[Federal Register Volume 76, Number 27 (Wednesday, February 9, 2011)]
[Notices]
[Pages 7222-7223]
[FR Doc No: 2011-2915]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0062]

Medical Device Innovation Initiative; Public Meeting; Request for
Comments

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of public meeting; request for comments.

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SUMMARY: The Food and Drug Administration (FDA) is announcing a public
meeting entitled ``CDRH's Medical Device Innovation Initiative Public
Workshop.'' The purpose of the public meeting is to solicit feedback on
select actions outlined in the Center for Devices and Radiological
Health's (CDRH) document, ``Medical Device Innovation Initiative''
(report). FDA is seeking input on a number of identified challenges
associated with incentivizing innovation, and the proposed solutions.
In addition, the Agency requests comments on the Innovation Pathway
proposed under the report.

DATES: The public meeting will be held on March 15, 2011, from 8 a.m.
to 5:30 p.m. Persons interested in attending and/or participating in
the meeting must register by 5 p.m. on March 4, 2011.

ADDRESSES: The public meeting will be held at the FDA White Oak Campus,
10903 New Hampshire Ave., Bldg. 31, Rm. 3502, Silver Spring, MD 20993.
A live Webcast of this meeting will be viewable on the day of the
meeting at http://fda.yorkcast.com/webcast/Viewer/?peid=fae7c7ac49174d159e49e8d83aaf3b9d. Closed captioning for this
Webcast will be available at http://www.speche.com/sbload.aspx?Load=Web,All,New&Height=90%&Width=100%&ClientID=31213.
    Submit electronic comments to http://www.regulations.gov. Submit
written comments to the Division of Dockets Management (HFA-305), Food
and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD
20852.
    Contact Person: Jonathan Sackner-Bernstein, Food and Drug
Administration, Center for Devices and Radiological Health, 10903 New
Hampshire Avenue, Bldg. 66, Rm. 5410, Silver Spring, MD 20993, 301-796-
5420, e-mail<EMAIL_ADDRESS>    Registration and Requests for Oral Presentations: If you wish to
attend the public meeting, you must register online at http://www.fda.gov/MedicalDevices/NewsEvents/WorkshopsConferences/ucm241095.htm. Provide complete contact information for each attendee,
including name, title, affiliation, address, email, and telephone
number. Registration requests should be received by March 4, 2011.
    If you wish to make an oral presentation during any of the open
comment sessions at the meeting, you must indicate this at the time of
registration. FDA has included general discussion topics and specific
questions for comment in this document. You should also identify which
discussion topic you wish to address in your presentation. In order to
keep each open session focused on the discussion topic at hand, each
oral presentation should address only one discussion topic. FDA will do
its best to accommodate requests to speak. Individuals and
organizations with common interests are urged to consolidate or
coordinate their presentations, and to request time for a joint
presentation. FDA will determine the amount of time allotted to each
presenter and the approximate time that each oral presentation is to
begin.
    Registration is free and will be on a first-come, first-served
basis. Early registration is recommended because seating is limited.
FDA may limit the number of participants from each organization based
on space limitations. Registrants will receive confirmation once they
have been accepted. Onsite registration on the day of the public
meeting will be provided on a space-available basis beginning at 7 a.m.
    Non-U.S. citizens are subject to additional security screening, and
they should register as soon as possible. If you need special
accommodations due to a disability, please contact Susan Monahan,
<EMAIL_ADDRESS>301-796-5661, at least 7 days in advance of
the public meeting.

SUPPLEMENTARY INFORMATION:

I. Background

    The United States is the global leader in medical device innovation
and CDRH is committed to assuring that American patients have timely
access to important new technologies and next-generation products
without compromising their safety. Each year, millions of American
patients benefit from innovative medical devices that reduce suffering,
treat previously untreatable conditions, extend lives, and improve
public health.
    CDRH is responsible for advancing public health and facilitating
innovation to help bring novel technologies to market and make the
medical devices that are already on the market safer and more
effective. Recently, CDRH announced 25 actions it will take in 2011 to
strengthen its most widely-used premarket review process--the 510(k)
program--and increase its use of emerging science to foster innovation
and improve the predictability, consistency, and transparency of its
decisionmaking.\1\ These actions will not only improve the safety of
medical devices but also increase the ability of innovating companies
to attract investors, estimate costs, and more quickly bring products
to market.
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    \1\ See ``510(k) and Science Report Recommendations: Summary and
Overview of Comments and Next Steps.'' Available at http://www.fda.gov/downloads/AboutFDA/CentersOffices/CDRH/CDRHReports/UCM239449.pdf, and ``Plan of Action for Implementation of 510(k) and
Science Recommendations.'' Available at http://www.fda.gov/downloads/AboutFDA/CentersOffices/CDRH/CDRHReports/UCM239450.pdf.
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    The Medical Device Innovation Initiative proposes the following
actions CDRH might take to help accelerate the development and
regulatory evaluation of innovative devices safely and based on sound
science:
     Facilitate the development and regulatory evaluation of
innovative medical devices;
     Strengthen the U.S. research infrastructure and promote
high-quality regulatory science; and
     Prepare for, and respond to, transformative innovative
technologies and scientific breakthroughs.
    Part of the Medical Device Innovation Initiative would consider the
creation of a special Innovation Pathway intended to provide earlier
investment of CDRH time and resources in devices that are true
pioneering technologies and that have the potential to revolutionize
patient care or health care delivery. By front-loading critical
aspects, such as identifying clinical endpoints and key scientific
questions, and seeking advice from external experts, the Innovation
Pathway would facilitate a more efficient regulatory review process for
transformative devices.
    The objective of this public meeting is to receive public input on
the proposals to facilitate medical device innovation as set forth in
the report. The public meeting's focus includes the following areas:
     The Innovation Pathway and Horizon Scanning (morning
session)
     Clinical Test Center Certification, Core Curriculum for
Medical Device Development, and Regulatory Science (afternoon session)
    During the meeting, FDA staff will present a brief overview of each
of the previously listed areas. Each of the FDA presentations will be
followed by an open comment session, during which members of the public
may present oral comments related to the topic under

discussion. As described previously in this document, individuals who
are interested in making an oral presentation during any of the open
comment sessions must indicate this at the time of registration, must
identify which discussion topic they intend to address (see
Registration and Requests for Oral Presentations), and must submit
their presentations in advance. In order to keep each open session
focused on the discussion topic at hand, each oral presentation should
address only one discussion topic. Commenters are free to submit
comments on any discussion topic(s) to the open docket (see II.
Comments). FDA will schedule speakers for each open session as time
permits.
    After each of the open comment sessions, there will be a panel
discussion between FDA staff and selected participants representing a
range of constituencies. The participants in the panel discussions will
reflect on the presentations and comments, engage in a dialogue with
each other and FDA staff, and provide closing thoughts for each
session. The participants will not be asked to develop consensus
opinions during the discussion, but rather to provide their individual
perspectives. Others in attendance at the meeting will have an
opportunity to listen to the panel discussions.
    In advance of the meeting, additional information, including a
meeting agenda with a speakers' schedule for each open comment session,
will be made available on the Internet. This information will be placed
on file in the public docket (docket number found in brackets in the
heading of this document), which is available at http://www.regulations.gov. This information will also be available at http://www.fda.gov/MedicalDevices/NewsEvents/WorkshopsConferences/ucm241095.htm.

II. Comments

    FDA is holding this public meeting to obtain information on a
number of questions regarding medical device innovation. The deadline
for submitting comments related to this public meeting is March 15,
2011.
    Regardless of attendance at the public meeting, interested persons
may submit to the Division of Dockets Management (see ADDRESSES) either
electronic or written comments. It is only necessary to send one set of
comments. It is no longer necessary to send two copies of mailed
comments. Identify comments with the docket number found in brackets in
the heading of this document. In addition, when responding to specific
questions as outlined in this document, please identify the question
you are addressing. Received comments may be seen in the Division of
Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

III. Transcripts

    Please be advised that as soon as a transcript is available, it
will be accessible at http://www.regulations.gov. It may be viewed at
the Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD. A
transcript will also be available in hardcopy or on CD-ROM, after
submission of a Freedom of Information request. Written requests are to
be sent to Division of Freedom of Information (HFI-35), Office of
Management Programs, Food and Drug Administration, 5600 Fishers Lane,
Rm. 6-30, Rockville, MD 20857.

