[Federal Register: June 10, 2008 (Volume 73, Number 112)]
[Notices]
[Page 32771-32775]
[DOCID:fr10jn08-89]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57920; File No. SR-FINRA-2008-019]

Self-Regulatory Organizations: Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to
Sales Practice Standards and Supervisory Requirements for Transactions
in Deferred Variable Annuities

June 4, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``SEA'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on May 21, 2008, Financial Industry Regulatory
Authority, Inc. (``FINRA'') (f/k/a National Association of Securities
Dealers, Inc. (``NASD'')) filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described

in Items I, II, and III below, which Items have been prepared
substantially by FINRA. The Commission is publishing this notice to
solicit comments on the proposed rule change 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

    FINRA is proposing to amend certain provisions of NASD Rule
2821.\3\ Below is the text of the proposed rule change. Proposed new
language is italicized; proposed deletions are in brackets.
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    \3\ On March 17, 2008, FINRA filed a separate proposed rule
change, which became effective upon filing, to delay the effective
date of paragraphs (c) and (d) of NASD Rule 2821 until 180 days
following the Commission's approval or rejection of this substantive
proposed rule change. See FINRA Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Delay the Effective Date of
Certain FINRA Rule Changes Approved in SR-NASD-2004-183, Securities
Exchange Act Release No. 57769 (May 2, 2008), 73 FR 26176 (May 8,
2008) (SR-FINRA-2008-015). Paragraphs (a), (b), and (e) of NASD Rule
2821, as approved in SR-NASD-2004-183, became effective as
originally scheduled on May 5, 2008.
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* * * * *
2821. Members' Responsibilities Regarding Deferred Variable Annuities
    (a) General Considerations
    (1) Application
    This Rule applies to recommended [the] purchases [or] and exchanges
of [a] deferred variable annuit[y]ies and recommended initial [the]
subaccount allocations. This Rule does not apply to reallocations [of]
among subaccounts made or to funds paid after the initial purchase or
exchange of a deferred variable annuity. This Rule also does not apply
to deferred variable annuity transactions made in connection with any
tax-qualified, employer-sponsored retirement or benefit plan that
either is defined as a ``qualified plan'' under Section 3(a)(12)(C) of
the [Securities] Exchange Act [of 1934] or meets the requirements of
Internal Revenue Code Sections 403(b), 457(b), or 457(f), unless, in
the case of any such plan, a member or person associated with a member
makes recommendations to an individual plan participant regarding a
deferred variable annuity, in which case the Rule would apply as to the
individual plan participant to whom the member or person associated
with the member makes such recommendations.
    (2) No change.
    (3) No change.
    (b) Recommendation Requirements
    (1) No member or person associated with a member shall recommend to
any customer the purchase or exchange of a deferred variable annuity
unless such member or person associated with a member has a reasonable
basis to believe
    (A) that the transaction is suitable in accordance with Rule 2310
and, in particular, that there is a reasonable basis to believe that
    (i) No change.
    (ii) No change.
    (iii) the particular deferred variable annuity as a whole, the
underlying subaccounts to which funds are allocated at the time of the
purchase or exchange of the deferred variable annuity, and riders and
similar product enhancements, if any, are suitable (and, in the case of
an exchange, the transaction as a whole also is suitable) for the
particular customer based on the information required by [sub]paragraph
(b)(2) of this Rule; and
    (B) in the case of an exchange of a deferred variable annuity, the
exchange also is consistent with the suitability determination required
by [sub]paragraph (b)(1)(A) of this Rule, taking into consideration
whether
    (i) No change.
    (ii) No change.
    (iii) the customer['s account] has had another deferred variable
annuity exchange within the preceding 36 months.
    The determinations required by this paragraph shall be documented
and signed by the associated person recommending the transaction.
    (2) No change.
    (3) Promptly after receiving information necessary to prepare a
complete and correct application package for a deferred variable
annuity, a person associated with a member who recommends the deferred
variable annuity shall transmit the complete and correct application
package to an office of supervisory jurisdiction of the member.
    (c) Principal Review and Approval
    Prior to transmitting a customer's application for a deferred
variable annuity to the issuing insurance company for processing, but
no later than seven business days after [the customer signs the
application] an office of supervisory jurisdiction of the member
receives a complete and correct application package, a registered
principal shall review and determine whether he or she approves of the
recommended purchase or exchange of the deferred variable annuity.
    [Subject to the exception in this paragraph, and treating all
transactions as if they have been recommended for purposes of this
principal review, a] A registered principal shall approve the
recommended transaction only if he or she [the registered principal]
has determined that there is a reasonable basis to believe that the
transaction would be suitable based on the factors delineated in
paragraph (b) of this Rule. [Notwithstanding the foregoing, a
registered principal may authorize the processing of the transaction if
the registered principal determines that the transaction was not
recommended and that the customer, after being informed of the reason
why the registered principal has not approved the transaction, affirms
that he or she wants to proceed with the purchase or exchange of the
deferred variable annuity.]
    The determinations required by this paragraph shall be documented
and signed by the registered principal who reviewed and then
approved[,] or rejected[, or authorized] the transaction.
    (d) No change.
    (e) Training
    Members shall develop and document specific training policies or
programs reasonably designed to ensure that associated persons who
effect and registered principals who review transactions in deferred
variable annuities comply with the requirements of this Rule and that
they understand the material features of deferred variable annuities,
including those described in [sub]paragraph (b)(1)(A)(i) of this Rule.

Supplementary Material:

    .01 Under Rule 2821, a member that is permitted to maintain
customer funds under SEA Rules 15c3-1 and 15c3-3 may, prior to the
member's principal approval of the deferred variable annuity, deposit
and maintain customer funds for a deferred variable annuity in an
account that meets the requirements of SEA Rule 15c3-3.
    .02 If a customer provides a member that is permitted to hold
customer funds with a lump sum or single check made payable to the
member (as opposed to being made payable to the insurance company) and
requests that a portion of the funds be applied to the purchase of a
deferred variable annuity and the rest of the funds be applied to other
types of products, Rule 2821 would not prohibit the member from
promptly applying those portions designated for purchasing products
other than a deferred variable annuity to such use. A member that is
not permitted to hold customer funds can comply with such requests only
through its clearing firm that will maintain customer funds for the
intended deferred variable annuity purchase in an account that meets
the requirements of SEA Rule 15c3-3. In such circumstances, the checks
would need to be made payable to the clearing firm.

    .03 Rule 2821 does not prohibit a member from forwarding a check
made payable to the insurance company or, if the member is fully
subject to SEA Rule 15c3-3, transferring funds for the purchase of a
deferred variable annuity to the insurance company prior to the
member's principal approval of the deferred variable annuity, as long
as the member fulfills the following requirements: (1) the member must
disclose to the customer the proposed transfer or series of transfers
of the funds and (2) the member must enter into a written agreement
with the insurance company under which the insurance company agrees to
(a) segregate the member's customers' funds in a bank in an account
equivalent to the deposit of those funds by a member into a ``Special
Account for the Exclusive Benefit of Customers'' (set up as described
in SEA Rules 15c3-3(k)(2)(i) and 15c3-3(f)) to ensure that the
customers' funds will not be subject to any right, charge, security
interest, lien, or claim of any kind in favor of the member, insurance
company, or bank where the insurance company deposits such funds or any
creditor thereof or person claiming through them and hold those funds
either as cash or any instrument that a broker or dealer may deposit in
its Special Reserve Account for the Exclusive Benefit of Customers, (b)
not issue the variable annuity contract prior to the member's principal
approval, and (c) promptly to return the funds to each customer at the
customer's request prior to the member's principal approval or upon the
member's rejection of the application.
    .04 A member is not prohibited from forwarding a check provided by
the customer for the purpose of purchasing a deferred variable annuity
and made payable to an IRA custodian for the benefit of the customer
(or, if the member is fully subject to SEA Rule 15c3-3, funds) to the
IRA custodian prior to the member's principal approval of the deferred
variable annuity transaction, as long as the member enters into a
written agreement with the IRA custodian under which the IRA custodian
agrees (a) to forward the funds to the insurance company to complete
the purchase of the deferred variable annuity contract only after it
has been informed that the member's principal has approved the
transaction and (b), if the principal rejects the transaction, to
inform the customer, seek immediate instructions from the customer
regarding alternative disposition of the funds (e.g., asking whether
the customer wants to transfer the funds to another IRA custodian,
purchase a different investment, or provide other instructions), and
promptly implement the customer's instructions.
    .05 Rule 2821 requires that the member or person associated with a
member consider whether the customer has had another deferred variable
annuity exchange within the preceding 36 months. Under this provision,
a member or person associated with a member must determine whether the
customer has had such an exchange at the member and must make
reasonable efforts to ascertain whether the customer has had an
exchange at any other broker-dealer within the preceding 36 months. An
inquiry to the customer as to whether the customer has had an exchange
at another broker-dealer within 36 months would constitute a
``reasonable effort'' in this context. Members shall document in
writing both the nature of the inquiry and the response from the
customer.
    .06 Rule 2821 requires principal review and approval ``[p]rior to
transmitting a customer's application for a deferred variable annuity
to the issuing insurance company for processing* * * .'' In
circumstances where an insurance company and its affiliated broker-
dealer share office space and/or employees who carry out both the
principal review and the issuance process, FINRA will consider the
application ``transmitted'' to the insurance company only when the
broker-dealer's principal, acting as such, has approved the
transaction, provided that the affiliated broker-dealer and the
insurance company have agreed that the insurance company will not issue
the contract prior to principal approval by the broker-dealer.
    07 Rule 2821 does not prohibit using the information required for
principal review and approval in the issuance process, provided that
the broker-dealer and the insurance company have agreed that the
insurance company will not issue the contract prior to principal
approval by the broker-dealer. For instance, the rule does not prohibit
a broker-dealer from inputting information used as part of its
suitability review into a shared database (irrespective of the media
used for that database, i.e., paper or electronic) that the insurance
company uses for the issuance process, provided that the broker-dealer
and the insurance company have agreed that the insurance company will
not issue the contract prior to principal approval by the broker-
dealer.
* * * * *

