[Federal Register Volume 81, Number 242 (Friday, December 16, 2016)]
[Proposed Rules]
[Pages 91066-91068]
[FR Doc No: 2016-29670]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2016-9439; Directorate Identifier 2016-NM-170-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain The Boeing Company Model 787-8 airplanes. This proposed AD was
prompted by a report indicating that during an airplane inspection in
production, the variable frequency starter generator (VFSG) power
feeder cables were found to contain terminal lugs incorrectly installed
common to terminal blocks located in the wing front spar. This proposed
AD would require a general visual inspection of the wings, section 16,
terminal lugs at the terminal power block of the VFSG power feeder
cable for correct installation and if required, applicable corrective
actions. We are proposing this AD to address the unsafe condition on
these products.

DATES: We must receive comments on this proposed AD by January 30,
2017.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Boeing
Commercial Airplanes, Attention: Contractual & Data Services (C&DS),
2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600;
telephone:<PHONE_NUMBER>; Internet: https://www.myboeingfleet.com. You
may view this referenced service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>. It
is also available on the Internet at http://www.regulations.gov by
searching for and locating Docket No. FAA-2016-9439.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-
9439; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Office (phone:<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Brendan Shanley, Aerospace Engineer,
Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft
Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-
3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2016-9439;
Directorate Identifier 2016-NM-170-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We have received a report indicating that during an airplane
inspection in production, the variable frequency starter generator
(VFSG) power feeder cables were found to contain terminal lugs
incorrectly installed common to terminal blocks located in the wing
front spar; the lugs were close to the structure causing the lug sleeve
to come in contact with adjacent fasteners. The installation procedures
have been corrected on subsequent production airplanes. Operators have
not reported any issues with the power feeder cables. This condition,
if not corrected, could result in electrical arcing in a flammable
leakage zone which could result in an electrical short and the possible
introduction of energy into the main fuel tanks.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin B787-81205-SB240027-00,
Issue 002, dated September 6, 2016. The service information describes
procedures for a general visual inspection of the right and left wing,
section 16, VFSG power feeder cable terminal lugs for correct
installation and corrective actions. This service information is
reasonably available because the interested parties have access to it
through their normal course of business or by the means identified in
the ADDRESSES section.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified
in the service information described previously. For information on the
procedures and compliance times, see this service information at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-
9439.
    The phrase ``corrective actions'' is used in this proposed AD.
Corrective actions correct or address any condition found. Corrective
actions in an AD could include, for example, repairs.

Costs of Compliance

    We estimate that this proposed AD affects 6 airplanes of U.S.
registry. We estimate the following costs to comply with this proposed
AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
               Action                        Labor cost           Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
Inspection..........................  8 work-hours x $85 per               $0             $680           $4,080
                                       hour = $680.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary repairs that
would be required based on the results of the proposed inspection. We
have no way of determining the number of aircraft that might need these
repairs:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Rework Wing Terminal Lugs....................  9 work-hours x $85 per hour =                $0             $765
                                                $765 \1\.
----------------------------------------------------------------------------------------------------------------
\1\ Labor costs are specific to each wing (left or right.)

    According to the manufacturer, some of the costs of this proposed
AD may be covered under warranty, thereby reducing the cost impact on
affected individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all costs in our cost
estimate.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and

Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

The Boeing Company: Docket No. FAA-2016-9439; Directorate Identifier
2016-NM-170-AD.

 (a) Comments Due Date

    We must receive comments by January 30, 2017.

 (b) Affected ADs

    None.

 (c) Applicability

    This AD applies to The Boeing Company Model 787-8 airplanes,
certificated in any category, as identified in Boeing Alert Service
Bulletin B787-81205-SB240027-00, Issue 002, dated September 6, 2016.

 (d) Subject

    Air Transport Association (ATA) of America Code 24, Electrical
power.

 (e) Unsafe Condition

    This AD was prompted by a report indicating that during an
airplane inspection in production, the variable frequency starter
generator (VFSG) power feeder cables were found to contain terminal
lugs incorrectly installed common to terminal blocks located in the
wing front spar; the lugs were close to the structure causing the
lug sleeve to come in contact with adjacent fasteners. We are
issuing this AD to detect and correct incorrectly installed terminal
lugs which may contact adjacent structure and be damaged. Damaged
terminal lugs could cause electrical arcing in a flammable leakage
zone which could result in an electrical short and the possible
introduction of energy into the main fuel tanks.

 (f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

 (g) Inspection of Terminal Lugs and Corrective Actions

    Within the applicable times specified in paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin B787-81205-
SB240027-00, Issue 002, dated September 6, 2016: Do a general visual
inspection of the right and left wing, section 16, VFSG power feeder
cable terminal lugs at the terminal block for correct installation
and do all applicable corrective actions in accordance with Boeing
Alert Service Bulletin B787-81205-SB240027-00, Issue 002, dated
September 6, 2016. Do all applicable corrective actions before
further flight.

 (h) Credit for Previous Actions

    This paragraph provides credit for the actions specified in
paragraph (g) of this AD, if those actions were performed before the
effective date of this AD using Boeing Alert Service Bulletin B787-
81205-SB240027-00, Issue 001, dated January 21, 2014.

 (i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (j)(1) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by the Boeing Commercial Airplanes Organization
Designation Authorization (ODA) that has been authorized by the
Manager, Seattle ACO, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.

 (j) Related Information

    (1) For more information about this AD, contact Brendan Shanley,
Aerospace Engineer, Systems and Equipment Branch, ANM-130S, FAA,
Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW.,
Renton, WA 98057-3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-
5600; telephone:<PHONE_NUMBER>; Internet: https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on December 1, 2016.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2016-29670 Filed 12-15-16; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 87, Number 123 (Tuesday, June 28, 2022)]
[Rules and Regulations]
[Pages 38281-38282]
[FR Doc No: 2022-13679]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2022-0265]

Safety Zones; Recurring Safety Zones in Captain of the Port Sault
Sainte Marie Zone for Events Beginning in August 2022

AGENCY: Coast Guard, Department of Homeland Security (DHS).

ACTION: Notification of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce established safety zones in the
Sault Sainte Marie area listed in Table 1 of this document for maritime
events starting in August 2022. This action is necessary and intended
to protect the safety of life on navigable waterways. During the
enforcement periods, vessels must stay out of the established safety
zones and may only enter with permission from the designated
representative of the Captain of the Port Sault Sainte Marie.

DATES: The regulations listed in 33 CFR 165.918 will be enforced for
the safety zones identified in Table 1 of the SUPPLEMENTARY INFORMATION
section below for the dates and times specified.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
publication, call or email LT Deaven Palenzuela, Waterways Management
division, Coast Guard Sector Sault Sainte Marie, U.S. Coast Guard;
telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION: The Coast Guard will enforce the safety
zones in 33 CFR 165.918 as per the time, dates, and locations in Table
1.

                                 Table 1
                            [Datum NAD 1983]
------------------------------------------------------------------------
             Event                     Location            Event date
------------------------------------------------------------------------
(20) Elk Rapids Harbor Days     All U.S. navigable      On August 6,
 Fireworks; Elk Rapids, MI.      waters within the arc   2022, from 10
                                 of a circle with an     p.m. through
                                 approximate 500-foot    10:30 p.m.
                                 radius from the
                                 fireworks launch site
                                 located on a barge in
                                 position
                                 44[deg]54'6.95'' N,
                                 85[deg]25'3.11'' W.
(21) Nautical City Fireworks,   All U.S. navigable      On August 7,
 Rogers City.                    waters within the arc   2022, from 10
                                 of a circle with an     p.m. through
                                 approximate 750-foot    10:30 p.m.
                                 radius from the
                                 fireworks launch site
                                 located near Harbor
                                 View Road in position
                                 45[deg]24'59.07.72''
                                 N, 083[deg]47'50.57''
                                 W.
------------------------------------------------------------------------

    This action is being taken to provide for the safety of life on
navigable waterways during the fireworks displays. The regulations for
safety zones within the Captain of the Port Sault Sainte Marie Zone,
Sec.  165.918, apply for these fireworks displays.
    This notification of enforcement is issued under authority of 33
CFR 165.918 and 5 U.S.C. 552(a). In addition to this notification of
enforcement in the Federal Register, the Coast Guard will provide the
maritime community with advance notification of this enforcement period
via Broadcast Notice to Mariners or Local Notice to Mariners. If the
Captain of the Port Sault Sainte Marie determines that the safety zone
need not be enforced for the full duration stated in this notification,
he may use a Broadcast Notice to Mariners to grant general permission
to enter the respective safety zone.

