[Federal Register: January 6, 2006 (Volume 71, Number 4)]
[Proposed Rules]
[Page 892-894]
[DOCID:fr06ja06-10]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2005-VA-0016; FRL- 8019-7]

Approval and Promulgation of Air Quality Implementation Plans;
Virginia; Amendments to the Ambient Air Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a State Implementation Plan (SIP)
revision submitted by the Commonwealth of Virginia. This revision
pertains to the amendments of the Commonwealth's existing ambient air
quality standards. This action is being taken under the Clean Air Act
(CAA or the Act).

DATES: Written comments must be received on or before February 6, 2006.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R03-OAR-2005-VA-0016 by one of the following methods:
    A. http://www.regulations.gov. Follow the on-line instructions for

submitting comments.
    B. E-mail<EMAIL_ADDRESS>    C. Mail: EPA-R03-OAR-2005-VA-0016, Makeba Morris, Chief, Air
Quality Planning Branch, Mailcode 3AP21, U.S. Environmental Protection
Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103.
    D. Hand Delivery: At the previously-listed EPA Region III address.
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-R03-OAR-
2005-VA-0016. EPA's policy is that all comments received will be
included in the public docket without change, and may be made available
online at http://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 http://www.regulations.gov

or e-mail. The http://www.regulations.gov Web site is a ``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
http://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.
    Docket: All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some

information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in http://www.regulations.gov or

in hard copy during normal business hours at the Air Protection
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal
are available at the Virginia Department of Environmental Quality, 629
East Main Street, Richmond, Virginia 23219.

FOR FURTHER INFORMATION CONTACT: Rose Quinto,<PHONE_NUMBER>, or by e-
mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    In 1997, EPA adopted an 8-hour ozone national ambient air quality
standard (NAAQS) with a level of 0.08 parts per million (ppm) to
provide greater protection to public health than the previous standard
of 0.12 ppm averaged over a 1-hour block of time (62 FR 38894, July 18,
1997). At the same time, EPA established a new standard for fine
particulate matter (PM2.5) that applies to particles 2.5
microns in diameter or less (62 FR 38711, July 18, 1997). These
standards became effective on September 16, 1997 and are located in 40
CFR part 50.
    On September 26, 2005, the Commonwealth submitted a SIP revision
that amends the existing Virginia Regulations for the Control and
Abatement of Air Pollution (9 VAC 5 Chapter 30, Ambient Air Quality
Standards). This amendment includes the NAAQS for the 8-hour ozone and
PM2.5, as well as general revisions to the Commonwealth's
regulations consistent with 40 CFR part 50.

II. Summary of SIP Revision

    The Commonwealth's revision incorporates the 1997 NAAQS for the 8-
hour ozone and PM2.5 standards into 9 VAC 5 Chapter 30. This
SIP revision provides that the 8-hour primary and secondary ozone
ambient air quality standards are met when the average of the fourth
highest daily maximum 8-hour average ozone concentration is less than
or equal to 0.08 ppm, averaged over three consecutive years. In
addition, the SIP revision adds a new PM2.5 ambient air
quality standard. The standards incorporated in this SIP revision are
65 micrograms per cubic meter based on a 24-hour average concentration
and 15.0 micrograms per cubic meter annual arithmetic mean
concentration.
    The other SIP revisions incorporated into 9 VAC 5 Chapter 30, are
amendments to the ambient air quality standards for sulfur dioxide,
carbon monoxide, ozone (1-hour), PM10, nitrogen dioxide, and
lead, to make the state regulation consistent with 40 CFR part 50.

