------------------------------------------------------

    First, NSCC believes it would be appropriate to revise the capital
measure used to calculate the ECP charge for broker-dealer Members to
replace excess net capital with net capital. This revision would align
the capital measures used for broker-dealer Members and other Members,
which would result in more consistent calculations of the ECP charge
across different types of Members.
    In addition to creating consistency in the calculations for
different Members, NSCC believes that using net capital rather than
excess net capital would also provide NSCC with a better measure of the
increased default risks presented when a Member operates at low net
capital levels relative to its margin requirements. This approach would
be consistent with the rationale for the Commission's amendments to
Rule 15c3-1 under the Act (the ``Net Capital Rule''), which were
designed to promote a broker-dealer's capital quality and require the
maintenance of ``net capital'' (i.e., capital in excess of liabilities)
in specified amounts as determined by the type of business
conducted.\34\ The Net Capital Rule was designed to ensure the
availability of funds and assets (including securities) in the event
that a broker-dealer's liquidation becomes necessary. The Net Capital
Rule represented a net worth perspective, which is adjusted by
unrealized profit or loss, deferred tax provisions, and certain
liabilities as detailed in the rule. It also included deductions and
offsets and required that a broker-dealer demonstrate compliance with
the Net Capital Rule, including maintaining sufficient net capital at
all times (including intraday).
---------------------------------------------------------------------------

    \34\ 17 CFR 240.15c3-1. See Securities Exchange Act Release No.
70072 (July 30, 2013), 78 FR 51823 (August 21, 2013) (File No. S7-
08-07).
---------------------------------------------------------------------------

    Similarly, NSCC believes that the Net Capital Rule is an effective
process of separating liquid and illiquid assets and computing a
broker-dealer's regulatory net capital that should replace NSCC's
existing practice of using excess net capital in the calculation of the
ECP charge.
    Second, NSCC is proposing to revise the Rules to provide that, for
all Members that are not broker-dealers, it would use equity capital in
calculating the ECP charge. Currently, the Rules state that NSCC would
use a Member's capital amount set forth in the membership standards in
Addendum B of the Rules.\35\ Section 1.B of Addendum B describes the
membership standards of Members, and currently states that the
applicable capital measure for Members that are banks is equity
capital, for Members that are trust companies and not banks the

applicable capital measure is consolidated capital, and for other legal
entities that are Members the applicable capital measure is determined
by NSCC. Currently, and historically, NSCC has had very few Members
that are trusts and not banks. For all Members that are not banks, non-
bank trusts or broker-dealers (which generally include, for example,
exchanges and registered clearing agencies), NSCC uses those Members'
reported equity capital in the calculation of the ECP charge.
Therefore, in practice, the ECP charge is calculated for the majority
of Members that are not broker-dealers using their equity capital, and
this proposed change is not expected to have a material impact on the
collection of ECP charges. The proposal would simplify the calculation
of the ECP charge for Members that are not broker-dealers by stating in
Section I(B)(2) of Procedure XV that NSCC would use equity capital
rather than use different measures that are based on other membership
requirements. This proposed change would also create consistency in the
calculations across Members.
---------------------------------------------------------------------------

    \35\ Supra note 12.
---------------------------------------------------------------------------

