[Federal Register: March 3, 2009 (Volume 74, Number 40)]
[Notices]
[Page 9235]
[DOCID:fr03mr09-41]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL03-37-011]

New England Power Company; Notice of Filing

February 24, 2009.
    Take notice that on February 17, 2009, the New England Power
Company submitted a compliance filing in accordance with the
Commission's Order on Remand dated January 15, 2009.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on March 10, 2009.

Kimberly D. Bose,
Secretary.
 [FR Doc. E9-4420 Filed 3-2-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Notices]
[Pages 75400-75406]
[FR Doc No: 2013-29498]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71000; File No. SR-NSCC-2013-802]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of No Objection To Advance Notice Filing, as
Modified by Amendment Nos. 1, 2, and 3, To Institute Supplemental
Liquidity Deposits to Its Clearing Fund Designed To Increase Liquidity
Resources To Meet Its Liquidity Needs

December 5, 2013.

I. Introduction

    On March 21, 2013, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 806(e) of Title VIII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank
Act''),\1\ entitled the Payment, Clearing, and Settlement Supervision
Act of 2010 (``Clearing Supervision Act'' or ``Title VIII'') and Rule
19b-4(n) of the Securities Exchange Act of 1934 (``Exchange Act''),\2\
advance notice SR-NSCC-2013-802 (``Advance Notice'') to institute
supplemental liquidity deposits to NSCC's Clearing Fund designed to
increase liquidity resources to meet NSCC's liquidity needs (``SLD
Proposal'').\3\
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ NSCC also filed the SLD Proposal contained in the Advance
Notice as proposed rule change SR-NSCC-2013-02 (``Proposed Rule
Change''). Release No. 34-69313 (Apr. 4, 2013), 78 FR 21487 (Apr.
10, 2013). On April 19, 2013, NSCC filed with the Commission
Amendment No. 1 to the Proposed Rule Change. Release No. 34-69620
(May 22, 2013), 78 FR 32292 (May 29, 2013). On June 11, 2013, NSCC
filed with the Commission Amendment No. 2 to the Proposed Rule
Change, as previously modified by Amendment No. 1. Release No. 34-
69951 (Jul. 9, 2013), 78 FR 42140 (Jul. 15, 2013). On October 7,
2013, NSCC filed Amendment No. 3 to the Proposed Rule Change, as
previously modified by Amendment Nos. 1 and 2. Release No. 34-70688
(Oct. 15, 2013), 78 FR 62846 (Oct. 22, 2013). On December 5, 2013,
the Commission issued an Order Approving the Proposed Rule Change,
as Modified by Amendment Nos. 1, 2, and 3, to Institute Supplemental
Liquidity Deposits to Its Clearing Fund Designed to Increase
Liquidity Resources to Meet Its Liquidity Needs. Release No. 34-
70999.
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    On April 19, 2013, NSCC filed with the Commission Amendment No. 1
to the Advance Notice.\4\ On May 1, 2013, the Commission published
notice of the Advance Notice, as modified by Amendment No. 1, for
comment in the Federal Register.\5\ On May 24, 2013, the Commission
published notice of its extension of its review period of the Advance
Notice, as modified by Amendment No. 1.\6\ The Commission received 12
comment letters, including the NFS Letter, to the SLD Proposal as
initially filed and as modified by Amendment No. 1.\7\
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    \4\ NSCC filed Amendment No. 1 to the Advance Notice and
Proposed Rule Change filings to include as Exhibit 2 a comment
letter from National Financial Services (``NFS''), a Fidelity
Investments (``Fidelity'') company, to NSCC, dated March 19, 2013,
regarding the SLD Proposal prior to NSCC filing the SLD Proposal
with the Commission (``NFS Letter''). See Release No. 34-69451 (Apr.
25, 2013), 78 FR 25496 (May 1, 2013) (``Notice'') and see Exhibit 2
to File No. SR-NSCC-2013-802, http://www.sec.gov/rules/sro/nscc/2013/34-69451-ex2.pdf.
    \5\ See Notice, 78 FR 25496.
    \6\ Release No. 34-69605 (May 20, 2013), 78 FR 31616 (May 24,
2013) (``Notice of Amendment No. 1'').
    \7\ See NFS Letter. See letters to Elizabeth M. Murphy,
Secretary, Commission from: John C. Nagel, Esq., Managing Director
and General Counsel, Citadel Securities (``Citadel''), dated April
18, 2013 (``Citadel Letter I'') and June 13, 2013 (``Citadel Letter
II''); Peter Morgan, Senior Vice President & Deputy General Counsel,
Charles Schwab & Co., Inc. (``Charles Schwab''), dated April 22,
2013 (``Charles Schwab Letter I'') and May 1, 2013 (``Charles Schwab
Letter II''); Thomas Price, Managing Director, Operations,
Technology & BCP, Securities Industry and Financial Markets
Association (``SIFMA''), dated April 23, 2013 (``SIFMA Letter I'');
Julian Rainero, Bracewell & Giuliani LLP, on behalf of Investment
Technology Group Inc. (``ITG''), dated April 25, 2013 (``ITG Letter
I''); Matthew S. Levine, Managing Director, Co-Chief Compliance
Officer, Knight Capital Americas LLC (``Knight Capital''), dated
April 25, 2013 (``Knight Capital Letter''); Giovanni Favretti, CFA,
Managing Director, Deutsche Bank, dated April 25, 2013 (``Deutsche
Bank Letter''); Scott C. Goebel, Senior Vice President, General
Counsel, Fidelity, dated April 25, 2013 (``Fidelity Letter I''); and
Chief Financial Officer & Executive Managing Director, ConvergEx
Execution Solutions LLC (``ConvergEx''), dated May 2, 2013
(``ConvergEx Letter I'') and May 22, 2013 (``ConvergEx Letter II'').
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    On June 11, 2013, NSCC filed with the Commission Amendment No. 2 to
the Advance Notice, as previously modified by Amendment No. 1
(``Amended SLD Proposal''), which the Commission published for comment
in the Federal Register on July 15, 2013.\8\ The Commission received
nine comment letters to Amendment No. 2.\9\
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    \8\ Release No. 34-69954 (Jul. 9, 2013), 78 FR 42127 (Jul. 15,
2013) (``Notice of Amendment No. 2'').
    \9\ See letters to Elizabeth M. Murphy, Secretary, Commission
from: Thomas Price, Managing Director, Operations, Technology & BCP,
SIFMA, dated June 24, 2013 (``SIFMA Letter II'') and August 7, 2013
(``SIFMA Letter III''); Scott C. Goebel, Senior Vice President,
General Counsel, Fidelity, dated June 26, 2013 (``Fidelity Letter
II''); Peter Morgan, Senior Vice President & Deputy General Counsel,
Charles Schwab, dated August 5, 2013 (``Charles Schwab Letter III'')
and September 11, 2013 (``Charles Schwab Letter IV''); Paul T. Clark
and Anthony C.J. Nuland, Seward & Kissel, LLP (representing Charles
Schwab), dated August 5, 2013 (``Charles Schwab Letter V''); John C.
Nagel, Esq., Managing Director and General Counsel, Citadel, dated
August 5, 2013 (``Citadel Letter III'') and September 5, 2013
(``Citadel Letter IV''); and Mark Solomon, Managing Director and
Deputy General Counsel, ITG, dated August 5, 2013 (``ITG Letter
II'').

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    On October 4, 2013, NSCC filed Amendment No. 3 to the Advance
Notice (``Final SLD Proposal''), as previously modified by Amendment
Nos. 1 and 2, which the Commission published for comment on October 15,
2013.\10\ The Commission received two comment letters to the Final SLD
Proposal (i.e., Amendment No. 3).\11\
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    \10\ Release No. 34-70689 (Oct. 15, 2013), 78 FR 62893 (Oct. 22,
2013) (``Notice of Amendment No. 3'').
    \11\ See letters to Elizabeth M. Murphy, Secretary, Commission
from: Managing Director and Deputy General Counsel, ITG, dated
November 1, 2013 (``ITG Letter III''); and Scott C. Goebel, Senior
Vice President, General Counsel, Fidelity, dated November 5, 2013
(``Fidelity Letter III'').
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    This publication serves as notice of no objection to the Advance
Notice, as modified by Amendment Nos. 1, 2, and 3.

II. Background

A. Purpose of the SLD Proposal

    NSCC filed the SLD Proposal to ensure that it would maintain
sufficient liquid financial resources to withstand, at a minimum, a
default by its single clearing member or clearing member family
(``Clearing Member'') to which it has the largest exposure (``Cover
One''), in compliance with Commission Rule 17Ad-22(b)(3) \12\ and a
long-standing NSCC policy.
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    \12\ 17 CFR 240.17Ad-22(b)(3).
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B. Development of the SLD Proposal

    As originally filed, the SLD Proposal would have created two
related funding obligations: (1) For the 30 Clearing Members that
presented NSCC with the largest peak liquidity requirements on days
that did not coincide with quarterly options expiration periods
(``Regular Periods''), a liquidity deposit calculated based on the
Clearing Member's pro rata portion of NSCC's aggregate liquidity
requirements from the 30 Clearing Members during Regular Periods
(``Regular SLD''); and (2) for a subset of the 30 Clearing Members that
present NSCC with a peak liquidity requirement above NSCC's total
liquidity resources on days that coincide with quarterly options
expiration periods (``Special Periods''), a liquidity deposit
calculated based on each Clearing Members' individual contribution to
NSCC's liquidity requirement above its liquidity resources during
Special Periods (``Special SLD'').\13\
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    \13\ See Notice, 78 FR at 25496.
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    Regular SLD would have been satisfied in cash only; however, a
Clearing Member would have received a dollar-for-dollar reduction of
its Regular SLD funding obligation to the extent that it contributed to
NSCC's line-of-credit (``Credit Facility'').\14\ Special SLD could only
be satisfied with cash.\15\
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    \14\ Id. at 25498.
    \15\ Id.
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    On June 11, 2013, in response to comments received, NSCC filed the
Amended SLD Proposal so that, in summary: (1) Special Periods were
expanded to include monthly options expirations periods along with
quarterly options expiration periods; (2) Clearing Members could
designate a commercial lender to commit to the Credit Facility on the
Clearing Member's behalf, enabling the Clearing Member to receive the
dollar-for-dollar reduction of its Regular SLD; (3) any commitments to
the Credit Facility made in excess of a Clearing Member's Regular SLD
would be allocated ratably among all 30 Clearing Members that would be
required to make a Regular SLD funding obligation; and (4) ``liquidity
exposure reports'' would be provided to all NSCC members, so that
members, particularly Clearing Members, could better assess their
liquidity exposure to NSCC.\16\
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    \16\ See Notice of Amendment No. 2, 78 FR 42127.
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    On October 4 and 7, 2013, in response to further comments received,
NSCC filed the Final SLD Proposal.\17\ Among other things, the Final
SLD Proposal eliminated the Regular SLD funding obligation.
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    \17\ NSCC filed the Amendment No. 3 to the Proposed Rule Change
on October 7, 2013, three days after the Final Advance Notice.
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III. Description of the Final SLD Proposal