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 is proposing to amend NASD Rule 2821 to modify the rule's
scope and the timing of principal review. FINRA also is proposing to
clarify various issues that commenters have raised through a
``Supplementary Material'' section following the rule text. Reasons for
these changes are discussed below.
Limit Application of the Rule To Recommended Transactions
    As approved by the Commission, NASD Rule 2821(c) requires
principals to treat ``all transactions as if they have been recommended
for purposes of this principal review.'' Following the Commission's
approval of the rule, however, numerous commenters asked the SEC and
FINRA to reconsider this approach. Some of the commenters asserted that
applying the rule to non-recommended transactions would have the
unintended and harmful consequence of essentially forcing some firms
that offer low-priced alternatives and do not allow recommendations or
use transaction-based compensation out of the deferred variable
annuities business. Still other commenters believed that, absent a
recommendation, a customer should be completely free to invest in a
deferred variable annuity without interference or second guessing from
a broker-dealer.
    After further reflection, FINRA is proposing to limit the rule's
application to recommended transactions. This approach is consistent
with that taken by FINRA's general suitability rule, Rule 2310. This
change, moreover, should not detract from the effectiveness of Rule
NASD 2821 in providing additional protection to investors in deferred
variable annuities. For instance, brokers recommend the vast majority
of purchases and exchanges of

deferred variable annuities. Thus, the rule would continue to cover
most transactions. FINRA emphasizes, moreover, that members must
implement reasonable measures to detect and correct circumstances when
brokers mischaracterize recommended transactions as non-recommended.
Where the transaction truly is initiated by the customer and not
recommended by the broker, there generally is less of a concern
regarding potential or actual conflicts of interest and less of a need
for heightened sales practice requirements. In addition, this change
would promote competition by allowing a wide variety of business models
to exist, including those premised on keeping costs low by, in part,
eliminating the need for a sales force and large numbers of principals.
Modifying the Starting Point for the Seven-Business-Day Review Period
    NASD Rule 2821(c) requires principal review and approval ``[p]rior
to transmitting a customer's application for a deferred variable
annuity to the issuing insurance company for processing, but no later
than seven business days after the customer signs the application.'' A
number of firms asserted that seven business days beginning from the
time when the customer signs the application may not allow for a
thorough principal review in all cases. These firms provided examples
of situations where a principal might not be able to complete the
required review within the allotted time, such as when a customer
inadvertently omits information from the application, when information
provided by a customer on the application needs clarification, when a
customer signs the application but does not mail it for several days
after signature, and when a customer mails the application by regular
U.S. mail.
    FINRA is proposing to modify the beginning of the period within
which the principal must review and determine whether to approve or
reject the application. Under the proposal, the period would begin to
run not from the date of the customer's signature but from the date
when the firm's office of supervisory jurisdiction (OSJ) receives a
complete and correct copy of the application.\4\ This period should be
sufficient to permit a principal to conduct an appropriate review,
building in time for readily foreseeable delays, while still
maintaining a definite period within which the principal must make a
final decision.
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    \4\ As FINRA and the Commission previously have noted, ``Many
broker-dealers are subject to lower net capital requirements under
[Exchange Act] Rule 15c3-1 and are exempt from the requirement to
establish and fund a customer reserve account under [Exchange Act]
Rule 15c3-3 because they do not carry customer funds or
securities.'' SEC Order Granting a Conditional Exemption to Broker-
Dealers from Requirements in Rules 15c3-1 and 15c3-3 under the
Securities Exchange Act of 1934 to Promptly Transmit Customer Checks
for the purchase of deferred variable annuity contracts, Securities
Exchange Act Release No. 56376 (Sept. 7, 2007), 72 FR 52400 (Sept.
13, 2007). Although some of these firms receive checks from
customers made payable to third parties, the SEC does not deem a
firm to be carrying customer funds if it ``promptly transmits'' the
checks to third parties. The SEC has interpreted ``promptly
transmits'' to mean that ``such transmission or delivery is made no
later than noon of the next business day after receipt of such funds
or securities.'' Id. In conjunction with its approval of NASD Rule
2821, the Commission provided an exemption to the ``promptly
transmits'' requirement as long as, among other things, the
``principal has reviewed and determined whether he or she approves
of the purchase or exchange of the deferred variable annuity within
seven business days in accordance with [Rule 2821].'' Id. FINRA
believes that the Commission's exemption order allows for the
modification to the event that triggers the review period, discussed
above.
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    To help ensure that the process remains efficient from the
beginning, the proposal also would require the associated person who
recommended the annuity to promptly transmit the complete and correct
application package to the OSJ. However, that latter provision,
proposed paragraph (b)(3) of NASD Rule 2821, would not preclude the
customer from transmitting the complete and correct application package
to the OSJ. For instance, there may be occasions where the application
package is technically complete and correct but the customer wants to
take it home and consider the purchase or exchange some more before
sending the application to the OSJ. Proceeding in such a manner would
not be inconsistent with the proposed provision.
Clarification of Issues Through Supplementary Material
    Commenters have raised a number of additional issues requiring
clarification. A ``Supplementary Material'' section following the
rule's text examines those issues that were raised by multiple groups
and that potentially could have a significant impact on how members
sell or process deferred variable annuities. FINRA refuted, for
instance, the misconception that firms generally allowed to handled and
carry customer funds under Exchange Act Rules 15c3-1 and 15c3-3 could
not deposit funds for a deferred variable annuity prior to principal
approval.
    FINRA also reconsidered the question of whether members could
forward funds to insurance companies for deposit in the companies'
``suspense accounts'' prior to principal approval. FINRA modified its
earlier position rejecting such a process, discussed in Regulatory
Notice 07-53 (Nov. 2007), and proposed to allow such action under
certain conditions, including, inter alia, that the insurance company
segregate the funds in a manner equivalent to that required of a member
under Exchange Act Rule 15c3-3.
    In addition, the Supplementary Material section discusses
customers' lump sum payments for the purchase of deferred variable
annuities and other products, the forwarding of customer checks or
funds to an IRA custodian prior to principal approval, the timing of
``transmittal'' of the application where an insurance company and its
affiliated broker-dealer share office space and/or employees,
consideration of what constitutes a ``reasonable effort'' to determine
whether a customer has had a recent exchange at another broker-
dealer,\5\ and the permissibility of using information required for
principal review in the contract issuance process. These are all issues
that commenters have raised on multiple occasions and that could
broadly impact how broker-dealers sell, or process transactions in,
deferred variable annuities.
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    \5\ FINRA notes that the proposal also clarifies in NASD Rule
2821(b)(1)(B)(iii) that an analysis of whether the customer has had
another recent exchange includes possible exchanges at other broker-
dealers. The rule currently states that the member must consider
whether ``the customer's account has had another deferred variable
annuity exchange within the preceding 36 months.'' Id. As FINRA
stated in Regulatory Notice 07-53 (Nov. 2007), however, FINRA did
not intend the use of the term ``account'' in that passage to limit
the analysis only to exchanges at the member firm performing the
review at issue. The proposal eliminates the term ``account'' to
make this point even more clear.
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2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Exchange Act, \6\ 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 rule change will promote
investor protection because it will allow firms to focus on recommended
transactions, which generally have the potential to raise more
significant sales-practice issues than do non-recommended transactions,
and will provide firms with adequate time to perform an appropriately
thorough principal review. It will also provide firms with

guidance to clarify various issues with respect to the operation of the
rule.
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    \6\ 15 U.S.C. 78o-3(b)(6).
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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 Exchange Act.