    Dated: June 22, 2022.
A.R. Jones,
Captain, U.S. Coast Guard, Captain of the Port Sault Sainte Marie.
[FR Doc. 2022-13679 Filed 6-27-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Notices]
[Pages 45462-45464]
[FR Doc No: 2016-16651]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 13318-003]

Swan Lake North Hydro LLC; Notice of Intent To Prepare an
Environmental Impact Statement and Notice of Scoping Meetings and
Environmental Site Review and Soliciting Scoping Comments

    Take notice that the following hydroelectric application has been
filed with Commission and is available for public inspection:
    a. Type of Application: Original Major License.
    b. Project No.: 13318-003.

    c. Date filed: October 28, 2015.
    d. Applicant: Swan Lake North Hydro LLC.
    e. Name of Project: Swan Lake North Pumped Storage Hydroelectric
Project.
    f. Location: Approximately 11 miles northeast of the city of
Klamath Falls, Klamath County, Oregon. The proposed project would
include about 730 acres of federal land managed by the U.S. Bureau of
Land Management and the U.S. Bureau of Reclamation.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791(a)-825(r).
    h. Applicant Contact: Joe Eberhardt, EDF-Renewable Energy, 1000 SW
Broadway Ave., Ste. 1800, Portland, OR 97205; phone:<PHONE_NUMBER>.
    i. FERC Contact: Dianne Rodman<EMAIL_ADDRESS>(202) 502-
6077.
    j. Deadline for filing scoping comments: September 9, 2016.
    The Commission strongly encourages electronic filing. Please file
scoping comments using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. For assistance, please contact
FERC Online Support at<EMAIL_ADDRESS>(866) 208-3676 (toll
free), or<PHONE_NUMBER> (TTY). In lieu of electronic filing, please
send a paper copy to: Secretary, Federal Energy Regulatory Commission,
888 First Street NE., Washington, DC 20426. The first page of any
filing should include docket number P-13318-003.
    The Commission's Rules of Practice and Procedure 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 is not ready for environmental analysis at this
time.
    l. The proposed project would be a closed-loop system using
groundwater for initial fill and consist of the following new
facilities: (1) A 7,972-foot-long earthen embankment forming a
geomembrane-lined upper reservoir with a surface area of 64.21 acres
and a storage capacity of 2,568 acre-feet at a maximum surface
elevation of 6,135 feet above mean sea level (msl); (2) a 8,003-foot-
long earthen embankment forming a geomembrane-lined lower reservoir
with a surface area of 60.14 acres and a storage capacity of 3,206
acre-feet at a maximum surface elevation of 4,457 feet msl; (3) a 500-
foot-long, rip-rap lined trapezoidal spillway built into the crest of
each embankment; (4) a 0.5-percent slope perforated polyvinyl chloride
tube of varying diameter and accompanying optical fiber drainage system
designed to detect, collect, and monitor water leakage from the
reservoirs; (5) a 25-inch-diameter bottom outlet with manual valve for
gravitational dewatering of the lower reservoir; (6) an upper intake
consisting of a bell mouth, 38.6-foot-wide by 29.8-foot-long inclined
screen, head gate, and 13.8-foot-diameter foundational steel pipe; (7)
a 36.5-foot-diameter, 9,655-foot-long steel high-pressure penstock from
the upper reservoir to the powerhouse that is predominantly above
ground with a 14-foot-long buried segment; (8) three 9.8-foot-diameter,
1,430-foot-long steel low-pressure penstocks from the lower reservoir
to the powerhouse that are predominantly above ground with a 78-foot-
long buried segment; (9) a partially-buried powerhouse with three
131.1-megawatt (MW) reversible pump-turbine units with a total
installed capacity of 393.3 MW; (10) a fenced substation next to the
powerhouse; (11) 32.8 mile, 230-kilovolt above-ground transmission line
interconnecting to an existing non-project substation; (12)
approximately 10.7 miles of improved project access road; (13)
approximately 3.4 miles of new permanent project access road; (14)
approximately 8.3 miles of temporary project access road; and (15)
appurtenant facilities. The project would generate about 1,187
gigawatt-hours annually.
    m. A copy of the application is available for review at the
Commission in the Public Reference Room or may be viewed on the
Commission's Web site at 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. For assistance, contact
FERC Online Support. A copy is also available for inspection and
reproduction at the address in item h above.
    You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.
    n. Scoping Process. The Commission intends to prepare an
Environmental Impact Statement (EIS) on the project in accordance with
the National Environmental Policy Act. The EIS will consider both site-
specific and cumulative environmental impacts and reasonable
alternatives to the proposed action.

Scoping Meetings

    FERC staff will conduct one agency scoping meeting and one public
meeting. The agency scoping meeting will focus on resource agency and
non-governmental organization (NGO) concerns, while the public scoping
meeting is primarily for public input. All interested individuals,
organizations, and agencies are invited to attend one or both of the
meetings, and to assist the staff in identifying the scope of the
environmental issues that should be analyzed in the EIS. The times and
locations of these meetings are as follows:

Agency Scoping Meeting

    DATE: Wednesday, August 10, 2016.
    TIME: 9:00 a.m.
    PLACE: Mt. Scott Room.
    ADDRESS: College Union, Oregon Institute of Technology, 3201 Campus
Drive, Klamath Falls, OR 97601.

Public Scoping Meeting

    DATE: Tuesday, August 9, 2016.
    TIME: 7:00 p.m.
    PLACE: Mt. Mazama Room.
    ADDRESS: College Union, Oregon Institute of Technology, 3201 Campus
Drive, Klamath Falls, OR 97601.
    Copies of the Scoping Document (SD1) outlining the subject areas to
be addressed in the EIS were distributed to the parties on the
Commission's mailing list. Copies of the SD1 will be available at the
scoping meeting or may be viewed on the web at http://www.ferc.gov
using the ``eLibrary'' link (see item m above).

Environmental Site Review

    The Applicant and FERC staff will conduct a project Environmental
Site Review beginning at 9:00 a.m. on August 9, 2016. All interested
individuals, organizations, and agencies are invited to attend. All
participants should meet at the Edgewood Ranch, 12501 Swan Falls Road,
Klamath Falls, Oregon. To reach the ranch from Main Street in Klamath
Falls, follow Oregon 39 South/Crater Lake east and south of town.
Follow signs for a slight left turn onto Oregon 140 East and follow it
for 9.4 miles to Swan Lake Road. Follow Swan Lake Road for 9.4 miles.
Edgewood Ranch is located off a driveway at the corner of a 90-degree
left-land turn in Swan Lake Road. The main office building is located
immediately on the right. Parking is available at the entry driveway
before the main office building. Anyone with questions about the
Environmental Site Review should contact Joe Eberhardt of EDF-Renewable
Energy at<PHONE_NUMBER>.

Objectives

    At the scoping meetings, the staff will: (1) Summarize the
environmental issues tentatively identified for analysis in the EIS;
(2) solicit from the meeting participants all available information,
especially quantifiable data, on the resources at issue; (3) encourage
statements from experts and the public on issues that should be
analyzed in the EIS, including viewpoints in opposition to, or in
support of, the staff's preliminary views; (4) determine the resource
issues to be addressed in the EIS; and (5) identify those issues that
require a detailed analysis, as well as those issues that do not
require a detailed analysis.

Procedures

    The meetings will be recorded by a stenographer and become part of
the formal record of the Commission proceeding on the project.
    Individuals, organizations, and agencies with environmental
expertise and concerns are encouraged to attend the meeting and to
assist the staff in defining and clarifying the issues to be addressed
in the EIS.

    Dated: July 8, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-16651 Filed 7-13-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register: June 17, 2010 (Volume 75, Number 116)]
[Rules and Regulations]
[Page 34347-34348]
[DOCID:fr17jn10-7]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0803; Directorate Identifier 2009-NE-34-AD;
Amendment 39-16330; AD 2010-12-09]
RIN 2120-AA64

Airworthiness Directives; Honeywell International Inc. Auxiliary
Power Unit Models GTCP36-150(R) and GTCP36-150(RR)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
Honeywell International Inc. auxiliary power unit (APU) models GTCP36-
150(R) and GTCP36-150(RR). This AD requires inspecting the fuel control
unit (FCU) differential pressure (Delta P) sleeve bore for erosion,
replacing the FCU if it fails the inspection, and installing a fuel
deflector on the Delta P sleeve of the FCU. This AD results from eight
reports of fuel leakage from the FCU. We are issuing this AD to prevent
fuel leakage in the APU compartment, which could lead to ignition of
fuel vapor, creating a fire and explosion hazard resulting in injury,
and damage to the APU and the airplane.