(iv) Establish a Cap for the Excess Capital Ratio
    NSCC is proposing to set a maximum amount of Excess Capital Ratio
that is used in calculating Members' ECP charge to 2.0. NSCC believes
capping the multiplier that is used in this calculation would allow
NSCC to appropriately address the risks it faces without imposing an
overly burdensome ECP charge. Historically, the Excess Capital Ratio
has rarely exceeded 2.0 in the calculation of Members' ECP charges, and
in cases when 2.0 was exceeded NSCC typically exercised the discretion
provided to it in the Rules to reduce the applicable charge. NSCC's
discretion was appropriate in these circumstances because NSCC believes
it is able to mitigate the risks presented to it by a Member's lower
capital levels by collecting an ECP charge calculated with an Excess
Capital Ratio that is at or below 2.0.
    Therefore, and consistent with NSCC's proposal to clarify its
discretion to waive the ECP charge, as described below, NSCC believes
capping the Excess Capital Ratio at 2.0 would continue to provide NSCC
with an appropriate measure of the risks presented to it relative to
Members' capital levels. This proposed change would also provide
Members with more clarity and transparency into the ECP charge, by
allowing them to predict and estimate the maximum amount of their
potential ECP charge.
(v) Improve Transparency Regarding the ECP Charge
    NSCC is proposing changes to Section I(B)(2) of Procedure XV to
improve transparency regarding the ECP charge by (a) clarifying the
description of the capital amounts that NSCC uses in the calculation of
the ECP charge by adopting new defined terms, (b) clarifying the
particular circumstances in which NSCC retains the ability to waive the
charge, and (c) providing that NSCC may calculate the charge based on
updated capital information.
    First, NSCC is proposing to clarify the description of the capital
amounts that it uses to calculate the ECP charge by introducing defined
terms and specifying the reporting requirements that NSCC relies on to
obtain that capital information for Members. As described above, for
Members that are broker-dealers, NSCC is proposing to use a Member's
net capital amount, and for all other Members, NSCC would use a
Member's equity capital in the calculation of the ECP charge. In order
to improve the clarity of the Rules, NSCC is proposing to introduce a
defined term for ``Equity Capital'' in Rule 1 and to revise a proposed
defined term for ``Net Capital'' in order to align the two defined
terms. The proposal would also revise Section I(B)(2) of Procedure XV
in describing the calculation of the ECP charge to use these defined
terms where appropriate. Finally, the proposal would amend Addendum B
to include the new defined term for Equity Capital.
    The definition of Equity Capital would be, as of a particular date,
the amount equal to the equity capital as reported on the Member's or
Limited Member's most recent Call Report, or, if the Member or Limited
Member is not required to file a Call Report, then as reported on its
most recent financial statements or equivalent reporting. NSCC would
also align a proposed definition of Net Capital to be, as of a
particular date, the amount equal to the net capital as reported on the
Member's or Limited Member's most recent FOCUS Report, or, if the
Member or Limited Member is not required to file a FOCUS Report, then
as reported on its most recent financial statements or equivalent
reporting.
    In addition to using these new defined terms, NSCC would also add a
statement to Section I(B)(2) of Procedure XV to clarify to Members that
the amounts used in the calculation of the ECP charge would be the
amounts included in their regular reporting that is provided to NSCC
pursuant to the ongoing membership reporting requirements, specifically
in their FOCUS Report or Call Report, as applicable, or in an
equivalent financial statement or report that is delivered to NSCC
pursuant to the same requirement. Collectively, these proposed changes
would provide Members with improved clarity and certainty regarding the
amounts that would be used in calculating the ECP charge.
    Second, the proposed changes would clarify the particular
circumstances in which NSCC retains the ability to waive the ECP
charge. NSCC believes that the proposed changes to the calculation of
the ECP charge described in this filing would have the collective
impact of eliminating most circumstances in which NSCC would have
exercised this discretion. For example, the proposal to cap the Excess
Capital Ratio at 2.0 and the proposal to specify that NSCC may
calculate an ECP charge based on updated capital amounts, both address
the most common circumstances when NSCC has either waived or reduced
the ECP charge in the past. However, NSCC believes that there may still
be circumstances when it may not be necessary or appropriate to collect
an ECP charge from a Member, for example, in certain exigent
circumstances when NSCC observes unexpected changes in market
volatility or trading volumes. Therefore, NSCC is proposing to retain
discretion to waive an ECP charge in certain defined circumstances and
to disclose the governance around the application of such discretion.
The proposed changes would revise Section I(B)(2) of Procedure XV by
adding a new subsection (c) to provide Members with transparency
regarding this retained discretion.
    The proposed subsection (c) would describe the exigent
circumstances in which NSCC would retain the ability to waive an ECP
charge. Such exigent circumstances would constitute circumstances when
NSCC, in its sole discretion, observes extreme market conditions or
other unexpected changes in factors such as market volatility, trading
volumes or other similar factors. As noted above, NSCC believes, based
on a review of past data, that the proposed changes to the calculation
of the ECP charge would otherwise eliminate most prior instances when
an ECP charge was waived. However, in further reviewing such data, NSCC
also observed that there have been instances, particularly in recent
years, when NSCC has waived the ECP charge in moments covered by the
concept of exigent circumstances, and that the ECP charge would have
been triggered in such

