[Federal Register Volume 87, Number 88 (Friday, May 6, 2022)]
[Proposed Rules]
[Pages 27032-27035]
[FR Doc No: 2022-08909]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0503; Project Identifier MCAI-2021-01244-T]
RIN 2120-AA64

Airworthiness Directives; Airbus SAS Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to supersede Airworthiness Directive (AD)
2018-03-12, which applies to certain Airbus SAS Model A318 series
airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, and -133
airplanes; Model A320-211, -212, -214, -231, -232, and -233 airplanes;
and Model A321-111, -112, -131, -211, -212, -213, -231, and -232
airplanes. AD 2018-03-12 requires repetitive rototest inspections for
cracking of the fastener holes in certain door stop fittings, and
repair if necessary. Since the FAA issued AD 2018-03-12, new analysis
by the manufacturer resulted in optimized compliance times for the
inspections. This proposed AD would require repetitive rototest
inspections for cracking of the fastener holes in certain door stop
fittings at revised compliance times, and corrective actions if
necessary, as specified in a European Union Aviation Safety Agency
(EASA) AD, which is proposed for incorporation by reference. The FAA is
proposing this AD to address the unsafe condition on these products.

DATES: The FAA must receive comments on this proposed AD by June 21,
2022.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For material that will be incorporated by reference (IBR) in this
AD, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany;
telephone +49 221 8999 000; email [email protected]; internet
www.easa.europa.eu. You may find this IBR material on the EASA website
at https://ad.easa.europa.eu. You may view this IBR material at the
FAA, Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>. It is also available in
the AD docket on the internet at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0503.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2022-
0503; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this NPRM, any comments received, and other information. The street
address for Docket Operations is listed above. Comments will be
available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Vladimir Ulyanov, Aerospace Engineer,
Large Aircraft Section, International Validation Branch, FAA, 2200
South 216th St., Des Moines, WA 98198; telephone<PHONE_NUMBER>; email
[email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2022-0503; Project Identifier
MCAI-2021-01244-T'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
the proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this proposed AD.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this

NPRM. Submissions containing CBI should be sent to Vladimir Ulyanov,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone 206-
231-3229; email [email protected]. Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Discussion

    The FAA issued AD 2018-03-12, Amendment 39-19185 (83 FR 5906,
February 12, 2018) (AD 2018-03-12), which applies to certain Airbus SAS
Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -
131, -132, and -133 airplanes; Model A320-211, -212, -214, -231, -232,
and -233 airplanes; and Model A321-111, -112, -131, -211, -212, -213, -
231, and -232 airplanes. AD 2018-03-12 requires repetitive rototest
inspections for cracking of the fastener holes in certain door stop
fittings, and repair if necessary. The FAA issued AD 2018-03-12 to
address cracking at the door stop fitting holes of fuselage frame (FR)
66 and FR68. Such cracking could result in reduced structural integrity
of the airplane due to the failure of structural components.

Actions Since AD 2018-03-12 Was Issued

    Since the FAA issued AD 2018-03-12, Airbus has revised the
compliance times to accomplish the rototest inspections based on
reports from operators and new analysis.
    EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2021-0242, dated November 8, 2021
(EASA AD 2021-0242) (also referred to as the Mandatory Continuing
Airworthiness Information, or the MCAI), to correct an unsafe condition
for certain Airbus SAS Model A318 series airplanes; Model A319-111, -
112, -113, -114, -115, -131, -132, and -133 airplanes; Model A320-211,
-212, -214, -215, -216, -231, -232, and -233 airplanes; and Model A321-
111, -112, -131, -211, -212, -213, -231, and -232 airplanes. EASA AD
2021-0242 supersedes EASA AD 2016-0238 (which corresponds to FAA AD
2018-03-12). Model A320-215 airplanes are not certificated by the FAA
and are not included on the U.S. type certificate data sheet; this AD
therefore does not include those airplanes in the applicability.
    This proposed AD was prompted by reports of fatigue damage in the
structure for the door stop fittings on certain fuselage frames. The
FAA is proposing this AD to address cracking at the door stop fitting
holes of fuselage FR66 and FR68 which could result in reduced
structural integrity of the airplane. See the MCAI for additional
background information.

Model A320-216 Airplanes

    The Airbus SAS Model A320-216 was U.S. type certificated on
December 19, 2016. Before that date, any EASA ADs that affected Model
A320-216 airplanes were included in the U.S. type certificate as part
of the Required Airworthiness Actions List (RAAL). One or more Model
A320-216 airplanes have subsequently been placed on the U.S. Register,
and will now be included in FAA AD actions. For Model A320-216
airplanes, the requirements that correspond to AD 2018-03-12 were
mandated by the MCAI via the RAAL. Although that RAAL requirement is
still in effect, for continuity and clarity the FAA has identified
Model A320-216 airplanes in paragraph (c) of this proposed AD; the MCAI
that is specified in paragraph (g) in this proposed AD includes
retained requirements, which would therefore apply to those airplanes.

Explanation of Retained Requirements

    Although this proposed AD does not explicitly restate the
requirements of AD 2018-03-12, this proposed AD would retain all of the
requirements of AD 2018-03-12. Those requirements are referenced in
EASA AD 2021-0242, which, in turn, is referenced in paragraph (g) of
this proposed AD.

Related Service Information Under 1 CFR Part 51

    EASA AD 2021-0242 describes procedures for rototest inspections for
cracking of the fastener holes in the airframe structure for the door
stop fittings installation in FR66 and FR68, and corrective actions.
Corrective actions include repair or modification of fastener holes at
door stop locations.
    This material is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to the FAA's bilateral agreement with the State of Design Authority,
the FAA has been notified of the unsafe condition described in the MCAI
referenced above. The FAA is proposing this AD because the FAA
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified
in EASA AD 2021-0242 described previously, as incorporated by
reference, except for any differences identified as exceptions in the
regulatory text of this proposed AD.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA developed a process to use some civil aviation
authority (CAA) ADs as the primary source of information for compliance
with requirements for corresponding FAA ADs. The FAA has been
coordinating this process with manufacturers and CAAs. As a result, the
FAA proposes to incorporate EASA AD 2021-0242 by reference in the FAA
final rule. This proposed AD would, therefore, require compliance with
EASA AD 2021-0242 in its entirety through that incorporation, except
for any differences identified as exceptions in the regulatory text of
this proposed AD. Using common terms that are the same as the heading
of a particular section in EASA AD 2021-0242 does not mean that
operators need comply only with that section. For example, where the AD
requirement refers to ``all required actions and compliance times,''
compliance with this AD requirement is not limited to the section
titled ``Required Action(s) and Compliance Time(s)'' in EASA AD 2021-
0242. Service information required by EASA AD 2021-0242 for compliance
will be available at https://www.regulations.gov by searching for and
locating Docket No. FAA-2022-0503 after the FAA final rule is
published.

Costs of Compliance

    The FAA estimates that this proposed AD affects 1,084 airplanes of
U.S. registry. The FAA estimates the following costs to comply with
this proposed AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
            Action                Labor cost      Parts cost       Cost per  product     Cost on U.S.  operators
----------------------------------------------------------------------------------------------------------------
Inspections..................  Up to 25 work-               $0  Up to $2,125..........  Up to $2,303,500.
                                hours x $85
                                per hour =
                                $2,125.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary on-
condition modifications that would be required based on the results of
any required actions. The FAA has no way of determining the number of
aircraft that might need these on-condition modifications:

                 Estimated Costs of On-Condition Actions
------------------------------------------------------------------------
                                                             Cost per
              Labor cost                   Parts cost        product
------------------------------------------------------------------------
Up to 27 work-hours x $85 per hour =              $610           $2,905
 $2,295...............................
------------------------------------------------------------------------

    The FAA has received no definitive data on which to base the cost
estimates for the on-condition repairs specified in this proposed AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive (AD) 2018-03-12, Amendment 39-19185
(83 FR 5906, February 12, 2018); and
0
b. Adding the following new AD:

Airbus SAS: Docket No. FAA-2022-0503; Project Identifier MCAI-2021-
01244-T.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by June 21, 2022

(b) Affected ADs

    This AD replaces AD 2018-03-12, Amendment 39-19185 (83 FR 5906,
February 12, 2018) (AD 2018-03-12).

