[Federal Register: August 15, 2007 (Volume 72, Number 157)]
[Notices]
[Page 45845-45846]
[DOCID:fr15au07-125]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56226; File No. SR-BSE-2007-35]

Self-Regulatory Organizations; Boston Stock Exchange, Inc; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Market Opening Procedures of the Rules of the Boston Options
Exchange

August 8, 2007.
    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 August 3, 2007, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Exchange filed the proposal as a ``non-controversial'' proposed
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and
Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The BSE is proposing to amend Chapter V, Section 9(e) of the rules
of the Boston Options Exchange (``BOX'') to establish a permanent
market opening procedure and to also define the relationship between
the opening of an underlying stock in its primary market and the
opening of the option on BOX during such times when the underlying
stock's primary market has not opened. The text of the proposed rule
change is available on the BSE's Web site at http://www.bostonoptions.com
, at BSE's principle office, and at the

Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange 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 Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    On February 4, 2004, the Commission approved the market opening
guidelines, as set forth in the BOX Rules, on a pilot basis through
August 6, 2004 \5\ and has since extended the Pilot Program through
August 6, 2007.\6\ The purpose of this rule filing is to make these
market opening guidelines permanent. The Exchange proposes to make its
market opening guidelines permanent since they have successfully opened
the market since BOX's inception.\7\
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    \5\ See Securities Exchange Act Release No. 49192 (February 4,
2004), 69 FR 7051 (February 12, 2004) (SR-BSE-2004-05).
    \6\ See Securities Exchange Act Release Nos. 50163 (August 6,
2004) 69 FR 50230 (August 13, 2004) (SR-BSE-2004-28); 52166 (July
29, 2005), 70 FR 44957 (August 4, 2005) (SR-BSE-2005-34); 54507
(September 26, 2006) 71 FR 58020 (October 2, 2006) (SR-BSE-2006-36);
and 54467 (September 18, 2006) 71 FR 55530 (September 22, 2006) (SR-
BSE-2006-37).
    \7\ The BOX market first opened on February 6, 2004.
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    In addition, the purpose of this rule filing is also to define the
relationship between the opening of the underlying stock in its primary
market and the opening of the option on BOX during such times when the
underlying stock's primary market has not opened.\8\ The BSE seeks to
establish a process that allows for BOX to have the proper flexibility
to open its market in an option in the morning when all other option
Exchanges are open for trading and BOX rules currently do not allow for
the opening of said options.
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    \8\ The proposed rule will deem an underlying security to have
opened on the primary market when the primary market has reported a
transaction in the underlying security, or disseminated opening
quotations for the underlying security and not given an indication
of a delayed opening, whichever occurs first.
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    In establishing this process, the BSE seeks to delegate to the
Exchange the authority to decide whether BOX should open the market in
an option when the underlying stock has not opened in the primary
market, and all other Exchanges are trading the option. The Exchange
presently has no express authority within the BOX Rules to authorize
said opening of the market. The BSE seeks to establish this process to
allow BOX to have the same authority as other Exchanges,\9\ to
eliminate a competitive disadvantage and to provide additional
liquidity and competitive quotes into the marketplace. Specifically,
the Exchange will delay opening an option until the underlying security
has opened unless the Exchange determines that the interests of a fair
and orderly market are best served by opening trading in the option.
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    \9\ See ISE Rules 701(b)(2) and 701(b)(3).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement

under Section 6(b) in general,\10\ and Section 6(b)(5) of the Act,\11\
in particular, that an exchange have rules that are designed to prevent
fraudulent and manipulative practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism for a
free and open market and a national market system, and, in general, to
protect investors and the public interest. In particular, the proposed
rule change will define the relationship between the opening of the
stock in its primary market and the opening of the option on BOX during
outages which will provide for a quick, efficient, fair and orderly
market opening process.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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)(iii) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4
\13\ thereunder because it does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; (iii) become operative for 30 days
from the date on which it was filed, or such shorter time as the
Commission may designate; and the Exchange has given the Commission
written notice of its intention to file the proposed rule change at
least five business days prior to filing. At any time within 60 days of
the filing of such proposed rule change, the Commission may summarily
abrogate 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
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    Under Rule 19b-4(f)(6) of the Act,\14\ the proposal does not become
operative for 30 days after the date of its filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange has requested that
the Commission waive the 30-day operative date, so that the Exchange
may have a market opening procedure which commences immediately. The
Commission believes that the proposed rule change does not raise any
new regulatory issues and, consistent with the protection of investors
and the public interest, has determined to waive the 30-day operative
date, so that the proposal may become operative upon filing.\15\
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    \14\ Id.
    \15\ For purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-BSE-2007-35 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BSE-2007-35. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the BSE. 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-BSE-2007-35 and should be
submitted on or before September 5, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-15933 Filed 8-14-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 85, Number 204 (Wednesday, October 21, 2020)]
[Notices]
[Pages 67018-67022]
[FR Doc No: 2020-23260]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90203; File No. SR-DTC-2020-012]

Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change To Adopt a New Service Guide
To Establish the ClaimConnectTM Service and Update the Settlement
Service Guide