circumstances even under the proposed calculation of the charge. Such
moments occurred multiple times in recent years, including, for
example, during the extreme market volatility experienced in early 2020
related to the global outbreak of the COVID-19 coronavirus and the meme
stock market event in early 2021.
    Based upon this further review of the data, NSCC believes there
remains some ongoing possibility that an unexpected increase in market
volatility, for example, could cause a relative increase in a Member's
volatility charge, which may, in turn, trigger an ECP charge, even
under the proposed new ECP charge calculation. In such circumstances,
under the proposal, NSCC would determine if the ECP charge being
triggered at that time is not primarily caused by the risk presented by
a Member's capital levels and whether NSCC can effectively address the
risk exposure presented by that Member without the collection of the
ECP charge from that Member. Alternatively, NSCC may determine, based
on its review of the information available to it, that the ECP charge
was appropriately triggered by a Member's capital position or trading
activity and was not driven primarily by the prevailing market
conditions or other exigent circumstances. Therefore, NSCC believes it
is appropriate to retain a certain amount of discretion to review an
ECP charge that is triggered in such circumstances to determine whether
a waiver of the ECP charge may be appropriate.
    In addition to defining the circumstances in which NSCC may waive
the ECP charge, the proposed changes would also describe the review
NSCC would conduct in deciding to waive the charge in the exigent
circumstances, the information NSCC would consider in such review, and
the governance around a determination by NSCC to waive the ECP charge.
More specifically, the proposed rule change provides that NSCC would
review all relevant facts and other information available to it at the
time of its decision, including the degree to which a Member's capital
position and trading activity compare or correlate to the prevailing
exigent circumstances and whether NSCC can effectively address the risk
exposure presented by a Member without the collection of the ECP charge
from that Member. For example, as noted above, if NSCC believes, based
on its review of the relevant circumstances, that the risk exposure
presented by a Member is driven by the unexpected increase in market
volatility and not by a Member's capital levels, NSCC may determine
that it is appropriate to address such risk through the collection of a
special charge from that Member rather than an ECP charge.\36\ By
describing NSCC's review in Procedure XV, the proposed changes would
alert Members that, while exigent circumstances may permit NSCC to
consider whether to waive an ECP charge, NSCC would still consider
information available to it at that time in determining whether a
waiver is appropriate, including NSCC's ability to effectively manage
the heightened default risks presented by Members that operate at lower
capital levels.
---------------------------------------------------------------------------

    \36\ See Section I(A)(1)(c) and (2)(c) of Procedure XV of the
Rules, under which NSCC may collect, as part of Members' Required
Fund Deposit to the Clearing fund, ``[a]n additional payment
(``special charge'') from Members in view of price fluctuations in
or volatility or lack of liquidity of any security.'' Supra note 12.
---------------------------------------------------------------------------

    Finally, the proposed rule change would provide transparency into
the governance around a decision to waive an ECP charge by identifying
the NSCC officer who would be authorized to apply a waiver and
requiring that the decision be documented.\37\
---------------------------------------------------------------------------

    \37\ NSCC would also update its internal procedures to include
waivers of the ECP charge in NSCC's regular updates to the
Commission.
---------------------------------------------------------------------------

    By clarifying the particular circumstances in which NSCC retains
the ability to waive the ECP charge, the proposal would provide Members
with more certainty and transparency in predicting when an ECP charge
may be waived and how NSCC would make a determination to apply such a
waiver.
    Third, NSCC would provide that it may calculate the ECP charge
based on updated capital information. As described above, NSCC would
use the net capital or equity capital amounts that are reported on
Members' most recent financial reporting or financial statements
delivered to NSCC in connection with the ongoing membership reporting
requirements. Under the proposal, if a Member's capital amounts change
between the dates when it submits these financial reports, it may
provide NSCC with updated capital information for purposes of
calculating the ECP charge. Today, when NSCC exercises its discretion
to waive or reduce the amount of an applicable ECP charge, NSCC
occasionally does so by applying updated capital information in its
calculation. Therefore, in connection with clarifying this discretion,
NSCC would disclose in the Rules that it may use updated capital
information in the calculation of an ECP charge rather than require
Members to wait until the issuances of their next financial reporting
or financial statements for changes in their capital positions to be
reflected in an ECP charge calculation.
    NSCC is proposing to retain some discretion in when it would accept
updated capital information for this purpose. For example, NSCC may
require a Member to provide documentation of the circumstances that
caused a change in capital information, and if adequate evidence is not
available or NSCC does not believe the evidence sufficiently verifies
that the Member's capital position has changed, NSCC would continue to
calculate the ECP charge for that Member based on the prior capital
information available to NSCC until the next financial reporting or
financial statements are delivered. NSCC believes it is appropriate to
retain some discretion to allow NSCC to determine if updated capital
information is adequately verified before it agrees to rely on that
information for this calculation. NSCC believes the proposal to
disclose that Members would have the opportunity to provide updated
capital information to NSCC to be used in an ECP charge calculation
would improve the transparency of the Rules despite NSCC's proposal to
retain a certain level of discretion.
(vi) Proposed Changes to Procedure XV of the Rules
    The proposal would amend Section I(B)(2) of Procedure XV of the
Rules to implement the proposed changes to the ECP charge. The proposed
changes would organize this section into three subsections.
    The proposed subsections (a) and (b) would describe the calculation
used to determine if an ECP charge may be applicable to a Member and,
if an ECP charge is applicable, how that charge would be calculated.
The revised description of these calculations would (i) replace the
definition of Calculated Amount with Members' volatility charge, (ii)
replace references to the capital amounts used in the calculation with
the new defined terms for Net Capital and Equity Capital, and (iii)
state that the Excess Capital Ratio used in calculating an ECP charge
is set at a maximum of 2.0. The proposed change would also include a
statement that the applicable capital amounts used in the calculation
would be the amounts most recently reported to NSCC on Members' FOCUS
Reports or Call Reports, as applicable, or other equivalent financial
reporting submitted to NSCC pursuant to Section 2 of Rule 2B. The
proposal would also state that NSCC may, in its sole discretion, accept
updated capital amounts in calculating an ECP charge.