DATES: This AD becomes effective July 22, 2010. The Director of the
Federal Register approved the incorporation by reference of certain
publications listed in the regulations as of July 22, 2010.

ADDRESSES: You can get the service information identified in this AD
from Honeywell International Inc., 111 S. 34th Street, Phoenix, Arizona
85034-2802; Web site: http://portal.honeywell.com/wps/portal/aero;
telephone No.<PHONE_NUMBER>; international telephone No. (601) 365-
3099.
    The Docket Operations office is located at Docket Management
Facility, U.S. Department of Transportation, 1200 New Jersey Avenue,
SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-
0001.

FOR FURTHER INFORMATION CONTACT: Roger Pesuit, Aerospace Engineer, Los
Angeles Aircraft Certification Office, FAA, Transport Airplane
Directorate, 3960 Paramount Blvd., Lakewood, CA 90712-4137; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>, fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39
with a proposed AD. The proposed AD applies to Honeywell International
Inc. APU models GTCP36-150(R) and GTCP36-150(RR). We published the
proposed AD in the Federal Register on December 23, 2009 (74 FR 68196).
That action proposed to require inspecting the Delta P sleeve bore for
erosion, replacing the FCU if it fails the inspection, and installing a
fuel deflector on the Delta P sleeve of the FCU.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Operations office (telephone<PHONE_NUMBER>) is provided in
the ADDRESSES section. Comments will be available in the AD docket
shortly after receipt.

Comments

    We provided the public the opportunity to participate in the
development of this AD. We received no comments on the proposal or on
the determination of the cost to the public.

Conclusion

    We have carefully reviewed the available data and determined that
air safety and the public interest require adopting the AD as proposed.

Costs of Compliance

    We estimate that this AD will affect four APUs installed on
airplanes of U.S. registry. We also estimate that it will take about
one work-hour per APU to perform the actions, and that the average
labor rate is $80 per work-hour. Required parts will cost about $201
per APU. Based on these figures, we estimate the total cost of the AD
to U.S. operators to be $1,124.

Authority for This Rulemaking

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

Regulatory Findings

    We have determined that this AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866;
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a summary of the costs to comply with this AD and
placed it in the AD Docket. You may get a copy of this summary at the
address listed under ADDRESSES.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the Federal Aviation Administration amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2010-12-09 Honeywell International Inc. (formerly AlliedSignal Inc.,
formerly Garrett Auxiliary Power Division): Amendment 39-16330.
Docket No. FAA-2009-0803; Directorate Identifier 2009-NE-34-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective July 22,
2010.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Honeywell International Inc. Auxiliary
Power Unit (APU) models GTCP36-150(R) and GTCP36-150(RR). These APUs
are installed on, but not limited to, Fokker Services B.V. Model
F.28 Mark 0100, and F.28 Mark 0070 airplanes.

Unsafe Condition

    (d) This AD results from eight reports of fuel leakage from the
fuel control unit (FCU). We are issuing this AD to prevent fuel
leakage in the APU compartment, which could lead to ignition of fuel
vapor, creating a fire and explosion hazard resulting in injury, and
damage to the APU and the airplane.

Compliance

    (e) You are responsible for having the actions required by this
AD performed at the next shop visit of the APU, or the next shop
visit of the APU FCU, or before the APU accumulates an additional
4,000 operating hours, whichever occurs first after the effective
date of this AD, unless the actions have already been done.

Inspection of the FCU Differential Pressure (Delta P) Sleeve Bore

    (f) Inspect the FCU Delta P sleeve bore for erosion. Use
paragraphs 3.B.(1) through 3.B.(4) of Honeywell International Inc.
Service Bulletin (SB) No. 3882840-49-7975, Revision 1, dated April
10, 2009, to do the inspection:
    (1) If the erosion in the Delta P sleeve bore is 0.030 inch or
more in depth, replace the FCU housing.
    (2) If the erosion in the Delta P sleeve bore is less than 0.030
inch in depth, the FCU housing is acceptable for use.

Installation of Fuel Deflector

    (g) Install fuel deflector, part number 70720001-1, onto the
Delta P sleeve of the FCU. Use paragraphs 3.B(5) through 3.B.(9) of
Honeywell International Inc. SB No. 3882840-49-7975, Revision 1,
dated April 10, 2009, to do the installation.

Alternative Methods of Compliance

    (h) The Manager, Los Angeles Aircraft Certification Office, has
the authority to approve alternative methods of compliance for this
AD if requested using the procedures found in 14 CFR 39.19.

Related Information

    (i) Contact Roger Pesuit, Aerospace Engineer, Los Angeles
Aircraft Certification Office, FAA, Transport Airplane Directorate,
3960 Paramount Blvd., Lakewood, CA 90712-4137; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>, fax<PHONE_NUMBER>,
for more information about this AD.

Material Incorporated by Reference

    (j) You must use Honeywell International Inc. SB No. 3882840-49-
7975, Revision 1, dated April 10, 2009, to perform the inspection
and installation required by this AD. The Director of the Federal
Register approved the incorporation by reference of this service
bulletin in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Contact Honeywell International Inc., 111 S. 34th Street, Phoenix,
Arizona 85034-2802; Web site: telephone No.<PHONE_NUMBER>;
international telephone No.<PHONE_NUMBER>, for a copy of this
service information. You may review copies at the FAA, New England
Region, 12 New England Executive Park, Burlington, MA; or at the
National Archives and Records Administration (NARA). For information
on the availability of this material at NARA, call<PHONE_NUMBER>, or
go to: http://www.archives.gov/federal-register/cfr/ibr-
locations.html.

    Issued in Burlington, Massachusetts, on May 28, 2010.
Peter A. White,
Assistant Manager, Engine and Propeller Directorate, Aircraft
Certification Service.
[FR Doc. 2010-13595 Filed 6-16-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 112 (Monday, June 11, 2018)]
[Notices]
[Pages 27034-27035]
[FR Doc No: 2018-12433]

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

[Release No. 34-83385; File No. SR-NYSEArca-2018-25]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of
Designation of a Longer Period for Commission Action on a Proposed Rule
Change to List and Trade Shares of the Natixis Loomis Sayles Short
Duration Income ETF

June 5, 2018.
    On April 16, 2018, NYSE Arca, Inc. filed with the Securities and
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade shares of the
Natixis Loomis Sayles Short Duration Income ETF pursuant to NYSE Arca
Rule 8.600-E, which governs the listing and trading of Managed Fund
Shares. The proposed rule change was published for comment in the
Federal

Register on May 3, 2018.\3\ The Commission has received no comment
letters on the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 83122 (April 27,
2018), 83 FR 19578.
---------------------------------------------------------------------------

    Section 19(b)(2) of the Act \4\ provides that within 45 days of the
publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding, or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
45th day after publication of the notice for this proposed rule change
is June 17, 2018. The Commission is extending this 45-day time period.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds it appropriate to designate a longer period
within which to take action on the proposed rule change so that it has
sufficient time to consider the proposed rule change. Accordingly, the
Commission, pursuant to Section 19(b)(2) of the Act,\5\ designates
August 1, 2018 as the date by which the Commission shall either approve
or disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change (File No. SR-NYSEArca-2018-25).
---------------------------------------------------------------------------

    \5\ Id.