    Dated: February 4, 2011.
Nancy K. Stade,
Deputy Director for Policy, Center for Devices and Radiological Health.
[FR Doc. 2011-2915 Filed 2-8-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 81, Number 111 (Thursday, June 9, 2016)]
[Notices]
[Pages 37232-37236]
[FR Doc No: 2016-13614]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77991; File No. SR-DTC-2016-003]

Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change Pursuant to Which It Would
Impose Deposit Chills and Global Locks and Provide Fair Procedures to
Issuers

June 3, 2016.
    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 May 27, 2016, The Depository Trust Company (``DTC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II and III below, which Items have been
prepared by DTC. DTC filed the proposed rule change pursuant to Section
19(b)(2) \3\ of the Act thereunder. 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)(2).
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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 Rules, By-
Laws and Organization Certificate of DTC (the ``Rules'') in order to
add a Rule which establishes: (i) The circumstances under which DTC
would impose and release a restriction on Deposits of an Eligible
Security (a ``Deposit Chill'') or on book-entry services for an
Eligible Security (a ``Global Lock''); and (ii) the fair procedures for
notice and an opportunity for the issuer of the Eligible Security (the
``Issuer'') to challenge the Deposit Chill or Global Lock (each, a
``Restriction''), as described below.\4\
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    \4\ Each capitalized term not otherwise defined herein has its
respective meaning as set forth in the Rules, available at http://www.dtcc.com/legal/rules-and-procedures.aspx.
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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 proposal would add new Rule 33 (Deposit Chills and Global
Locks) to establish: (i) The circumstances under which DTC would impose
and release a Deposit Chill or a Global Lock; and (ii) the fair
procedures for notice and an opportunity for the Issuer to challenge
the Restriction, as described below.
(i) Background
A. DTC
    DTC is the nation's central securities depository, registered as a
clearing agency under Section 17A of the Act.\5\ DTC's deposit and
book-entry transfer services help facilitate the operation of the
nation's securities markets. By serving as registered holder of
trillions of dollars of Securities, DTC, on a daily basis, processes
enormous volumes of securities transactions facilitated by book-entry
movement of interests, without the need to transfer physical
certificates.
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    \5\ See Securities Exchange Act Release No. 20221 (September 23,
1983), 48 FR 45167 (October 3, 1983) (File No. 600-1).
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    DTC performs services and maintains Securities Accounts for its
Participants, primarily banks and broker dealers, pursuant to its Rules
and Procedures. Participants agree to be bound by the Rules and
Procedures of DTC as a condition of their DTC membership.\6\ DTC allows
a Participant to present Securities to be made eligible for DTC's
depository and book-entry services. If a Security is accepted by DTC as
meeting DTC's eligibility requirements for services \7\ and is
deposited with DTC for credit to the Securities Account of a

Participant, it becomes an Eligible Security. Thereafter, Participants
may deposit shares of that Eligible Security into their respective DTC
accounts. To facilitate book-entry transfers and other services that
DTC provides for its Participants with respect to Deposited Securities,
the Deposited Securities are generally registered on the books of the
Issuer (typically, in a register maintained by a transfer agent) in
DTC's nominee name, Cede & Co. Deposited Securities that are eligible
for book-entry services are maintained in ``fungible bulk,'' i.e., each
Participant whose Securities of an issue have been credited to its
Securities Account has a pro rata (proportionate) interest in DTC's
entire inventory of that issue, but none of the Securities on deposit
are identifiable to or ``owned'' by any particular Participant.\8\
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    \6\ See supra note 5.
    \7\ See Rule 5, supra note 4; DTC Operational Arrangements
(Necessary for Securities to Become and Remain Eligible for DTC
Services), January 2012 (the ``Operational Arrangements''), Section
1, available at http://www.dtcc.com/~/media/Files/Downloads/legal/
issue-eligibility/eligibility/operational-arrangements.pdf.
    \8\ See Securities Exchange Act Release No. 19678 (April 15,
1983), 48 FR 17603, 17605, n.5 (April 25, 1983) (describing fungible
bulk); see also N.Y. Uniform Commercial Code, Sec.  8-503, Off. Cmt
1 (``. . . all entitlement holders have a pro rata interest in
whatever positions in that financial asset the [financial]
intermediary holds'').
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    The Commission has recognized that DTC plays a ``critical
function'' in the National Clearance and Settlement system.\9\ More
recently, the federal Financial Stability Oversight Council, which was
established pursuant to the Dodd-Frank Wall Street Reform and Consumer
Protection Act,\10\ designated DTC as a Systemically Important
Financial Market Utility (as defined therein).\11\
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    \9\ See Securities Exchange Act Release No. 47978 (June 4,
2003), 68 FR 35037, 35041 (June 11, 2003) (File No. SR-DTC-2003-02).
    \10\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Pub. L. 111-203, 124 Stat. 1376 (2010).
    \11\ See Financial Stability Oversight Council, 2012 Annual
Report, Appendix A, available at https://www.treasury.gov/initiatives/fsoc/Documents/2012%20Appendix%20A%20Designation%20of%20Systemically%20Important%20Market%20Utilities.pdf.
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B. Deposit Chills and Global Locks: Prior Procedures
    Previously, upon detecting suspiciously large deposits of a thinly
traded Eligible Security, DTC imposed or proposed to impose a Deposit
Chill as a measure to maintain the status quo while, pursuant to its
Operational Arrangements,\12\ DTC required the Issuer to confirm by
legal opinion of independent counsel that the Eligible Security
fulfilled the requirements for eligibility. The Deposit Chill would be
maintained until the Issuer provided a satisfactory legal opinion. The
Deposit Chill could remain in place for years, due to an Issuer's non-
responsiveness, refusal, or inability to submit the required legal
opinion.
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    \12\ See Operational Arrangements, Section I.A, supra note 7.
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    With respect to Global Locks, DTC previously imposed a Global Lock
on an Eligible Security when a governmental or regulatory authority
commenced a proceeding or action alleging violations of Section 5 of
the Securities Act of 1933, as amended, with respect to such Eligible
Security. A Global Lock could be released when the underlying
enforcement action was withdrawn, dismissed on the merits with
prejudice, or otherwise resolved in a final, non-appealable judgment in
favor of the defendants allegedly responsible for the violations of
federal securities laws. However, many enforcement actions are only
resolved after several years \13\ and commonly without any definitive
determination of wrongdoing.\14\
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    \13\ See, e.g., SEC v. Kahlon, 12-CV-517 (E.D. Tex., filed
August 14, 2012); SEC v. Bronson, 12-cv-06421-KMK (S.D.N.Y., filed
August 22, 2012). As of the date of this filing, neither case has
been resolved.
    \14\ See, e.g., SEC v. Reiss, 13-cv-01537, dkt no. 10 (S.D.N.Y.
2014) (issuing a final judgment against the defendant in an
enforcement action, without the defendant admitting or denying the
allegations).
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    The above describes, in part, the proposed procedures filed by DTC
on December 5, 2013,\15\ in response to the Commission's opinion and
order in In re International Power Group, Ltd. (``IPWG'') directing DTC
to ``adopt procedures that accord with the fairness requirements of
Section 17A(b)(3)(H).'' \16\ DTC withdrew the proposed rule change on
August 18, 2014.\17\
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    \15\ See Securities Exchange Act Release No. 71132 (December 18,
2013); 78 FR 77755 (December 24, 2013) (File No. SR-DTC-2013-11).
    \16\ See Securities Exchange Act Release No. 66611 (March 15,
2012), 2012 SEC LEXIS 844 at *32 (March 15, 2012) (Admin. Proc. File
No. 3-13687).
    \17\ See Securities Exchange Act Release No. 72860 (August 18,
2014), 79 FR 49825 (August 22, 2014) (File No. SR-DTC-2013-11).
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    As a result of DTC's experiences following the IPWG decision and in
connection with the previous proposed rule change, DTC has determined
that its proposed procedures for imposing Deposit Chills and Global
Locks are more appropriately directed to current trading halts or
suspensions imposed by the Commission, the Financial Industry
Regulatory Authority, Inc. (``FINRA''), or a court of competent
jurisdiction, and therefore are more effective in targeting suspected
securities fraud that is ongoing at the time the Restriction is
imposed. In particular, with respect to Deposit Chills imposed pursuant
to DTC's previous procedures, DTC believes that wrongdoers have
seemingly taken into account DTC's Restriction process, and have been
avoiding it by shortening the timeframe in which they complete their
scheme, dump their shares into the market, and move on to another
issue.
    Additionally, Global Locks were typically being imposed on the
basis of a Commission enforcement action alleging securities law
violations that had occurred in the past, and so could not affect the
violative behavior (unless the alleged securities law violations were
ongoing). In fact, it is DTC's understanding that, by the time of an
enforcement action, the wrongdoers had long since transferred the
subject securities. In addition, although a Global Lock bars book-entry
settlements within DTC, it does not affect the trading of the issue,
which occurs outside of DTC.
(ii) Proposal
A. Proposed Basis for the Imposition of Deposit Chills and Global Locks
    With this proposal, DTC would establish the basis for the
imposition of Deposit Chills and Global Locks, premised on direct
current judicial or regulatory intervention or the threat of imminent
adverse consequences to DTC or its Participants. DTC believes that the
proposed rule change would provide a basis for imposing and releasing
Restrictions that is consistent with its obligations under applicable
law.
    Under subsections (a) and (b) of Section 1 of the proposed rule, if
FINRA or the Commission halts or suspends trading of an Eligible
Security, DTC would impose a Global Lock. Similarly, under subsection
(c) of Section 1 of the proposed rule, DTC would impose a Restriction
if ordered to do so by a court of competent jurisdiction. Consistent
with its mandate ``to promote the prompt and accurate clearance and
settlement of securities transactions,'' \18\ DTC's facilities should
not be available to settle transactions otherwise prohibited by the
Commission, FINRA, or a court of competent jurisdiction. The imposition
of a Global Lock on an Eligible Security for which trading is halted or
suspended would prevent settlement of trades that continue despite the
halt or suspension, and prevent a bad actor from liquidating a position
through DTC in order to obtain the proceeds of fraudulent activities.
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    \18\ 15 U.S.C. 78q-1(b)(3)(F).
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    Notwithstanding subsections (a) and (b) of Section 1 of the
proposed Rule, DTC recognizes that FINRA and the Commission issue
trading halts and suspensions for numerous reasons, and so there may be
certain limited circumstances where a Global Lock