(c) Applicability

    This AD applies to Airbus SAS Model airplanes specified in
paragraphs (c)(1) through (4) of this AD, certificated in any
category, as identified in European Union Aviation Safety Agency
(EASA) AD 2021-0242, dated November 8, 2021 (EASA AD 2021-0242).
    (1) Model A318-111, -112, -121, and -122 airplanes.
    (2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133
airplanes.
    (3) Model A320-211, -212, -214, -216, -231, -232, and -233
airplanes.
    (4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232
airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by reports of fatigue damage in the
structure for the door stop fittings on certain fuselage frames, and
new analysis by the manufacturer, which resulted in optimized
compliance times for the inspections. The FAA is issuing this AD to
address cracking at the door stop fitting holes of fuselage frame
(FR) 66 and FR68, which could result in reduced structural integrity
of the airplane.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, EASA AD 2021-0242.

(h) Exceptions to EASA AD 2021-0242

    (1) Where EASA AD 2021-0242 refers to its effective date, this
AD requires using the effective date of this AD.
    (2) The ``Remarks'' section of EASA AD 2021-0242 does not apply
to this AD.
    (3) Where paragraph (3) of EASA AD 2021-0242 specifies if any
crack is found during any inspection to ``contact Airbus for
approved instructions for corrective actions and accomplish those
instructions accordingly,'' this AD requires if any cracking is
found, the cracking must be repaired before further flight using a
method approved by the Manager, Large Aircraft Section,
International Validation Branch, FAA; or EASA; or Airbus SAS's EASA
Design Organization Approval (DOA). If approved by the DOA, the
approval must include the DOA-authorized signature.
    (4) Where paragraphs (2), (3), (5), and (5.1) of EASA AD 2021-
0242 specify limits or actions in ``the applicable SRM'' or ``the

SRM,'' for purposes of this AD, replace those phrases with the
following phrase: ``the applicable SRM as specified in the
instructions of the inspection SB.''

(i) No Reporting Requirement

    Although the service information referenced in EASA AD 2021-0242
specifies to submit certain information to the manufacturer, this AD
does not include that requirement.

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, International Validation Branch, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or responsible Flight
Standards Office, as appropriate. If sending information directly to
the Large Aircraft Section, International Validation Branch, send it
to the attention of the person identified in paragraph (k)(2) of
this AD. Information may be emailed to: [email protected].
    (i) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.
    (ii) AMOCs approved previously for AD 2018-03-12 are approved as
AMOCs for the corresponding provisions of EASA AD 2021-0242 that are
required by paragraph (g) of this AD.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, Large Aircraft
Section, International Validation Branch, FAA; or EASA; or Airbus
SAS's EASA Design Organization Approval (DOA). If approved by the
DOA, the approval must include the DOA-authorized signature.
    (3) Required for Compliance (RC): For any service information
referenced in EASA AD 2021-0242 that contains RC procedures and
tests: Except as required by paragraph (j)(2) of this AD, RC
procedures and tests must be done to comply with this AD; any
procedures or tests that are not identified as RC are recommended.
Those procedures and tests that are not identified as RC may be
deviated from using accepted methods in accordance with the
operator's maintenance or inspection program without obtaining
approval of an AMOC, provided the procedures and tests identified as
RC can be done and the airplane can be put back in an airworthy
condition. Any substitutions or changes to procedures or tests
identified as RC require approval of an AMOC.

(k) Related Information

    (1) For information about EASA AD 2021-0242 contact EASA,
Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221
8999 000; email [email protected]; internet www.easa.europa.eu. You
may find this EASA AD on the EASA website at https://ad.easa.europa.eu. You may view this material at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>. This material may be
found in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-
2022-0503.
    (2) For more information about this AD, contact Vladimir
Ulyanov, Aerospace Engineer, Large Aircraft Section, International
Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198;
telephone<PHONE_NUMBER>; email [email protected].

    Issued on April 21, 2022.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2022-08909 Filed 5-5-22; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 63 (Wednesday, April 2, 2014)]
[Notices]
[Pages 18546-18547]
[FR Doc No: 2014-07102]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2014-0233; FRL-9908-77]

Office of Pesticide Programs; Notice of Public Meeting

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: EPA's Office of Pesticide Programs, the U.S. Department of
Agriculture (USDA), and the U.S. Fish and Wildlife Service and the
National Marine Fisheries Service (collectively, the Services), are
holding a one day workshop to provide a forum for stakeholders to offer
scientific and technical feedback on the interim approaches that were
issued in November 2013 by the EPA, USDA, and the Services in response
to the National Academy of Sciences (NAS) report entitled, ``Assessing
Risks to Endangered and Threatened Species from Pesticides''. The
workshop is an opportunity for stakeholders and agencies to continue
their dialogue on the technical aspects of implementing the NAS
recommendations, building upon public meetings held in November and
December 2013 and the implementation of the enhanced stakeholder
engagement process that was finalized in March 2013. The workshop is
not designed to, or intended to be a decision-making forum; consensus
will not be sought or developed at the meeting. This public meeting
furthers the agencies' goal of developing a consultation process for
pesticide impacts on listed species that is efficient, inclusive, and
transparent.

DATES: The meeting will be held on April 22, 2014 from 9:00 a.m. to
5:00 p.m.
    Requests to participate in the meeting must be received on or
before April 15, 2014. To request accommodation of a disability, please
contact the person listed under FOR FURTHER INFORMATION CONTACT,
preferably at least 10 days prior to the meeting, to give EPA as much
time as possible to process your request.

ADDRESSES: The meeting will be held at Office of Pesticide Programs,
One Potomac Yard, 2777 S. Crystal Drive, Arlington, Virginia 22202 in
the 1st floor conference room. Webinar and teleconference information
will be provided to participants requesting access via webinar and
telephone.
    Requests to participate in the meeting, identified by docket
identification (ID) number EPA-HQ-OPP-2014-0233, may be submitted to
the person listed under FOR FURTHER INFORMATION CONTACT.

FOR FURTHER INFORMATION CONTACT: Catherine Eiden, Pesticide Re-
evaluation Division (7508P) and the Environmental Fate and Effects
Division (7507P), Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-
0001; telephone number:<PHONE_NUMBER>; fax 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 develop,
manufacture, formulate, sell, and/or apply pesticide products, and if
you are interested in the potential impacts of pesticide use on listed
species. 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)
 Other stakeholders who have an interest in potential impacts
of pesticides on listed species

B. How can I get copies of this document and other related information?

    The docket for this action, identified by docket identification
(ID) number EPA-HQ-OPP-2014-0233, 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), EPA West 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 (202)
566-1744, and the telephone number for the OPP Docket is (703) 305-
5805. Please review the visitor instructions and additional information
about the docket available at http://www.epa.gov/dockets.

II. Background

    The workshop is an opportunity for stakeholders and agencies to
continue their dialogue on the technical aspects of implementing the
NAS recommendations, building upon public meetings held in November and
December 2013 and the implementation of the enhanced stakeholder
engagement process that was finalized in March 2013. The workshop is
not designed, or intended to be a decision-making forum; consensus will
not be sought, or developed at the meeting.
    Stakeholders will be asked to provide scientific and technical
information that could potentially be used by the agencies to inform
various scientific determinations that will be made during the course
of evaluation pesticides, including:
    1. Step 1, otherwise known as the ``May Affect'' threshold
identified by NAS;
    2. Systematic methods for implementing ``Weight of Evidence''
analysis that consider both quantitative and qualitative data; and
    3. The consideration of uncertainty in the scientific assessment
process.

While the focus of this public meeting is on the three topics noted in
this unit, comments on all aspects of the materials previously provided
to the public will be accepted. The agencies' interim approach document
entitled, ``Interagency Approach for Implementation of the National
Academy of Sciences Report'' (11/13/2013) and the presentation
materials from the November 2013 stakeholder workshop are available at
the following Web site: http://www.epa.gov/oppfead1/endanger/2013/nas.html.

    In addition to the scientific and technical information presented
by stakeholders, representatives from Federal agencies will join the
dialogue to ask clarifying questions of the presenters and to respond
to questions regarding the pesticide registration process and
Endangered Species Act consultation. The agencies see this forum as an
integral component of the stakeholder engagement process developed for
pesticide consultations and contributes to the agencies' commitment to
adapt and refine the interim approaches as we progress through the
initial consultations.