    The proposed subsection (c) would describe NSCC's discretion to
waive the ECP charge in certain defined circumstances, the information
NSCC would consider in deciding to apply this discretion and the
governance around this decision.
(vii) Impact Study Results
    NSCC has provided the Commission with the results of an impact
study that reviewed the potential impacts of the proposal during the
period of June 1, 2020 through December 31, 2021. The study showed that
the proposed enhancement would have reduced the number of ECP charges
that would have been triggered by the calculation by 65 percent, from
347 ECP charges triggered for 19 Members to 122 ECP charges triggered
for 14 Members. The total aggregate amount that would have been
triggered by the proposed calculation if the proposal was effective
during that time would have been reduced from $51.31 billion (the
actual total amount of ECP charges triggered by the current calculation
during that period) to approximately $17.44 billion (the total amount
of ECP charges that would have been triggered during that time by the
proposed calculation). The average amount that would have been
calculated for each Member would have been reduced from $147.9 million
to approximately $143.0 million. The study showed that the proposal
would have had no impact to NSCC's overall, or Member-level, end-of-day
Clearing Fund Requirement backtesting coverage.
    Over the impact study period, NSCC waived and adjusted calculated
ECP charges by $38.80 billion. NSCC waived a total of 33 ECP charges
that totaled approximately $26.12 billion. If the proposal had been in
place at that time, 14 of these charges would have been collected from
Members (although the amount would have been reduced), totaling $6.46
billion, 14 charges would not have been triggered as the calculated ECP
ratio was below 1.0, and NSCC would have waived 5 of the ECP charges,
mainly following receipt of updated financial information. NSCC
adjusted the amount of 16 ECP charges by a total of approximately
$12.69 billion. If the proposal had been in place at that time, 7 of
these charges would have been still collected, totaling $6.48 billion,
and 9 charges would not have been triggered as the calculated ECP ratio
was below 1.0.
(viii) Implementation Timeframe
    NSCC would implement the proposed changes no later than 30 days
after the approval of the proposed rule change by the Commission. NSCC
would announce the effective date of the proposed changes by Important
Notice posted to its website.
2. Statutory Basis
    NSCC believes the proposed rule change is consistent with the
requirements of the Act, and the rules and regulations thereunder
applicable to a registered clearing agency. In particular, NSCC
believes the proposed rule change is consistent with Section
17A(b)(3)(F) of the Act,\38\ and Rules 17Ad-22(e)(4)(i), (e)(6)(i) and
(e)(23)(ii), each promulgated under the Act,\39\ for the reasons
described below.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78q-1(b)(3)(F).
    \39\ 17 CFR 240.17Ad-22(e)(4)(i), (e)(6)(i) and (e)(23)(ii).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires that the rules of NSCC be
designed to, among other things, promote the prompt and accurate
clearance and settlement of securities transactions and 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.\40\
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    NSCC believes the proposed changes are consistent with the
requirements of Section 17A(b)(3)(F) of the Act because such changes
enhance the effectiveness of the ECP charge by (1) replacing the
Calculated Amount with a Member's volatility component, (2) replacing
excess net capital with net capital for broker-dealer Members and using
equity capital for all other Members, and (3) establishing a cap for
the Excess Capital Ratio. As described above, NSCC believes these
proposed changes would create a simpler, clearer calculation of the ECP
charge that is based on more consistent metrics, while allowing NSCC to
continue to effectively address the heightened default risks presented
by Members that operate at lower capital levels.
    The Clearing Fund is a key tool that NSCC uses to mitigate
potential losses to NSCC associated with liquidating a Member's
portfolio in the event of Member default. Each of the proposed
enhancements described above are designed to collectively improve
NSCC's ability to collect amounts that reflect the risks posed by its
Members. The proposal to enhance the calculation of the ECP charge by
replacing the Calculated Amounts with Members' volatility charges would
make the calculation clearer and more predictable to Members. The
proposal to use net capital for broker-dealer Members and equity
capital for all other Members in the calculation of the ECP charge
would result in a more consistent calculation across different types of
Members. The proposal to cap the Excess Capital Ratio at 2.0 would
allow NSCC to appropriately address the risks it faces without imposing
an overly burdensome ECP charge and would reduce the circumstances in
which NSCC may waive the charge, resulting in a more transparent
margining methodology.
    Together, by improving the consistency and predictability of the
ECP charge, the proposed enhancements would also improve NSCC's ability
to collect amounts that reflect the risks posed by its Members such
that, in the event of Member default, NSCC's operations would not be
disrupted, and non-defaulting Members would not be exposed to losses
they cannot anticipate or control. In this way, the proposed rule
change is designed to assure the safeguarding of securities and funds
which are in the custody or control of NSCC or for which it is
responsible, consistent with Section 17A(b)(3)(F) of the Act.\41\
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