October 15, 2020.
    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 October 8, 2020, The Depository Trust Company (``DTC'') 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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    \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 \3\ consists of amendments to (i) adopt a
new DTC service guide to establish the ClaimConnect service at DTC
(``ClaimConnect Service Guide''),\4\ and (ii) update the existing DTC
Settlement Service Guide \5\ (``Settlement Guide'') to (A) account for
a new ClaimConnect process that would bypass DTC's existing Receiver
Authorized Delivery function (``RAD''), (B) make related clarifying
changes regarding RAD, and (C) update certain address and contact
information in the Copyright section of the Settlement Guide, as
described in greater detail below.
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    \3\ Capitalized terms not defined herein are defined in the
Rules, By-Laws and Organization Certificate of DTC (``Rules'')
available at http://www.dtcc.com/~/media/Files/Downloads/legal/
rules/dtc_rules.pdf, or in the hereby proposed ClaimConnect Service
Guide, included as Exhibit 5 to this proposed rule change filing.
    \4\ The hereby proposed ClaimConnect Service Guide sets forth
Procedures for the proposed DTC ClaimConnect service. Procedures, in
this context, pursuant to Section 1 of Rule 1, means ``the
Procedures, service guides, and regulations of [DTC] adopted
pursuant to Rule 27, as amended from time to time.'' Rule 1, Section
1, supra note 3. The proposed ClaimConnect Service Guide would
constitute a Procedure of DTC, as defined in the Rules.
    \5\ Available at http://www.dtcc.com/~/media/Files/Downloads/
legal/service-guides/Settlement.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
    The purpose of the proposed rule change is to (i) adopt the
ClaimConnect Service Guide, and (ii) update the Settlement Guide to (A)
account for a new ClaimConnect process that would bypass RAD, (B) make
related clarifying changes regarding RAD, and (C) update certain
address and contact information in the Copyright section of the
Settlement Guide.
About ClaimConnect
    The proposed ClaimConnect service will be an optional service
available to all Participants.\6\ The service will enable Participants
to bilaterally match and settle cash claim transactions at DTC.
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    \6\ A fee associated with Participants' use of the ClaimConnect
service will be the subject of a separate, subsequent rule filing
with the Commission.
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    With respect to ClaimConnect, a cash claim or cash claim
transaction is a cash entitlement (i.e., a request for cash) from one
Participant to another Participant. Typically, cash claims arise as a
result of trading exceptions from a Corporate Action event,\7\ where a
cash entitlement needs to be delivered from one holder to another.
Today, such claims are settled away from DTC, except for some stock
loan and repurchase (``repo'') substitution payments, which can be
settled via Adjustment Payment Orders (``APOs'').\8\ However, based on
discussions with Participants, DTC has developed ClaimConnect so
Participants can settle cash claims in one centralized location, using
the DTC system.\9\
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    \7\ Trading exceptions include, but are not limited to, trades
outside of the market's agreed upon settlement cycle, lack of due
bill fail tracking, stock loan or repo transaction discrepancy, or
tax treaty differences.
    \8\ In light of the proposed ClaimConnect service, DTC is
considering retiring the APO process. If such a decision is made,
then any corresponding changes would be the subject of a separate,
subsequent rule filing with the Commission, as applicable. Until
such time, Participants would have the option to settle stock loan
and repo substitution payments via APOs or ClaimConnect.
    \9\ Based on discussions with Participants, DTC estimates that
ClaimConnect may process approximately 212,000 claims its first
year, increasing to approximately 425,000 claims by its fifth year.
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    As described below, ClaimConnect will be a validation and matching
engine that continually monitors claims throughout their lifecycle in
order to settle and close claims through DTC's settlement process. This
continuous processing will allow for both the manual matching of claims
(i.e., to Affirm or Affirmation) by ClaimConnect users (``Users'') and
systematic matching of two like claims by ClaimConnect based on the
alignment of certain data elements (i.e., Auto-matching).
    ClaimConnect will offer various claim processing functions,
including end-of-day settlement of cash claims through systematic
Securities Payment Orders (``SPOs'') generated and submitted by
ClaimConnect at set times intraday (``settlement time'') on a
settlement date.
Preparing To Use ClaimConnect
    To use ClaimConnect, a Participant need only request to be a
``Claim Participant'' by contacting its Relationship Manager. The
Participant's account information at DTC will then be updated to
indicate that the Participant is now a member of the service (i.e., a
User).
    Once permissioned, a Participant (now a User) will be able to
engage ClaimConnect in two ways: (i) The ClaimConnect application via
the MyDTCC portal, and (ii) the ClaimConnect Application Programming
Interfaces (``APIs'').\10\
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    \10\ ClaimConnect APIs will provide Users with callable
endpoints for creating and deleting data resources, as well as
reading and updating data resource values. Information including
specifications related to ClaimConnect APIs will be available to
Participants at https://developer.dtcc.com or by navigating through
the Portals menu on www.dtcc.com.
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    If using ClaimConnect through the web application on the MyDTCC
portal, Users will have access to all ClaimConnect functionality,
including:
     Submitting new claims;
     modifying claims submitted by the User;
     attaching documents to claims;
     Canceling claims submitted by the User;
     DKing and Un-DKing claims; \11\
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    \11\ DK is shorthand for ``Don't Know.''
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     Affirming claims;
     utilizing the ClaimConnect Auto-match feature;
     establishing Approvals; and
     searching all claims submitted or received by the User.
    Additionally, the ClaimConnect dashboard, which would be available
via the MyDTCC portal, will offer a comprehensive overview of a User's
claim activity, as well as provide daily and weekly email alerts on the
status of claims, and the ability to pull reports and export data for
manipulation and analysis.
    Meanwhile, the ClaimConnect family of APIs will enable Users to
automate the claim process. The APIs could be used separately for
machine-to-machine processing of claims or in combination with the
ClaimConnect web application through the MyDTCC portal. Although
ClaimConnect functionality is more limited through the APIs (i.e., APIs
cannot Affirm claims, attach documents to claims, access the
ClaimConnect dashboard or establish an Approval), Users will still be
able to:
     Submit new claims;
     modify their own claims;
     Cancel their own claims;
     utilize the ClaimConnect Auto-match feature;
     DK and Un-DK claims; and
     search all claims submitted or received by the User.
    Each ClaimConnect function is described in greater detail below.
Unless otherwise noted, the functions apply to both the ClaimConnect
service via the web application and the APIs.
Submitting Claims
    If overpaid or underpaid a cash entitlement due to a trading
exception, a User will be able to create a claim against a claim
counterparty through ClaimConnect. To create a claim, the ClaimConnect
system will require certain data elements to be included, while other
data elements will be optional.\12\ Optional data elements will help
Users differentiate similar claims.
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    \12\ A sample list of required and optional data elements will
be available in the proposed ClaimConnect Service Guide. A complete
list of data elements and whether the data elements are required or
optional will be available on the ClaimConnect DTCC Learning Center
page.
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    To help expedite the claim process, Users will be able to attach a
document to a claim, through the ClaimConnect web application in the
MyDTCC portal, which can provide further details about the claim.
Similarly, to more easily identify claims and expedite the settlement
process, claim submitters should work with claim counterparties during
the claim submission process.
    Once all required data elements are entered and the claim is
submitted, the claim is assigned a Claim ID.\13\ If both parties to a
claim submit their respective sides to the claim (i.e., a debit claim
and a credit claim), and the two sides of the claim are Auto-matched,
then the claim will be identified by the Claim ID associated with the
debit side of the claim. The Claim ID of the credit side of the claim
will be viewable in the claim's audit history.
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    \13\ A Claim ID is a unique claim identification number that is
assigned to a claim after all required data elements are entered and
the claim is submitted.
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Claim States
    Once submitted, claims can exist in several different ``states''
depending upon the actions taken by the parties to the claim. Claims
will be able to exist

as Matched, Uncompared, DK-uncompared, Cancelled, or Closed.
    Matched. A claim will be in a Matched state when it has been Auto-
matched by the ClaimConnect system, or it has been Affirmed by the
counterparty to the claim.
    Uncompared. A claim will be in an Uncompared state, and will remain
in such a state indefinitely, until an action is taken on it. This will
occur when (i) a claim is initially submitted, without any further
action taken on the claim; (ii) a claim is modified by the submitting
party before the counterparty has acted on it; (iii) a claim is
modified by the submitting party after it has been DK'd by the
counterparty; or (iv) a claim is Un-DK'd, without any further action
taken on the claim.
    DK-uncompared. A claim will be in a DK-uncompared state when it has
been DK'd by the receiving counterparty, and the submitting party has
not yet acted on the counterparty's DK.\14\
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    \14\ The DK-uncompared state is synonymous with an Uncompared
status but will be distinguished in the proposed ClaimConnect
Service Guide to better depict the workflow.
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    Cancelled. A claim will be in a Cancelled state when the submitting
party determines that the claim is no longer needed. This will occur
when the submitting party Cancels the claim before it has been acted on
by the counterparty, or the submitting party Cancels a claim that has
been DK'd by the counterparty.
    Closed. A claim will be in a Closed state when a Matched claim
settles or fails to settle, as part of DTC's end-of-day settlement
process, by the close of the scheduled settlement day, as described
below. Once a claim is either Matched or Closed, then it can no longer
be modified, DK'd, or moved into an Uncompared state. If a correction
needs to be made to a Matched or Closed claim, then a new claim will
need to be submitted.
Validating Claims
    Validation, the process of confirming claim data elements, will
happen in two ways: (i) When a claim is Affirmed (i.e., by Affirming a
claim, the receiving counterparty is confirming the claim's data
elements), or (ii) when ClaimConnect Auto-matches two claims.
    Once Validated, a claim will switch from an Uncompared to a Matched
state. However, if certain data elements of the two sides of a claim do
not agree, the claims cannot be Validated and, thus, cannot be
Matched.\15\ Such claims will remain in an Uncompared state until
action is taken upon one or both claims.
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    \15\ A complete list of data elements that require matching will
be available in the training materials found on the ClaimConnect
DTCC Learning Center page.
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Modifying and Canceling Claims
    Users will be able to modify or Cancel claims. However, not all
data elements can be modified after submission,\16\ and a claim can be
modified if and only if:
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    \16\ Users will be able to refer to the ClaimConnect user guides
and other training materials to determine which fields can be
modified.
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     The modifying User is the User that submitted the claim;
and
     the claim is Uncompared;
     the claim has not been Cancelled;
     the claim has not been Matched; or
     the claim has not been Closed.
    A claim can be Cancelled if and only if:
     The Canceling User is the User that submitted the claim;
and
     the claim is Uncompared;
     the claim has not been Matched; or
     the claim has not been Closed.
    Once a claim is Cancelled, no further action can be made on the
claim.
Affirming Claims
    If a counterparty receives a claim and agrees with its details
(i.e., the data elements), then the counterparty could Affirm the
claim. Affirming a claim will be a confirmation of the claim's data
elements and would move the claim into a Matched state. Once Affirmed,
the claim will be settled on the Claim Settlement Date \17\ or Settle
After Match,\18\ whichever the parties agree to.
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    \17\ The Claim Settlement Date is the date on which a claim will
settle, as agreed upon by the claim parties.
    \18\ Settle After Match is a settlement option where a Matched
claim will settle at the next scheduled settlement time, as compared
to a future settlement date. Both parties to the claim would need to
select the Settle After Match option to be effective.
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    Affirmation will usually occur only when one side of a claim is
submitted because it affords the counterparty enough time to Affirm the
claim. If both sides of a claim are submitted, and the applicable data
elements align, then Auto-match will likely Match the claims before
either party has time to make an Affirmation.
    Claims can be Affirmed only:
     ``Manually'' via the MyDTCC portal, not through an API;
     by the counterparty that received the claim; and
     when the claim is Uncompared; or
     when the claim is not Cancelled or Closed.
    Once Affirmed, the claim will move to a Matched state and no
further action will be permitted on the claim.
DKing Claims
    If a counterparty receives a claim that it does not know or does
not agree with, then it can DK the claim. Claims can be DK'd only by
the User that received the claim and when the claim is Uncompared or
when the claim is not Cancelled or Closed. Users that DK a claim must
provide a reason for the DK.\19\ DKing a claim will return it to the
submitting party and change the state of the claim to DK-uncompared.
The submitting party will then have the option to modify the claim or
Cancel it.
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    \19\ Reasons for a DK include, but are not limited to, bad
quantity, bad trade date, bad settlement date, bad amount, bad
counterparty, duplicate record, invalid security identifier, need
paperwork, need medallion stamp, settlement date difference, other
bad data, or wrong event type.
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    A claim DK'd in error can be Un-DK'd (i.e., reversed) by the party,
and only that party, that DK'd the claim. Once Un-DK'd, the claim will
be in an Uncompared state. Uncompared claims can be modified or
Cancelled by the submitting party, or they can be Affirmed or DK'd by
the receiving party.
Searching and Reporting on Claims
    ClaimConnect also will have both search and report functions. There
will be two types of searches: (i) Quick Search, to look up a specific
claim using either the unique Claim ID or Xref that the User assigned
to the claim, and (ii) Advanced Search, to search for a range of claim
activity, including claims submitted by the User or by a counterparty.
    From the search results, Users will be able to select a claim to
view more detailed information. ClaimConnect also will enable Users to
view all of their claims as of a given date (either on a current or
historic day), which can then be downloaded into a CSV (Comma-Separated
Value) file format report.
Approving Claims
    To assist Users with the management of their claims, ClaimConnect
will offer an Approval feature. The Approval feature will require
certain actions on a claim to be approved by a separate User employee,
if the claim amount meets or exceeds a predetermined dollar threshold
set by the User, before that action can be completed. This feature is
designed to enable Users to better monitor and manage certain cash
debits that are leaving their account to satisfy claims.
    Users will be able to activate the Approval feature by updating
their ClaimConnect client profile. When doing so, the User must then
set the dollar threshold that will trigger the Approval process. For
example, if a User wants all debit claims equaling $100.00 or greater
to be Approved, the User would set the Approval threshold