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

    \6\ 17 CFR 200.30-3(a)(31).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-12433 Filed 6-8-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 26 (Monday, February 9, 2015)]
[Notices]
[Pages 7056-7062]
[FR Doc No: 2015-02566]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74202; File No. SR-OCC-2014-813]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of an Advance Notice, as Modified by Amendment No. 1,
Concerning a Proposed Capital Plan for Raising Additional Capital That
Would Support The Options Clearing Corporation's Function as a
Systemically Important Financial Market Utility

February 4, 2015.
    Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act entitled the Payment,
Clearing, and Settlement Supervision Act of 2010 (``Payment, Clearing
and Settlement Supervision Act'' or ``Clearing Supervision Act'') \1\
and Rule 19b-4(n)(1)(i) \2\ under the Securities Exchange Act of 1934
(``Act'') notice is hereby given that on December 29, 2014, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission (``Commission'') the advance notice as described in Items I
and II below, which Items have been prepared by OCC.\3\ On January 14,
2015, OCC filed Amendment No. 1 to the advance notice.\4\ The
Commission is publishing this notice to solicit comments on the advance
notice from interested persons.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ In Items I and II below, OCC states that the purpose of this
proposal is in part to facilitate compliance with the SEC Proposed
Rules (as defined below) and address Principle 15 of the Principles
for Financial Market Infrastructures (``PMFIs''). The Commission
notes that the SEC Proposed Rules are pending. The Commission will
evaluate the advance notice under the Clearing Supervision Act and
the rules currently in force thereunder.
    \4\ According to OCC, Amendment No. 1 to the SR-OCC-2014-813
(``Filing''): (i) Updates OCC's plan for raising additional capital
(``Capital Plan'') in connection with negotiations between OCC and
the options exchanges that own equity in OCC (``Stockholder
Exchanges'' or ``stockholders'') and that would contribute
additional capital under the Capital Plan, (ii) corrects
typographical errors in the Filing, and (iii) updates the Term Sheet
included as an exhibit to the Filing, which summarizes material
features of the Capital Plan.
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the Advance
Notice

    This advance notice is filed by OCC in order to set forth a
proposed Capital Plan for raising additional capital that would support
OCC's function as a systemically important financial market utility and
facilitate OCC's compliance with new regulatory requirements applicable
to systemically important financial market utilities that have been
proposed by the Commission but have not yet been adopted.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice

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

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

    Written comments on the advance notice were not and are not
intended to be solicited with respect to the advance notice and none
have been received.

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

    The proposed change sets forth the Capital Plan under which the
Stockholder Exchanges would make an additional capital contribution and
commit to replenishment capital (``Replenishment Capital'') in
circumstances discussed below, and would receive, among other things,
the right to receive dividends from OCC. In addition to the additional
capital contribution and Replenishment Capital, the main features of
the Capital Plan are: (i) A policy establishing OCC's fees at a level
that would be sufficient to cover OCC's estimated operating expenses
plus a ``Business Risk Buffer'' as described below (``Fee Policy''),
(ii) the Refund Policy [sic], and (iii) a policy for calculating the
amount of dividends to be paid to the options exchanges owning equity
in OCC (``Dividend Policy''). The Capital Plan is proposed to be
implemented on or about February 27, 2015, subject to all necessary
regulatory approvals.\5\
---------------------------------------------------------------------------

    \5\ The material features of the Capital Plan are summarized in
the Term Sheet that is included as Exhibit 3. Certain details of the
Term Sheet may change as a result of further negotiations or changes
in financial figures, but OCC does not anticipate any material
changes to the Capital Plan. OCC intends to separately file a
proposed rule change seeking approval of changes to its By-Laws,
Certificate of Incorporation and relevant agreements, including its
Stockholders Agreement, necessary to implement the Capital Plan.
---------------------------------------------------------------------------

Purpose of the Proposed Change
    The purpose of this proposed change is to implement the Capital
Plan, which would significantly increase OCC's capital in connection
with its increased responsibilities as a systemically important
financial market utility, and which OCC believes would facilitate OCC's
compliance with new regulatory requirements applicable to such
systemically important financial market utilities that have been
proposed by the Commission but have not yet been adopted.\6\ For
purposes of this filing, OCC has used the working assumption that the
new requirements contained in the Commission's proposed amendments to
Rule 17Ad-22 of the SEC Proposed Rules will be adopted substantially as
proposed. The proposed change is intended to ensure OCC's ability to
comply with Rule 17Ad-22, specifically paragraph (e)(15) thereof, when
the SEC Proposed Rules become effective. In addition, it is intended to
address Principle 15 of the Principles for Financial Market
Infrastructures published by the Bank for International Settlements and
the International Organization of Securities Commissions, which
provides, among other things, that a financial market utility should
identify, monitor and manage its general business risk and hold
sufficient liquid net assets funded by equity to cover potential
general business losses so that it can continue to operate as a going
concern. The proposal includes an infusion of substantial additional
equity capital by the Stockholder Exchanges to be made prior to
February 27, 2015, subject to regulatory approval, that when added to
retained earnings accumulated by OCC in 2014 will significantly
increase OCC's capital levels as compared to historical levels.
Additionally, the proposed change includes the Replenishment Capital
commitment, which would provide OCC access to additional equity

contributed by the Stockholder Exchanges should OCC's equity fall close
to or below the amount that OCC determines to be appropriate to support
its business and manage business risk in compliance with Rule 17Ad-22,
as discussed more fully below.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 71699 (March 12,
2014), 79 FR 29507 (May 22, 2014) (``SEC Proposed Rules'').
---------------------------------------------------------------------------

Background
    OCC is a clearing agency registered with the Commission and is also
a derivatives clearing organization (``DCO'') regulated in its capacity
as such by the Commodity Futures Trading Commission (``CFTC''). OCC is
a Delaware business corporation and is owned equally by the Stockholder
Exchanges, five national securities exchanges for which OCC provides
clearing services.\7\ In addition, OCC provides clearing services for
seven other national securities exchanges that trade options (``Non-
Stockholder Exchanges''). In its capacity as a DCO, OCC also provides
clearing services to four futures exchanges.
---------------------------------------------------------------------------

    \7\ The Stockholder Exchanges are: Chicago Board Options
Exchange, Incorporated; International Securities Exchange, LLC;
NASDAQ OMX PHLX LLC; NYSE MKT LLC; and NYSE Arca, Inc.
---------------------------------------------------------------------------

    OCC has been designated systemically important by the Financial
Stability Oversight Council pursuant to the Payment, Clearing and
Settlement Supervision Act, and the Commission is OCC's ``Supervisory
Agency'' under Section 803(8) of the Payment, Clearing and Settlement
Supervision Act. OCC is therefore a ``covered clearing agency''
(``CCA'') as defined in proposed amendments to the Commission's Rule
17Ad-22(a)(7) and would be required to comply with the provisions of
proposed Rule 17Ad-22 applicable to CCA's, including paragraph (e)(15)
thereof.\8\
---------------------------------------------------------------------------

    \8\ SEC Proposed Rules at 32-33, FR 29507, 29515 (May 22, 2014).
---------------------------------------------------------------------------

    Proposed Rule 17Ad-22(e)(15) provides:

    Each covered clearing agency shall establish, implement,
maintain and enforce written policies and procedures reasonably
designed to, as applicable: . . . Identify, monitor, and manage the
covered clearing agency's general business risk and hold sufficient
liquid net assets funded by equity to cover potential general
business losses so that the covered clearing agency can continue
operations and services as a going concern if those losses
materialize, including by:
    (i) Determining the amount of liquid net assets funded by equity
based upon its general business risk profile and the length of time
required to achieve recovery or orderly wind-down, as appropriate,
of its critical operations and services if such action is taken;
    (ii) Holding liquid net assets funded by equity equal to the
greater of either (x) six months of the covered clearing agency's
current operating expenses, or (y) the amount determined by the
board of directors to be sufficient to ensure a recovery or orderly
wind-down of critical operations and services of the covered
clearing agency, as contemplated by the plans established under
paragraph (e)(3)(ii) of this section, and which:
    (A) shall be in addition to resources held to cover participant
defaults or other risks covered under the credit risk standard in
paragraph (b)(3) or paragraph (e)(4)(i)-(iii) of this section, as
applicable, and the liquidity risk standard in paragraph (e)(7)(i)
and (ii) of this section; and
    (B) Shall be of high quality and sufficiently liquid to allow
the covered clearing agency to meet its current and projected
operating expenses under a range of scenarios, including adverse
market conditions; and
    (iii) Maintaining a viable plan, approved by the board of
directors and updated at least annually, for raising additional
equity should its equity fall close to or below the amount required
under paragraph (e)(15)(ii) of this section.\9\
---------------------------------------------------------------------------

    \9\ SEC Proposed Rules at 417-418, FR 29507, 29616 (May 22,
2014).

