[Federal Register Volume 85, Number 70 (Friday, April 10, 2020)]
[Proposed Rules]
[Pages 20216-20218]
[FR Doc No: 2020-07450]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0364; Project Identifier MCAI-2019-00119-E]
RIN 2120-AA64

Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG
(Type Certificate Previously Held by Rolls-Royce plc) Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for all Rolls-Royce Deutschland Ltd. & Co KG Trent 1000-A2, Trent 1000-
AE2, Trent 1000-C2, Trent 1000-CE2, Trent 1000-D2, Trent 1000-E2, Trent
1000-G2, Trent 1000-H2, Trent 1000-J2, Trent 1000-K2, and Trent 1000-L2
model turbofan engines. This proposed AD was prompted by the
manufacturer revising the engine Time Limits Manual (TLM) life limits
of certain critical rotating parts and direct accumulation counting
(DAC) data files. This proposed AD would require operators to revise
the airworthiness limitation section (ALS) of their approved
maintenance program by incorporating the revised tasks of the
applicable TLM for each affected engine model. The FAA is proposing
this AD to address the unsafe condition on these products.

DATES: The FAA must receive comments on this proposed AD by May 26,
2020.

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 https://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 Rolls-
Royce Deutschland Ltd & Co KG, Eschenweg 11, 15827 Blankenfelde-Mahlow,
Germany; phone: +49 (0) 33 708 6 0; email: https://www.rolls-royce.com/contact-us.aspx. You may view this service information at the FAA,
Engine and Propeller Standards Branch, 1200 District Avenue,
Burlington, MA 01803. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0364; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this NPRM, the mandatory continuing airworthiness information (MCAI),
any comments received, and other information. The street address for
Docket Operations is listed above. Comments will be available in the AD
docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Stephen Elwin, Aerospace Engineer, ECO
Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone: 781-
238-7236; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites 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-2020-0364;
Project Identifier MCAI-2019-00119-E'' at the beginning of your
comments. The FAA specifically invites comments on the overall
regulatory, economic, environmental, and energy aspects of this NPRM.
The FAA will consider all comments received by the closing date and may
amend this NPRM because of those comments.
    Except for Confidential Business Information as described in the
following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The FAA will also post a report summarizing each substantive
verbal contact received about this NPRM.

Confidential Business Information

    Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
this NPRM contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to this NPRM, it is important that you
clearly designate the submitted comments as CBI. Please mark each page
of your submission containing CBI as ``PROPIN.'' The FAA will treat
such marked submissions as confidential under the FOIA, and they will
not be placed in the public docket of this NPRM. Submissions containing
CBI should be sent to Stephen Elwin, Aerospace Engineer, ECO Branch,
FAA, 1200 District Avenue, Burlington, MA 01803. Any commentary that
the FAA receives which is not specifically designated as CBI will be
placed in the public docket for this rulemaking.

Discussion

    The European Union Aviation Safety Agency (EASA), which is the
Technical Agent for the Member States of the European Community, has
issued EASA AD 2019-0058R1, dated April 2, 2019 (referred to after this
as ``the MCAI''), to address the unsafe condition on these products.
The MCAI states:

    The airworthiness limitations and/or certification maintenance
instructions for certain Trent 1000 engines (also known as `Package
C'), which are approved by EASA, are defined and published in TLM T-
Trent-10RRC. These instructions have been identified as mandatory
for continued airworthiness.
    Failure to accomplish these instructions could result in an
unsafe condition.
    Rolls-Royce recently revised the TLM, updating declared lives of
certain critical parts and updating Direct Accumulation Counting
(DAC) Data Files.
    For the reason described above, this [EASA] AD requires
accomplishment of the actions specified in the TLM. This [EASA] AD
is revised to clarify that only tasks contained in two specific
chapters of Rolls-Royce TLM T-Trent-10RRC are required by this
[EASA] AD.

    You may obtain further information by examining the MCAI in the AD
docket on the internet at https://www.regulations.gov by searching for
and locating Docket No. FAA-2020-0364.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Chapter 05-10 of Rolls-Royce (RR) Trent 1000-A2 RR
TLM T-Trent-10RRC, RR Trent 1000-AE2 RR TLM T-Trent-10RRC, RR Trent
1000-C2 RR TLM T-Trent-10RRC, RR Trent 1000-CE2 RR TLM T-Trent-10RRC,
RR Trent 1000-D2 RR TLM T-Trent-10RRC, RR Trent 1000-E2 RR TLM T-Trent-
10RRC, RR Trent 1000-G2 RR TLM T-Trent-10RRC, RR Trent 1000-H2 RR TLM
T-Trent-10RRC, RR Trent 1000-J2 RR TLM T-Trent-10RRC, RR Trent 1000-K2
RR TLM T-Trent-10RRC, and RR Trent 1000-L2 RR TLM T-Trent-10RRC
(referred to after this as ``RR Trent 1000 RR TLM T-Trent-10RRC,
Chapter 05-10''), all dated December 12, 2018 . RR Trent 1000 RR TLM T-
Trent-10RRC, Chapter 05-10, differentiated by engine model, identifies
the reduced life limits of certain critical rotating parts and the
latest DAC data files to include within the DAC life-usage calculator
tool.
    The FAA also reviewed Chapter 05-20 of RR Trent 1000-A2 RR TLM T-
Trent-10RRC, RR Trent 1000-AE2 RR TLM T-Trent-10RRC, RR Trent 1000-C2
RR TLM T-Trent-10RRC, RR Trent 1000-CE2 RR TLM T-Trent-10RRC, RR Trent
1000-D2 RR TLM T-Trent-10RRC, RR Trent 1000-E2 RR TLM T-Trent-10RRC, RR
Trent 1000-G2 RR TLM T-Trent-10RRC, RR Trent 1000-H2 RR TLM T-Trent-
10RRC, RR Trent 1000-J2 RR TLM T-Trent-10RRC, RR Trent 1000-K2 RR TLM
T-Trent-10RRC, and RR Trent 1000-L2 RR TLM T-Trent-10RRC (referred to
after this as ``RR Trent 1000 RR TLM T-Trent-10RRC, Chapter 05-20''),
all dated March 1, 2018. RR Trent 1000 RR TLM T-Trent-10RRC, Chapter
05-20, differentiated by engine model, identifies the critical rotating
part inspection thresholds and intervals.
    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