    The Final SLD Proposal would add Rule 4A to NSCC's Rules and
Procedures \18\ to establish a supplemental liquidity funding
obligation designed to cover the liquidity exposure attributable to
those Clearing Members that regularly incur the largest gross
settlement debits over a settlement cycle during times of increased
trading and settlement activity that arise around Special Periods. More
specifically, the obligation applies to a subset of the 30 Clearing
Members that present NSCC with historic peak liquidity needs on days
that coincide with Special Periods above NSCC's current total liquidity
resources. For this subset, NSCC will require a liquidity deposit based
on the proportion of the historic peak liquidity exposure that is
presented by each Clearing Member in excess of NSCC's then-available
total liquidity resources. NSCC will hold deposits made in satisfaction
of a Special SLD funding obligation in its Clearing Fund for a period
of seven days after the end of the Special Period.
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    \18\ See Exhibit 5 to File No. SR-NSCC-2013-802, http://www.sec.gov/rules/sro/nscc/2013/34-70689-ex5.pdf.
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    Additionally, if a Clearing Member believes its current trading
activity will present a liquidity need to NSCC above NSCC's total
liquidity resources, it may voluntarily deposit funds with NSCC to
cover the shortfall (``Prefund Deposit''). NSCC will hold Prefund
Deposit funds for a period of seven days after the end of the Special
Period. If a Clearing Member presents NSCC with a liquidity need above
total liquidity resources that is not funded by a Special SLD funding
obligation or a Prefund Deposit, the Final SLD Proposal will empower
NSCC to call from that Clearing Member the amount of the shortfall, or
that Clearing Member's share if caused by more than one Clearing
Member, and hold it for 90 days (``Call Deposit'').

IV. Summary of Comments Received and NSCC's Responses

    The Commission received 23 comment letters to the SLD Proposal \19\
from eight commenters,\20\ including the NFS Letter.\21\ Commenters
include bank affiliated and non-bank affiliated NSCC members, as well
as one industry trade group, SIFMA.\22\ NSCC also submitted two
responses to comment letters received.\23\ The Commission has reviewed
and taken into full consideration all of the comments received.
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    \19\ Since the SLD Proposal was filed as both the Proposed Rule
Change and the Advance Notice, the Commission considered all public
comments received on the proposal, regardless of whether the
comments were submitted to the Proposed Rule Change or the Advance
Notice. See NFS Letter, Citadel Letter I, Citadel Letter II, Citadel
Letter III, Citadel Letter IV, Charles Schwab Letter I, Charles
Schwab Letter II, Charles Schwab Letter III, Charles Schwab Letter
IV, Charles Schwab Letter V, SIFMA Letter I, SIFMA Letter II, SIFMA
Letter III, ITG Letter I, ITG Letter II, ITG Letter III, Knight
Capital Letter, Deutsche Bank Letter, Fidelity Letter I, Fidelity
Letter II, Fidelity Letter III, ConvergEx Letter I, and ConvergEx
Letter II.
    \20\ See Comments to the Advance Notice (File No. SR-NSCC-2013-
802), http://sec.gov/comments/sr-nscc-2013-802/nscc2013802.shtml and
the Proposed Rule Change (File No. SR-NSCC-2013-02), http://sec.gov/comments/sr-nscc-2013-02/nscc201302.shtml (``Comments Received'').
For purposes of discussion, the Commission considers the comment
submitted by Seward & Kissel on behalf of Charles Schwab as a
Charles Schwab comment, see Charles Schwab Letter V, supra note 9,
and the NFS Letter as a Fidelity comment. See NFS Letter.
    \21\ See NFS Letter.
    \22\ See Comments Received, supra note 20.
    \23\ See letters to Elizabeth M. Murphy, Secretary, Commission
from Larry E. Thompson, Managing Director and DTCC General Counsel,
dated June 10, 2013 (``NSCC Letter I'') and August 20, 2013 (``NSCC
Letter II'').
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    All eight commenters express support for NSCC's overall goal of
maintaining sufficient financial resources to

withstand a default by a Clearing Member (i.e., Cover One).\24\ One
commenter, who previously supported approval of the Amended SLD
Proposal, supports approval of the Final SLD Proposal.\25\ The
remaining seven commenters oppose the original SLD Proposal and the
Amended SLD Proposal, as discussed in more detail below.\26\ One of
those seven commenters submitted the sole comment letter in opposition
to the Final SLD Proposal.\27\

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    \24\ See NFS Letter, Citadel Letter III, Charles Schwab Letter
II, Charles Schwab Letter III, Charles Schwab Letter V, SIFMA Letter
II, SIFMA Letter III, Knight Capital Letter, Deutsche Bank Letter,
Fidelity Letter I, Fidelity Letter II, ConvergEx Letter I, ConvergEx
Letter II, ITG Letter II.
    \25\ See Fidelity Letter II, Fidelity Letter III.
    \26\ See NFS Letter, Citadel Letter I, Citadel Letter II,
Citadel Letter III, Citadel Letter IV, Charles Schwab Letter I,
Charles Schwab Letter II, Charles Schwab Letter III, Charles Schwab
Letter IV, Charles Schwab Letter V, SIFMA Letter I, SIFMA Letter II,
SIFMA Letter III, ITG Letter I, ITG Letter II, ITG Letter III,
Knight Capital Letter, Deutsche Bank Letter, Fidelity Letter I,
ConvergEx Letter I, and ConvergEx Letter II.
    \27\ See ITG Letter III.
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A. Comments Expressing Support for the Provision of Adequate Liquidity
at NSCC

    As mentioned above, all eight commenters to the SLD Proposal agreed
that NSCC must have access to sufficient liquidity and capital to meet
the Cover One standard, and some stated NSCC's critical role as a
national clearance and settlement system.\28\ For example, one
commenter states ``that a clearing agency performing central
counterparty services is essential to the proper functioning of the
capital markets, and that ensuring the clearing agency is well
capitalized and financially sound serves to benefit both the clearing
agency's members and the capital markets as a whole.'' \29\ The
commenter goes on to state that it ``appreciates the need for the NSCC,
both as a central counterparty and as a financial market utility that
has been designated by the Financial Stability Oversight Council as
systemically important, to maintain sufficient financial resources to
withstand a default by the NSCC member or family of affiliated members
to which the NSCC has the largest exposure . . . [and] also understands
the NSCC's desire to broaden the base of support for its liquidity
needs beyond the small group of firms that has historically supported
these needs through participation in the NSCC's revolving credit
facility, and believes it is important to enable all of the NSCC's
members to help the NSCC maintain sufficient financial resources.''
\30\ Another commenter notes that ``NSCC should have the resources it
needs to be a source of strength for the national clearing and
settlement system. . . .'' \31\ Additionally, another commenter states
that it ``appreciates the importance of NSCC's critical role as a
[c]entral [c]ounterparty . . . and supports NSCC's goal in ensuring
that it has access to sufficient capital in the event that is largest
participant fails.'' \32\
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    \28\ See supra note 24.
    \29\ See SIFMA Letter II.
    \30\ Id.
    \31\ See Charles Schwab Letter III, Charles Schwab Letter V.
    \32\ See ConvergEx Letter II.
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B. Opposing Comments Received Prior to the Final SLD Proposal