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 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date 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 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 Exchange 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2008-019 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-2008-019. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m.. Copies of such 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-2008-019 and
should be submitted on or before July 1, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-12948 Filed 6-9-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 86, Number 169 (Friday, September 3, 2021)]
[Notices]
[Pages 49537-49538]
[FR Doc No: 2021-19108]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2019-N-3402]

Advisory Committee; National Mammography Quality Assurance
Advisory Committee; Renewal

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

ACTION: Notice; renewal of advisory committee.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the
renewal of the National Mammography Quality Assurance Advisory
Committee by the Commissioner of Food and Drugs (the Commissioner). The
Commissioner has determined that it is in the public interest to renew
the National Mammography Quality Assurance Advisory Committee for an
additional 2 years beyond the charter expiration date. The new charter
will be in effect until July 7, 2023, expiration date.

DATES: Authority for the National Mammography Quality Assurance
Advisory Committee will expire on July 7, 2023, unless the Commissioner
formally determines that renewal is in the public interest.

FOR FURTHER INFORMATION CONTACT: Aden Asefa, Office of Management,
Center for Devices and Radiological Health, Food and Drug
Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5214, Silver
Spring, MD 20993-0002,<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Pursuant to 41 CFR 102-3.65 and approval by
the Department of Health and Human Services pursuant to 45 CFR part 11
and by the General Services Administration, FDA is announcing the
renewal of the National Mammography Quality Assurance Advisory
Committee (the Committee). The committee is a non-discretionary Federal
advisory committee established to provide advice to the Commissioner.
    The Commissioner is charged with the administration of the Federal
Food, Drug and Cosmetic Act and various provisions of the Public Health
Service Act. The Mammography Quality Standards Act of 1992 amends the
Public Health Service Act to establish national uniform quality and
safety standards for mammography facilities. The National Mammography
Quality Assurance Advisory Committee advises the Secretary and, by
delegation, the Commissioner or designee in discharging their
responsibilities with

respect to establishing a mammography facilities certification program.
The Committee shall advise the HHS Secretary and the Commissioner or
designee on:
    (A) Developing appropriate quality standards and regulations for
mammography facilities;
    (B) Developing appropriate standards and regulations for bodies
accrediting mammography facilities under this program;
    (C) Developing regulations with respect to sanctions;
    (D) Developing procedures for monitoring compliance with standards;
    (E) Establishing a mechanism to investigate consumer complaints;
    (F) Reporting new developments concerning breast imaging which
should be considered in the oversight of mammography facilities;
    (G) Determining whether there exists a shortage of mammography
facilities in rural and health professional shortage areas and
determining the effects of personnel on access to the services of such
facilities in such areas;
    (H) Determining whether there will exist a sufficient number of
medical physicists after October 1, 1999; and
    (I) Determining the costs and benefits of compliance with these
requirements.
    The Committee shall consist of a core of 15 members, including the
Chair. Members and the Chair are selected by the Commissioner or
designee from among physicians, practitioners, and other health
professionals, whose clinical practice, research specialization, or
professional expertise includes a significant focus on mammography.
Members will be invited to serve for overlapping terms of up to 4
years. Almost all members of this committee serve as Special Government
Employees. The core of voting members shall include at least four
individuals from among national breast cancer or consumer health
organizations with expertise in mammography, and at least two
practicing physicians who provide mammography services. In addition to
the voting members, the Committee shall include two nonvoting industry
representative members who have expertise in mammography equipment. The
Committee may include one technically qualified member, selected by the
Commissioner or designee, who is identified with consumer interests.
    Further information regarding the most recent charter and other
information can be found at https://www.fda.gov/AdvisoryCommittees/CommitteesMeetingMaterials/Radiation-EmittingProducts/NationalMammographyQualityAssuranceAdvisoryCommittee/ucm520365.htm or
by contacting the Designated Federal Officer (see FOR FURTHER
INFORMATION CONTACT). In light of the fact that no change has been made
to the committee name or description of duties, no amendment will be
made to 21 CFR 14.100.
    This notice is issued under the Federal Advisory Committee Act (5
U.S.C. app.). For general information related to FDA advisory
committees, please visit us at https://www.fda.gov/AdvisoryCommittees/default.htm.

    Dated: August 31, 2021.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2021-19108 Filed 9-2-21; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 81, Number 55 (Tuesday, March 22, 2016)]
[Notices]
[Pages 15382-15384]
[FR Doc No: 2016-06340]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77380; File No. TP 16-5]

Order Granting Limited Exemptions From Exchange Act Rule 10b-17
and Rules 101 and 102 of Regulation M to First Trust Dorsey Wright
Dynamic Focus 5 ETF Pursuant to Exchange Act Rule 10b-17(b)(2) and
Rules 101(d) and 102(e) of Regulation M

March 16, 2016.
    By letter dated March 16, 2016 (the ``Letter''), as supplemented by
conversations with the staff of the Division of Trading and Markets,
counsel for First Trust Exchange-Traded Fund VI (the ``Trust'') on
behalf of the Trust, First Trust Dorsey Wright Dynamic Focus 5 ETF (the
``Fund''), any national securities exchange on or through which shares
of the Fund (``Shares'') are listed and/or may subsequently trade, and
persons or entities engaging in transactions in Shares (collectively,
the ``Requestors''), requested exemptions, or interpretive or no-action
relief, from Rule 10b-17 of the Securities Exchange Act of 1934, as
amended (``Exchange Act''), and Rules 101 and 102 of Regulation M, in
connection with secondary market transactions in Shares and the
creation or redemption of aggregations of Shares of 50,000 shares
(``Creation Units'').
    The Trust is registered with the Commission under the Investment
Company Act of 1940, as amended (``1940 Act''), as an open-end
management investment company. The Fund seeks to track the performance
of an underlying index, the Dorsey Wright Dynamic Focus Five Index
(``Underlying Index''). The Underlying Index is designed to provide
targeted exposure to the five First Trust sector-based and industry-
based ETFs that the index provider determines offer the greatest
potential to outperform the other First Trust sector-based and
industry-based ETFs. The Underlying Index is also designed to decrease
overall equity exposure when the cash equivalents \1\

gain strength. The allocation of the Cash Index is evaluated and
adjusted periodically. The Cash Index may constitute between 0% and 95%
of the weight of the Underlying Index.
---------------------------------------------------------------------------

    \1\ The cash equivalents in which the Fund may invest are 1- to
3-month U.S. Treasury Bills representing the component securities of
an index (the Nasdaq US T-Bill Index (the ``Cash Index'')) that is a
component of the Underlying Index.
---------------------------------------------------------------------------

    The Fund will seek to track the performance of its Underlying Index
by normally investing at least 80% of its total assets in the
underlying exchange-traded funds and the cash equivalents that comprise
the Underlying Index. In light of the composition of the Underlying
Index, the Fund intends to operate as an ``ETF of ETFs.'' Except for
the fact that the Fund will operate as an ETF of ETFs, the Fund will
operate in a manner identical to the underlying ETFs.
    The Requestors represent, among other things, the following:
     Shares of the Fund will be issued by the Trust, an open-
end management investment company that is registered with the
Commission;
     Creation Units will be continuously redeemable at the net
asset value (``NAV'') next determined after receipt of a request for
redemption by the Fund, and the secondary market price of the Shares
should not vary substantially from the NAV of such Shares;
     Shares of the Fund will be listed and traded on The NASDAQ
Stock Market LLC or another exchange in accordance with exchange
listing standards that are, or will become, effective pursuant to
Section 19(b) of the Exchange Act (the ``Listing Exchange''); \2\
---------------------------------------------------------------------------

    \2\ Further, the Letter states that should the Shares also trade
on a market pursuant to unlisted trading privileges, such trading
will be conducted pursuant to self-regulatory organization rules
that have become effective pursuant to Section 19(b) of the Exchange
Act.
---------------------------------------------------------------------------

