[Federal Register Volume 85, Number 136 (Wednesday, July 15, 2020)]
[Notices]
[Pages 42933-42939]
[FR Doc No: 2020-15208]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89271; File No. SR-NSCC-2020-012]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change To Amend the Clearing Agency Risk Management Framework

July 9, 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 July 7, 2020, National Securities Clearing Corporation (``NSCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the clearing agency. NSCC filed the
proposed rule change pursuant to Section 19(b)(3)(A) 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 change 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of amendments to the Clearing
Agency Risk Management Framework (``Risk Management Framework'' or
``Framework'') of NSCC and its affiliates, The Depository Trust Company
(``DTC'') and Fixed Income Clearing Corporation (``FICC,'' and together
with NSCC and DTC, the ``Clearing Agencies''). Specifically, the
proposed rule change would (1) include a description of a set of
policies that addresses the Clearing Agencies' compliance with Rule
17Ad-22(e)(22) of the Standards for Covered Clearing Agencies
(``Standards''), under the Act,\5\ (2) update the Risk Management
Framework to reflect recent changes to certain processes and other
matters described in the Framework, and changes to the status of
documents identified in the Framework; and (3) clarify the descriptions
of certain matters within the Framework to improve comprehensiveness
and correct errors, as further described below.
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    \5\ 17 CFR 240.17Ad-22(e)(22).
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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 Clearing Agencies adopted the Risk Management Framework \6\ to
provide an outline for how each of the Clearing Agencies (i) maintains
a well-founded, clear, transparent and enforceable legal basis for each
aspect of its activities; (ii) comprehensively manages legal, credit,
liquidity, operational, general business, investment, custody, and
other risks that arise in or are borne by it; (iii) identifies,
monitors, and manages risks related to links it establishes with one or
more clearing agencies, financial market utilities, or trading markets;
and (iv) meets the requirements of its participants and the markets it
serves efficiently and effectively. In this way, the Risk Management
Framework currently supports the Clearing Agencies' compliance with
Rules 17Ad-22(e)(1), (3), (20) and (21) of the Standards,\7\ as
described in the Initial Filing. In addition to setting forth the
manner in which each of the Clearing Agencies addresses these
requirements, the Risk Management Framework also contains a section
titled ``Framework Ownership and Change Management'' that, among other
matters, describes the Framework ownership and the required governance
process for review and approval of changes to the Framework.

In connection with the annual review and approval of the Framework by
the Board of Directors of each of NSCC, DTC and FICC (each a ``Board''
and collectively, the ``Boards''), the Clearing Agencies are proposing
to make certain revisions to the Framework.
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    \6\ See Securities Exchange Act Release No. 81635 (September 15,
2017), 82 FR 44224 (September 21, 2017) (SR-DTC-2017-013; SR-NSCC-
2017-012; SR-FICC-2017-016) (``Initial Filing'').
    \7\ 17 CFR 240.17Ad-22(e)(1), (3), (20) and (21).
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    The proposed changes would add a new Section 4.4 to describe a
policy and a communication standard document that support the Clearing
Agencies' compliance with Rule 17Ad-22(e)(22), which requires the
Clearing Agencies to establish, implement, maintain and enforce written
policies and procedures reasonably designed to use, or at a minimum
accommodate, relevant internationally accepted communication procedures
and standards in order to facilitate efficient payment, clearing, and
settlement.\8\
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    \8\ 17 CFR 240.17Ad-22(e)(22).
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    The proposed changes would also update the Risk Management
Framework to reflect (1) a change to the name of the Vendor Risk
Management group to the Third Party Risk Management group; (2) a change
to the format of the Balanced Business Scorecard, which is an internal
performance management tool used to measure the effectiveness of
various aspects of the operations of The Depository Trust & Clearing
Corporation (``DTCC'') and its subsidiaries, including the Clearing
Agencies; and (3) the filing of certain documents identified in the
Framework, pursuant to Section 19(b)(1) of the Act,\9\ and the rules
thereunder, and Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, entitled the Payment,
Clearing, and Settlement Supervision Act of 2010,\10\ and the rules
thereunder (collectively, ``Filing Requirements''), as described in
greater detail below.
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    \9\ 15 U.S.C. 78s(b)(1).
    \10\ 12 U.S.C. 5465(e)(1).
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    The proposed changes would also clarify and enhance the
descriptions in the Risk Management Framework to (1) identify the
