[Federal Register Volume 78, Number 247 (Tuesday, December 24, 2013)]
[Notices]
[Pages 77755-77761]
[FR Doc No: 2013-30595]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71132; File No. SR-DTC-2013-11]

Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change To Specify Procedures
Available to Issuers of Securities Deposited at DTC for Book Entry
Services When DTC Imposes or Intends To Impose Restrictions on the
Further Deposit and/or Book Entry Transfer of Those Securities

December 18, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 5, 2013, The Depository Trust Company (``DTC'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change described in Items I, II and III below, which Items have
been prepared by DTC. 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. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change modifies DTC's Rules & Procedures
(``Rules'') to specify procedures available to issuers of securities
deposited at DTC for book entry services when DTC imposes or intends to
impose restrictions on the further deposit and/or book entry transfer
of those securities, as more fully described below.

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

    In its filing with the Commission, DTC 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. DTC 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

Purpose
A. Background: DTC's Role Under Section 17A of the Securities Exchange
Act of 1934, as amended (captioned ``National System for Clearance and
Settlement of Securities Transactions'')
    DTC is the nation's central securities depository, registered as a
clearing agency under Section 17A of the Exchange Act (``Section
17A'').\3\ DTC performs services and maintains securities accounts for
its participants, primarily banks and broker dealers
(``Participants'').\4\ Among the services DTC provides to its
Participants, a Participant may present a Security (as defined in Rule
1, Section 1 of the DTC Rules) to be made eligible for DTC's depository
and book-entry services and, if the Security is accepted by DTC as
eligible for those services and is deposited with DTC for credit to the
securities account of a Participant, it becomes an ``Eligible
Security'' (as defined in Rule 1, Section 1 of the DTC Rules). (The
determination of eligibility is described more fully in Section 3.B.,
below.) Thereafter, other Participants may deposit that Eligible
Security into their respective DTC accounts. Once the Eligible Security
is credited to the account of one or more Participants, interests in
that Eligible Security may be transferred among Participants by book-
entry in accordance with the DTC Rules and Procedures.
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    \3\ See Securities Exchange Act Release No. 20221 (Sept. 23,
1983), 48 FR 45167 (Oct. 3, 1983).
    \4\ See 15 U.S.C. 78c(a)(24).
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    As provided in the DTC Rules and Procedures, DTC processes the
transfer of interests in Eligible Securities among DTC Participants by
credits and debits to Participant accounts in accordance with the
instructions of delivering and receiving Participants who are parties
to the transaction. Participants in DTC agree to be bound by the Rules
and Procedures of DTC as a condition of membership.
    To facilitate book-entry transfer and other services that DTC
provides for its Participants with respect to Deposited Securities (as
defined in Rule 1, Section 1 of the DTC Rules), Eligible Securities are
registered on the books of the issuer (typically, in a register
maintained by a transfer agent) in DTC's nominee name, Cede & Co.
Eligible Securities of an issue deposited at DTC are maintained in
``fungible bulk;'' i.e., each Participant to whose DTC account
securities of that issue have been credited has a pro rata
(proportionate) interest in DTC's entire inventory of that issue, but
none of the securities on deposit is identifiable to or ``owned'' by
any particular Participant.\5\
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    \5\ See Securities Exchange Act Release No. 19678 (Apr. 15,
1983), 48 FR 17603, 17605, n.5 (Apr. 25, 1983) (describing fungible
bulk); see also N.Y. Uniform Commercial Code, Sec.  8-503, Off. Cmt
1 (``. . . all entitlement holders have a pro rata interest in
whatever positions in that financial asset the [financial]
intermediary holds'').
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    DTC's deposit and book-entry transfer services facilitate the
operation of the nation's securities markets. By serving as registered
holder of trillions of dollars of securities, DTC processes the
enormous volume of daily securities transactions by the book-entry
movement of interests, without the need to transfer physical
certificates.
    The Commission has recognized that DTC plays a ``critical
function'' in the national system for securities clearance and
settlement.\6\ More recently, the federal Financial Stability Oversight
Council, which was established pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act, designated DTC as a Systemically
Important Financial Market Utility (as defined therein).\7\
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    \6\ See Securities Exchange Act Release No. 47978, Order
Granting Approval of a Proposed Rule Change Concerning Requests for
Withdrawal of Certificates by Issuers, 68 Fed. Reg. 35037, 35041
(Jun. 4, 2003).
    \7\ See http://www.treasury.gov/initiatives/fsoc/designations/Pages/default.aspx.
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B. Eligibility Standards for Securities are Set Forth in DTC Rules and
Procedures
    In furtherance of Section 17A's requirement that DTC's Rules be
``designed to promote the prompt and accurate clearance and settlement
of securities transactions . . . and, in general, to protect investors
and the public interest,'' DTC's Rules and Procedures provide standards
for determining eligibility.\8\
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    \8\ See DTC Rule 5, http://www.dtcc.com/legal/rules_proc/dtc_rules.pdf; see also Operational Arrangements (Jan. 2012), Section
I.A., available at http://www.dtcc.com/downloads/legal/rules_proc/eligibility/operational-arrangements.pdf.
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    DTC Rule 5 authorizes DTC to determine whether to accept a security
as an Eligible Security and when an Eligible Security will cease to be
such. DTC Rule 6 provides that DTC ``may limit certain services to
particular issues of Eligible Securities.''
    DTC's Operational Arrangements, Section I.A.2., addresses specific
standards for making a security an Eligible Security:
    Generally, the issues that may be made eligible for DTC's book-
entry delivery, settlement and depository services are those that have
been issued in a transaction that: (i) Has been registered with the
Commission pursuant to the Securities Act of 1933 (``Securities Act'');
(ii) was exempt from registration pursuant to a Securities Act
exemption that does not involve (or, at the time of the request for
eligibility no longer involves) transfer or ownership restrictions; or
(iii) permits resale of the securities pursuant to Rule 144A or
Regulation S and in all cases such securities otherwise meet DTC's
eligibility criteria.
    Thus, an essential element of DTC eligibility is that the
securities are ``freely tradeable'' or, if restricted by Rule 144A or
Reg S, are processed through a separate program in which Participants
acknowledge and agree to comply with the applicable restrictions.
    In determining whether deposited securities satisfy DTC's
eligibility requirements, Section I.B.2. of DTC's Operational
Arrangements provides that DTC may require an issuer to provide an
opinion from outside counsel in order ``to substantiate the legal basis
for eligibility.'' \9\ Additionally, DTC may require legal opinions,
inter alia, otherwise ``. . . to protect DTC and its Participants from
risk.'' \10\ That is, DTC may require the issuer's outside counsel to
provide a legal opinion in support of the eligibility determination.
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    \9\ Section I.A.1 of the Operational Arrangements further
specifies that such counsel must be ``an experienced securities
practitioner, licensed to practice law in the relevant jurisdiction
and in good standing in any bar to which such practitioner is
admitted. Such counsel must be engaged in an independent private
practice (i.e., not in-house counsel) and may not have a beneficial
ownership interest in the security for which the opinion is being
provided or be an officer, director or employee of the Issuer. ''
    \10\ Id.
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C. DTC's Compliance Monitoring Program and Imposition of Deposit Chills
and Global Locks
    DTC maintains a robust system for monitoring its compliance with
governing law including, without limitation, the AML requirements of
the BSA, and OFAC sanctions.\11\
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    \11\ See 31 U.S.C. 5318 (authorizing Secretary of the Treasury
to require financial institutions to establish AML procedures); 31
CFR 1020.210 (AML standards for certain financial institutions); 31
CFR 500.202 (prohibiting, inter alia, dealing in a security
registered in the name of a person subject to OFAC sanctions).
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    Where such monitoring raises concerns as to whether securities held
at DTC have been distributed in violation of federal law including,
without limitation, the requirements of Section 5