     The Fund seeks to track the performance of the Underlying
Index, all the components of which have publicly available last sale
trade information;
     The Listing Exchange will disseminate continuously every
15 seconds throughout the trading day, through the facilities of the
Consolidated Tape Association, the market value of a Share;
     The Listing Exchange, market data vendors or other
information providers will disseminate, every 15 seconds throughout the
trading day, a calculation of the intraday indicative value of a Share;
     On each business day before the opening of business on the
Listing Exchange, the Fund will cause to be published through the
National Securities Clearing Corporation the list of the names and the
quantities of securities of the Fund's portfolio that will be
applicable that day to creation and redemption requests;
     The arbitrage mechanism will be facilitated by the
transparency of the Fund's portfolio and the availability of the
intraday indicative value, the liquidity of securities held by the
Fund, the ability to acquire such securities, as well as arbitrageurs'
ability to create workable hedges;
     The Fund will invest solely in liquid securities;
     The Fund will invest in securities that will facilitate an
effective and efficient arbitrage mechanism and the ability to create
workable hedges;
     All ETFs in which the Fund invests will either meet all
conditions set forth in one or more class relief letters,\3\ will have
received individual relief from the Commission, will be able to rely on
individual relief even though they are not named parties, or will be
able to rely on applicable class relief for actively-managed ETFs; \4\
---------------------------------------------------------------------------

    \3\ Exchange Act Rel. No. 67215 (Jun. 19, 2012), 77 FR 37941
(Jun. 25, 2012); Letter from Catherine McGuire, Esq., Chief Counsel,
Division of Market Regulation, to the Securities Industry
Association Derivative Products Committee (Nov. 21, 2005); Letter
from Racquel L. Russell, Branch Chief, Division of Market
Regulation, to George T. Simon, Esq., Foley & Lardner LLP (Jun. 21,
2006); Letter from James A. Brigagliano, Acting Associate Director,
Division of Market Regulation, to Stuart M. Strauss, Esq., Clifford
Chance US LLP (Oct. 24, 2006); Letter from James A. Brigagliano,
Associate Director, Division of Market Regulation, to Benjamin
Haskin, Esq., Willkie. Farr & Gallagher LLP (Apr. 9, 2007); or
Letter from Josephine Tao, Assistant Director, Division of Trading
and Markets, to Domenick Pugliese, Esq., Paul, Hastings, Janofsky
and Walker LLP (Jun. 27, 2007).
    \4\ See Staff Legal Bulletin No. 9, ``Frequently Asked Questions
About Regulation M'' (Apr. 12, 2002) (regarding actively-managed
ETFs).
---------------------------------------------------------------------------

     The Trust believes that arbitrageurs are expected to take
advantage of price variations between the Fund's market price and its
NAV; and
     A close alignment between the market price of Shares and
the Fund's NAV is expected.

Regulation M

    While redeemable securities issued by an open-end management
investment company are excepted from the provisions of Rule 101 and 102
of Regulation M, the Requestors may not rely upon that exception for
the Shares.\5\ However, we find that it is appropriate in the public
interest and is consistent with the protection of investors to grant a
conditional exemption from Rules 101 and 102 to persons who may be
deemed to be participating in a distribution of Shares of the Fund as
described in more detail below.
---------------------------------------------------------------------------

    \5\ While ETFs operate under exemptions from the definitions of
``open-end company'' under Section 5(a)(1) of the 1940 Act and
``redeemable security'' under Section 2(a)(32) of the 1940 Act, the
Fund and its securities do not meet those definitions.
---------------------------------------------------------------------------

Rule 101 of Regulation M

    Generally, Rule 101 of Regulation M is an anti-manipulation rule
that, subject to certain exceptions, prohibits any ``distribution
participant'' and its ``affiliated purchasers'' from bidding for,
purchasing, or attempting to induce any person to bid for or purchase
any security which is the subject of a distribution until after the
applicable restricted period, except as specifically permitted in the
rule. Rule 100 of Regulation M defines ``distribution'' to mean any
offering of securities that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of
special selling efforts and selling methods. The provisions of Rule 101
of Regulation M apply to underwriters, prospective underwriters,
brokers, dealers, or other persons who have agreed to participate or
are participating in a distribution of securities. The Shares are in a
continuous distribution and, as such, the restricted period in which
distribution participants and their affiliated purchasers are
prohibited from bidding for, purchasing, or attempting to induce others
to bid for or purchase extends indefinitely.
    Based on the representations and facts presented in the Letter,
particularly that the Trust is a registered open-end management
investment company, that Creation Unit size aggregations of the Shares
of the Fund will be continuously redeemable at the NAV next determined
after receipt of a request for redemption by the Fund, and that a close
alignment between the market price of Shares and the Fund's NAV is
expected, the Commission finds that it is appropriate in the public
interest and consistent with the protection of investors to grant the
Trust an exemption under paragraph (d) of Rule 101 of Regulation M with
respect to the Fund, thus permitting persons participating in a
distribution of Shares of the Fund to bid for or purchase such Shares
during their participation in such distribution.\6\
---------------------------------------------------------------------------

    \6\ Additionally, we confirm the interpretation that a
redemption of Creation Unit size aggregations of Shares of the Fund
and the receipt of securities in exchange by a participant in a
distribution of Shares of the Fund would not constitute an ``attempt
to induce any person to bid for or purchase, a covered security
during the applicable restricted period'' within the meaning of Rule
101 of Regulation M and therefore would not violate that rule.
---------------------------------------------------------------------------

Rule 102 of Regulation M

    Rule 102 of Regulation M prohibits issuers, selling security
holders, and any affiliated purchaser of such person from bidding for,
purchasing, or attempting to

induce any person to bid for or purchase a covered security during the
applicable restricted period in connection with a distribution of
securities effected by or on behalf of an issuer or selling security
holder.
    Based on the representations and facts presented in the Letter,
particularly that the Trust is a registered open-end management
investment company, that Creation Unit size aggregations of the Shares
of the Fund will be continuously redeemable at the NAV next determined
after receipt of a request for redemption by the Fund, and that a close
alignment between the market price of Shares and the Fund's NAV is
expected, the Commission finds that it is appropriate in the public
interest and consistent with the protection of investors to grant the
Trust an exemption under paragraph (e) of Rule 102 of Regulation M with
respect to the Fund, thus permitting the Fund to redeem Shares of the
Fund during the continuous offering of such Shares.

Rule 10b-17

    Rule 10b-17, with certain exceptions, requires an issuer of a class
of publicly traded securities to give notice of certain specified
actions (for example, a dividend distribution) relating to such class
of securities in accordance with Rule 10b-17(b). Based on the
representations and facts in the Letter, and subject to the conditions
below, we find that it is appropriate in the public interest, and
consistent with the protection of investors to grant the Trust a
conditional exemption from Rule 10b-17 because market participants will
receive timely notification of the existence and timing of a pending
distribution, and thus the concerns that the Commission raised in
adopting Rule 10b-17 will not be implicated.\7\
---------------------------------------------------------------------------

    \7\ We also note that timely compliance with Rule 10b-
17(b)(1)(v)(a) and (b) would be impractical in light of the nature
of the Fund. This is because it is not possible for the Fund to
accurately project ten days in advance what dividend, if any, would
be paid on a particular record date.
---------------------------------------------------------------------------

Conclusion

    It is hereby ordered, pursuant to Rule 101(d) of Regulation M, that
the Trust, based on the representations and facts presented in the
Letter, is exempt from the requirements of Rule 101 with respect to the
Fund, thus permitting persons who may be deemed to be participating in
a distribution of Shares of the Fund to bid for or purchase such Shares
during their participation in such distribution.
    It is further ordered, pursuant to Rule 102(e) of Regulation M,
that the Trust, based on the representations and the facts presented in
the Letter, is exempt from the requirements of Rule 102 with respect to
the Fund, thus permitting the Fund to redeem Shares of the Fund during
the continuous offering of such Shares.
    It is further ordered, pursuant to Rule 10b-17(b)(2), that the
Trust, based on the representations and the facts presented in the
Letter and subject to the conditions below, is exempt from the
requirements of Rule 10b-17 with respect to transactions in the shares
of the Fund.
    This exemptive relief is subject to the following conditions:
     The Trust will comply with Rule 10b-17 except for Rule
10b-17(b)(1)(v)(a) and (b); and
     The Trust will provide the information required by Rule
10b-17(b)(1)(v)(a) and (b) to the Listing Exchange as soon as
practicable before trading begins on the ex-dividend date, but in no
event later than the time when the Listing Exchange last accepts
information relating to distributions on the day before the ex-dividend
date.
    This exemptive relief is subject to modification or revocation at
any time the Commission determines that such action is necessary or
appropriate in furtherance of the purposes of the Exchange Act. Persons
relying upon this exemptive relief shall discontinue transactions
involving the Shares of the Fund, pending presentation of the facts for
the Commission's consideration, in the event that any material change
occurs with respect to any of the facts or representations made by the
Requestors and, consistent with all preceding letters, particularly
with respect to the close alignment between the market price of Shares
and the Fund's NAV. In addition, persons relying on this exemption are
directed to the anti-fraud and anti-manipulation provisions of the
Exchange Act, particularly Sections 9(a) and 10(b), and Rule 10b-5
thereunder.
    Responsibility for compliance with these and any other applicable
provisions of the federal securities laws must rest with the persons
relying on these exemptions. This order should not be considered a view
with respect to any other question that the proposed transactions may
raise, including, but not limited to the adequacy of the disclosure
concerning, and the applicability of other federal or state laws to,
the proposed transactions.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(6) and (9).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-06340 Filed 3-21-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: December 17, 2008 (Volume 73, Number 243)]
[Notices]
[Page 76636-76637]
[DOCID:fr17de08-74]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2003-0034; FRL-8753-2]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Reporting Requirements Under EPA's Voluntary Aluminum
Industrial Partnership (VAIP); EPA ICR No. 1867.04, OMB Control No.
2060-0411