would not further the regulatory purpose of such trading halt or
suspension. Therefore, if DTC reasonably determines that such is the
case, DTC may decline to impose a Global Lock. Some examples of when
DTC may decline to impose a Global Lock include, but are not limited
to, if FINRA issues a trading halt in all OTC equity securities due to
a technical glitch; or if FINRA issues a trading halt clearly based on
financial uncertainty in a foreign jurisdiction that doesn't affect
DTC's ability to settle transactions.
    Finally, under subsection (d) of Section 1 of the proposed rule,
DTC would impose a Restriction when it becomes aware of a need for
immediate action to avert an imminent harm, injury, or other such
material adverse consequence to DTC or its Participants that could
arise from further Deposits of, or continued book-entry services with
respect to, an Eligible Security. While it is impossible to anticipate
all possible scenarios that may give rise to the need for action by DTC
under this subsection (d) to avoid imminent harm, DTC does not
anticipate that it would impose Restrictions pursuant to this
formulation frequently. Some examples where this provision may be
invoked include, but are not limited to, if DTC becomes aware that
marketplace actors were about to deposit Securities at DTC in
connection with an ongoing corporate hijacking, market manipulation, or
in violation of other applicable laws; if an Issuer or its agent
provides DTC with plausible information that Security certificates were
stolen and were about to be deposited; or if an Issuer notifies DTC
that shares of a Security had just been issued erroneously upon a
conversion of previously satisfied notes.
    The concept of taking immediate action to avoid imminent harm to
DTC or its Participants was recognized in the Commission's opinion in
IPWG. The Commission ruled that, when faced with justifiable
circumstances, DTC may design fair procedures ``in accordance with its
own internal needs and circumstances,'' \19\ recognizing that:
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    \19\ IPWG, 2012 SEC LEXIS at *30, n.36.

    If DTC believes that circumstances exist that justify imposing a
suspension of services with respect to an issuer's securities in
advance of being able to provide the issuer with notice and an
opportunity to be heard on the suspension, it may do so. However, in
such circumstances, these processes should balance the identifiable
need for emergency action with the issuer's right to fair procedures
under the Exchange Act. Under such procedures, DTC would be
authorized to act to avert an imminent harm, but it could not
maintain such a suspension indefinitely without providing expedited
fair process to the affected issuer.\20\
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    \20\ Id. at *29. See also In re Atlantis Internet Group
(``Atlantis''), Securities Exchange Act Release. No. 75168 at 7-8,
2015 SEC LEXIS 2394 at *18 (June 12, 2015) (Admin. Proc. File No. 3-
15432) (``DTC's imposition of the Global Lock without advance notice
was an appropriate exercise of its authority to act to prevent
imminent harm . . .'').
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B. Proposed Basis for the Release of Deposit Chills and Global Locks
    As part of DTC's process for imposing Restrictions premised on
direct court or regulatory agency intervention or the prospect of
imminent adverse consequences to DTC or its Participants, the proposed
rule change provides corresponding criteria for releasing such
Restrictions.
    As an initial matter, pursuant to the proposed rule change, DTC
would release a Restriction when DTC reasonably determines that its
imposition of the Restriction was based on a clerical mistake.
    In the case of a Global Lock imposed pursuant to subsections (a) or
(b) of Section 1 of the proposed rule (FINRA trading halt or Commission
trading suspension), under the proposed rule change, DTC would release
the Global Lock when the halt or suspension of trading of the Eligible
Security has been lifted. In the case of a Restriction imposed pursuant
to subsection (c) of Section 1 of the proposed rule (order from a court
of competent jurisdiction), under the proposed rule change, DTC would
release the Restriction when a court of competent jurisdiction orders
DTC to release the Restriction. Since trading would no longer be
prohibited by FINRA, the Commission, or court order, respectively,
there should not be any settlement restrictions, other than those
otherwise provided in the Rules.
    Finally, in the case of a Restriction imposed pursuant to
subsection (d) of Section 1 of the proposed rule (imminent adverse
consequences to DTC or its Participants), pursuant to the proposed rule
change, DTC would release the Restriction when it reasonably determines
that the release of the Restriction would not pose a threat of imminent
adverse consequences to DTC or its Participants, obviating the original
basis for the Restriction.
    It is impossible to anticipate all possible scenarios that may give
rise to a release of a Restriction under this basis. However, DTC
anticipates that it would release such Restriction in a number of
circumstances, including without limitation:
     When DTC determines that the perceived harm has passed or
is significantly remote;
     when the basis for the Restriction no longer exists. For
example, where DTC imposed a Deposit Chill on the basis of plausible
information that certificates were stolen and about to be deposited,
and DTC subsequently receives plausible information that the
certificates have been recovered and will not be deposited, or where
DTC imposed a Deposit Chill based on erroneously issued shares, and
subsequently receives copies of a ``Stop transfer'' \21\ directive and
cancellation of such shares before they have been deposited; or
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    \21\ A ``stop transfer'' is an order made to prevent the
transfer of ownership of a security.
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     when an Eligible Security had been previously Globally
Locked based on a Commission enforcement action but there is no
indication that illegally distributed Securities are about to be
deposited.
C. Proposed Fair Procedures
    DTC has developed the procedures in the proposed rule change to
give the Issuer a timely notice of the Restriction, provide the Issuer
an opportunity to submit a written challenge to the Restriction,
provide a review and written determination by an independent officer,
and maintain a complete record of the proceeding, consistent with
Section 17A(b)(3)(H) of the Act \22\ and the Commission's opinion and
order in IPWG.
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    \22\ 15 U.S.C. 78q-1(b)(3)(H).
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    Pursuant to the proposed rule change, DTC would send written notice
(``Restriction Notice'') to the Issuer's last known business address
and to the last known business address of the Issuer's transfer agent,
if any, on record with DTC. The Restriction Notice would be sent within
three Business Days of imposition of a Restriction and would set forth:
(i) The basis for the Restriction; (ii) the date the Restriction was
imposed; (iii) that the Issuer may submit a written response to DTC
detailing the basis for release of the Restriction under proposed Rule
33 (``the Restriction Response''); and (iv) that the Restriction
Response must be received by DTC within twenty Business Days of
delivery of the Restriction Notice.
    Once the Restriction Response is received by DTC, the proposed rule
change provides that it would be reviewed by a DTC officer who did not
have responsibility for the imposition of the Restriction. DTC may
request additional information from the Issuer. After the officer's
review is completed, DTC would provide a written decision (a
``Restriction Decision'') to the Issuer.

Within ten Business Days of delivery of the Restriction Decision, the
Issuer may submit a supplement (a ``Supplement'') for the sole purpose
of establishing that DTC made a clerical mistake or mistake arising
from an oversight or omission in reviewing the Restriction Response.
    If the Issuer submits a Supplement, the officer would provide a
supplement decision (a ``Supplement Decision'') within ten Business
Days after the Supplement was delivered. The Restriction Notice, the
Restriction Response, the Restriction Decision, the Supplement, the
Supplement Decision, and any other documents submitted in connection
with these procedures would constitute the record for purposes of any
appeal to the Commission.
    The proposed rule change would not affect DTC's ability (A) to lift
or modify a Restriction; (B) to operationally restrict book-entry
services, Deposits or other services in the ordinary course of
business, as such restrictions do not constitute Deposit Chills or
Global Locks for purposes of proposed Rule 33; (C) to communicate with
the Issuer or its transfer agent or representative, if any, provided
that substantive communications are memorialized in writing to be
included in the record for purposes of any appeal to the Commission; or
(D) to send out a Restriction Notice prior to the imposition of a
Restriction.
    DTC believes that these procedures comport with Section
17A(b)(3)(H) of the Act, which requires that a registered clearing
agency that denies or limits access to the agency's services to a
``person,'' it must ``provide a fair procedure.'' \23\ Such procedures
require the clearing agency to give the person notice and an
opportunity to address the specific grounds for denial or prohibition
or limitation and to keep a record.\24\ In its decision in IPWG, the
Commission ruled, inter alia, that issuers are ``persons'' for the
purposes of Section 17A(b)(3).\25\
---------------------------------------------------------------------------

    \23\ See id.
    \24\ See 15 U.S.C. 78q-1(b)(5)(B).
    \25\ IPWG, 2012 SEC LEXIS at *24.
---------------------------------------------------------------------------

    Section 17A of the Act does not specify the nature of the fair
procedures DTC must provide to ``persons,'' including issuers. In IPWG,
the Commission observed that:

    Exchange Act Section 17A(b)(5)(B) states that, when a registered
clearing agency determines that ``a person shall be . . . prohibited
or limited with respect to access to services offered by the
clearing agency, the clearing agency shall notify such person of,
and give him an opportunity to be heard upon, the specific grounds
for . . . prohibition or limitation under consideration and keep a
record.'' \26\
---------------------------------------------------------------------------

    \26\ Id.