    The proposed changes are also designed to improve the transparency
of the Rules regarding the ECP charge, for example, by introducing new
defined terms regarding the capital amounts used in the charge and by
clarifying the exigent circumstances in which NSCC may waive the
charge. By enhancing the clarity and transparency of the Rules, the
proposed changes would allow Members to better anticipate their margin
charges, which would allow them to more efficiently and effectively
conduct their business in accordance with the Rules. In this way, NSCC
believes the proposed changes would promote the prompt and accurate
clearance and settlement of securities transactions, consistent with
Section 17A(b)(3)(F) of the Act.\42\
---------------------------------------------------------------------------

    \42\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(4)(i) under the Act requires that NSCC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to effectively identify, measure, monitor, and
manage its credit exposures to participants and those arising from its
payment, clearing, and settlement processes, including by maintaining
sufficient financial resources to cover its credit exposure to each
participant fully with a high degree of confidence.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 240.17Ad-22(e)(4)(i).
---------------------------------------------------------------------------

    As described above, NSCC believes the proposed rule change would
enable NSCC to better identify, measure, monitor, and, through the
collection of Members' Required Fund Deposits,

manage its credit exposures to Members by maintaining sufficient
resources to cover those credit exposures fully with a high degree of
confidence. Specifically, NSCC believes that the proposed enhancements
to the calculation of the ECP charge to use the volatility charge
rather than the Calculated Amount, and to use net capital and equity
capital, as appropriate, would collectively make the calculation
clearer and more predictable to Members. The proposal to use net
capital rather than excess net capital for broker-dealer Members, and
equity capital for all other Members, would also result in a more
consistent calculation across different types of Members. Additionally,
the proposal to cap the Excess Capital Ratio at 2.0 would allow NSCC to
appropriately address the risks it faces without imposing an overly
burdensome ECP charge and would reduce the circumstances in which NSCC
may waive the charge, resulting in a more transparent margining
methodology. Finally, the proposed change to clarify NSCC's discretion
to waive the ECP charge would enable NSCC to better identify, measure,
monitor, and manage its credit exposures to Members by permitting NSCC
to determine, in certain exigent circumstances, when it is necessary to
collect an ECP charge and when it is appropriate to waive an ECP
charge.
    Overall, NSCC believes the proposal would improve the clarity and
predictability of the ECP charge and, in this way, would enhance NSCC's
ability to effectively identify, measure and monitor its credit
exposures, and would enhance NSCC's ability to maintain sufficient
financial resources to cover NSCC's credit exposure to each participant
fully with a high degree of confidence. As such, NSCC believes the
proposed rule change is consistent with Rule 17Ad-22(e)(4)(i) under the
Act.\44\
---------------------------------------------------------------------------

    \44\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6)(i) under the Act requires that NSCC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to cover its credit exposures to its participants
by establishing a risk-based margin system that, at a minimum,
considers, and produces margin levels commensurate with, the risks and
particular attributes of each relevant product, portfolio, and
market.\45\
---------------------------------------------------------------------------

    \45\ 17 CFR 240.17Ad-22(e)(6)(i).
---------------------------------------------------------------------------

    The Required Fund Deposits are made up of risk-based components (as
margin) that are calculated and assessed daily to limit NSCC's
exposures to Members. NSCC's proposed changes to use the volatility
charge rather than the Calculated Amount, and to use net capital and
equity capital, as appropriate, in the calculation of the ECP charge
would collectively make the calculation clearer and more predictable to
Members, while continuing to apply an appropriate risk-based charge
designed to mitigate the risks presented to NSCC. Similarly, the
proposal to cap the Excess Capital Ratio at 2.0 would allow NSCC to
appropriately address the risks it faces without imposing an overly
burdensome ECP charge and would reduce the circumstances in which NSCC
may waive the charge, resulting in a more transparent margining
methodology. Finally, the proposed rule change would clarify the
exigent circumstances when NSCC may determine that it is appropriate to
waive the ECP charge. Overall, these proposed changes would improve the
effectiveness of the calculation of the ECP charge and, therefore,
allow NSCC to more effectively address the increased default risks
presented by Members that operate with lower capital levels relative to
their margin requirements. In this way, the proposed changes enhance
the ability of the ECP charge to produce margin levels commensurate
with the risks NSCC faces related to its Members' operating capital
levels. Therefore, NSCC believes the proposed rule change is consistent
with Rule 17Ad-22(e)(6)(i) under the Act.\46\
---------------------------------------------------------------------------