    This product has been approved by EASA and is approved for
operation in the United States. Pursuant to our bilateral agreement
with the European Community, EASA has notified us of the unsafe
condition described in the MCAI and service information referenced
above. The FAA is proposing this AD because we evaluated all the
relevant information provided by EASA 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 operators to revise the ALS of their
approved maintenance program by incorporating the revised tasks of the
applicable TLM for each affected model turbofan engine.

Costs of Compliance

    The FAA estimates that this proposed AD affects 20 engines
installed on airplanes of U.S. registry.
    The FAA estimates the following costs to comply with this proposed
AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Revise the TLM........................  1 work-hour x $85 per                 $0             $85          $1,700
                                         hour = $85.
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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.
    The FAA is 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

    The FAA 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) Will not affect intrastate aviation in Alaska, 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.

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):

Rolls-Royce Deutschland Ltd & Co KG: Docket No. FAA-2020-0364;
Project Identifier MCAI-2019-00119-E.

(a) Comments Due Date

    The FAA must receive comments by May 26, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Rolls-Royce Deutschland Ltd. & Co KG (Type
Certificate previously held by Rolls-Royce plc) Trent 1000-A2, Trent
1000-AE2, Trent 1000-C2, Trent 1000-CE2, Trent 1000-D2, Trent 1000-
E2, Trent 1000-G2, Trent 1000-H2, Trent 1000-J2, Trent 1000-K2, and
Trent 1000-L2 model turbofan engines.

(d) Subject

    Joint Aircraft System Component (JASC) Code 7200, Engine
(Turbine/Turboprop).

(e) Unsafe Condition

    This AD was prompted by the manufacturer revising the engine
Time Limits Manual (TLM) life limits of certain critical rotating
parts and direct accumulation counting (DAC) data files. The FAA is
issuing this AD to prevent the failure of critical rotating parts.
The unsafe condition, if not addressed, could result in failure of
one or more engines, loss of thrust control, and loss of the
airplane.

(f) Compliance

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

(g) Required Actions

    Within 60 days after the effective date of this AD, revise the
airworthiness limitation section (ALS) of the approved maintenance
program by incorporating:
    (1) Task 05-10-01-800-801, ``Critical Part Mandatory Lives,''
from Chapter 05-10 of the applicable Rolls-Royce (RR) Trent 1000 RR
TLM T-Trent-10RRC, dated December 12, 2018, and
    (2) Task 05-20-01-800-801, ``Critical Parts Mandatory
Inspections,'' from Chapter 05-20 of the applicable RR Trent 1000 RR
TLM T-Trent-10RRC, dated March 1, 2018.

(h) Definition

    (1) For the purpose of this AD, the ``approved maintenance
program'' is defined as the basis for which the operator or the
owner ensures the continuing airworthiness of each operated
airplane.
    (2) For the purpose of this AD, the ``applicable RR Trent 1000
RR TLM T-Trent-10RRC'' refers to, depending on the affected model,
the following engine models TLMs:
    (i) RR Trent 1000-A2 RR TLM T-Trent-10RRC;
    (ii) RR Trent 1000-AE2 RR TLM T-Trent-10RRC;
    (iii) RR Trent 1000-C2 RR TLM T-Trent-10RRC;
    (iv) RR Trent 1000-CE2 RR TLM T-Trent-10RRC;
    (v) RR Trent 1000-D2 RR TLM T-Trent-10RRC;
    (vi) RR Trent 1000-E2 RR TLM T-Trent-10RRC;
    (vii) RR Trent 1000-G2 RR TLM T-Trent-10RRC;
    (viii) RR Trent 1000-H2 RR TLM T-Trent-10RRC;
    (ix) RR Trent 1000-J2 RR TLM T-Trent-10RRC;
    (x) RR Trent 1000-K2 RR TLM T-Trent-10RRC; or
    (xi) RR Trent 1000-L2 RR TLM T-Trent-10RRC.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, 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
ECO Branch, send it to the attention of the person identified in
paragraph (j)(1) of this AD. You may email your request 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.