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that EPA is planning to
submit a request to renew an existing approved Information Collection
Request (ICR) to the Office of Management and Budget (OMB). This ICR is
scheduled to expire on February 28, 2009. Before submitting the ICR to
OMB for review and approval, EPA is soliciting comments on specific
aspects of the proposed information collection as described below.

DATES: Comments must be submitted on or before February 17, 2009.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2003-0034, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for
submitting comments.
     E-mail<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>.
     Mail: Air and Radiation Docket and Information Center,
Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania
Ave., NW., Washington, DC 20460.
     Hand Delivery: EPA Docket Center, Public Reading Room, EPA
Headquarters West Building, Room 3334, 1301 Constitution Avenue, NW.,
Washington, DC 20460. Such deliveries are only accepted during the
Docket's normal hours of operation, and special arrangements should be
made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2003-0034 EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or e-mail.
The www.regulations.gov website is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov
your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: Sally Rand, Climate Change Division,
Office of Atmospheric Programs, 6207J, Environmental Protection Agency,
1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number:
202-343-9739; fax number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

How Can I Access the Docket and/or Submit Comments?

    EPA has established a public docket for this ICR under Docket ID
No. EPA-HQ-OAR-2003-0034, which is available for online viewing at
www.regulations.gov, or in person viewing at the Air and Radiation
Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301
Constitution Ave., NW., Washington, DC. The EPA/DC Public Reading Room
is open from 8 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The telephone number for the Reading Room is 202-566-
1744, and the telephone number for the Air and Radiation Docket is 202-
566-1742.
    Use www.regulations.gov to obtain a copy of the draft collection of
information, submit or view public comments, access the index listing
of the contents of the docket, and to access those documents in the
public docket that are available electronically. Once in the system,
select ``search,'' then key in the docket ID number identified in this
document.

What Information Is EPA Particularly Interested in?

    Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically
solicits comments and information to enable it to:
    (i) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the Agency,
including whether the information will have practical utility;
    (ii) Evaluate the accuracy of the Agency's estimate of the burden
of the proposed collection of information, including the validity of
the methodology and assumptions used;
    (iii) Enhance the quality, utility, and clarity of the information
to be collected; and
    (iv) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses. In particular, EPA is requesting comments from
very small businesses (those that employ less than 25) on examples of
specific additional efforts that EPA could make to reduce the paperwork
burden for very small businesses affected by this collection.

What Should I Consider When I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your
comments:
    1. Explain your views as clearly as possible and provide specific
examples.
    2. Describe any assumptions that you used.

    3. Provide copies of any technical information and/or data you used
that support your views.
    4. If you estimate potential burden or costs, explain how you
arrived at the estimate that you provide.
    5. Offer alternative ways to improve the collection activity.
    6. Make sure to submit your comments by the deadline identified
under DATES.
    7. To ensure proper receipt by EPA, be sure to identify the docket
ID number assigned to this action in the subject line on the first page
of your response. You may also provide the name, date, and Federal
Register citation.

What Information Collection Activity or ICR Does This Apply to?

Docket ID No. EPA-HQ-OAR-2003-0034

    Affected entities: Entities potentially affected by this action are
those engaged in primary aluminum production.
    Title: Reporting Requirements under the Voluntary Aluminum
Industrial Partnership (VAIP).
    ICR numbers: EPA ICR No. 1867.04, OMB Control No. 2060-0411.
    ICR status: This ICR is currently scheduled to expire on February
28, 2008. An Agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information, unless it displays
a currently valid OMB control number. The OMB control numbers for EPA's
regulations in title 40 of the CFR, after appearing in the Federal
Register when approved, are listed in 40 CFR part 9, are displayed
either by publication in the Federal Register or by other appropriate
means, such as on the related collection instrument or form, if
applicable. The display of OMB control numbers in certain EPA
regulations is consolidated in 40 CFR part 9.
    Abstract: EPA's Voluntary Aluminum Industrial Partnership (VAIP)
was initiated in 1995 and is an important voluntary program
contributing to the overall reduction in emissions of greenhouse gases.
This program focuses on reducing direct greenhouse gas emissions
including perfluorocarbon (PFC) and carbon dioxide (CO2)
emissions from the production of primary aluminum. Seven of the eight
U.S. producers of primary aluminum participate in this program. PFCs
are very potent greenhouse gases with global warming potentials several
thousand times that of carbon dioxide and they persist in the
atmosphere for thousands of years. CO2 is emitted from
consumption of the carbon anode. EPA has developed this ICR to renew
authorization to collect information from companies in the VAIP.
Participants voluntarily agree to the following: Designating a VAIP
liaison; undertaking technically feasible and cost-effective actions to
reduce PFC and direct CO2 emissions; and reporting to EPA,
on an annual basis, the PFC and CO2 emissions or production
parameters used to estimate emissions. The information contained in the
annual reports of VAIP members is used by EPA to assess the success of
the program in achieving its goals. The information contained in the
annual reports may be considered confidential business information and
is maintained as such.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated to average 90.4
hours per response. Burden means the total time, effort, or financial
resources expended by persons to generate, maintain, retain, or
disclose or provide information to or for a Federal agency. This
includes the time needed to review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements which have subsequently changed; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.
    The ICR provides a detailed explanation of the Agency's estimate,
which is only briefly summarized here:
    Estimated total number of potential respondents: 7.
    Frequency of response: Annual.
    Estimated total average number of responses for each respondent:
one per respondent per year.
    Estimated total annual burden hours: 90.4 hours.
    Estimated total annual costs: $47,054. This includes an estimated
burden cost of $47,054 and an estimated cost of $0 for capital
investment or maintenance and operational costs.

Are There Changes in the Estimates From the Last Approval?

    There is a decrease of 8 hours in the total estimated respondent
burden compared with that identified in the ICR currently approved by
OMB. This decrease reflects EPA's revised estimates, the number of
hours associated with additional activities such as partnership
meetings which has decreased from 16.5 hours to 8.5.hours with a
corresponding decrease in the associated burden. This change is an
adjustment due the reduced frequency of partnership meetings and the
use of teleconferencing.

What Is the Next Step in the Process for this ICR?

    EPA will consider the comments received and amend the ICR as
appropriate. The final ICR package will then be submitted to OMB for
review and approval pursuant to 5 CFR 1320.12. At that time, EPA will
issue another Federal Register notice pursuant to 5 CFR
1320.5(a)(1)(iv) to announce the submission of the ICR to OMB and the
opportunity to submit additional comments to OMB. If you have any
questions about this ICR or the approval process, please contact the
technical person listed under FOR FURTHER INFORMATION CONTACT.

    Dated: December 4, 2008.
Dina Kruger,
Director, Climate Protection Division.
[FR Doc. E8-29963 Filed 12-16-08; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register Volume 86, Number 175 (Tuesday, September 14, 2021)]
[Notices]
[Pages 51139-51140]
[FR Doc No: 2021-19770]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

Filings Instituting Proceedings

    Docket Numbers: PR21-63-000.
    Applicants: Kinder Morgan Keystone Gas Storage LLC.
    Description: Submits tariff filing per 284.123(b),(e)/:
Informational Filing Concerning MBR Authority.
    Filed Date: 9/3/2021.
    Accession Number: 20210903-5173.
    Comments/Protests Due: 5 p.m. ET 9/24/21.