1. Comments Inapplicable to the Final SLD Proposal
    The seven commenters opposed to approval of the SLD Proposal
objected to the SLD Proposal for various reasons, as discussed
below.\33\ Additionally, five of the seven commenters that oppose the
SLD Proposal, as well as the commenter in support of the Final SLD
Proposal, suggested potential alternative mechanisms for NSCC to
satisfy its liquidity needs.\34\
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    \33\ See Citadel Letter I, Citadel Letter II, Citadel Letter
III, Citadel Letter IV, Charles Schwab Letter I, Charles Schwab
Letter II, Charles Schwab Letter III, Charles Schwab Letter IV,
Charles Schwab Letter V, SIFMA Letter I, SIFMA Letter II, SIFMA
Letter III, ITG Letter I, ITG Letter II, ITG Letter III, Knight
Capital Letter, Deutsche Bank Letter, ConvergEx Letter I, and
ConvergEx Letter II.
    \34\ Alternatives included, but were not limited to: NSCC should
issue long-term debt to increase its liquidity resources; NSCC
should increase intra-day margin calls; NSCC should increase
Clearing Member fees; NSCC should reduce the settlement cycle; NSCC
should reduce the volume of unsettled trades; NSCC should establish
a bilateral third-party bank committed facility; and NSCC should
change its capital structure. See NFS Letter, Citadel Letter II,
Citadel Letter III, Charles Schwab Letter II, Charles Schwab Letter
III, SIFMA Letter II, SIFMA Letter III, ITG Letter II, Fidelity
Letter II, Fidelity Letter III and ConvergEx Letter II. The
Commission notes that these comments are beyond the subject of the
Final SLD Proposal by NSCC.
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    Many of the commenters opposed to the original SLD Proposal and
Amended SLD Proposal raised concerns with a component of the proposal
that NSCC eliminated in the Final SLD Proposal.\35\ Those comments
included concerns about: (1) The anticipated costs for Clearing Members
as a result of implementation of Regular SLD funding obligation,
including costs imposed by a quick implementation period; \36\ (2)
Clearing Members' inability to accurately predict or control their
funding obligation and the effects thereof, including broker-dealers'
inability to plan for funding and liquidity risks as provided in FINRA
Reg. Notice 10-57; \37\ (3) distributional effects associated with
implementation of the Regular SLD funding obligation, manifested in
particular by an anti-competitive and disparate impact on non-bank
affiliated Clearing Members compared to bank affiliated Clearing
Members with regard to the offsetting commitments to the Credit
Facility; \38\ and (4) perceived mechanical flaws with the application
of the Regular SLD funding obligation.\39\
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    \35\ See Citadel Letter II, Citadel Letter III, Citadel Letter
IV, Charles Schwab Letter I, Charles Schwab Letter II, Charles
Schwab Letter III, Charles Schwab Letter IV, Charles Schwab Letter
V, SIFMA Letter I, SIFMA Letter II, SIFMA Letter III, ITG Letter I,
ITG Letter II, Knight Capital Letter, Deutsche Bank Letter,
ConvergEx Letter I, ConvergEx Letter II.
    \36\ See, e.g., ITG Letter I, ITG Letter II, Citadel Letter III.
    \37\ See Citadel Letter II, Citadel Letter III, Citadel Letter
IV, Charles Schwab Letter II, SIFMA Letter I, SIFMA Letter II, ITG
Letter II, Knight Capital Letter, Deutsche Bank Letter, ConvergEx
Letter II.
    \38\ See Citadel Letter II, Charles Schwab Letter I, Charles
Schwab Letter II, Charles Schwab Letter III, Charles Schwab Letter
IV, Charles Schwab Letter V, SIFMA Letter II, SIFMA Letter III, ITG
Letter I, ITG Letter II, Knight Capital Letter, ConvergEx Letter I,
ConvergEx Letter II.
    \39\ See ITG Letter II.
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    Since NSCC has eliminated the aspect of the SLD Proposal to which
these comments were made, the Commission believes these comments are
not relevant for its determination on the Final SLD Proposal.
2. Comments Applicable to the Final SLD Proposal and NSCC's Responses
Thereto
    Seven of the eight commenters raised concerns with the SLD Proposal
that, while not necessarily directly associated with the Special SLD
funding obligation, could apply to elements of the Special SLD funding
obligation and thus are relevant for the Commission's consideration of
the Final SLD Proposal.\40\ Four commenters argued that the SLD
Proposal is arbitrary and capricious because it applies to no more than
30 Clearing Members.\41\ Six

commenters argued that the SLD Proposal would have unintended
consequences of forcing a number of Clearing Members to terminate their
membership and thereby concentrating the broker clearing business in
fewer Clearing Members, potentially increasing systemic risk.\42\ One
commenter stated that historic peak liquidity needs, which would be
used by NSCC to determine the liquidity need presented by each Clearing
Member, is not necessarily predictive of future liquidity needs.\43\
Three commenters argued that NSCC incorrectly calculates its liquidity
needs in the SLD Proposal, either because the liquidity need is
calculated using Clearing Member gross settlement debits instead of net
settlement debits or because the settlement debits were aggregated over
a four-day cycle.\44\ Seven commenters stated that treatment of funds
delivered to NSCC to satisfy a funding obligation under the SLD
Proposal for Commission Rule 15c3-1 purposes was unclear.\45\
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    \40\ See Citadel Letter II, Citadel Letter III, Citadel Letter
IV, Charles Schwab Letter I, Charles Schwab Letter II, Charles
Schwab Letter III, Charles Schwab Letter IV, Charles Schwab Letter
V, SIFMA Letter I, SIFMA Letter II, SIFMA Letter III, ITG Letter I,
ITG Letter II, ITG Letter III, Knight Capital Letter, Deutsche Bank
Letter, ConvergEx Letter I, ConvergEx Letter II.
    \41\ See Citadel Letter II, ITG Letter I, Charles Schwab Letter
IV, Charles Schwab Letter V, SIFMA Letter III, ITG Letter II, ITG
Letter III. All four commenters argue that the imposition of a
funding obligation to no more than 30 Clearing Members was arbitrary
and capricious referred to the Regular SLD funding obligation, in
which a Regular SLD funding obligation is satisfied pro rata by 30
Clearing Members irrespective of whether each Clearing Member
presented a peak liquidity need above NSCC total available liquidity
resources. One of the four commenters claims that the same argument
persists for the Special SLD Funding Obligation; as such, the
Commission will consider the comment here. See Charles Schwab Letter
V.
    \42\ See Citadel Letter II, Charles Schwab Letter II, Charles
Schwab Letter III, SIFMA Letter I, SIFMA Letter II, SIFMA Letter
III, ITG Letter I, ITG Letter II, Knight Capital Letter, ConvergEx
Letter II.
    \43\ See ITG Letter II.
    \44\ See Citadel Letter III, ITG Letter II, ConvergEx Letter I,
ConvergEx Letter II.
    \45\ See 17 CFR 240.15c3-1. See, e.g., Citadel Letter II,
Citadel Letter III, Charles Schwab Letter II, Charles Schwab Letter
III, SIFMA Letter II, ITG Letter I, ITG Letter II, ITG Letter III,
Knight Capital Letter, ConvergEx Letter II.
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    In response to comments that imposition of a funding obligation is
arbitrary and capricious, NSCC revised the SLD Proposal to eliminate
the Regular SLD funding obligation component,\46\ which would have: (i)
Assigned a funding obligation to the 30 Clearing Members that presented
NSCC with the largest peak liquidity needs irrespective of whether the
peak liquidity need itself would have surpassed NSCC available
liquidity resources, and (ii) allocated a funding obligation to each of
those 30 Clearing Members driven substantially by the peak liquidity
need presented to NSCC by the largest Clearing Member.\47\ In response
to comments regarding unintended consequences of the SLD Proposal, such
as Clearing Members terminating their membership, NSCC stated that the
Clearing Member is in the best position to monitor and manage the
liquidity risks presented by its own activity.\48\ Similarly, NSCC
states that the maintenance of adequate liquidity resources at NSCC is
a key element in the reduction of systemic risk at a systemically-
important financial market utility and also a key component of NSCC's
ability to prevent the failure of a Clearing Member from having a
cascading effect on other Clearing Members.\49\
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    \46\ See Notice of Amendment No. 3, 78 FR at 62894-95.
    \47\ Id. at 62894.
    \48\ NSCC Letter I.
    \49\ See NSCC Letter I.
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    NSCC agreed that historic peak liquidity needs are not necessarily
predictive of future liquidity needs, and as a result NSCC has proposed
a mechanism whereby Clearing Members may voluntarily prefund liquidity
needs that the Clearing Member anticipates will surpass total liquidity
resources available at NSCC through the Prefund Deposit.\50\
Furthermore, in the event a Clearing Member does not elect to prefund
potential liquidity needs but does present a liquidity need to NSCC
above total liquidity resources that is not accounted for by a Special
SLD funding obligation, NSCC has proposed a mechanism to require the
Clearing Member to fund the liquidity need through the Call
Deposit.\51\ With respect to comments that NSCC incorrectly calculates
its liquidity need by using gross settlement debits instead of net
settlement debits, NSCC responded that, as a central counterparty for
its members, its risk exposure is reflected by the gross settlement
debits presented to it, not net settlement debits, in the event of a
Clearing Member default.\52\ Furthermore, NSCC stated that calculating
liquidity obligations over a four-day settlement cycle is consistent
with NSCC's practical liquidity obligation in the event of a Clearing
Member default.\53\ Finally, in response to comments that the treatment
of funds posted in satisfaction of an SLD funding obligation for Rule
15c3-1 purposes is unclear, NSCC stated that it structured the SLD
Proposal so that deposits made pursuant to an SLD funding obligation
would constitute Clearing Fund deposits, which have clear regulatory
capital treatment under Rule 15c3-1.\54\
---------------------------------------------------------------------------

    \50\ See Notice of Amendment No. 3, 78 FR at 62895.
    \51\ See Notice, 78 FR at 25498.
    \52\ See NSCC Letter I.
    \53\ Id.
    \54\ Id.
---------------------------------------------------------------------------

    Six commenters stated that the SLD Proposal did not provide a
sufficient evaluation of its burden on competition and lacked necessary
detail so as to elicit meaningful comment.\55\ Many of these commenters
argued that, while they supported NSCC's need for liquidity resources
generally, NSCC did not demonstrate a specific need for additional
liquidity in connection with the SLD Proposal.\56\ Five commenters
argued the SLD Proposal lacked sufficient Clearing Member input prior
to submitting the proposal.\57\ Three commenters argued that the SLD
Proposal did not meet the standard required for an advance notice
filing because it did not discuss expected effects on risks to NSCC's
Clearing Members or NSCC's management of those risks.\58\ Three
commenters also argued that the SLD Proposal did not adequately protect
investors.\59\ One commenter argued that the fact that NSCC submitted
the SLD Proposal without Clearing Member input is indicative of a lack
of fair representation for Clearing Members in the governance of
NSCC.\60\ One commenter stated that NSCC did not take into account the
potential impact of other central counterparties instituting similar
liquidity provisions.\61\ Five commenters argued in opposition of cash
being the only source by which a Clearing Member could satisfy a
supplemental liquidity deposit.\62\
---------------------------------------------------------------------------