    Over the last nine months, OCC has devoted substantial efforts to:
(1) Develop a 5-year forward looking model of expenses; (2) quantify
maximum recovery and wind-down costs under OCC's Recovery and Wind-Down
Plan; (3) assess and quantify OCC's operational and business risks; (4)
model projected capital accumulation taking into account varying
assumptions concerning business conditions, fee levels, buffer margin
levels and refunds; and (5) develop an effective mechanism that
provides OCC access to replenishment capital in the event of losses
that could cause OCC to be non-compliant with the SEC Proposed Rules.
Incorporating the results of those efforts, the proposed change is
intended to provide OCC with the means to increase its stockholder
equity and, in particular, to obtain timely compliance with Rule 17Ad-
22(e)(15) \10\ as proposed by the Commission. A more detailed
discussion of the manner in which the proposed change would allow OCC
to comply with Rule 17Ad-22(e)(15) appears below.
---------------------------------------------------------------------------

    \10\ SEC Proposed Rules at 222-223, FR 29507, 29547-29548 (May
22, 2014).
---------------------------------------------------------------------------

OCC's Projected Capital Requirement
    Using the methods described in detail below, OCC will annually
determine a ``Target Capital Requirement'' consisting of (i) a
``Baseline Capital Requirement'' equal to the greatest of (x) six
months operating expenses for the following year, (y) the maximum cost
of the recovery scenario from OCC's Recovery and Wind-Down Plan, and
(z) the cost to OCC of winding down operations as set forth in the
Recovery and Wind-Down Plan, plus (ii) a ``Target Capital Buffer''
linked to plausible loss scenarios from operational risk, business risk
and pension risk. OCC has determined that its currently appropriate
``Target Capital Requirement'' is $247 million, reflecting a Baseline
Capital Requirement of $117 million, which is equal to six months of
projected operating expenses, plus a Target Capital Buffer of $130
million. This Target Capital Buffer would provide a significant capital
cushion to offset potential business losses.
    As of December 31, 2013, OCC had total shareholders' equity of
approximately $25 million,\11\ meaning that OCC proposes to add
additional capital of $222 million to meet its 2015 Target Capital
Requirement. In addition, OCC would be obligated under paragraph
(e)(15)(iii) \12\ of proposed Rule 17Ad-22 to maintain ``a viable
plan'' for raising additional equity should its equity fall close to or
below the amount required under paragraph (e)(15)(ii) of the Rule; \13\
i.e., the Baseline Capital Requirement. OCC has determined that its
viable plan for Replenishment Capital should provide for a
``Replenishment Capital Amount'' which would give OCC access to
additional capital as needed up to a maximum of the Baseline Capital
Requirement, which is currently $117 million.\14\ Therefore, OCC's
proposed Capital Plan would provide OCC in 2015 with ready access to
approximately $364 million in equity capital as follows:
---------------------------------------------------------------------------

    \11\ See OCC 2013 Annual Report, Financial Statements,
Statements of Financial Condition, available on OCC's Web site,
http://optionsclearing.com/components/docs/about/annual-reports/occ_2013_annual_report.pdf.
    \12\ SEC Proposed Rules at 418, FR 29507, 29616 (May 22, 2014).
    \13\ SEC Proposed Rules at 417, FR 29507, 29616 (May 22, 2014).
    \14\ The obligation to provide Replenishment Capital will be
capped at $200 million, which OCC projects will sufficiently account
for increases in its capital requirements for the foreseeable
future.

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

------------------------------------------------------------------------
Baseline Capital Requirement.........................       $117,000,000
Target Capital Buffer................................        130,000,000
                                                      ------------------
Target Capital Requirement...........................        247,000,000
Replenishment Capital Amount.........................        117,000,000
                                                      ------------------
  Total OCC Capital Resources........................        364,000,000
------------------------------------------------------------------------

Procedures Followed in Order To Determine Capital Requirement
    Various measures were used in determining the appropriate level of
capital necessary to comply with the

SEC Proposed Rules. An outside consultant conducted a ``bottom-up''
analysis of OCC's risks and quantified the appropriate amount of
capital to be held against each risk. The analysis was comprehensive
across risk types, including credit, market pension, operation, and
business risk. Based on internal operational risk scenarios and loss
modeling at or above the 99% confidence level, OCC's operational risk
was quantified at $226 million and pension risk at $21 million,
resulting in the total Target Capital Requirement of $247 million.
Business risk was addressed by taking into consideration that OCC has
the ability to fully offset potential revenue volatility and manage
business risk to zero by adjusting the levels at which fees and refunds
are set and by adopting a ``Business Risk Buffer'' of 25% when setting
fees. Other risks, such as counterparty risk and on-balance sheet
credit and market risk, were considered to be immaterial for purposes
of requiring additional capital based on means available to OCC to
address those risks that did not require use of OCC's capital. As
discussed in more detail below in the context of OCC's Fee Policy, the
Business Risk Buffer of 25% is achieved by setting OCC's fees at a
level intended to achieve target annual revenue that will result in a
25% buffer for the year after paying all operating expenses.
    An analysis was also performed to identify OCC's risk in terms of
the regulatory requirements set forth in proposed Rule 17Ad-
22(e)(15)(ii). This analysis estimated that, currently, OCC's maximum
recovery costs would be $100 million and projected wind-down costs
would be $73 million. OCC's projected expenses for 2015 are $234
million, so that six months projected expenses are $234 million/2 =
$117 million. The greater of recovery or wind-down costs and six months
of operating expenses is therefore $117 million, and OCC's Baseline
Capital Requirement (minimum regulatory requirement) is therefore $117
million. OCC then computed the appropriate amount of a Target Capital
Buffer from operational risk, business risk, and pension risk. This
resulted in a determination that the current Target Capital Buffer
should be $130 million. Thus, the Target Capital Requirement is $117
million + $130 million = $247 million.
Overview of, and Basis for, OCC's Proposal To Acquire Additional Equity
Capital
    In order to meet its Target Capital Requirement, and after
consideration of available alternatives, OCC's Board approved a
proposal from OCC's Stockholder Exchanges under which OCC would meet
its Target Capital Requirement of $247 million in early 2015 as
follows:

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

------------------------------------------------------------------------
Shareholders' Equity as of 1/1/2014..................        $25,000,000
Shareholders Equity Accumulated Through Retained              72,000,000
 Earnings \15\.......................................
                                                      ------------------
Additional Contribution from Stockholder Exchanges...        150,000,000
Target Capital Requirement...........................        247,000,000
Replenishment Capital Amount.........................        117,000,000
                                                      ------------------
  Total OCC Capital Resources........................        364,000,000
------------------------------------------------------------------------

    The additional contribution of the Stockholder Exchanges would be
made in respect of their Class B Common Stock on a pro rata basis. The
Stockholder Exchanges will also commit to provide additional equity
capital up to the Replenishment Capital Amount, which is currently $117
million, in the event Replenishment Capital is needed. While the
Replenishment Capital Amount will increase as the Baseline Capital
Requirement increases, it would be capped at a total of $200 million
that could be outstanding at any point in time. OCC has estimated that
the Baseline Capital Requirement would not exceed this amount before
2022. When the limit is being approached, OCC would revise the Capital
Plan as needed to address future needs. In consideration for their
capital contributions and replenishment commitments, the Stockholder
Exchanges will receive dividends as described in the Dividend Policy
discussed below for so long as they remain stockholders and maintain
their contributed capital and commitment to replenish capital up to the
Replenishment Capital Amount, subject to the $200 million cap.
---------------------------------------------------------------------------

    \15\ See Proposed Rule Change by The Options Clearing
Corporation to Reflect the Elimination of a Discount to the Clearing
Fee Schedule, Securities Exchange Act Release No. 71769 (March 21,
2014), 79 FR 17214 (March 27, 2014) (SR-OCC-2014-05) (Filing for
immediate effectiveness of a proposed rule change with the
Commission to reinstate OCC's permanent clearing fee schedule for
securities options and securities futures that became effective May
1, 2007 (``Permanent Schedule Reinstatement Filing'')). The $72
million is after giving effect to the approximately $40 million
refund referred to below.
---------------------------------------------------------------------------