of the Securities Act,\12\ DTC may impose a Deposit Chill or Global
Lock.
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    \12\ See 15 U.S.C. 77e (prohibiting sales of unregistered
securities, subject to 15 U.S.C. 77(d)).
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    There are two principal scenarios under which DTC imposes these
restrictions, as described in more detail below.
(1) Deposit Chills: Large Volume Deposits
    DTC is mindful that various regulatory agencies have identified
unusually large volumes of deposits of unregistered shares of low
priced or thinly-traded securities as a ``red flag'' for possible
unlawful distribution of securities.
    For instance, in pursuing an enforcement action with respect to
illegal sales of penny stocks, the Commission has highlighted as
problematical ``sales that represented a high percentage of trading
volume or of an issuer's public float.'' \13\
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    \13\ See e.g. Order Making Finding and Imposing Remedial
Sanctions, In the Matter of Ronald S. Bloomfield, et al., SEC Rel.
No. 62750 (Aug 20, 2010), available at http://www.sec.gov/litigation/admin/2010/34-62750.pdf (enumerating red flags relating
to how penny stocks were sold, including (a) repeated delivery in
and selling to the public of privately obtained shares of penny
stocks; (b) selling within weeks of receipt; (c) selling while
promotional activity was occurring; and (d) sales that represented a
high percentage of trading volume or of an issuer's public float).
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    Similarly, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') has advised broker-dealers to be on alert for ``red flags''
of possible illegal distribution of unregistered securities. Although
DTC is not subject to FINRA oversight, DTC has nonetheless taken
account of FINRA's ``red flags'' in considering if Deposited Securities
continue to comply with DTC's eligibility requirements. As stated by
FINRA:
    Recently, FINRA has investigated and brought several enforcement
actions concerning unregistered distributions of securities. A common
theme in these cases was that firms resold large amounts of low-priced
equity securities in over-the-counter transactions.
    The following are examples of red flags of unlawful unregistered
distributions . . .;
     A customer of the broker opens a new account and delivers
physical certificates representing a large block of thinly traded or
low-priced securities;
     A customer of the broker deposits share certificates that
are recently issued or represent a large percentage of the float for
the security;
     The company was a shell company when it issued the shares;
     A customer of the broker with limited or no other assets
under management at the firm receives an electronic transfer or journal
transactions of large amounts of low-priced, unlisted securities;
     The issuer has been through several recent name changes,
business combinations or recapitalizations, or the company's officers
are also officers of numerous similar companies;
     The issuer's SEC filings are not current, are incomplete,
or nonexistent.\14\
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    \14\ See Financial Industry Regulatory Authority, Inc.,
Regulatory Notice 09-05, available at http://www.finra.org/web/groups/industry/@ip/<EMAIL_ADDRESS>(footnotes omitted); see also Review of Disciplinary Action Taken by
FINRA, In the Matter of the Application of World Trade Financial
Corp., et al., Securities Exchange Act Release No. 66114, Jan. 6,
2012, available at http://sec.gov/litigation/opinions/2012/34-66114.pdf (sustaining FINRA violations and sanctions, where
customers deposited large blocks of recently issued, little known
stock into firm accounts and directed registered representative to
sell shortly thereafter, and registered representative failed to
inquire whether proposed sales qualified for exemption from
registration and were part of an unlawful distribution.); Order
Accepting Settlement, Dept. of Enforcement v. NevWest Securities
Corp et al., NASD Case No. E0220040112-01 (Mar. 13, 2007), available
at http://wwv.sec.gov/about/offices/ocie/am12007/nasdnev-nevwest.pdf
(finding that NevWest failed to adequately implement anti-money
laundering procedures by failing adequately to perform due
diligence, file Suspicious Activity Reports, or cease trading in
multiple accounts owned and controlled by customer, regarding over
500 transactions involving more than 250 billion shares of sub-penny
stock.)
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    The federal Financial Crimes Enforcement Network (``FinCen''),
which is responsible for enforcing the AML provisions of the BSA, has
similarly recognized that ``substantial deposit, transfer or journal of
very low-priced and thinly traded securities'' implicates anti-money
laundering monitoring concerns.\15\
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    \15\ Financial Crimes Enforcement Network, The SAR Activity
Review: Trends Tips & Issues, Issue 15, pp. 23-25 (BSA Advisory
Group, May 2009), available at http://fincen.gov/news_room/rp/files/sar_tti_15.pdf, citing Financial Industry Regulatory
Authority, Inc., Regulatory Notice 09-05, available at http://www.finra.org/Industry/Regulation/Notices/2009/P117713; see also
Financial Crimes Enforcement Network, The Role of Domestic Shell
Companies in Financial Crime and Money Laundering (2006), available
at http://www.fincen.gov/LLCAssessment_FINAL.pdf (``These `pump and
dump' schemes often involve shell companies with low market
capitalization whose stock trades at pennies per share on the `pink
sheets' (www.pinksheets.com), OTC Bulletin Board, or other over-the-
counter trading and information systems. One indicator of this
scheme is concentrated trading in normally thinly traded stocks.'').
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    When DTC detects large volume deposits of a low-priced or thinly-
traded security, and its monitoring otherwise suggests that an issue
may not be freely-tradeable, it imposes a Deposit Chill on that issue.
The Deposit Chill blocks the deposit of further securities of the
issue, although other services, including book-entry transfer
movements, continue to be provided with respect to the Eligible
Securities deposited at DTC before the Deposit Chill.
    Section 2 of proposed Rule 22(A) addresses the procedures by which
DTC gives affected issuers notice of a Deposit Chill and the procedures
they may follow to object to the restriction, under the standards
discussed in Section D(1), below.
    Section 2 also provides that if an issuer fails to respond to a
notice of a Deposit Chill as required, or if DTC determines that the
response is insufficient to establish that Deposited Securities satisfy
DTC's eligibility requirements, a Global Lock will be instituted. Under
such circumstances, an issuer would be given notice of the impending
Global Lock and an opportunity to demonstrate that a response to the
Deposit Chill notice had, in fact, been submitted or that in reviewing
the response, DTC had made a clerical mistake or oversight.
(2) Global Locks: Enforcement Proceedings
    When DTC becomes aware of a law-enforcement or regulatory
proceeding alleging violations of federal law or regulations (an
``Enforcement Proceeding''), particularly those alleging any violation
of Section 5 of the Securities Act, relating to securities of an issue
on deposit at DTC, DTC imposes a Global Lock on that issue. A Global
Lock prevents additional deposits and restricts all book-entry and
related depository services with respect to the issue.\16\
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    \16\ Globally Locked Eligible Securities continue to be Eligible
Securities unless and until DTC makes a determination under its
Rules to terminate eligibility, as to which DTC Rule 22, Right to
Contest Decisions, would apply; alternatively, those securities may
be held in custody only at DTC, as provided in the DTC Rules and
Procedures applicable to custody only, i.e., not for book-entry
transfer and asset services applicable to Eligible Securities. See
generally http://www.dtcc.com/products/asset/services/custody.php#overview.
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    Sections 2, 3 and 4 of proposed Rule 22(B) address the procedures
by which DTC gives affected issuers notice of the Global Lock and the
procedures they may follow to object to the restriction, under the
standards discussed in Section D(2), below.
D. Grounds for Releasing Deposit Chills and Global Locks
    The fair procedures set forth in proposed Rules 22(A) and (B) are
designed to enable issuers to object to a Deposit Chill or Global Lock
prior to imposition of the restriction by DTC or