requirement of Rule 17Ad-22(e)(3)(i) under the Act that the Framework
be reviewed and approved by the Boards on an annual basis; \11\ (2)
identify the role of the DTCC Legal Department in supporting the
management of legal risks that arise in or are borne by the Clearing
Agencies; (3) enhance the description of the DTCC Risk Department as
``Second Line of Defense,'' (4) enhance the description of the DTCC
Internal Audit Department as ``Third Line of Defense;'' (5) enhance the
description of a policy relating to the establishment and governance of
internal management committees; (6) enhance the description of the
processes designed to maintain comprehensive policies, procedures and
other documents; (7) clarify that certain activities described in the
Framework that relate to the public disclosure of material information,
including market data, address the Clearing Agencies' compliance with
Rule 17Ad-22(e)(23) under the Act; \12\ (8) enhance the description of
the management of systemic risks by describing the role of the Systemic
Risk Council; (9) correct a sentence by removing an unnecessary phrase;
and (10) enhance the descriptions of certain actions by removing the
indication that the Clearing Agencies have discretion in engaging in
those actions.
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    \11\ 17 CFR 240.17Ad-22(e)(3)(i).
    \12\ 17 CFR 240.17Ad-22(e)(23).
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    Finally, the proposed changes would correct an error in the Risk
Management Framework to identify the Audit Committees of the Boards as
the committees to which the DTCC Internal Audit Department has a direct
reporting line. Each of these proposed changes is described below.
i. Proposed Amendments To Describe Policies That Address Compliance
With Rule 17Ad-22(e)(22)
    First, the proposed changes would add a new Section 4.4 to the
Framework to describe a policy maintained by the Clearing Agencies to
use and accommodate relevant internationally accepted communication
procedures and standards to facilitate efficient payment, clearing, and
settlement, to support the Clearing Agencies' compliance with Rule
17Ad-22(e)(22).\13\
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    \13\ 17 CFR 240.17Ad-22(e)(22).
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    The policy describes how the communication standards and data
formats that are currently used by the Clearing Agencies for payment,
clearing, and settlement are regarded as accepted industry standards
for transactions processed through the Clearing Agencies. The policy
also provides that the Clearing Agencies would accommodate new industry
standards that are considered internationally accepted communication
procedures and standards. The new Section 4.4 would also state that the
Clearing Agencies maintain a communication standard document that
supports this policy.
    The Clearing Agencies are proposing to amend the Risk Management
Framework to adopt a new Section 4.4 that would describe these
documents, which support the Clearing Agencies' compliance with Rule
17Ad-22(e)(22).\14\
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    \14\ Id.
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ii. Proposed Amendments To Update the Framework
    Second, the proposed changes would update the Risk Management
Framework to reflect recent developments with respect to certain
processes and other matters described in the Framework, and changes to
the status of documents described in the Framework, as described below.
1. Proposed Change To Identify Third Party Risk Management
    Section 4 of the Risk Management Framework outlines ways in which
each of the Clearing Agencies manages certain risks that arise in or
are borne by it. Specifically, Section 4.2 describes the management of
risks related to material interdependencies and external links that may
be established by the Clearing Agencies. The Clearing Agencies
represent that management of risks presented by vendors and other
material service providers is guided by a function within the
Operational Risk Management group within the Group Chief Risk Office .
This function was previously referred to as ``Vendor Risk Management.''
While the role and responsibilities of this risk management function
have not changed, its name has recently been changed to ``Third Party
Risk Management'' to clarify that the function covers any material
third party service provider that provides a service to a DTCC entity.
    The Clearing Agencies are proposing to amend Section 4.2.1 of the
Risk Management Framework to reflect this name change and to clarify
that the function covers any material third party service provider that
provides a service to a DTCC entity by adding ``Third Party'' as a new
defined term. The Clearing Agencies are also proposing to identify the
existing policy and procedure that is maintained to manage these risks.
2. Proposed Change to Description of Balanced Business Scorecard
    Section 4.3 of the Risk Management Framework addresses certain
processes implemented by the Clearing Agencies in order to be efficient
and effective in meeting the requirements of their respective
participants and the markets they serve.\15\ One of the methods the
Clearing Agencies use to meet these requirements is the periodic
creation of a Balanced Business Scorecard, which provides insight into
the effectiveness of the Clearing Agencies' operations,