    As stated in IPWG, ``DTC may design such [Section 17A procedures]
in accordance with its own internal needs and circumstances.'' \27\ The
Commission further ruled in IPWG that DTC ``should adopt procedures
that accord with the fairness requirements of Section 17A(b)(3)(H),
which may be applied uniformly'' in the cases where DTC denies or
limits services with respect to an Issuer's Securities.
---------------------------------------------------------------------------

    \27\ Id. at *30 n.36.
---------------------------------------------------------------------------

    In the Commission's more recent opinion in Atlantis, the Commission
upheld the notice, opportunity to be heard, and recordkeeping that DTC
provided to a Globally Locked issuer. Significantly, the Commission
held that Section 17A of the Act does not require DTC to hold a formal
hearing in order to satisfy its obligations under Section 17A to
provide Issuers with an opportunity to be heard.\28\
---------------------------------------------------------------------------

    \28\ Id. at *19.
---------------------------------------------------------------------------

    DTC believes that the procedures in proposed Rule 33 for giving
notice of the Restriction to the Issuer with an opportunity to be heard
are consistent with the fair procedures upheld by the Commission in
Atlantis. In addition, consistent with the Commission's broad directive
in IPWG, DTC believes that the proposed rule would establish uniform
standards for the imposition of Restrictions, as well as the fair
procedures for Issuers whose Securities are subject to a Restriction.
Implementation Timeframe
    DTC will announce the effective date via Important Notice upon the
Commission's approval of the proposed rule change.
2. Statutory Basis
    DTC believes that the proposed rule change is consistent with the
requirements of the Act, and the rules and regulations thereunder
applicable to DTC, in particular Section 17A(b)(3)(F) of the Act \29\
and Section 17A(b)(3)(H) of the Act.\30\
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78q-1(b)(3)(F).
    \30\ 15 U.S.C. 78q-1(b)(3)(H).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act \31\ requires, inter alia, that the
rules of the 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. By establishing a framework for DTC to impose and release
Restrictions, the proposed rule change would provide a mechanism for
DTC to act quickly and efficiently to screen out, prior to deposit, or
restrict, after deposit, Securities for which trading has been
prohibited by the Commission, FINRA, or a court of competent
jurisdiction, or which pose a threat of imminent adverse consequences
to DTC or its Participants, to assure the safeguarding of Securities
deposited to and held by DTC, consistent with the requirements of the
Act, in particular Section 17A(b)(3)(F) of the Act, cited above.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Section 17A(b)(3)(H) of the Act, requires, inter alia, that the
rules of a clearing agency are in accordance with the provisions of
Section 17A(b)(5)(B) of the Act,\32\ and in general provide a fair
procedure with respect to the prohibition or limitation by the clearing
agency of any person with respect to access to services offered by the
clearing agency. By establishing a procedure that would provide for:
(A) Criteria for notice to an Issuer that a Deposit Chill or Global
Lock has been imposed; (B) an explanation of the specific grounds upon
which any Restriction has been imposed; (C) the actions that the Issuer
may take to object to the Restriction; (D) the process DTC would
undertake to review written submissions of the Issuer and to render a
final decision concerning the Restriction; (E) the grounds upon which
DTC may release the Restriction; and (F) the maintenance of a complete
record for submission to the Commission in the event an Issuer appeals,
the proposed rule change would provide Issuers with fair procedures
with respect to Deposit Chills and Global Locks, consistent with the
requirements of the Act, in particular Section 17A(b)(3)(H) of the Act,
cited above.\33\
---------------------------------------------------------------------------

    \32\ Section 17A(b)(5)(B) of the Act, 15 U.S.C. 78q-1(b)(5)(B)
provides: ``In any proceeding by a registered clearing agency to
determine whether a person shall be denied participation or
prohibited or limited with respect to access to services offered by
the clearing agency, the clearing agency shall notify such person
of, and give him an opportunity to be heard upon, the specific
grounds for denial or prohibition or limitation under consideration
and keep a record. A determination by the clearing agency to deny
participation or prohibit or limit a person with respect to access
to services offered by the clearing agency shall be supported by a
statement setting forth the specific grounds on which the denial or
prohibition or limitation is based.''
    \33\ 15 U.S.C. 78q-1(b)(3)(H).
---------------------------------------------------------------------------

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

    DTC does not believe that the proposed rule change would have any
impact on, or impose any burden on competition that is not necessary or

appropriate in furtherance of the purposes of the Act, because the
proposed procedures as described above would apply to all Eligible
Securities that may be subject to a Deposit Chill or Global Lock.

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

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

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-DTC-2016-003 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-DTC-2016-003. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of DTC and on DTCC's
Web site (http://dtcc.com/legal/sec-rule-filings.aspx). All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-DTC-2016-003 and should be
submitted on or before June 30, 2016.
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
Brent J. Fields,
Secretary.
[FR Doc. 2016-13614 Filed 6-8-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 47 (Friday, March 9, 2012)]
[Notices]
[Pages 14447-14450]
[FR Doc No: 2012-5732]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29975; File No. 812-13882]

Kohlberg Capital Corporation; Notice of Application

March 5, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
section 12(d)(3) of the Act.

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Applicant: Kohlberg Capital Corporation (the ``Company'').

Summary of Application: Applicant requests an order (``Order'') of the
Commission pursuant to section 6(c) of the Act granting an exemption
from the provisions of section 12(d)(3) of the Act, to the extent
necessary, in order to permit the Company and its wholly-owned holding
companies Katonah Management Holdings LLC (``Katonah Management'') and
Commodore Holdings, L.L.C. (``Commodore Holdings'' and together with
Katonah Management, the ``Holding Companies'') to continue to hold a
greater than 50% equity interest in Katonah Debt Advisors, LLC
(``KDA''), Trimaran Advisors, L.L.C. (``Trimaran'' and together with
KDA, the ``Advisers''), and the Special Purpose Subsidiaries (as
defined below), each of which is a direct or indirect wholly-owned
portfolio company of the Company, when the Advisers and the Special
Purpose Subsidiaries are required to register as investment advisers
under the Investment Advisers Act of 1940, as amended (``Advisers
Act'').

Filing Dates: The application was filed on March 18, 2011, and amended
on September 12, 2011, and March 1, 2012. Applicant has agreed to file
an amendment during the notice period, the substance of which is
reflected in this notice.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on March 26, 2012, and should be accompanied by proof of
service on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC, 20549-1090; Applicant,
295 Madison Avenue, 6th Floor, New York, NY 10017.

FOR FURTHER INFORMATION CONTACT:  Barbara T. Heussler, Senior Counsel,
at<PHONE_NUMBER>, or Jennifer Sawin, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file

number, or applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Applicant's Representations

    1. The Company, a Delaware corporation, is a non-diversified,
closed-end management investment company that has elected to be
regulated as a business development company (``BDC'') under section
54(a) the Act.\1\ The Company's investment objective is to generate
current income and capital appreciation from investments made in senior
secured term loans, mezzanine debt and selected equity investments in
privately-held middle market companies. The Company originates and
invests in senior secured term loans, mezzanine debt and selected
equity securities primarily in middle market companies. The Company was
formed in 2006 for the purpose of acquiring 100% of the equity
interests in KDA, and raising capital in an initial public offering
(``Formation Transactions''). On February 29, 2012, the Company
acquired 100% of the equity interests in Trimaran, an unregistered
investment adviser (the ``Trimaran Transaction'').\2\ Trimaran was
acquired as a wholly-owned subsidiary of Commodore Holdings, which is a
newly formed wholly-owned subsidiary of the Company. The Company is and
will continue to be an internally managed BDC. In connection with the
Formation Transactions, KDA became a wholly-owned portfolio company of
the Company. In connection with the Trimaran Transaction, Trimaran
became an indirect wholly-owned portfolio company of the Company. The
Company, the Advisers and the Special Purpose Subsidiaries are directly
or indirectly overseen by the Company's eight member board of directors
(``Board''), of whom five are not considered ``interested persons'' of
the Company within the meaning of section 2(a)(19) of the Act.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) of the Act defines a BDC to be any closed-
end investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act, makes available significant managerial
assistance with respect to the issuers of such securities, and has
elected to be subject to sections 55 through 65 of the Act.
    \2\ The Advisers and the Special Purpose Subsidiaries currently
rely on the exemption set forth in section 203(b)(3) of the Advisers
Act, which provides generally that an investment adviser with fewer
than 15 clients is not required to register under the Advisers Act.
As discussed below, this exemption has been eliminated.
---------------------------------------------------------------------------

    2. The Advisers manage certain unregistered collateralized loan
obligation funds that invest in broadly syndicated loans, high yield
bonds and other credit instruments (``CLO Funds'').\3\ The Advisers and
the Special Purpose Subsidiaries do not currently offer any other
investment advisory services or provide services to any other entities
other than the CLO Funds. The Advisers receive contractual and
recurring management fees and may also receive incentive fees from the
CLO Funds for management and advisory services. The Company expects to
receive dividends of earnings from the Advisers that are derived from
recurring fee income and to generate capital appreciation from its
investment in the asset management business of the Advisers.
Alternatively, for internal structuring purposes, these fees may be
paid to certain special purpose vehicles that are direct or indirect
wholly-owned subsidiaries of the Company (each a ``Special Purpose
Subsidiary'').\4\ The revenue that the Advisers and the Special Purpose
Subsidiaries generate through the fees they receive for managing the
CLO Funds and after paying the expenses associated with its operations,
including compensation of employees, may be distributed to the Company
as dividends.\5\
---------------------------------------------------------------------------