III. General Information Pertaining to SIP Submittals From the
Commonwealth of Virginia

    In 1995, Virginia adopted legislation that provides, subject to
certain conditions, for an environmental assessment (audit)
``privilege''' for voluntary compliance evaluations performed by a
regulated entity. The legislation further addresses the relative burden
of proof for parties either asserting the privilege or seeking
disclosure of documents for which the privilege is claimed. Virginia's
legislation also provides, subject to certain conditions, for a penalty
waiver for violations of environmental laws when a regulated entity
discovers such violations pursuant to a voluntary compliance evaluation
and voluntarily discloses such violations to the Commonwealth and takes
prompt and appropriate measures to remedy the violations. Virginia's
Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-
1198, provides a privilege that protects from disclosure documents and
information about the content of those documents that are the product
of a voluntary environmental assessment. The Privilege Law does not
extend to documents or information (1) that is generated or developed
before the commencement of a voluntary environmental assessment; (2)
that is prepared independently of the assessment process; (3) that
demonstrates a clear, imminent and substantial danger to the public
health or environment; or (4) that is required by law.
    On January 12, 1998, the Commonwealth of Virginia Office of the
Attorney General provided a legal opinion that states that the
Privilege Law, Va. Code Sec. 10.1-1198, precludes granting a privilege
to documents and information ``required by law,'' including documents
and information ``required by Federal law to maintain program
delegation, authorization or approval,'' since Virginia must ``enforce
Federally authorized environmental programs in a manner that is no less
stringent than their Federal counterparts. * * *'' The opinion
concludes that ``[r]egarding Sec.  10.1-1198, therefore, documents or
other information needed for civil or criminal enforcement under one of
these programs could not be privileged because such documents and
information are essential to pursuing enforcement in a manner required
by Federal law to maintain program delegation, authorization or
approval.''
    Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that
``[t]o the extent consistent with requirements imposed by Federal
law,'' any person making a voluntary disclosure of information to a
state agency regarding a violation of an environmental statute,
regulation, permit, or administrative order is granted immunity from
administrative or civil penalty. The Attorney General's January 12,
1998 opinion states that the quoted language renders this statute
inapplicable to enforcement of any Federally authorized programs, since
``no immunity could be afforded from administrative, civil, or criminal
penalties because granting such immunity would not be consistent with
Federal law, which is one of the criteria for immunity.''
    Therefore, EPA has determined that Virginia's Privilege and
Immunity statutes will not preclude the Commonwealth from enforcing its
program consistent with the Federal requirements. In any event, because
EPA has also determined that a state audit privilege and immunity law
can affect only state enforcement and cannot have any impact on Federal
enforcement authorities, EPA may at any time invoke its authority under
the Clean Air Act, including, for example, sections 113, 167, 205, 211
or 213, to enforce the requirements or prohibitions of the state plan,
independently of any state enforcement effort. In addition, citizen
enforcement under section 304 of the Clean Air Act is likewise
unaffected by this, or any, state audit privilege or immunity law.

IV. Proposed Action

    EPA's review of this material indicates that the amendments to 9
VAC 5 Chapter 30 are consistent with 40 CFR part 50. EPA is proposing
to approve the Virginia SIP revision for 9 VAC 5 Chapter 30, which was
submitted on September 26, 2005. EPA is soliciting public comments on
the issues discussed in this document. These comments will be
considered before taking final action.

V. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
proposed action is not a ``significant regulatory action'' and
therefore is not subject to review by the Office of Management and
Budget. For this reason, this action is also not subject to Executive
Order 13211, ``Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use'' (66 FR 28355 (May 22, 2001)).
This action merely proposes to approve state law as meeting Federal
requirements and imposes no additional requirements beyond those
imposed by state law. Accordingly, the Administrator certifies that
this proposed rule will not have a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-
existing requirements under state law and does not impose any
additional enforceable duty beyond that required by state law, it does
not contain any unfunded mandate or

significantly or uniquely affect small governments, as described in the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposed
rule also does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes, as specified by
Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132 (64 FR 43255, August 10, 1999),
because it merely proposes to approve a state rule implementing a
Federal requirement, and does not alter the relationship or the
distribution of power and responsibilities established in the Clean Air
Act. This proposed rule also is not subject to Executive Order 13045
(62 FR 19885, April 23, 1997), because it is not economically
significant.
    In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act. In
this context, in the absence of a prior existing requirement for the
State to use voluntary consensus standards (VCS), EPA has no authority
to disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission, to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the Clean Air Act. Thus, the requirements
of section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3
of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing
this proposed rule, EPA has taken the necessary steps to eliminate
drafting errors and ambiguity, minimize potential litigation, and
provide a clear legal standard for affected conduct. EPA has complied
with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining
the takings implications of the rule in accordance with the ``Attorney
General's Supplemental Guidelines for the Evaluation of Risk and
Avoidance of Unanticipated Takings'' issued under the executive order.
    This proposed rule pertaining to the amendments of Virginia's
ambient air quality standards, does not impose an information
collection burden under the provisions of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: December 28, 2005.
Donald S. Welsh,
Regional Administrator, Region III.
[FR Doc. E6-30 Filed 1-5-06; 8:45 am]