to cause DTC to release Deposit Chills and Global Locks imposed without
such prior notice or at any time during the continuance of any such
restriction, pursuant to the standards set forth below.
(1) Release of Deposit Chills
    In order to challenge a Deposit Chill, proposed Rule 22(A) provides
the affected issuer with the opportunity to establish that the issue
meets DTC's eligibility requirements, including by submitting an
opinion from independent legal counsel establishing that the securities
deposited at DTC are freely tradeable. DTC's reliance on legal opinions
for this purpose is authorized by DTC's Operational Arrangements, which
expressly authorize DTC to require opinions ``to substantiate the legal
basis for eligibility,'' or otherwise ``. . . to protect DTC and its
Participants from risk.'' \17\ If the issuer successfully demonstrates
that the deposited securities continue to satisfy DTC's eligibility
requirements, DTC would not impose the Deposit Chill or, if already in
effect, would release it.
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    \17\ See, supra, n.11; see also DTC Rule 5 (providing that DTC
``shall accept a Security as an Eligible Security only . . . upon
such inquiry, or based upon such criteria, as the Corporation may,
in its sole discretion, determine from time to time.'').
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(2) Release of Global Locks
    In order to challenge a Global Lock, proposed Rule 22(B)(2)(b)
provides the affected issuer with the opportunity to establish that (i)
DTC has made a mistake in associating the issuer's Eligible Securities
with the specified Enforcement Proceeding or (ii) that the Enforcement
Proceeding has been has been withdrawn or dismissed on the merits with
prejudice or otherwise resolved in a final, non-appealable judgment in
favor of the defendants allegedly responsible for the alleged
violations of Section 5 of the Securities Act relating to the Eligible
Securities. If the issuer successfully demonstrates either factor, DTC
would not impose the Global Lock or, if already in effect, DTC would
release it.
    Otherwise, proposed Rule 22(B)(3) provides that DTC will release a
Global Lock within either one year or six months, as the case may
be,\18\ after the final disposition of the Enforcement Proceeding with
respect to those defendants alleged to have been responsible for the
illegal distribution of the Eligible Securities that were subject to
the Global Lock. Similarly, pursuant to proposed Rule 22(B)(4), where a
Global Lock has been imposed because an issuer has failed to satisfy
DTC's concerns that led to a Deposit Chill,\19\ the one year/six month
waiting period also applies, but runs from the date of the imposition
of the Global Lock.
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    \18\ Six months applies to issuers that are required to file,
and have filed, all reports pursuant to Sections 13(a) or 15(d) of
the Exchange Act, and one year applies to issuers that are not
publicly reporting.
    \19\ See proposed Rule 22(A)(2)(c); see also Section 3.F.1.
infra.
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    The proposed standard to release a Global Lock after the passage of
six months or one year (from the appropriate starting date) was
developed by analogy to the safe harbor provision of the Securities
Act, Rule 144, which, under certain circumstances, permits the
unregistered resale of restricted securities (as defined under
paragraph (a)(3) of the Rule) after expiration of the relevant holding
period. However, again by reference to Rule 144, this approach is not
applicable to an issuer that is, or was, a shell company as defined in
Rule 144(i)(1), unless the issuer has filed the specified disclosure
required by Rule 144(i)(2).
E. Legal Principles Underlying Fair Procedures Challenging Deposit
Chills and Global Locks
(1) Section 17A(b)(3) and (5)
    Under Section 17A, where a registered clearing agency denies or
limits access to the agency's services to a ``person,'' it must employ
``fair procedures.'' \20\ Such procedures require the clearing agency
to give the person notice and an opportunity to address the specific
grounds for denial or prohibition or limitation and to keep a
record.\21\
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    \20\ See Exchange Act, Section 17A(b)(3)(H); 15 U.S.C. 78q-
1(b)(3)(H).
    \21\ See Exchange Act, Section 17A(b)(5)(B); 15 U.S.C. 78q-
1(b)(5)(B).
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    In its decision in IPWG, the Commission ruled, inter alia, that
issuers are ``persons'' for the purposes of Section 17(a)(b)(3).
(i) Fair Procedures in Advance of the Imposition of a Deposit Chill or
Global Lock
    Section 17A does not specify the nature of the fair procedures DTC
must provide to ``persons,'' including issuers. In IPWG, the Commission
observed that:

    ``Exchange Act Section 17A(b)(5)(B) states that, when a
registered clearing agency determines that ``a person shall be . . .
prohibited or limited with respect to access to services offered by
the clearing agency, the clearing agency shall notify such person
of, and give him an opportunity to be heard upon, the specific
grounds for . . . prohibition or limitation under consideration and
keep a record.'' \22\

    \22\ IPWG at http://www.sec.gov/litigation/opinions/2012/34-66611.pdf.
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    The Commission further ruled in IPWG that DTC ``should adopt
procedures that accord with the fairness requirements of Section
17A(b)(3)(H), which may be applied uniformly'' in the cases where DTC
denies or limits services with respect to an issuer's securities.
Consistent with the Commission's broad directive, and as set forth
below in Sections 3F(1) and (2), proposed Rules 22(A) and 22(B)
encompass uniform fair procedures for issuers whose securities may be
or are subject to a Deposit Chill or Global Lock. These procedures
include:
     Advance notice (except as provided in the following
section) that a Deposit Chill or Global Lock will be imposed;
     An explanation of the specific grounds upon which the
restrictions are being or have been imposed;
     The actions that the issuer must take in order to prevent
or remove the restriction;
     The process DTC will undertake to review written
submissions of the issuer and to render a final decision concerning the
restriction; and
     Maintaining a complete record for submission to the
Commission in the event an issuer appeals.
(ii) Fair Procedures Where a Deposit Chill or Global Lock Is Imposed
Without Advance Notice
    In IPWG, the Commission opined that, when faced with justifiable
circumstances, DTC may design fair procedures ``in accordance with its
own internal needs and circumstances,'' \23\ recognizing that:
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    \23\ Id. at 12, fn. 36.
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    If DTC believes that circumstances exist that justify imposing a
suspension of services with respect to an issuer's securities in
advance of being able to provide the issuer with notice and an
opportunity to be heard on the suspension, it may do so. However, in
such circumstances, these processes should balance the identifiable
need for emergency action with the issuer's right to fair procedures
under the Exchange Act. Under such procedures, DTC would be authorized
to act to avert an imminent harm, but it could not maintain such a
suspension indefinitely without providing expedited fair process to the
affected issuer.\24\
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    \24\ Id. at 12-13 (footnote omitted); see also ATIG at 3, fn. 5
(affirming that DTC may, consistent with IPWG, impose a Deposit
Chill or Global Lock without advance notice in order to avert an
imminent harm).
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    For example, where DTC's monitoring suggests that marketplace
actors are