information technology service levels, financial performance, human
capital, and their respective participants' experience.
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    \15\ Such processes support the Clearing Agencies' compliance
with the requirements of Rule 17Ad-22(e)(21) under the Act. 17 CFR
240.17Ad-22(e)(21).
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    Previously, a Balanced Business Scorecard (referred to as the
``Core Balance Business Scorecard'') was created for the Clearing
Agencies, and a separate Balanced Business Scorecard was created for
the other subsidiaries of DTCC. Recently, these two tools merged, and
only one Balanced Business Scorecard (now referred to as the ``DTCC
Balanced Business Scorecard'') is created, which addresses DTCC and
each of its subsidiaries, including each of the Clearing Agencies.
While the new, enterprise-wide Balanced Business Scorecard reports its
conclusions on a less granular, enterprise-wide basis, it is created
using the same set of metrics as the legacy Clearing Agencies version.
Therefore, the Balanced Business Scorecard continues to support the
Clearing Agencies' compliance with the requirements of Rule 17Ad-
22(e)(21) under the Act.\16\ The Balanced Business Scorecard now
reports those metrics in the context of the DTCC enterprise, at a less
granular level.
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    \16\ Id.
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    The Clearing Agencies are proposing to amend Section 4.3 of the
Risk Management Framework to reflect the change in format of the
Balanced Business Scorecard described above.
3. Proposed Change to Description of Certain Documents To Reflect
Filing Pursuant To Filing Requirements
    Following the adoption of the Risk Management Framework, certain
documents that are identified in the Framework were filed pursuant to
the Filing Requirements. The Clearing Agencies are proposing to revise
the descriptions of these documents to reflect this change.
    Section 3.3 of the Framework describes certain frameworks that are
maintained by the Clearing Agencies and provide an outline for certain
policies and procedures that address, in whole or in part, the
management of operational, liquidity, credit, market, collateral, and
other risks. This section identified five such frameworks, the Clearing
Agency Operational Risk Management Framework, the Clearing Agency
Liquidity Risk Management Framework, the Clearing Agency Securities
Valuation Framework, the Clearing Agency Stress Testing Framework, and
the Clearing Agency Model Risk Management Framework. Each of these
frameworks has been filed pursuant to the applicable Filing
Requirements and adopted by the Clearing Agencies.\17\ The Clearing
Agencies are proposing to update Section 3.3 to reflect this change.
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    \17\ See Securities Exchange Act Release Nos. 81745 (September
28, 2017), 82 FR 46332 (October 4, 2017) (SR-DTC-2017-014; SR-NSCC-
2017-013; SR-FICC-2017-017) (Operational Risk Management Framework);
82377 (December 21, 2017), 82 FR 61617 (December 28, 2017) (SR-DTC-
2017-004; SR-NSCC-2017-005; SR-FICC-2017-008) (Liquidity Risk
Management Framework); 82006 (November 2, 2017), 82 FR 51892
(November 8, 2017) (SR-DTC-2017-016; SR-NSCC-2017-016; SR-FICC-2017-
020) (Securities Valuation Framework); 82368 (December 19, 2017), 82
FR 61082 (December 26, 2017) (SR-DTC-2017-005; SR-FICC-2017-009; SR-
NSCC-2017-006) (Stress Testing Framework); and 81485 (August 25,
2017), 82 FR 41433 (August 31, 2017) (SR-DTC-2017-008; SR-FICC-2017-
014; SR-NSCC-2017-008) (Model Risk Management Framework).
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    Section 5 of the Risk Management Framework describes the plans that
are maintained by each of the Clearing Agencies for their recovery or
orderly wind-down (``R&W Plans''). The R&W Plans were still in
development when the Framework was adopted, but have since been
finalized, approved by the Boards, filed pursuant to the Filing
Requirements, and adopted by the Clearing Agencies.\18\ Therefore, the
Clearing Agencies are proposing to update Section 5 to reflect these
developments, and to describe the ongoing governance of the R&W Plans.
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    \18\ See Securities Exchange Act Release Nos. 83972 (August 28,
2018), 83 FR 44964 (September 4, 2018) (SR-DTC-2017-021); 83953
(August 27, 2018), 83 FR 44381 (August 30, 2018) (SR-DTC-2017-803);
83974 (August 28, 2018), 83 FR 44988 (September 4, 2018) (SR-NSCC-
2017-017); 83955 (August 27, 2018), 83 FR 44340 (August 30, 2018)
(SR-NSCC-2017-805); 83973 (August 28, 2018), 83 FR 44942 (September
4, 2018) (SR-FICC-2017-021); 83954 (August 27, 2018), 83 FR 44361
(August 30, 2018) (SR-FICC-2017-805).
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iii. Proposed Amendments To Clarify, Enhance, and Correct Descriptions
in the Framework
    Finally, the proposed changes would enhance the descriptions of
certain matters within the Risk Management Framework to improve its
clarity and comprehensiveness and correct an error, as described below.
1. Proposed Change To Correct Annual Approval of Framework by Boards
    Section 2 of the Risk Management Framework addresses the
Framework's ownership and change management. This section currently
states that the Framework should be reviewed by the document owner no
less frequently than annually but does not specifically identify the
requirement that the Framework also be approved by the Boards on an
annual basis. The Clearing Agencies are proposing to correct the
Framework to include the requirement that the Framework be approved by
the Boards, or a duly authorized committee of the Boards, annually.
    Rule 17Ad-22(e)(3) under the Act requires that the Clearing
Agencies maintain a sound risk management framework for comprehensively
managing the risks that arise in or are borne by the Clearing Agencies,
including investment and custody risks.\19\ Rule 17Ad-22(e)(3)(i) under
the Act requires that the risk management policies, procedures, and
systems that are maintained in compliance with Rule 17Ad-22(e)(3) be
subject to review on a specified periodic basis and be approved by the
Boards annually.\20\ As stated above, the Framework provides an outline
for how each of the Clearing Agencies comprehensively manages legal,
credit, liquidity, operational, general business, investment, custody,
and other risks that arise in or are borne by it, as required by Rule
17Ad-22(e)(3) under the Act.\21\ Therefore, the Risk Management
Framework is reviewed and approved by the Boards annually, as required
by Rule 17Ad-22(e)(3)(i) under the Act.\22\
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    \19\ 17 CFR 240.17Ad-22(e)(3).
    \20\ 17 CFR 240.17Ad-22(e)(3)(i).
    \21\ 17 CFR 240.17Ad-22(e)(3).
    \22\ 17 CFR 240.17Ad-22(e)(3)(i).
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    The Clearing Agencies are proposing to amend Section 2 of the
Framework to state that the Framework shall be approved by the Boards,
or a duly authorized committee of the Boards, annually. The proposed
change would correct the Framework to include this requirement, which
is aligned with the applicable requirements of Rule 17Ad-22(e)(3)(i)
under the Act.\23\
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    \23\ Id.
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2. Proposed Change To Identify DTCC Legal Department's Role in
Management of Clearing Agencies' Legal Risks
    Section 3.1 of the Risk Management Framework describes the ``three
lines of defense'' approach adopted by each of the Clearing Agencies
for identifying, assessing, measuring, monitoring, mitigating, and
reporting the risks that arise in or are borne by it. Currently, this
section outlines the role of each line of defense, and specifically
describes the roles of the DTCC Risk Department (``Risk Department'')
and DTCC Internal Audit Department (``Internal Audit'') within this
risk management approach. The DTCC Legal Department (``Legal
Department'') also plays a particular role in the three lines of
defense approach by supporting each line of defense in the management
of legal risks.
    While the Legal Department is currently identified as part of the