Fee, Refund, and Dividend Policies
    Upon reaching the Target Capital Requirement, the Capital Plan
requires OCC to set its fees at a level that utilizes a Business Risk
Buffer of 25%. The purpose of this Business Risk Buffer is to ensure
that OCC accumulates sufficient capital to cover unexpected
fluctuations in operating expenses, business capital needs, and
regulatory capital requirements. Furthermore, the Capital Plan requires
OCC to maintain Fee, Refund, and Dividend Policies, described in more
detail below, which are designed to ensure that OCC's shareholders'
equity remains well above the Baseline Capital Requirement. The
required Business Risk Buffer of 25% is below OCC's 10-year historical
pre-refund average buffer of 31%. The target will remain 25% so long as
OCC's shareholders' equity remains above the Target Capital Requirement
amount. The reduction in buffer margin from OCC's 10-year average of
31% to 25% reflects OCC's commitment to operating as an industry
utility and ensuring that market participants benefit as much as
possible from OCC's operational efficiencies in the future. This
reduction will permit OCC to charge lower fees to market participants
rather than maximizing refunds to clearing members and dividend
distributions to Stockholder Exchanges. OCC will review its fee
schedule on a quarterly basis to manage revenue as closely to this
target as possible.\16\ For example, if the Business Risk Buffer is
materially above 25% after the first quarter of a particular year, OCC
may decrease fees for the remainder of the year, and conversely if the
Business Risk Buffer is materially below 25% at this time, OCC may
increase fees for the remainder of the year.
---------------------------------------------------------------------------

    \16\ If OCC's fee schedule needs to be changed in order to
achieve the 25% Business Risk Buffer, OCC would file a proposed rule
change seeking approval of the revised fee schedule.
---------------------------------------------------------------------------

    The Capital Plan would allow OCC to refund approximately $40
million from 2014 fees to clearing members in 2015 and to reduce fees
in an amount to be determined by the Board, effective in the second
quarter 2015. OCC will announce new fee levels early in 2015 and will
make them effective following notification to clearing members and any
necessary approval by the Commission. OCC will endeavor to provide
clearing members with no less than 60-day advance notice of the
effectiveness of changes to fee levels, particularly those that result
in increases to fee levels. No dividends will be declared until
December 2015 and no dividends will be paid until 2016.
    Changes to the Fee, Refund or Dividend Policies will require the
affirmative vote of two-thirds of the directors then in office and
approval of

the holders of all of OCC's outstanding Class B Common Stock. The
formulas for determining the amount of refunds and dividends under the
Refund and Dividend Policies, respectively, which are described in more
detail below, are based on, among other things, the current tax
treatment of refunds as a deductible expense. The Refund and Dividend
Policies would each provide that in the event that refunds payable
under the Refund Policy are not tax deductible, the policies would be
amended to restore the relative economic benefits between the
recipients of the refunds and the Stockholder Exchanges.\17\
---------------------------------------------------------------------------

    \17\ This sentence and the previous sentence relate to a
provision added to the Refund and Dividend Policies and designed to
preserve the original business understanding between OCC and the
Stockholder Exchanges even if refunds are no longer deductible.
---------------------------------------------------------------------------

Fee Policy
    Under the Fee Policy, in setting fees each year, OCC would
calculate an annual revenue target based on a forward twelve months
expense forecast divided by the difference between one and the Business
Risk Buffer of 25%, i.e., OCC will divide the expense forecast by .75.
Establishing a Business Risk Buffer at 25% would allow OCC to manage
the risk that fees would generate less revenue than expected due to
lower-than-expected trading volume or other factors, or that expenses
would be higher than projected. The Fee Policy also will include
provisions from existing Article IX, Section 9 of the By-Laws to the
effect that the fee schedule may also include additional amounts
necessary to (i) maintain such reserves as are deemed reasonably
necessary by the Board to provide facilities for the conduct of OCC's
business and to conduct development and capital planning activities in
connection with OCC's services to the options exchanges, Clearing
Members and the general public, and (ii) accumulate such additional
surplus as the Board may deem advisable to permit OCC to meet its
obligations to Clearing Members and the general public; however, these
provisions will be used only in extraordinary circumstances and to the
extent that the Board has determined that the required amount of such
additional reserves or additional surplus will exceed the full amount
that will be accumulated through the Business Risk Buffer (prior to
payment of refunds or dividends) so OCC's fees will ordinarily be based
on its projected operating expenses and the Business Risk Buffer of
25%.
    Under the proposed change, OCC would calculate its annual revenue
target as follows:
    Annual Revenue Target = Forward 12 Months Expense Forecast/(1-.25).
    Because OCC's clearing fee schedules typically reflect different
rates for different categories of transactions, fee projections would
include projections as to relative volume in each such category. The
clearing fee schedule would therefore be set to achieve a blended or
average rate per contract sufficient, when multiplied by total
projected contract volume, to achieve the Annual Revenue Target. Under
extraordinary circumstances, OCC would then add any amount determined
to be necessary for additional reserves or surplus and divide the
resulting number by the projected contract volume to determine the
applicable average fee per cleared contract needed to achieve the
additional amounts required. Consistent with past practice, OCC would
notify its clearing members of the fees it determines it would apply
for any particular period by describing the change in an information
memorandum distributed to all clearing members. Consistent with past
practice, OCC would also notify regulators of the fees it determines it
would apply for any particular period by filing an amendment to its
Schedule of Fees as a proposed rule change for immediate effectiveness
under Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(2)
thereunder.\18\
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    \18\ See, e.g., the Permanent Schedule Reinstatement Filing,
supra n. 14 [sic]; Proposed Rule Change by The Options Clearing
Corporation to Reduce the Per Contract Clearing Fee for Routing
Trades Executed in Accordance With the Options Order Protection and
Locked/Crossed Market Plan to $.01 per Contract, Securities Exchange
Act Release No. 68025 (October 12, 2012), 77 FR 63398 (October 16,
2012) (SR-OCC-2012-18).
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Refund Policy
    Under the Refund Policy, except at a time when Replenishment
Capital is outstanding as described below, OCC would declare a refund
to Clearing Members in December of each year, beginning in 2015, in an
amount equal to 50% of the excess, if any, of (i) pre-tax income for
the year prior to the refund over (ii) the sum of (x) the amount of
pre-tax income after the refund necessary to produce after-tax income
sufficient to maintain shareholders' equity at the Target Capital
Requirement for the following year plus (y) the amount of pre-tax
income after the refund necessary to fund any additional reserves or
additional surplus not already included in the Target Capital
Requirement. Such refund will be paid in the year following the
declaration after the issuance of OCC's audited financial statements,
provided that (i) the payment does not result in total shareholders'
equity falling below the Target Capital Requirement, and (ii) such
payment is otherwise permitted by applicable Delaware law and
applicable federal laws and regulations. OCC would not be able to pay a
refund on a particular date unless dividends were paid on the same
date. If Replenishment Capital has been contributed and remains
outstanding, OCC would not pay refunds until such time as the Target
Capital Requirement is restored through the accumulation of retained
earnings. Refunds in accordance with the Refund Policy would resume
once the Target Capital Requirement is restored and all Replenishment
Capital is repaid in full, provided that the restoration of the Target
Capital Requirement and the repayment of Replenishment Capital occurred
within 24 months of the issuance date of the Replenishment Capital. If,
within 24 months of the issuance date of any Replenishment Capital,
such Replenishment Capital has not been repaid in full or shareholders'
equity has not been restored to the Target Capital Requirement, OCC
would no longer pay refunds to clearing members, even if the Target
Capital Requirement is restored and all Replenishment Capital is repaid
at a later date.
Dividend Policy
    The Dividend Policy would provide that, except at a time when
Replenishment Capital is outstanding as described below, OCC would
declare a dividend on its Class B Common Stock in December of each year
in an aggregate amount equal to the excess, if any, of (i) after-tax
income for the year, after application of the Refund Policy (unless the
Refund Policy has been eliminated, in which case the refunds shall be
deemed to be $0) over (ii) the sum of (A) the amount required to be
retained in order to maintain total shareholders' equity at the Target
Capital Requirement for the following year, plus (B) the amount of any
additional reserves or additional surplus not already included in the
Target Capital Requirement. Such dividend will be paid in the year
following the declaration after the issuance of OCC's audited financial
statements, provided that (i) the payment does not result in total
shareholders' equity falling below the Target Capital Requirement, and
(ii) such payment is otherwise permitted by applicable Delaware law and
applicable federal laws and regulations. If

Replenishment Capital has been contributed and remains outstanding, OCC
would not pay dividends until such time as the Target Capital
Requirement is restored.
OCC's Status as an Industry Utility
    OCC has always been operated on an ``industry utility'' model. The
Stockholder Exchanges have heretofore contributed only minimal capital
to OCC.\19\ OCC's By-Laws currently require that OCC set its clearing
fees at a level that is designed to cover operating expenses and to
maintain such reserves and accumulate such additional capital as are
deemed reasonably necessary for OCC to meet its obligations to its
clearing members and the public. Clearing fees that are collected in
excess of these amounts are refunded annually on a pro rata basis to
the clearing members who paid them. Under this model, OCC has never
paid dividends to the Stockholder Exchanges. However, OCC has paid
significant refunds to clearing members each year. OCC is aware that a
portion--possibly a significant portion--of those refunds are not
passed through by the clearing members to their end user customers.
Accordingly, by adopting an approach that includes paying dividends to
the Stockholder Exchanges that have invested a significant amount of
additional capital ($150 million) but that also reduces the historical
pre-refund average buffer of 31% by adopting a Business Risk Buffer of
25%, OCC believes that the proposed approach maintains, and perhaps
better aligns with, an industry utility model.
---------------------------------------------------------------------------