    \46\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(23)(ii) under the Act requires that NSCC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to provide for providing sufficient information to
enable participants to identify and evaluate the risks, fees, and other
material costs they incur by participating in NSCC.\47\ NSCC is
proposing to improve the clarity and transparency of the Rules related
to its calculation of the ECP charge in a number of ways described in
this filing. The proposed changes would clarify the description of the
capital amounts that NSCC uses in the calculation of the ECP charge by
adopting new defined terms, clarify NSCC's discretion to waive the
charge, and provide that NSCC may calculate the charge based on updated
capital information. Additionally, as described above, the proposed
changes to use the volatility charge rather than the Calculated Amount,
and to use net capital and equity capital, as appropriate, in the
calculation of the ECP charge, would collectively make the calculation
clearer and more predictable to Members. Finally, the proposed rule
change would provide clarity and transparency around the circumstances
in which NSCC may waive the ECP charge, the information NSCC would
consider in making this determination and the governance around such a
decision. Through these proposed amendments to the Rules, the proposal
would assist NSCC in providing its Members with sufficient information
to identify and evaluate the risks and costs, in the form of Required
Fund Deposits to the Clearing Fund, that they incur by participating in
NSCC. In this way, NSCC believes the proposed changes are consistent
with Rule 17Ad-22(e)(23)(ii) under the Act.\48\
---------------------------------------------------------------------------

    \47\ 17 CFR 240.17Ad-22(e)(23)(ii).
    \48\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe the proposed rule change to enhance the
calculation of the ECP charge would impact competition because the
proposed changes are designed to create a clearer and simpler
calculation that is based on more consistent metrics and is likely to
result in lower and less frequent ECP charges than are applied under
the current methodology. More specifically, the replacement of the
Calculated Amount with the volatility charge, which is currently a
portion of the Calculated Amount, when used in the calculation to
determine if an ECP charge is applicable, is likely to result in fewer
triggered ECP charges, as evidenced by the impact study referenced
above. Additionally, the replacement of excess net capital with net
capital for broker-dealer Members, and using equity capital for all
other Members, would create more consistent calculations of the ECP
charge across types of Members, reducing any burden on competition that
the existing calculation could have presented. Finally, the proposal to
cap the Excess Capital Ratio to 2.0 in the calculation of the ECP
charge would limit the total amount a Member could be charged, and
would provide all Members with more certainty and transparency into
their potential margin requirements.
    Therefore, by creating a simpler and clearer calculation that uses
more consistent metrics, the proposals would improve NSCC's ability to
apply the ECP charge more consistently across its Members and reduce
the impact this charge could have on competition. As noted above, in
the impact study results, the proposed changes are also expected

to result in fewer and lower ECP charges.
    Further, NSCC does not believe the proposed rule change to improve
the clarity and predictability of the calculation of the ECP charge
would impact competition because this proposed change would not impact
the calculation of Members' Required Fund Deposits. Therefore, this
proposed change would not affect NSCC's operations or the rights and
obligations of membership. As such, NSCC believes the proposed rule
change to improve the transparency of the Rules would not have any
impact on competition.

C. Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others

    NSCC has not received or solicited any written comments relating to
this proposal. If any written comments are received, they will be
publicly filed as an Exhibit 2 to this filing, as required by Form 19b-
4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
    All prospective commenters should follow the Commission's
instructions on how to submit comments, available at https://www.sec.gov/regulatory-actions/how-to-submit-comments. General
questions regarding the rule filing process or logistical questions
regarding this filing should be directed to the Main Office of the
Commission's Division of Trading and Markets at
[email protected] or<PHONE_NUMBER>.
    NSCC reserves the right to not respond to any comments received.