continuing to cause the deposit of Eligible Securities that are not
freely-tradeable, DTC would need to act quickly to stop further
improper deposits, and thus may impose a restriction without prior
notice. Otherwise, if DTC were to provide prior notice, marketplace
actors would have additional time to make such deposits and accelerate
the deposit volume during the notice period. In these cases, the risk
of harm to the national clearance and settlement system stemming from
comingling or further comingling of non-freely tradeable securities
with DTC's fungible bulk for that issue outweighs any potential impact
on the issuer as a result of not giving it advance notice of the
restriction.
    As described below in Sections 3.F(1) and (2), where a restriction
is imposed before notice in order to forestall, among other things,
imminent harm, injury or other such consequence, DTC will provide
notice to the affected issuer within three business days from the
imposition of the restriction. After DTC has provided such notice, the
affected issuer is afforded the same fair procedures as issuers that
received advance of a restriction.
F. Fair Procedures: Summary of Proposed Rule Changes
    DTC proposes to: (i) Adopt a new Rule 22(A) that provides specific
fair procedures for issuers in connection with imposition and release
of Deposit Chills; and (ii) adopt a new Rule 22(B) that provides
specific fair procedures for issuers in connection with imposition and
release of Global Locks. DTC additionally proposes to amend Rule 1,
Section 1 in the definition of ``Procedures'' to include, expressly,
the Operational Arrangements.\25\
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    \25\ DTC's existing Rule 22 is primarily focused on procedures
applicable to DTC's Participants that are facing disciplinary
actions as a result of violating DTC's Rules. Rule 22, however, also
sets forth the fair procedures available to issuers where DTC
determines that an issuer's Eligible Securities should no longer be
deemed to be such or, as provided by Rule 5, where DTC determines
not to approve a security as an Eligible Security. Rule 22 does not
address the fair procedures applicable to issuers stemming from
Deposit Chills or Global Locks. DTC has determined to set forth such
procedures in the two proposed rules.
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    The substantive elements of the proposed rules are as follows:
(1) Proposed Rule 22(A)
    Section 1 provides that Rule 22(A) sets forth the fair procedures
available to issuers where DTC intends to impose or has imposed a
Deposit Chill as a result of DTC having detected large volume deposits
with respect to the issuer's Eligible Securities.
    Section 2 provides that issuers will be given twenty business days'
advance notice that DTC intends to impose a Deposit Chill or, if DTC
reasonably determines that it is faced with, among other things,
imminent harm, injury or other such consequence, to DTC or its
Participants, or where the Corporation otherwise reasonably determines
that such action is necessary to protect the prompt and accurate
clearance and settlement of securities transactions through the
Corporation, whether or not such circumstances are otherwise specified
by Rule 22(A), notice will be given within three business days after
the Deposit Chill has been imposed. In addition to setting forth the
contents of the notice, Section 2(a) sets forth the issuer's right to
contest the action by submitting a response to the notice and the time
frame for doing so.
    Section 2(b) requires, consistent with DTC's Operational
Arrangements, that the issuer support the response with a legal
opinion, prepared by independent counsel, confirming that the issuer's
securities deposited at DTC satisfy DTC's eligibility requirements. As
guidance for the issuer and its counsel, DTC will provide a template
legal opinion. DTC will accept, from counsel to the issuer reasonably
acceptable to DTC,\26\ an opinion that includes the material opinions
and other matters set forth in the template.
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    \26\ In determining whether counsel is acceptable for this
purpose DTC refers to the relevant provisions set forth in the
Operational Arrangements. See, supra, n.12.
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    Section 2(b)(i) provides that, in response to the Deposit Chill
Response, DTC may present the issuer with a request for additional
information (the ``Additional Request''), to which the issuer shall
submit a response to the Corporation (the ``Additional Response'') in a
time frame set by the Corporation, which shall not be less than 10
business days from the date of the Additional Request.
    Section 2(c) establishes the time frame in which DTC will provide
the issuer with a written decision in connection with the issuer's
timely response to notice of the Deposit Chill. Specifically, DTC will
provide each issuer that submits a Deposit Chill Response or Additional
Response with a written decision within twenty business days after DTC
receives the Deposit Chill Response or the Additional Response or, in
the case of a Deposit Chill imposed before issuance of the Deposit
Chill Notice, within ten business days after receipt by DTC of the
Deposit Chill Response or Additional Response.
    Section 2(c) also provides that if the issuer does not submit a
response to the notice or does not do so in a timely matter, or if DTC
reasonably determines that the response does not establish that the
issuer's securities on deposit at DTC satisfy DTC's eligibility
requirements, DTC will impose a Global Lock on the issue. An officer of
DTC who did not play any role in the determination regarding the
Deposit Chill notice will review the issuer's response and decide
whether the response has satisfied DTC's eligibility standards. Once
the officer has made a decision: (i) If the decision is in favor of the
issuer, DTC will not impose or will release the Global Lock, as the
case may be; or (ii) if the decision is that the issuer's response is
not satisfactory, DTC will nevertheless not impose the Global Lock
until DTC has given the issuer notice of the adverse decision and the
opportunity to demonstrate that DTC's determination was the result of
DTC's clerical mistake or a mistake arising from an oversight or
omission in reviewing the issuer's response. This added process will
not constitute a substantive review. It will be limited to DTC making a
determination whether, as the issuer has asserted, there was a clerical
mistake or mistake arising from an oversight or omission. Absent such a
showing, the Global Lock will be imposed.
    Section 2(d) specifies the contents of the ``record'' in the event
that the issuer appeals to the Commission from an adverse decision.
    Section 3(a) provides that the issuer's right to respond to the
notice is dependent on compliance with the time periods specified for
making submissions.
    Section 3(b)(i) reserves to DTC the right: (x) To lift a Deposit
Chill, or (y) to impose a Deposit Chill after it has provided a Deposit
Chill Notice but before it has received or resolved a Deposit Chill
Response (including after any Additional Request when an Additional
Response is pending) without waiting for the applicable notice periods
to run, in either case, in order to prevent imminent harm, injury or
other such consequences to DTC or its Participants or where DTC
reasonably determines that such action is necessary to protect the
prompt and accurate clearance and settlement of securities transactions
through it, irrespective of whether Rule 22(A) provides specific
grounds for doing so. Section 3(b)(ii) specifically provides that Rule
22(A) does not apply to processing interruptions based upon ordinary
course operational requirements such as those in