    \55\ See Citadel Letter II, Charles Schwab Letter I, Charles
Schwab Letter II, Charles Schwab Letter III, Charles Schwab Letter
V, SIFMA Letter II, ITG Letter I, ITG Letter II, Knight Capital
Letter, ConvergEx Letter I, ConvergEx Letter II.
    \56\ See Citadel Letter II, Citadel Letter III, SIFMA Letter II,
SIFMA Letter III, ITG Letter II, ITG Letter III, ConvergEx Letter
II.
    \57\ See Citadel Letter III, Charles Schwab Letter I, ITG Letter
I, ITG Letter II, Knight Capital Letter, Deutsche Bank Letter.
    \58\ See Citadel Letter II, Charles Schwab Letter II, Charles
Schwab Letter III, ConvergEx Letter II.
    \59\ See Deutsche Bank Letter, Charles Schwab Letter II, Charles
Schwab Letter IV, Charles Schwab Letter V, SIFMA Letter II.
    \60\ See Citadel Letter III.
    \61\ See Charles Schwab Letter II, Charles Schwab Letter III.
Additionally, one commenter argued that NSCC attempted to improperly
amend the SLD Proposal through a response to comments. See Charles
Schwab Letter V. The Commission notes that NSCC filed the Final SLD
Proposal subsequent to the Commission's receipt of this comment in
accordance with the rule filing process. See Notice of Amendment No.
3, 78 FR 62893.
    \62\ See NFS Letter, Charles Schwab Letter II, Charles Schwab
Letter III, Citadel Letter II, Citadel Letter III, SIFMA Letter I,
Fidelity Letter II, ITG Letter II.
---------------------------------------------------------------------------

    In response to comments received regarding insufficient detail of
the SLD Proposal, NSCC provided detail regarding: the specific need for
liquidity resources,\63\ implementation timeframes for the SLD
Proposal,\64\ and a suite of

tools, such as monthly and daily reports, to enable Clearing Members to
more accurately predict a potential Regular SLD funding obligation.\65\
NSCC stated that it would work with Clearing Members to help them
understand and develop tools to forecast liquidity exposure and
mitigate their peak liquidity exposure.\66\ NSCC also stated that it
would provide monthly and daily reports to Clearing Members that would
show liquidity exposure during relevant periods.\67\ NSCC also stated
that fluctuating peak activity recently has exceeded NSCC available
total liquidity resources.\68\ NSCC believes these liquidity needs are
largely driven by industry consolidation, developments in trading
techniques, including an increased use of high frequency trading, and a
reduction in volatility from post-2008 financial crisis levels,
generally resulting in a reduction in Clearing Fund requirements.\69\
In response to comments received regarding insufficient analysis of the
burden on competition that might ensue from implementation of the SLD
Proposal, NSCC substantially revised the SLD Proposal twice to expand
its analysis of the burden on competition to include, for example,
individual subsections specifically addressing competition concerns
raised by commenters,\70\ and to reduce any disparate impact on
Clearing Members stemming from implementation of the SLD Proposal,
first to provide a mechanism by which non-bank affiliated Clearing
Members could contribute to Credit Facility, and second to eliminate
the Regular SLD from the Final SLD Proposal.\71\
---------------------------------------------------------------------------

    \63\ See NSCC Letter II (stating that ``NSCC has seen continued
increases in potential liquidity needs, driven by consolidation in
the industry, developments in trading techniques (including a rise
in high frequency trading), and a reduction in volatility from the
post-[2008] crisis highs which result in reduced Clearing Fund
requirements'').
    \64\ See Notice of Amendment No. 3, 78 FR 62893 (stating that
the Final SLD Proposal would be implemented on February 1, 2014).
    \65\ See NSCC Letter I, NSCC Letter II, Notice of Amendment No.
2, 78 FR 42127, Notice of Amendment No. 3, 78 FR 62893.
    \66\ See NSCC Letter I.
    \67\ See NSCC Letter I, NSCC Letter II.
    \68\ See NSCC Letter II.
    \69\ Id.
    \70\ See Notice of Amendment No. 2, 78 FR 42127. See also NSCC
Letter I. NSCC argued that the SLD Proposal would apply fairly
across Clearing Members and, while recognizing potential competitive
impacts on such members, believed the SLD Proposal addressed
important financial resource requirements. NSCC also stated that it
was revising the SLD Proposal to address competition concerns.
    \71\ See Notice of Amendment No. 2, 78 FR 42127; Notice of
Amendment No. 3, 78 FR 62893. See also NSCC Letter I, NSCC Letter
II.
---------------------------------------------------------------------------

    In response to comments regarding the lack of Clearing Member input
in the SLD Proposal and that the development of the SLD Proposal
without Clearing Member input was indicative of a lack of fair
representation of all Clearing Members at NSCC, NSCC stated that it
engaged in discussions with Clearing Members likely to be impacted by
the SLD Proposal, including more than 100 meetings with Clearing
Members to enhance Clearing Members' understanding of liquidity risks
presented to NSCC and the SLD Proposal generally.\72\ The Advance
Notice and subsequent amendments were published for comment three
times, so Clearing Members had an opportunity to comment, and NSCC also
substantially revised the SLD Proposal twice as a direct response to
comments received on the SLD Proposal.\73\ Finally, on September 18,
2013, NSCC announced to its membership that it was forming the Clearing
Agency Liquidity Council (``CALC''), an advisory group to continue the
dialogue between NSCC and its Clearing Members regarding liquidity
issues in a formal setting.\74\ According to NSCC, the CALC intends to
explore additional liquidity resources in advance of the 2014 renewal
of NSCC's Credit Facility, in order to address, for example, NSCC's
liquidity needs outside of Special Periods and the refinancing risk
associated with the annual renewal of the Credit Facility.\75\
According to NSCC, twenty-four Clearing Members joined the CALC,
including all eight commenters to the SLD Proposal, which has met on
multiple occasions since its inception.
---------------------------------------------------------------------------

    \72\ See NSCC Letter I.
    \73\ See Notice of Amendment No. 2, 78 FR 42127; Notice of
Amendment No. 3, 78 FR 62893. See also NSCC Letter II.
    \74\ DTCC Important Notice a7706, Creation of DTCC Clearing
Agency Liquidity Council and Nomination Process (Sep. 18, 2013),
http://dtcc.com/downloads/legal/imp_notices/2013/nscc/a7706.pdf.
    \75\ See NSCC Letter II. See also Notice of Amendment No. 2, 78
FR 42127, Notice of Amendment No. 3, 78 FR 62893.
---------------------------------------------------------------------------

    NSCC responded to comments that the SLD Proposal did not contain
sufficient information by amending the SLD Proposal twice to further
identify the potential impact of the SLD Proposal on Clearing Members
and to make substantive revisions to the SLD Proposal to address those
concerns.\76\ NSCC responded to comments that the SLD Proposal did not
protect investors by stating that the maintenance of adequate liquidity
resources at NSCC, a designated systemically-important financial market
utility \77\ that plays a fundamental role in the United States cash
equities market,\78\ will protect against the transmission of systemic
risk among Clearing Members in the event of a failure of one Clearing
Member, thereby promoting the prompt and accurate settlement of
securities transactions and the protection of investors.\79\ NSCC
responded to the comment that it did not take into account other
central counterparties imposing similar liquidity requirements by
stating that such a concern was unlikely given the difference in
liquidity risk between cash market central counterparties (i.e., NSCC),
where potential liquidity needs typically are orders of magnitude
greater than the market risk that their margin collections are designed
to cover, and derivatives central counterparties, where liquidity needs
generally are more closely aligned to market risk of members'
portfolios and the members' margin requirements.\80\ In response to
comments opposed to cash being the sole funding source by which a
Clearing Member could satisfy a supplemental liquidity deposit, NSCC
eliminated Regular SLD, thereby eliminating concern relating to
disparate treatment that might ensue by requiring Clearing Members that
do not make a commitment to lend to NSCC through the Credit Facility to
make their Regular SLD funding obligation in cash, and NSCC states that
the CALC will evaluate potential alternative collateral approaches that
could be used to fund a portion of a Clearing Member's funding
obligation.\81\

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

    \76\ See Notice of Amendment No. 2, 78 FR 42127; Notice of
Amendment No. 3, 78 FR 62893. See also NSCC Letter II.
    \77\ Financial Stability Oversight Council (``FSOC'') 2012
Annual Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf (``FSOC Designation'').
    \78\ See 12 U.S.C. 5462(9).
    \79\ See NSCC Letter I, NSCC Letter II. Designation as
systemically-important by FSOC means that a failure of or disruption
to its functioning could create, or increase, the risk of
significant credit or liquidity problems spreading among financial
institutions or markets, thereby threatening financial stability.
See 12 U.S.C. 5462(9). See also FSOC Designation, supra note 77.
    \80\ See NSCC Letter II.
    \81\ Id. See also discussion below noting that any cash deposit
is driven by the Clearing Member's own trading activity.
---------------------------------------------------------------------------

C. Comments to the Final SLD Proposal

    The Commission received two comments on the Final SLD Proposal.
Both commenters supported NSCC's decision to eliminate the Regular SLD
funding obligation from the SLD Proposal.\82\ One commenter argued for
approval of the Final SLD Proposal, since the Final SLD Proposal ``is a
helpful development in the process of determining how best to increase
NSCC's liquidity resources to meet its liquidity needs.'' \83\
Moreover, the commenter believes that ``NSCC has addressed the area of
greatest [m]ember concern in removing provisions of the

[SLD] Proposal that collectively deal with the imposition of the
Regular [SLD].'' \84\ One commenter argued for disapproval of the Final
SLD Proposal, stating that flawed concepts remain and approval would
unnecessarily inhibit the development of ideas from NSCC's CALC.\85\
NSCC did not submit a response to comments received after submission of
the Final SLD Proposal.
---------------------------------------------------------------------------

    \82\ See ITG Letter III, Fidelity Letter III.
    \83\ See Fidelity Letter III.
    \84\ Id.
    \85\ See ITG Letter III.
---------------------------------------------------------------------------

V. Discussion and Commission Findings

    Although Title VIII does not specify a standard of review for an
advance notice, the purpose of Title VIII is instructive.\86\ The
stated purpose of Title VIII is to mitigate systemic risk in the
financial system and promote financial stability by, among other
things, promoting uniform risk management standards for and
strengthening the liquidity of systemically-important financial market
utilities.\87\
---------------------------------------------------------------------------