III. How can I request to participate in this meeting?

    You may submit a request to participate in this meeting to the
person listed under FOR FURTHER INFORMATION CONTACT. Do not submit any
information in your request that is considered CBI. Requests to
participate in the meeting, identified by docket ID number EPA-HQ-OPP-
2014-0233, must be received on or before April 15, 2014.

List of Subjects

    Environmental protection, FIFRA/ESA consultations, Interim
approaches, Pesticides, Threatened and endangered species.

    Dated: March 25, 2014.
Michael Goodis,
Acting Director, Pesticide Re-evaluation Division, Office of Pesticide
Programs.
[FR Doc. 2014-07102 Filed 4-1-14; 8:45 am]
BILLING CODE 6560-50-P


UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on April 14, 2006

NOTICE OF ACTION TAKEN -- DOCKET OST-2006-24505

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  VOLGA-DNEPR J.S. CARGO AIRLINE (Volga-Dnepr)
Date Filed:  April 12, 2006

Relief requested:  Exemption from 49 USC § 40109(g) to permit the
applicant to operate four, one-way, all-cargo charter flights, using its
AN-124-100 aircraft, carrying outsized cargo on behalf of the U.S.
Department of Defense, from Victorville, California, to Fort Drum, New
York, during the period April 17 through April 23, 2006.  The applicant
states that the flights would carry nine OH-58D helicopters and
associated equipment.  The applicant asserts that DOD needs the subject
lift to meet highly time-sensitive training and operational mission
schedules; that the DOD organic lift scheduled to transport the cargo
was diverted to other areas; that the cargo is too large for
transportation on any commercially available U.S. aircraft; and that
surface transportation is not feasible because of the delicate nature of
the cargo and urgency of the shipment.

Applicant representative:  Glenn P. Wicks,<PHONE_NUMBER>
 DOT analyst:  Robert J. Finamore,<PHONE_NUMBER>

Responsive pleadings:  Volga-Dnepr served its application on those U.S.
carriers operating large all-cargo aircraft.  Each carrier indicated
that it did not have aircraft available to conduct the proposed
operations and that it had no comment or did not oppose grant of the
requested authority.

Statutory Standards:  Under 49 USC § 40109(g), we may authorize a
foreign air carrier to carry commercial traffic between U.S. points
(i.e., cabotage traffic) under limited circumstances.  Specifically, we
must find that the authority is required in the public interest; that
because of an emergency created by unusual circumstances not arising in
the normal course of business the traffic cannot be accommodated by U.S.
carriers holding certificates under 49 USC § 41102; that all possible
efforts have been made to place the traffic on U.S. carriers; and that
the transportation is necessary to avoid unreasonable hardship to the
traffic involved (an additional required finding, concerning emergency
transportation during labor disputes, was not relevant here).

DISPOSITION

Action: Approved.

Action date: April 14, 2006

Effective dates of authority granted: April 17, 2006, through April 23,
2006.

Basis for approval:  We are granting Volga-Dnepr’s request to operate
the four proposed one-way flights (described above), on behalf of DOD.
We found that its request met all the relevant criteria of 49 USC §
40109(g) for the grant of an exemption of this type, and that the grant
was required in the public interest.  Specifically, we were persuaded
that the need to move the cargo to meet highly time-sensitive training
and operational mission schedules; the fact that the DOD organic lift
scheduled to transport the cargo was diverted to other areas; and the
unique, outsized nature of the cargo, constituted an emergency not
arising in the normal course of business.  Moreover, based on the
representations of the U.S. carriers, we concluded that no U.S. carrier
had aircraft available that could be used to conduct the operations at
issue here.  We also found that grant of this authority would prevent
unreasonable hardship to DOD.  Finally, we found that the applicant was
qualified to perform its proposed operations.

Except to the extent exempted/waived, this authority is subject to our
standard exemption conditions (attached) and to the condition that the
applicant must comply with an FAA-approved flight routing for the
authorized operation.

Action taken by:        				Michael W. Reynolds

Acting Assistant Secretary for Aviation

and International Affairs

An electronic version of this document is available on the World Wide
Web at:

  HYPERLINK "http://dms.dot.gov//reports/reports_aviation.asp"
http://dms.dot.gov//reports/reports_aviation.asp

FOREIGN CARRIER EXEMPTION CONDITIONS
                       		       ATTACHMENT

In the conduct of the operations authorized, the foreign carrier
applicant(s) shall:

1) Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

2) Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security, including, but not limited to, 49 CFR Part 1546 or 1550, as
applicable.  To assure compliance with all applicable U.S. Government
requirements concerning security, the holder shall, before commencing
any new service (including charter flights) from a foreign airport that
would be the holder’s last point of departure for the United States,
contact its International Principal Security Inspector (IPSI) to advise
the IPSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served;

3) Comply with the requirements for minimum insurance coverage contained
in 14 CFR Part 205, and, prior to the commencement of any operations
under this authority, file evidence of such coverage, in the form of a
completed OST Form 6411, with the Federal Aviation Administration’s
Program Management Branch (AFS-260), Flight Standards Service (any
changes to, or termination of, insurance also shall be filed with that
office);

4) Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

5) Conform to the airworthiness and airman competency requirements of
its Government for international air services;

6) Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR Part 203,
concerning waiver of Warsaw Convention liability limits and defenses;

7) Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are: a) based on its
operations in international air transportation that, according to the
contract of carriage, include a point in the United States as a point of
origin, point of destination, or agreed stopping place, or for which the
contract of carriage was purchased in the United States; or b) based on
a claim under any international agreement or treaty cognizable in any
court or other tribunal of the United States.  In this condition, the
term “international air transportation” means “international
transportation” as defined by the Warsaw Convention, except that all
States shall be considered to be High Contracting Parties for the
purpose of this definition;

8) Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

9) Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department’s
rules governing charters (including 14 CFR Parts 212 and 380); and

11) Comply with such other reasonable terms, conditions, and limitations
required by the public interest as may be prescribed by the Department,
with all applicable orders or regulations of other U.S. agencies and
courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code.

05/2004


Comment Info: =================

General Comment:Dear Mr. Zeller:

I am writing as an individual consumer to request an extension of the comment period for the Food and Drug Administration's ("FDA") Proposed Rule Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, as amended by the Family Smoking and Prevention and Tobacco Control Act (the "Proposed Rule") published at 79 Fed. Reg. 23,142 and Federal Register No. 2014-09491. On behalf of myself, I am requesting that the comment period for the Proposed Rule be extended by the FDA for an additional 105 days, from its current 75-day period, to 180 days.

The Proposed Rule raises a number of significant issues and questions that are important and relevant to me, as a consumer of products that are proposed for regulation under the Proposed Rule. The Proposed Rule asks about a hundred different questions I would like to have more research completed on. I want to give the consumers a chance to devote research and provide thoughtful comments on these important questions. I have already spent many hours researching and dissecting these issues, but they take time. I know that the FDA took many years to even come up with the Proposed Rule, so I do not think it is at all unreasonable to allow the public a mere six months to comment on it. This is our only opportunity, as consumers, to provide our feedback.

I feel very strongly about e-cigarettes as an alternative to combustible cigarettes. Quite simply, I firmly believe that they saved my life and allowed me to spend more quality time with my family and friends. We, the people need to provide good quality feedback, and not just rush into any answers we can provide. I realize that the FDA has the authority under 21 CFR 10.40 to extend this time frame and that the FDA has exercised this authority on numerous occasions in the past. I would therefore ask that you do so here, so that all stakeholders have the opportunity to provide their comments on this proposed regulation.

I appreciate your consideration of my request and am happy to discuss this issue with you further.


[Federal Register Volume 83, Number 151 (Monday, August 6, 2018)]
[Notices]
[Pages 38302-38303]
[FR Doc No: 2018-16805]

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

ENVIRONMENTAL PROTECTION AGENCY

[EPA-OW-2018-0270; FRL-9981-86-OW]

Announcement of the Per- and Polyfluoroalkyl Substances (PFAS)
North Carolina Community Engagement

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of an event.