connection with corporate actions and reorganization events that may
occur at the request of the issuer or its representatives, or other
such processing interruptions specifically set forth in the Procedures.
    Section 3(b)(iii) recognizes that Rule 22(A) shall not displace any
legal or regulatory requirements that DTC is subject to under
applicable law, rule or regulation. This could conceivably include
imposing a Deposit Chill where required by applicable law, rule or
regulation and for reasons that may not include large volume deposits
of low value or thinly traded securities. If, however, DTC imposed a
Deposit Chill under such circumstances, DTC would afford the affected
issuer the fair procedures set forth in proposed Rule 22(A) (except if
prohibited by law, rule or regulation). Section 3(b)(iv) emphasizes
that while DTC may freely communicate with the issuer or its
representative, substantive communications must be in writing in order
to provide the Commission with a complete record in the event of an
appeal.
    Section 3(c) provides that in the event that the Corporation shall
impose a Deposit Chill pursuant to Section 3(b)(i) of Rule 22(A), the
procedures contained in Section 2(c) of Rule 22(A) shall apply,
including that the Corporation shall provide the Deposit Chill Response
within ten (10) business days after the Corporation receives the
Deposit Chill Response or the Additional Response.
    Section 3(d) sets forth the means by which DTC shall send notice to
the issuer.
(2) Proposed Rule 22(B)
    Section 1 provides that Rule 22(B) sets forth the fair procedures
available to issuers where DTC imposes a Global Lock with respect to an
issuer's Eligible Securities, in two situations. Section 1(a) refers to
a Global Lock based upon an Enforcement Proceeding with respect to an
issue of securities that DTC determines were deposited at DTC. Section
1(b) refers to a Global Lock where an issuer has failed to satisfy the
requirements to object to the imposition of, or for lifting, a Deposit
Chill pursuant to Rule 22(A).
    Section 2(a) provides that issuers will be given twenty business
days' advance notice that DTC intends to impose a Global Lock or if DTC
reasonably determines that it is faced with, among other things,
imminent harm, injury or other such consequence to itself or its
Participants, or where the Corporation otherwise reasonably determines
that such action is necessary to protect the prompt and accurate
clearance and settlement of securities transactions through the
Corporation, whether or not such circumstances are otherwise specified
by Rule 22(B), notice will be given within three business days after
the Global Lock has been imposed. In addition to setting forth the
contents of the notice, Section 2(a) sets forth the issuer's right to
contest the action by submitting a response to the notice and the time
frame for doing so.
    Pursuant to Section 2(b)(i), if the issuer is able to demonstrate
that an error had been made in identifying its securities as the
subject of the underlying Enforcement Proceeding, the Global Lock would
not be imposed or, had it already been imposed (whether by virtue of
being imposed without notice or at any time after the imposition of a
Global Lock), it would be released. Pursuant to Section 2(b)(ii), if,
at any time, the Enforcement Proceeding has been withdrawn or dismissed
on the merits with prejudice or otherwise resolved in a final, non-
appealable judgment in favor of the Defendants allegedly responsible
for the violations of Section 5 of the Securities Act relating to the
Eligible Securities, the Global Lock would not be imposed or, had if it
had already been imposed, it would be released. In reviewing the
issuer's response, DTC will not provide a forum for litigating or re-
litigating the allegations or findings in the Enforcement Proceeding,
provided, however, that the issuer's response may include a
demonstration that the allegations or findings in the Enforcement
Proceeding have been rejected by a court or that the issuer can
otherwise satisfy the criteria set forth in Section 3 of proposed Rule
22(B).
    Section 2(c) sets forth the time frame in which DTC will provide
the issuer with a written decision responsive to the Global Lock
Response. Specifically, DTC will provide each issuer that submits a
Global Lock Response with a written decision within twenty business
days after DTC receives Global Lock Response or, in the case of a
Global Lock imposed before issuance of the Global Lock Notice, within
ten business days of its imposition.
    Section 2(d) specifies the contents of the ``record'' in the event
that the issuer appeals to the Commission from a determination by DTC.
    Section 3 provides for the release of Global Locks. In the case of
Global Locks imposed pursuant to Section 1(a), the restriction will be
lifted either six months or one year, as the case may be, after the
Enforcement Proceeding has been withdrawn or dismissed on the merits
with prejudice or otherwise resolved in a final, non-appealable
judgment in favor of the Defendants allegedly responsible for the
violations of Section 5 of the Securities Act relating to the Eligible
Securities. The six-month period applies to affected issuers that file
periodic reports pursuant to Section 13(a) and 15(d) of the Exchange
Act) and the one-year period applies to issuers that are not public
reporting companies. In support of the foregoing: (i) The Issuer may be
required to submit a legal opinion, in form and substance satisfactory
to the Corporation, from independent securities counsel to the issuer,
reasonably acceptable to the Corporation, and/or (ii) such other
evidence or other documentation as the Corporation may reasonably
require. Companies defined in Securities Act Rule 144(i)(1) are not
entitled to take advantage of this procedure and the Global Lock will
remain in effect for any shell company issuer, unless it complies, or
has complied, with the requirements of Securities Act Rule 144(i)(2).
    Section 4 is similar to Section 3, except that the one-year and
six-month time frames are measured from the date of the imposition of
the Global Lock pursuant to Section 1(b).
    Section 5(a) provides that the issuer's right to respond to the
notice is dependent on compliance with the time periods for making
submissions.
    Section 5(b)(i) reserves to DTC the right: (x) To lift a Global
Lock, or (y) to impose a Global Lock after DTC has provided a Global
Lock Notice but before it has received or resolved a Global Lock
Response without waiting for the applicable notice periods to run, in
either case, in order to prevent imminent harm, injury or other such
consequences to DTC or its Participants or where DTC reasonably
determines that such action is necessary to protect the prompt and
accurate clearance and settlement of securities transactions through
it, irrespective of whether Rule 22(B) provides specific grounds for
doing so. Section 5(b)(ii) specifically provides that Rule 22(B) does
not apply to processing interruptions based upon ordinary course
operational requirements such as those in connection with corporate
actions and reorganization events that may occur at the request of the
issuer or its representatives, or other such processing interruptions
set forth in the Procedures.
    Section 5(b)(iii) recognizes that Rule 22(B) shall not displace any
legal or regulatory requirements that DTC is subject to under
applicable law, rule or regulation. This could conceivably

include imposing a Global Lock where required by applicable law, rule
or regulation and for reasons that may not include an Enforcement
Proceeding. If, however, DTC imposed a Global Lock under such
circumstances, DTC would afford the affected issuer the fair procedures
set forth in proposed Rule 22(B) (except if prohibited by law, rule or
regulation). Section 5(b)(iv) provides that while DTC may freely
communicate with the issuer or its representative, substantive
communications must be in writing in order to provide the Commission
with a complete record in the event of an appeal.
    Section 5(c) sets forth the means by which DTC shall send notice to
the issuer.
Statutory Basis
    The proposed Rules 22(A) and (B) establish a procedure which
provides for: (a) criteria for notice to an issuer that a Deposit Chill
or Global Lock will be imposed, (b) an explanation of the specific
grounds upon which the restrictions are being or have been imposed, (c)
the actions that the issuer must take in order to prevent or remove the
restriction, (d) the process DTC will undertake to review written
submissions of the issuer and to render a final decision concerning the
restriction, and (e) maintenance of a complete record for submission to
the Commission in the event an issuer appeals. As such the proposed
rule change is in accordance with Section 17A(b)(5)(B) of the Act \27\
and encompasses a uniform procedure for issuers whose securities may be
or are subject to a Deposit Chill or Global Lock. Therefore, the
proposed rule change is consistent with the requirements of the Section
17A(b)(3)(H) of the Act,\28\ which requires that the rules of a
registered clearing agency are in accordance with the provisions of
Section 17A(b)(5)(B) of the Act, and in general provide a fair
procedure with respect to the prohibition or limitation by the clearing
agency of any person with respect to access to services offered by the
clearing agency.
---------------------------------------------------------------------------

    \27\ See 15 U.S.C. 78q-1(b)(5)(B) which provides: ``In any
proceeding by a registered clearing agency to determine whether a
person shall be denied participation or prohibited or limited with
respect to access to services offered by the clearing agency, the
clearing agency shall notify such person of, and give him an
opportunity to be heard upon, the specific grounds for denial or
prohibition or limitation under consideration and keep a record. A
determination by the clearing agency to deny participation or
prohibit or limit a person with respect to access to services
offered by the clearing agency shall be supported by a statement
setting forth the specific grounds on which the denial or
prohibition or limitation is based.
    \28\ 15 U.S.C. 78q-1(b)(3)(H).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC does not believe that the proposed rule changes will have any
impact on, or impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Exchange Act, because
the proposed procedures as described above will apply to all issues
that may subject to Deposit Chill or Global Lock.