    \3\ The CLO Funds are not registered as ``investment companies''
under the Act in reliance on section 3(c)(1) or 3(c)(7) of the Act,
which excepts certain funds from the definition of investment
company.
    \4\ The Special Purpose Subsidiaries are currently wholly owned
subsidiaries of Katonah Management Company. In the future, Special
Purpose Subsidiaries may be wholly owned directly or indirectly by
the Advisers, Katonah Management, Commodore Holdings, or another
holding company wholly owned by the Company. Currently, the
Company's only subsidiaries are KDA, Trimaran, the Holding
Companies, the Special Purpose Subsidiaries, and Kohlberg Capital
Funding LLC I and KCAP Funding, two wholly owned, special purpose
financing subsidiaries.
    \5\ The Company has invested in the CLO Funds managed by the
Advisers and the Special Purpose Subsidiaries and expects to invest
in future CLO Funds to be managed by the Advisers and the Special
Purpose Subsidiaries for which the Company expects to receive a
current cash return.
---------------------------------------------------------------------------

    3. The Company has made an election to be treated for tax purposes
as a regulated investment company (``RIC''). The fee income received by
the Advisers and the Special Purpose Subsidiaries in connection with
the provision of services to the CLO Funds could impair the Company's
RIC status if the Company earned such income directly. Therefore, in
order for the Company to maintain its RIC status while continuing to
receive this income, the Company believes that it is in the best
interests of the Company and its shareholders for the Advisers and the
Special Purpose Subsidiaries to continue to receive fees from the CLO
Funds instead of the Company receiving such fees directly.
    4. The Private Fund Investment Advisers Registration Act of 2010
(the ``2010 Act'') \6\ eliminated the exemption from investment advisor
registration on which the Advisers and the Special Purpose Subsidiaries
have relied, and they will be required to register with the Commission
as investment advisers under the Advisers Act.\7\ The Company states
that if relief is not granted, the Company will likely be forced to
decide between losing its RIC status, terminating its relationship with
the Advisers and the Special Purpose Subsidiaries, or limiting the
dollar amount of assets that the Adviser and the Special Purpose
Subsidiaries manage in order to avoid them having to register as
investment advisers with the Commission.
---------------------------------------------------------------------------

    \6\ Title IV of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010).
    \7\ None of the Advisers or Special Purpose Subsidiaries is
expected to qualify for an exemption from registration under the
rules the Commission recently adopted. See Exemptions for Advisers
to Venture Capital Funds, Private Fund Advisers With Less Than $150
Million in Assets Under Management, and Foreign Private Advisers,
Investment Advisers Act Release No. IA-3222 (Jun. 22, 2011). The
Company intends to register KDA and the Special Purpose Subsidiaries
on a single application for registration. See Commission staff
letter issued January 18, 2012, to the American Bar Association
Business Law Section, Subcommittee on Hedge Funds (``2012 ABA
Letter''). Trimaran intends to register separately as an investment
adviser. The Company will not own any security or other interest in
any investment adviser that will not be registered under the
Advisers Act.
---------------------------------------------------------------------------

Applicant's Legal Analysis

    1. Section 12(d)(3) of the Act makes it unlawful for any registered
investment company and any company controlled by such registered
investment company,\8\ to purchase or otherwise acquire any security
issued by or any other interest in certain securities-related
businesses, including the business of any person who is an investment
adviser registered under the Advisers Act, unless (a) such person is a
corporation all the outstanding securities of which are owned by one or
more registered investment companies; and (b) such person is primarily
engaged in the business of underwriting and distributing securities
issued by other persons, selling securities to customers, or any one or
more of such or related activities, and the gross income of such person
normally is derived principally from such business or related
activities. Section 60 of the Act provides that section 12 shall apply
to a BDC to the same extent as if it were

a registered closed-end investment company.
---------------------------------------------------------------------------

    \8\ The Holding Companies are wholly owned by the Company, and
therefore are subject to section 12(d)(3).
---------------------------------------------------------------------------

    2. Section 6(c) of the Act provides that the Commission may
conditionally or unconditionally exempt any person, security, or
transaction from any provision of the Act or any rule thereunder, if
and to the extent that such exemption is necessary or appropriate in
the public interest and consistent with the protection of investors and
the purposes fairly intended by the policy and provisions of the Act.
    3. It is not expected that the Advisers or the Special Purpose
Subsidiaries would also be broker-dealers that are primarily engaged in
the business of underwriting and distributing securities issued by
other persons. The ownership of the Advisers and the Special Purpose
Subsidiaries, at such point as it becomes necessary for them to
register as investment advisers, could thus cause the Company (and the
Holding Companies) to be in violation of section 12(d)(3) of the
Act.\9\
---------------------------------------------------------------------------

    \9\ Rule 12d3-1 under the Act provides certain limited relief
from the restrictions of section 12(d)(3). Since the Company expects
that a significant portion of the Advisers and the Special Purpose
Subsidiaries' gross revenues will be derived from ``securities
related activities'' as defined in rule 12d3-1, and since the
Company owns all of the outstanding securities of the Advisers and
the Special Purpose Subsidiaries, rule 12d3-1 does not appear to be
available.
---------------------------------------------------------------------------

    4. The Company requests an order pursuant to section 6(c) of the
Act granting an exemption from the provisions of section 12(d)(3) of
the Act, to the extent necessary to permit the Company (and the Holding
Companies) to continue to hold a greater than 50% equity interest in
the Advisers and the Special Purpose Subsidiaries, when the Advisers
and the Special Purpose Subsidiaries are required to register as
investment advisers under the Advisers Act.
    5. The Company states that section 12(d)(3) was intended to
safeguard investment companies from (a) entrepreneurial risks of
securities related businesses, and (b) conflicts of interest and
reciprocal practices between investment companies and securities
related businesses.
    6. The Company does not believe a greater than 50% ownership of the
Advisers or the ownership of the Special Purpose Subsidiaries presents
the potential for the type of abuse intended to be eliminated by
section 12(d)(3) of the Act. The Company's and Holding Companies'
ownership and control of the Advisers and the Special Purpose
Subsidiaries does not raise the concerns regarding entrepreneurial
risks and conflicts of interests and reciprocal practices. The Company
notes that the form of organization of most securities related
businesses has changed since the time section 12(d)(3) was enacted,
from privately held general partnerships to corporate forms that are
characterized by limited liability. The Company's ownership of the
Advisers and the Special Purpose Subsidiaries does not expose its
shareholders to unlimited liability because the Advisers and the
Special Purpose Subsidiaries are each organized as a separate entity
and are structured as limited liability companies, not partnerships.
    7. Applicant also asserts that the Company's and Holding Companies'
ownership and control of the Advisers and the Special Purpose
Subsidiaries do not present potential conflicts of interest and
reciprocal practices. The Company owns 100% of the equity interests in
the Advisers and the Special Purpose Subsidiaries and, as a result,
exercises total control over the strategic direction of the Advisers
and the Special Purpose Subsidiaries, including the power to control
the policies that affect the Company and to protect the Company from
potential conflicts of interest and reciprocal practices. The
investment focus of the CLO Funds and the Company are distinct and
generally do not overlap.\10\ Furthermore, the CLO Funds do not hold
securities of the Advisers or Special Purpose Subsidiaries or the
Company, and the Advisers and the Special Purpose Subsidiaries do not
serve as investment adviser, underwriter or promoter to the Company.
---------------------------------------------------------------------------

    \10\ In the unusual circumstance where the Company and the CLO
Funds invest in the same security, the policies and procedures of
the Company and the Advisers and the Special Purpose Subsidiaries
govern the allocation of investment opportunities. These policies
provide that investment opportunities are allocated according to
``optimum investment amounts'' for the Company and the CLO Funds
based on criteria such as investment objectives, diversification
cash flow, liquidity requirements and asset allocation targets
specific to each CLO Fund. If the total investment is unavailable,
the allocation available is generally allocated among investing
entities pro rata based on the optimum investment amount. The
Company, the Advisers and Special Purpose Subsidiaries have also
adopted other policies and procedures to address potential
conflicts, including but not limited to, allocation of expenses,
personal securities trading, insider trading and confidentiality of
proprietary information.
---------------------------------------------------------------------------