    \86\ 12 U.S.C. 5461(b).
    \87\ Id. See also FSOC Designation, supra note 77.
---------------------------------------------------------------------------

    Section 805(a)(2) of the Clearing Supervision Act \88\ authorizes
the Commission to prescribe risk management standards for the payment,
clearing, and settlement activities of designated clearing entities and
financial institutions engaged in designated activities for which it is
the supervisory agency or the appropriate financial regulator. Section
805(b) of the Clearing Supervision Act \89\ states that the objectives
and principles for the risk management standards prescribed under
Section 805(a) shall be to:
---------------------------------------------------------------------------

    \88\ 12 U.S.C. 5464(a)(2).
    \89\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    The Commission adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act on October 22, 2012,
(``Clearing Agency Standards'').\90\ The Clearing Agency Standards
became effective on January 2, 2013, and require clearing agencies that
perform central counterparty services to establish, implement,
maintain, and enforce written policies and procedures that are
reasonably designed to meet certain minimum requirements for their
operations and risk management practices on an ongoing basis.\91\ As
such, it is appropriate for the Commission to review advance notices
against these risk management standards that the Commission promulgated
under Section 805(a) and the objectives and principles of these risk
management standards as described in Section 805(b). Commission Rule
17Ad-22(b)(3), adopted as part of the Clearing Agency Standards,
requires a central counterparty to establish, implement, maintain and
enforce written policies and procedures reasonably designed to maintain
sufficient financial resources to withstand, at a minimum, a default by
the participant family to which it has the largest exposure in extreme
but plausible market conditions.\92\
---------------------------------------------------------------------------

    \90\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (Nov. 2,
2012).
    \91\ The Clearing Agency Standards are substantially similar to
the risk management standards established by the Board of Governors
governing the operations of systemically-important financial market
utilities that are not clearing entities and financial institutions
engaged in designated activities for which the Commission or the
Commodity Futures Trading Commission is the Supervisory Agency. See
Financial Market Utilities, 77 FR 49507 (Aug. 2, 2012).
    \92\ 17 CFR 240.17Ad-22(b)(3).
---------------------------------------------------------------------------

    After carefully considering the Final SLD Proposal and the comments
received \93\ on the SLD Proposal and NSCC responses thereto, the
Commission finds that NSCC has demonstrated that its Final SLD Proposal
is in furtherance of the objectives and principles of Title VIII and
the risk management standards prescribed thereunder by the Commission
and accordingly it is appropriate for the Commission to issue a no-
objection to the Final SLD Proposal.
---------------------------------------------------------------------------

    \93\ In its assessment of this advance notice of the Final SLD
Proposal, the Commission assessed whether the issues raised by the
commenters relate to the level or nature of risks presented by the
Final SLD Proposal. Comments received that relate to issues that do
not relate to the Final SLD Proposal's effect on the level or nature
of risks presented by NSCC are not considered within the context of
his Notice of No Objection to the Advance Notice under Title VIII;
rather, they are considered within an analysis of the Final SLD
Proposal's consistency with the Exchange Act and applicable rules
and regulations thereunder, which the Commission has done in the
Order Approving the Proposed Rule Change, as Modified by Amendment
Nos. 1, 2, and 3, to Institute Supplemental Liquidity Deposits to
Its Clearing Fund Designed to Increase Liquidity Resources to Meet
its Liquidity Needs. See supra note 3.
---------------------------------------------------------------------------

    The Commission recognizes that some commenters did not support
certain aspects of the SLD Proposal. However, the Commission believes
that the Final SLD Proposal eliminated most of the aspects of the SLD
Proposal which concerns were raised, and no comments convinced the
Commission that the Final SLD Proposal was not consistent with Title
VIII. The Commission believes that, overall, the increased liquidity
resources available to NSCC as a result of the Final SLD Proposal: (i)
Will improve financial safety at NSCC by increasing its ability meet
its liquidity needs; (ii) reduce systemic risks and support the
stability of the broader financial system; and (iii) accordingly is
reasonably designed to ensure NSCC maintains sufficient financial
resources to withstand, at a minimum, a default by the participant
family to which it has the largest exposure in extreme but plausible
market conditions. The Commission's analysis of the comments applicable
to the Final SLD Proposal and the Final SLD Proposal's consistency with
Title VIII of the Dodd-Frank Act and risk management standards
prescribed thereunder by the Commission are discussed below.
    As stated above, several commenters argued that the original SLD
Proposal suffered from certain defects, such as a failure of NSCC to
consult with Clearing Members prior to submitted the SLD Proposal,\94\
that the SLD Proposal did not adequately address items required by
Title VIII,\95\ and that NSCC did not demonstrate a specific need for
additional liquidity in connection with the SLD Proposal.\96\ The
Commission believes that the Final SLD Proposal is consistent with
Title VIII. NSCC made substantial revisions to the SLD Proposal
directly responsive to comments raised during the comment period, the
creation of the CALC to continue the dialogue between NSCC and Clearing
Members regarding liquidity generally, and a more robust description of
the SLD Proposal and its potential effects on the competition between
Clearing Members. The Commission notes the stated intention of the CALC
to revisit and further impose NSCC's practices with respect to
liquidity risk management as also being relevant in this respect.
---------------------------------------------------------------------------

    \94\ See Citadel Letter III, Charles Schwab Letter I, ITG Letter
I, ITG Letter II, Knight Capital Letter, Deutsche Bank Letter,
Fidelity Letter I.
    \95\ See Citadel Letter II, Charles Schwab Letter II, Charles
Schwab Letter III, ConvergEx Letter II.
    \96\ See Citadel Letter II, Citadel Letter III, SIFMA Letter II,
SIFMA Letter III, ITG Letter II, ITG Letter III, ConvergEx Letter
II. With respect to the comments described above about NSCC
requiring cash be deposited as collateral, the Commission believes
that NSCC has addressed these comments and has stated that the CALC
will evaluate potential alternative collateral approaches.
---------------------------------------------------------------------------

    The Commission notes that all commenters supported NSCC's objective
of maintaining sufficient financial resources to withstand a default by
a Clearing Member and acknowledged that NSCC must have sufficient
liquidity for these purposes. The Commission agrees with commenters and
with NSCC that the maintenance of sufficient liquidity resources at
NSCC is of

paramount importance to promote safety and soundness and support the
broader stability of the financial system. This is underscored by
NSCC's designation as a systemically-important financial market utility
for which a failure or disruption of its operations would create or
increase risk of significant credit or liquidity problems spreading
among financial institutions or markets and thereby threaten the
stability of the financial system of the U.S.\97\
---------------------------------------------------------------------------

    \97\ See 12 U.S.C. 5462(9).
---------------------------------------------------------------------------

    The Commission also notes that NSCC has stated that fluctuating
peak liquidity needs presented to NSCC have exceeded total liquidity
resources available to NSCC, emphasizing the need for NSCC to develop a
mechanism to help ensure that it maintains adequate liquidity as soon
as possible.\98\ These liquidity needs are driven by Clearing Members'
trading activity, and the Final SLD Proposal is designed as a mechanism
to allocate a funding obligation to those Clearing Members with peak
liquidity needs that surpass NSCC available liquidity resources.
---------------------------------------------------------------------------

    \98\ See NSCC Letter II.
---------------------------------------------------------------------------

    The Commission takes specific note of comments arguing that
implementation of the SLD Proposal could result in an increase of
systemic risk by concentrating clearing services into fewer firms if
Clearing Members opt to terminate their NSCC membership instead of
meeting a Special SLD funding obligation. The Commission has carefully
considered those comments, but does not believe a risk of increased
concentration is a significant risk under the Final SLD Proposal for
several reasons. First, since a Special SLD funding obligation is
correlated directly to the liquidity need presented to NSCC as a result
of Clearing Members' own \99\ trading activity, the Special SLD funding
obligation is not an unexpected cost for which the Clearing Member is
incapable of controlling. Second, the Special SLD funding obligation
applies only in the case where a Clearing Member presents a liquidity
need that surpasses the then-current total available liquidity
resources, based on a two-year look-back period of the Clearing
Member's trading activity. These liquidity resources include the
Clearing Fund and the Credit Facility, and historically these liquidity
resources have provided NSCC with adequate liquidity resources a
substantial portion of the time. While the Commission believes the
Final SLD Proposal is important for NSCC to ensure that it has a
mechanism to maintain adequate liquidity resources at all times, the
Commission also expects based on the representations of NSCC that a
Special SLD funding obligation will be required in only a small number
of cases and from a select few Clearing Members with trading activity
that is substantial enough to create a liquidity need above NSCC's
total liquidity resources. Finally, the Commission notes that the Final
SLD Proposal would enable a Clearing Member to avoid a Special SLD
funding obligation by either managing its own trading activity to avoid
such an obligation or using the Prefund Deposit, which would likely
avoid a Call Deposit that would enable NSCC to hold the deposited funds
for 90 days, so that the Clearing Member has options other than
termination of membership available to it to manage its potential
liquidity funding obligation.
---------------------------------------------------------------------------

    \99\ For these purposes, a Clearing Members' own trading
activity includes trading activity from all clients of the Clearing
Member.
---------------------------------------------------------------------------

    For the reasons stated above, the Commission believes that the
Final SLD Proposal is: (i) Consistent with Commission regulations and
risk management standards in Section 805(b) of the Clearing Supervision
Act because it promotes robust risk management and improves safety and
soundness at NSCC, while reducing systemic risks to the financial
system more generally and (ii) consistent with Rule 17Ad-22 (b)(3)
because it provides NSCC with a mechanism to maintain sufficient
financial resources to withstand, at a minimum, a default by the
Clearing Member to which NSCC has the largest exposure.