(j) Related Information

    (1) For more information about this AD, contact Stephen Elwin,
Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) Refer to European Union Aviation Safety Agency AD 2019-
0058R1, dated April 2, 2019, for more information. You may examine
the EASA AD in the AD docket on the internet at https://www.regulations.gov by searching for and locating it in Docket No.
FAA-2020-0364.
    (3) For service information identified in this AD, contact
Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, 15827
Blankenfelde-Mahlow, Germany; phone: +49 (0) 33 708 6 0; email:
https://www.rolls-royce.com/contact-us.aspx. You may view this
referenced service information at the FAA, Engine and Propeller
Standards Branch, 1200 District Avenue, Burlington, MA 01803. For
information on the availability of this material at the FAA, call
781-238-7759.

    Issued on April 3, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-07450 Filed 4-9-20; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 136 (Thursday, July 16, 2015)]
[Notices]
[Pages 42146-42149]
[FR Doc No: 2015-17399]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75426; File No. SR-ICEEU-2015-010]

Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change Relating to Credit Default Swap Risk
Policies

July 10, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that
on June 25, 2015, ICE Clear Europe Limited (``ICE Clear Europe'' or the
``Clearing House'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been primarily prepared by ICE Clear
Europe. The Commission is publishing this notice to solicit comments on
the proposed changes to the rules from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    ICE Clear Europe proposes to amend certain of its credit default
swap (``CDS'') risk policies (the ``Risk Policy Amendments'') in order
to enhance its current risk model.

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

    In its filing with the Commission, ICE Clear Europe included
statements concerning the purpose of and basis for the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. ICE Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C) below, of the most significant
aspects of such statements.

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

1. Purpose
    The principal purpose of the proposed rule change is to amend
certain ICE Clear Europe risk policies relating to the CDS product
category to incorporate enhancements to the existing CDS risk model.
The relevant policies being modified are the CDS Risk Policy (``CDS
Risk Policy'') and the CDS Risk Model Description (``Risk Model
Description''). ICE Clear Europe does not propose to make any changes
to its Clearing Rules or Procedures in connection with these
amendments.
    The proposed rule change would, among other matters, (i) modify the
credit spread response component of the risk model to devolatilize
returns, (ii) enhance the portfolio spread response component of the
risk model to limit procyclicality, (iii) establish a new framework for
recovery rate sensitivity requirement (``RRSR'') parameters, (iv)
modify the CDS Guaranty Fund allocation methodology, (v) modify index
liquidity and concentration charges and (vi) revise procedures for
intraday margin calls. The Risk Policy Amendments also include certain
other clarifications and conforming changes.
    The following is a summary of the principal changes in the Risk
Policy Amendments:
    Devolatilization of Credit Spread Response. Under the revised Risk
Model Description, the credit spread response component of the margin
model would be revised to provide that the tail estimation of the
relevant fitted returns distribution is based on devolatilized returns.
The use of devolatilized returns in this manner facilitates the
comparison of returns for periods with different volatilities.
    Procyclicality of Portfolio Spread Response. In order to limit
procyclicality of the spread response component of the model, ICE Clear
Europe proposes to modify the CDS Risk Policy and Risk Model
Description to use an additional portfolio analysis that features price
changes observed during and immediately after the Lehman Brothers
default. The analysis considers price scenarios derived from the
greatest price decrease and increase during and immediately after the
Lehman Brothers default. These scenarios are designed to capture the
default of a major participant in the credit market and the market
response to the event. The introduced scenarios are defined in price
terms to maintain the stress severity during periods of low credit
spread levels (high price) when the spread response requirements,
computed under the current framework, are expected to be lower.
Furthermore, the Lehman default price scenarios are also incorporated
into the calculation of CDS Guaranty Fund requirements.\3\
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    \3\ This enhancement also addresses a regulatory requirement in
Article 30 of the Regulatory Technical Standards implementing the
European Market Infrastructure Regulations (``EMIR''). Commission
Delegated Regulation (EU) No. 153/2013 of 19 December 2012
Supplementing Regulation (EU) No. 648/2012 of the European
Parliament and of the Council with regard to Regulatory Technical
Standards on Requirements for Central Counterparties (the
``Regulatory Technical Standards'').
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Recovery Rate Sensitivity Requirements
    ICE Clear Europe proposes to revise the Risk Model Description to
incorporate a more sensitive parameter estimation approach for the RRSR
computation. The RRSR factor is designed to capture the risk of
fluctuations in market expected recovery rates under CDS transactions.
Under the current model, the RRSR is determined using fixed minimum and
maximum recovery rate stress scenarios based on sector levels. In
calculating the RRSR, all instruments belonging to a risk factor
(``RF'') or risk sub-factor (``RSF'') are subjected to recovery rate
stress scenarios to obtain resulting profit/loss responses, and the
worst scenario response is chosen for the estimation of the RRSR. (In
addition, these same recovery rate stress scenarios