    \19\ OCC's common stock and paid in capital total $2,659,999.
See OCC 2013 Annual Report, Financial Statements, Statements of
Financial Condition, available on OCC's Web site, http://optionsclearing.com/components/docs/about/annual-reports/occ_2013_annual_report.pdf.
---------------------------------------------------------------------------

    Given the very large increase in capital that OCC has determined to
be appropriate in order to assure compliance with regulatory
requirements and meet the increased responsibilities imposed upon it as
a systemically important financial market utility, OCC has determined
that the best alternative available to it is to obtain a substantial
further capital contribution from the Stockholder Exchanges. This
cannot be accomplished without modification of the past practice of not
providing dividends to stockholders. Accordingly, it would be necessary
for OCC to establish the new Fee Policy, Refund Policy, and Dividend
Policy. Because of the Business Risk Buffer being set at 25%, the
combination of the Fee, Refund and Dividend Policies will effectively
cap the dividends to be paid to the Stockholder Exchanges at a level
that the Board (with the advice of outside financial experts) has
determined results in a reasonable rate of return on contributed
capital, particularly in comparison to the implied cost of capital to
the clearing members and their customers of instead pursuing an
approach which required the accumulation of retained earnings through
higher fees and no refunds for several years. OCC will continue to
refund a significant percentage of excess clearing fees to clearing
members, thereby benefiting both clearing members and their customers.
The Capital Plan therefore effectively preserves OCC's industry utility
model of providing its services in an efficient manner, but enhances
the benefits to the end user customers by charging lower initial fees
as a result of the decrease in the buffer margin from OCC's 10-year
average of 31% to 25%.
    Clearing members and customers will benefit from the proposed
Capital Plan because it will allow OCC to continue to provide clearing
services at low cost. As noted, OCC expects that this capital infusion
from stockholders will enable OCC to provide a significant refund of
2014 fees. OCC further expects that its current clearing fees will be
reduced significantly based on the Business Risk Buffer of 25%
beginning in 2015 with refunds restored, and that these lower fees will
continue for the foreseeable future.
    Stockholder Exchanges will benefit from the dividend return they
receive and, perhaps more importantly, they will be assured that OCC
will be in a position to provide clearing services for their markets on
an on-going basis within the same basic structure that has served these
markets well since their inception and without the need to radically
change the structure to address potential demands of outside equity
investors. Non-Stockholder Exchanges will also benefit by continuing to
receive OCC's clearing services for their products on the same basis as
they presently do.\20\
---------------------------------------------------------------------------

    \20\ Non-Stockholder Exchanges contribute capital by purchasing
a promissory note in the principal amount of $1,000,000. See Section
2 of Article VIIB of OCC's By-Laws. The required Capital
Contribution of Non-Stockholder exchanges will not change under the
Capital Plan.
---------------------------------------------------------------------------

    OCC also believes that the Capital Plan will better align the
interests of Stockholder Exchanges and clearing members with respect to
expenses, since changes to the level of operating expenses directly
affect the Target Capital Requirement. In sum, OCC believes that the
present proposal represents a fair and reasonable balancing of the
interests of the Stockholder Exchanges, the other exchanges for which
OCC provides clearing services, clearing members, customers, and the
general public while providing an immediate infusion of capital and a
structure within which OCC can meet its obligations to the public as a
systemically important financial market utility, as well as the
requirements under the SEC Proposed Rules.
Replenishment Capital Plan
    OCC proposes to put in place a Replenishment Capital Plan whereby
OCC's Stockholder Exchanges are obligated to provide on a pro rata
basis a committed amount of Replenishment Capital should OCC's total
shareholders' equity fall below the hard trigger (as defined below).
The aggregate committed amount for all five Stockholder Exchanges in
the form of Replenishment Capital that could be outstanding at any time
would be capped at the excess of (i) the lesser of (A) the Baseline
Capital Requirement, which is currently $117 million, at the time of
the relevant funding or (B) $200 million, over (ii) amounts of
outstanding Replenishment Capital (``Cap''). The $200 million figure in
the Cap formula takes into account projected growth in the Baseline
Capital Requirement for the foreseeable future. The commitment to
provide Replenishment Capital would not be limited by time, but only by
the Cap. Replenishment Capital could be called in whole or in part
after the occurrence of a ``hard trigger'' event described below,
subject to the Cap. If the Baseline Capital Requirement approaches or
exceeds $200 million, the Board can consider, as part of its annual
review of the Replenishment Capital Plan that is required by the SEC
Proposed Rules, alternative arrangements to obtain replenishment
capital in excess of the $200 million committed under the Replenishment
Capital Plan. In addition, the Refund Policy and the Dividend Policy
will provide that, in the absence of obtaining any such alternative
arrangements, the amount of the difference will be subtracted from
amounts that would otherwise be available for the payment of refunds
and dividends.
    Replenishment Capital contributed to OCC under the Replenishment
Capital Plan would take the form of a new class of common stock
(``Class C Common Stock'') of OCC to be issued to the Stockholder
Exchanges solely in exchange for Replenishment Capital contributions.

    The Replenishment Capital Plan would be part of OCC's overall
Capital Plan. In implementing the Replenishment Capital Plan, OCC's
management would monitor OCC's levels of shareholders' equity to
identify certain triggers, or reduced capital levels, that might
require action. OCC has identified two key triggers--a soft trigger and
a hard trigger--and proposes that OCC take certain steps upon the
occurrence of either as described in more detail below.
    The ``soft trigger'' for re-evaluating OCC's capital would occur if
OCC's shareholders' equity falls below the sum of (i) the Baseline
Capital Requirement and (ii) 75% of the Target Capital Buffer. The soft
trigger would be a warning sign that OCC's capital had fallen to a
level that required attention and responsive action to prevent it from
falling to unacceptable levels. Upon a breach of the soft trigger,
OCC's senior management and the Board would review alternatives to
increasing capital, and take appropriate action as necessary, including
increasing fees or decreasing expenses, to restore shareholders' equity
to the Target Capital Requirement.
    The ``hard trigger'' for making a mandatory Replenishment Capital
call would occur if shareholders' equity falls below 125% of the
Baseline Capital Requirement (``Hard Trigger Threshold''). The hard
trigger would be a sign that corrective action more significant and
with a more immediate impact than increasing fees or decreasing
expenses should be taken to increase OCC's capital, either as part of a
recovery plan or a wind-down plan for OCC's business. OCC's
shareholders' equity would have to fall more than $100,000,000 below
the fully funded capital amount described above in order for the Hard
Trigger Threshold to be breached. As a result, OCC views the breach of
the Hard Trigger Threshold as unlikely and occurring only as a result
of a significant, unexpected event. Upon a breach of the Hard Trigger
Threshold, the Board would have to determine whether to attempt a
recovery, a wind-down of OCC's operations or a sale or similar
transaction, subject in each case to any necessary stockholder
consent.\21\ If the Board decides to wind-down OCC's operations, OCC
would access the Replenishment Capital in an amount sufficient to fund
the wind-down, as such amount would be determined by the Board, and
subject to the Cap described above. If the Board decides to attempt a
recovery of OCC's capital and business, OCC would access the
Replenishment Capital in an amount sufficient to return shareholders'
equity to an amount equal to $20 million above the Hard Trigger
Threshold, subject to the Cap described above.
---------------------------------------------------------------------------

    \21\ The requirement for stockholder consent would arise under
OCC's Restated Certificate of Incorporation, which would provide
that any decision to attempt a recovery would require separate
approval by the stockholders, while a decision to wind-down would
require separate approval by the stockholders.
---------------------------------------------------------------------------