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

SUMMARY: The Environmental Protection Agency (EPA) will host a Per- and
Polyfluoroalkyl Substances (PFAS) community engagement in Fayetteville,
North Carolina. The goal of the event is to allow the EPA to hear
directly from North Carolina communities to understand ways the Agency
can best support the work that is being done at the state, local, and
tribal level. For more information on the event, visit the EPA's PFAS
website: https://www.epa.gov/pfas/pfas-community-engagement. During the
recent PFAS National Leadership Summit, the EPA announced plans to
visit communities to hear directly from those impacted by PFAS. These
engagements are the next step in the EPA's commitment to address
challenges with PFAS. The EPA anticipates that the community
engagements will provide valuable insight for the Agency's efforts
moving forward. For more information, go to the SUPPLEMENTARY
INFORMATION section of this notice.

DATES: The event will be held on August 14, 2018, from 10 a.m. to 8
p.m., eastern time. The public listening session will begin at 3 p.m.,
eastern time.

ADDRESSES: The event will be held at the Crown Ballroom, 1960 Coliseum
Drive, Fayetteville, North Carolina 28306. If you are unable to attend
the North Carolina Community Engagement event, you will be able to
submit comments at http://www.regulations.gov: Enter Docket ID No. EPA-
OW-2018-0270. Citizens, including those that attend and provide oral
statements, are encouraged to send written statements to the public
docket. Follow the online instructions for submitting comments. Once
submitted, comments cannot be edited or withdrawn. The EPA may publish
any comment received to its public docket. Do not submit electronically
any information you consider to be Confidential Business Information
(CBI) or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Davina Marraccini, USEPA Region 4, 61
Forsyth Street SW (Mail Code 9T24), Atlanta, Georgia 30303-8960;
telephone

number:<PHONE_NUMBER>; email address: [email protected].

SUPPLEMENTARY INFORMATION:
    Details about Participating in the Event: The public is invited to
speak during the August 14 listening session. Those interested in
speaking can sign up for a 3-minute speaking slot on the EPA's website
at https://www.epa.gov/pfas/pfas-community-engagement. Please check
this website for event materials as they become available, including a
full agenda, leading up to the event.
    The PFAS National Leadership Summit: On May 22-23, 2018, the EPA
hosted the PFAS National Leadership Summit. During the summit,
participants worked together to share information on ongoing efforts to
characterize risks from PFAS, develop monitoring and treatment/cleanup
techniques, identify specific near-term actions (beyond those already
underway) that are needed to address challenges currently facing states
and local communities, and develop risk communication strategies that
will help communities to address public concerns regarding PFAS.
    The EPA wants to assure the public that their input is valuable and
meaningful. Using information from the National Leadership Summit,
public docket, and community engagements, the EPA plans to develop a
PFAS Management Plan for release later this year. A summary of the
North Carolina Community Engagement will be made available to the
public following the event on the EPA's PFAS Community Engagement
website at: https://www.epa.gov/pfas/pfas-community-engagement.

    Dated: July 27, 2018.
Jennifer McLain,
Acting Director, Office of Ground Water and Drinking Water.
[FR Doc. 2018-16805 Filed 8-3-18; 8:45 am]
 BILLING CODE 6560-50-P


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Agenda of the January 11, 2005 Exposure Modeling Public Meeting

Agenda of the January 11, 2005 Exposure Modeling Public Meeting

Room 1123 Crystal Mall 2

1801 Bell St.

Arlington, VA 22202

Welcome and Introductions (9:00 - 9:05)

Old Action Items     (9:05 - 9:15)

Brief Updates (9:15 - 9:50)

PRZM3.12.2 Evaluation (J. Hetrick)

EXPRESS (R. Parker)

Review of Public Comments on EFED's Modeling Scenarios (R. Parker)

Spray Drift Update (N. Birchfield)

Release of PGW Guidance Document (B. Behl)

Major Topics

Morning Session

9:50 - 10:50

PRZM Diary -- Silk purse or sow's ear?  Comparing the predicted occurrence of atrazine in the vadose zone (PRZM3) with observed detections in shallow ground water across the United States (NAWQA) (J. Barbash, USGS)

10:50 - 11:10
Break

11:10 - 12:00

Comparison of LEACHM and PRZM Modeling to Field Data: Effect of Evaporation Simulation on Water Balance and Pesticide Movement (J.Triano, CDPR)

12:00 - 1:00
Lunch Break

Afternoon Session

1:00 - 1:50

Root Zone Water Quality Model (RZWQM): Brief Overview and Case Study (D. Wauchope, S. Cohen, Q. Ma)

1:50 - 2:05

Groundwater Modeling for Carbamate Cumulative Assessment (N. Thurman, D. Young)

2:05 - 2:20
Break

2:20 - 2:45

User-friendly CXTFIT2 Model to Estimate Setback Distances (T. Estes)

2:45 - 3:00

Wrap-Up: Next Meeting (R. Parker)

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PAPERWORK REDUCTION ACT SUBMISSION Please read the instructions before completing this form. For additional forms or assistance in completing this form, contact your agency's Paperwork Clearance Officer. Send two copies of this form, the collection instrument to be reviewed, the Supporting Statement and any additional documentation to: Office of Information and Regulatory Affairs, Office of Management and Budget, Docket Library, Room 10102, 725 17th Street NW Washington, DC 20503.

1. Agency/ Subagency originating request EPA/ OECA/ OC/ CAMPD 2. OMB control number b. G None a 2060 0025 __ __ __ __

3. Type of information collection ( check one) a. G New collection b. G Revision of a currently approved collection c. X Extension of a currently approved collection d. G Reinstatement, without change, of a previously approved collection for which approval has expired e. G Reinstatement, with change, of a previously approved collection for which approval has expired f. G Existing collection in use without an OMB control number 4. Type of review requested ( check one) a. X Regular b. G Emergency  Approval requested by: / / c. G Delegated 5. Small entities Will this information collection have a significant economic impact on a substantial number of small entities? G Yes X No For b f, note item A2 of Supporting Statement Instructions 6. Requested expiration date a. X Three years from approval date b. G Other Specify: / /___

7. Title New Source Performance Standard for Portland Cement Plants, 40 CFR Part 60, Subpart F 8. Agency form number( s) ( If applicable) 1051.08 9. Keywords: Clean Air Act , Environmental Protection, Air Pollution Control 10. Abstract Entities potentially affected by this action are portland cement plants with the following facilities: kilns, clinker coolers, raw mill systems, raw mill dryers, raw material storage, clinker storage, finished product storage, conveyor transfer points, bagging and bulk loading and unloading systems.

11. Affected public ( Mark primary with " P" and all others that apply with " X") a. Individuals or households d. Farms b. P Business or other for profit e. Federal Government c. Not for profit institutions f. State, Local or Tribal Government 12. Obligation to respond ( Mark primary with " P" and all others that apply with " X") a. G Voluntary b. G Required to obtain or retain benefits c. P Mandatory 13. Annual reporting and recordkeeping hour burden a. Number of respondents 113 b. Total annual responses 448 1. Percentage of these responses collected electronically 0 % c. Total annual hours requested 7968 d. Current OMB inventory 7968 e. Difference 0 f. Explanation of difference 1. Program Change 0 2. Adjustment 0 14. Annual reporting and recordkeeping cost burden ( in thousands of dollars)

a. Total annualized capital/ startup costs 139 b. Total annual costs ( O& M) 848 c. Total annualized cost requested 987 d. Current OMB inventory 941 e. Difference 46 f. Explanation of difference 1. Program change 0 2. Adjustment 46 15. Purpose of information collection ( Mark Primary With " P" and all others that apply with " X") a. __ Application for benefits e. __ Program planning or management b. __ Program evaluation f. __ Research c. __ General purpose statistics g. _ P_ Regulatory or compliance d. __ Audit 16. Frequency of recordkeeping or reporting ( check all that apply) a. X Recordkeeping b. Q Third party disclosure c. X Reporting 1. X On occasion 2. Q Weekly 3. Q Monthly 4. Q Quarterly 5. X Semi annually 6. Q Annually 7. Q Biannually 8. Q Other ( describe)

17. Statistical methods Does this information collection employ statistical methods?

Q Yes X No 18. Agency contact ( person who can best answer questions regarding the content of this submission) Name: Valerie Bynum Phone: 202 564 4189 OMB 83 I 10/ 95 19. Certification for Paperwork Reduction Act Submissions On behalf of this Federal agency, 1 certify that the collection of information encompassed by this request complies with' 5 CFR 1320.9.