are used in determination of jump-to-default requirements.)
    ICE Clear Europe proposes separating the recovery rate stress
levels for these two computations in order to introduce more dynamic
and appropriate estimations of the recovery rate stress levels for RRSR
purposes. Under the revised framework, the recovery rate levels for
RRSR purposes will be determined using a 5-day, 99% confidence interval
expected shortfall risk measure assuming a distribution of recovery
rate fluctuations. The proposal will also eliminate index RRSR, as
index recovery rates are assumed under relevant market convention and
are thus not subject to market uncertainty. The dynamic feature of the
revised stress level estimations is achieved by analyzing historical
time series of recovery rates in order to calibrate a statistical model
with a time varying volatility. In ICE Clear Europe's view, the
proposed enhancements provide a robust and quantitative driven approach
for establishing the recovery rate stress scenarios.
    Modifications to Guaranty Fund Methodology. ICE Clear Europe
proposes certain clarifications and enhancements to its CDS Guaranty
Fund methodology. The Risk Model Description has been revised to
clarify that the CDS Guaranty Fund size is calculated to cover losses
associated with the default of the two Clearing Members and their
affiliates that create the greatest cumulative uncollateralized loss
under extreme but plausible scenarios. Certain other clarifications
have been made in the calculation of the various components of the
overall CDs Guaranty Fund requirement.
    ICE Clear Europe also proposes to modify the procedure for
allocating CDS Guaranty Fund requirements among the CDS Clearing
Members. Under the existing model, CDS Guaranty Fund allocations
reflect a risk ``silo'' approach, in which a Clearing Member's
contribution reflects its uncollateralized exposure for each CDS
Guaranty Fund component or ``silo''. Under the current approach,
allocations can significantly fluctuate in response to position changes
in the portfolios of the Clearing Members that drive the CDS Guaranty
Fund size, and in response to the distribution of the total CDS
Guaranty Fund size across all ``silos''. The Clearing House proposes
modifying the methodology, so that the allocations are based on the
Clearing Members' total unconditional uncollateralized losses in the
CDS product category.\4\ Under the proposed approach, the allocations
are independent of the distribution of the uncollateralized losses
across the ``silos''. In ICE Clear Europe's view, the new allocation
methodology reflects an improved and more stable approach which allows
for easier attributions of contributions to individual CDS Clearing
Member or client portfolios.
---------------------------------------------------------------------------

    \4\ The existing specific wrong way risk component of the CDS
Guaranty Fund calculation is maintained.
---------------------------------------------------------------------------

    The CDS Risk Policy's discussion of the ICE Clear Europe's initial
CDS Guaranty Fund contribution has been revised to be consistent with
the requirements of the Finance Procedures.
Index Liquidity and Concentration Charges
    ICE Clear Europe proposes to modify the liquidity charge
calculation in the margin model as it applies to index CDS positions.
(The existing liquidity charge calculation for single-name CDS will
remain unchanged.) The revised approach will address calculation of
liquidity charges where index CDS is traded under either price or
spread terms, and will calculate a separate liquidity charge for
positions in each series of the relevant index. The revised approach
also limits the reduction in liquidity charge for offsetting positions
across different series of the same index family, by applying the
greater of the liquidity charge applicable to the long and short
positions in the relevant portfolio in the same index family. Under the
revised methodology, the reduction in liquidity charge is greatest
across positions in the ``on-the-run'' (current) index and first (most
recent) ``off-the-run'' indices, with a higher reduction during the
period immediately following the index roll (when the two indices are
treated as effectively the same index) and a lower reduction over time
as the liquidity of contracts in the two series diverge.
    Similarly, ICE Clear Europe proposes to modify the concentration
charge calculation for index CDS positions. (Again, the existing
approach for single-name CDS will not change.) The revised framework
provides for calculation of series-specific concentration charges,
based on the direction of the 5-year equivalent notional amount or the
net notional amount of positions in the particular series and a series
threshold limit (above which the concentration charge is imposed).
Series threshold limits are expected to be higher for the on-the-run
and the first off-the-run index series, and are determined based on a
formula comparing the open interest in the series to the on-the-run
open interest.
Intraday Margin Calls
    Certain amendments are proposed to the intra-day risk monitoring
and special margin call processes. Intra-day margin calls will be made
based on an ``Intraday Risk Limit.'' The Intraday Risk Limit is set at
the Clearing Member level and is calculated based on 40% of the total
initial margin requirements (across all account classes), with a
minimum amount of EUR 15 million and a maximum of EUR 100 million.
Intra-day margin calls will be made on the following basis: (i) Where
there has been a 50% erosion of the Intraday Risk Limit, the Risk
Department will investigate what is driving the shortfall and monitor
the CDS Clearing Member, (ii) where the erosion of the Intraday Risk
Limit exceeds 50%, the Risk Department will inform the CDS Clearing
Member that its initial margin may cease to be sufficient and that it
may be subject to an intraday margin call, and (iii) where there has
been a 100% erosion of the Intraday Risk Limit, the Risk Department
will issue an intraday margin call to the CDS Clearing Member (and will
also contact it by telephone and/or email) for a sum sufficient to
reduce the level of Intraday Risk Limit erosion back to 0%. The member
intraday shortfall is the sum of intraday shortfalls at account level
(i.e. house and client accounts), and the account level shortfall
represents the unrealized profit and loss from the aggregate change in
the Mark-to-Market Margin and Initial Margin.
    Governance. The CDS Risk Policy has been revised to address in
further detail management and governance oversight in a new Management
and Governance Oversight section. The new section provides that the CDS
Director of Risk is responsible for ensuring that the CDS Risk Policy
remains up-to-date and is reviewed in accordance with certain
guidelines. The Risk Working Group (``RWG'') and Trading Advisory
Committee (``TAC'') will provide on-going consultation and support with
respect to the CDS Risk Policy. The composition of the RWG and the TAC
include both ICE Clear Europe Management and Clearing Member
representatives, mainly from risk, trading and compliance areas.
    Changes to the CDS Risk Policy are subject to initial approval by
the Director of Risk and may be determined in consultation with the RWG
and/or the TAC. Any changes that affect the risk profile of ICE Clear
Europe are subject to Board approval on the advice and support of the
CDS Risk Committee