control functions that form the second line of defense in Section
3.1.2, its particular role is not separately described. Therefore, the
Clearing Agencies are proposing to update the introduction of Section
3.1 to state that the Legal Department supports each line of defense in
the management of legal risks. This proposed change would more clearly
describe the particular role of the Legal Department in this risk
management approach.
3. Proposed Change To Enhance Description of DTCC's Risk Department as
``Second Line of Defense'' in Risk Management
    As stated above, Section 3.1 of the Risk Management Framework
describes the ``three lines of defense'' approach to risk management
adopted by the Clearing Agencies. Section 3.1.2 describes the
particular role of the Risk Department as the second line of defense
within this risk management approach. The Clearing Agencies are
proposing to amend this Section 3.1.2 to enhance the description of the
Risk Department's role, including by providing details relating to the
role of the Operational Risk Management group within the Risk
Department. The proposed amendments would describe how the Operational
Risk Management group addresses and escalates incidents based on a risk
rating of those incidents. In addition, the proposed change would
clarify the description relating to the procedures, processes, tools,
mechanisms, analyses, and testing controls employed by the Risk
Department and indicate that such procedures, etc. are subject to the
parameters set forth in Section 3.3, which discusses the Filing
Requirements and document standards relating to policies, procedures,
frameworks and certain related documents. In addition, the Clearing
Agencies are proposing to add a defined term in Section 3.1 to reflect
that the Risk Department refers to the Risk Department of DTCC. The
proposed changes would more clearly describe the particular role of the
Risk Department in this risk management approach.
4. Proposed Change To Enhance Description of DTCC's Internal Audit
Department as ``Third Line of Defense'' in Risk Management
    Section 3.1.3 of the Risk Management Framework describes the
particular role of Internal Audit as the third line of defense within
the risk management approach. The Clearing Agencies are proposing to
amend this Section 3.1.3 to enhance the description of Internal Audit's
role, including by providing a clearer description of the
responsibilities of Internal Audit, making grammatical changes to
certain descriptions to improve readability, and removing references to
Internal Audit as providing an advisory role to the Clearing Agencies.
By removing references to advisory services, the proposed changes would
conform the Risk Management Framework to the charter of the Audit
Committees of the Boards, where similar changes have been made to
reinforce the group's role as the third line of defense in risk
management and its independence and objectivity in the performance of
assurance services. In addition, the Clearing Agencies are proposing to
add a defined term in Section 3.1 to clarify that Internal Audit refers
to the Internal Audit Department of DTCC.
5. Proposed Change To Enhance Description of Policy Regarding
Management Committees and Oversight
    Section 3.2 of the Risk Management Framework states that a set of
senior management committees provides oversight of various aspects of
the Clearing Agencies' activities, including risk management, and
describes the policy that sets forth the requirements for establishing
and governing these committees. The Clearing Agencies are proposing to
amend Section 3.2 by including a reference to the described document
and providing a clearer and more complete description of the contents
of this policy and the ongoing governance requirements of senior
management committees. The proposed changes would not make any
substantive changes to this description.
6. Proposed Change To Enhance Description of Management of Policies,
Procedures, and Other Documents
    Section 3.3.1 of the Risk Management Framework states that the
Clearing Agencies maintain comprehensive policies and procedures
designed to identify, measure, monitor and manage the risks that arise
in or are borne by the Clearing Agencies, and describes a set of
standards the Clearing Agencies have established for creating and
managing these documents. The Clearing Agencies are proposing to amend
the description of these standards. The proposed amendments to Section
3.3.1 would re-word the descriptions of these standards by, for
example, more clearly describing the governance of these documents, how
these standards provide guidance on reviews of these documents by
document owners, and the role of the document owners in adhering to
these standards. The proposed changes would not make any substantive
changes to this description.
7. Proposed Change To Clarify Regulatory Basis of Certain Public
Disclosures
    Section 4.1 of the Risk Management Framework states that the
Clearing Agencies provide their respective participants with
information and incentives to enable them, and, through them, their
customers, to understand, monitor, manage, and contain the risks they
pose to the respective Clearing Agencies, and identifies some of the
tools the Clearing Agencies provide to their participants to facilitate
this understanding. The Clearing Agencies are proposing to amend
Section 4.1 to make clarifying edits.
    First, the proposed amendments would clarify that the tools and
activities described in Section 4.1 support the Clearing Agencies'
compliance with Rule 17Ad-22(e)(23) under the Act.\24\ Rule 17Ad-
22(e)(23) requires, in part, that the Clearing Agencies establish,
implement, maintain and enforce written policies and procedures
reasonably designed to provide for publicly disclosing relevant basic
data on transaction volume and values, and a comprehensive public
disclosure that describes their material rules, policies, and
procedures regarding their legal, governance, risk management, and
operating framework, accurate in all material respects at the time of
publication.\25\ Certain matters described in Section 4.1 of the
Framework, including the publication of disclosure frameworks and
quantitative disclosures (described below), support the Clearing
Agencies' compliance with the requirements of Rule 17Ad-22(e)(23).\26\
Therefore, the Clearing Agencies would update the introduction to
Section 4.1, and make a conforming change to Section 1 of the
Framework, to refer to Rule 17Ad-22(e)(23).\27\
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    \24\ 17 CFR 240.17Ad-22(e)(23).
    \25\ Id.
    \26\ Id.
    \27\ Id.
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    Second, the proposed amendments would correct a statement in
Section 4.1 of the Framework regarding the disclosure frameworks posted
to the DTCC website for each of the Clearing Agencies on a biennial
basis, which provide a comprehensive description of how the businesses
and operations of the Clearing Agencies reflect the Principles for
financial market infrastructures, issued by the Committee on Payment
and Settlement Systems (``CPSS'') and the Technical Committee of the
International Organization of