BILLING CODE 6560-50-P


U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410 0500 AMERICA'S AFFORDABLE COMMUNITIES INITIATIVE www. hud. gov espanol. hud. gov March 31, 2004 Mr. Jesse Pritts, P. E. U. S. Environmental Protection Agency Office of Water Office of Science and Technology Engineering and Analysis Division ( 4303T) 1200 Pennsylvania Avenue, NW Washington, DC 20460 Dear Mr. Pritts:

The Office of Management and Budget ( OMB) recently contacted HUD to advise that the U. S. Environmental Protection Agency ( EPA) is concluding its rulemaking on Effluent Limitation Guidelines and New Source Performance Standards for the Construction and Development Category, for which a proposed rule was published on June 24, 2002. As Director of America's Affordable Communities Initiative within the Department of Housing and Urban Development ( HUD), I would like to reiterate concerns with this rule that were earlier raised in 2002 by John C. Weicher, HUD's Assistant Secretary for Housing and Federal Housing Commissioner, to the extent that these concerns may still be relevant to this rulemaking. America's Affordable Communities Initiative ( Initiative) is a departmentwide initiative, which commenced in June 2003, and focuses on breaking down regulatory barriers at the federal, state, and local levels that impede the production or rehabilitation of affordable housing. Because of the focus and work of the Initiative, this EPA rule and its status were brought to my attention.

HUD staff previously reviewed an April 5, 2002, draft of this rule during EPA's development of the proposed rule, and concerns were expressed on the draft rule provided to HUD. HUD has not reviewed this rule since prior to its publication as a proposed rule. It is our understanding that EPA is making final decisions about this rule and therefore, on behalf of HUD and the Initiative, I am submitting for EPA's consideration the concerns with this rule first relayed by Commissioner Weicher in the spring of 2002, in the event that some or all of these concerns remain relevant to the decisions being considered by EPA about the revised proposed rule.

Commissioner Weicher noted HUD's particular concern that the proposed $ 4.2 billion option described by EPA could seriously affect the housing of lower income and moderate income families. The effect on the rental market is likely to make it harder to achieve the national housing goal of a decent home for all families, and the effect on single family homes is likely to make it harder for young families to buy their first homes. 2 In addition to this particular concern, HUD's concerns with the initial draft rule and supporting analyses fall into two general areas: the overall scope of the initial draft rule, and the estimates of its cost/ economic impact on the construction of single family and multifamily housing and housing markets in general. We repeat HUD's offer made by Commissioner Weicher to make available to EPA the expertise of HUD with housing markets so that EPA's rule and accompanying analyses that take into consideration the impact of the rule on the housing market. Again, the following presents a reiteration of the concerns previously raised by HUD.

Scope of the Rule The Circuit Court consent decree under which this rule is being issued does not appear to require EPA to create effluent guidelines for post construction storm water controls. We would urge EPA to drop provisions related to post construction controls from the rule because they are not required, and because they seem to account for the majority of the cost of the rule according to EPA's analysis. Also, for reasons outlined below we do not believe that the " infrastructure savings" that EPA expects to be available for post construction controls under the draft proposed rule will in fact be realized, so that the higher cost estimates associated with EPA's " no infrastructure savings" scenarios are more likely to be correct.

Accounting for Storm Water Control Costs Estimated compliance costs appear to be implausibly low. This may be due to the requirement of Executive Order 12866 that the Economic Analysis of the draft proposed rule evaluate the incremental cost of the draft proposed rule taking the existing regulatory regime as the fixed baseline. In this case, however, the baseline has not been fully implemented ( Phase II Storm Water rules become effective in March 2003). While estimates of the compliance costs of the baseline regulations appear in an appendix to chapter 5 of the Economic Analysis, this appendix does not contain a sufficiently detailed description of the baseline technology to provide a basis for determining the reasonableness of the estimates of incremental costs of the draft proposed rule. The Economic Analysis should include a side by side table clearly describing baseline technologies and their costs, describing technologies compliant with the draft proposed rule and the costs, and the net difference in costs.