to $100.00. Unfortunately, because of the manual aspects of the
Approval feature, this feature will not be available via APIs.\20\
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    \20\ Because APIs are a form of machine-to-machine or system-to-
system communication, all necessary actions, such as the manual
process of Approving a claim, must be completed prior to that
communication.
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    Once the Approval process is activated and a dollar threshold set,
Approval by another User employee is required when the dollar threshold
is met for claims that are new, being Affirmed, being modified, or
being Cancelled after being previously Approved.
    If a claim would be modified so that the dollar amount of the claim
would no longer meet or exceed a previously established approval
threshold, then the modification will not need to be Approved.
Conversely, if a claim would be modified so that the dollar amount of
the claim would now meet or exceed a previously established Approval
threshold, then the claim will need to be Approved. If a previously
Approved claim is modified but the claim amount remains unchanged
(i.e., it still meets or exceeds the Approval threshold), then the
claim will need to be re-Approved. Approval is not required to DK or
Un-DK a claim.
    New claims that are pending Approval will not have a claim state,
and the counterparty to the claim will not see the claim until it is
Approved. Once Approved, the claim will be moved to an Uncompared
state.
    In order to modify a new claim that is still pending Approval, the
submitting User should reject the claim, make the modification, and
resubmit it for Approval. If the claim has already been Approved, a
modification may require re-Approval, if the Approval threshold is met.
    Claim Approvers must be different than the User employee that
created the claim. Approvers can view the details of the claim prior to
Approving. If an Approver rejects a claim, the claim will need to be
resubmitted for Approval or Cancelled.
Settling Claims
    Matched claims will generate a ClaimConnect SPO for settlement on
either the Claim Settlement Date, the next applicable daily settlement
time if the Settle After Match indicator has been agreed to by both
parties,\21\ or the first settlement time on the next settlement day if
the current day is a holiday or non-settlement date. The SPO will
credit the payee Participant and debit the payor Participant the claim
amount and will then be incorporated into DTC's end-of-day settlement
process.
---------------------------------------------------------------------------

    \21\ The intraday settlement times for processing ClaimConnect
SPOs will be available on the ClaimConnect DTCC Learning Center
page.
---------------------------------------------------------------------------

    Although a ClaimConnect SPO will be similar to other DTC SPOs, it
will be unique to ClaimConnect and its settlement process in several
ways:
     The reason code for ClaimConnect SPOs will be used only
for ClaimConnect cash movements;
     ClaimConnect SPOs will not be able to be instructed
manually, as the instructions will be an automated process through the
ClaimConnect service; and
     ClaimConnect SPOs will bypass RAD, meaning there will be
no additional approval or rejection process for ClaimConnect SPOs.
    ClaimConnect will Close the claim once it settles or fails to
settle by the close of the settlement day. Closed claims cannot be
reopened, modified, or processed again. If an adjustment is needed, a
new claim will need to be submitted and processed.
    ClaimConnect SPOs will be subject to DTC's Risk Controls (i.e.,
Collateral Monitor and Net Debit Cap) and will ``recycle'' (i.e., pend)
if the SPO cannot satisfy those controls.\22\ If a ClaimConnect SPO
does not ``make'' (i.e., settle) by the end of the settlement day, the
SPO will be ``dropped'' (i.e., Closed). Details on failed claims will
be available using the Settlement Web activity inquiry function.
---------------------------------------------------------------------------

    \22\ Because ClaimConnect SPOs will not be submitted for night
cycle processing, they will not be subject to DTC's settlement
optimization process. See Securities Exchange Act Release No. 87022
(September 19, 2019), 84 FR 50541 (September 25, 2019) (SR-DTC-2019-
005).
---------------------------------------------------------------------------

Changes to the Rules
    To effectuate the establishment of the ClaimConnect service, DTC
hereby proposes to adopt a new service guide--the ClaimConnect Service
Guide--to explain the ClaimConnect service as described above. In
addition, the existing Settlement Guide will be updated to (A) indicate
that not all SPOs are subject to RAD prior to settlement, as
ClaimConnect SPOs will not be subject to RAD, (B) make related
clarifying changes regarding RAD, and (C) update certain address and
contact information in the Copyright section of the Settlement Guide.
Implementation Timeframe
    The ClaimConnect service, and associated guide, will become
effective and available to Participants within 10 business days
following Commission approval. DTC will announce the effective date of
the proposed changes by Important Notice posted to its website. A fee
associated with Participants' use of ClaimConnect will be the subject
of a separate, subsequent rule filing with the Commission. If that fee
filing has not been completed by the time the ClaimConnect service
becomes effective and available to Participants, then Participants will
not be charged a fee for their use of ClaimConnect until that filing is
completed. The proposed changes the Settlement Service Guide will
become effective upon Commission approval.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a clearing agency be designed to foster cooperation and coordination
with persons engaged in the clearance and settlement of securities
transactions.\23\ DTC believes this proposed rule change is consistent
with that provision of the Act, and the rules and regulations
thereunder applicable to a registered clearing agency.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    As described above, the ClaimConnect service will be an optional
service that was developed based on discussions with Participants.
ClaimConnect would enable Participants to bilaterally match and settle
cash claim transactions at DTC. While settlement of cash claims occurs
today, it does so away from DTC, in a dispersed fashion. ClaimConnect
would establish a centralized and coordinated location for Participants
to settle such claims and, as described above, include various
functionality, such as a web application, APIs, an Auto-match feature,
an Approval function, and final settlement via SPOs.
    Although a cash claim transaction itself is not a securities
transaction, it is the biproduct of a securities transaction and a
Corporate Action event on the securities. By offering a centralized and
coordinated location for Participants to settle cash claims, with
various functionality, the ClaimConnect service is designed to help
Participants more easily settle cash claim activity associated with a
securities transaction. Similarly, by updating the existing Settlement
Service Guide to indicate that not all SPOs will be subject to RAD
(since ClaimConnect SPOs will not be subject to RAD, as explained
above), the guide will help Participants better understand the
clearance and settlement processes.
    Finally, by updating the Settlement Guide with more current
information about where Participants and others may direct inquiries
about the DTC

service guides, the Settlement Guide will provide the most up-to-date
information to help Participants submit questions or comments about the
service guides.
    Therefore, for the above reasons, DTC believes that the proposed
rule change will help foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of the Act.\24\
---------------------------------------------------------------------------

    \24\ Id.
---------------------------------------------------------------------------

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

    DTC does not believe that the adoption of the proposed service
guide to establish the ClaimConnect service or the proposed
modifications to the existing Settlement Guide will have any impact on
competition.
    As described above, the ClaimConnect service will be an optional
service (i.e., Participants will have the option to either use
ClaimConnect or continue to settle cash claims away from DTC). Although
DTC believes settling a cash claim via ClaimConnect will offer benefits
over settling such claims away from DTC, those benefits would be
available to all Participants that choose to use the service, including
both the credit and debit sides of any single claim. Meanwhile, the
proposed changes to the Settlement Guide would simply (A) account for
the processing of ClaimConnect SPOs, with respect to RAD, (B) make
related clarifying changes regarding RAD, and (C) update certain
address and contact information in the Copyright section of the
Settlement Guide.
    For these reasons, DTC does not believe that the proposed rule
change will have any impact on competition.