Securities Commissions (``IOSCO'').\28\ These disclosure frameworks
also address how the businesses and operations of the Clearing Agencies
reflect the Standards. Therefore, the Clearing Agencies would correct
this statement in Section 4.1 regarding the scope of the disclosure
frameworks by also referring to the Standards.
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    \28\ CPSS and the Technical Committee of IOSCO, Principles for
financial market infrastructures (April 16, 2012), available at
http://www.bis.org/cpmi/publ/d101a.pdf. In 2014, CPSS became the
Committee on Payments and Market Infrastructures (``CPMI'').
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    Finally, the proposed amendments would correct a statement in
Section 4.1 of the Framework regarding the quantitative disclosures
that are posted to the DTCC website on a quarterly basis, which
disclose certain quantitative data and other information as set out in
the Public quantitative disclosure standards for central counterparties
published by CPMI and IOSCO.\29\ Currently, Section 4.1 states that
these disclosures relate to the Clearing Agencies. However, these
disclosures are only required for central counterparties and, as such,
only relate to NSCC and FICC, and not DTC. The Clearing Agencies would
correct this error by replacing ``Clearing Agencies'' with ``NSCC and
FICC, as central counterparties'' in Section 4.1 of the Framework.
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    \29\ CPMI and the Board of IOSCO, Public quantitative disclosure
standards for central counterparties (February 26, 2015), available
at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD475.pdf.
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8. Proposed Change To Enhance Description of Governance of Systemic
Risk Management
    The proposed change would enhance the description of the governance
of systemic risk management in Section 4.2.1 by including a description
of the Systemic Risk Council, the frequency of this Council's meetings,
and stating that matters discussed at these meetings may be escalated
to the Management Risk Committee or the Board Risk Committee when
appropriate. The proposed changes would improve the descriptions in the
Framework by providing additional details regarding the governance of
systemic risk management.
9. Proposed Change To Enhance Description of Management of Risk Related
to Other External Links
    The proposed change would enhance the description of the management
of risks related to external links in Section 4.2.2 by identifying a
policy and a procedure that are maintained by the Clearing Agencies to
govern this process. The proposed change would improve the disclosures
in the Framework by providing a clear reference to these documents.
10. Proposed Change To Remove Unnecessary Phrase
    The proposed change would remove an unnecessary phrase ``, is set
forth in'' that is incorrectly at the end of a sentence in Section 1 of
the Framework.
11. Proposed Change To Rephrase Sentences That Incorrectly Indicate
Discretion in Taking Certain Actions
    The proposed change would rephrase four sentences in the Framework
that currently indicate the action described is discretionary. First,
the proposed change would rephrase a statement in Section 4.2.1 to
remove the indication that the Clearing Agencies have discretion to not
manage risks related to participants and settlement banks. Second, the
proposed change would rephrase a statement in Section 4.2.1 to remove
the indication that the Clearing Agencies have discretion to not
maintain policies, procedures or templates relating to the management
of third-party risks. Third, the proposed change would rephrase a
statement in Section 4.2.2 to remove the indication that the General
Counsel's Office has discretion in reviewing certain key link
arrangements. Finally, the proposed change would rephrase a statement
in Section 5 to remove the indication that the Clearing Agencies have
discretion to not maintain policies and procedures governing the
development and maintenance of R&W Plans.
12. Proposed Change To Correct Error Regarding Reporting Line of DTCC
Internal Audit Department
    The Clearing Agencies are proposing a change to the Framework to
correct an error in Section 3.1.3, which currently states Internal
Audit has a direct reporting line to the Risk Committees of the Boards.
This statement is incorrect, as Internal Audit has a direct reporting
line to the Audit Committees of the Boards. The Clearing Agencies would
correct this error by making a minor revision to Section 3.1.3 of the
Framework. In addition, the Clearing Agencies are proposing to change
references of ``Audit Committee'' to ``Audit Committees'' to reflect
that each of the Boards has an audit committee.
2. Statutory Basis
    The Clearing Agencies believe that the proposed changes are
consistent with Section 17A(b)(3)(F) of the Act \30\ and Rules 17Ad-
22(e)(22) and (e)(23) promulgated under the Act,\31\ for the reasons
described below.
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    \30\ 15 U.S.C. 78q-1(b)(3)(F).
    \31\ 17 CFR 240.17Ad-22(e)(22) and (e)(23).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a registered clearing agency be 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.\32\ The proposed changes would (1) add a description of
how the Clearing Agencies address compliance with Rule 17Ad-22(e)(22),
(2) update the descriptions of certain matters in the Risk Management
Framework, and (3) clarify and correct other statements within the
Framework, as described above. By addressing the Clearing Agencies'
compliance with Rule 17Ad-22(e)(22), creating clearer, updated
descriptions and correcting errors, the Clearing Agencies believe that
the proposed changes would make the Risk Management Framework more
effective in providing an overview of the important risk management
activities of the Clearing Agencies, as described therein.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    As described in the Initial Filing, the risk management functions
described in the Risk Management Framework allow the Clearing Agencies
to continue to promote the prompt and accurate clearance and settlement
of securities transactions, and continue to assure the safeguarding of
securities and funds which are in their custody or control or for which
they are responsible notwithstanding the default of a member of an
affiliated family. The proposed changes to describe policies that
address to the Clearing Agencies' communication standards and improve
the clarity and accuracy of the descriptions of risk management
functions within the Framework would assist the Clearing Agencies in
carrying out these risk management functions. Therefore, the Clearing
Agencies believe these proposed changes are consistent with the
requirements of Section 17A(b)(3)(F) of the Act.\33\
---------------------------------------------------------------------------