VI. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act,\100\ that the Commission does not object to
the proposed rule change described in the Advance Notice (File No. SR-
NSCC-2013-802) and that NSCC be and hereby is authorized to implement
the proposed rule change as of the date of this notice or the date of
the ``Order Approving Proposed Rule Change, as Modified by Amendment
Nos. 1, 2, and 3 to Institute Supplemental Liquidity Deposits to
[NSCC's] Clearing Fund Designed to Increase Liquidity Resources to Meet
Its Liquidity Needs,'' SR-NSCC-2013-02, whichever is later.
---------------------------------------------------------------------------

    \100\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29498 Filed 12-10-13; 8:45 am]
BILLING CODE 8011-01-P


NOx SO2 MER CO2 Carbon Year: 2020, System Totals ( By Region) Generation Trillion Emission Emission Emission Emission Emission  ( GWh) ( Btu) ( 1000 Tons) ( 1000 Tons) ( Tons) ( Mil Tonnes)( Mil Tonnes) WINTER SUMMER Total WINTER SUMMER Total WINTER SUMMER Total Total Total Total Total Region MECS 81922. 58465. 140386. 731.55 534.02 1265.57 88.165 43.430 1 31.595 384.967 1.579 97.114 26.486 Region ECAO 364697. 276116. 640813. 3490.73 2641.97 6132.71 714.813 151.037 8 65.850 2251.831 10.323 524.753 143.114 Region ERCT 178936. 198267. 377204. 1631.73 1794.67 3426.40 85.558 101.946 1 87.504 342.433 3.033 244.686 66.732 Region MACE 84244. 64220. 148464. 798.11 610.69 1408.80 48.161 20.396 68.557 143.926 1.697 53.404 14.565 Region MACW 68538. 51153. 119691. 644.63 480.85 1125.48 101.463 31.242 1 32.705 604.058 3.843 77.784 21.214 Region MACS 46905. 35013. 81918. 441.76 330.19 771.94 58.139 16.286 74.425 188.471 1.256 56.881 15.513 Region WUMS 49880. 38221. 88100. 484.40 372.39 856.79 60.503 46.375 1 06.878 200.541 1.241 69.032 18.827 Region MANO 161272. 123659. 284931. 1623.39 1245.68 2869.07 187.221 77.914 2 65.135 763.614 3.284 164.406 44.838 Region MAPP 113908. 89122. 203030. 1121.97 878.95 2000.92 220.243 169.008 3 89.251 545.045 3.974 161.632 44.081 Region UPNY 46465. 34863. 81329. 300.02 241.22 541.24 28.117 15.678 43.795 185.351 1.489 24.609 6.712 Region DSNY 17319. 14631. 31950. 141.71 119.85 261.56 8.134 5.908 14.042 31.394 0.396 14.270 3.892 Region NYC 22392. 18861. 41253. 194.21 166.45 360.66 10.668 9.381 20.049 17.635 0.295 31.983 8.723 Region LILC 10231. 7920. 18151. 90.02 70.89 160.91 4.589 3.594 8.183 7.493 0.481 13.366 3.645 Region NENG 97178. 67462. 164640. 757.22 536.22 1293.44 19.355 14.372 33.727 48.424 1.958 58.083 15.841 Region FRCC 156201. 129917. 286118. 1411.56 1176.42 2587.97 112.564 92.873 2 05.437 265.746 2.204 179.291 48.897 Region VACA 239175. 185942. 425117. 2210.26 1735.45 3945.71 138.221 72.943 2 11.164 501.282 2.585 241.805 65.947 Region TVA 115632. 89487. 205119. 1021.00 813.45 1834.45 158.215 43.525 2 01.740 405.120 1.628 109.945 29.985 Region SOU 225791. 184097. 409888. 2054.62 1676.56 3731.17 252.597 83.696 3 36.293 1001.339 3.669 288.116 78.577 Region ENTG 90906. 74373. 165279. 853.44 692.80 1546.23 68.956 42.812 1 11.768 206.562 1.733 82.054 22.378 Region SPPN 47772. 39427. 87199. 479.52 396.12 875.65 86.260 60.999 1 47.259 135.422 1.648 70.756 19.297 Region SPPS 85676. 81920. 167596. 752.25 714.83 1467.08 93.761 80.883 1 74.644 366.448 2.334 126.647 34.540 Region CALI 201831. 162119. 363950. 1594.57 1263.17 2857.75 13.690 11.661 25.351 18.728 1.093 102.212 27.876 Region PNW 133669. 89073. 222742. 547.39 321.83 869.22 34.356 24.736 59.092 38.418 0.555 65.010 17.730 Region AZNM 133109. 107112. 240221. 1215.81 968.17 2183.98 116.023 91.486 2 07.510 114.264 1.989 153.926 41.980 Region RMPA 40591. 29968. 70559. 354.65 258.18 612.83 59.128 46.483 1 05.611 81.575 0.483 56.137 15.310 Region NWPE 57194. 45140. 102334. 578.25 451.92 1030.17 113.882 89.521 2 03.404 107.376 1.146 90.828 24.771 System Total 2871435. 2296547. 5167982. 25524.76 20492.95 46017.71 2882.781 1448.185 43 30.966 8957.464 55.916 3158.729 861.472    (**) Industrial Boiler generation not included in generation totals

NOx SO2 MER CO2 Carbon Year: 2020, System Totals ( Emissions By Plant Type) Generation Trillion Emission Emission Emission Emission Emission  ( GWh) ( Btu) ( 1000 Tons) ( 1000 Tons) ( Tons) ( Mil Tonnes)( Mil Tonnes)

WINTER SUMMER Total WINTER SUMMER Total WINTER SUMMER Total Total Total Total Total Total Scrubbed Coal_ NOx 1 591529. 445417. 1036946. 5259.74 3964.90 9224.63 472.245 200.562 6 72.807 688.802 5.640 861.771 235.028 Total Scrubbed Coal 2 210726. 165869. 376595. 2178.94 1713.90 3892.84 458.170 359.163 8 17.334 530.013 6.543 369.215 100.695 Total Unscrubbed Coal_ NOx 3 175766. 136338. 312104. 1674.28 1297.81 2972.10 393.719 62.243 4 55.962 1780.161 7.225 279.766 76.300 Total Unscrubbed Coal 4 373930. 285346. 659276. 3816.42 2910.86 6727.28 748.313 569.096 13 17.408 3509.268 16.173 637.710 173.921 Total Oil/ Gas Steam 5 1053. 21443. 22496. 10.10 212.22 222.32 1.005 26.873 27.877 0.000 0.000 11.799 3.218 Total Oil/ Gas Steam_ Nox 6 0. 1160. 1160. 0.00 11.52 11.52 0.000 0.812 0.812 0.000 0.000 0.611 0.167 Total Nuclear 7 447949. 339035. 786984. 4720.33 3573.37 8293.69 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Hydro 8 154390. 114990. 269380. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Comb. Cycle Gas 9 343663. 288317. 631980. 2572.24 2167.12 4739.35 35.097 30.235 65.332 0.000 0.000 251.519 68.596 Total IGCC 10 2652. 2050. 4702. 19.30 14.91 34.21 0.902 0.697 1.598 0.000 0.006 3.185 0.869 Total Turbine 11 19067. 46284. 65351. 175.93 445.62 621.56 8.294 21.181 29.474 0.000 0.000 32.986 8.996 Total Biomass 12 6113. 4328. 10441. 54.10 38.33 92.43 0.541 0.383 0.924 3.697 0.026 0.000 0.000 Total Geothermal 13 13772. 10799. 24571. 369.68 289.40 659.08 0.000 0.000 0.000 0.000 1.027 0.000 0.000 Total Landfill Gas 14 4415. 3278. 7694. 51.28 38.22 89.50 6.308 4.701 11.009 0.000 0.000 0.000 0.000 Total Wind 15 11786. 6486. 18272. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Fuel Cell 16 14. 26. 40. 0.11 0.20 0.30 0.021 0.039 0.061 0.000 0.000 0.016 0.004 Total Solar 17 580. 312. 892. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Non Fossil_ Other 18 10028. 7909. 17936. 110.04 86.79 196.83 0.000 0.000 0.000 0.000 5.684 0.000 0.000 Total Fossil_ Other 19 559. 426. 985. 6.15 4.69 10.84 1.425 1.087 2.512 0.012 0.018 0.000 0.000 Total Pump Storage 20 5924. 6414. 12337. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Int. Imports 21 13160. 9497. 22657. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Cgn_ Coal 22 16161. 12600. 28761. 147.05 114.37 261.42 28.649 21.994 50.643 121.444 0.568 24.422 6.661 Total Cgn_ Gas 23 47308. 51131. 98440. 363.52 401.76 765.28 12.280 11.632 23.912 0.000 0.000 40.614 11.076 Total Cgn_ Oil 24 2103. 1715. 3818. 16.31 13.32 29.63 0.212 0.207 0.419 5.598 0.002 1.840 0.502 Total Cgn_ Other 25 3906. 3092. 6998. 26.82 21.30 48.12 1.130 0.902 2.031 1.020 0.427 0.000 0.000 Total NonCG IPP_ Coal 26 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total NonCG IPP_ Gas 27 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total NonCG IPP_ Other 28 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Blr_ Coal 29 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Blr_ Gas 30 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Blr_ Oil 31 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Blr_ Other 32 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total SteamOnly Cogen 33 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Rep. Coal CC 34 618. 474. 1093. 4.47 3.43 7.89 0.045 0.034 0.079 0.000 0.000 0.419 0.114 Total Rep. O/ G CC 35 51731. 39680. 91411. 373.50 286.49 659.99 3.735 2.865 6.600 0.000 0.000 35.026 9.552 Total Rep. Coal IGCC 36 1057. 817. 1875. 8.13 6.28 14.41 0.081 0.063 0.144 0.360 0.003 1.342 0.366 Total Ret. Scrubber 37 20259. 17028. 37288. 210.73 177.50 388.23 46.272 37.860 84.132 38.025 1.222 37.368 10.191 Total Ret. ExistSCR & Scrub 38 26268. 20862. 47130. 254.75 202.33 457.08 21.536 5.317 26.853 35.507 0.535 42.564 11.608 Total Ret. ExistSNCR & Scrub 39 772. 613. 1386. 8.25 6.55 14.80 0.839 0.667 1.506 0.888 0.028 1.379 0.376 Total Ret. SCR 40 171716. 135882. 307598. 1659.51 1312.83 2972.34 420.406 37.377 4 57.783 1617.389 6.985 280.469 76.491 Total Ret. ExistScrub & SCR 41 81525. 67564. 149088. 822.90 684.20 1507.10 136.957 17.765 1 54.722 410.546 2.662 142.461 38.853 Total Ret. SNCR 42 14981. 10833. 25814. 160.50 115.65 276.15 39.911 19.095 59.006 149.892 0.551 25.945 7.076 Total Ret. ExistScrub & SNCR 43 3839. 2807. 6646. 41.33 30.31 71.64 11.667 5.643 17.310 16.349 0.133 6.672 1.820 Total Ret. SCR+ Scrb 44 42114. 33448. 75561. 408.40 324.36 732.75 33.021 8.313 41.334 48.493 0.458 68.441 18.666 Total Ret. SNCR+ Scrub 45 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. Gas Reburn 46 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistScrub+ GasR 47 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. GasReburn+ Scrub 48 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ACI 49 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistScrub& ACI 50 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSCR& ACI 51 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSNCR& ACI 52 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ACI & SCR 53 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistScrub& ACI& SCR 54 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ACI & SNCR 55 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistScrub& ACI& SNCR 56 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ACI & Srub 57 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSCR& ACI& Scrub 58 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSNCR& ACI& Scrub 59 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSNCR& ExistScrub& ACI 60 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistSCR& ExistScrub& ACI 61 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. ExistNOx& ExistScrub& ACI 62 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. SCR & Scrub & ACI 63 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. SNCR & Scrub & ACI 64 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. O/ G SCR 65 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. O/ G SNCR 66 0. 2277. 2277. 0.00 22.40 22.40 0.000 1.381 1.381 0.000 0.000 1.189 0.324 Total Ret. Nuclear ( age 30+ 10 yrs) 67 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. Nuclear ( age 40+ 20 yrs) 68 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Ret. Biomass Cofiring 69 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total CT Early Retirement 70 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total CC Early Retirement 71 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total O/ G Early Retirement 72 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Coal Early Retirement 73 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Nuke Early Retirement 74 0. 0. 0. 0.00 0.00 0.00 0.000 0.000 0.000 0.000 0.000 0.000 0.000 System Total 2871435. 2296547. 5167982. 25524.76 20492.95 46017.71 2882.781 1448.185 43 30.966 8957.464 55.916 3158.729 861.472 System Total Without Imports 2858275. 2287050. 5145325. 25524.76 20492.95 46017.71 2882.781 1448.185 43 30.966 8957.464 55.916 3158.729 861.472    (**) Industrial Boiler generation in BBtu, not included in generation totals