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

    Section 19(b)(2) of the Act \49\ provides that proceedings to
determine whether to approve or disapprove a proposed rule change must
be concluded within 180 days of the date of publication of notice of
filing of the proposed rule change. The time for conclusion of the
proceedings may be extended for up to 60 days if the Commission
determines that a longer period is appropriate and publishes the
reasons for such determination.\50\ The 180th day after publication of
the Notice in the Federal Register is December 5, 2022.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(2).
    \50\ 15 U.S.C. 78s(b)(2)(B)(ii)(II).
---------------------------------------------------------------------------

    The Commission is extending the period for Commission action on the
Proposed Rule Change. The Commission finds that it is appropriate to
designate a longer period within which to take action on the Proposed
Rule Change so that the Commission has sufficient time to consider the
issues raised by the Proposed Rule Change and to take action on the
Proposed Rule Change. Accordingly, pursuant to Section
19(b)(2)(B)(ii)(II) of the Act,\51\ the Commission designates February
3, 2023, as the date by which the Commission should either approve or
disapprove the Proposed Rule Change SR-NSCC-2022-005.
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NSCC-2022-005 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSCC-2022-005. 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 website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website 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 NSCC and on DTCC's website
(http://dtcc.com/legal/sec-rulefilings.aspx). 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-NSCC-2022-005 and should be submitted on
or before December 22, 2022. Any person who wishes to file a rebuttal
to any other person's submission must file that rebuttal on or before
December 28, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\52\
---------------------------------------------------------------------------

    \52\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-26535 Filed 12-6-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 219 (Monday, November 14, 2011)]
[Notices]
[Pages 70529-70530]
[FR Doc No: 2011-29336]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2011-1243]

Designation of Administrative Judges and Delegation of Authority

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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

SUMMARY: The Federal Aviation Administration (FAA) gives notice that
the FAA Administrator has: designated the Director and Dispute
Resolution Officers of the Office of Dispute Resolution for Acquisition
(ODRA) as Administrative Judges for all matters within the ODRA's
jurisdiction; and delegated authority to the ODRA that supersedes and
replaces previous delegations of authority. The FAA is publishing the
text of the Designation and Delegation, executed on October 12, 2011,
so that it is available to interested parties.

FOR FURTHER INFORMATION CONTACT: Marie A. Collins, Dispute Resolution
Officer and Administrative Judge for the Office of Dispute Resolution
for Acquisition (AGC-70), Federal Aviation Administration, 800
Independence Street SW., Room 323, Washington, DC 20591; telephone
(202) 267-3290; facsimile<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background

    In 1995 Congress, through the Department of Transportation
Appropriations Act, directed the FAA ``to develop and implement, not
later than April 1, 1996, an acquisition management system that
addressed the unique needs of the agency and, at a minimum, provided
for more timely and cost effective acquisitions of equipment and
materials.'' \1\ In response, the FAA developed the Acquisition
Management System (AMS), a system of policy guidance for the management
of FAA procurement, and as a part of the AMS, created the Office of
Dispute Resolution for Acquisition (ODRA) to facilitate the
Administrator's review of procurement protests and contract
disputes.\2\ Subsequently, the FAA promulgated rules of procedure
governing the ODRA's dispute resolution process by publishing a final
rule entitled, Procedures for Protests and Contract Disputes; Amendment
of Equal Access to Justice Act Regulations (effective June 28,
1999).\3\ In addition to the rules of procedures, ODRA operates
pursuant to a series of delegations of authority from the
Administrator. Over time, the authority delegated to the ODRA by the
Administrator expanded to include the authority of the ODRA Director,
among other things, ``to execute and issue, on behalf of the
Administrator, Orders and Final Decisions for the Administrator in all
matters'' under the ODRA's jurisdiction valued at not more than $10
Million.\4\ Congress provided further confirmation as to the FAA's
dispute resolution authority in the Vision 100-Century of Aviation
Reauthorization Act of 2003 (2003 Reauthorization Act), which expressly
provided the ODRA with exclusive jurisdiction over bid protests and
contract disputes under the AMS.\5\ Specifically, the 2003
Reauthorization Act provided at Subsection (b)(2)(4), under the title
``Adjudication of Certain Bid Protests and Contract Disputes,'' that
``[a] bid protest or contract dispute that is not addressed or resolved
through alternative dispute resolution shall be adjudicated by the
Administrator,

through Dispute Resolution Officers or Special Masters of the Federal
Aviation Administration Office of Dispute Resolution for Acquisition,
acting pursuant to Sections 46102, 46104, 46105, 46106 and 46107 and
shall be subject to judicial review under Section 46110 and Section 504
of Title 5.'' On January 12, 2011, the FAA proposed to update and
streamline the ODRA's procedural rules by publishing a notice of
proposed rulemaking in the Federal Register amended Procedures for
Protests and Contracts Dispute (76 FR 2035) which, among other things,
reorganized and streamlined the rules, and harmonized them with current
statutory and other authority. On September 7, 2011, the FAA adopted
the proposed rule, publishing it as a final rule (76 FR 55217) in the
Federal Register, with an effective date of October 7, 2011. The full
text of the FAA Administrator's October 12, 2011 Designation and
Delegation provides as follows:
---------------------------------------------------------------------------