    While Replenishment Capital is outstanding, no refunds or dividends
would be paid and, if any Replenishment Capital remains outstanding for
more than 24 months or the Target Capital Requirement is not restored
during that period, changes would be made to how OCC calculates refunds
and dividends, as described in more detail above under Refund Policy
and Dividend Policy. In addition, while Replenishment Capital is
outstanding, OCC would first utilize the entire amount of Available
Funds to repurchase, on a pro rata basis from each Stockholder, to the
extent permitted by applicable Delaware and federal law and
regulations, outstanding shares of Class C Common Stock as soon as
practicable after completion of the financial statements following the
end of each calendar quarter at a price equal to the original amount
paid for such shares, plus an additional ``gross up'' amount to
compensate the holders of the Class C Common Stock for taxes on
dividend income (if any) that they may have to recognize as a result of
such repurchase.\22\ For this purpose, ``Available Funds'' would equal,
as of the end of any calendar quarter, the excess, if any, of (x)
shareholders' equity over (y) the Minimum Replenishment Level. The
``Minimum Replenishment Level'' would mean $20 million above the Hard
Trigger Threshold, so that OCC's shareholders' equity would remain at
or above the Minimum Replenishment Level after giving effect to the
repurchase.
---------------------------------------------------------------------------

    \22\ Based on current federal rates, if the full amount of the
payment is classified as a dividend and the recipient is entitled to
a dividends received deduction, this gross up is estimated to be
approximately 12% of the payment.
---------------------------------------------------------------------------

Compliance with Rule 17Ad-22(e)(15)
    The capital base described above will permit OCC to hold at all
times cash and other assets of high quality and sufficiently liquid to
allow OCC to meet its current and projected operating expenses under a
range of scenarios, including adverse market conditions. In compliance
with proposed Rule 17Ad-22(e)(15),\23\ OCC proposes at all times to
hold liquid net assets funded by equity sufficient to cover potential
general business losses so that OCC can continue operations and
services as a going concern if those losses materialize, which assets
will always be greater than either (x) six months of the covered
clearing agency's current operating expenses, or (y) the amount
determined by the Board to be sufficient to ensure a recovery or
orderly wind-down of critical operations and services of the covered
clearing agency, as contemplated by the plans established under
paragraph (e)(3)(ii) \24\ of the proposed Rule. These assets will be
held in addition to resources held to cover participant defaults or
other risks covered under the credit risk standard in paragraph (b)(3)
or paragraph (e)(4)(i)-(iii) \25\ of proposed Rule 17Ad-22, as
applicable, and the liquidity risk standard in paragraph (e)(7)(i) and
(ii) \26\ of that proposed rule.
---------------------------------------------------------------------------

    \23\ SEC Proposed Rules at 417, FR 29507, 29616 (May 22, 2014).
    \24\ SEC Proposed Rules at 408, FR 29507, 29613 (May 22, 2014).
    \25\ SEC Proposed Rules at 408-409, FR 29507, 29614 (May 22,
2014).
    \26\ SEC Proposed Rules at 412-413, FR 29507, 29615 (May 22,
2014).
---------------------------------------------------------------------------

    OCC believes that the Replenishment Capital Plan described above
together with OCC's ability to set fees and retain earnings as
described above will assure OCC's ability to remain at all times in
compliance with the requirements of proposed Rule 17Ad-22(e)(15),\27\
including providing the basis for maintaining a viable capital plan for
replenishment capital in compliance with subparagraph (e)(15)(iii) \28\
of the rule.
---------------------------------------------------------------------------

    \27\ SEC Proposed Rules at 417-418, FR 29507, 29616 (May 22,
2014).
    \28\ SEC Proposed Rules at 418, FR 29507, 29616 (May 22, 2014).
---------------------------------------------------------------------------

Statutory Basis for the Advance Notice
    OCC believes that the proposed change is consistent with Section
805(b) of the Clearing Supervision Act \29\ because the proposed change
will reduce systemic risk.\30\ OCC believes that implementation of the
Capital Plan will provide OCC with an immediate injection of capital
and future committed capital to help ensure that it can continue to
provide its clearing services if it suffers business losses as a result
of a decline in revenues or otherwise. OCC believes that the proposed
change, as described above, is necessary for it to meet the capital
requirements under the proposed amendments \31\ to Rule 17Ad-22. For

these same reasons, the proposed change will reduce systemic risk
because it will promote confidence that OCC will be able to continue
operating even if it suffers business losses.
---------------------------------------------------------------------------

    \29\ 12 U.S.C. 5464(b).
    \30\ 12 U.S.C. 5464(b)(3).
    \31\ See generally Securities Exchange Act Release No. 71699
(March 12, 2014), 79 FR 29507 (May 22, 2014).
---------------------------------------------------------------------------

Anticipated Effect on and Management of Risk
    OCC believes that the proposed change will reduce OCC's overall
level of risk because it will help ensure that OCC will be able to
continue to provide its clearing services even if it suffers
significant business losses. As described above, the proposed change
includes a significant infusion of permanent capital. In addition, each
feature of the Capital Plan would help ensure that OCC's capital is
sufficient on an ongoing basis to allow it to withstand business
losses, whether resulting from a decline in revenue or otherwise. The
Fee Policy would provide for the Business Risk Buffer, which is
designed to ensure that fees will be sufficient to cover projected
operating expenses. The Refund Policy and Dividend Policy both would
allow for refunds of fees or payment of dividends, respectively, only
to the extent that they would allow OCC to maintain shareholders'
equity at the Target Capital Requirement. They would also prohibit
refunds and dividends when Class C Common Stock is outstanding under
the Replenishment Capital Plan and OCC was in the process of rebuilding
its capital base. In addition, the Replenishment Capital Plan would
establish a mandatory mechanism for the contribution of additional
capital by OCC's stockholder exchanges in the event capital fell below
desired levels. Together these features of the Capital Plan help ensure
that OCC maintains levels of capital sufficient to allow it to absorb
substantial business losses and meet its increased responsibilities
imposed upon it as a systemically important financial market utility,
which in turn helps reduce OCC's overall level of risk.

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

    The designated clearing agency may implement this change if it has
not received an objection to the proposed change within 60 days of the
later of (i) the date that the Commission receives the notice of
proposed change, or (ii) the date the Commission receives any further
information it requests for consideration of the notice. The designated
clearing agency shall not implement this change if the Commission has
an objection.
    The Commission may, during the 60-day review period, extend the
review period for an additional 60 days for proposed changes that raise
novel or complex issues, subject to the Commission providing the
designated clearing agency with prompt written notice of the extension.
The designated clearing agency may implement a change in less than 60
days from the date of receipt of the notice of proposed change by the
Commission, or the date the Commission receives any further information
it requested, if the Commission notifies the designated clearing agency
in writing that it does not object to the proposed change and
authorizes the designated clearing agency to implement the change on an
earlier date, subject to any conditions imposed by the Commission.
    The designated clearing agency shall post notice on its Web site of
proposed changes that are implemented.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.\32\
---------------------------------------------------------------------------

    \32\ See note 5, supra.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-OCC-2014-813 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-OCC-2014-813. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the advance notice that are filed
with the Commission, and all written communications relating to the
advance notice between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of OCC and on OCC's Web site http://www.optionsclearing.com/about/publications/bylaws.jsp. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-OCC-2014-813 and should be
submitted on or before February 24, 2015.

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2015-02566 Filed 2-6-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 168 (Thursday, August 29, 2019)]
[Notices]
[Page 45486]
[FR Doc No: 2019-18676]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL19-93-000]

Western Farmers Electric Cooperative v. Southwest Power Pool,
Inc.; Notice of Complaint

August 23, 2019.
    Take notice that on August 22, 2019, pursuant to sections 206, 306,
and 309 of the Federal Power Act (FPA), 16 U.S.C. 824e, 825e, and 825h
and Rule 206 of the Federal Energy Regulatory Commission's (Commission)
Rules of Practice and Procedure, 18 CFR 385.206, Western Farmers
Electric Cooperative (Complainant), filed a formal complaint against
Southwest Power Pool, Inc. (Respondent) alleging that SPP violated its
tariff and contractual obligations by failing to properly implement
Attachment Z2 of its tariff, all as more fully explained in the
complaint.
    Complainants certifies that copies of the complaint were served on
the contacts for Respondent as listed on the Commission's list of
Corporate Officials.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. The Respondent's
answer and all interventions, or protests must be filed on or before
the comment date. The Respondent's answer, motions to intervene, and
protests must be served on the Complainants.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the website that enables subscribers to receive email
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on September 23, 2019.

Kimberly D. Bose,
Secretary.
[FR Doc. 2019-18676 Filed 8-28-19; 8:45 am]
 BILLING CODE 6717-01-P