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

    DTC has not received or solicited any written comments relating to
this proposal. DTC will notify the Commission of any written comments
received by DTC.

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-2020-012 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-DTC-2020-012. 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 website (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 website 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 DTC and on DTCC's website
(http://dtcc.com/legal/sec-rule-filings.aspx). All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-DTC-2020-012 and should be submitted on
or before November 12, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23260 Filed 10-20-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 208 (Monday, October 28, 2019)]
[Rules and Regulations]
[Pages 57619-57621]
[FR Doc No: 2019-23360]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2019-0062; FRL-9999-56]

Mandipropamid; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: This regulation establishes tolerances for residues of
mandipropamid in or on cacao, dried bean. Syngenta Crop Protection, LLC
requested these tolerances under the Federal Food, Drug, and Cosmetic
Act (FFDCA).

DATES: This regulation is effective October 28, 2019. Objections and
requests for hearings must be received on or before December 27, 2019
and must be filed in accordance with the instructions provided in 40
CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPP-2019-0062, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory
Public Docket (OPP Docket) in the Environmental Protection Agency
Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334,
1301 Constitution Ave. NW, Washington, DC 20460-0001. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the OPP
Docket is<PHONE_NUMBER>. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Michael L. Goodis, P.E., Registration
Division (7505P), Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-
0001; main telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
The following list of North American Industrial Classification System
(NAICS) codes is not intended to be exhaustive, but rather provides a
guide to help readers determine whether this document applies to them.
Potentially affected entities may include:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).

B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's
tolerance regulations at 40 CFR part 180 through the Government
Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2019-0062 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing and must be received by the Hearing Clerk on or before
December 27, 2019. Addresses for mail and hand delivery of objections
and hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing (excluding any Confidential Business Information (CBI)) for
inclusion in the public docket. Information not marked confidential
pursuant to 40 CFR part 2 may be disclosed publicly by EPA without
prior notice. Submit the non-CBI copy of your objection or hearing
request, identified by docket ID number EPA-HQ-OPP-2019-0062, by one of
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments. Do not submit
electronically any information you consider to be CBI or other
information whose disclosure is restricted by statute.
     Mail: OPP Docket, Environmental Protection Agency Docket
Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC
20460-0001.
     Hand Delivery: To make special arrangements for hand
delivery or delivery of boxed information, please follow the
instructions at http://www.epa.gov/dockets/contacts.html.
    Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at http://www.epa.gov/dockets.

II. Summary of Petitioned-For Tolerance

    In the Federal Register of June 7, 2019 (84 FR 26630) (FRL-9993-
93), EPA issued a document pursuant to FFDCA section 408(d)(3), 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
9F8733) by Syngenta Crop Protection, LLC, P.O. Box 18300, Greensboro,
NC 27419. The petition requested that 40 CFR 180.637 be amended by
establishing tolerances for residues of the fungicide mandipropamid in
or on cocoa bean at 0.05 parts per million (ppm). That document
referenced a summary of the petition prepared by Syngenta Crop
Protection, LLC, the registrant, which is available in the docket,
http://www.regulations.gov. There were no comments received in response
to the notice of filing.
    Based upon review of the data supporting the petition, EPA is
establishing the tolerance at 0.06 ppm in or on cacao, dried bean. The
reason for this change is explained in Unit IV.C.

III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a
tolerance (the legal limit for a pesticide chemical residue in or on a
food) only if EPA determines that the tolerance is ``safe.'' Section
408(b)(2)(A)(ii) of FFDCA defines ``safe'' to mean that ``there is a
reasonable certainty that no harm will result from aggregate exposure
to the pesticide chemical residue, including all anticipated dietary
exposures and all other exposures for which there is reliable
information.'' This includes

exposure through drinking water and in residential settings but does
not include occupational exposure. Section 408(b)(2)(C) of FFDCA
requires EPA to give special consideration to exposure of infants and
children to the pesticide chemical residue in establishing a tolerance
and to ``ensure that there is a reasonable certainty that no harm will
result to infants and children from aggregate exposure to the pesticide
chemical residue. . . .''
    Consistent with FFDCA section 408(b)(2)(D), and the factors
specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available
scientific data and other relevant information in support of this
action. EPA has sufficient data to assess the hazards of and to make a
determination on aggregate exposure for mandipropamid including
exposure resulting from the tolerances established by this action.

A. Risk Assessment

    In the Federal Register of March 22, 2019 (84 FR 10695) (FRL-9987-
25), EPA established tolerances for residues of mandipropamid in or on
several commodities. Because much of the safety assessment of
mandipropamid for the current action remains the same, EPA is
incorporating several aspects of that previous rule and relying in part
upon the findings made in the March 22, 2019 final rule in support of
this action.
    A summary of the toxicological profile and endpoints used for human
risk assessment is discussed in Units III.A. and III.B of the March 22,
2019 final rule. In evaluating dietary exposure for this action, EPA
considered exposure under the petitioned-for tolerances as well as all
existing mandipropamid tolerances in 40 CFR 180.637. The exposure
assumptions used to assess the mandipropamid tolerances remain the same
as discussed in the March 22, 2019 final rule, except to incorporate
the exposure associated with the tolerance on cacao, dried beans, for
which the Agency assumed 100 percent crop treated and tolerance-level
residues. For a summary of those exposure assumptions, see Unit III.C.1
of the March 22, 2019 final rule. In addition, because there is no U.S.
registration associated with the use of mandipropamid on cacao, dried
beans, the estimated drinking water exposures reported in the March 22,
2019 final rule remain the same for this rule. A summary of EPA's
assessment of drinking water exposure is discussed in Unit III.C.2. of
the March 22, 2019 final rule. Similarly, the Agency's assessment of
cumulative risks remains the same as in the March 22, 2019 final rule.
    Because there have been no changes to the potential for prenatal
and postnatal toxicity or in the completeness of data with respect to
toxicity and exposure, EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
additional tenfold (10X) margin of safety required under section
408(b)(2)(C) (``FQPA safety factor'') were reduced to 1X. A summary of
EPA's rationale for this determination is discussed in Unit III.D. of
the March 22, 2019 final rule.

B. Determination of Safety

    EPA determines whether acute and chronic dietary pesticide
exposures are safe by comparing aggregate exposure estimates to the
acute population-adjusted dose (aPAD) and chronic population-adjusted
dose (cPAD). Short-, intermediate-, and chronic-term risks are
evaluated by comparing the estimated aggregate food, water, and
residential exposure to the appropriate points of departure to ensure
that an adequate margin of exposure exists.
    No acute effects were identified in the toxicological studies for
mandipropamid; therefore, a quantitative acute dietary exposure
assessment was not conducted. The chronic dietary risk is 31% of the
cPAD for the general U.S. population and 49% of the cPAD for children 1
to 2 years old, the population subgroup with the highest estimated
chronic dietary exposure to mandipropamid. The Agency level of concern
is percentage numbers greater than 100% of the cPAD. Mandipropamid is
not registered for any specific use patterns that would result in
residential exposure. Therefore, all aggregate risk estimates are
expected to be equivalent to the dietary (food and drinking water) risk
estimates mentioned above.
    Therefore, EPA concludes that there is a reasonable certainty that
no harm will result to the general population, or to infants and
children from aggregate exposure to mandipropamid residues.
    Mandipropamid is classified as ``Not Likely to be Carcinogenic to
Humans.'' Therefore, a dietary exposure assessment for the purpose of
assessing cancer risk is unnecessary.
    For a detailed discussion of the aggregate risk assessments and
determination of safety for these tolerances, please refer both to the
March 22, 2019 final rule and its supporting documents, available at
http://www.regulations.gov in docket ID number EPA-HQ-OPP-2017-0671,
and to the risk assessment for this current action, ``Mandipropamid.
Human Health Risk Assessment to Support the Proposed Establishment of a
Tolerance for the Fungicide (without Section 3 Registration) in/on
Imported Cacao Beans.'' in docket ID number EPA-HQ-OPP-2019-0062.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology, using method RAM 415/02, for the
determination of mandipropamid using high-performance liquid
chromatography with tandem mass spectrometric detection (LC/MS/MS), is
available to enforce the tolerance. The method has been adequately
validated by an independent laboratory, with a validated limit of
quantitation (LOQ) of 0.010 ppm and a limit of detection (LOD) of 0.002
ppm in the crops tested.
    The method may be requested from: Chief, Analytical Chemistry
Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD
20755-5350; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint United Nations
Food and Agriculture Organization/World Health Organization food
standards program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    The Codex has not established an MRL for mandipropamid in cacao,
dried bean.