" Infrastructure Savings"

The Economic Analysis of the draft proposed rule contemplates the realization of " infrastructure savings" through the use of " Low Impact Development ( LID)" and other techniques to comply with the provisions of the rule. These techniques supposedly could accomplish the effluent reductions but use less expensive forms of infrastructure than conventional construction that is not compliant with the draft proposed rule. The techniques listed in the draft proposed rule include the use of " swales, bioretention cells ( highly permeable engineered soils planted with vegetation),   and depression storage" to control runoff and remove pollutants. Storm water would be retained on the property or in the neighborhood for a significantly longer period of time, rather than being carried away, for example, by more conventional curbs and gutters. LID and related practices have not been widely used in the construction industry and their use would result in new developments that are substantially different in appearance from most existing developments. 3 Homebuyers are likely to regard the change as a reduction in quality of the housing in the community rather than a savings in cost. The reduction in quality may cause the sales prices of homes in LID developments to fall below any actual infrastructure savings realized. Builders may be unwilling to take such risks, which would result in little or no use of LID or other techniques that would generate infrastructure savings.

In addition, the LID and related techniques appear from their description to be more land intensive than other, more expensive, storm water control techniques. Affordable housing developments, particularly in high housing cost markets are built at relatively higher densities to fit the most units onto the available land, keeping prices low by reducing land costs per unit. Such intensive use of land is unlikely to leave the open land space necessary for LID and other infrastructure saving methods of storm water control. Thus, infrastructure savings are least likely to be realized in the lower end of the new housing market or in affordable multifamily construction.

Housing Affordability Analysis EPA's analysis of the effects of the rule on housing affordability focus on a model singlefamily unit with a final baseline price of $ 288,397 and households within a narrow income range around that required to afford this house ( assuming conventional mortgage market income constraints). While the model unit analysis is useful in tracing the impact of the draft proposed rule through the development process to measure the potential impact on final house price, the use of the model house price in analyzing affordability effects of the rule is inadequate. It entirely ignores the majority of the new single family housing market. According to the Census Bureau, the mean price of a newly constructed single family home was $ 208,000 in 2001. In fact, in 2001, 40 percent of newly constructed homes sold for less than $ 150,000. Clearly, new homes are sold at a wide range of prices to households throughout the income distribution. We would recommend that EPA widen the affordability and analysis better to reflect the market for new housing.

The Economic Analysis of the draft proposed rule offers a variety of estimates of the cost increase for single family homes. These range from several hundred dollars up to over $ 2,200 ( the figure $ 2,228 appears in Appendix F to Chapter 5 as the combined cost of Phase II rules that become effective in March 2003 and the draft proposed rule). Whatever the best estimate may be within the range, or higher or lower the most vulnerable families in America will feel the greatest impact of increases in overall housing costs. While at higher incomes a $ 2,200 increase in house price would only affect the family's choice of a house, those at the margin of homeownership would find a $ 2,200 increase, or even a much smaller increase, to be much more serious. Some families would certainly find themselves priced completely out of the market unable to purchase any home at all. FHA's Data show that such families are disproportionately members of minority groups.

Multifamily Housing Impact With respect to multifamily housing, the Economic Analysis of the draft proposed rule is quite brief and omits several important aspects of the multifamily housing market, in particular the predominance of lower income households in multifamily housing and the effect of the rule of housing financed and constructed with federal subsidies. While the Economic Analysis estimates the effects of the rule on the costs of construction of multifamily housing, it does not relate these 4 effects back to the rental market. In many markets, low income households have great difficulty finding adequate rental housing except at very high rent burdens ( measured as rent to income ratios). Some of the impact estimates in the Economic Analysis seem to indicate that compliance costs of the draft proposed rule are higher for the multifamily housing sector than for the singlefamily housing sector. The increase in the cost of new rental housing under the draft proposed rule would be felt throughout the rental housing market. This will adversely affect low income renter households, particularly those seeking employment and housing opportunities in growing suburban areas where the draft proposed rule's impact on affordable housing construction would be greatest. EPA should consider adding an assessment of the relative effects of the rule on households in different parts of the income distribution.