and the Board Risk Committee. In addition, the CDS Risk Policy is
subject to at least an annual routine approval by the Board, after
consultation with the CDS Risk Committee and the Board Risk Committee.
CDS risk model performance testing is subject to review by the Director
of Risk and reported to the CDS Risk Committee and the Board Risk
Committee.
    Additional Changes. The Risk Policy Amendments contain certain
other clarifications and enhancements. Certain clarifications are made
in the CDS Risk Policy with respect to wrong way risk requirements. The
policy has also been revised to clarify that the currency specific
initial margin requirements must cover at least the specific and
general wrong way risk components of the initial margin requirement for
the relevant currency. The CDS Risk Policy has also been revised to
incorporate (without change) from the Clearing House's existing CDS
clearing membership policy the capital-to-margin ratio limit (which
requires that certain remedial actions be taken if the margin
requirement for a Clearing Member's CDS positions would exceed three
times the Clearing Member's capital as set forth on its balance sheet).
The description of the Clearing House's Monte Carlo model has been
revised to clarify that model parameters used are the same as those
used in the credit spread model. Various other defined terms and
certain obsolete references have been updated throughout the CDS Risk
Policy and Risk Model Description.
2. Statutory Basis
    ICE Clear Europe believes that the proposed rule change is
consistent with the requirements of section 17A of the Act \5\ and the
regulations thereunder applicable to it, including the standards under
Rule 17Ad-22.\6\ Section 17A(b)(3)(F) of the Act \7\ requires, among
other things, that the rules of a clearing agency be designed to
promote the prompt and accurate clearance and settlement of securities
transactions and, to the extent applicable, derivative agreements,
contracts, and transactions, the safeguarding of securities and funds
in the custody or control of the clearing agency, and the protection of
investors and the public interest. The proposed rule change is designed
to enhance relevant risk policies, impose more conservative initial
margin requirements and in general tailor CDS margin and guaranty fund
requirements more closely to the specific risks presented by cleared
CDS Contracts. As a result, ICE Clear Europe believes that the proposed
rule change will enhance the financial resources available to the
Clearing House and enhance the stability of the clearing system, by
reducing the risk to market participants of a default by a CDS Clearing
Member or customer. The amendments thereby facilitate the Clearing
House's ability to promptly and accurately clear and settle CDS
contracts, within the meaning of section 17(A)(b)(3)(F).\8\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
    \6\ 17 CFR 240.17Ad-22.
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    In addition, the Risk Policy Amendments are consistent with the
relevant requirements of Rule 17Ad-22.\9\ In particular, the amendments
to the CDS Risk Policy and Risk Model Description will enhance the
financial resources available to the clearing house by imposing more
appropriate initial margin requirements for CDS, and are therefore
reasonably designed to meet the margin and financial resources
requirements of Rule 17Ad-22(b)(2-3).\10\ Additionally, the amendments
to the CDS Guaranty Fund methodology further ensure that the Clearing
House maintains sufficient financial resources for CDS clearing,
consistent with the requirements of Rule 17Ad-22(b)(3).\11\ The changes
also enhance and clarify the Clearing House's governance process
concerning review and modification of the CDS risk policies, consistent
with the requirements of Rule 17Ad-22(d)(8).\12\ For the reasons noted
above, ICE Clear Europe believes that the proposed Risk Policy
Amendments are consistent with the requirements of Section 17A of the
Act and regulations thereunder applicable to it.
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22.
    \10\ 17 CFR 240.17Ad-22(b)(2-3).
    \11\ 17 CFR 240.17Ad-22(b)(3).
    \12\ 17 CFR 240.17Ad-22(d)(8).
---------------------------------------------------------------------------