C. Revisions to Petitioned-For Tolerances

    The tolerance definition was revised from ``cocoa bean'' to
``cacao, dried bean'' in accordance with tolerance naming conventions.
EPA has revised the tolerance level for mandipropamid residues in
cacao, dried bean based on the review conducted by the European Food
Safety Authority (EFSA) (Setting

of an import tolerance for mandipropamid in cocoa beans; A. Brancato et
al; 31 October 2018). The EFSA review addresses the same use pattern
and residue data submitted to the EPA to support this use, so the
tolerance being established is harmonized with EFSA's recommended MRL
(0.06 mg/kg).

V. Conclusion

    Therefore, tolerances are established for residues of
mandipropamid, in or on cacao, dried bean at 0.06 ppm.

VI. Statutory and Executive Order Reviews

    This action establishes a tolerance under FFDCA section 408(d) in
response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Because this action has been
exempted from review under Executive Order 12866, this action is not
subject to Executive Order 13211, entitled ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997), nor is it considered a
regulatory action under Executive Order 13771, entitled ``Reducing
Regulations and Controlling Regulatory Costs'' (82 FR 9339, February 3,
2017). This action does not contain any information collections subject
to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
et seq.), nor does it require any special considerations under
Executive Order 12898, entitled ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations'' (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under FFDCA section 408(d), such as the tolerance in this
final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.), do not apply.
    This action directly regulates growers, food processors, food
handlers, and food retailers, not States or tribes, nor does this
action alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of FFDCA section 408(n)(4). As such, the Agency has determined that
this action will not have a substantial direct effect on States or
tribal governments, on the relationship between the national government
and the States or tribal governments, or on the distribution of power
and responsibilities among the various levels of government or between
the Federal Government and Indian tribes. Thus, the Agency has
determined that Executive Order 13132, entitled ``Federalism'' (64 FR
43255, August 10, 1999) and Executive Order 13175, entitled
``Consultation and Coordination with Indian Tribal Governments'' (65 FR
67249, November 9, 2000) do not apply to this action. In addition, this
action does not impose any enforceable duty or contain any unfunded
mandate as described under Title II of the Unfunded Mandates Reform Act
(UMRA) (2 U.S.C. 1501 et seq.).
    This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) (15 U.S.C. 272 note).

VII. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
EPA will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to publication of
the rule in the Federal Register. This action is not a ``major rule''
as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure,
Agricultural commodities, Pesticides and pests, Reporting and
recordkeeping requirements.

    Dated: October 11, 2019.
Daniel Rosenblatt,
Acting Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

0
 1. The authority citation for part 180 continues to read as follows:

     Authority:  21 U.S.C. 321(q), 346a and 371.

0
2. In Sec.  180.637, add alphabetically the commodity ``Cacao, dried
bean'' to the table in paragraph (a) to read as follows:

Sec.  180.637  Mandipropamid; tolerances for residues.

    (a) * * *

------------------------------------------------------------------------
                                                               Parts per
                          Commodity                             million
------------------------------------------------------------------------

                                * * * * *
Cacao, dried bean \1\.......................................        0.06

                               * * * * *
------------------------------------------------------------------------
\1\ There are no U.S. registrations allowing use of mandipropamid on
  cacao as of October 28, 2019.

* * * * *
[FR Doc. 2019-23360 Filed 10-25-19; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 152 (Tuesday, August 7, 2012)]
[Notices]
[Page 47062]
[FR Doc No: 2012-19274]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL12-94-000]

Kentucky Municipal Power Agency; Notice of Filing

    Take notice that on July 30, 2012, Kentucky Municipal Power Agency
filed a Proposed Revenue Requirement for reactive supply service under
Midwest Independent Transmission System Operator, Inc. Tariff Schedule
2.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the web site that enables subscribers to receive email
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on August 20, 2012.

    Dated: July 31, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-19274 Filed 8-6-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 201 (Thursday, October 21, 2021)]
[Notices]
[Pages 58380-58384]
[FR Doc No: 2021-22975]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2017-0039; Notice 2]

Ride the Ducks International, LLC, Denial of Petition for
Decision of Inconsequential Noncompliance

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

ACTION: Denial of petition.

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SUMMARY: Ride the Ducks International, LLC (RTDI), has determined that
certain model year (MY) 1996-2014 RTDI Stretch Amphibious passenger
vehicles (APVs) do not fully comply with Federal Motor Vehicle Safety
Standard (FMVSS) No. 113, Hood Latch System, and FMVSS No. 302,
Flammability of Interior Materials. RTDI filed a noncompliance
information report dated March 15, 2017. RTDI also petitioned NHTSA on
April 12, 2017, for a decision that the subject noncompliances are
inconsequential as they relate to motor vehicle safety. This document
announces the denial of RTDI's petition.

FOR FURTHER INFORMATION CONTACT: Abraham Diaz at<PHONE_NUMBER>
regarding FMVSS No. 302, and Neil Dold at<PHONE_NUMBER> regarding
FMVSS No. 113; Office of Vehicle Safety Compliance, NHTSA, facsimile
(202) 366-5930.

SUPPLEMENTARY INFORMATION:
    I. Overview: RTDI has determined that certain MY 1996-2014 RTDI
APVs do not fully comply with paragraph S4.2 of FMVSS No. 113, Hood
Latch System (49 CFR 571.113), and paragraph S2 of FMVSS No. 302,
Flammability of Interior Materials (49 CFR 571.302). RTDI filed a
noncompliance information report dated March 15, 2017 pursuant to 49
CFR 573, Defect and Noncompliance Responsibility and Reports. RTDI also
petitioned NHTSA on April 12, 2017, pursuant to 49 U.S.C. 30118(d) and
30120(h) and 49 CFR part 556, for an exemption from the notification
and remedy requirements of 49 U.S.C. chapter 301 on the basis that
these noncompliances are inconsequential as they relate to motor
vehicle safety.
    Notice of receipt of the petition was published in the Federal
Register (82 FR 43452) with a 30-day public comment period, on
September 15, 2017. No comments were received. To view the petition and
all supporting documents log onto the Federal Docket Management System
(FDMS) website at: http://www.regulations.gov/. Then follow the online
search instructions to locate docket number ``NHTSA-2017-0039.''
    II. Vehicles Involved: Approximately 105 MY 1996-2014 RTDI Stretch
APVs, manufactured between January 1, 1996 and December 31, 2014 are
potentially involved.
    III. Noncompliances: RTDI explained that the noncompliances are
that the subject vehicles were not equipped with a secondary hood latch
system, as required by paragraph S4.2 of FMVSS No. 113, and that there
are interior components and materials that do not conform to the burn
rate requirements of paragraph S2 of FMVSS No. 302.
    IV. Rule Requirements: Requirements from FMVSS No. 113 and 302 are
relevant to this petition. Specifically, paragraph S4.2 of FMVSS No.
113 requires that a front opening hood which, in any open position,
partially or completely obstructs a driver's forward view through the
windshield must be provided with a second latch position on the hood
latch system or with a second hood latch system. Paragraphs S2 and S4
of FMVSS No. 302 explain that the purpose of FMVSS No. 302 is to reduce
the deaths and injuries to motor vehicle occupants caused by vehicle
fires, especially those originating in the interior of the vehicle from
sources such as matches or cigarettes. FMVSS No. 302 lists the
components of vehicle occupant compartments that shall meet the burn
rate requirements of the standard and specifies the maximum allowable
burn rate of material under specified test conditions.
    V. Summary of RTDI's Petition: RTDI states that it began to produce
APVs in