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

    Written comments relating to the proposed rule change have not yet
been solicited or received with respect to this filing. To the extent
DTC receives written comments on the proposed Rule change DTC will
forward such comments to the Commission.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-DTC-2013-11 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-DTC-2013-11. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filings also will be available
for inspection and copying at the principal office of DTC and on DTC's
Web site at http://dtcc.com/en/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-DTC-2013-11 and should be
submitted on or before January 14, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
Kevin M. O'Neill,
Deputy Secretary.
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    \29\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-30595 Filed 12-23-13; 8:45 am]
BILLING CODE 8011-01-P


where necessary, to ensure emission levels''; and ``(h) Compliance/
enforcement strategies, including how compliance will be determined
in practice.''
    \22\ Utah Division of Air Quality Approval Orders: Huntington
Unit 2--AN0238012-05, Huntington Unit 1--AN0102380019-09; and Hunter
Units 1 and 2--AN0102370012-08.
    \23\ See response to EPA comments in the State's September 9,
2008 regional haze SIP submittal.
---------------------------------------------------------------------------

    During the State's development of its regional haze SIP, we
consistently informed in comment letters and in conversations that
foregoing a BART analysis is not acceptable and that the SIP must
contain the necessary elements to ensure emission limits, including
BART emission limits, are practicably enforceable. EPA sent letters to
the State in 2008 and 2011 outlining our concerns with the State's
proposed SIP as discussed above.\24\
---------------------------------------------------------------------------

    \24\ See August 4, 2008 letter from Callie A. Videtich, EPA
Region 8, to Cheryl Heying, Utah Air Quality Division and February
4, 2011 letter from Deborah Lebow-Aal, EPA Region 8, to Cheryl
Heying, Utah Air Quality Division in the Supporting and Related
Materials section of this docket.
---------------------------------------------------------------------------

    Therefore, we are proposing to find that the State did not properly
follow the requirements of 40 CFR 51.308(e)(1)(ii)(A) and section
169A(g)(2) of the CAA in determining PM and NOX BART for
PacifiCorp Hunter Unit 1 and Unit 2 and PacifiCorp Huntington Unit 1
and Unit 2. Specifically, neither the State nor PacifiCorp, conducted a
BART analyses for each of the units that took into account the five
BART factors. We are also proposing to partially disapprove the State's
SIP because it does not contain the elements necessary to make the BART
limits practically enforceable as required by section 110(a)(2) of the
CAA and Appendix V to part 51. For these reasons, we are proposing to
disapprove the State's determination that BART for NOX for
PacifiCorp Hunter Unit 1 and Unit 2 and PacifiCorp Huntington Unit 1
and Unit 2 is a NOX emission limit of 0.26 lb/MMBtu (30-day
rolling average) (assumed to be achieved by LNBs plus SOFA). We are
also proposing to disapprove the State's determination that BART for PM
for PacifiCorp Hunter Unit 1 and Unit 2 and PacifiCorp Huntington Unit
1 and Unit 2 is an emission limit of 0.05 lb/MMBtu (30-day rolling
average) (assumed to be achieved by fabric filter baghouses).

G. Mobile Sources

    Pursuant to 40 CFR 51.309(d)(5)(i), the State, in collaboration
with the WRAP, assembled a comprehensive statewide inventory of mobile
source emissions. The inventory included on-road and non-road mobile
source emissions inventories for western states for the 2003 base year
and emission projections for the year 2018.\25\ The inventory shows a
continuous decline in emissions from mobile sources from VOC,
NOX, PM2.5, EC, and OC emissions over the period
of 2003-2018. Between 2003 and 2018, the inventory shows that there
will be a 54 percent decrease in NOX emissions, a 39 percent
decrease in OC, a 24 percent decrease in EC, a 38 percent decrease of
PM2.5, and a 56 percent decrease of VOC. Per 40 CFR
51.309(d)(5)(i)(A), the inventory shows a decline in the required
mobile source emissions categories, and therefore, no further action is
required by the State to address mobile source emissions (see section
F.2.a of the SIP).
---------------------------------------------------------------------------

    \25\ Detailed information on the emission inventory is contained
in the ENVIRON Report WRAP Mobile Source Emission Inventories
Update, May 2006. This report is included in the Supporting and
Related Materials section of the docket.
---------------------------------------------------------------------------

    Pursuant to 40 CFR 51.309(d)(5)(i)(B), emission inventory
projections show that there will be a 99 percent decrease in
SO2 emissions from non-road mobile sources for 2003-2018.
The reduction will result from the implementation of EPA's rule titled
Control of Emissions of Air Pollution from Non-road Diesel Engines and
Fuel (see 69 FR 38958). A 99 percent reduction in SO2 from
non-road mobile sources is consistent with the goal of reasonable
progress and that no other long-term strategies are necessary to
address SO2 emissions from non-road mobile sources.
    We are proposing to determine the State's SIP meets the
requirements of 40 CFR 51.309(d)(5).

H. Programs Related to Fire

    EPA has proposed approval of the requirements related to fire under
40 CFR 51.309(d)(6) in a separate action (76 FR 69217).

I. Paved and Unpaved Road Dust

    WRAP performed an assessment of the impact of dust emissions from
paved and unpaved roads on the 16 Class I areas of the Colorado
Plateau. The WRAP modeled and calculated the significance of road dust
in terms of the impact on visibility on the worst 20 percent days. The
modeled regional impact of road dust emissions ranged from 0.31
deciviews at the Black Canyon of the Gunnison National Park

to 0.08 deciviews at the Weminuche Wilderness Area. (For more
information on the WRAP modeling and assessment of road dust impacts,
see Chapter 7 of the WRAP TSD). Based on the WRAP modeling, the State
has concluded that road dust is not a significant contributor to
visibility impairment in the 16 Class I areas. Since the State has
found that road dust is not a significant contributor to visibility
impairment, the State did not include road dust control strategies in
the SIP pursuant to 40 CFR 51.309(d)(7) (see section H.2.b of the SIP).
    The State will track road dust emissions with the assistance of the
WRAP and provide an update on paved and unpaved road dust emission
trends, including any modeling or monitoring information regarding the
impact of these emissions on visibility in the 16 Colorado Plateau
Class I Areas. These updates will include a reevaluation of whether
road dust is a significant contributor to visibility impairment. These
updates shall be part of the periodic implementation plan revisions
pursuant to 40 CFR 51.309(d)(10) (see section H.2.a of the SIP).
    We propose to determine the State's SIP meets the requirements of
40 CFR 51.309(d)(7).

J. Pollution Prevention

    Under 40 CFR 51.309(d)(8), states must provide information on
renewable energy and other pollution prevention efforts in the state.
40 CFR 51.309(d)(8) does not require states to adopt any new measures
or regulations. Thus, we find the information Utah provided adequate to
meet the requirements of 40 CFR 51.309(d)(8) as discussed below (see
section I of the SIP).
1. Description of Existing Pollution Prevention Programs
    Pursuant to 40 CFR 51.309(d)(8)(i), section I of the State's TSD
summarizes all pollution prevention and renewable energy programs
currently in place in Utah. The State's SIP provides an estimate of
renewable energy generating capacity in megawatts for each of the
renewable energy categories (see Table 12 of the SIP). Total installed
generation capacity within Utah in 2002 was 5,485 MW. Renewable energy
generation capacity represented 0.77 percent of the total installed
capacity.
2. Incentive Programs
    Per 40 CFR 51.309(d)(8)(ii), the State has provided incentives for
early compliance by participating in the 309 regional SO2
backstop trading program. The backstop trading program allows for early
reduction credits. Sources of SO2 subject to the trading
program that reduce emissions prior to the program trigger date shall
receive additional emission allowances. The source may use such
allowances for compliance purposes or may sell them to other parties.
3. Programs To Preserve and Expand Energy Conservation Efforts
    Per 40 CFR 51.309(d)(8)(iii), the State provided a table that
discusses the programs within the State that preserve and expand energy
conservation efforts (see Table 17 in the SIP). Such programs include
the Residential Energy Efficiency Program and Salt Lake City Climate
Action Plan Program.
4. Potential for Renewable Energy
    Pursuant to 40 CFR 51.309(d)(8)(iv), the renewable energy resource
potential in Utah and its geographic distribution across the State have
been characterized succinctly in the Renewable Energy Atlas of the
West.\26\ The Renewable Energy Atlas of the West was assembled using
best available renewable energy resource maps and data. The State used
the Renewable Energy Atlas of the West to determine the potential for
renewable energy across the State. The State has summarized the
potential for renewable energy development in section I.10.B of the
SIP.
---------------------------------------------------------------------------