    \1\ Public Law 104-50, 109 Stat. 436 (November 15, 1995).
    \2\ 61 FR 24348; May 14, 1996.
    \3\ 64 FR 32926; June 18, 1999.
    \4\ See 63 FR 49151, September 14, 1998; 65 FR 19958-01, April
13, 2000; 69 FR 17469-02, April 2, 2004.
    \5\ See Public Law 108-176, Sec.  224(b), 117 Stat. 2490, 2528
(codified as amended at 49 U.S.C. 40110(d)(4)).
---------------------------------------------------------------------------

    In furtherance of an efficient FAA acquisition dispute resolution
process, pursuant to 49 U.S.C. 106(f)(2), Sec. Sec.  40101, et seq.,
46101, et. seq., 40110 and 14 CFR part 17, I hereby designate the
Director and the Dispute Resolution Officers of the Office of Dispute
Resolution for Acquisition (``ODRA'') as Administrative Judges for all
matters within the ODRA's jurisdiction and hereby delegate authority to
the ODRA Director as follows:
    a. To administer and conduct proceedings in individual bid
protests, contract disputes and Circular A-76 contests, to appoint ODRA
Dispute Resolution Officers/Administrative Judges and Special Masters
to adjudicate all or portions of individual bid protests, contract
disputes and contests; and to prepare findings and recommendations as
well as proposed final orders in such cases;
    b. To grant or deny dismissal or summary relief in bid protests,
contract disputes or contests;
    c. To stay an award or the performance of a contract temporarily,
for no more than ten (10) business days, pending an Administrator's
decision on a permanent stay. A stay will only be ordered by the ODRA
in cases where the ODRA, based on the submissions of the parties, finds
compelling reasons which would justify a stay, and recommends a stay to
the Administrator;
    d. To dismiss bid protests, contract disputes or contests, based on
settlement agreements or voluntary withdrawals by the parties that
instituted such proceedings;
    e. To issue procedural and other interlocutory orders aimed at
proper and efficient case management, including, without limitation,
scheduling orders, subpoenas, sanctions orders for failure of
discovery, and the like;
    f. To issue protective orders aimed at prohibiting the public
dissemination of certain information and materials provided to the ODRA
and opposing parties during the course of bid protest, contract dispute
or contest proceedings, including, but not limited to, documents or
other materials reflecting trade secrets, confidential financial
information and other proprietary or competition-sensitive data, as
well as confidential Agency source selection information the disclosure
of which might jeopardize future Agency procurement activities;
    g. To utilize voluntary alternative dispute resolution (ADR)
methods as the primary means of dispute resolution, in accordance with
established Department of Transportation and FAA policies for using ADR
to the maximum extent practicable;
    h. To appoint ODRA Dispute Resolution Officers/Administrative
Judges and Special Masters to engage with parties in voluntary,
mutually agreeable ADR efforts aimed at resolving acquisition related
disputes at the earliest possible stage, even before any formal
protest, contract dispute or contest is filed with the ODRA;
    i. To execute and issue, on behalf of the Administrator, final FAA
decisions and orders in all matters within the ODRA's jurisdiction,
provided that such matters involve either: (1) A bid protest concerning
an acquisition having a minimum dollar value of not more than ten
million dollars ($10,000,000.00); or (2) a contract dispute involving a
total amount to be adjudicated, exclusive of interest, legal fees or
costs, or not more than ten million dollars ($10,000,000.00). This
Delegation does not preclude the Director of the ODRA from requesting,
in any matter before the ODRA, that the order setting forth the final
decision of the FAA be executed by the Administrator;
    j. To execute and issue orders and final decisions on behalf of the
Administrator for any applications made pursuant to the Equal Access to
Justice Act for matters within the ODRA's jurisdiction;
    k. To take all other reasonable steps deemed necessary and proper
for the management of the FAA Dispute Resolution System and for the
resolution of bid protests, contract disputes, or contests, in
accordance with the Acquisition Management System and applicable law.
    The foregoing authority may be re-delegated by the Director to ODRA
Dispute Resolution Officers/Administrative Judges and to Special
Masters. This Delegation supersedes and replaces the Delegations issued
to the Director of the ODRA on July 29, 1998, March 27, 2000, March 10,
2004 (Delegation), March 10, 2004 (OMB Circular A-76 Delegation), and
March 31, 2010.

    Issued in Washington, DC, on October 12, 2011.
Marc L. Warren,
Acting Chief Counsel.
[FR Doc. 2011-29336 Filed 11-10-11; 8:45 am]
BILLING CODE 4910-13-P