    \33\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(22) under the Act requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to use, or at a minimum
accommodate, relevant internationally accepted communication procedures
and standards in order to facilitate efficient payment, clearing,

and settlement.\34\ The Framework would describe a policy maintained by
the Clearing Agencies that (1) identifies the communication standards
and data forms used by the Clearing Agencies for payment, clearing and
settlement that are regarded as accepted industry standards for
transactions processed through the Clearing Agencies, and (2) provides
that the Clearing Agencies would accommodate relevant internationally
accepted communication procedures and standards when new industry
standards are introduced. By describing the Clearing Agencies' use of
accepted industry communication standards and their policy of
supporting new industry standards when introduced, this policy, and a
supporting communication standards document, both support the Clearing
Agencies' compliance with Rule 17Ad-22(e)(22).\35\ Therefore, the
Clearing Agencies believe that the proposed rule change to include this
policy in the Risk Management Framework is consistent with Rule 17Ad-
22(e)(22).\36\
---------------------------------------------------------------------------

    \34\ 17 CFR 240.17Ad-22(e)(22).
    \35\ Id.
    \36\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(23) under the Act requires, in part, that the
Clearing Agencies establish, implement, maintain and enforce written
policies and procedures reasonably designed to provide for publicly
disclosing relevant basic data on transaction volume and values, and a
comprehensive public disclosure that describes their material rules,
policies, and procedures regarding their legal, governance, risk
management, and operating framework, accurate in all material respects
at the time of publication.\37\ Section 4.1 of the Framework currently
describes how the Clearing Agencies provide their respective
participants with information and incentives to enable them, and,
through them, their customers, to understand, monitor, manage and
contain the risks they pose to the respective Clearing Agencies, and
identifies some of the tools the Clearing Agencies provide to their
participants to facilitate this understanding. The proposed rule change
would revise Section 4.1 of the Framework to state that those tools and
activities support the Clearing Agencies' compliance with Rule 17Ad-
22(e)(23) under the Act.\38\ By describing these actions, including the
publication of disclosure frameworks and quantitative disclosures, the
Clearing Agencies believe that the proposed change to the Risk
Management Framework is consistent with Rule 17Ad-22(e)(23).\39\
---------------------------------------------------------------------------

    \37\ 17 CFR 240.17Ad-22(e)(23).
    \38\ Id.
    \39\ Id.
---------------------------------------------------------------------------

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

    The Clearing Agencies do not believe that the proposed changes to
the Framework described above would have any impact, or impose any
burden, on competition. As described above, the proposed rule changes
would improve the comprehensiveness of the Framework by including a
description of the Clearing Agencies' compliance with Rule 17Ad-
22(e)(22) under the Act and would also improve the clarity and accuracy
of the descriptions of certain matters within the Framework. Therefore,
the proposed changes are technical and non-material in nature, relating
mostly to the operation of the Framework rather than the risk
management functions described therein. As such, the Clearing Agencies
do not believe that the proposed rule changes would have any impact on
competition.

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

    The Clearing Agencies have not solicited or received any written
comments relating to this proposal. The Clearing Agencies will notify
the Commission of any written comments received by the Clearing
Agencies.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \40\ and
Rule 19b-4(f)(6) thereunder.\41\
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(3)(A).
    \41\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NSCC-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-NSCC-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 NSCC 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-NSCC-2020-012 and should be submitted on
or before August 5, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\42\
---------------------------------------------------------------------------

    \42\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-15208 Filed 7-14-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 192 (Wednesday, October 5, 2022)]
[Proposed Rules]
[Pages 60349-60352]
[FR Doc No: 2022-21450]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-1236; Project Identifier MCAI-2021-01376-T]
RIN 2120-AA64

Airworthiness Directives; Airbus Canada Limited Partnership (Type
Certificate Previously Held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Airbus Canada Limited Partnership Model BD-500-1A10 and BD-
500-1A11 airplanes. This proposed AD was prompted by a report of a
thrust reverser actuation system (TRAS) deploy hose failure upon the
commanded deployment of a thrust reverser. This proposed AD would
require removing each non-conforming TRAS deploy hose, and replacing it
with a conforming TRAS deploy hose, as specified in a Transport Canada
Civil Aviation (TCCA) 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 November
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 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: Deliver to Mail address above 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 TCCA, Transport Canada National Aircraft Certification, 159
Cleopatra Drive, Nepean, Ontario K1A 0N5, Canada; telephone 888-663-
3639; email [email protected]; internet tc.canada.ca/en/aviation. 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 206-
231-3195. It is also available in the AD docket at regulations.gov by
searching for and locating Docket No. FAA-2022-1236.

Examining the AD Docket

    You may examine the AD docket at regulations.gov by searching for
and locating Docket No. FAA-2022-1236; 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, the mandatory
continuing airworthiness information (MCAI), any comments received, and
other information. The street address for Docket Operations is listed
above.

FOR FURTHER INFORMATION CONTACT: Joseph Catanzaro, Aerospace Engineer,
Airframe and Propulsion Section, FAA, New York ACO Branch, 1600 Stewart
Avenue, Suite 410, Westbury, NY 11590; 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-2022-1236; Project Identifier
MCAI-2021-01376-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
this 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
regulations.gov, including any personal information you provide. The
agency will also post a report summarizing each substantive verbal
contact received about this NPRM.

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
Joseph Catanzaro, Aerospace Engineer, Airframe and Propulsion Section,
FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY
11590; telephone<PHONE_NUMBER>; 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.

Background

    The TCCA, which is the aviation authority for Canada, has issued
TCCA AD CF-2021-46, dated December 8, 2021 (TCCA AD CF-2021-46) (also
referred to as the MCAI), to correct an unsafe condition for certain
Airbus Canada Limited Partnership Model BD-500-1A10 and BD-500-1A11
airplanes.
    This proposed AD was prompted by a report of a TRAS deploy hose
failure upon the commanded deployment of a thrust reverser. It was
found that certain TRAS deploy hoses were made with incomplete
installation of the wire overbraid, which created a weak point and
subsequently led to failure of the deploy hose. The FAA is proposing
this AD to address failure of a deploy hose, which could lead to loss
of thrust reverser function and hydraulic systems. Losing one or both
thrust reversers during landing on a contaminated runway could lead to
a runway excursion. See the MCAI for additional background information.

Related Service Information Under 1 CFR Part 51

    TCCA AD CF-2021-46 specifies procedures for removing each non-
conforming TRAS deploy hose, and replacing it with a conforming TRAS
deploy hose. 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.

Explanation of Affected Thrust Reversers

    The service information referenced in TCCA AD CF-2021-46 specifies
a list of affected thrust reversers (the non-conforming TRAS deploy
hoses are installed on the affected thrust reversers). Airbus Canada
has notified the FAA that the list in Airbus Canada Limited Partnership
Service Bulletin BD500-783002, Issue 001, dated October 22, 2020,
contains incorrect part numbers for several serial numbers. Later
revisions of the service information contain correct part and serial
numbers. In addition, Table 1 to paragraph (h)(3) specifies the correct
part and serial numbers for the affected thrust reversers.