EPA should include in the Economic Analysis an assessment of the effects of the draft proposed rule on federal multifamily housing construction subsidy and mortgage insurance programs including the Low Income Housing Tax Credit ( LIHTC), Mortgage Revenue Bonds ( MRBs), and HUD's Section 202, Section 811, and Section 221( d)( 3) programs. In all of these programs, the amounts supporting each multifamily project are related to the depreciable capital costs of the project, while the total budget authority of the programs is limited. If compliance costs of the draft proposed rule are included in depreciable basis, the total number of units that can be produced under these programs will be reduced. On the other hand, if compliance costs cannot be covered by these government funding sources, these costs will need to be financed with other sources of funds, making multifamily projects generally more difficult to finance and produce.

We thank EPA for consideration of HUD's views on this rule. If you have questions, please do not hesitate to contact me at ( 202) 708 0282.

Sincerely,

A. Bryant Applegate Director, America's Affordable Communities Initiative


[Federal Register Volume 82, Number 128 (Thursday, July 6, 2017)]
[Notices]
[Pages 31384-31386]
[FR Doc No: 2017-14141]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81044; File No. SR-NSCC-2017-009]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change To Further Describe and Codify Existing Practices Relating
to the Bond Haircut

June 29, 2017.
    Pursuant toSection 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 23, 2017, National Securities Clearing Corporation (``NSCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the clearing agency. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \73\ 17 CFR 200.30-3(a)(12).
    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of amendments to NSCC's Rules &
Procedures (``Rules'') \3\ in order to (1) provide additional
transparency in the Rules with respect to the existing methodology for
calculating margin on Members' Net Unsettled Positions and Net Balance
Order Unsettled Positions (for purposes of this filing, referred to
collectively herein as ``Net Unsettled Positions'') in corporate and
municipal bonds (``Bond Haircut''), which are excluded from the
parametric volatility component of the margin calculation (``VaR
Charge''); and (2) codify NSCC's existing practice of applying the Bond
Haircut to all corporate and municipal bonds without discretion, as
described below.
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    \3\ Terms not defined herein are defined in the Rules, available
at www.dtcc.com/~/media/Files/Downloads/legal/rules/nscc_rules.pdf.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

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

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

1. Purpose
Proposal Overview
    The proposed rule change would provide additional transparency in
the Rules with respect to the calculation and the application of the
Bond Haircut. NSCC currently excludes Net Unsettled Positions in
corporate and municipal bonds from its parametric VaR calculation and
instead charges a Bond Haircut, which is calculated by multiplying the
absolute value of the Net Unsettled Positions in each security by a
percentage that is no less than two percent.
    NSCC is proposing to enhance the description of the Bond Haircut in
Procedure XV to provide more detail regarding the determination of the
applied percentage, and to codify NSCC's existing practice of applying
the Bond Haircut to all corporate and municipal bonds without
discretion.
The Required Deposit and the Bond Haircut
    A primary objective of NSCC's Clearing Fund is to have on deposit
from each applicable Member assets sufficient to satisfy losses that
may otherwise be incurred by NSCC as the result of the default of the
Member and the resultant close out of that Member's unsettled positions
under NSCC's trade guaranty. Each Member's Clearing Fund required
deposit is calculated daily pursuant to a formula set forth in
Procedure XV of the Rules designed to provide sufficient funds to cover
this risk of loss. The Clearing Fund formula accounts for a variety of
risk factors through the application of a number of charges, each
described in Procedure XV.
    The VaR Charge is a core component of this formula and is designed
to calculate the amount of money that may be lost on a portfolio over a
given period of time assumed necessary to liquidate