    Docket Numbers: PR21-64-000.
    Applicants: Banquete Hub LLC.
    Description: Submits tariff filing per 284.123(b),(e)/:
Informational Filing Concerning MBR Authority.
    Filed Date: 9/3/2021.
    Accession Number: 20210903-5176.
    Comments/Protests Due: 5 p.m. ET 9/24/21.

    Docket Numbers: RP21-1102-000.
    Applicants: Millennium Pipeline Company, LLC.
    Description: Sec.  4(d) Rate Filing: Negotiated Rate Service Agmt--
SWN to be effective 11/1/2021.
    Filed Date: 9/7/21.
    Accession Number: 20210907-5071.
    Comment Date: 5 p.m. ET 9/20/21.

    Docket Numbers: RP21-1103-000.

    Applicants: DTM Birdsboro Pipeline, LLC.
    Description: Sec.  4(d) Rate Filing: Name Change--FERC Gas Tariff
Original Volume No. 1 to be effective 9/8/2021.
    Filed Date: 9/7/21.
    Accession Number: 20210907-5139.
    Comment Date: 5 p.m. ET 9/20/21.

    Docket Numbers: RP21-1104-000.
    Applicants: Rover Pipeline LLC.
    Description: Sec.  4(d) Rate Filing: Summary of Negotiated Rate
Capacity Release Agreements on 9-7-21 to be effective 9/1/2021.
    Filed Date: 9/8/21.
    Accession Number: 20210908-5021.
    Comment Date: 5 p.m. ET 9/20/21.

    Docket Numbers: RP21-1105-000.
    Applicants: Panhandle Eastern Pipe Line Company, LP.
    Description: Sec.  4(d) Rate Filing: Update GT&C Section 12 to be
effective 11/1/2021.
    Filed Date: 9/8/21.
    Accession Number: 20210908-5023.
    Comment Date: 5 p.m. ET 9/20/21.

    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    The filings are accessible in the Commission's eLibrary system
(https://elibrary.ferc.gov/idmws/search/fercgensearch.asp) by querying
the docket number.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: September 8, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2021-19770 Filed 9-13-21; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: February 12, 2008 (Volume 73, Number 29)]
[Notices]
[Page 8089-8092]
[DOCID:fr12fe08-72]

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-57279; File No. SR-FINRA-2007-011]

Self-Regulatory Organizations: Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of Proposed Rule Change as Modified by Amendment
No. 1 To Amend NASD Rule 2711 (Research Analysts and Research Reports)
and NYSE Rule 472 (Communications With the Public) Regarding a Member's
Disclosure and Supervisory Review Obligations When It Distributes or
Makes Available Third-Party Research Reports

February 6, 2008.

I. Introduction

    On September 12, 2007, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposed rule change pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule
19b-4 thereunder.\2\ Notice of the proposal was published for comment
in the Federal Register on September 26, 2007.\3\ The Commission
received five comment letters to the proposed rule change.\4\ On
January 16, 2008, FINRA filed Amendment No. 1 to the proposed rule
change to make certain modifications to the original rule filing. This
order provides notice of the proposed rule change, as modified by
Amendment No. 1, and approves the proposed rule change as amended on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 56480 (September 20,
2007), 72 FR 54698 (September 26, 2007).
    \4\ See letters to Nancy M. Morris, Secretary, Commission, from
Morris N. Simkin, Esq., Katten Muchin Rosenman LLP (``Katten''),
dated October 12, 2007; Stephen R. Biggar, Global Director of Equity
Research, Standard & Poor's Equity Research Services (``S&P''),
dated October 16, 2007; Jill Ostergaard and Christopher J. Mahon,
Co-Chairs, Self Regulation and Supervisory Practices Committee,
Securities Industry and Financial Markets Association (``SIFMA''),
dated October 17, 2007; Stephanie R. Nicholas, WilmerHale
(``WilmerHale''), dated October 19, 2007; and William D. Lyons and
Arkadiy Neyman, Westminster Securities Corporation (``Westminster'')
dated January 30, 2008.
---------------------------------------------------------------------------

II. Description

    On September 12, 2007, FINRA filed with the Commission a proposed
rule change to amend NASD Rule 2711 (``Research Analysts and Research
Reports'') and NYSE Rule 472 (``Communications With the Public'')
regarding a member's disclosure and supervisory review obligations when
it distributes or makes available third-party research reports.\5\ The
Commission received four comment letters to the proposed rule change
during the comment period.\6\ FINRA responded to those comments in a
letter dated January 16, 2008.\7\ In accordance with that response to
comments, FINRA amended the proposed rule change. The Commission then
received a fifth comment letter on January 30, 2008.\8\
---------------------------------------------------------------------------

    \5\ See supra note 3.
    \6\ Katten, S&P, SIFMA, and WilmerHale.
    \7\ The comments and responses thereto are discussed in greater
detail in FINRA's Response to Comments. See letter from Philip
Shaikun to Nancy M. Morris dated January 16, 2008.
    \8\ Westminster. FINRA had already produced a response to
comments dated January 16, 2008 by the time that the Commission
received this letter. Per discussion with FINRA, FINRA does not
believe that this letter changes its analysis.
---------------------------------------------------------------------------

A. Current Rules

    NASD Rule 2711(h)(13) and NYSE Rule 472(k)(4) set forth a member's
disclosure and supervisory review obligations when the member
distributes--i.e., ``pushes out''--or makes available a research report
produced by a third party. A member that distributes a third-party
research report must accompany the report with certain current
applicable disclosures (``third-party disclosures''), as they pertain
to the member. The third-party disclosure requirements do not apply if
a member makes available to its customers non-affiliate research either
upon request or through a member-maintained Web site.
    NASD Rule 2711(h)(13) further requires that a registered principal
(or

supervisory analyst approved pursuant to Rule 344 of the New York Stock
Exchange) review and approve by signature or initial any third-party
research distributed by a member. Consistent with NASD Rule
2210(d)(1)(B), the member must review such research to ensure that the
applicable disclosures discussed above are complete and accurate
(``disclosure review'') and the content of the research reports
contains no untrue statement of material fact or is otherwise not false
or misleading (``content review''). Similarly, NYSE Rule 472(k)(4)
requires a supervisory analyst approved pursuant to New York Stock
Exchange Rule 344 to approve by signature or initial any third-party
research distributed by a member organization. Additionally, NYSE Rule
472(k)(4) requires a supervisory analyst or qualified person,
designated pursuant to NYSE Rule 342(b)(1), to conduct the same
disclosure and content review as NASD Rule 2711(h)(13).
    FINRA has interpreted that content review requirement to mean that
a member's supervisory obligation for review of third-party research
extends to any untrue statement of material fact or any false or
misleading information that (1) should be known from a reading of the
report or (2) is known based on information otherwise possessed by the
member.\9\ No supervisory review is required under either rule when a
member makes available non-affiliate research either upon request or
through a member-maintained Web site.
---------------------------------------------------------------------------

    \9\ See Notice to Members 07-04. NYSE Information Memo 07-11,
which has been incorporated by FINRA, sets out the same standard for
NYSE Rule 472(k)(4).
---------------------------------------------------------------------------

B. Amended Proposal

    The proposed rule change would define a ``third-party research
report'' for the purposes of the rules as a research report that is
produced by a person or entity other than a member. The proposal
further would create the subcategory of ``independent third-party
research'' and eliminate the content review requirement when a member
distributes or makes available such research. The proposal, as amended,
would define ``independent third-party research'' for the purposes of
the rules to mean a third-party research report, in respect of which
the person or entity producing the report: (1) Has no affiliation or
business or contractual relationship with the distributing member or
that member's affiliates that is reasonably likely to inform the
content of its research reports; and (2) makes content determinations
without any input from the distributing member or that member's
affiliates.
    The proposed rule change would create an exception from the
disclosure review requirement for independent third-party research
reports made available by a member either (1) upon request, (2) through
a member-maintained Web site, or (3) where such report is made
available by a member to a customer in connection with a solicited
order in which the registered representative has informed the customer,
during the course of the solicitation, of the availability of
independent research on the solicited equity security and the customer
requests such independent research.
    The proposed rule change would require that current applicable
third-party disclosures accompany any third-party research report that
does not meet the definition of ``independent third-party research
report,'' irrespective of whether it is distributed or made available
upon request, on a member-maintained web site or in connection with a
solicitation, as described above. However, the proposed rule change
would amend NASD Rule 2711(h)(13) and NYSE 472(k)(4) to allow a member
to direct a customer to a web address where such applicable third-party
disclosures could be found. As amended, the proposal would allow
members to meet the disclosure review requirement for non-independent
or pushed out independent third-party research if the member
establishes written supervisory polices and procedures reasonably
designed to ensure the completeness and accuracy of all applicable
disclosures.
    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be the date of publication
of the Regulatory Notice announcing Commission approval.