    \26\ Land and Water Fund of the Rockies, Northwest Sustainable
Energy for Economic Development, and Green Info Network with support
from the Hewlett Foundation and the Energy Foundation. Renewable
Energy Atlas of the West: A Guide to the Region's Resource
Potential. Available in section I of the State's TSD.
---------------------------------------------------------------------------

5. Projections of Renewable Energy Goals, Energy Efficiency, and
Pollution Prevention Activities
    Pursuant to 40 CFR 51.309(d)(8)(v), the State has used projections
made by the WRAP of the short and long-term emissions reductions,
visibility improvements, cost savings, and secondary benefits
associated with renewable energy goals, energy efficiency, and
pollution prevention activities.\27\ The document referenced in the
prior sentence provides overall projections of visibility improvements
for the 16 Class I areas. These projections include the combined
effects of all measures in this SIP, including air pollution prevention
programs. Although emission reductions and visibility improvements from
air-pollution prevention programs are expected at some level, they were
not explicitly calculated because the resolution of the regional air
quality modeling system is not currently sufficient to show any
significant visibility changes resulting from the marginal
NOX emission reductions expected from air pollution
prevention programs.
---------------------------------------------------------------------------

    \27\ A complete description of these projections can be found in
section I of the Utah TSD in a document titled Economic Assessment
of Implementing the 10/20 Goals and Energy Efficiency
Recommendations.
---------------------------------------------------------------------------

6. Programs To Achieve the GCVTC Renewable Energy Goal
    Pursuant to 40 CFR 51.309(d)(8)(vi), the State will rely on current
renewable energy programs as described in section I.10.a of the SIP to
demonstrate progress in achieving the renewable energy goal of the
GCVTC. The GCVTC's goal is that that renewable energy will comprise 10
percent of the regional power needs by 2005 and 20 percent by 2015. The
State will submit progress reports in 2013 and 2018, describing the
State's contribution toward meeting the GCVTC renewable energy goals.
To the extent that it is not feasible for the State to meet its
contribution to these goals, the State will identify what measures were
implemented to achieve its contribution, and explain why meeting its
contribution was not feasible.

K. Additional Recommendations

    As part of the 1996 GCVTC report to EPA, the Commission included
additional recommendations that EPA did not adopt as part of 40 CFR
51.309. Pursuant to 40 CFR 51.309(d)(9), the State has evaluated the
additional recommendations of the GCVTC to determine if any of these
recommendations could be practicably included in the SIP.\28\ Based on
this evaluation, the State determined no additional measures were
practicable or necessary to demonstrate reasonable progress (see
section J of the SIP).
---------------------------------------------------------------------------

    \28\ The State's complete evaluation is included in the State's
Report to the Environmental Protection Agency and the Public to
Satisfy the Requirements of 40 CFR 51.309(d)(9) in section J of the
State's TSD.
---------------------------------------------------------------------------

    We are proposing to determine that the State's SIP meets the
requirements of 40 CFR 51.309(d)(9).

L. Periodic Implementation Plan Revisions

    Pursuant to 40 CFR 51.309(d)(10)(i), section L of the SIP requires
the State to submit to EPA, as a SIP revision, periodic progress
reports for the years 2013 and 2018. The State will assess whether
current programs are achieving reasonable progress in Class I areas
within Utah, and Class I areas outside Utah that are affected by
emissions from Utah. The State will address the elements listed under
40 CFR 51.309(d)(10)(i)(A) through (G) as

summarized below: (1) Implementation status of 2003 SIP measures; (2)
summary of emissions reductions; (3) assessment of most/least impaired
days; (4) analysis of emission reductions by pollutant; (5) significant
changes in anthropogenic emissions; (6) assessment of 2003 SIP
sufficiency; and (7) assessment of visibility monitoring strategy.
    Pursuant to 40 CFR 51.309(d)(10)(ii), the State will take one of
the following actions based upon information contained in each periodic
progress report. The State will provide a negative declaration
statement to EPA saying that no SIP revision is needed if the State
determines reasonable progress is being achieved. If the State finds
that the SIP is inadequate to ensure reasonable progress due to
emissions from outside the State, the State will notify EPA and the
other contributing state(s), and initiate efforts through a regional
planning process to address the emissions in question. If the State
finds that the SIP is inadequate to ensure reasonable progress due to
emissions from another country, Utah will notify EPA and provide
information on the impairment being caused by these emissions. If the
State finds that the SIP is inadequate to ensure reasonable progress
due to emissions from within the State, the State will develop emission
reduction strategies to address the emissions and revise the SIP no
later than one year from the date that the progress report was due.
    We propose to determine that the State's SIP meets the requirements
of 40 CFR 51.309(d)(10).

M. Interstate Coordination

    Pursuant to 40 CFR 51.309(d)(11), the State has participated in
regional planning and coordination with other states by participating
in the WRAP while developing its emission reduction strategies under 40
CFR 51.309. Appendix D of the SIP contains detailed information on the
interstate coordination programs developed by the WRAP and the State's
participation in those programs. The backstop trading program in the
SIP and companion rules involved coordination of the three states
(Wyoming, Utah, and New Mexico, including Albuquerque) in its
development and will continue to involve coordination of the
participants once it is implemented.
    We propose to determine the State's SIP is consistent with the 40
CFR 51.309(d)(11).

N. Additional Class I Areas

    The five Class I areas in Utah (Zion National Park, Bryce Canyon
National Park, Arches National Park, Capitol Reef National Park, and
Canyonlands National Park) are located on the Colorado Plateau. Since
the State does not have Class I areas off the Colorado Plateau, the
State of Utah is not required to take action pursuant to 40 CFR
51.309(g)(1).

VI. Proposed Action

    In this action, EPA is proposing to partially approve and partially
disapprove a Utah SIP revision submitted on May 26, 2011 that addresses
the RHR requirements for the mandatory Class I areas under 40 CFR
51.309. Specifically, EPA is proposing to approve all sections of the
SIP submittal as meeting the requirements under 40 CFR 51.309, with the
exception of the requirements under 40 CFR 51.309(d)(4)(vii) pertaining
to NOX and PM BART. EPA is proposing to disapprove the
State's NOX and PM BART determinations and limits in section
D.6.d of the SIP for the following four subject-to-BART EGUs:
Pacificorp Hunter Unit 1 and Hunter Unit 2 and PacifiCorp Huntington
Unit 1 and Huntington Unit 2. EPA is proposing to disapprove these BART
determinations because they do not comply with our regulations under 40
CFR 51.308(e)(1) or sections 110(a)(2) and 169A(g)(2) of the CAA.
    We are proposing to approve specific sections of the State's
September 9, 2008 SIP submittal. Specifically, we are proposing to
approve UAR R307-250, Western Backstop Sulfur Dioxide Trading Program
and R307-150, Emission Inventories. We are taking no action on the rest
of the September 9, 2008 submittal as the May 26, 2011 submittal
supersedes and replaces the remaining sections of the September 9, 2008
SIP submittal, except for the requirements pertaining to smoke
management. We have taken proposed action on the smoke management
requirements in a separate action (76 FR 69217).