    8. No advisory personnel employed by the Company or any of its
investment adviser subsidiaries are involved in any advisory businesses
or activities outside of the Company's ownership and control, except
for certain principals of Trimaran (the ``Trimaran Principals''). These
principals serve as employees of Trimaran, serve as directors of the
Company, and are also the principals and sole owners of a registered
investment adviser that is not an affiliated person (as defined in
section 2(a)(3) of the Act) of the Company (together with any adviser
that is a ``relying adviser'' (as that term is used in the 2012 ABA
Letter) of such registered investment adviser, the ``Unaffiliated
Adviser''). No new investments are currently being recommended to the
Unaffiliated Adviser's clients. Furthermore, the investment strategies
of the CLO Funds and the Unaffiliated Adviser's clients (the
``Unaffiliated Adviser Clients'') \11\ do not overlap. The Company, the
Advisers, the Special Purpose Subsidiaries, and the CLO Funds shall not
invest in the same securities or investments as the Unaffiliated
Adviser or the Unaffiliated Adviser Clients.
---------------------------------------------------------------------------

    \11\ The term ``Unaffiliated Adviser Clients'' includes the
current clients of the Unaffiliated Adviser and any future advisory
clients of the Unaffiliated Adviser so long as any Trimaran
Principal is employed by, or on the Board of, the Company or any
investment adviser owned by the Company.
---------------------------------------------------------------------------

    9. The Company asserts that allowing the Company and Holding
Companies to own the Advisers and the Special Purpose Subsidiaries
after they have registered as advisers under the Advisers Act is not
only consistent with the protection of investors, but it benefits the
Company and its shareholders by ultimately increasing its gross
revenues and net income. The Company's Board found that the continued
investment by the Company in the Advisers and Special Purpose
Subsidiaries is in the best interests of the Company and its
shareholders. Moreover, if the requested relief is not granted, the
Company, and, thus, the Company's shareholders, will likely suffer the
harm of either losing some or all of the benefit of the income from
owning the Advisers and Special Purpose Subsidiary business or
potentially losing the benefit of the Company's RIC status.
    10. For the foregoing reasons, the Company believes that permitting
the Company and the Holding Companies to continue to hold a greater
than 50% equity interest of each Adviser and to hold each Special
Purpose Subsidiary after their registration as an investment adviser
under the Advisers Act is in the best interests of the Company and its
shareholders, appropriate in the public interest, and consistent with
the protection of investors and the purposes fairly intended by the
policies and provisions of the Act.

Applicant's Conditions

    The Company agrees that the order granting the requested relief
will be subject to the following conditions:
    1. The Company will not dispose of its interests in an Adviser if,
as a result, the Company would own, directly or indirectly, 50% or less
of the outstanding voting interests or economic interests in that
Adviser unless the Company disposes of 100% of its interests in such
Adviser.
    2. The Board will review at least annually the investment
management business of the Company, the Advisers and the Special
Purpose Subsidiaries in order to determine whether the benefits derived
by the Company warrant the continuation of the ownership by the Company
of the Advisers and the Special Purpose Subsidiaries and, if
appropriate, will approve (by at least a majority of the directors of
the Company who are not ``interested persons'' of the Company as
defined by the Act) at least annually, such continuation.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-5732 Filed 3-8-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 228 (Monday, November 28, 2016)]
[Rules and Regulations]
[Pages 85440-85445]
[FR Doc No: 2016-28102]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 372

[EPA-HQ-TRI-2015-0607; FRL-9953-28]
RIN 2025-AA42

Addition of Hexabromocyclododecane (HBCD) Category; Community
Right-to-Know Toxic Chemical Release Reporting

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is adding a hexabromocyclododecane (HBCD) category to the
list of toxic chemicals subject to reporting under section 313 of the
Emergency Planning and Community Right-to-Know Act (EPCRA) and section
6607 of the Pollution Prevention Act (PPA). EPA is adding this chemical
category to the EPCRA section 313 list because EPA has determined that
HBCD meets the EPCRA section 313(d)(2)(B) and (C) toxicity criteria.
Specifically, EPA has determined that HBCD can reasonably be
anticipated to cause developmental and reproductive effects in humans
and is highly toxic to aquatic and terrestrial organisms. In addition,
based on the available bioaccumulation and persistence data, EPA has
determined that HBCD should be classified as a persistent,
bioaccumulative, and toxic (PBT) chemical and assigned a 100-pound
reporting threshold.

DATES:  Effective Date: This final rule is effective November 30, 2016.
    Applicability date: This final rule will apply for the reporting
year beginning January 1, 2017 (reports due July 1, 2018).

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-TRI-2015-0607. All documents in the docket are listed on
http://www.regulations.gov. Although listed in the index, some
information is not publicly available, e.g., Confidential Business
Information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy
form. Publicly available docket materials are available electronically
through http://www.regulations.gov. Additional instructions on visiting
the docket, along with more information about dockets generally, is
available at http://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT:

    For technical information contact: Daniel R. Bushman, Toxics
Release Inventory Program Division (7410M), Office of Pollution
Prevention and Toxics, Environmental Protection Agency, 1200
Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number:
(202) 566-0743; email<EMAIL_ADDRESS>    For general information contact: The EPCRA Hotline; telephone
numbers: Toll free at<PHONE_NUMBER> (select menu option 3) or (703)
412-9810 in Washington DC and International; or toll free, TDD (800)
553-7672; or go to http://www.epa.gov/superfund/contacts/infocenter/.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this document apply to me?

    You may be potentially affected by this action if you manufacture,
process, or otherwise use HBCD. 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:
     Facilities included in the following NAICS manufacturing
codes (corresponding to Standard Industrial Classification (SIC) codes
20 through 39): 311*, 312*, 313*, 314*, 315*, 316, 321, 322, 323*, 324,
325*, 326*, 327, 331, 332, 333, 334*, 335*, 336, 337*, 339*, 111998*,
211112*, 212324*, 212325*, 212393*, 212399*, 488390*, 511110, 511120,
511130, 511140*, 511191, 511199, 512220, 512230*, 519130*, 541712*, or
811490*.

*Exceptions and/or limitations exist for these NAICS codes.

     Facilities included in the following NAICS codes
(corresponding to SIC codes other than SIC codes 20 through 39):
212111, 212112, 212113 (corresponds to SIC code 12, Coal Mining (except
1241)); or 212221, 212222, 212231, 212234, 212299 (corresponds to SIC
code 10, Metal Mining (except 1011, 1081, and 1094)); or 221111,
221112, 221113, 221118, 221121, 221122, 221330 (Limited to facilities
that combust coal and/or oil for the purpose of generating power for
distribution in commerce) (corresponds to SIC codes 4911, 4931, and
4939, Electric Utilities); or 424690, 425110, 425120 (Limited to
facilities previously classified in SIC code 5169, Chemicals and Allied
Products, Not Elsewhere Classified); or 424710 (corresponds to SIC code
5171, Petroleum Bulk Terminals and Plants); or 562112 (Limited to
facilities primarily engaged in solvent recovery services on a contract
or fee basis (previously classified under SIC code 7389, Business
Services, NEC)); or 562211, 562212, 562213, 562219, 562920 (Limited to
facilities regulated under the Resource Conservation and Recovery Act,
subtitle C, 42 U.S.C. 6921 et seq.) (corresponds to SIC code 4953,
Refuse Systems).
     Federal facilities.
    To determine whether your facility would be affected by this
action, you should carefully examine the applicability criteria in part
372, subpart B of Title 40 of the Code of Federal Regulations. If you
have questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.

B. What action is the Agency taking?

    EPA is adding an HBCD category to the list of toxic chemicals
subject to reporting under EPCRA section 313 and PPA section 6607. EPA
is adding this chemical category to the EPCRA section 313 list because
EPA has determined that HBCD meets the EPCRA section 313(d)(2)(B) and
(C) toxicity criteria. EPA is also adding the HBCD category to the list
of chemicals with special concern (see 40 CFR 372.28(a)(2)) and
establishing a 100-pound reporting threshold.

C. What is the Agency's authority for taking this action?

    This action is issued under EPCRA sections 313(d) and 328, 42
U.S.C. 11023 et seq., and PPA section 6607, 42 U.S.C. 13106. EPCRA is
also referred to as Title III of the Superfund Amendments and
Reauthorization Act of 1986.
    Section 313 of EPCRA, 42 U.S.C. 11023, requires certain facilities
that manufacture, process, or otherwise use listed toxic chemicals in
amounts above reporting threshold levels to report their environmental
releases and other waste management quantities of such chemicals
annually. These facilities must also report pollution prevention and
recycling data for such chemicals, pursuant to section 6607 of the PPA,
42 U.S.C. 13106. Congress established an initial list of toxic
chemicals that comprised 308 individually listed chemicals and 20
chemical categories.
    EPCRA section 313(d) authorizes EPA to add or delete chemicals from
the list and sets criteria for these actions. EPCRA section 313(d)(2)
states that EPA may add a chemical to the list if any of the listing
criteria in EPCRA section 313(d)(2) are met. Therefore, to add a
chemical, EPA must demonstrate that at least one criterion is met, but
need not determine whether any other criterion is met. Conversely, to
remove a chemical from the list, EPCRA section 313(d)(3) dictates that
EPA must demonstrate that none of the criteria in EPCRA section
313(d)(2) are met. The listing criteria in EPCRA section 313(d)(2)(A)-
(C) are as follows:
     The chemical is known to cause or can reasonably be
anticipated to cause significant adverse acute human health effects at
concentration levels that are reasonably likely to exist beyond
facility site boundaries as a result of continuous, or frequently
recurring, releases.
     The chemical is known to cause or can reasonably be
anticipated to cause in humans: Cancer or teratogenic effects, or
serious or irreversible reproductive dysfunctions, neurological
disorders, heritable genetic mutations, or other chronic health
effects.
     The chemical is known to cause or can be reasonably
anticipated to cause, because of its toxicity, its toxicity and
persistence in the environment, or its toxicity and tendency to
bioaccumulate in the environment, a significant adverse effect on the
environment of sufficient seriousness, in the judgment of the
Administrator, to warrant reporting under this section.
    EPA often refers to the EPCRA section 313(d)(2)(A) criterion as the
``acute human health effects criterion;'' the EPCRA section
313(d)(2)(B) criterion as the ``chronic human health effects
criterion;'' and the EPCRA section 313(d)(2)(C) criterion as the
``environmental effects criterion.''
    EPA published in the Federal Register of November 30, 1994 (59 FR
61432) (FRL-4922-2), a statement clarifying its interpretation of the
EPCRA section 313(d)(2) and (d)(3) criteria for modifying the EPCRA
section 313 list of toxic chemicals.