NOTE: The text of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8( b)( 3), appear at the end of the instructions. The certification is to be made with reference to those regulatory provisions as set forth in the instructions.

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

( a) It is necessary for the proper performance of agency functions;

( b) It avoids unnecessary duplication;

© It reduces burden on small entities;

( d) It uses plain, coherent, and unambiguous terminology that is understandable to respondents;

( e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

( f) It indicates the retention periods for recordkeeping requirements;

( g) It informs respondents of the information called for under 5 CFR 1320.8( b)( 3): ( I) Why the information is being collected; ( ii) Use of information; ( iii) Burden estimate; ( iv) Nature of response ( voluntary, required for a benefit, or mandatory); ( v) Nature and extent of confidentiality; and ( vi) Need to display currently valid OMB control number;

( h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected ( see note in Item 19 of the instructions);

( i) It uses effective and efficient statistical survey methodology; and ( j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item below and explain the reason in Item 18 of the Supporting Statement.

Signature of Program Office Official Date Signature of Senior Official or designee Joseph Retzer, Director Regulatory Information Division Office of Regulatory Management and Information ( OPPE) Date OMB 83 I 10/ 95


[Federal Register Volume 78, Number 69 (Wednesday, April 10, 2013)]
[Notices]
[Pages 21460-21464]
[FR Doc No: 2013-08307]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69302; File No. SR-NSCC-2012-10]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Approving Proposed Rule Change To Eliminate the
Offset of Its Obligations With Institutional Delivery Transactions That
Settle at The Depository Trust Company for the Purpose of Calculating
Its Clearing Fund Under Procedure XV of Its Rules & Procedures

April 4, 2013.

I. Introduction

    On December 17, 2012, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') proposed rule change SR-NSCC-2012-10 (``Proposed Rule
Change'') pursuant to Section 19(b)(1) of the Securities Exchange Act
of 1934 (``Act'')\1\ and Rule 19b-4 thereunder.\2\ The Proposed Rule
Change was published in the Federal Register on January 4, 2013.\3\ The
Commission extended the period of review of the Proposed Rule Change on
February 5, 2013.\4\ The Commission received two comment letters to the
Proposed Rule Change from one commenter,\5\ as well as two responses
from NSCC to the comment letters.\6\ This order approves the Proposed
Rule Change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Release No. 34-68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4,
2013). NSCC also filed an advance notice pursuant to Section
806(e)(1) of the Payment, Clearing, and Settlement Supervision Act
of 2010 relating to these changes. Release No. 34-68621 (Jan. 10,
2013), 78 FR 3960 (Jan. 17, 2013).
    \4\ Release No. 34-68829 (Feb. 5, 2013), 78 FR 9751 (Feb. 11,
2013).
    \5\ Comment Letter from Lek Securities Corporation dated January
25, 2013 (``First Lek Letter'') (http://sec.gov/comments/sr-nscc-2012-810/nscc2012810-1.pdf), and Comment Letter from Lek Securities
Corporation dated March 18, 2013 (``Second Lek Letter'') (http://sec.gov/comments/sr-nscc-2012-810/nscc2012810-3.pdf), (collectively,
the ``Lek Letters'').
    \6\ Response Letter from NSCC dated February 22, 2013 (``First
NSCC Response'') (http://sec.gov/comments/sr-nscc-2012-810/nscc2012810-2.pdf), and Response Letter from NSCC dated March 21,
2013 (``Second NSCC Response'') (http://sec.gov/comments/sr-nscc-2012-810/nscc2012810-4.pdf), (collectively, the ``NSCC Responses'').
---------------------------------------------------------------------------

II. Description

    NSCC filed the Proposed Rule Change to permit it to make rule
changes to its Rules and Procedures (``Rules'') designed to eliminate
the offset of NSCC obligations with institutional delivery (``ID'')
transactions that settle at The Depository Trust Company (``DTC'') for
the purpose of calculating the NSCC clearing fund (``Clearing Fund'')
under Procedure XV of its Rules, as discussed below.

A. ID Offset

    NSCC maintains a Clearing Fund to have on deposit assets sufficient
to satisfy losses that may otherwise be incurred by NSCC as the result
of the default of an NSCC member (``Member'') and the resulting
closeout of that Member's unsettled positions under NSCC's trade
guaranty. Each Member is required to contribute to the Clearing Fund
pursuant to a formula calculated daily. The Clearing Fund formula
accounts for a variety of risk factors through the application of a
number of components, including Value-at-Risk (``VaR'') \7\ and Market
Maker Domination (``MMDOM'').\8\
---------------------------------------------------------------------------

    \7\ The VaR component of the Clearing Fund calculation is a core
component of the formula and is designed to calculate the amount of
money that may be lost on a portfolio over a given period of time
that is assumed necessary to liquidate the portfolio, within a given
level of confidence. See Release No. 34-68549 (Dec. 28, 2012), 78 FR
792 (Jan. 4, 2013).
    \8\ The MMDOM component of the Clearing Fund calculation is
charged to market makers or firms that clear for them. In
calculating the MMDOM, if the sum of the absolute values of net
unsettled positions in a security for which the firm in question
makes a market is greater than that firm's excess net capital, NSCC
may then charge the firm an amount equal to such excess or the sum
of each of the absolute values of the affected net unsettled
positions, or a combination of both. MMDOM operates to identify
concentration within a given CUSIP. See Release No. 34-68549 (Dec.
28, 2012), 78 FR 792 (Jan. 4, 2013).
---------------------------------------------------------------------------

    NSCC currently calculates the VaR and MMDOM components of a
Member's Clearing Fund required deposit after allowing for a Member's
net unsettled NSCC positions in a particular CUSIP to be offset by any
pending ID transactions settling at DTC in the same CUSIP, which have
been confirmed and/or affirmed through an institutional delivery system
acceptable to NSCC (``ID Offset'').\9\ ID Offset is based on the
assumption that in the event of a Member's insolvency NSCC will be able
to close out any trade for which there is a corresponding ID
transaction settling at DTC by completing that ID transaction.\10\
---------------------------------------------------------------------------

    \9\ For purposes of the ID Offset, NSCC includes ID transactions
that are confirmed and/or affirmed on trade date, as well as ID
transactions affirmed one day after trade date and remain affirmed
through settlement date. See Release No. 34-68549 (Dec. 28, 2012),
78 FR 792 (Jan. 4, 2013).
    \10\ ID transactions are included in the ID Offset only if they
are on the opposite side of the market from the Member's net NSCC
position (i.e., only if they reduce the net position). See Release
No. 34-68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4, 2013).
---------------------------------------------------------------------------

B. Potential Inability To Complete ID Transactions

    Generally, when NSCC ceases to act for a Member, it is obligated,
for those transactions that it has guaranteed, to pay for deliveries
made by non-defaulting Members that are due to the failed Member on the
day they are due. If NSCC is unable to complete the ID transactions as
contemplated by the current Clearing Fund calculation, then NSCC may
need to liquidate a portfolio that could be substantially different
than the portfolio for which NSCC collected its Clearing Fund, leaving
NSCC potentially under-collateralized and exposed to market risk.
    A defaulting Member's pending ID transactions may not be completed
for a number of reasons. Completion of an ID transaction by its
institutional counterparty is voluntary because that counterparty is
not a Member, which means it is not bound by NSCC's Rules and is not
party to any legally binding contract with NSCC that requires it or its
custodian to complete the transaction. Moreover, based on news that a
Member may be in distress or insolvent, the institutional counterparty
or its investment adviser may take immediate market action with respect
to

the ID transaction, in order to reduce its market risk, which
effectively eliminates the option for NSCC to complete the
transactions. Finally, ID transactions settle trade-by-trade between
the executing broker and the custodian; the netted ID positions used to
offset the NSCC position could be comprised of thousands of individual
trades with hundreds of different counterparties. In the event of a
Member default, it could be time consuming for NSCC to contact the
counterparties individually to get their agreement to complete the ID
transactions. Even if NSCC were to get all of the counterparties to
agree to complete the ID transactions, this could delay the prompt
closeout of the defaulter's open positions and possibly expose NSCC to
additional market risk in excess of the Clearing Fund.
    Due to the risk that, in the event it ceases to act for a Member
with pending ID transactions, NSCC may be unable to complete the
pending ID transactions in the timeframe contemplated by its current
Clearing Fund calculations and, as a result, may have insufficient
margin in its Clearing Fund, as described above, NSCC will eliminate
the ID Offset calculation from the VaR and MMDOM components of a
Member's Clearing Fund requirement deposit.