III. Comment Letters

    The Commission received five comment letters to the proposed rule
change.\10\ The commenters generally expressed support for the
proposal,\11\ but requested that FINRA consider certain modifications
to it. As originally proposed, this rule change would define
``independent third-party research'' to mean a research report, in
respect of which the person or entity producing the report: (1) Has no
affiliation or business or contractual relationship with the
distributing member or that member's affiliates that is reasonably
likely to inform the content of its research reports; and (2) makes
both coverage and content determinations without any input from the
distributing member or that member's affiliates.
---------------------------------------------------------------------------

    \10\ See supra note 4.
    \11\ Westminster did not specifically express general support
for the proposal and suggested changes. See infra.
---------------------------------------------------------------------------

    One commenter \12\ asserted that the prohibition on input into
coverage determinations could significantly diminish a firm's ability
to rely on the exception. The commenter noted that firms typically
request coverage from independent research providers of particular
sectors or market capitalization companies to supplement their own
research or offer a second opinion of companies they cover. The
commenter argued that a distributing firm's inability to control the
content of a research report should suffice to establish independence
and therefore the second prong of the definition is superfluous and
should be eliminated.
---------------------------------------------------------------------------

    \12\ WilmerHale.
---------------------------------------------------------------------------

    FINRA agreed that input into coverage decisions does not
necessarily compromise the independence of a third-party research
report and thus amended the original proposed rule change to delete the
prohibition on coverage determinations in Amendment No. 1. However,
FINRA believed the remainder of the second prong of the definition (the
requirement that the member have no input on the content of the report)
went beyond the prohibition of a contractual or affiliate relationship
prohibited by the first prong and therefore should remain. Therefore,
FINRA will construe the amended second prong to mean that a
distributing firm cannot have any input into the outcome of the
research report. Thus, input into coverage determinations would be
permissible, so long as the agreement to cover a company or sector does
not carry with it an implicit understanding as to any particular
conclusions or recommendations of the resultant research reports.
    FINRA also received comments regarding the proposed disclosure
review requirement. NASD and NYSE rules currently require a member that
distributes any third-party research report to accompany the report
with certain current applicable disclosures as they pertain to the
member. These rules further require that a registered principal or
supervisory analyst review and approve by signature or initial any
third-party research distributed by a member. That review must ensure
that the applicable disclosures are complete and accurate. No
disclosures or review is required when the third-party

research report is made available upon request or through a member-
maintained web site.
    The rule change, as originally proposed, would maintain the
disclosure review requirements when a member distributes independent
third-party research reports, but would expand the exception to the
requirement where independent third-party research is made available by
a member to a customer in connection with a solicited order in which
the registered representative has informed the customer, during the
course of the solicitation, of the availability of such research and
the customer requests it. The disclosure review requirement would still
pertain where a member ``pushes out'' independent third-party research.
    One commenter \13\ suggested that the disclosure review requirement
be more principles-based, such that firms can discharge their
obligations with policies and procedures reasonably designed to ensure
that the disclosures are complete and accurate. The commenter asserted
that many firms have systems to populate the disclosures, where
applicable, and that those disclosures are updated frequently through
automated processes that derive their information from areas outside of
the research department. The commenter further noted that many firms
distribute thousands of third-party research reports, making it
difficult or impractical to review and approve each one.
---------------------------------------------------------------------------

    \13\ SIFMA.
---------------------------------------------------------------------------

    In view of the volume of third-party research reports distributed
by many firms, FINRA agreed that the disclosure review requirement
should be satisfied with written supervisory policies and procedures
reasonably designed to ensure the completeness and accuracy of all
applicable disclosures and amended its proposal accordingly in
Amendment No. 1.
    One commenter \14\ wanted clarification that the disclosure review
requirement does not apply where no disclosures are required, such as
when independent third-party research is made available to a customer
upon their request. FINRA agreed that no disclosure review is required
under such circumstances but noted that members must have policies and
procedures in place to verify that disclosures are not required in the
first instance.
---------------------------------------------------------------------------

    \14\ S&P.
---------------------------------------------------------------------------

    One commenter \15\ suggested that FINRA create an exception from
the disclosure requirements altogether for independent third-party
research that is distributed to institutional investors. FINRA
responded that it is considering providing exceptions for the
application of certain of the rules under its jurisdiction for
institutional investors in its efforts in developing a single
consolidated NASD and NYSE rulebook.
---------------------------------------------------------------------------

    \15\ Katten.
---------------------------------------------------------------------------

    One commenter \16\ suggested that the proposal be amended to
``include language that reflects the fact that a principal or
supervisory analyst assigned by a member firm to carry out the review
of third party research may not be aware of all information his or her
member firm employer possesses regarding a specific company, industry,
etc.'' The commenter also requested that the rule text be amended to
``refer to such reviews being performed based on information that can
reasonably be expected to be in the possession of the reviewer (rather
than the corporate knowledge of the reviewer's entire firm).'' Per
discussion with FINRA, this comment did not change their analysis.
---------------------------------------------------------------------------

    \16\ Westminster.
---------------------------------------------------------------------------

IV. Discussion

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
association.\17\ In particular, the Commission finds that the proposed
rule change is consistent with section 15A(b)(6) of the Act,\18\ which
requires, among other things, that FINRA rules 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 Commission believes that the proposed rule
change will promote the availability of independent third party
research reports, thereby resulting in more fully informed decisions by
investors.
---------------------------------------------------------------------------

    \17\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
    \18\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    The Commission also finds good cause to approve Amendment No. 1 to
the proposed rule change prior to the thirtieth day after the date of
publication of notice of filing of the amendment in the Federal
Register. The proposed rule change was published in the Federal
Register on September 26, 2007.\19\ FINRA submitted Amendment No. 1 in
response to the four comments received on the proposed rule change
prior to FINRA's response to those comments.\20\ The Commission
believes that Amendment No. 1 simplifies the obligations of FINRA
member firms but not at the expense of investor protection. Amendment
No. 1 does not contain major modifications that are more restrictive
than the scope of the proposed rule change as published in the Federal
Register. The Commission believes that approving Amendment No. 1 will
simplify compliance and is consistent with the public interest and the
investor protection goals of the Act. Finally, the Commission finds
that it is in the public interest to approve the proposed rule change
as soon as possible to expedite its implementation.
---------------------------------------------------------------------------

    \19\ See supra note 3.
    \20\ As discussed above, FINRA believes that no change is
necessary based on the fifth comment (Westminster) because that
comment did not change their analysis.
---------------------------------------------------------------------------

    Accordingly, the Commission believes good cause exists, consistent
with sections 15A(b)(6) and 19(b) of the Act,\21\ to approve Amendment
No. 1 to the proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78o-3(b)(6), and 78s(b).
---------------------------------------------------------------------------

V. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
changes are 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-FINRA-2007-011 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-FINRA-2007-011. This
file number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such 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-2007-011 and should be
submitted on or before March 4, 2008.

VI. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular section 15A of the Act and the rules and regulations
thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\22\ that the proposed rule change (File No. SR-FINRA-2007-011), as
modified by Amendment No. 1, be, and hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2518 Filed 2-11-08; 8:45 am]

BILLING CODE 8011-01-P


	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C.  20460

OFFICE OF

PREVENTION, PESTICIDES

AND TOXIC SUBSTANCES

MEMORANDUM

Date:		August 15, 2002

Subject:	Guidance: Waiver Criteria for Multiple-Exposure Inhalation
Toxicity Studies.

From:		Margaret J. Stasikowski, Director

Health Effects Division (7509C)

To:		Health Effects Division Staff

Attached is SOP 2002.01 - “HED Standard Operating Procedure:
“Guidance: Waiver Criteria for Multiple-Exposure Inhalation Toxicity
Studies”.

SOP provides guidance to HED staff members for determining when to grant
waivers for multiple exposure inhalation toxicity studies.

If you have any questions, please contact John Whalan (305-6511) or Jess
Rowland (308-2719).