1996 by performing extensive modifications to General Motors (GM)
amphibious military trucks, which were originally designated with
product code DUKW per GM's nomenclature.\1\ The resulting ``Stretch''
APVs were refurbished by RTDI in accordance with state and U.S. Coast
Guard rules and regulations. RTDI has not manufactured any vehicles
since 2014.
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    \1\ NHTSA notes that the ability of the DUKW to transport
troops, supplies or equipment across both land and water made them
indispensable in World War II and the Korean War. The modifications
performed by RTDI, which included replacement of the original
drivetrain and enlarging the hull or body, were such that the end
product was a newly manufactured vehicle employing donor parts.
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    RTDI described the subject noncompliances as the lack of a
secondary hood latch system and the failure of certain materials in the
passenger compartment to meet burn resistance requirements. RTDI stated
its belief that the noncompliances are inconsequential as they relate
to motor vehicle safety.
    In support of its petition, RTDI submitted the following reasoning:
    1. FMVSS No. 113 specifies, ``a front opening hood which, in any
open position, partially or completely obstructs a driver's forward
view through the windshield must be provided with a second latch
position on the hood latch system or with a second hood latch system.''
49 CFR 571.113, S4.2. The purpose of FMVSS No. 113 is to establish
requirements for vehicle hood latch systems so that the hood remains
secure while the vehicle is operated even if the primary latch fails or
is not properly engaged. The absence of a secondary latch increases the
possibility that the hood may open during vehicle operation and prevent
the driver from seeing the road ahead.
    2. The U.S. Coast Guard has adopted specific design and operational
requirements for APVs.\2\ Pursuant to U.S. Coast Guard regulations,
while an APV is operating on water, the hood is to remain in an
``open'' position. See 46 CFR 182.460 (``a space containing machinery
powered by, or fuel tanks for, gasoline must have a ventilation system
that complies with this section''), 46 CFR 182.465 (``a space
containing diesel machinery must be fitted with adequate means . . . to
provide sufficient air for proper operation of main engines and
auxiliary engines.''). This requirement is intended to permit a
sufficient amount of air flow around the engine compartment, which
reduces the potential for the engine to overheat and potentially cause
a fire.\3\ During waterborne operation, the hood of the APV is opened
or elevated by approximately four inches. Although the hood of the APV
is slightly raised, it has vertical arms which rest on manually
operated drop latches. The hood does not pose a risk of opening
unexpectedly during operation, even without a secondary hood latch
system. The hoods of the APVs are substantially heavier than the hoods
of traditional motor vehicles. As a practical matter, it is highly
unlikely that the force of the wind against the vehicle could move the
hood of the APV. In its more than 30 years of operation, RTDI has never
received a report or allegation involving the opening of a vehicle's
hood while operating either on the public roads or in the public
waterways.
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    \2\ Under the U.S. Coast Guard rubric, APVs are classified as
``T-Boats'' which are small passenger vessels weighing less than 100
gross tons.
    \3\ U.S. Coast Guard regulations also require that while
operating in the water, the engine compartment can be fully closed.
In the event of a fire in the engine compartment, the operator will
deploy the hood latch, dropping the hood and closing off the
compartment. This feature is designed to contain the fire by
preventing the flow of oxygen around the engine.
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    3. FMVSS No. 302 sets out the burn resistance requirements for
materials used in certain parameters within the occupant compartments
of vehicles. The stated purpose of FMVSS No. 302 is ``to reduce the
deaths and injuries to motor vehicle occupants caused by vehicle fires,
especially those originating in the interior of the vehicle from
sources such as matches or cigarettes.'' 49 CFR 571.302, S2.
    The fire risks that exist in traditional motor vehicles are not the
same concerns that present themselves in the APVs. Mitigating the risks
of a fire occurring on board an APV are centered around the operation
and safeguarding of the engine compartment and passenger egress
conditions.
    The APVs also have installed a series of systems designed to
protect passengers and allow for ease of egress from the occupant
compartment in the event of a fire. The RTDI vehicles have an open-air
design with multiple areas of passenger egress. Additionally, and per
U.S. Coast Guard requirements, all of the vehicles have a fire
suppression system installed throughout the vehicle. The fire
suppression systems include vent closures, heat detection devices,
vapor detection systems and fire extinguishing systems. In the event of
a fire in the APV, the operator will activate the fire suppression
system which releases the carbon dioxide fire extinguishing agent. The
vehicles are also equipped with two portable fire extinguishers and all
vehicle operators receive emergency evacuation training on no less than
a quarterly basis, per U.S. Coast Guard requirements, and often more
regularly.
    4. By contrast, FMVSS No. 302 is primarily concerned with
protecting passengers against vehicle fires that occur due to flames or
sparks inside the vehicle. In addition to the safety features described
above, the vehicles have implemented other measures that provide an
equivalent measure of safety to vehicle occupants. Smoking is expressly
prohibited in the APVs. Passengers are advised of this requirement
prior to the start of the tour. Onboard each vehicle there is a
``narrator'' or second crew member present. The narrator sits rearward,
facing into the occupant compartment and in continuous view of the
passengers' activities at all times while the APV is in operation. The
narrator is physically located so that he/she would be able to see and
stop a passenger attempting to light a match, flame or smoke on board.
    In recognizing that APVs have a unique design and may encounter
specialized hazard conditions, the U.S. Coast Guard employs a ``systems
approach'' to certification for APVs. To meet U.S. Coast Guard
requirements, the APVs must have ``a level of safety equivalent to that
required for a vessel of similar size and service.'' See Navigation and
Vessel Inspection Circular (NVIC) No. 1-01. These requirements are met,
``in part through a combination of design requirements and operational
restrictions'' and by considering ``the entire vehicle and its
equipment as a complete safety system.'' Id. The RTDI APVs are
certified to meet U.S. Coast Guard fire safety requirements for T-
boats.
    5. From its inception, the Safety Act has included a provision
recognizing that some noncompliances may pose little or no actual
safety risk. The Safety Act exempts manufacturers from their statutory
obligation to provide notice and remedy upon a determination by NHTSA
that a noncompliance is inconsequential to motor vehicle safety. See 49
U.S.C. 30118(d). In applying this recognition to particular fact
situations, the agency considers whether the noncompliance gives rise
to ``a significantly greater risk than . . . in a compliant vehicle.''
69 FR 19897, 19900 (April 14, 2000). The design and construction of the
APVs address the potential risks to passenger safety arising from fire-
related concerns to these vehicles. The safety features present on the
APVs provide a level of protection that is, at a minimum, equivalent to
the vehicle safety standards so that granting the