[Federal Register Volume 77, Number 227 (Monday, November 26, 2012)]
[Notices]
[Page 70434]
[FR Doc No: 2012-28542]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP12-464-000]

Petal Gas Storage, L.L.C., Hattiesburg Industrial Gas Sales,
L.L.C.; Notice of Offer of Settlement

    Take notice that on November 8, 2012, Petal Gas Storage, L.L.C.
(Petal) and Hattiesburg Industrial Gas Sales, L.L.C. (Hattiesburg),
filed a Stipulation and Agreement (Settlement), including pro forma
tariff records, pursuant to 18 CFR 385.602 (2012) to resolve all issues
in the above-captioned docket raised by Consolidated Edison of New
York, Inc. (ConEd).
    The Stipulation and Agreement is uncontested by all settling
parties (Petal, Hattiesburg and ConEd) within the meaning of Rule
602(g). Petal and Hattiesburg have submitted to ConEd a draft service
agreement that would govern ConEd's firm storage service under Petal's
Rate Schedule FSS. Petal has also agreed as a part of the Settlement to
make the tariff filings set forth in Article I of the Stipulation and
Agreement to address ConEd's concerns regarding the terms and
conditions of Petal's FSS service. Except as specified, each of the
tariff filings will be generally applicable to all Petal customers,
including former Hattiesburg customers, and are designed to replicate
certain aspects of the terms and conditions of the 311 firm storage
service offered by Hattiesburg. Petal agrees to submit tariff filing in
a compliance filing to the Commission within thirty days of the
effective date of this Settlement, all as described more fully in the
Settlement filing.
    Petal states that it has served copies of this filing on all
affected customers and interested state commissions. Pursuant to Rule
602(f)(2) of the Commission's Rules of Practice and Procedure, 18 CFR
385.602(f)(2) (2012), initial comments on the Settlement are due not
later than 20 days after the filing of the Settlement, and reply
comments are due not later than 30 days after the filing of the
Settlement.
    The Commission encourages electronic submission interventions and
comments in lieu of paper using the ``eFiling'' link at
http:[sol][sol]www.ferc.gov. This filing is accessible on-line at
http:[sol][sol]www.ferc.gov, using the ``eLibrary'' link and is
available for review in the Commission's Public Reference Room in
Washington, DC. There is an ``eSubscription'' link on the Web site that
enables subscribers to receive email notification when a document is
added to a subscribed docket(s). For assistance with any FERC Online
service, please email<EMAIL_ADDRESS>or call (866) 208-
3676 (toll free). For TTY, call<PHONE_NUMBER>.
    Comments are due by: November 28, 2012.
    Reply Comments are due by: December 8, 2012.

    Dated: November 19, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-28542 Filed 11-23-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 83 (Friday, April 29, 2016)]
[Notices]
[Page 25661]
[FR Doc No: 2016-10024]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL16-51-000]

Beaver Dam Energy LLC; Notice of Institution of Section 206
Proceeding and Refund Effective Date

    On April 22, 2016, the Commission issued an order in Docket No.
EL16-51-000, pursuant to section 206 of the Federal Power Act (FPA), 16
U.S.C. 824e (2012), instituting an investigation into the justness and
reasonableness of Beaver Dam Energy LLC's reactive power rate schedule.
Beaver Dam Energy LLC, 155 FERC ] 61,086 (2016).
    The refund effective date in Docket No. EL16-51-000, established
pursuant to section 206(b) of the FPA, will be the date of publication
of this notice in the Federal Register.

    Dated: April 22, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-10024 Filed 4-28-16; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: April 15, 2008 (Volume 73, Number 73)]
[Proposed Rules]
[Page 20232-20234]
[DOCID:fr15ap08-25]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 168

[Docket No. USCG-2006-23556, formerly CGD91-202a]
RIN 1625-AA10, formerly RIN 2115-AE56

Escort Vessels in Certain U.S. Waters

AGENCY: Coast Guard, DHS.

ACTION: Notice of withdrawal and request for comments.

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SUMMARY: The Coast Guard announces its intent to withdraw a 1993
advance notice of proposed rulemaking (ANPRM). Because of the length of
time since the ANPRM was published, the Coast Guard requests additional
public comment before proceeding with withdrawal. The rulemaking deals
with supplementing a statutory requirement that single-hulled oil
tankers in Prince William Sound, Alaska, and Puget Sound, Washington,
be accompanied through those waters by escort vessels. It would extend
those requirements to other U.S. waters, and possibly to vessels other
than single-hulled oil tankers. Subject to reconsideration in light of
public comment, the Coast Guard believes that this rulemaking is
inappropriate and inefficient and therefore not the best way to
consider such extensions.

DATES: Comments and related material must reach the Docket Management
Facility on or before July 14, 2008.

ADDRESSES: You may submit comments identified by Coast Guard docket
number USCG-2006-23556 to the Docket Management Facility at the U.S.
Department of Transportation. To avoid duplication, please use only one
of the following methods:
    (1) Online: http://www.regulations.gov.
    (2) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building, Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590-0001.
    (3) Hand delivery: Room W12-140 on the Ground Floor of the West
Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The
telephone number is<PHONE_NUMBER>.
    (4) Fax:<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: If you have questions on this notice,
contact Lieutenant Commander Vivianne Louie, U.S. Coast Guard,
telephone<PHONE_NUMBER> or e-mail<EMAIL_ADDRESS>If you have
questions on viewing or submitting material to the docket, call Ms.
Renee V. Wright, Program Manager, Docket Operations, telephone 202-366-
9826.

SUPPLEMENTARY INFORMATION:

Request for Comments

    We request public comment on our intent to withdraw this
rulemaking. In particular, we are interested in comments that tell us:
     Why we should not withdraw this rulemaking;
     How to go about this rulemaking, if it continues; and
     What criteria should govern the extension of escort vessel
requirements to waters other than Prince William Sound and Puget Sound,
or to vessels other than single-hulled oil tankers.
    All comments received will be posted, without change, to http://
www.regulations.gov and will include any personal information you have

provided. We have an agreement with the Department of Transportation
(DOT) to use the Docket Management Facility. Please see DOT's ``Privacy
Act'' paragraph below.
    Submitting comments: If you submit a comment, please identify the
docket number for this notice (USCG-2006-23556) and give the reason for
each comment. We recommend that you include your name and a mailing
address, an e-mail address, or a phone number in the body of your
document so that we can contact you if we have questions regarding your
submission. You may submit your comments by electronic means, mail,
fax, or delivery to the Docket Management Facility at the address under
ADDRESSES; but please submit your comments by only one means. If you
submit them by mail or delivery, submit them in an unbound format, no
larger than 8\1/2\ by 11 inches, suitable for copying and electronic
filing. If you submit them by mail and would like to know that they
reached the Facility, please enclose a stamped, self-addressed postcard
or envelope. We will consider all comments received during the comment
period.
    Viewing comments and documents: To view comments, go to http://
www.regulations.gov at any time. Enter the docket number for this
rulemaking (USCG-2006-23556) in the Search box, and click ``Go >>.''
You may also visit the Docket Management Facility in room W12-140 on
the Ground Floor of the West Building, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    Privacy Act: Anyone can search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
Department of Transportation's Privacy Act Statement in the Federal
Register published on April 11, 2000 (65 FR 19477), or you may visit
http://DocketsInfo.dot.gov.