VII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is not a ``significant regulatory action'' under the
terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is
therefore not subject to review under Executive Orders 12866 and 13563
(76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on
small entities, small entity is defined as: (1) A small business as
defined by the Small Business Administration's (SBA) regulations at 13
CFR 121.201; (2) a small governmental jurisdiction that is a government
of a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
    After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This
proposed rule will not impose any requirements on small entities
because small entities are not subject to the requirements of this
rule. We continue to be interested in the potential impacts of the
proposed rule on small entities and welcome comments on issues related
to such impacts.

D. Unfunded Mandates Reform Act (UMRA)

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector, of $100 million or more
(adjusted for inflation) in any one year. Before

promulgating an EPA rule for which a written statement is needed,
section 205 of UMRA generally requires EPA to identify and consider a
reasonable number of regulatory alternatives and adopt the least
costly, most cost-effective, or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 of
UMRA do not apply when they are inconsistent with applicable law.
Moreover, section 205 of UMRA allows EPA to adopt an alternative other
than the least costly, most cost-effective, or least burdensome
alternative if the Administrator publishes with the final rule an
explanation why that alternative was not adopted. Before EPA
establishes any regulatory requirements that may significantly or
uniquely affect small governments, including Tribal governments, it
must have developed under section 203 of UMRA a small government agency
plan. The plan must provide for notifying potentially affected small
governments, enabling officials of affected small governments to have
meaningful and timely input in the development of EPA regulatory
proposals with significant federal intergovernmental mandates, and
informing, educating, and advising small governments on compliance with
the regulatory requirements.
    Under Title II of UMRA, EPA has determined that this proposed rule
does not contain a federal mandate that may result in expenditures that
exceed the inflation-adjusted UMRA threshold of $100 million by State,
local, or Tribal governments or the private sector in any one year. In
addition, this proposed rule does not contain a significant federal
intergovernmental mandate as described by section 203 of UMRA nor does
it contain any regulatory requirements that might significantly or
uniquely affect small governments.

E. Executive Order 13132: Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces
Executive Orders 12612 (Federalism) and 12875 (Enhancing the
Intergovernmental Partnership). Executive Order 13132 requires EPA to
develop an accountable process to ensure ``meaningful and timely input
by State and local officials in the development of regulatory policies
that have federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that 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.'' Under Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law unless the
Agency consults with State and local officials early in the process of
developing the proposed regulation.
    This rule will not 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, because it
merely addresses the State not fully meeting its obligation to prohibit
emissions from interfering with other states measures to protect
visibility established in the CAA. Thus, Executive Order 13132 does not
apply to this action. In the spirit of Executive Order 13132, and
consistent with EPA policy to promote communications between EPA and
State and local governments, EPA specifically solicits comment on this
proposed rule from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    Executive Order 13175, entitled Consultation and Coordination With
Indian Tribal Governments (65 FR 67249, November 9, 2000), requires EPA
to develop an accountable process to ensure ``meaningful and timely
input by tribal officials in the development of regulatory policies
that have tribal implications.'' This proposed rule does not have
tribal implications, as specified in Executive Order 13175. It will not
have substantial direct effects on tribal governments. Thus, Executive
Order 13175 does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying
only to those regulatory actions that concern health or safety risks,
such that the analysis required under section 5-501 of the EO has the
potential to influence the regulation. This action is not subject to EO
13045 because it implements specific standards established by Congress
in statutes. However, to the extent this proposed rule will limit
emissions of NOX, SO2, and PM, the rule will have
a beneficial effect on children's health by reducing air pollution.

H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355
(May 22, 2001)), because it is not a significant regulatory action
under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994), establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    We have determined that this proposed action, if finalized, will
not have disproportionately high and adverse human health or
environmental effects on minority or low-income populations because it
increases the level of environmental protection for all

affected populations without having any disproportionately high and
adverse human health or environmental effects on any population,
including any minority or low-income population.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, does not
apply because this action is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects in 40 CFR Part 52

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

    Dated: April 26, 2012.
James B. Martin,
Regional Administrator, Region 8.
[FR Doc. 2012-11848 Filed 5-15-12; 8:45 am]
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[Federal Register: March 7, 2008 (Volume 73, Number 46)]
[Notices]
[Page 12452-12453]
[DOCID:fr07mr08-88]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2008-N-0146]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Requirements for Collection of Data Relating to the
Prevention of Medical Gas Mix-ups at Health Care Facilities-Survey

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing an
opportunity for public comment on the proposed collection of certain
information by the agency. Under the Paperwork Reduction Act of 1995
(the PRA), Federal agencies are required to publish notice in the
Federal Register concerning each proposed collection of information,
including each proposed extension of an existing collection of
information, and to allow 60 days for public comment in response to the
notice. This notice solicits comments on measures, taken by certain
health care medical facilities that use medical oxygen, to present mix-
ups with other gases.

DATES: Submit written or electronic comments on the collection of
information by May 6, 2008.

ADDRESSES: Submit electronic comments on the collection of information
to http://www.regulations.gov. Submit written comments on the
collection of information to the Division of Dockets Management (HFA-
305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852. All comments should be identified with the docket
number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Elizabeth Berbakos, Office of the
Chief Information Officer (HFA-250), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
agencies must obtain approval from the Office of Management and Budget
(OMB) for each collection of information they conduct or sponsor.
``Collection of information'' is defined in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and includes agency requests or requirements that members of
the public submit reports, keep records, or provide information to a
third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A))
requires Federal agencies to provide a 60-day notice in the Federal
Register concerning each proposed collection of information, including
each proposed extension of an existing collection of information,
before submitting the collection to OMB for approval. To comply with
this requirement, FDA is publishing notice of the proposed collection
of information set forth in this document.
    With respect to the following collection of information, FDA
invites comments on these topics: (1) Whether the proposed collection
of information is necessary for the proper performance of FDA's
functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.

Requirements for Collection of Data Relating to the Prevention of
Medical Gas Mix-ups at Health Care Facilities-Survey--(OMB Control
Number 0910-0548)--Extension

    FDA has received four reports of medical gas mix-ups occurring
during the past 9 years. These reports were received from hospitals and
nursing homes and involved 7 deaths and 15 injuries to patients who
were thought to be receiving medical grade oxygen, but who were
actually receiving a different gas (e.g., nitrogen, argon) that had
been mistakenly connected to the facility's oxygen supply system. In
2001, FDA published guidance making recommendations to help hospitals,
nursing homes, and other health care facilities avoid the tragedies
that result from medical gas mix-ups and alerting these facilities to
the hazards. This survey is intended to assess the degree of
facilities' compliance with safety measures to prevent mix-ups, to
determine if further steps are warranted to ensure the safety of
patients.
    FDA estimates the burden of this collection of information as
follows:

                                                     Table 1.--Estimated Annual Reporting Burden\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              No. of         Annual Frequency       Total Annual        Hours per
                    21 CFR Section                         Respondents         per Response          Responses           Response         Total Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
210 and 211                                                           285                     1                285                .25              71.25
Total                                                                 285                     1                285                .25              71.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\There are no capital costs or operating and maintenance costs associated with this collection of information.

    Please note that on January 15, 2008, the FDA Web site transitioned
to the Federal Dockets Management System (FDMS). FDMS is a Government-
wide, electronic docket management system. Electronic submissions will
be accepted by FDA through FDMS only.

    Dated: February 29, 2008.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E8-4474 Filed 3-6-08; 8:45 am]

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