the portfolio, within a given level of confidence. Pursuant to
Procedure XV, NSCC may currently exclude from this calculation Net
Unsettled Positions in classes of securities whose volatility is
amenable to generally accepted statistical analysis only in a complex
manner, including corporate and municipal bonds.
    NSCC believes the Bond Haircut is a more appropriate measure of the
risk presented to NSCC by its Members' positions in corporate and
municipal bonds than the VaR Charge because the volatility of these
securities is generally amenable to statistical analysis only in a
complex manner. Because NSCC believes the Bond Haircut is more
effective in capturing the risks presented by corporate and municipal
bonds, in addition to adding more detail to Procedure XV regarding the
calculation of the Bond Haircut, NSCC is also proposing to codify its
existing practice by removing reference to discretion in application of
the Bond Haircut to these securities.
a. Corporate Bonds
    In order to calculate the Bond Haircut for positions in corporate
bonds, NSCC first categorizes corporate bonds into security groups
according to the bonds' remaining time to maturity and credit rating.
NSCC then aligns each security group against a Merrill Lynch bond
index.\4\ Each bond index is chosen to provide a valuation proxy for
computing the appropriate margin for securities categorized into that
group. NSCC calculates a haircut rate applicable to each security group
based on historical returns of the aligned Merrill Lynch bond index in
the specified look-back period and a predetermined calibration
percentile. NSCC is proposing to clarify in Procedure XV that the look-
back period shall be no shorter than 10 years. Currently, the look-back
period is from 1995 to present day.\5\ The haircut rate for each
security group is recalculated periodically, based on a predetermined
frequency. While NSCC is proposing to clarify in Procedure XV that such
recalculation shall occur at least annually, currently the
recalculation is performed on a daily basis.\6\
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    \4\ Bond indices are widely used to measure the risk of
particular classes of corporate bonds. By aligning each security
group to a Merrill Lynch bond index, NSCC is able to use widely
accepted historical pricing information as a valuation proxy for
each security group to correlate with the actual risk coverage for
the particular attributes of the bonds. Using these reliable pricing
proxies permits NSCC to conduct loss estimation associated with
clearing these securities in a less complex statistical manner,
while achieving the desired coverage target.
    \5\ NSCC regularly reviews whether its margining methodology is
achieving the desired risk mitigation objectives. In connection with
such review, NSCC has determined to make technical enhancements to
the calculation of the Bond Haircut as applied to positions in
corporate bonds, including an adjustment to this look-back period.
Such enhancements shall be proposed pursuant to a separate advance
notice filing, to be filed pursuant to Section 806(e)(1) of the
Payment, Clearing, and Settlement Supervision Act of 2010. 12 U.S.C.
5465(e)(1).
    \6\ NSCC has also determined that the frequency of re-
calibration of the haircut rates should be adjusted, and will
propose to change this frequency pursuant to an advance notice
filing. Id.
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    Further, NSCC determines the appropriate specified look-back period
and predetermined calibration percentile, which shall not be less than
99 percent, in order to account for the particularized risk
characteristics of corporate bonds, including market, liquidity and
idiosyncratic risk (i.e., the volatility of a particular issue compared
to the volatility of the index).
b. Municipal Bonds
    The Bond Haircut for positions in municipal bonds is calculated at
the CUSIP level. In order to account for price and valuation
volatility, NSCC has set a tenor-based haircut schedule that applies
according to the remaining time to maturity for separate categories of
municipal bonds. Currently, NSCC applies this schedule to six separate
categories of municipal bonds. For municipal bonds rated BBB+ or lower
and for non-rated bonds, an additional factor is applied based on the
applicable municipal sector. If a municipal bond is not mapped to any
particular sector, the highest numerical municipal factor is applied to
positions in that bond. NSCC reviews and re-assigns, as necessary, the
risk factors assigned to each municipal sector no less frequently than
annually.
    This additional factor is added to lower rated municipal bonds
because variable risk factors exist between municipal sectors. In
addition to the risk associated with time-to-maturity, municipal bonds
may also pose credit risk depending upon the bonds' assigned credit
rating. The added sector-based factor, applicable to lower-rated
municipal bonds, is designed to compensate for this additional credit
risk. Therefore, NSCC believes the Bond Haircut as applied to municipal
bonds is also an appropriate measure for the risk presented by these
positions.
Proposed Changes to Procedure XV
    In order to make the proposed changes, NSCC would exclude Net
Unsettled Positions in corporate and municipal bonds from Procedure XV,
Sections I.(A)(1)(a)(ii) and (2)(a)(ii). These Sections of Procedure XV
would continue to provide NSCC with discretion to exclude certain
securities, as described therein and other than corporate and municipal
bonds, from its VaR margin calculation and instead apply a haircut-
based margin charge. NSCC would add new Sections I.(A)(1)(a)(iii) and
(2)(a)(iii) to Procedure XV to include more transparency around the
determination of the Bond Haircut and to make clear that the Bond
Haircut shall apply to all Net Unsettled Positions in corporate and
municipal bonds, in lieu of a VaR Charge, and would not be subject to
NSCC's discretion.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act, requires, in part, that the Rules
promote the prompt and accurate clearance and settlement of securities
transactions.\7\ The proposed rule change with respect to the Bond
Haircut would provide additional transparency in the Rules regarding
the calculation and application of the Bond Haircut, and would codify
NSCC's practice to apply the Bond Haircut to all positions in corporate
and municipal bonds without discretion. The proposed changes would
ensure that the Rules remain transparent, accurate and clear, which
would enable all stakeholders to readily understand their rights and
obligations in connection with NSCC's clearance and settlement of
securities transactions. Therefore, NSCC believes that the proposed
rule changes would promote the prompt and accurate clearance and
settlement of securities transactions, consistent with Section
17A(b)(3)(F) of the Act.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1(b)(3)(F).
    \8\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(23)(i) under the Act requires, in part, that NSCC
establish, implement, maintain and enforce written policies and
procedures reasonably designed to provide for publicly disclosing all
relevant rules and material procedures.\9\ Rule 17Ad-22(e)(23)(ii)
under the Act requires, in part, that NSCC establish, implement,
maintain and enforce written policies and procedures reasonably
designed to provide sufficient information to enable participants to
identify and evaluate the risks, fees, and other material costs they
incur by participating in NSCC.\10\ The proposed rule change enhances
the transparency in the Rules regarding the calculation and application
of the Bond Haircut and codifies NSCC's practice to apply the Bond
Haircut to all positions in corporate and municipal bonds without
discretion. In this way, the