Changes in Docket Numbering

    This notice is the first document published since 1994 for a
rulemaking that began in 1993, under Coast Guard docket number CGD 91-
202a. Until now, public comment letters and other material pertinent to
CGD 91-202a were only available for public inspection at Coast Guard
Headquarters in Washington, DC. Beginning in 1998, the Coast Guard
adopted a new docket numbering system in order to make its Headquarters
rulemaking documents available to the public on the Internet. The
format of the new docketing system is incompatible with the ``CGD''
system that we used in 1993. Therefore, in order to complete the CGD
91-202a rulemaking in a way that makes our actions visible to the
public on the http://www.regulations.gov Web site, we opened an
Internet-compatible docket number, USCG-2006-23556. The public comments
we received on CGD 91-202a will be placed in the http://
www.regulations.gov docket for USCG-2006-23556.

Background and Purpose

    The Coast Guard has broad authority under the Ports and Waterways
Safety Act (PWSA, 33 U.S.C. 1221 et seq.) to control vessel traffic in
navigable waters of the United States. In addition, section 4116(c) of
the Oil Pollution Act of 1990 (OPA 90, Pub. L. 101-380) required the
Coast Guard to initiate a rulemaking to identify any navigable waters
of the United States on which single-hulled oil tankers over 5,000
gross tons should require escort vessels. OPA 90 specified that escort
vessels must be provided in Prince William Sound, Alaska, and in Puget
Sound, Washington. Requirements for escort vessels in Prince William
Sound and Puget Sound were set in a rulemaking that was originally
docketed as CGD 91-202, and completed in 2005 under docket number USCG-
2003-14734; the final rule appears at 70 FR 55728 (Sep. 23, 2005), and
the regulations appear in 33 CFR part 168. The CGD 91-202 rulemaking
originally sought to deal with escort vessel requirements in waters
other than Prince William Sound and Puget Sound, but in 1993 the Coast
Guard opened a new docket, CGD 91-202a, to address those other waters.
Public meetings held in 1993, in Anchorage and Valdez, Alaska, and in
Seattle, Washington, addressed both rulemakings.
    In an advance notice of proposed rulemaking (ANPRM; 58 FR 25766,
April 27, 1993) issued under docket number CGD 91-202a, the Coast Guard
asked for public comment on three general questions: (1) Whether escort
vessel requirements should apply to any navigable waters of the United
States other than Prince William Sound and Puget Sound; (2) whether
escort vessel requirements should apply to vessels other than single-
hulled oil tankers; and (3) what an escort vessel should be expected to
do. In its discussion, the ANPRM listed numerous subsidiary questions
to put the general questions in perspective.
    In 1994, the Coast Guard published a notice of meeting and request
for comments (59 FR 65741, Dec. 21, 1994) to follow up on the ANPRM.
The 1994 notice said that numerous comments had been received in
response to the ANPRM, but that they lacked consensus and tended to be
based on subjective arguments without supporting data. The notice
acknowledged that the 1993 ANPRM had been issued before publication of
the Prince William Sound and Puget Sound regulations in 33 CFR part
168, and included no special guidance on how waterways should be
evaluated or nominated for escort vessel requirements. Accordingly, the
1994 notice sought to engage the public's assistance in developing
criteria for evaluating the navigational risks of a waterway, and how
to determine if escorting is an effective strategy to offset those
risks. Noting that OPA 90 called for oil tankers to have two escort
vessels and that, in some circumstances, this could be undesirable, the
notice stated that any escort vessel requirements for waters other than
Prince William Sound or Puget Sound would rely on PWSA in addition to
OPA 90.
    The 1994 notice proposed 13 criteria, derived from the PWSA, for
use in determining when escort vessels are necessary, and illustrated
the scope of each criterion through a set of follow-on questions. It
announced a public meeting in Washington, DC on January 23, 1995, and
asked for comment on these and other criteria that could be used in
evaluating waterways with respect to escorting.

Discussion of Comments

    In response to the 1993 ANPRM and 1994 notice, the Coast Guard
received nearly 700 written comments as well as the oral testimony of
hundreds of attendees at four public meetings. We thank all these
commenters for their interest. For convenience, we discuss the comments
under four subheadings:
    Escort vessel criteria. We received many thoughtful comments
analyzing the 13 criteria we proposed and offering background
information or constructive criticism. Most of these commenters
stressed the importance of understanding local waters and the specific
vessels and cargoes transiting those waters. A number of commenters
suggested development of a nationwide risk assessment program, in order
to allocate escort vessel or other safety resources in an objective way
that prioritizes where those resources can do the most good. A
nationwide risk assessment program may be a good concept but it would
be very expensive and time-consuming to implement. The reliability of
such an assessment would be hard to validate, making its usefulness
questionable.

    We agree with many commenters that local conditions are very
important in determining what safety measures should be taken. If the
need for specific resources in specific waters can be shown, it is
better to focus directly on addressing that need, than on the more
conceptual exercise of ranking that need relative to the needs of other
areas. For many years the Coast Guard has sponsored Ports and Waterway
Safety Assessments (PAWSAs) that bring public and private stakeholders
together to identify major safety hazards in specific local waterways,
evaluate potential mitigation measures including escorting, and set the
stage for implementing selected measures. You can get more information
about PAWSAs at http://www.navcen.uscg.gov/mwv/projects/pawsa/PAWSA_
home.htm, or read reports on any of the 38 PAWSAs conducted to date, at
http://www.navcen.uscg.gov/mwv/projects/pawsa/PAWSA_FinalReports.htm.
We believe that the PAWSA program provides a more comprehensive
alternative for evaluating local risks and conditions. Therefore, we
think it is neither appropriate nor beneficial to continue developing
nationwide Coast Guard escort vessel criteria within the context of
this 1993 rulemaking.
    Escort vessel effectiveness. Most commenters who discussed the
effectiveness of escort vessels agreed that different ``escorts'' have
different capabilities, and that under certain conditions it is
unrealistic to think that escorts will provide added safety. While some
commenters recommended that we specify the capabilities desired in an
escort vessel, many others pointed out that escort vessels should be
considered as just one of many tools available for enhancing the safety
of specific waters, along with aids to navigation, local regulated
navigation areas, vessel traffic services, response vessels, or other
means. We agree with these commenters that any consideration of escort
vessels should begin by assessing specific local conditions and
analyzing other possible safety measures. As previously described, the
Coast Guard's PAWSA program can provide this assessment and analysis.
Therefore, we think it is neither appropriate nor beneficial to
continue a nationwide Coast Guard assessment of escort vessel
effectiveness within the context of this 1993 rulemaking.
    Specific waters other than Cook Inlet; vessels other than single-
hulled oil tankers. Numerous commenters made recommendations for or
against requiring escort vessels in specific waters other than Prince
William Sound or Puget Sound. A few commenters also recommended
extending escort vessel requirements to vessels other than single-
hulled oil tankers. As noted above, we have concluded that any such
requirements should be considered by the Coast Guard at a local level,
in light of local conditions and the possibility of increased
effectiveness of alternative safety measures. The Coast Guard's PAWSA
program can provide that consideration. Therefore, we think it is
neither appropriate nor beneficial to continue the consideration of
escort vessels for use in specific waters or with specific types of
vessel within the nationwide context of this 1993 rulemaking.
    Cook Inlet. Between 1993 and 1995, hundreds of commenters focused
on whether or not escort vessels should be required in Cook Inlet,
Alaska. Those opposed to requiring escort vessels in Cook Inlet tended
to cite favorable local conditions, the availability of alternative
safety measures, and adverse economic impact as their reasons. Those in
favor of requiring escort vessels in Cook Inlet tended to cite
unfavorable local conditions, the superiority of escort vessels to
other possible safety measures, and the economic and environmental
risks posed by tanker traffic as their reasons. The Coast Guard has
carefully considered the 1993-1995 comments, but finds that they are
inconclusive on the merits of extending escort vessel requirements to
Cook Inlet. Further study, in light of current conditions, would be
needed before the Coast Guard would propose such an extension.
    In 2000, a Ports and Waterways Safety Assessment was conducted for
Cook Inlet. The PAWSA report is available at http://
www.navcen.uscg.gov/mwv/projects/pawsa/PAWSA_FinalReports.htm. It
noted a ``significant drop off in oil spills'' over the preceding 5
years, and listed 9 ``existing mitigations'' in place to control the
risk from petroleum cargoes. Although escort vessels for oil tankers
were considered, they were not among the new mitigation measures
adopted by the PAWSA final report.
    The Coast Guard understands that concerns over navigational safety
in Cook Inlet persist. We take these concerns seriously, because they
relate directly to two of the Coast Guard's strategic goals: Maritime
safety and maritime stewardship.
    The Alaska-based Coast Guard Seventeenth District is planning to
conduct additional studies of the local waterways in an effort to more
fully define the need for risk reduction measures or other mitigating
factors in areas such as Cook Inlet, Prince William Sound and the
Aleutian Islands. Any findings from these risk assessments would be
addressed in local Coast Guard policies or rulemakings. Therefore, we
think it is neither appropriate nor beneficial to continue considering
Cook Inlet's navigational safety within the nationwide context of this
1993 rulemaking.

Conclusion

    The Coast Guard has tentatively decided that nationwide Coast Guard
action to extend statutory escort vessel requirements is not advisable,
and that escort vessels may be required in other waters or for vessels
other than single-hulled oil tankers only after specific Coast Guard
consideration of local conditions and possible alternative safety
measures. We request public comment on this tentative decision. If,
after receiving public comment, we affirm this tentative decision, we
will withdraw the rulemaking, using another Federal Register notice to
do so.
    Please note that, regardless of our final decision to withdraw or
continue this rulemaking, you may request Coast Guard regulatory action
for specific U.S. waters, by using the Coast Guard rulemaking petition
process detailed in 33 CFR 1.05-20. Send your request to the Marine
Safety and Security Council (CG-0943), United States Coast Guard
Headquarters, 2100 Second Street, SW., Washington, DC 20593-0001.

    Dated: April 4, 2008.
Brian M. Salerno,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine,
Safety, Security and Stewardship.
 [FR Doc. E8-7935 Filed 4-14-08; 8:45 am]

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