FAA's Determination

    These products have been approved by the aviation authority of
another country and are approved for operation in the United States.
Pursuant to the FAA's bilateral agreement with the State of Design
Authority, it has notified the FAA of the unsafe condition described in
the MCAI referenced above. The FAA is issuing this NPRM after
determining that the unsafe condition described previously is likely to
exist or develop in other products of these same type designs.

Proposed AD Requirements in This NPRM

    This proposed AD would require accomplishing the actions specified
in TCCA AD CF-2021-46 described previously, 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 TCCA AD CF-2021-46 by reference in the FAA
final rule. This proposed AD would, therefore, require compliance with
TCCA AD CF-2021-46 in its entirety through that incorporation, except
for any differences identified as exceptions in the regulatory text of
this proposed AD. Service information required by TCCA

AD CF-2021-46 for compliance will be available at regulations.gov by
searching for and locating Docket No. FAA-2022-1236 after the FAA final
rule is published.

Costs of Compliance

    The FAA estimates that this proposed AD would affect 8 airplanes of
U.S. registry. The FAA estimates the following costs to comply with
this proposed AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
3 work-hours x $85 per hour = $255...........................            * $0             $255           $2,040
----------------------------------------------------------------------------------------------------------------
* The FAA has received no definitive data on which to base the cost estimates for the parts specified in this
  proposed AD.

    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some or all of the costs of
this proposed AD may be covered under warranty, thereby reducing the
cost impact on affected operators.

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) Would not affect intrastate aviation in Alaska, and
    (3) Would 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 adding the following new airworthiness
directive:

Airbus Canada Limited Partnership (Type Certificate Previously Held
by C Series Aircraft Limited Partnership (CSALP); Bombardier, Inc.):
Docket No. FAA-2022-1236; Project Identifier MCAI-2021-01376-T.

(a) Comments Due Date

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

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus Canada Limited Partnership (Type
Certificate previously held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Model BD-500-1A10 and BD-500-1A11
airplanes, certificated in any category, as identified in Transport
Canada Civil Aviation (TCCA) AD CF-2021-46, dated December 8, 2021
(TCCA AD CF-2021-46).

(d) Subject

    Air Transport Association (ATA) of America Code 14, Hardware;
24, Electrical Power; 78, Engine Exhaust.

(e) Unsafe Condition

    This AD was prompted by a report of a thrust reverser actuation
system (TRAS) deploy hose failure upon the commanded deployment of a
thrust reverser. The FAA is issuing this AD to address failure of a
deploy hose, which could lead to loss of thrust reverser function
and hydraulic systems. Losing one or both thrust reversers during
landing on a contaminated runway could lead to a runway excursion.

(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, TCCA AD CF-2021-46.

(h) Exception to TCCA AD CF-2021-46

    (1) Where TCCA AD CF-2021-46 refers to hours air time, this AD
requires using flight hours.
    (2) Where TCCA AD CF-2021-46 refers to its effective date, this
AD requires using the effective date of this AD.
    (3) Where any service information referenced in TCCA AD CF-2021-
46 lists affected thrust reversers, this AD requires using the
serial and part numbers listed in table 1 to paragraph (h)(3) of
this AD.

[GRAPHIC] [TIFF OMITTED] TP05OC22.039

(i) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, New
York ACO 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 manager of the certification
office, send it to ATTN: Program Manager, Continuing Operational
Safety, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone<PHONE_NUMBER>. Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the responsible Flight
Standards Office.
    (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, New York ACO
Branch, FAA; or TCCA; or Airbus Canada Limited Partnership's TCCA
Design Approval Organization (DAO). If approved by the DAO, the
approval must include the DAO-authorized signature.

(j) Related Information

    (1) For TCCA AD CF-2021-46, contact TCCA, Transport Canada
National Aircraft Certification, 159 Cleopatra Drive, Nepean,
Ontario K1A 0N5, Canada; telephone<PHONE_NUMBER>; email [email protected]; internet tc.canada.ca/en/aviation. 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 at regulations.gov by
searching for and locating Docket No. FAA-2022-1236.
    (2) For more information about this AD, contact Joseph
Catanzaro, Aerospace Engineer, Airframe and Propulsion Section, FAA,
New York ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY
11590; telephone<PHONE_NUMBER>; email [email protected].

    Issued on September 26, 2022.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2022-21450 Filed 10-4-22; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 86, Number 27 (Thursday, February 11, 2021)]
[Proposed Rules]
[Pages 9036-9037]
[FR Doc No: 2021-02742]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2020-0387; FRL 10017-05-Region 5]

Air Plan Approval; Indiana; Emissions Reporting Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve a revision to the Indiana State Implementation Plan (SIP)
submitted on July 16, 2020, by the Indiana Department of Environmental
Management (IDEM). The revision incorporates changes to Indiana's
existing emission reporting rule to be consistent with the emissions
statement requirements in the Clean Air Act (CAA). The CAA requires
stationary sources in ozone nonattainment areas to submit annual
emissions statements. The revision to the rule extends the requirements
in Indiana's emission reporting rule to Clark and Floyd counties, which
were designated nonattainment under the 2015 ozone National Ambient Air
Quality Standard (NAAQS) in 2018, and removes the requirement for
Lawrenceburg Township in Dearborn County and to LaPorte County, because
these areas are currently designated attainment for the 1997, 2008 and
2015 ozone standards.