proposed rule change provides for the public disclosure, through the
new Procedure XV, Sections I.(A)(1)(a)(iii) and (2)(a)(iii) of the
Rules, of the rules and procedures through which NSCC calculates and
applies the Bond Haircut. The proposed rule change would allow NSCC to
further provide its participants with sufficient information regarding
the Bond Haircut to enable those participants to identify and evaluate
the risks and material costs associated with the calculation and
application of the Bond Haircut, which are incurred through their
participation in NSCC. As such, NSCC believes the proposed rule change
is consistent with Rule 17Ad-22(e)(23)(i) and (ii) under the Act.\11\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(23)(i).
    \10\ 17 CFR 240.17Ad-22(e)(23)(ii).
    \11\ 17 CFR 240.17Ad-22(e)(23)(i), (ii).
---------------------------------------------------------------------------

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

    NSCC does not believe that the proposed rule change would impact
competition.\12\ The proposed rule change would increase transparency
of the Rules by codifying NSCC's current practice with respect to the
assessment and imposition of the Bond Haircut. As such, NSCC believes
that the proposed rule change would not impact Members or have any
impact on competition.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

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

    NSCC has not received any written comments relating to this
proposal. NSCC will notify the Commission of any written comments it
receives.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder. At
any time within 60 days of the filing of the proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NSCC-2017-009 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSCC-2017-009. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of NSCC and on
DTCC's Web site (http://dtcc.com/legal/sec-rule-filings.aspx). 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-NSCC-2017-009 and should be
submitted on or before July 27, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Jill M. Peterson,
Assistant Secretary.
---------------------------------------------------------------------------

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

[FR Doc. 2017-14141 Filed 7-5-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Pages 3467-3468]
[FR Doc No: 2014-00921]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket Number NHTSA-2013-0147; Notice 1]

Reports, Forms, and Recordkeeping Requirements

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Notice of proposed extension, without change, of a currently
approved collection of information.

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

SUMMARY: Before a Federal agency can collect certain information from
the public, it must receive approval from the Office of Management and
Budget (OMB). Under procedures established by the Paperwork Reduction
Act of 1995, before seeking OMB approval, Federal agencies must solicit
public comment on proposed collections of information, including
extensions and reinstatement of previously approved collections.
    This document describes one collection of information for which
NHTSA intends to seek extension of OMB approval.

DATES: Comments must be received on or before March 24, 2014.

ADDRESSES: You may submit comments identified by DOT Docket No. NHTSA-
2013-0147 by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
     Mail: Docket Management Facility: U.S. Department of
Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays. Telephone: 1-800-647-
5527.
     Fax:<PHONE_NUMBER>.
    Instructions: All submissions must include the agency name and
docket number for this proposed collection of information. Note that
all comments received will be posted without change to http://www.regulations.gov, including any personal information provided.
Please see the Privacy Act heading below.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78).
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov. or the street
address listed above. Follow the online instructions for accessing the
dockets.