company's petition would be appropriate.
    RTDI concluded by expressing the belief that the subject
noncompliances are inconsequential as they relate to motor vehicle
safety, and that its petition to be exempted from providing
notification of the noncompliances, as required by 49 U.S.C. 30118, and
a remedy for the noncompliances, as required by 49 U.S.C. 30120, should
be granted.
    VI. Supplemental Information: On October 10, 2017, RTDI, per a
request from NHTSA's Office of Chief Counsel, provided the following
supplemental information:
    Regarding FMVSS No. 113, RTDI asserted that:
    1. From the driver's seat with the hood open in the normal
operating position there is no obstruction to the driver's view. When
in the ``open'' position, the hood is elevated at an angle of
approximately 4.5 inches to 5 inches. The tip of the bow of the APV
remains visible with the hood open or closed. There is no visual
obstruction to the driver when the hood is in the ``open'' position.
    2. The vehicle's engine requires the hood to remain partially open
to provide sufficient air flow to the engine. The engine's air supply
is forced through the forward opening of the engine hood. The radiator
has a reverse fan which draws fresh air through the radiator to keep
the engine cool.
    3. The hood incorporates a stand which rests on a cam lever that is
mechanically operated by a cable and handle located in the driver's
compartment. To close the hood, the driver simply pulls a handle which
rotates the cam and closes the hood. The driver would only need to
close the hood in the event of a fire in the engine compartment to cut
off the supply of oxygen.
    4. The hood itself weighs approximately 139 pounds. Given the heavy
weight of the hood and low operating speeds of the APVs (maximum 50
miles-per-hour (mph)), these features preclude the hood from
unexpectedly opening due to air flow lifting the hood open and forcing
it upward. The design of the engine hood has been in service for nearly
30 years, without incident. During testing, as much as 69.5 pounds of
force was needed to lift the hood assembly. RTDI's consultant completed
an analysis of the aerodynamic loading of the unlatched hood for the
subject vehicles and reviewed the parameters for the force of air flow
that potentially would cause an unlatched hood to open. This analysis
was done by determining the applied aerodynamic forces due to lift and
drag. The resulting moments about the hood hinge were then compared to
the moments created by the weight of the hood. The overall goal was to
determine the air speed (combined vehicle and headwind speed) necessary
for the moments created by aerodynamic forces to exceed that of the
moment created by weight.
    The hood consists of a flat steel plate which is 49.5 inches long,
53.5 inches wide, and weighs approximately 139 lbs. Calculations for
aerodynamic forces utilized flat plate assumptions with an aspect ratio
of 1.08. Under the worst-case scenario, RTDI's consultant estimated
that the hood angle of attack (AoA) will not exceed +5[deg] during use;
however, calculations were completed up to and including 10[deg] in an
excess of caution. All calculations utilized highly conservative
assumptions and approximations.
    Below is a bulleted summary of the RTDI consultant's findings:
     Under normal fully-loaded driving conditions, the hood
sits at a zero or slightly negative AoA. Given these conditions, no
lift can be generated on the flat plate. Thus, there is no critical
speed sufficient to pivot the hood open.
     At the maximum projected AoA (5[deg]), an air speed of at
least 100 mph would be needed to generate sufficient aerodynamic forces
to begin to open the hood.
     Even at 10[deg] AoA, double that expected in normal use, a
minimum air speed of 70 mph is necessary to potentially open the hood.
This speed is still beyond the maximum combined (vehicle and headwind)
air speed that would be seen by these vehicles in normal operation.
    Regarding FMVSS No. 302, RTDI asserted that:
    1. It had not certified each of the individual components and
materials listed in FMVSS No. 302, S4.2 to the burn rate requirements
of S4.3. However, all of the materials used in the occupant compartment
of the APVs do follow the guidance provided by the U.S. Coast Guard in
NVIC 1-01: Guidelines For The Certification Of DUKW Amphibious
Vehicles. The NVIC recommends that:
    Operators should consider highway requirements and land use when
selecting the type of fire extinguishing system. Pre-engineered
automatic systems may be required to shut down the engine when
activated. This could pose a safety hazard if the DUKW is equipped with
power steering and or brakes and the shutdown occurs in traffic.
    The fire protection system, as well as other safety devices of the
RTDI APVs, are designed to take into consideration the various hazards
the vehicle may encounter in different operating zones (i.e., system
approach).
    2. The risk of fire associated with APVs stems primarily from
mechanical and electrical faults serving as mechanisms for ignition.
The risk of fire above deck is mitigated through constant visual
monitoring by the onboard crew of the passenger compartment, as well as
enforcement of a ``No Smoking'' policy. To satisfy U.S. Coast Guard
requirements for commercial operations on water, RTDI APVs are
outfitted with a robust fire protection system not normally found on
land based vehicles, including the presence of fire extinguishers on
board each vehicle. In addition, the construction of the APVs takes
into account the particular risks associated with a vehicle that
operates both on road and in the water. For example, traditional
automotive wire is not allowed. Instead, marine electrical wire is
required to be used, which is specifically designed for harsh
environments: it is flexible yet heavily coated, resistant to corrosion
and less likely to chafe and cause fires.
    Below is a list of U.S. Coast Guard fire protection standards which
the RTDI APVs meet. Although these standards are promulgated by the
U.S. Coast Guard, they are all aimed at fire prevention and mitigation
and would prevent a fire from occurring on the road as well as in the
water.

 46 CFR 185.504 Emergency Instructions List Posted
 46 CFR 176.810 (a) and (7)/181.450 Fire and Smoke Detection
System
 46 CFR 176.810/176.810 (b) and (1) Portable Fire Extinguishers
 46 CFR 181.500 Date Cylinder Hydro Tested
 46 CFR 181.520 Proper Location
 46 CFR 176.810 (a) and (b) Fixed Fire Extinguishing System
 46 CFR 181.400 Annual Service
 46 CFR 182.465 (h) Engine Power/Ventilation Shut Down
 46 CFR 182.425 Exhaust Systems
 46 CFR 176.804 Fuel System
 46 CFR 182.460 Tank Space Properly Vented
 46 CFR 182.450 (e) Fuel Tank Vent
 46 CFR 182.15-35 Vent Opening
 46 CFR 182.440 (b/4) Independent Fuel Tank Ground
 46 CFR 182.455 (b/4) Shut Off Valve (Tank/Engine)
 46 CFR 182.20-40 (b/5) Fuel Tank Hose
 46 CFR 182.20.30 (d) Flexible Hoses (SAE J-1942)

 46 CFR 182.470 Ventilation of Machinery Spaces
 46 CFR 182.470/182.460 (e)
 46 CFR 182.15-45 Closure Devices for Spaces w/Fixed
CO2
 46 CFR 182.710/182.40-1 Vital Systems Piping
 46 CFR 182.720/182.40 Non-Metallic Piping
 46 CFR 183.310 Primary Power and Lighting System
 46 CFR 183.376 Grounding
 46 CFR 176.806/183.310/183.350/183.354 Batteries/Alternators
 46 CFR 183.330/183.05-15/183.10-15 Switchboards and
Distribution Panels
 46 CFR 183.340/183.05-45/183.05-50/183.10-20 Cable/Wiring
 46 CFR 176.810 (b) (2) Fixed CO2 Certificate