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

    ICE Clear Europe does not believe the Risk Policy Amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The Risk Policy
Amendments will apply to all CDS Clearing Members, and the changes to
the margin model applicable to customer business will apply to all
other market participants. ICE Clear Europe does not believe that the
adoption of the policy amendments will adversely affect competition
among Clearing Members, or the ability of market participants to clear
contracts generally. The Clearing House also does not believe that the
amendments will reduce access to clearing CDS contracts generally or
limit market participants' choices for clearing CDS. The Risk Policy
Amendments may result in higher initial margin or guaranty fund
requirements for certain positions or portfolios of CDS, which may
increase the costs for some Clearing Member and other market
participants of trading or carrying those positions or portfolios.
However, ICE Clear Europe believes that the amendments appropriately
tailor CDS margin and guaranty fund requirements to the risks presented
by particular CDS positions, and that the amendments will therefore
enhance the Clearing House's financial resources and risk management.
As a result, in ICE Clear Europe's view, any incremental increase in
cost resulting from such higher margin or guaranty fund requirements is
warranted in light of the risks posed to the Clearing House. ICE Clear
Europe therefore believes that any impact on competition from the
amendments is appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    Written comments relating to the rule changes have not been
solicited or received. ICE Clear Europe will notify the Commission of
any written comments received by ICE Clear Europe.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or

     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ICEEU-2015-010 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-ICEEU-2015-010. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 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 such filings will also be available
for inspection and copying at the principal office of ICE Clear Europe
and on ICE Clear Europe's Web site at https://www.theice.com/clear-europe/regulation. 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-
ICEEU-2015-010 and should be submitted on or before August 6, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-17399 Filed 7-15-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 190 (Thursday, October 1, 2015)]
[Notices]
[Pages 59215-59218]
[FR Doc No: 2015-24885]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75988; File No. SR-FINRA-2015-032]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend
FINRA Rule 8312 (FINRA BrokerCheck Disclosure) To Reduce the Waiting
Period for the Release of Information Reported on Form U5

September 25, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 14, 2015, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 8312 (FINRA BrokerCheck
Disclosure) to reduce the 15-day waiting period for the release of
information reported on Form U5 (Uniform Termination Notice for
Securities Industry Registration) through BrokerCheck[supreg].
    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA and at
the Commission's Public Reference Room.

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

    In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the

proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. FINRA has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

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

1. Purpose
    FINRA BrokerCheck provides the public with information on the
professional background, business practices and conduct of FINRA member
firms and their associated persons. The information that FINRA releases
to the public through BrokerCheck is derived from the Central
Registration Depository (``CRD[supreg]''), the securities industry
online registration and licensing database. FINRA member firms, their
associated persons and regulators report information to the CRD system
via the uniform registration forms.\3\ By making most of this
information publicly available, BrokerCheck, among other things, helps
investors make informed choices about the individuals and firms with
which they conduct business.
---------------------------------------------------------------------------

    \3\ FINRA discloses through BrokerCheck information that is
reported on the following uniform registration forms: Form U4
(Uniform Application for Securities Industry Registration or
Transfer), Form U5, Form U6 (Uniform Disciplinary Action Reporting
Form), Form BD (Uniform Application for Broker-Dealer Registration),
and Form BDW (Uniform Request for Broker-Dealer Withdrawal).
---------------------------------------------------------------------------

    Rule 8312 governs the information that FINRA releases to the public
through BrokerCheck. Pursuant to this rule, most of the information
that FINRA releases through BrokerCheck generally is made available the
day after it is filed with the CRD system.\4\ Rule 8312, however,
provides for a 15-day delay in the release of disclosure information
filed on Form U5, which is used by firms to terminate registrations
with self-regulatory organizations (``SROs'') and the states.\5\ The
15-day waiting period was established to give brokers on whose behalf
the Form U5 was submitted an opportunity to comment on the disclosure
event either through a Form U4, which is used by firms to register
brokers with SROs and the states, or by submitting a Broker Comment
directly to FINRA.\6\
---------------------------------------------------------------------------

    \4\ BrokerCheck is periodically ``refreshed'' based on
information filed with the CRD system on the uniform registration
forms. Information filed with the CRD system on Monday through
Thursday generally is released through BrokerCheck the following
day. Information filed with the CRD system on Friday or Saturday
generally is released through BrokerCheck on Sunday. The CRD system
is not available for filings on Sunday. Information filed with the
CRD system that contains details about a disclosure event may
require additional processing time. See, e.g., infra note 7.
    \5\ Only disclosure information is subject to the 15-day waiting
period. Other Form U5 information, such as the date of termination
of a broker's registrations, is published in BrokerCheck in
accordance with the protocols described earlier (see supra note 4).
    \6\ See Securities Exchange Act Release No. 55127 (January 18,
2007), 72 FR 3455 (January 25, 2007) (Order Approving File No. SR-
NASD-2003-168).
---------------------------------------------------------------------------