C. Implementation Schedule

    In order to mitigate the impact of this rule change on its Members,
NSCC will implement the changes set forth in the Proposed Rule Change
over an 18-month period. On a date no earlier than 10 days following
notice to Members by Important Notice (``Initial Implementation
Date''), NSCC will eliminate ID Offset from ID transactions that have
only been confirmed, but have not yet been affirmed. Beginning on a
date approximately 12 months from the Initial Implementation Date, and
no earlier than 10 days following notice to Members by Important
Notice, NSCC will eliminate from ID Offset all affirmed ID transactions
that have reached settlement date at the time the Clearing Fund
calculations are run. Three months later, or approximately 15 months
following the Initial Implementation Date, and on a date no earlier
than 10 days following notice to Members by Important Notice, NSCC will
eliminate from ID Offset all affirmed ID transactions that have reached
either settlement date or the day prior to settlement date. Finally, on
a date approximately 18 months following the Initial Implementation
Date, and no earlier than 10 days following notice to Members by
Important Notice, NSCC will eliminate ID Offset entirely for all ID
transactions. Members will be advised of each proposed implementation
date through issuance of NSCC Important Notices, which are publicly
available at www.dtcc.com.

III. Comments

    The Commission received two comment letters to the Proposed Rule
Change from a single commenter,\11\ and two responses from NSCC to the
comment letters.\12\
---------------------------------------------------------------------------

    \11\ See Lek Letters, supra note 5.
    \12\ See NSCC Responses, supra note 6.
---------------------------------------------------------------------------

    The commenter's arguments opposing NSCC's proposal generally fall
into two categories: (1) Those that challenge a premise for, or the
decision-making process with respect to, the Proposed Rule Change; and
(2) those that identify potential ramifications of the Proposed Rule
Change.\13\ Each of the arguments, as well as NSCC's responses, are
discussed in more detail below.
---------------------------------------------------------------------------

    \13\ See Lek Letters, supra note 5. The First Lek Letter also
argued that broker-dealers should be permitted to use customer funds
to meet margin requirements derived from customer positions. See
First Lek Letter, supra note 5. Because that argument addresses a
Commission requirement and not an NSCC requirement, it is outside
the scope of this Proposed Rule Change.
---------------------------------------------------------------------------

    The commenter argues that it is a reasonable assumption that most
ID transactions will be completed because institutional customers are
reliable and creditworthy, so NSCC should not assume for purposes of
the Proposed Rule Change that all ID transactions will not be
completed.\14\
---------------------------------------------------------------------------

    \14\ See First Lek Letter, supra note 5.
---------------------------------------------------------------------------

    NSCC responded that there is no guarantee that any pending ID
transaction will be completed because there is no privity of contract
between NSCC and the non-member institutional counterparties to the ID
transactions,\15\ which the commenter conceded.\16\ Therefore,
notwithstanding institutional customers' past practices, NSCC argues
that there is no contractual obligation with NSCC that ID transactions
be completed; as a result, the assumption that NSCC will be able to
close out defaulting member trades for which there is a corresponding
ID transaction that will settle at DTC is wrong.\17\
---------------------------------------------------------------------------

    \15\ See NSCC Responses, supra note 6; see also Release No. 34-
68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4, 2013).
    \16\ See Second Lek Letter, supra note 5 (``NSCC is however
correct that there is lack of privity of contract between NSCC and
the institutional counterparty, and that if left unaddressed NSCC
would not be able to complete the pending ID transactions. We
applaud NSCC for identifying this concern.''); see also First Lek
Letter, supra note 5 (``We do concede that one, or maybe even two,
of an agency broker's customers might reneg [sic] on their losing
trades * * * and as a result the broker would be stuck with the
trades and lose money covering them.'').
    \17\ See NSCC Responses, supra note 6; see also Release No. 34-
68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4, 2013).
---------------------------------------------------------------------------

    The commenter claims that NSCC currently collects sufficient
margin, as NSCC has never had to use the Clearing Fund deposits of a
non-defaulting Member, nor has it ever suffered a loss due to
insufficient margin.\18\ Because NSCC's current margin requirements are
adequately calculated, the ID Offset should remain.\19\
---------------------------------------------------------------------------

    \18\ See First Lek Letter, supra note 5.
    \19\ Id.
---------------------------------------------------------------------------

    In response, NSCC stated, and to which the commenter agreed,\20\
that past events may not be adequate indicators of future risks when
calculating its margin requirements, particularly in light of recent
financial market disruptions, changing trading patterns, and new
trading technologies.\21\ Additionally, by allowing the ID Offset, NSCC
maintains that its current Clearing Fund calculation fails to account
for the risk that NSCC will not be able to settle pending ID trades,
and that therefore the calculation should be adjusted to eliminate this
known risk, irrespective of whether the current margin has been
sufficient.\22\
---------------------------------------------------------------------------

    \20\ See Second Lek Letter, supra note 5 (``We * * * agree that
NSCC should not necessarily rely on past events as indicators of
future risks and that high frequency trading and computerized
algorithms have introduced additional risk into the market.'').
    \21\ See First NSCC Response, supra note 6.
    \22\ Id.
---------------------------------------------------------------------------

    The commenter argues that agency broker-dealers are less risky than
Members engaged in proprietary trading for a number of reasons,
including that agency broker-dealers do not trade on margin, cannot
assume short positions, and cannot write options.\23\ As a result, the
commenter argues that agency broker-dealers should not be required to
meet the same margin requirements as Members engaged in proprietary
trading.\24\
---------------------------------------------------------------------------

    \23\ See First Lek Letter, supra note 5.
    \24\ Id.
---------------------------------------------------------------------------

    NSCC responds that agency broker-dealer firms, along with other
firms, are trading in greater volume and frequency and are employing
riskier trading techniques, like high frequency trading, than they have
historically.\25\ As a result, NSCC believes that all firms, including
agency broker-dealers, present a greater risk of failure now than they
have historically.\26\
---------------------------------------------------------------------------

    \25\ See First NSCC Response, supra note 6. NSCC noted that a
technology-related trading disruption that occurred in August 2012
was generated by an agency broker-dealer. Id.
    \26\ Id.

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

    Citing the requirement in Section 17A(b)(3)(C) of the Act that the
rules of a registered clearing agency should assure a fair
representation of its members and participants in the selection of its
directors and administration of its affairs, the commenter suggests
that the Depository Trust and Clearing Corporation (``DTCC'') \27\
Board may not fairly represent NSCC's independent, agency broker-dealer
Members, given that there is not one representative on the board from a
traditional, non-bank affiliated brokerage firm; although, the
commenter notes that it is not suggesting that the DTCC Board's
composition is a direct violation of 17A(b)(3)(C) of the Act.\28\ As
discussed below, NSCC has noted that it took various steps to discuss
the proposal with its Members and seek input from Members.
---------------------------------------------------------------------------

    \27\ NSCC is a wholly owned subsidiary of DTCC. About DTCC:
NSCC, http://dtcc.com/about/subs/nscc.php (last visited Apr. 2,
2013).
    \28\ See First Lek Letter, supra note 5 (``[W]e are not
suggesting that the Board's current makeup directly violates
[Section 17A(b)(3)(C) of the Exchange Act] * * *.''); see also 15
U.S.C. 78q-1(b)(3)(C).
---------------------------------------------------------------------------

    The commenter argues that the proposal has a disparate, negative
impact on agency broker-dealers not only because such firms are less
risky and, therefore, should not require as much margin, as discussed
above, but also because the elimination of the ID Offset will likely
increase Clearing Fund margin requirements, increases that independent
broker-dealers (i.e., non-bank affiliated firms) may be unable to meet
due to funding restraints, which may force such broker-dealers out of
business, possibly reducing competition in the industry. The commenter
has also stated that the proposal may have a negative impact on
customers of such broker-dealers.\29\
---------------------------------------------------------------------------