FOR FURTHER INFORMATION CONTACT: George Stevens, NHTSA, 1200 New Jersey
Avenue SE., Room W43-490, Washington, DC 20590. Mr. Steven's telephone
number is<PHONE_NUMBER>. Please identify the relevant collection of
information by referring to its OMB Control Number.

SUPPLEMENTARY INFORMATION: Under the Paperwork Reduction Act of 1995,
before an agency submits a proposed collection of information to OMB
for approval, it must first publish a document in the Federal Register
providing a 60-day comment period and otherwise consult with members of
the public and affected agencies concerning each proposed collection of
information. The OMB has promulgated regulations describing what must
be included in such a document. Under OMB's regulation (at 5CFR
1320.8(d), an agency must ask for public comment on the following:
    (i) 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) 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) how to enhance the quality, utility, and clarity of the
information to be collected;
    (iv) how to minimize the burden of the collection of information on
those who are to respond, including 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 compliance with these requirements, NHTSA asks for public
comments on the following proposed collections of information:
    Type of Request: Extension of clearance.
    OMB Control Number: 2127-0045.
    Form Number: This collection of information uses no form.
    Title: 49 CFR Part 556, Petitions for Inconsequentiality.
    Affected Public: Businesses or other for profit entities.
    Abstract: If a motor vehicle or item of replacement motor vehicle
equipment is determined to contain a defect related to motor vehicle
safety or not to comply with an applicable Federal motor vehicle safety
standard (FMVSS), the manufacturer is required under 49 U.S.C. 30118 to
furnish NHTSA and owners, purchasers, and dealers of the motor vehicle
or equipment with notification of the defect or noncompliance. The
manufacturer must also remedy the defect or noncompliance without
charge under 49 U.S.C. 30120.
    A manufacturer may be exempted from these requirements under 49
U.S.C. 30118(d) if the agency decides, upon application of the
manufacturer, that the defect or noncompliance is inconsequential as it
relates to motor vehicle safety. That section provides that the agency
may only take such action after publishing notice in the Federal
Register and providing an opportunity for any interested person to
present information, views, and arguments.
    Regulations implementing this provision are found in 49 CFR part
556 Exemption for Inconsequential Defect or Noncompliance. The
regulations provide that ``the effect of a grant of a petition is to
relieve the manufacturer from any further responsibility to provide
notice and remedy of the defect or noncompliance.'' See 49 CFR 556.7.
    The regulations further provide that each petition submitted under
part 556 must:
    (1) Be written in the English language;
    (2) Be submitted in three copies to NHTSA;
    (3) State the full name and address of the applicant, the nature of
its organization (e.g., individual, partnership, or corporation) and
the name of the State or county under the laws of which it is
organized;
    (4) Describe the motor vehicle or item of replacement equipment,
including the number involved and the period of production, and the
defect or noncompliance concerning which an exemption is sought, and
    (5) Set forth all data, views, and arguments of the petitioner
supporting the petition.

See 49 CFR 556.4(b).

    The regulations also provide that the petition must be accompanied
by three copies of the report of the defect or noncompliance that the
manufacturer has compiled for submission to NHTSA under 49 CFR part 573
Defect and Noncompliance Responsibility and

Reports, and be submitted no later than 30 days after the manufacturer
determines the existence of the defect or noncompliance or is notified
that NHTSA has determined the existence of the defect or noncompliance.
See 49 CFR 556.4(b)(6) and (c).
    The agency receives, on average, 30 petitions per year seeking
exemptions under part 556 for an inconsequential defect or
noncompliance. The agency estimates that it would take, on average,
five hours for a manufacturer to compile, organize, and submit the
information needed to support each petition.
    Estimated Annual Burden: 150 hours.
    Number of Respondents: 30.
    Comments are invited on: Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Department, including whether the information will have practical
utility; the accuracy of the Department's estimate of the burden of the
proposed information collection; ways to enhance the quality, utility
and clarity of the information to be collected; and ways to minimize
the burden of the collection of information on respondents, including
the use of automated collection techniques or other forms of
information technology.

Claude H. Harris,
Acting Associate Administrator for Enforcement.
[FR Doc. 2014-00921 Filed 1-17-14; 8:45 am]
BILLING CODE 4910-59-P