BACKGROUND

The only reliable way to characterize inhalation toxicity and to
quantify inhalation risk is through the use of inhalation toxicity
studies.  Chemicals tend to be more toxic by the inhalation route than
by the oral route due to rapid absorption and distribution, bypassing of
the liver’s metabolic protection (portal circulation), and potentially
serious portal-of-entry effects, such as irritation, edema, cellular
transformation, degeneration, and necrosis.  An inhalation risk
assessment that is based on oral data generally underestimates the
inhalation risk because it cannot account for these factors.

There are occasions when the requirement for inhalation toxicity studies
should be waived for ethical or scientific reasons.  The purpose of this
document is to provide guidance for  for waiving inhalation toxicity
studies when a pesticide active ingredient has a very low potential for
human inhalation hazard during handling or application.  This guidance
is based upon the following three waiver guidance documents, but has
been updated to reflect current regulatory concerns:

Penelope A. Fenner-Crisp.  Policy on Acute Inhalation Toxicity Data
Waivers.  Health Effects Division Memorandum to Anne E. Lindsay.
December 8, 1991.

Thomas C. Ellwanger.  Acute Toxicity Waiver Guidance Document.
Registration Division Memorandum.  August 24, 1993.

John Whalan, Donald Cooper, Dennis Gibbons, John Ross, James Sanborn.
Inhalation Exposure Waivers for Pesticides (A Guidance Document for
Pesticide Registrants).  Draft Joint NAFTA document. 1998.

The following scientists from the various Divisions of the Office of
Pesticide Progaram contributed to the preparation of this guidance.
Ayaad Assaad, Edwin Budd, William Burnam

Jeff Evans, Timothy Leighton, Jess Rowland, Steven Weiss, John Whalan,
Karen Whibty (HED), Karen Hicks (AD),  Roger Gardner (BPPD), John Redden
(RD), Mark Perry (SRRD)

B.	INTRODUCTION

This document provides guidance for determining when to grant waivers
for multiple exposure inhalation toxicity studies.  All waiver requests
are considered on a case-by-case basis, and the burden of proof lies
entirely with the registrant.  The process for granting waivers will
include consideration by a toxicologist, an exposure specialist, and the
Exposure Science Advisory Council for Exposure (ExpoSAC).  If no
significant inhalation hazard is identified during risk characterization
and risk assessment, HED may also initiate a waiver.  The following four
criteria may be used to justify a waiver:

Severe irritation and corrosivity

Low volatility

Large particle size

Inhalation Toxicity Category IV and an extrapolated Margin-of-Exposure
(MOE)

Engineering solutions, such as closed systems and enclosed cabs are not
included in this guidance because it is difficult to verify the accuracy
of claims.  Any waiver request based on an engineering solution must be
definitively substantiated.

Waiver Criteria 1 and 3 (below) must be applied on a
chemical-by-chemical basis.  Any significant change in application
methodology, including recommended equipment, will require additional
waiver requests and data submission.

C. 	WAIVER CRITERIA

Criteria 1 - Severe Irritation and Corrosivity

An active ingredient which causes severe irritation or corrosion of the
skin or eye will also damage the sensitive respiratory mucosa if
inhaled.  Waivers should be granted for active ingredients which are
corrosive (pH <2 or >11.5) or severely irritating.

Waivers should not be granted for active ingredients which are slight to
moderate irritants.  Inhalation toxicity studies of irritants can
quantify the sensitivity of this route and characterize portal-of-entry
effects.  This information is essential in an inhalation risk
assessment.

Criteria 2 - Low Volatility

Waivers will be considered for non-volatile active ingredients which are
not aerosolized (i.e. generated as mists, fogs, dust, smoke, fumes),
heated, evaporated, or otherwise made inhalable as a gas or vapor.
Non-volatile active ingredients are defined as having vapor pressures <1
x 10-5 kPa (7.5 x 10-5 mmHg) for indoor uses, and  <1 x 10-4 kPa (7.5 x
10-4 mmHg) for outdoor uses at 20-30(C.   Waiver candidates based on
volatility may include, but are not limited to: Viscous liquids (under
conditions of use), waxes, resins, lotions, and caulks. Waivers for
formulated products such as animal dips, shampoos, pour-ons, slow
release collars, ear tags, and tree injections will be considered by the
appropriate division.

Criteria 3 - Large Aerosol Particle Size

An inhalable particle is capable of entering the respiratory tract via
the nose and/or mouth.  A respirable particle evades capture in the
upper respiratory tract and reaches the lungs.  The larger the particle,
the less likely it is to be inhalable or respirable.  Waivers will be
considered for active ingredients that do not pose a significant
inhalation hazard because the particles are too large to be inhaled.

Large particles have the potential to do considerable local damage if
they are absorbed because of the volume of material they contain.  Table
1 demonstrates that with each 10-fold increase in particle diameter,
there is a 1000-fold increase in particle volume.  Compared to a 0.1 μm
particle, a 100 μm particle has 1000-times the diameter and a
billion-times the volume.

	Table 1.  A Comparison of Aerosol Particle Diameters and Volumes

Particle Diameter (μm)

 Diameter Δ

Particle Volume

(μm3)a

Volume Δ

0.1

–

0.000524

–

1.0

10

0.524

1000

10

100

524

1,000,000

100

1000

523,599

1,000,000,000

An aerosol for a product formulation or application method can be
considered essentially non-inhalable provided (99% of the particles are
>100 μm in diameter.  Although aerosols that meet this criteria are
candidates for waivers, it is the responsibility of the registrant to
provide data on aerosol size distribution.  Waiver candidates based on
large particle size include, but are not limited to:

Microencapsulated formulations which are not readily fractured,
dissolved, time-released, leaky, or small enough to be respirable during
mixing/loading or application.  Evidence of capsule durability must be
provided.

Granular products placed in or on the soil, and baits applied by hand or
during seed planting.  Although granular products are inherently
non-inhalable, they may pose a significant inhalation hazard if
attrition occurs.  Attrition is the breaking down of a material into
smaller particles as can occur during shipping, handling, pouring, and
application.  A product susceptible to attrition is said to be friable.
A friable product may pose a significant inhalation hazard if it
produces a measurable quantity of dust when poured or scattered.

A registrant requesting a waiver on the basis of particle size must
demonstrate that their product contains large, non-inhalable particles
which are resistant to attrition.  This can be accomplished by using the
latest version of the American Society of Testing Materials (ASTM) Test
Method 35.22–Pesticide Formulations and Application Systems Method for
the Determination of Inhalable Particles of Granular Products.  This
test method is not available from the EPA, but can be purchased from
ASTM (100 Barr Harbor Drive, West Conshohocken, Pennsylvania, USA
19428-2959; or http://www.astm.org/).

Criteria 4 - Toxicity Category IV and An Extrapolated MOE

Inhalation waivers are not granted for active ingredients based solely
on low oral toxicity because:

Toxicity via the inhalation route tends to be more severe than by other
routes.

Inhaled chemicals by-pass the metabolic protection of the liver (portal
circulation).

Oral data cannot be used to predict respiratory portal-of-entry effects
(e.g. irritation, edema, cellular transformation, degeneration, and
necrosis).

The use of route extrapolation in a risk assessment minimizes the true
inhalation risk (see example below).

The application rate is usually higher for pesticides with low oral
toxicity, so there is a potential for high inhalation exposure.

Nevertheless, a waiver may be granted for an active ingredient that is
Toxicity Category IV for inhalation provided an extrapolated inhalation
MOE (based on an oral NOAEL) exceeds a target MOE of 1000 or greater.
The target MOE may include the conventional UF of 100; an additional UF
of 10-100 to account for unknown pharmacokinetic and pharmacodynamic
differences between the oral and inhalation routes in animals and
humans, and respiratory portal-of-entry effects; and any other
additional assigned UF (e.g. for use of a LOAEL).

	Example:  Route-Specific MOE v Route-Extrapolated MOE

`„Ð

f

g

ˆÿž	˜

ˆÿž	˜

ˆÿž	˜

ˆÿž	˜

 0.013 mg/kg/day

Route-Specific MOE:

Route-Extrapolated MOE:

Comparison: Route-Extrapolated MOE v Route-Specific MOE:

If the extrapolated inhalation MOE had been based on an oral endpoint
instead of an inhalation endpoint, the true inhalation risk would
probably be under-stated by more than 600%.  This is because the oral
endpoint would neither reflect the impact of an inhaled chemical
by-passing the metabolic protection of the liver, nor consider the
extent of respiratory portal-of entry effects.

HED SOP2002.01									August 15, 2002

GUIDANCE: WAIVER CRITERIA FOR MULTIPLE-EXPOSURE INHALATION TOXICITY
STUDIES
________________________________________________________________________
__

 PAGE  7