II. Summary of Proposed Rule

A. What chemical did EPA propose to add to the EPCRA section 313 list
of toxic chemicals?

    As discussed in the proposed rule June 2, 2016 (81 FR 35275) (FRL-
9943-55), EPA proposed to add HBCD which is a cyclic aliphatic
hydrocarbon consisting of a 12-membered carbon ring with 6 bromine
atoms attached (molecular formula
C12H18Br6). HBCD has 16 possible
stereoisomers. HBCD may be designated as a non-specific mixture of all
isomers (hexabromocyclododecane, Chemical Abstracts Service Registry
Number (CASRN) 25637-99-4) or as a mixture of the three main
diastereomers

(1,2,5,6,9,10-hexabromocyclododecane, CASRN 3194-55-6). EPA proposed to
create an HBCD category that would cover these two chemical names and
CASRNs and would be defined as: Hexabromocyclododecane, includes those
chemicals covered by the following CAS numbers:

 3194-55-6; 1,2,5,6,9,10-Hexabromocyclododecane
 25637-99-4; Hexabromocyclododecane.

As a category, facilities that manufacture, process, or otherwise use
HBCD covered under both of these names and CASRNs would file just one
report.

B. What reporting threshold did EPA propose to establish for the HBCD
category?

    As EPA stated in the proposed rule June 2, 2016 (81 FR 35275) (FRL-
9943-55), EPA proposed to add the HBCD category to the list of
chemicals of special concern (see 40 CFR 372.28(a)(2)). There are
several chemicals and chemical categories on the EPCRA section 313
chemical list that have been classified as chemicals of special concern
because they are PBT chemicals. In a final rule published in the
Federal Register of October 29, 1999 (64 FR 58666) (FRL-6389-11), EPA
established the PBT classification criteria for chemicals on the EPCRA
section 313 chemical list. The data presented in the proposed rule
supported classifying the HBCD category as a PBT chemical category with
a 100-pound reporting threshold.

C. What was EPA's rationale for proposing to list the HBCD category?

    As discussed in the proposed rule June 2, 2016 (81 FR 35275) (FRL-
9943-55), HBCD has been shown to cause developmental effects at doses
as low as 146.3 milligrams per kilogram per day (mg/kg/day) lowest-
observed-adverse-effect level (LOAEL) in male rats. Developmental
effects have also been observed with a benchmark dose lower bound
confidence limit (BMDL) of 0.056 mg/kg/day (benchmark dose (BMD) of
0.18 mg/kg/day) based on effects in female rats and a BMDL of 0.46 mg/
kg/day (BMD of 1.45 mg/kg/day) based on effects in male rats. HBCD also
causes reproductive toxicity at doses as low 138 mg/kg/day (LOAEL) in
female rats. Based on the available developmental and reproductive
toxicity, EPA stated that HBCD can be reasonably anticipated to cause
moderately high to high chronic toxicity in humans. EPA stated that the
evidence was sufficient for listing the HBCD category on the EPCRA
section 313 toxic chemical list pursuant to EPCRA section 313(d)(2)(B)
based on the available developmental and reproductive toxicity data.
    As also discussed in the proposed rule, HBCD has been shown to be
highly toxic to both aquatic and terrestrial species with acute aquatic
toxicity values as low as 0.009 milligrams per liter (mg/L) and chronic
aquatic toxicity values as low as 0.0042 mg/L. HBCD is highly toxic to
terrestrial species as well with observed toxic doses as low as 0.51
and 2.1 mg/kg/day. In addition to being highly toxic, HBCD is also
bioaccumulative and persistent in the environment, which further
supports a high concern for the toxicity to aquatic and terrestrial
species. EPA stated that HBCD meets the EPCRA section 313(d)(2)(C)
listing criteria on toxicity alone but also based on toxicity and
bioaccumulation as well as toxicity and persistence in the environment.
Therefore, EPA stated that the evidence is sufficient for listing the
HBCD category on the EPCRA section 313 toxic chemical list pursuant to
EPCRA section 313(d)(2)(C) based on the available ecological toxicity
data as well as the bioaccumulation and persistence data.

D. What was EPA's rationale for lowering the reporting threshold for
HBCD?

    EPA stated in the proposed rule that the available bioaccumulation
and persistence data for HBCD support a classification of HBCD as a PBT
chemical June 2, 2016 (81 FR 35275) (FRL-9943-55). HBCD has been shown
to be highly bioaccumulative in aquatic species and to also biomagnify
in aquatic and terrestrial food chains. While there is limited data on
the half-life of HBCD in soil and sediment, the best available data
supports a determination that the half-life of HBCD in soil and
sediment is at least 2 months. This determination is further supported
by the data from environmental monitoring studies, which indicate that
HBCD has significant persistence in the environment. The widespread
presence of HBCD in numerous terrestrial and aquatic species also
supports the conclusion that HBCD has significant persistence in the
environment. Therefore, consistent with EPA's established policy for
PBT chemicals (See 64 FR 58666, October 29, 1999) (FRL-6389-11) EPA
proposed to establish a 100-pound reporting threshold for the HBCD
category.

III. What comments did EPA receive on the proposed rule?

    EPA received three comments on the proposed rule, two from
individuals (Refs. 1 and 2) and one from a coalition of environmental
and public interest groups and individuals (the coalition) (Ref. 3).
All commenters supported the addition of the HBCD category to the EPCRA
section 313 toxic chemical list. However, in their comments the
coalition stated that HBCD is highly bioaccumulative and highly
persistent and based on EPA's PBT classification criteria, a reporting
threshold of 10 pounds should be established for the HBCD category. EPA
provided the following background information in the proposed rule:
    ``In a final rule published in the Federal Register of October 29,
1999 (64 FR 58666) (FRL-6389-11), EPA established the PBT
classification criteria for chemicals on the EPCRA section 313 chemical
list. For purposes of EPCRA section 313 reporting, EPA established
persistence half-life criteria for PBT chemicals of 2 months in water/
sediment and soil and 2 days in air, and established bioaccumulation
criteria for PBT chemicals as a bioconcentration factor (BCF) or
bioaccumulation factor (BAF) of 1,000 or higher. Chemicals meeting the
PBT criteria were assigned 100-pound reporting thresholds. With regards
to setting the EPCRA section 313 reporting thresholds, EPA set lower
reporting thresholds (10 pounds) for those PBT chemicals with
persistence half-lives of 6 months or more in water/sediment or soil
and with BCF or BAF values of 5,000 or higher, these chemicals were
considered highly PBT chemicals. The data presented in this proposed
rule support classifying the HBCD category as a PBT chemical category
with a 100-pound reporting threshold.'' June 2, 2016 (81 FR 35277)
(FRL-9943-55).
    EPA agrees with the commenter that HBCD is highly bioaccumulative
but does not agree that HBCD meets the established criteria for highly
persistent. The commenter stated that ``While half-life data is
limited, several studies estimate the half-life in sediment and soil to
be greater than 120 days, while one study estimates a half-life of 190
days in abiotic sediment.'' The study that the commenter cited as
estimating a half-life of 190 days in abiotic sediment was Davis et al.
2005 (Ref. 4), which, as EPA discussed in the proposed rule, is a study
that had a number of problems. For example, EPA noted that:
    ``Additionally, the Davis et al. 2005 study (Ref. 96) was
considered to be of

uncertain reliability for quantifying HBCD persistence because of
concerns regarding potential contamination of sediment samples, an
interfering peak corresponding to [gamma]-HBCD in the liquid
chromatography/mass spectrometry (LC/MS) chromatograms, and poor
extraction of HBCD leading to HBCD recoveries of 33-125% (Refs. 44 and
101).'' June 2, 2016 (81 FR 35284).
    A better-conducted subsequent study by the same authors Davis et
al. 2006 (Ref. 5) resulted in longer overall half-life values but no
specific value equal to or above 180 days. As stated in the proposed
rule, ``While there is limited data on the half-life of HBCD in soil
and sediment, the best available data supports a determination that the
half-life of HBCD in soil and sediment is at least 2 months.'' EPA does
not believe that it would be appropriate to set a lower reporting
threshold based on one half-life value of 190 days from a study that
had a number of identified problems.