    FINRA is concerned that the length of the current waiting period
may provide, for an extended period of time, an incomplete picture of a
broker's disclosure history if an investor reviews a broker's
BrokerCheck report during the waiting period. Under those
circumstances, an investor, without knowing about a potentially
significant disclosure event that has been reported to the CRD system,
may determine to conduct business with a formerly registered person
who, although no longer in the securities industry in a registered
capacity, may work in another investment-related industry or may have
attained another position of trust with potential investors.
    Moreover, FINRA's concerns regarding the length of the current
waiting period remain even if a broker moves to a new firm and files a
Form U4 to report the disclosure event that occurred when the broker
was registered at his or her prior firm. In such cases, the broker may
not be aware of all the facts and circumstances involving the
disclosure event and may therefore provide only limited details about
the event. In addition, some brokers may attempt to intentionally
reframe the circumstances surrounding the event to put it in a light
that is most favorable to the broker. In either case, investors have
access only to the details reported by the broker on the Form U4 if it
is processed by FINRA staff prior to the filing of the Form U5 or
during the current 15-day waiting period.
    To address these concerns, FINRA is proposing to reduce the waiting
period for the release of disclosure information reported on Form U5
(other than internal review disclosure information) from 15 days to
three business days following the processing \7\ of such information by
FINRA.\8\ FINRA believes that a three-business-day waiting period is
more reasonable than a 15-day period because it allows investors to
more quickly access disclosure information reported on Form U5 while at
the same time still providing brokers with the opportunity to comment
on the reported disclosure event.
---------------------------------------------------------------------------

    \7\ For purposes of this rule, a Form U5 will be considered
processed once the Disclosure Reporting Page, which contains the
details about a disclosure event, has been reviewed by FINRA staff.
Most Forms U5 that contain disclosure information are processed
within two days of being filed with the CRD system.
    \8\ For example, if disclosure information on Form U5 is
processed on Monday, FINRA would release that information via
BrokerCheck on Thursday.
---------------------------------------------------------------------------

    In addition to reducing the length of the waiting period to three
business days, FINRA is proposing that the waiting period potentially
be curtailed if a broker reports on Form U4 the disclosure event that
the broker's prior firm reported on Form U5 prior to the expiration of
the waiting period. For example, if FINRA processes a disclosure event
reported on Form U5 on Monday, and on Tuesday processes a Form U4 filed
by a broker reporting that event, the Form U5 information would be made
publicly available in BrokerCheck on Wednesday, which is the same day
that the Form U4 information would be released. In such circumstances,
the broker has had a chance to comment on the disclosure event that has
been reported by the firm on Form U5, so continuing to exclude the Form
U5 version of the event from BrokerCheck does not serve any purpose.\9\
Furthermore, releasing the Form U5 information at the same time as the
Form U4 information helps investors by reducing the uncertainty
regarding the reason for a broker's termination from a firm when the
broker remains in the industry after leaving his or her old firm.
---------------------------------------------------------------------------

    \9\ If a disclosure event is reported on Form U4 before the same
event is reported on Form U5, the waiting period will still apply
since the broker will not have had the opportunity to review and
comment on the information provided by the firm on Form U5.
---------------------------------------------------------------------------

    If the Commission approves the proposed rule change, FINRA will
announce the implementation date of the proposed rule change in a
Regulatory Notice to be published no later than 60 days following
Commission approval. The implementation date will be no later than 180
days following publication of the Regulatory Notice announcing
Commission approval.\10\
---------------------------------------------------------------------------

    \10\ The implementation of the proposed rule change will require
programming changes to the CRD system, including changing the
waiting period to business days from calendar days and allowing for
the potential curtailment of the waiting period.
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative

acts and practices, to promote just and equitable principles of trade,
and, in general, to protect investors and the public interest. The
proposed rule change to reduce the waiting period for the release of
Form U5 information through BrokerCheck will enhance investor
protection, because it will allow investors to more quickly access
disclosure information reported on Form U5 and also limit the time
period during which an incomplete picture of a broker's disclosure
history may be displayed in BrokerCheck. The proposed rule change will
help investors better determine whether to conduct business with
registered persons who have changed firms, as well as formerly
registered persons who, although no longer in the securities industry
in a registered capacity, may work in another investment-related
industry or may have attained another position of trust with potential
investors.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Economic Impact Assessment
A. Need for the Rule
    As discussed above, FINRA is concerned that the length of the
current waiting period for the release of disclosure information filed
on Form U5 may provide, for an extended period of time, an incomplete
picture of a broker's disclosure history if an investor reviews a
broker's BrokerCheck report during the waiting period. Moreover, if a
broker moves to a new firm and files a Form U4 to report the disclosure
event that the broker's prior firm reported on Form U5 prior to the
expiration of the waiting period, investors could have access only to
the details reported by the broker on the Form U4 which may be
potentially limited or misleading.
B. Regulatory Objective
    The proposed reduction in the waiting period for the release of
disclosure information reported on Form U5 aims to allow investors to
access important information more quickly while still providing brokers
with the opportunity to comment on the reported disclosure event. In
addition, FINRA is proposing the simultaneous release of Form U5 and
Form U4 information in the case where FINRA processes a Form U4 that
reports a disclosure event that a broker's prior firm reported on Form
U5 prior to the expiration of the waiting period. The proposed
simultaneous release would prevent brokers from accidentally or
intentionally releasing incomplete information regarding a disclosure
event to the public.
C. Economic Baseline
    The current regulatory environment serves as a baseline for the
proposed rule change. Specifically, Rule 8312 provides for a 15-day
delay in the release of Form U5 disclosure information to the public
through BrokerCheck. Investors reviewing a broker's BrokerCheck report
during the waiting period may not be able to obtain a complete picture
of the broker's disclosure history.
    Brokers on whose behalf a Form U5 was submitted may comment on the
disclosure event either through a Form U4 or by submitting a Broker
Comment directly to FINRA. Form U4 is used by firms to register brokers
with SROs and the states, and thus brokers who remain in the securities
industry in a registered capacity have a Form U4 filing requirement. In
the cases where a Form U4 was filed prior to the filing of a Form U5 or
during the current 15-day waiting period, investors may have access
only to the details about the disclosure event reported by the broker
on the Form U4 for an extended period of time.
D. Economic Impacts
    The proposed rule change to reduce the waiting period for the
release of Form U5 information through BrokerCheck will enhance
investor protection, because it will allow investors to more quickly
access disclosure information reported on Form U5 and also limit the
time period during which an incomplete picture of a broker's disclosure
history may be displayed in BrokerCheck. Therefore, the rule change
will benefit investors by allowing them to make better informed
decisions about the individuals with whom they conduct business and, in
turn, potentially to have greater trust in the markets.
    FINRA does not anticipate that the proposed rule change will impose
any burden or additional economic costs on member firms. In this
regard, FINRA notes that the proposed rule change will not subject
member firms to any new or additional uniform registration form
reporting requirements. The Form U5 questions that elicit disclosure
information will remain the same as will the timing of filing
requirements; only the waiting period for the inclusion of the
disclosure information in BrokerCheck will change.
    FINRA anticipates that the proposed rule change may impose only a
limited burden or additional economic costs on associated persons. As
previously mentioned, the proposed rule change will not result in any
new or additional uniform registration form reporting requirements. In
addition, associated persons will continue to have the opportunity to
comment on any disclosure event reported on Form U5. Under the FINRA
By-Laws, a firm must provide a terminated broker with a copy of a Form
U5 concurrently with the firm filing it with the CRD system.\12\
Furthermore, if a broker has moved to a new firm before their prior
firm has filed a Form U5, the broker's new firm receives notice of the
Form U5 filing when it is made with the CRD system. As a result, FINRA
believes that the proposed three-business-day waiting period generally
will provide brokers with sufficient time to comment on the reported
disclosure event. To the extent that some registered brokers may find
the proposed three-business-day waiting period insufficient to comment
fully on the disclosure event, they have the option to file a Form U4
amendment within three days of the Form U5 filing to indicate that
additional information regarding the facts and circumstances involving
the disclosure event will be reported in a forthcoming Form U4
amendment. The additional cost to the broker would include time and
effort to file the first U4 amendment and an additional disclosure
review fee of $110.
---------------------------------------------------------------------------

    \12\ See FINRA By-Laws Article V, Section 3(a).
---------------------------------------------------------------------------

    FINRA also anticipates that the proposed rule change may impose
only a limited burden on associated persons because FINRA believes that
the proposal will affect only a small percentage of those individuals
who have a disclosure event reported on Form U5. FINRA reviewed all
5,654 disclosure events that were reported on Form U5 in 2014 and found
that approximately 9.7 percent of Form U4 filings reporting such
disclosure events were made between 4 and 15 days after the Form U5 had
been filed and that no Broker Comments were submitted to FINRA during
that timeframe. Thus, in 2014 the proposed rule change would have
likely had no impact on those individuals for whom more than 90 percent
of the Forms U5 were filed that included a disclosure event.\13\
Furthermore, the percentage of individuals potentially impacted by the
proposed rule change may be even less

than the figure cited above because some individuals may have had the
ability to file a Form U4 within three days of the Form U5 being filed
but chose not to do so.\14\
---------------------------------------------------------------------------

    \13\ Such individuals include those who filed a Form U4 or
Broker Comment prior to or within three days of the filing of the
Form U5, more than 15 days after the Form U5 was filed, and never
filed a Form U4 or Broker Comment.
    \14\ During its review, FINRA was unable to determine the reason
why individuals made their Form U4 filings between 4 and 15 days
after the filing of the Form U5 and therefore FINRA cannot reliably
estimate how many individuals may have had the ability to file a
Form U4 within three days of the Form U5 being filed. FINRA further
notes that the waiting period under the current rule is based on
calendar days following the filing of the Form U5 while the waiting
period under the proposed rule change is based on business days
after FINRA processes the Form U5.
---------------------------------------------------------------------------

    FINRA further notes that the proposed rule change will not impact
the number of options brokers have to address their concerns regarding
a disclosure event that has been reported on Form U5. As previously
mentioned, a broker can respond via a Form U4 or a Broker Comment.\15\
Moreover, a broker also may file a complaint with FINRA if they believe
that a firm has filed false or misleading information on Form U5.
Brokers now also have the ability to dispute the accuracy of (or
update) a reported disclosure event.\16\
---------------------------------------------------------------------------

    \15\ FINRA has improved the display of Broker Comments in the
last few years by placing the comment next to the corresponding
disclosure in BrokerCheck rather than at the top of the first page
of an individual's BrokerCheck report.
    \16\ See Rule 8312(e).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2015-032 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-FINRA-2015-032. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 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 FINRA. 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-FINRA-2015-032 and should be
submitted on or before October 22, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-24885 Filed 9-30-15; 8:45 am]
BILLING CODE 8011-01-P