    3. The fire protection features satisfying the list of requirements
cited above are also relevant to the prevention or suppression of fire
during on road use of the APVs and all RTDI operators are trained in
the use of these systems for both land and water operation. The design
and construction of the APVs is consistent with the requirements set
out above. Further, RTDI APV operators hold both commercial driver's
licenses and U.S. Coast Guard certified vessel captain licenses. As the
purpose of FMVSS No. 302 is to ``reduce deaths caused by vehicle fires,
especially those originating in the interior of the vehicle from
sources such as matches or cigarettes,'' the measures taken to mitigate
against the outbreak of fires in the APVs per U.S. Coast Guard
regulations also mitigate against the risk of fire contemplated by the
FMVSS.
    4. The APVs meet all U.S. Coast Guard requirements related to fire
prevention and emergency response, which provides an equivalent level
of protection from the risks contemplated by FMVSS No. 302.
    5. In recall 17V-193, RTDI determined that the amphibious vehicles
it manufactured between 1996 and 2014 do not meet the requirements of
FMVSS No. 302. To view NTHSA's information request to RTDI and RTDI's
full response including pictures and further vehicle information please
refer to the docket.
    VII. NHTSA's Analysis: The agency has reviewed RTDI's petition and
provides the following analysis:
    The burden of establishing the inconsequentiality of a failure to
comply with a performance requirement in a standard--as opposed to a
labeling requirement--is more substantial and difficult to meet.
Accordingly, the agency has not found many such noncompliances
inconsequential.\4\ Potential performance failures of safety-critical
equipment, like seat belts or air bags, are rarely deemed
inconsequential.
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    \4\ Cf. Gen. Motors Corporation; Ruling on Petition for
Determination of Inconsequential Noncompliance, 69 FR 19897, 19899
(Apr. 14, 2004) (citing prior cases where noncompliance was expected
to be imperceptible, or nearly so, to vehicle occupants or
approaching drivers).
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    An important issue to consider in determining inconsequentiality
based upon NHTSA's prior decisions on noncompliance issues was the
safety risk to individuals who experience the type of event against
which the recall would otherwise protect.\5\ NHTSA also does not
consider the absence of complaints or injuries to show that the issue
is inconsequential to safety. ``Most importantly, the absence of a
complaint does not mean there have not been any safety issues, nor does
it mean that there will not be safety issues in the future.'' \6\
``[T]he fact that in past reported cases good luck and swift reaction
have prevented many serious injuries does not mean that good luck will
continue to work.'' \7\
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    \5\ See Gen. Motors, LLC; Grant of Petition for Decision of
Inconsequential Noncompliance, 78 FR 35355 (June 12, 2013) (finding
noncompliance had no effect on occupant safety because it had no
effect on the proper operation of the occupant classification system
and the correct deployment of an air bag); Osram Sylvania Prods.
Inc.; Grant of Petition for Decision of Inconsequential
Noncompliance, 78 FR 46000 (July 30, 2013) (finding occupant using
noncompliant light source would not be exposed to significantly
greater risk than occupant using similar compliant light source).
    \6\ Morgan 3 Wheeler Limited; Denial of Petition for Decision of
Inconsequential Noncompliance, 81 FR 21663, 21666 (Apr. 12, 2016).
    \7\ United States v. Gen. Motors Corp., 565 F.2d 754, 759 (D.C.
Cir. 1977) (finding defect poses an unreasonable risk when it
``results in hazards as potentially dangerous as sudden engine fire,
and where there is no dispute that at least some such hazards, in
this case fires, can definitely be expected to occur in the
future'').
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    Arguments that only a small number of vehicles or items of motor
vehicle equipment are affected have also not justified granting an
inconsequentiality petition.\8\ Similarly, NHTSA has rejected petitions
based on the assertion that only a small percentage of vehicles or
items of equipment are likely to actually exhibit a noncompliance. The
percentage of potential occupants that could be adversely affected by a
noncompliance does not determine the question of inconsequentiality.
Rather, the issue to consider is the consequence to an occupant who is
exposed to the consequence of that noncompliance.\9\
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    \8\ See Mercedes-Benz, U.S.A., L.L.C.; Denial of Application for
Decision of Inconsequential Noncompliance, 66 FR 38342 (July 23,
2001) (rejecting argument that noncompliance was inconsequential
because of the small number of vehicles affected); Aston Martin
Lagonda Ltd.; Denial of Petition for Decision of Inconsequential
Noncompliance, 81 FR 41370 (June 24, 2016) (noting that situations
involving individuals trapped in motor vehicles--while infrequent--
are consequential to safety); Morgan 3 Wheeler Ltd.; Denial of
Petition for Decision of Inconsequential Noncompliance, 81 FR 21663,
21664 (Apr. 12, 2016) (rejecting argument that petition should be
granted because the vehicle was produced in very low numbers and
likely to be operated on a limited basis).
    \9\ See Gen. Motors Corp.; Ruling on Petition for Determination
of Inconsequential Noncompliance, 69 FR 19897, 19900 (Apr. 14,
2004); Cosco Inc.; Denial of Application for Decision of
Inconsequential Noncompliance, 64 FR 29408, 29409 (June 1, 1999).
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    RTDI has not met its burden of demonstrating that the noncompliance
with FMVSS No. 113 is inconsequential. In regards to FMVSS No. 113,
RTDI says that as a practical matter, the hood on these vehicles is
heavier than hoods on traditional vehicles and because of the weight it
is highly unlikely that the force of the wind against the vehicle could
move the hood. As the agency understands the hood design, the hood
simply rests in the down position due to its weight and the effects of
gravity. RTDI explained that ``the hood incorporates a stand which
rests on a cam lever that is mechanically operated by a cable and
handle located in the driver's compartment. To close the hood, the
driver simply pulls a handle which rotates the cam and closes the
hood.'' RTDI also explained that the hood on these vehicles must remain
in an elevated open position at all times while operating (i.e., while
on public roads and on waterways) in order to provide the engine with
sufficient air flow. The agency is concerned, regardless of hood
position (i.e., fully closed or normally elevated), that any
irregularities in the roadway (i.e., humps, bumps, debris or pot holes)
could cause the hood to bounce up and down from its resting place. In
its normal partially opened position, and with no hood latching system,
there is an increased risk that the hood on these vehicles could
inadvertently fly open when encountering the right combination of
vehicle loading, road geometry, road debris, vehicle speed, and wind
speed.
    RTDI had a consultant conduct an aerodynamic loading analysis to
look at the possibility of the hood lifting, due to vehicle and wind
speeds, and hood angle of incline. The actual analysis was not provided
to the agency, but a summary of the results was provided by RTDI. The
analysis concluded that under ``normal fully-loaded driving
conditions'' and a wind speed in the range of 70-100 mph, based on
different hood elevation levels, the hood could begin to open. The
agency is unable to

fully assess whether the consultant's analysis supports RTDI's claims
because the underlying data, calculations, and supporting assumptions
were not provided to the agency in a manner sufficient to accept the
consultant's analysis. Even if the agency were to accept the
consultant's analysis, the agency would remain concerned about the
safety risk. For example, a vehicle traveling at or near the 50 mph
maximum speed that encounters a strong wind gust could foreseeably
experience total wind speed at or above the wind speed range of 70-100
mph, causing the hood to open and obstructing the driver's view.
    RTDI stated that in 30 years it has never received a report or
allegation involving the opening of the hood while operating on the
public roads or in public waterways. From a safety perspective, the
agency believes that the absence of prior reports or allegations of the
hood opening under operation is not sufficient justification to ensure
it will not happen in the future.
    RTDI also stated that the presence of a secondary hood latch system
is unnecessary because operating these vehicles with the hood slightly
elevated diminishes the potential for a fire to occur in these
vehicles. FMVSS No. 302 and FMVSS No. 113 are separate safety standards
addressing separate safety needs. FMVSS No. 302 specifies burn
resistance requirements for materials used in the occupant compartments
of motor vehicles and FMVSS No. 113 establishes the requirement for
providing a hood latch system or hood latch systems to reduce the risk
of the hood opening and obstructing the driver's view. Reducing the
probability of a vehicle fire is not an appropriate justification for
not meeting the safety requirements of FMVSS No. 113.
    RTDI also has not met its burden of demonstrating that the
noncompliance with FMVSS No. 302 is inconsequential to safety,
particularly without having provided information on the burn rates of
the materials in the occupant compartment. The purpose of FMVSS No. 302
is to establish a burn rate for materials to reduce severity and
frequency of burn injuries, allow the driver time to stop the vehicle,
and increase occupant evacuation time.
    FMVSS No. 302 differs from U.S. Coast Guard standards in that FMVSS
No. 302 has a burn rate requirement for interior materials while U.S.
Coast Guard standards focus on containment of fires originating in the
engine and fire suppression. In response to an inquiry by the agency,
RTDI stated that each of the individual components and materials within
the boundaries of the occupant compartment of the subject APVs has not
been certified to the burn rate requirements of paragraph S4.3 of FMVSS
No. 302; however, it meets the standards and follows the guidelines
provided by the U.S. Coast Guard. RTDI stated that the APVs are
equipped with fire suppression systems and that the operators of the
subject APVs hold both commercial driver's licenses and U.S. Coast
Guard certified vessel captain licenses and are trained to identify and
suppress a fire, should one occur.
    While U.S. Coast Guard regulations are intended to mitigate some of
the same fire risks as FMVSS No. 302, there are other potential sources
of fire that the U.S. Coast Guard regulations do not address. In
addition to fires originating in the engine compartment, NHTSA is
concerned about other sources of fire, such as a fire originating from
a vehicle crash, that may occur when the vehicle is operating on a
roadway. Having trained personnel on board the subject APVs does not
necessarily mitigate the need for compliance with FMVSS No. 302.
Without information on the actual burn rates of the materials used in
the vehicles' occupant compartment, NHTSA cannot evaluate whether the
factors cited by RTDI mitigate the noncompliance to the point that it
is inconsequential to motor vehicle safety. For instance, if the
materials used in the occupant compartment are highly flammable,
trained personnel may not have sufficient time to use a fire
extinguisher in the event of a fire, or activate the fire suppression
systems.
    Lastly, RTDI also stated that it has a strict ``No Smoking'' policy
and that the operators and crew monitor the passengers accordingly.
Having a ``No Smoking'' policy does not necessarily appropriately
mitigate safety risk in the subject APVs. A ``No Smoking'' policy would
not prevent fires from other sources, even assuming that such a policy
is always followed. Further, NHTSA cannot rely on RTDI's policies as a
means to mitigate safety risks because later operations/owners may not
implement on the same policies.
    VIII. NHTSA's Decision: In consideration of the foregoing, NHTSA
finds that RTDI has not met its burden of persuasion that the
noncompliances with FMVSS No. 113 and 302 in the subject vehicles are
inconsequential to motor vehicle safety.
    Accordingly, RTDI's petition is hereby denied and RTDI is
consequently obligated to provide notification of, and a free remedy
for, the noncompliances under 49 U.S.C. 30118 and 30120.

(Authority: 49 U.S.C. 30118, 30120: delegations of authority at 49
CFR 1.95 and 501.8)

Joseph Kolly,
Acting Associate Administrator for Enforcement.
[FR Doc. 2021-22975 Filed 10-20-21; 8:45 am]
BILLING CODE 4910-59-P