IV. Summary of Final Rule

    EPA is finalizing the addition of an HBCD category to the EPCRA
section 313 list of toxic chemicals. EPA has determined that HBCD meets
the listing criteria under EPCRA section 313(d)(2)(B) and (C). The HBCD
category will be defined as: Hexabromocyclododecane (This category
includes only those chemicals covered by the CAS numbers listed here)
 3194-55-6; 1,2,5,6,9,10-Hexabromocyclododecane
 25637-99-4; Hexabromocyclododecane.
    EPA is also finalizing the addition of the HBCD category to the
list of chemicals with special concern (see 40 CFR 372.28(a)(2)) and
establishing a 100-pound reporting threshold. EPA has determined that
the data support classifying the HBCD category as a PBT chemical
category with a 100-pound reporting threshold.

V. References

    The following is a listing of the documents that are specifically
referenced in this document. The docket includes these documents and
other information considered by EPA, including documents that are
referenced within the documents that are included in the docket, even
if the referenced document is not itself physically located in the
docket. For assistance in locating these other documents, please
consult the person listed under FOR FURTHER INFORMATION CONTACT.
    1. Comment submitted by M. Clark. July 22, 2016. EPA-HQ-TRI-
2015-0607-0217.
    2. Anonymous public comment. July 31, 2016. EPA-HQ-TRI-2015-
0607-0218.
    3. Comment submitted by E. Gartner, Staff Attorney, Earthjustice
et al. Re: Addition of Hexabromocyclododecane (HBCD) Category;
Community Right-to-Know Toxic Chemical Release Reporting, August 1,
2016. EPA-HQ-TRI-2015-0607-0219.
    4. Davis, J.W., Gonsior, S.J., Marty, G.T., et al. 2005. The
transformation of hexabromocyclododecane in aerobic and anaerobic
soils and aquatic sediments. Water Res. 39:1075-1084.
    5. Davis, J.W., Gonsior, S.J., Markham, D.A., et al. 2006.
Biodegradation and product identification of
[\14\C]hexabromocyclododecane in wastewater sludge and freshwater
aquatic sediment. Environ. Sci. Technol. 40:5395-5401. Including
supporting information document.
    6. USEPA, OCSPP. 2016. Economic Analysis of the Final Rule to
add HBCD to the List of TRI Reportable Chemicals. August 10, 2016.

VI. What are the Statutory and Executive Orders reviews associated with
this action?

    Additional information about these statutes and Executive Orders
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

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

    This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review under Executive Orders 12866 (58 FR 51735, October 4, 1993)
and 13563 (76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act (PRA)

    This action does not contain any new information collection
requirements that require additional approval by OMB under the PRA, 44
U.S.C. 3501 et seq. OMB has previously approved the information
collection activities contained in the existing regulations and has
assigned OMB control numbers 2025-0009 and 2050-0078. Currently, the
facilities subject to the reporting requirements under EPCRA section
313 and PPA section 6607 may use either EPA Toxic Chemicals Release
Inventory Form R (EPA Form 1B9350-1), or EPA Toxic Chemicals Release
Inventory Form A (EPA Form 1B9350-2). The Form R must be completed if a
facility manufactures, processes, or otherwise uses any listed chemical
above threshold quantities and meets certain other criteria. For the
Form A, EPA established an alternative threshold for facilities with
low annual reportable amounts of a listed toxic chemical. A facility
that meets the appropriate reporting thresholds, but estimates that the
total annual reportable amount of the chemical does not exceed 500
pounds per year, can take advantage of an alternative manufacture,
process, or otherwise use threshold of 1 million pounds per year of the
chemical, provided that certain conditions are met, and submit the Form
A instead of the Form R. Since the HBCD category would be classified a
PBT category, it is designated as a chemical of special concern, for
which Form A reporting is not allowed. In addition, respondents may
designate the specific chemical identity of a substance as a trade
secret pursuant to EPCRA section 322, 42 U.S.C. 11042, 40 CFR part 350.
    OMB has approved the reporting and recordkeeping requirements
related to Forms A and R, supplier notification, and petitions under
OMB Control number 2025-0009 (EPA Information Collection Request (ICR)
No. 1363) and those related to trade secret designations under OMB
Control 2050-0078 (EPA ICR No. 1428). As provided in 5 CFR 1320.5(b)
and 1320.6(a), an Agency may not conduct or sponsor, and a person is
not required to respond to, a collection of information unless it
displays a currently valid OMB control number. The OMB control numbers
relevant to EPA's regulations are listed in 40 CFR part 9 or 48 CFR
chapter 15, and displayed on the information collection instruments
(e.g., forms, instructions).

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA, 5
U.S.C. 601 et seq. The small entities subject to the requirements of
this action are small manufacturing facilities. The Agency has
determined that of the 55 entities estimated to be impacted by this
action, 42 are small businesses; no small governments or small
organizations are expected to be affected by this action. All 42 small
businesses affected by this action are estimated to incur annualized
cost impacts of less than 1%. Thus, this action is not expected to have
a significant adverse economic impact on a substantial number of small
entities. A more detailed analysis of the impacts on small entities is
located in EPA's economic analysis (Ref. 6).

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. This action is not
subject to the requirements

of UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. Small governments
are not subject to the EPCRA section 313 reporting requirements. EPA's
economic analysis indicates that the total cost of this action is
estimated to be $372,973 in the first year of reporting (Ref. 6).

E. Executive Order 13132: Federalism

    This action does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999). It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.

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

    This action does not have tribal implications as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This action
relates to toxic chemical reporting under EPCRA section 313, which
primarily affects private sector facilities. Thus, Executive Order
13175 does not apply to this action.

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

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern environmental
health or safety risks that EPA has reason to believe may
disproportionately affect children, per the definition of ``covered
regulatory action'' in section 2-202 of the Executive Order. This
action is not subject to Executive Order 13045 because it does not
concern an environmental health risk or safety risk.

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

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

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards and is
therefore not subject to considerations under section 12(d) of NTTAA,
15 U.S.C. 272 note.

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

    EPA has determined that this action will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations as specified in Executive
Order 12898 (59 FR 7629, February 16, 1994). This action does not
address any human health or environmental risks and does not affect the
level of protection provided to human health or the environment. This
action adds an additional chemical to the EPCRA section 313 reporting
requirements. By adding a chemical to the list of toxic chemicals
subject to reporting under section 313 of EPCRA, EPA would be providing
communities across the United States (including minority populations
and low income populations) with access to data which they may use to
seek lower exposures and consequently reductions in chemical risks for
themselves and their children. This information can also be used by
government agencies and others to identify potential problems, set
priorities, and take appropriate steps to reduce any potential risks to
human health and the environment. Therefore, the informational benefits
of the action will have positive human health and environmental impacts
on minority populations, low-income populations, and children.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects in 40 CFR Part 372

    Environmental protection, Community right-to-know, Reporting and
recordkeeping requirements, and Toxic chemicals.

    Dated: November 15, 2016.
Gina McCarthy,
Administrator.
    Therefore, 40 CFR chapter I is amended as follows:

PART 372--[AMENDED]

0
1. The authority citation for part 372 continues to read as follows:

    Authority: 42 U.S.C. 11023 and 11048.

0
2. In Sec.  372.28, amend the table in paragraph (a)(2) as follows:
0
a. Revise the second column header to read ``Reporting threshold (in
pounds unless otherwise noted)'', and
0
b. Alphabetically add the category ``Hexabromocyclododecane (This
category includes only those chemicals covered by the CAS numbers
listed here)'' and entries ``3194-55-6 (1,2,5,6,9,10-
Hexabromocyclododecane)'' and ``25637-99-4 (Hexabromocyclododecane)''.
    The additions read as follows:

Sec.  372.28  Lower thresholds for chemicals of special concern.

    (a) * * *
    (2) * * *

------------------------------------------------------------------------
                                                             Reporting
                                                           threshold (in
                      Category name                        pounds unless
                                                             otherwise
                                                              noted)
------------------------------------------------------------------------

                              * * * * * * *
Hexabromocyclododecane (This category includes only                  100
 those chemicals covered by the CAS numbers listed here)
3194-55-6 1,2,5,6,9,10-Hexabromocyclododecane             ..............
25637-99-4 Hexabromocyclododecane                         ..............

                              * * * * * * *
------------------------------------------------------------------------

* * * * *

0
3. In Sec.  372.65, paragraph (c) is amended by adding alphabetically
an entry for ``Hexabromocyclododecane (This category includes only
those chemicals covered by the CAS numbers listed here)'' to the table
to read as follows:

Sec.  372.65  Chemicals and chemical categories to which this part
applies.

* * * * *
    (c) * * *

------------------------------------------------------------------------
                      Category name                       Effective date
------------------------------------------------------------------------

                              * * * * * * *
Hexabromocyclododecane (This category includes only               1/1/17
 those chemicals covered by the CAS numbers listed here)
3194-55-6 1,2,5,6,9,10-Hexabromocyclododecane             ..............
25637-99-4 Hexabromocyclododecane                         ..............

                              * * * * * * *
------------------------------------------------------------------------

[FR Doc. 2016-28102 Filed 11-25-16; 8:45 am]
 BILLING CODE 6560-50-P