    \29\ See Lek Letters, supra note 5.
---------------------------------------------------------------------------

    NSCC responded that the elimination of the ID Offset is equally
applied to its Members, and that the ID Offset provides an unfair and
disproportionate advantage currently enjoyed by Members who have ID
transactions to offset; therefore, the proposal actually ``levels the
playing field,'' with respect to calculating the margin collected for
the Clearing Fund.\30\ Additionally, NSCC acknowledges that the
proposal to eliminate ID Offsets will likely increase the Clearing Fund
requirements of certain Members.\31\ However, to mitigate that effect,
NSCC explains that it performed an impact study of the proposal, shared
the results of the study with impacted Members, and provided
opportunities for those Members to discuss, prepare for, and further
mitigate the impact, most specifically through a working group that,
ultimately, developed an 18-month implementation timeframe, as outlined
in the notice of the Proposed Rule Change.\32\ NSCC has also noted that
NSCC Relationship Management and Enterprise Risk Management staff met
with Members that would have experienced a change to their clearing
fund requirement of greater than 25%, and other impacted Members were
invited to contact their NSCC Relationship Managers to schedule
meetings with HSCC staff. Furthermore, NSCC notes that Members who are
unable to meet its Clearing Fund requirements are not necessarily
forced out of business; rather, such firms could choose to clear their
transactions through Members who continue to meet the requirements, as
some agency broker-dealers currently do.\33\ Finally, NSCC argues that
given the important risk mitigating benefits of eliminating the ID
Offset, NSCC believes the possible, unintended impact on competition
should not be considered unreasonable or inappropriate. NSCC also has
stated that the rule change will improve the safety and soundness of
the U.S. capital markets, generally.\34\
---------------------------------------------------------------------------

    \30\ See First NSCC Response, supra note 6.
    \31\ See NSCC Responses, supra note 6.
    \32\ See First NSCC Response, supra note 6; see also Release No.
34-68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4, 2013).
    \33\ See First NSCC Response, supra note 6.
    \34\ See First NSCC Response, supra note 6.
---------------------------------------------------------------------------

    The commenter states that a viable alternative to the proposal to
eliminate the ID Offset exists, in that NSCC could serve as a central
counterparty (``CCP'') for ID transactions (``CCP Alternative''),\35\
as it does for other transactions.\36\ According to the commenter, this
would alleviate NSCC's concern that it may not be able to close out
defaulting member trades for which there is a corresponding ID
transaction that will settle at DTC with the corresponding ID
transaction.\37\ Furthermore, the commenter claims that NSCC staff
believes that the CCP Alternative is viable and would satisfy NSCC
concerns with regard to ID Offsets, but it is not supported by NSCC's
senior management, who may have ulterior motives in seeing ID Offsets
eliminated.\38\
---------------------------------------------------------------------------

    \35\ See Second Lek Letter, supra note 5.
    \36\ Among other things, NSCC provides CCP services and
guarantees completion for certain transactions, but not ID
transactions. See About DTCC: NSCC, supra note 27.
    \37\ See Lek Letters, supra note 5.
    \38\ See Second Lek Letter, supra note 5.
---------------------------------------------------------------------------

    NSCC counters, generally, that alternatives to the proposal were
explored, particularly through the working group mentioned above, but
no viable options exist.\39\ More specifically, NSCC argues that the
CCP Alternative is not practical because the institutional
counterparties to ID trades are not NSCC members, and thus NSCC would
have to voluntarily guarantee uncollateralized ID trades without
collecting margin to insulate NSCC from a default of a counterparty,
which would not resolve the market risk that ID Offsets present and
NSCC seeks to eliminate with its proposal.\40\ Additionally, even if
the CCP Alternative were to eliminate the ID Offset market risk, NSCC
claims that implementing the CCP Alternative would require a
significant change to the current securities market structure.\41\
Finally, NSCC asserts that the CCP Alternative is not viable.\42\
---------------------------------------------------------------------------

    \39\ See First NSCC Response, supra note 6.
    \40\ See Second NSCC Response, supra note 6 (``The [CCP
Alternative] would require the buy-side of the market to
contractually agree to settle its transactions at NSCC, whereby NSCC
would essentially provide a central counterparty guarantee to the
buy-side of those trades on an uncollateralized basis, without
collecting margin that would protect it and its membership from the
default of those buy-side parties.'').
    \41\ Id.
    \42\ Id.
---------------------------------------------------------------------------

IV. Discussion

    In its assessment of the Proposed Rule Change for consistency with
the Act, the Commission carefully considered the comments and responses
it received and the information provided in the Proposed Rule Change
itself. After an extended review, the Commission finds that the
Proposed Rule Change is consistent with the requirements of the Act and
the applicable rules and regulations thereunder, as discussed
below.\43\
---------------------------------------------------------------------------

    \43\ In approving the Proposed Rule Change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires that, among other things,
``[t]he rules of the clearing agency are designed to promote the prompt
and accurate clearance and settlement of securities transactions and *
* * to assure the safeguarding of securities and funds which are in the
custody or control of the clearing agency or for which it is
responsible.'' \44\
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    As a CCP, NSCC occupies an important role in the securities
settlement system by interposing itself between counterparties to
financial transactions, thereby reducing certain risks faced by Members
and contributing to global financial stability. In this role, however,
NSCC is

necessarily subject to certain risks in the event of the default of a
Member.
    Here, NSCC's proposal to eliminate the ID Offset, as described
above, is designed to help mitigate the risk that NSCC will be under-
collateralized if it ceases to act for a defaulting Member and is
unable to complete the offsetting ID transactions in the time currently
contemplated by its Clearing Fund calculation. As such, the Commission
believes that NSCC's proposal to eliminate ID Offsets should help
further promote the prompt and accurate clearance and settlement of
securities transactions, and assure the safeguarding of securities and
funds for which NSCC is responsible.
    Furthermore, Commission Rule 17Ad-22(b)(1) regarding measurement
and management of credit exposure,\45\ adopted as part of the Clearing
Agency Standards,\46\ requires a CCP to establish, implement, maintain
and enforce written policies and procedures reasonably designed to
measure its credit exposures to its participants at least once a day
and limit its exposures to potential losses from defaults by its
participants under normal market conditions so that the operations of
the CCP would not be disrupted and non-defaulting participants would
not be exposed to losses that they cannot anticipate or control.\47\
---------------------------------------------------------------------------

    \45\ 17 CFR 240.17Ad-22(b)(1).
    \46\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (Nov. 2,
2012).
    \47\ 17 CFR 240.17Ad-22(b)(1).
---------------------------------------------------------------------------

    Here, as described in detail above, NSCC's proposal to eliminate ID
Offsets should help to limit its exposure, as well as non-defaulting
members' exposure, to potential losses from a defaulting Member, while
minimizing disruption to its CCP operations, by more accurately
reflecting its risks in the calculation of its Clearing Fund margin. As
discussed above, NSCC's calculation of its Clearing Fund margin will be
more accurate in that it will not include an assumption of trade
closeouts following a Member insolvency with respect to trades for
which there is a corresponding ID transaction.
    Finally, Commission Rules 17Ad-22(d)(4) regarding identification
and mitigation of operational risk,\48\ and 17Ad-22(d)(11) regarding
default procedures,\49\ also both adopted as part of the Clearing
Agency Standards,\50\ require that registered clearing agencies
``establish, implement, maintain and enforce written policies and
procedures reasonably designed to, as applicable: * * * Identify
sources of operational risk and minimize them through the development
of appropriate systems, controls, and procedures * * * '',\51\ and `` *
* * establish default procedures that ensure that the clearing agency
can take timely action to contain losses and liquidity pressures and to
continue meeting its obligations in the event of a participant
default,'' \52\ respectively.
---------------------------------------------------------------------------

    \48\ 17 CFR 240.17Ad-22(d)(4).
    \49\ 17 CFR 240.17Ad-22(d)(11).
    \50\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (Nov. 2,
2012).
    \51\ 17 CFR 240.17Ad-22(d)(4).
    \52\ 17 CFR 240.17Ad-22(d)(11).
---------------------------------------------------------------------------