DATES: Comments must be received on or before March 15, 2021.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2020-0387 at http://www.regulations.gov or via email to
<EMAIL_ADDRESS>For comments submitted at Regulations.gov,
follow the online instructions for submitting comments. Once submitted,
comments cannot be edited or removed from Regulations.gov. For either
manner of submission, 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. 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, please contact the person
identified in the FOR FURTHER INFORMATION CONTACT section. For 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: Charles Hatten, Environmental
Engineer, Control Strategies Section, Air Programs Branch (AR 18J),
Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,
Chicago, Illinois 60604,<PHONE_NUMBER><EMAIL_ADDRESS>The
EPA Region 5 office is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding federal holidays and facility closures due to COVID-
19.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA.

I. Emissions Statement Rule Requirements

    Section 182(a)(3)(B) of the CAA requires states with ozone
nonattainment areas to submit revisions to their SIPs to require the
owner or operator of each stationary source of volatile organic
compounds (VOC) or oxides of nitrogen (NOX) to provide the
state with an annual statement documenting the actual emissions of VOC
and NOX from their source. This requirement applies to each
stationary source emitting greater than or equal to 25 tons per year of
VOC or NOX in an ozone nonattainment area.
    As EPA has promulgated more stringent NAAQS for ozone in 1997,
2008, and 2015, additional areas in Indiana have been designated as
nonattainment. On March 29, 2007 (72 FR 14681), EPA determined that
Indiana regulation 326 Indiana Administrative Code (IAC) 2-6, Emission
Reporting, satisfied the requirements of CAA Section 182(a)(3)(B) for
nonattainment areas under the 1997 ozone NAAQS. The requirement to
submit annual emissions statements affected stationary sources located
in Lake, Porter, and LaPorte Counties. On April 7, 2017 (82 FR 16926),
EPA approved into Indiana's SIP a revised version of 326 IAC 2-6 that
extended the emissions reporting requirements to Lawrenceburg Township,
Dearborn County, which had been designated nonattainment under the 2008
ozone NAAQS. In a separate action, on April 7, 2017 (82 FR 16934), EPA
approved Indiana's emissions reporting requirements for Lake and Porter
counties designated

nonattainment under the 2008 ozone NAAQS.
    On October 26, 2015 (80 FR 65292), EPA promulgated a revised ozone
NAAQS of 0.070 parts per million (ppm). Clark and Floyd Counties,
Indiana were designated nonattainment for the 2015 ozone NAAQS on
August 3, 2018 (83 FR 25776).
    Under the existing federally approved SIP for Indiana, the emission
statement requirements apply to Lake, Porter, LaPorte, and Dearborn
(Lawrenceburg Township) Counties. On July 16, 2020, IDEM submitted a
request that EPA approve the revisions to the existing emission
reporting rule, 326 IAC 2-6, to be consistent with the current
emissions statement requirements for stationary sources in section
182(a)(3)(B) of the CAA.

II. What changes is Indiana requesting?

    The changes to the SIP revise the applicability of the emission
reporting rule, 326 IAC 2-6-1. IDEM is adding Clark and Floyd Counties,
designated nonattainment for the 2015 ozone NAAQS, to the list of areas
for which stationary sources that emit 25 tons or more per year of VOC
or NOX must submit annual emissions statement to IDEM. In
addition, IDEM is removing the applicability of the emission reporting
rule to Lawrenceburg Township in Dearborn County and to LaPorte County.
Once an area meets the ozone standard and is redesignated to
attainment, sources in the area are no longer subject to the emissions
statement requirements of the CAA. LaPorte County and Lawrenceburg
Township in Dearborn County have both been redesignated to attainment
of the ozone standard. LaPorte County was redesignated to attainment of
the 1997 ozone standard on July 19, 2007 (72 FR 39574); and designated
as attainment of the 2008 ozone standard on May 21, 2012 (77 FR 30088).
Lawrenceburg Township in Dearborn County was redesignated to attainment
of the 2008 ozone standard on April 7, 2017 (82 FR 16943). Also, these
two areas were designated as attainment of the 2015 ozone standard on
June 4, 2018 (83 FR 25776) and therefore, they are attaining all ozone
standards. Thus, IDEM has revised the applicability of regulation 326
IAC 2-6-1 to discontinue the emission reporting requirement for
stationary sources the areas of Lawrenceburg Township in Dearborn
County and LaPorte County to submit annual emissions statements.

III. EPA's Analysis of Indiana's Submittal

    Indiana's revised version of 326 IAC 2-6-1 appropriately extends
the emissions statement requirements to Clark and Floyd Counties, and
removes the requirement for Lawrenceburg Township in Dearborn County
and LaPorte County. Indiana's emissions reporting rule correctly
reflects areas for which the CAA requires stationary sources to submit
annual emissions statements.

IV. What action is EPA taking?

    As discussed above, EPA is proposing to approve the revisions to
the emission reporting rule, 326 IAC 2-6-1, into Indiana's SIP, as
submitted on July 16, 2020, to address the CAA emission statement
requirement in section 182(a)(3)(B).

V. Incorporation by Reference

    In this rule, EPA is proposing to include in a final EPA rule
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by
reference Indiana rule 326 IAC 2-6-1 ``Applicability'', effective on
April 4, 2020. EPA has made, and will continue to make, these documents
generally available through www.regulations.gov and at the EPA Region 5
Office (please contact the person identified in the FOR FURTHER
INFORMATION CONTACT section of this preamble for more information).

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
action merely approves state law as meeting federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this action:
     Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because it is not a significant regulatory
action under Executive Order 12866;
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian
reservation land or in any other area where EPA or an Indian tribe has
demonstrated that a tribe has jurisdiction. In those areas of Indian
country, the rule does not have tribal implications and will not impose
substantial direct costs on tribal governments or preempt tribal law as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Nitrogen dioxide, Ozone, Volatile organic compounds.

    Dated: February 4, 2021.
Cheryl Newton,
Acting Regional Administrator, Region 5.
[FR Doc. 2021-02742 Filed 2-10-21; 8:45 am]
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