    Here, as described in detail above, the elimination of ID Offsets
should help NSCC better minimize settlement risks and better ensure
that it can contain losses and liquidity pressures, and meet its
obligations in a timely fashion, by more accurately accounting for
those risks in its Clearing Fund calculation that is designed to
satisfy potential losses in a timely manner.
    After specifically considering each of the commenter's claims, as
discussed below, the Commission maintains its belief that the Proposed
Rule Change is consistent with the requirements of the Act and the
applicable rules and regulations thereunder, as discussed above.
    The Commission understands that institutional counterparties to ID
transactions are not NSCC members and, therefore, maintain no privity
of contract with NSCC regarding ID trades.\53\ Since there is no
contractual obligation with NSCC that ID transactions be completed, the
assumption that NSCC may not be able to close out defaulting member
trades for which there is a corresponding ID transaction that will
settle at DTC is correct.
---------------------------------------------------------------------------

    \53\ See NSCC Responses, supra note 6, and see Second Lek
Letter, supra note 5.
---------------------------------------------------------------------------

    Given the risk that NSCC may not be able to settle ID trades, as
discussed above, NSCC may be collecting insufficient margin, regardless
of past needs, potentially leaving it under-collateralized if a Member
defaults. The Commission believes that the Proposed Rule Change
furthers NSCC's compliance with the requirements of Section
17A(b)(3)(F)\54\ of the Act, as well as Rules 17Ad-22(b)(1),\55\ 17Ad-
22(d)(4),\56\ and 17Ad-22(d)(11),\57\ as described above.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78q-1(b)(3)(F).
    \55\ 17 CFR 240.17Ad-22(b)(1).
    \56\ 17 CFR 240.17Ad-22(d)(4).
    \57\ 17 CFR 240.17Ad-22(d)(11).
---------------------------------------------------------------------------

    The Commission believes that agency broker-dealer firms are not
riskless and those Members could present serious risks to NSCC, as
demonstrated by the significant market events involving an NSCC Member
in August 2012, which both NSCC and the commenter acknowledge.\58\
Therefore, as noted above, the Commission believes that the elimination
of the ID Offset, which would mitigate a known risk, as discussed
above, furthers NSCC's compliance with Section 17A(b)(3)(F) of the
Act,\59\ as well as Rules 17Ad-22(b)(1),\60\ 17Ad-22(d)(4),\61\ and
17Ad-22(d)(11),\62\ as discussed above.
---------------------------------------------------------------------------

    \58\ See First NSCC Response, supra note 6, and see Second Lek
Letter, supra note 5.
    \59\ 15 U.S.C. 78q-1(b)(3)(F).
    \60\ 17 CFR 240.17Ad-22(b)(1).
    \61\ 17 CFR 240.17Ad-22(d)(4).
    \62\ 17 CFR 240.17Ad-22(d)(11).
---------------------------------------------------------------------------

    Though the commenter did not suggest that DTCC Board's composition
is a direct violation of 17A(b)(3)(C) of the Act,\63\ the Commission
notes that fair representation can be achieved through multiple
channels, including exposing Members to proposed rule changes in order
for Members to have an opportunity to express their particular needs or
concerns.\64\ Here, before filing the proposal with the Commission,
where the proposal became available for public comment,\65\ NSCC:
notified its Members of its intent to file; completed a study on the
proposal's impact; provided impacted Members with direct feedback;
convened a working group of impacted Members to address ways of
mitigating the proposals impact; and incorporated an 18-month
implementation schedule into the proposal--a direct result of the
working group.\66\ The Commission believes that in the circumstances of
the Proposed Rule Change, these processes have provided NSCC Members
adequate opportunity to fairly represent themselves in the development
of the proposal.
---------------------------------------------------------------------------

    \63\ See First Lek Letter, supra note 5 (``[W]e are not
suggesting that the Board's current makeup directly violations
[Section 17A(b)(3)(C) of the Exchange Act] * * * .''), and see 15
U.S.C. 78q-1(b)(3)(C).
    \64\ See Release No. 34-16900 (June 17, 1980), 45 FR 41920 (June
23, 1980).
    \65\ Release No. 34-68549 (Dec. 28, 2012), 78 FR 792 (Jan. 4,
2013).
    \66\ See NSCC Reponses, supra note 6.
---------------------------------------------------------------------------

    By eliminating the ID Offset, which the Commission believes applies
universally to all Members and which would be consistent with Section
17A(b)(3)(F) of the Act,\67\ as well as Rules 17Ad-22(b)(1),\68\ 17Ad-
22(d)(4),\69\ and 17Ad-22(d)(11),\70\ as discussed above, there could
be a resulting increase in NSCC's Clearing Fund requirement, as both
NSCC and the

commenter acknowledge,\71\ which may have a detrimental impact on
certain Members and possibly competition overall. However, the
Commission believes NSCC has taken adequate steps to engage Members
impacted by the increase and mitigate the effect of the increase, as
demonstrated by the impact studies and the working group that NSCC
convened that resulted in the 18-month implementation scheduled.\72\
Additionally, the Commission believes that while there could be a
redistribution of business for agency broker-dealers,\73\ agency
broker-dealers impacted by the Proposed Rule Change could seek
alternative arrangements, such as moving the applicable portion of the
impacted business to or through a continuing Member, as NSCC suggests
and as is currently done by some firms.\74\ The Commission also
acknowledges that while the proposal may have an effect on customers, a
more accurate reflection of risks in the calculation of Clearing Fund
margin, however, could benefit customers through reducing risks to
NSCC.
---------------------------------------------------------------------------

    \67\ 15 U.S.C. 78q-1(b)(3)(F).
    \68\ 17 CFR 240.17Ad-22(b)(1).
    \69\ 17 CFR 240.17Ad-22(d)(4).
    \70\ 17 CFR 240.17Ad-22(d)(11).
    \71\ See First Lek Letter, supra note 5, and see NSCC Responses,
supra note 6.
    \72\ See NSCC Responses, supra note 6.
    \73\ See Lek Letters, supra note 5.
    \74\ See First NSCC response, supra note 6. The Commission notes
that it did not receive comments from any other firms potentially
impacted by the Proposed Rule Change.
---------------------------------------------------------------------------

    NSCC has not proposed the CCP Alternative discussed above as a
proposed rule change, and thus the CCP Alternative is outside the scope
of this Proposed Rule Change. Nonetheless, in considering the
consistency of the Proposed Rule Change with the requirements of the
Act and the applicable rules and regulations thereunder, the Commission
acknowledges that the CCP Alternative does not appear practical for
NSCC at the current time because, as NSCC has pointed out, the
institutional counterparties to ID trades are not NSCC members, and
thus, absent new membership for these counterparties, NSCC would have
to voluntarily guarantee uncollateralized ID trades without collecting
margin to insulate NSCC from a default of a counterparty, which would
not resolve the market risk that ID Offsets present and NSCC seeks to
eliminate through the Proposed Rule Change. Furthermore, even if the
CCP Alternative did resolve the market risk that the Proposed Rule
Change is intended to address, the CCP Alternative does not appear to
be an immediately viable option for NSCC, as it would likely require
potentially complicated changes to the current clearance and settlement
structure.\75\
---------------------------------------------------------------------------

    \75\ See Second NSCC Response, supra note 6.
---------------------------------------------------------------------------

V. Conclusion

    On the basis of the foregoing, the Commission finds the Proposed
Rule Change consistent with the requirements of the Act, particularly
with the requirements of Section 17A of the Act,\76\ and the rules and
regulations thereunder.
---------------------------------------------------------------------------

    \76\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\77\ that the proposed rule change SR-NSCC-2012-10 be and hereby is
APPROVED as of the date of this order or the date of the ``Notice of
Filing No Objection to Advance Notice Filing to Eliminate the Offset of
[NSCC's] Obligations with Institutional Delivery Transactions that
Settle at The Depository Trust Company for the Purpose of Calculating
Its Clearing Fund Under Procedure XV of Its Rules & Procedures'' (File
No. SR-NSCC-2012-810),\78\ whichever is later.
---------------------------------------------------------------------------

    \77\ 15 U.S.C. 78s(b)(2).
    \78\ Release No. 34-69301

    For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\79\
---------------------------------------------------------------------------

    \79\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08307 Filed 4-9-13; 8:45 am]
BILLING CODE 8011-01-P